Preseault v. City of Burlington, VT

Preseault v. City of Burlington (2005-236); 180 Vt. 597; 908 A.2d 419

2006 VT 63

[Filed 11-Jul-2006]

[Motion for Reargument Denied 18-Aug-2006]


                                 ENTRY ORDER

                                 2006 VT 63

                      SUPREME COURT DOCKET NO. 2005-236

                              MARCH TERM, 2006


  J. Paul Preseault and Patricia     }           APPEALED FROM:
  Preseault, Individually and as     }
  Partners 985 Associates, Ltd.      }
                                     ]
       v.                            }           Original Jurisdiction
                                     }  
  City of Burlington, Vermont and    }
  State of Vermont                   }           DOCKET NO.  04-1154-cv


             In the above-entitled cause, the Clerk will enter:

       ¶  1.  In this litigation, plaintiffs J. Paul Preseault and Patricia
  Preseault seek to prevent defendant City of Burlington from adding a fiber
  optic line to existing utility poles and lines that run through their
  property along a recreation path and former railroad right-of-way.  In
  response to a certified question accepted from the United States Court of
  Appeals for the Second Circuit pursuant to V.R.A.P. 14, we conclude that
  the provisions of 30 V.S.A. §§ 2513-2514 confer rights in the nature of a
  common-law easement with respect to allowing the placement of utility lines
  along  rights-of-way no longer used for railway services.  Accordingly, we
  answer the certified question in the affirmative.

       ¶  2.  The material facts relevant to this case are not in dispute. 
  The City of Burlington owns and operates a municipal electric utility that
  has maintained utility poles since the 1950s within an historic railroad
  right-of-way that crosses the Preseaults' property.  In 2002, the City
  began a telecommunications project that involved installing approximately
  sixteen and one-half miles of fiber optic cable for the transmission of
  video, voice, and data services, including cable television service, to
  connect city-owned buildings and facilities.  As part of the project, the
  City installed a fiber optic cable along the utility poles abutting the
  Preseaults' property, as permitted by a Public Service Board rule allowing
  licensed entities access to utility poles.  The cable is located several
  feet below the crossbars that hold the preexisting lines.

       ¶  3.  The Preseaults filed a complaint in federal district court,
  asserting that the installation of the cable was an unlawful taking that
  violated their constitutional rights.  The district court dismissed the
  complaint, ruling that 30 V.S.A. §§ 2513-2515 unequivocally granted the
  City a right to install the fiber optic cable on existing utility poles. 
  The Preseaults appealed, and the Second Circuit Court of Appeals certified
  to this Court the following question, which we accepted for review: "Are
  the City's rights under section 2514, which remained following the
  abandonment of the railroad easement pursuant to Proctor, in the nature of
  a common law easement, or limited to maintaining the lines that existed
  prior to the abandonment?"  Preseault v. City of Burlington, 412 F.3d 96,
  102 (2d Cir. 2005).

       ¶  4.  As the Second Circuit noted, "[t]he present lawsuit follows
  more than 20 years of litigation over the Preseaults' ownership and right
  to exclusive possession of land that once had been subject to the railroad
  easement."  Id. at 98.  A summary of the historical background and various
  proceedings between the parties is helpful in understanding the current
  dispute.  In 1899, pursuant to an act of the Vermont Legislature, the
  Rutland-Canadian Railroad Company acquired a right-of-way to operate a
  railway line on lands that included property owned by the Preseaults'
  predecessors-in-title.  In 1962, defendant State of Vermont acquired the
  railroad right-of-way from one railroad company and leased it to another,
  which continued to operate a railway line.  In the 1970s, the railroad
  discontinued rail service on the land abutting the Preseaults' property and
  removed all existing track and railroad equipment.  In 1981, the Preseaults
  brought a quiet title action in the superior court alleging that the
  railroad's easement had been abandoned, and that title to the right-of-way
  had reverted back to them.  The court dismissed the action, holding that
  the matter was within the exclusive jurisdiction of the federal Interstate
  Commerce Commission (ICC), and we affirmed.  See Trustees of Diocese of Vt.
  v. State, 145 Vt. 510, 515, 496 A.2d 151, 154 (1985).

       ¶  5.  The Preseaults next sought a certificate of abandonment from
  the ICC, but, pursuant to the National Trails System Act, the ICC approved
  an agreement between the State of Vermont and the City of Burlington to use
  the railroad right-of-way as a bicycle and pedestrian path. (FN1)  See 16
  U.S.C. § 1247(d) (giving ICC authority to encourage preservation of
  railroad rights-of-way by establishing interim recreational uses).  The
  Preseaults appealed first to the Second Circuit and eventually to the
  United States Supreme Court, arguing that the National Trails System Act
  resulted in an unconstitutional taking of their property and was not a
  valid exercise of Congress's Commerce Clause power.  The Supreme Court
  upheld the constitutionality of the statute, but found it unnecessary to
  evaluate the merits of the takings claim because the Preseaults had failed
  to seek compensation from the federal government under the Tucker Act.  See
  Preseault v. Interstate Commerce Comm'n, 494 U.S. 1, 17-18 (1990). 
  Accordingly, the Preseaults filed a complaint in the Court of Federal
  Claims against the United States seeking compensation for the alleged
  taking.  The court denied the claim, as did a three-judge panel of the
  United States Court of Appeals for the Federal Circuit, but the Federal
  Circuit reheard the matter and reversed en banc.  See Preseault v. United
  States,100 F.3d 1525 (Fed. Cir. 1996).  In a split decision, a plurality of
  the en banc court held that the railroad easement was abandoned in 1975,
  and that the establishment of a recreation path where the railroad
  right-of-way had been was a taking that entitled the Preseaults to
  compensation.  Id. at 1551.  On remand, the court of claims awarded the
  Preseaults $234,000, plus interest and fees, for the taking.
                                                                
       ¶  6.  Meanwhile, in 1987, the State of Vermont and the City of
  Burlington initiated trespass proceedings in state court seeking damages
  and injunctive relief based on the Preseaults' excavation and removal of
  large amounts of soil from the railroad right-of-way that had been
  maintained by the State and leased to the City.  The superior court granted
  a permanent injunction in 1993, holding that the City had an exclusive
  possessory interest in the right-of-way, and that the Preseaults'
  reversionary interest in the right-of-way would vest only when the ICC
  issued an unconditional certificate of abandonment.  We affirmed the
  superior court's judgment, citing well-settled Vermont law "that the holder
  of a railroad easement enjoys the right to the exclusive occupancy of the
  land, and has the right to exclude all concurrent occupancy in any mode and
  for any purpose."  State v. Preseault, 163 Vt. 38, 41, 652 A.2d 1001, 1003
  (1994).

       ¶  7.    We now return to the instant dispute.  In dismissing the
  Preseaults' complaint challenging the City's installation of the fiber
  optic cable, the federal district court ruled that 30 V.S.A. §§ 2513-2515
  entitle utilities to maintain easements arising from railroad
  rights-of-way, and that the Preseaults had failed to raise any disputed
  fact indicating that the fiber optic line had materially increased the
  burden of the existing utility easement.  The Second Circuit opined that
  the district court's reasoning treated "the statutory right as having the
  characteristics of a common law easement," which it deemed to be an
  unsettled question of Vermont law, and thus certified the following
  question to this Court: "Are the City's rights under section 2514, which
  remained following the abandonment of the railroad easement pursuant to
  Proctor, in the nature of a common law easement, or limited to maintaining
  the lines that existed prior to the abandonment?"  Preseault, 412 F.3d  at
  100, 102.

       ¶  8.  The Preseaults ask this Court to answer the certified
  question in the negative, arguing that 30 V.S.A. § 2514 provides only a
  limited statutory right to maintain existing utility lines and cannot be
  construed as granting a common-law easement that would allow utilities to
  add new non-burdensome lines .  Defendants City of Burlington and the State
  of Vermont respond that the rights provided by §§ 2513-2514 are in the
  nature of an easement and are properly construed as such.  In the
  alternative, defendants argue that this Court should reformulate the
  certified question and reconfirm its determination in prior cases that the
  railroad right-of-way in question was never formally abandoned as required
  under federal law, and thus they are entitled to exclusive possession of
  the historic right-of-way.  Central Vermont Public Service Corporation has
  filed an amicus brief expressing the concern that our resolution of the
  certified question in this case could affect the right of utilities under
  30 V.S.A. § 2502 to construct and maintain transmission lines along town
  highway right-of-ways without obtaining the consent of adjacent landowners. 
  See Dessureau v. Maurice Memorials, Inc., 132 Vt. 350, 352, 318 A.2d 652,
  653 (1974) ("It has long been the law of this State . . . that a railroad
  is an improved highway; and property taken for its use by legislative
  authority is property taken for a public use and is the same as if it were
  taken for any other highway.").  Because our resolution of the certified
  question resolves the current dispute between the parties, we decline
  defendants' request that we reformulate the question certified to us.
   
       ¶  9.  The instant dispute centers around the statutory rights
  embodied in 30 V.S.A. §§  2513-2514.  Section 2513(a) allows a utility to
  "erect and maintain its telecommunications or electric transmission and
  distribution lines and facilities along the sides of railroad tracks within
  the limits of lands owned or held by a railroad on paying reasonable
  compensation to the railroad."  Section 2514 provides further, in relevant
  part, that a line erected under § 2513 "shall remain the property of [the
  utility], and shall not pass by sale, transfer or mortgage made by the
  railroad corporation, of the lands upon which the line is erected."  In
  Proctor v. Central Vt. Pub. Serv. Corp., 116 Vt. 431, 77 A.2d 828 (1951),
  the case cited by the Second Circuit in its certified question, this Court
  construed the nearly identical predecessor statutes to §§ 2513-2514.  In
  that case, a street railway company had secured by condemnation in 1902 the
  right to use land for railway purposes.  The defendant utility obtained
  from the railway company a right-of-way for electric lines and poles.  The
  railway tracks were torn up in 1926.  Twenty-three years later, the
  plaintiff landowner filed an action for trespass against the utility for
  erecting and maintaining electric transmission lines.  The issue was
  whether the utility's right-of-way terminated when the railway tracks were
  removed.  This Court held that the aforementioned statutes made "the
  electric line the permanent property of the electric company independent of
  the railroad use," thereby giving the electric company "the right to
  maintain a then existing independent electric line."  Proctor, 116 Vt. at
  434, 77 A.2d  at 830.

       ¶  10.  In so holding, the Court reasoned as follows:

    [Under the statute,] [t]he railroad use . . . was not confined
    strictly to railroad purposes, but carried inherent in it rights
    in favor, among others, of electric light companies.  These rights
    might or might not come into actual physical being at a later
    period.  Put another way, railroad use encompassed other uses,
    including electric lines.  Since this is so, the [landowner's]
    predecessor in title was entitled to show and receive damages for
    the full use to which the condemned property might be put by the
    appropriation, not only railroading but also any other statutory
    use, electric lines included.

      The compensation paid in the condemnation proceedings to the
    [landowner's] predecessor for railway use was full indemnity for
    that use and all the other uses which the statute of the day
    included or encompassed therein.  The Rutland Street Railway
    Company having paid the then owner of the land for the right of
    way now owned and used by the [utility], the [utility] is under no
    obligation, either legal or equitable, to pay this [landowner]
    therefor a second time.

  Id. at 433-34, 77 A.2d  at 830 (citations omitted).

       ¶  11.  This reasoning indicates that the Legislature intended the
  predecessor statutes of §§ 2513-2514 to allow utilities to provide electric
  and telecommunication services along railroad rights-of-way even after the
  railroad's abandonment of the rights-of-way because the railroad is
  presumed to have already compensated adjoining landowners for all of the
  permitted uses, including the installation and maintenance of electric and
  telecommunication lines-even if those uses came into being at a later time. 
  Nevertheless, the Preseaults argue that the statutes allow utilities only
  to maintain existing lines.  In making this argument, they focus on the
  statement in Proctor that "when the railroad use is abandoned, the right to
  maintain a then existing independent electric line continues."  Id. at 434,
  77 A.2d  at 830 (emphasis added).   This statement is correct and consistent
  with the facts of Proctor, but does not necessarily imply that utilities
  may never add lines to existing poles.
   
       ¶  12.  Indeed, the language of the decision quoted above suggests
  the contrary.  Under the reasoning in Proctor, the statutory right provided
  by §§ 2513-2514 and predecessor statutes is in the nature of an easement in
  the sense that the right entitles utilities to use the railroad
  right-of-way in a manner that does not materially burden the landowner
  beyond what was originally intended by the conveyance or condemnation of
  the right-of-way.  That does not suggest that telecommunication lines other
  than telegraph or telephone lines are foreclosed if the original statute
  referred only to the latter type of lines.  Rather, it means that the
  intrusion must be generally of the type originally contemplated-in this
  case, telecommunication or electric lines-and must not materially burden
  the landowner beyond what was intended.  See Dernier v. Rutland Ry. Light &
  Power Co., 94 Vt. 187, 194, 110 A. 4, 7 (1920) ("The principle which
  underlies the use of all easements is that the owner thereof cannot
  materially increase the burden of it upon the servient estate, nor impose a
  new or additional burden thereon.").  This analysis is consistent with this
  Court's position that §§ 2513-2514 must be construed broadly to avoid
  anomalous results and to realize the legislative purpose underlying the
  statutes "to minimize the amount of land condemnation and maximize the
  effective use of land taken, consistent with the operations involved." 
  Delaware & Hudson Ry. Co. v. Central Vt. Pub. Serv. Corp., 134 Vt. 322,
  324, 360 A.2d 86, 88 (1976).

       ¶  13.  As indicated in the cases cited above, the plain intent of
  the Legislature in enacting §§ 2513-2514 and predecessor statutes is to
  allow utilities to continue to provide electric and telecommunications
  services within railroad rights-of-way even after railroad operations
  cease.  Cf. Davis v. MCI Telecommunications Corp., 606 So. 2d 734, 736-37
  (Fla. Dist. Ct. App. 1992) ( ruling that utility had right to install fiber
  optic cable along abandoned railroad bed without compensating owners of
  underlying land, and noting that historically State of Florida and United
  States Congress required railroads with right-of-way passage to make
  telecommunications lines and telegraph facilities available for
  governmental, commercial, and all other purposes).  This statutory right is
  in the nature of an express easement and thus is subject to an
  increase-in-burden analysis under the common law.  Interpreting the
  statutory right as an easement strikes the appropriate balance between the
  interests of utilities and property owners.  Utilities may continue to use
  the right-of-ways for their intended purposes so long as the uses do not
  materially increase the burden for which the landowners or their
  predecessors-in-title have already been compensated.

       The question certified by the United States Court of Appeals for the
  Second Circuit in Preseault v. City of Burlington, 412 F.3d 96, 102 (2005)
  is answered in the affirmative.


                                       BY THE COURT:


                                       ________________________________________
                                       Paul L. Reiber, Chief Justice

                                       ________________________________________
                                       Marilyn S. Skoglund, Associate Justice

                                       ________________________________________
                                       Brian L. Burgess, Associate Justice

                                       ________________________________________
                                       Michael S. Kupersmith, District Judge,
                                       Specially Assigned

                                       ________________________________________
                                       Stephen B. Martin, Superior Judge,
                                       Specially Assigned


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                                  Footnotes


FN1.  Apparently, the ICC has never issued a certificate of abandonment with
  respect to the railroad line at issue in this case.