OMAHA, Neb. — The U.S. government began handing out land to railroads to encourage their development more than 150 years ago, but there are still questions about how much control those companies have over the land.
Union Pacific is facing several lawsuits related to whether a railroad it acquired years ago had the authority to allow an oil pipeline to be built along its tracks in six states and who is entitled to the royalties that are now worth more than $14 million a year.
Sorting out whether Union Pacific controls the land beneath its tracks might require a detailed review to determine whether the Omaha, Neb.-based railroad bought the land or received it as part of a federal grant. When Union Pacific — or its predecessor, the Southern Pacific — received a land grant is also a factor because the terms can be different.
“You have to go deed-by-deed to see what property interests the railroad acquired,” said Danaya Wright, a University of Florida law professor who has studied the issues related to these railroad rights of way.
The debate over the railroad land is linked to the settlement of the western United States in the 1800s. President Abraham Lincoln signed laws giving railroads the right to lay track on public lands to speed development of a rail link to the West Coast, with the land reverting to the government if the railroad failed.
Initially, courts treated the land grants as if the railroads owned the land outright. But the legal picture has become more muddied in recent decades, as thousands of miles of rail were abandoned and many were converted into trails.
Railroad land generally falls into one of three broad categories:
• Federal land grants railroads received before 1871 to help link the country included stronger ownership rights.
• Land grants handed out after 1871 primarily gave railroads permission to build and operate tracks across the land without full rights to the land as in an easement.
• Land that railroads purchased, which carries full ownership rights.
Property owners who filed lawsuits against Union Pacific last month over the pipeline want additional compensation for the pipeline company’s access to their land and possibly the royalty money.
At the time this pipeline was built in the 1950s, both the railroad and pipeline company were owned by the same corporation. Now Union Pacific owns the railroad and Kinder Morgan owns the pipeline, which runs along 1,871 miles of railroad tracks in Arizona, California, Nevada, New Mexico, Oregon and Texas. The pipeline also crosses 1,400 miles of land away from the tracks.
“We plan to vigorously defend ourselves against the lawsuits brought by these class-action lawyers,” Union Pacific spokesman Aaron Hunt said.
A number of past court cases seem to indicate Union Pacific will eventually prevail.
