Pub. 10 2015 Issue 1

www.ucls.org 16 Issue 1 2015 / UCLS Foresights RAILROAD RIGHT OF WAY continued on page 18 Congress intended to give the Railroad the right to use the land under its rights-of-way for non-railroad purposes, like renting it out to third parties.” 9 . Whether or not it can fairly be said that UP should have known better than to grant easements and charge rent for the use of land to which it held only an ambigu- ous, speculative or undefined fee title, perhaps really amounting to no more than color of title, if even that, with regard to the underlying land, is an open question. In failing to recognize the physical limits of that title however, UP can be found guilty of no error that has not been made by countless others in completing comparable transactions involving RR R/W, and therein lies the true gravity of the outcome suggested by this CCOA decision. Having thus clearly communicated their conclusion on the portion of the conflict relating to the title issue, for the edifi - cation of both the litigants and the trial court, the members of the CCOA panel went on to address the valuation issue as well, since that matter would also be relevant upon remand. Quite possibly, portions of the corridor at issue pass through sections of land which are in fact owned in fee simple by UP, and if in fact the tracks cross any such sections then technically no RR R/W exists within those areas, since no party or entity can hold an easement situated upon or within their own fee property. The presence of such lands along the corridor, upon which no RR R/W exists, could well explain why the parties made the fateful decision to describe the lands which they intended to be subject to their agreement using the generic term “property” rather than the more specific phrase “RR R/W”. Nevertheless, as a fee simple owner UP has the right to grant easements across any such sections, or any other lands in which UP holds a right of full legal control embracing the subsurface, and if SF facilities exist within such sections, the agreement in contention would be applicable to those sections, so valuation would be relevant in those areas. The parties were thus left to cogitate upon what their strat - egy might be going forward, and perhaps to ponder entering yet another settlement agreement, in preference to potentially opening Pandora’s Box, by setting out to litigate each problem - atic portion of the RR R/W as an independent quiet title action. The wide variety of land acquisition methods, which might be leveraged by UP if necessary, enumerated by the CCOA, includ- ing prior condemnation actions, prior quiet title actions or other court decrees relevant to title, existing state laws pertaining to marketable title, and potentially even adverse possession, make it clear that the outcome of the present action could precipi - tate numerous subsequent actions. Yet whether or not UP, as a railroad operator, truly acquired and holds the subsurface in fee in any such areas defined as RR R/W, in addition to the surface, remains very much an open question, and will remain so until fully adjudicated, which could well make it clear to legal counsel for UP and UP executives that any effort to secure such rights unto UP through further litigation could be one which would simply not be cost effective. Were the sum at stake in the pres - ent action not so huge, there can be little doubt that rational people would just drop the whole matter, but if the litigation does continue, and it proceeds down the track pointed out here by the CCOA, our nation stands to greatly benefit from this on - going struggle, provided that it ultimately produces conclusive clarification of the true title status of all existing federally creat - ed RR R/W. As an interesting sidebar item, not vital to the core title is - sue, which relates to the nature and legal status of the RR R/W as a direct function of the origin of that R/W, yet highly relevant to the overall valuation equation, the CCOA also addressed the assertion made by UP that even some lands which had been sold by UP, through which SF facilities passed, were subject to the contested agreement, even though now owned by various other parties, as grantees of UP. In other words, UP maintained that by virtue of reservation, in numerous conveyances made by UP over the decades, UP had deliberately and expressly re- tained a right of control over the SF facilities in such locations for rental purposes. Not surprisingly, given its position on the core title issue previously documented herein, the CCOA was not receptive to this assertion by UP, and proceeded to fore - close it, while pointing out the fallacy embodied in it. “Congress clearly intended that a railroad’s interest in its rights-of-way would terminate once it no longer used or occupied the land. Continuing to have an interest in the land, and to generate revenue from it, would run directly counter to the legislative in - tent.” 11 . UP certainly can reserve easements when selling land, just as can any legitimate grantor, but no such reservation can be valid if the grantor had no such land right or property inter- est to retain. Thus it would appear that a very severe burden of proof, regarding the validity of any such reservations made by UP, will descend upon UP, should UP decide to continue to pursue this element of the overall controversy upon remand, presuming that the CCOA ruling remains in effect. Moreover, should UP either fail in that effort or simply abandon it, the ongoing land use being made by SF will then be exposed to po- tential legal assault by the grantees of UP or others, potentially adding liability issues, stemming from the creation and Re - cording of invalid easements, to the imposing list of concerns confronting UP. In producing this truly exhaustive and wonderfully erudite opinion on a highly problematic subject, Judge Kussman and his colleagues elected to emphatically apply the fundamental principle, with reference to the federal land grants at issue, that no land rights which have not been very clearly and expressly stated in conveyance documentation can be successfully as - serted by a grantee, specifically UP in this instance. Although there are a multitude of exceptions to this principle, such as the passage of unrecited appurtenant easements for example, the principle of grant limitation based upon purpose is univer - sally recognized as valid, being wisely counterbalanced as it RAILROAD RIGHT OF WAY continued from page 15 9 See pages 38 & 42. 10 See page 57 - “32 percent is claimed to be held in fee”. 11 See page 65, the full discussion of this issue begins on page 60.