Colorado Supreme Court Decides Case Affecting Determination of Title to Land Underlying Abandoned Railroad Easements

The Colorado Supreme Court recently decided the case of Asmussen v. United States, which affects the determination of legal title to the land underlying abandoned railroad easements sometimes referred to as railroad “right-of-way” (please note that the term “right-of-way” can encompass fee simple interests held by railroads in addition to mere easements – this case only dealt with railroad easements).

The Asmussen case has its origins in the National Trails System Act, also known as the Rails-To-Trails Act, which allows railroads to “bank” right-of-way that they no longer need so that it can be converted into public trails.  If the railroad later decides that it once again needs to use the right-of-way, it is allowed to do so.  The Asmussen case started when a group of landowners, whose property is adjacent to abandoned right-of-way, filed claims with the Court of Federal Claims arguing that this “railbanking” amounts to a taking of their reversionary interest to the land underlying the railroad easement and entitles them to just compensation (rights to an abandoned easement estate generally revert back to the owner of the underlying fee interest).

The landowners in the federal takings case presented evidence that they owned the adjoining land, but they did not present any evidence that their title stemmed from the owner of the land at the time when the railroad first received its easement interest.  The government moved for summary judgment, arguing that the landowners did not present sufficient evidence to justify their claims.  In response, the landowners relied on what is known as the “centerline presumption.”  This common-law rule states that the conveyance of land abutting a railroad right-of-way is presumed to carry title to the centerline of the right-of-way to the extent that the grantor has any interest therein and absent a clearly expressed, contrary intent.  The government argued that the centerline presumption did not apply because the landowners failed to trace their title back to a grantor that held title to the land underlying the right-of-way.  The Court of Federal Claims decided to certify this issue as a question to the Colorado Supreme Court (this procedural device allows federal courts to ask state courts for guidance on undecided issues of state law).

The question certified to the Colorado Supreme Court was whether an adjoining landowner is presumed to be the owner of the fee interest all the way to the centerline of the abandoned railroad right-of-way even if that landowner has not presented evidence that his or her title derives from someone who actually held title to the land underlying the right-of-way.  The Court answered the question in the negative: an adjoining landowner cannot claim presumptive ownership to the centerline of the railroad right-of-way unless that owner produces evidence that his or her title derives from someone who held title to the land underlying the right-of-way.

The Court offered different rationales for its decision.  The most convincing was that absent this evidentiary showing the government might end up having to pay compensation to the wrong party.  For instance, the original grantor might have explicitly reserved the right to the land underlying the railroad right-of-way and conveyed it to someone else.  Additionally, the following hypothetical situation could occur:

In the 1850s Mr. Smith received a patent to a parcel of land next to another parcel owned by Mr. Thomas.  In 1865, Mr. Smith granted an easement to a railroad over a portion of his property that extended all the way to his boundary line with Mr. Thomas.  Mr. Thomas did not grant the railroad any easement.  Below is a crude visual depiction of the scenario:

Under the rule advocated by the landowners, the modern-day landowner who derived title from Mr. Thomas (i.e., Mr. Blue) would be presumed to be the owner of the abandoned “right-of-way” all the way to the center line, even though Mr. Thomas never held title to the underlying property.  That means the landowner tracing her title back to Mr. Smith (i.e., Ms. White) would be deprived of compensation for half of the right-of-way, or the government might have to pay two claims.

It is important to keep in mind that this decision does not take any property rights away from landowners.  Rather, it merely increases the evidentiary burden on landowners in a takings or quiet title case by requiring them to trace their title back to the original owner of the land underlying the disputed railroad right-of-way.  While this may be onerous, it ensures that the correct party is receiving compensation.