Wells v. Union Pacific Railroad Co., No. 16-56562 (9th Cir. 2018)
Annotate this CaseThe Ninth Circuit reversed the district court's order granting a motion to dismiss Union Pacific's counterclaims in class actions filed by landowners challenging the railroad's ability to lease land to Santa Fe Pacific Pipelines (SFPP). The panel rejected plaintiffs' contention that the panel should not reach the merits of the certified questions and declined to apply the doctrine of collateral estoppel. With respect to the first certified question, the panel held that the pre-1871 Acts, which Congress passed to aid in the construction of railroad lines, do not require a "railroad purpose." In regard to the second certified question, the panel held that Union Pacific has plausibly alleged that the pipeline serves such a purpose. Therefore, the court remanded with instructions to grant leave to amend.
Court Description: Railroads / Rights of Way. The panel reversed the district court’s order granting a motion to dismiss Union Pacific Railroad’s counterclaims in class action suits brought by landowners challenging Union Pacific’s ability to lease land under 1,800 miles of its right of way to Santa Fe Pacific Pipeline, L.P., which uses the land for a petroleum pipeline. Congress granted railroads various rights of way under “pre-1871 Acts” and the General Railroad Right-of-Way Act of 1875. The district court held that (1) the acts of Congress conferring the right of way authorized Union Pacific to use the right of way only for a “railroad purpose,” and (2) the pipeline did not serve such a purpose. The district court certified those issues for interlocutory review under 28 U.S.C. § 1292(b). The panel rejected the appellees’ contention that this court should not reach the merits of the certified questions, but instead should give preclusive effect to the California Court of Appeal’s decision in Union Pac. R.R. v. Santa Fe Pac. Pipelines, Inc., 231 Cal. App. 4th 134, 155 (2014), under the doctrine of collateral estoppel. 4 WELLS V. UNION PAC. R.R. CO. The panel held that the pre-1871 Acts do not require a “railroad purpose.” Specifically, the panel held that while the Union Pacific decision modified the holding in Northern Pacific Railway v. Townsend, 190 U.S. 267 (1903), to stand only for the proposition that the railroads obtained at least the rights necessary to carry out railroad purposes under the pre- 1871 Acts, it did not go further and hold that “railroad purposes” actually defined the outer limits of the grants. The panel also held that the pre-1871 Acts conferred a fee simple defeasible in everything except the mineral estate; and that interest entitled Union Pacific to lease the subsurface as well as the surface of its right of way to Santa Fe Pipeline as long as it continued to use the right of way to operate a railroad, regardless of whether the pipeline itself served a “railroad purpose.” Concerning whether the pipeline served a railroad purpose under the 1875 Act, the panel held that Union Pacific plausibly alleged that the benefit it derived from the pipeline was sufficient for the “incidental-use doctrine” (providing that railroad rights of way confer all rights incident to a use for railroad purposes) to apply. The panel further held that the district court should have granted Union Pacific leave to amend to add facts supporting the contention that the pipeline served a railroad purpose; and remanded with instructions to grant leave to amend.
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.