By Joel Warner
By Michael Roberts
By Alan Prendergast
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By Michael Roberts
By Amber Taufen
By Patricia Calhoun
By William Breathes
Western history is filled with stories of sometimes violent conflicts between railroads and common folk. In the days when trains were the only transportation link to the outside world, farmers and ranchers were often at the mercy of the rail line, which could charge exorbitant fees with no fear of competition in the remote reaches of the west.
Many of the laws governing railroads date back as far as the 1860s. But a lawsuit in Denver Federal Court involving the 21st-century technology of fiber optics reveals that allegations of railroad profit-mongering are not just something from the history books.
The rise of the Internet has encouraged dozens of telecom companies to lay thousands of miles of fiber-optic cable across the country. Many of these companies -- including locally based Qwest and Level 3 -- have used the right-of-way along railroad tracks to bury the cable lines. This has spared them the daunting task of having to negotiate with thousands of private landowners for their own right-of-way.
Two of those landowners, in Weld County, are now challenging this practice, saying the law grants the railroad -- in this case, Union Pacific -- the power to use its right-of-way only for railroad-related purposes. The two, Orin Loos and Timothy Thompson, argue that because the rail line goes across their property, they are both entitled to compensation from the telecom companies that have laid cable next to the railroad tracks. Union Pacific, Level 3, Sprint Corporation and Williams Communications are all named in the suit.
"What's interesting about this is the collision between modern technology and the history of the railroads," says attorney Scott Gilchrist, who represents Loos and Thompson.
The case is now awaiting possible class-action status, meaning dozens of other property owners along the Union Pacific line in Colorado could also try to win reimbursement. That would be a nightmare for the telecom companies, who have laid so much cable that there is now a glut of fiber optics. Several of these companies are losing money and have seen their stock prices plummet. (A spokesman for Level 3 declined comment on the lawsuit.)
When the lawyers do get together, their arguments will go right back to the days before Colorado even became a state. A territory could not be extensively settled until the railroads linked it to the rest of the country. To encourage the railroad owners to make this investment, Congress gave them huge land grants. If they put in a line, they were given ownership of hundreds of square miles of land alongside the line.
The railroads were able to transport settlers to an isolated spot on the prairie, sell them a plot of land and then charge them sky-high fees to move crops and livestock to market. The windfall profits the railroads made from this arrangement are often seen as one of the first examples of corporate welfare, and many of the great populist crusades of the nineteenth and early-twentieth centuries were spurred by anger at the railroads.
Gilchrist believes the current lawsuit is about a similar, modern-day abuse of power. "When Congress made these land grants to the railroads to build these rail lines, they conveyed a right of passage over property, hence the term right-of-way," he says. "In most instances, that conveyance did not result in ownership of the underlying property. Although the railroad was given the right to operate, they weren't given the right to make commercial use of the property unrelated to the operation of the railroad."
According to Gilchrist, fiber-optic lines have nothing to do with the railroad business and everything to do with a separate money-making venture. Almost all the railroads in the country have now negotiated lucrative agreements with fiber-optic companies. "Congress conveyed the right to operate a railroad and nothing more," he says. "They certainly didn't know there would be fiber optics in 1862."
However, Union Pacific insists that the right-of-way has always been used for telecom purposes, going back to the telegraph lines that were early Denver's only means of communication with the rest of the country. "Historically, we had telegraph and telephone lines. Now we have fiber-optic lines," says Union Pacific spokesman John Bromley. "We do use the fiber-optic lines for railroad communication purposes."
The question of the railroad's use of the lines along the rail bed may be crucial to the outcome of the lawsuit. If Union Pacific can show it uses the fiber-optic lines to make the trains run on time, legal observers say it may be able to get the case thrown out of court. "The easement is for the railroad, not for fiber optics," says Denver real-estate attorney Will Carpenter. "Because they have an easement, that doesn't mean they can put in a highway. But if they use the fiber optics for the railroad, they may have a good argument."
Gilchrist scoffs at the idea that the fiber-optic lines, which can move thousands of messages in a split second, are vital to the operation of the railroad. "The capacity that's actually needed by the railroad is truly miniscule compared to the capacity of these fiber-optic lines."
Lawsuits like this one have been filed in dozens of states, and Gilchrist is working with attorneys all over the country in the hopes that they can win a sweeping verdict that will apply to tens of thousands of landowners. Still, the odds are against the plaintiffs. Union Pacific has a skilled lobbying team in Washington, and the railroad has always employed some of the country's sharpest legal minds.
"You've got to remember, Abraham Lincoln was a railroad lawyer," says Carpenter. "The railroads ran things around here."