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Over the last decade, there have been numerous class actions regarding telecommunication companies’ use of railroad easements. In many of those cases, the telecommunication companies obtained permission from the railroad companies to locate their facilities, but failed to seek permission from the owners of the land upon which the railroad easements ran. These lawsuits have often been decided in favor of landowners. For example, last year Sprint, Qwest, and WilTel Communications settled a nation-wide class action lawsuit filed in the Northern District of New York regarding the companies’ use of railroad easements to lay fiber-optic cable. Vormwald, et al. v. Sprint Communications Company, L.P., et al., No. 5:11-cv-00329-LEK-DEP. The settlement required the telecommunication companies to pay the landowners for the use of their property without their consent. The Vormwald settlement reminds us that landowners retain the right to control the use of their property, even if the property is burdened by existing easements or rights of ways.
Will utility companies be the next to make headlines? Will the location of their facilities come under scrutiny? Should utilities head the warnings of Vormwald and obtain the consent of the underlying fee owner(s) before using public or private easements.
This is true even when trying to locate utilities within public roads. Under the law, if a municipality holds a prescriptive easement over the land for roadway purposes by use or location of the roadway on an official map, the municipality only acquires a limited easement or right to use the property for “street purposes”. Ferguson v. Producers Gas Co., 286 A.D.2d 521, 523 (4th Dep’t 1955). The right to use property for “street purposes” does not include the right to grant others permission to run facilities such as transmission or distribution pipelines when such pipelines are unconnected with the public’s use of the streets. Id. See also Ashland Oil & Refining Co. v. State, 26 N.Y.2d 390, 394 (1970). That’s not to say franchise agreements are of no value to utility companies. Franchise agreements necessarily memorialize municipal consent to the utility companies’ “shared” use of the roadway rights of way with the public. However, utility companies must still negotiate the purchase or condemnation of the initial right to use the underlying property for utility purposes from the underlying landowner(s) before proceeding.
