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Railroads, Whistles, and Rights‐of‐Way First American Title Insurance Company, and its affiliates, make no express or implied warranty respecting the information
presented and assume no responsibility for errors or omissions. First American, the eagle logo, and First American Title are
registered trademarks or trademarks of First American Financial Corporation and/or its affiliates.
The following presentation is for informational purposes only and is not and may not be construed as legal advice. No third party
entity may rely upon anything contained herein when making legal and/or other determinations regarding its practices, and such
third party should consult with an attorney prior to embarking upon any specific course of action.
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Railroaded
First American Title Insurance Company, and its affiliates, make no express or implied warranty respecting the information
presented and assume no responsibility for errors or omissions. First American, the eagle logo, and First American Title are
registered trademarks or trademarks of First American Financial Corporation and/or its affiliates.
The following presentation is for informational purposes only and is not and may not be construed as legal advice. No third party
entity may rely upon anything contained herein when making legal and/or other determinations regarding its practices, and such
third party should consult with an attorney prior to embarking upon any specific course of action.
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Common Railroad Concerns
• Railroad Ownership, Abandonment & Access
Issues
• Rails to Trails
• Title Issues
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Railroad Acts & Private Grants
– PACIFIC RAILROAD ACTS:
– PRE‐1871 GRANTS IN AID OF
CONSTRUCTION GRANT
– PACIFIC RAILROAD ACTS: 1871‐1875
GRANTS
– General Railroad Right‐Of‐Way Act of 1875
– Private Grants
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Federal Land Grants
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CONGRESSIONAL GRANTS
• PACIFIC RAILROAD ACTS: PRE‐1871 GRANTS
– The Pacific Railroad Acts, dating from 1862 through 1871 (also referred to as Charter Acts), established a system of railroads spanning the western United States. These charter railroads were created by Congress, and acquired land for the construction of the railroad lines. – These grants from Congress gave the railroad companies a "limited fee" title to strips of land usually 400 feet in width, although some grants were 200 feet in width, wherever tracks might be laid in the future along the routes established in the particular Act.
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In Aid of Construction Grant
• In addition to the grant of a right ‐of‐way, the Acts gave railroad companies the right to fee ownership of alternate sections of land along railroad lines. These alternate sections of land (also called "checkerboard sections") were provided for, yet not conveyed through the Congressional grant. Instead, the alternate sections were patented to the railroad companies without restriction other than a mineral reservation after the railroad met certain track completion requirements.
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PACIFIC RAILROAD ACTS: 1871‐1875 GRANTS
• During the years between 1871 and 1875, Congress continued to create railroads through Congressional Acts granting rights‐of‐way to specified railroad companies. However, Congress was not so generous to the railroads as it had been prior to 1871. The railroad was still granted a limited fee title to its right‐of‐way; however, the width of the right‐of‐way was reduced from 400 feet to 200 feet. The railroads received necessary adjacent lands for stations, water towers, etc.; but no longer received patents for adjacent sections along their routes
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• During these years, railroad titles continued to relate back to the date of the Act, once its tract location plat was filed, and those grants did not include minerals. Abandonment is handled the same as under the pre‐1871 Acts.
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GENERAL RAILROAD RIGHT‐OF‐WAY ACT OF 1875 GRANTS
• By 1875, public and Congressional dissatisfaction with railroad "giveaways" resulted in the passage of the General Railroad Right‐of‐Way Act.
• After 1875, railroad companies received only 200 foot‐wide rights‐of‐way. And, court decisions held this right of‐way to be an easement rather than a limited fee.
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PRIVATE GRANTS
• NATURE OF GRANT: IS IT FEE OR IS IT EASEMENT?
• Railroads have acquired rights‐of‐way by purchase and grant from private owners. There is no federal interest in these grants and the language of the grant itself must be examined to determine the nature of the interest acquired by the railroad. That interest may be fee simple, a "determinable" or "limited" fee, or an easement, depending upon what was intended by the parties to the original grant.
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Interpetation
• Courts generally recognize that the words 'right of way' have a twofold meaning. They are sometimes used to describe a mere right of passage over a tract, and sometimes to describe the strip of land which railroad companies purchase, or otherwise compulsorily acquire, upon which to construct their railroad.
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• A title examiner faced with the challenge of interpreting a deed or other instrument of conveyance in which the grantee is a railroad, or where the subject property is used or to be used for railroad purposes, becomes a judge knowing that there is a real risk that someday an official judge will review the same instrument and decide whether or not the title examiner made the correct determination. In effect, the trial court becomes a "court of appeal" to review the decision of the title examiner in the "court below" (i.e. the title insurer).
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• Real judges in real courts struggle mightily with this challenge, and are sometimes reversed on appeal, so it should come as no surprise that title insurers may be unwilling to insure the title to railroad right of way property in the absence of a quiet title action which makes the determination of whether the deed conveyed fee title or merely granted an easement.
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Disposition of Rights‐of‐Way: Abandonment
– SURFACE TRANSPORTATION BOARD
– Rails to Trails
• US Supreme Court Decisions regarding Rails to Trails
– PRESEAULT V. INTERSTATE COMMERCE COMMISSION et al
– BRANDT REVOCABLE TRUST ET AL. v. UNITED STATES
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ABANDONMENT
• Once the Railroad has determined that it
wants to abandon its rail line they have to
have the Surface Transportation Board’s
approval.
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STB Website
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RAILS‐TO‐TRAILS
• On October 4, 1988, Congress enacted the National Trail System Improvements Act of 1988, also commonly referred to as "Rails to Trails" (16 U.S.C. §
1248(c)‐(f)). • This Act provides that upon abandonment of a railroad right‐of‐way, which is not to be used for a federal highway, the right‐of‐way can be incorporated into a planned system of hiking, biking or nature trails if it is in or adjacent to federal lands.
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• If not in or adjacent to federal lands, local agencies or organizations may apply to manage the right‐of‐
way as a trail; or, if there is no interest in managing the right‐of‐way as a trail, the federal interest in the right‐of‐way may be sold with proceeds going to the Federal Land and Water Conservation Fund. • Unless the time is extended, an application for Certificate of Interim Trail Use must be submitted within 180 days after the effective date of the order for abandonment
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Preseault
Supreme Court of the United States
J. Paul PRESEAULT, et ux., Petitioners
v.
INTERSTATE COMMERCE
COMMISSION et al.
No. 88‐1076.
|
Argued Nov. 1, 1989.
|
Decided Feb. 21, 1990.
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• This case essentially deemed the Rails to Trail Act legal.
• Even if the rails‐to‐trails statute gives rise to a taking, compensation is available under the Tucker Act, and the requirements of the Fifth Amendment are therefore satisfied.
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Tucker Act
• Under the Tucker Act of 1887, the United States waived its sovereign immunity as to certain kinds of claims. Although the government is immune to lawsuits as a general rule, the Tucker Act exposes the government to liability for certain claims. Specifically, the Act extended the original Court of Claims’ jurisdiction to include claims for liquidated or unliquidated damages arising from the Constitution (including takings claims under the Fifth Amendment), a federal statute or regulation, and claims in cases not arising in tort. The relevant text of the Act is codified in 28 U.S.C. §§ 1346(a) and 1491.
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Brandt
Supreme Court of the United States.
Marvin M. BRANDT, Revocable Trust and Marvin M. Brandt, Trustee, Petitioners,
v.
UNITED STATES OF AMERICA, Respondent.
No. 12‐1173.
March 22, 2013.
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• Congress passed the General Railroad Right‐of‐Way Act of 1875 to provide railroad companies “right[s] of way through the public lands of the United States,” 43 U. S. C. §934. One such right of way, obtained by a railroad in 1908, crosses land that the United States conveyed to the Brandt family in a 1976 land patent. That patent stated, as relevant here, that the land was granted subject to the railroad’s rights in the 1875 Act right of way, but it did not specify what would occur if the railroad later relinquished those rights. ©2016 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
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The right of way was an easement that was terminated by the railroad’s abandonment, leaving Brandt’s land unburdened. Pp. 8–17. • (a) The Government loses this case in large part because it won when it argued the opposite in Great Northern R. Co. v. United States, 315 U. S. 262 (1942). There, the Government contended that the 1875 Act (unlike pre‐1871 statutes granting rights of way) granted nothing more than an easement, and that the railroad in that case therefore had no interest in the resources beneath the surface of its right of way. This Court adopted the Government’s position in full.
•
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TITLE ISSUES
• Excluding A Railroad Right OF Way From The
Land
• "EXCEPTING THEREFROM any portion lying within a strip of land 400 feet wide as granted by an Act of Congress approved July 1, 1862 and amended July 2, 1864, May 7, 1866, July 3, 1866, March 3, 1869 to the Union Pacific Railway Company.“
• Except that portion lying within the Union Pacific Railway Company right of way. ©2016 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
• Including A Railroad Right OF Way In The
Land
– Typically you’ll use the metes and bounds description from the original conveyance from the railroad
– Any failure to comply with any requirement of approval, consent, exemption or other action by, or notice to or filing with the Surface Transportation Board, or any public utility commission or other similar regulatory authority, relating to abandonment, cessation of rail operations, or other disposition of that portion of the Land lying within the right‐of‐way granted to the ___________ Railroad by the United States Government.”
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What do I need to know?
• You already have a search back to when the railroad acquired its interest in the corridor. Often railroads acquired their interests in the corridor by more than one method because rarely did the grantor own all of the property over which the corridor passes. Thus, for example, portions of the same corridor could be vested in the railroad as fee simple, easement, or determinable fee (limited Fee). ©2016 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
1. How did the railroad acquire its interest in the corridor?
• ____ Private Grant
• ____ Congressional Act Grant
• ____ Condemnation
• ____ Prescription or Adverse Possession
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2. What interest did the railroad obtain?
• Fee Simple absolute [The railroad can do virtually anything with the land, but in order to abandon service or sell the corridor to another railroad, Surface Transportation Board (STB) approval may be required.
• 62‐424. HEARING ON ABANDONMENT. (1) Whenever any railroad proposes to abandon any branch line or main line now in operation within the state of Idaho, the railroad shall file notice of the intended abandonment with the public utilities commission.
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Limited or Determinable Fee
• Limited or Determinable Fee (i.e. “for railroad purposes only” or “for so long as used for a railroad”) (upon abandonment [i.e. both railroad service and state law property rights] title reverts to the original grantor or successors thereto)
• The limited or determinable fee could have been acquired by private grant, Congressional Act Grant prior to 1875, Condemnation
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Easement
• Easement (Surface and subsurface for railroad purposes only) (upon abandonment [i.e. railroad service and state law property rights] title to the center of the right of way reverts in adjoining land owners unless the original grantor reserved the rights in the right of way in the conveyance to the bounds of the corridor) • An easement could have been acquired by private grant, Congressional Act Grant of 1875, Condemnation
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Does the railroad have an interest in property outside the corridor?
• Conveyances to the railroad often granted additional land outside the corridor for watering places, depots, and workshops.
• These may or may not be insurable, but you certainly want to include an exception for them if they won’t be insured. ©2016 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
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Can the railroad convey all or part of its interest in the land to a third party?
• If the “third party” is another railroad that will use the corridor for railroad purposes, the railroad can convey, but Surface Transportation Board (“STB”) approval is generally required. Depending on the nature of the transaction and the size of the acquiring railroad, a notice and petition for exemption may be appropriate.
• If the “third party” is not a railroad, STB approval for abandonment of service is required and an analysis of state or federal law property rights is required to determine whether conveyances from persons or entities other than the railroad are required
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What happens to the title once the railroad discontinues its rail service over the right‐of‐way (i.e. strip of land)?
• A two‐step process is required before the railroad may convey.
• Did the railroad obtain STB approval for abandonment of service? • Have we accounted for all potential interests in the corridor? ©2016 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
Access
• Access over Railroad Rights of Way
– Access rights established by recorded easement or public right – Access rights established by recorded license
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Access over Railroad Rights of Way
• A public right of access for street crossings may be granted by the railroad. • Prescriptive rights generally do not accrue against rights in RR Property. • Private rights of access are commonly restricted to those who have an easement (reserved from the original grant or otherwise) or a revocable license from the railroad (sometimes called a “private way license” or “crossing permit”). Licenses and permits, unlike easements, do not run with the land in favor of successors or assigns, are often not recorded, and may be terminated by the railroad. ©2016 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
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Access rights established by recorded easement or public right • If access to the Land depends on a recorded easement or public right to cross RR Property that is valid, currently existing, and unencumbered, no additional steps are necessary. However, an exception for the terms and conditions of the easement or public right may be required. ©2016 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
Access rights established by recorded license • If access to the Land depends on a recorded license, an exception for the terms and conditions of the license is required and the consequences of its future termination must be addressed. If the existing license is recorded in the Public Records in favor of the current owner, or a new license is obtained by the purchaser of the Land in the contemplated transaction, an exception and note must be included in Schedule B of the commitment or preliminary report. The exception must also be included in the policy to be issued. ©2016 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
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No access of record • If access to the Land requires crossing RR Property and a public or private right to cross the RR Property is not found in the Public Records, the policy (and any commitment or preliminary report) must contain an exception. • In order to remove the exception, you’ll need to obtain an easement or license granting access to and from the Land. A requirement should be appropriate. ©2016 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
U. S. DOT CROSSING INVENTORY FORM
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Conclusion
• Crucial to know the nature of the current or
former railroads interest
• Fee?
• Limited Fee?
• Easement?
• Whatever the nature of the interest, it poses
title issues for the examiner
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Helpful Links
• Crossings / Lines / Mileposts – Federal Railroad Administration http://fragis.fra.dot.gov/GISFRASafety/
• Abandoned, Discontinued, and Railbanked Rail Lines
• Surface Transportation Board https://stb.maps.arcgis.com/home/webmap/viewer.html?webmap=59c56
62600854756a7e6f18bca1a0f44
• BNSF – Crossing Permits
• http://www.bnsf.com/communities/faqs/permits‐real‐estate/#property
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