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McDaniel v. Qwest Commision Corp.

May 23, 2006

DON WAYNE MCDANIEL, ET AL., PLAINTIFFS,
v.
QWEST COMMUNICATIONS CORPORATION, REBECCA R. PALLMEYER ET AL., DEFENDANTS.



The opinion of the court was delivered by: Rebecca R. Pallmeyer United States District Judge

MEMORANDUM OPINION AND ORDER

In this action, fourteen landowners in ten states have sued four telecommunications companies for trespass and unlawful enrichment based on the installation and operation of fiber optic cables in railroad rights-of-way that cross or are adjacent to the Plaintiffs' properties. In addition to prosecuting their own claims, Plaintiffs ask this court to certify a ten-subclass, six-issue class of all present and former owners of land in the ten states at issue, adjacent to or underlying a railroad right-of-way in which Defendants have installed or operate fiber optic cable. Defendants oppose this motion and further move that all non-Illinois Plaintiffs be dropped. For the reasons explained here, the court denies Plaintiffs' motion for class certification and grants Defendants' motion to drop parties.

BACKGROUND

Before addressing the parties' arguments, the court takes a moment to describe the events that generate their dispute. More than a century ago, railroad companies seeking land for their rail lines initially acquired much of that land through government land grants or condemnation. Jeffery M. Heftman, Railroad Right-of-Way Easements, Utility Apportionments, and Shifting Technological Realities, 2002 U. ILL. L. REV. 1401, 1406. Subject to the language used in the particular legislative act at issue, railroad companies usually owned the right-of-way acquired with government assistance outright. See, e.g., Missouri, Kan. & Tex. Ry. Co. v. Roberts, 152 U.S. 114, 118 (1894) (finding that an act of Congress of July 26, 1866 granted the land in dispute to the defendant railroad in fee simple).

With the General Right of Way Grant of 1875, Congress ceased granting railroad companies condemnation authority; as a result, further expansion of the rail line network would require private negotiation between the railroad companies and individual landowners along the rail corridor. Heftman, 2002 U. ILL. L. REV.at 1406-07. These negotiations, and the property interests they created, were memorialized in a myriad of deeds, often containing non-uniform language. Id. Depending upon the particular language used in the particular deed as interpreted under a particular state's law, these private transactions might result in the railroad company's taking a fee simple or a more limited estate, such as an easement. Compare Miller v. United States, 67 Fed. Cl. 542, 547 (Fed. Cl. 2005) (finding under Missouri law that the language used in a deed that conveyed the property underlying a roadway gave the railroad company a fee simple interest) with Shroeder v. United States, 66 Fed. Cl. 508, 510 (Fed. Cl. 2005) (certifying the question of whether under Washington law, language used in a deed might have conveyed only an easement to the railroad company). While the holder of a fee simple may use property in any way he or she pleases, an easement entitles its holder to use land only for limited purposes. BLACK'S LAW DICTIONARY 509 (West 6th ed. 1990).

In the late nineteenth century, network-oriented businesses, beginning with telegraph and telephone companies, and eventually, the telecommunications firms involved in this matter, began building the physical infrastructure of their networks. See Heftman, 2002 U. ILL. L. REV. at 1401.

These businesses often leased access to the railroad companies' existing rights-of-way, paying the railroad companies for the right to erect telegraph poles, string telephone wires, or bury fiber optic cables. Id. at 1410-11. In recent years, however, landowners neighboring or underlying railroad rights-of-way that have been leased for non-railroad purposes have sued on the theory that the installation and operation of a fiber optic cable network, for instance, exceeds the scope of the property interest conveyed to the railroad companies by the landowners' predecessors.

Landowners argue that the installation and operation of the networks is a trespass, and that unless the telecommunication companies wish to remove the cables, the landowners are entitled to some share of the lease or operating revenues. The instant action is of this nature.

In seeking class certification, Plaintiffs here face an uphill battle: Federal trial courts have routinely denied these suits class status because the trespass theory and the derivative theory of unjust enrichment require highly individuated inquiry as to the relative property interests of each putative class member vis-a-vis the defendant railroad or telecommunications company. Cf. Peeler v. MCI, Inc., No. 01-3019, __ F.3d __, 2006 WL 1215195, *2 (7th Cir. May 8, 2006). As this inquiry must be made on a parcel-by-parcel basis along the entire length of the disputed right-ofway, the class becomes unmanageable. See, e.g., Smith v. Sprint Communications Co., 387 F.3d 612 (7th Cir. 2004) (denying certification of a nationwide settlement class between railroad right-ofway lessees and neighboring landowners); Isaacs v. Sprint Corp., 261 F.3d 679 (7th Cir. 2001) (denying certification of a nationwide litigation class between railroad right-of-way lessees and neighboring landowners). Plaintiffs attempt to distinguish these controlling cases, proposing subclasses drawn along state lines and identifying particular common issues.*fn1 As explained below, however, the court concludes that these efforts have been unsuccessful.

FACTS

The allegations of the Plaintiffs' complaint, presumed true for purposes of this opinion, are as follows:

I. Parties

Defendant Qwest Communications Corp. (hereinafter, "Qwest,") is a Delaware corporation with its principal place of business in Colorado. (Compl. ¶ 6.) Defendant Sprint Communications Co., L.P. (hereinafter, "Sprint,") is a Delaware limited partnership with its principal place of business in Kansas. (Id. at ¶ 7.) Defendant Level 3 Communications, L.L.C. (hereinafter, "Level 3,") is a Delaware limited liability company with its principal place of business in Colorado. (Id. at ¶ 8.) Defendant WilTel Communications, L.L.C. (f/k/a Williams Communications, LLC; hereinafter, "WilTel,") is a Delaware limited liability company with its principal place of business in Oklahoma.*fn2 (Id. at ¶ 9.) Plaintiffs allege that all four Defendants provide telecommunications services throughout the United States, and that Defendants (or their predecessors in interest) created, operated, and leased fiber optic cables that run through the lands owned by Plaintiffs and members of the class they seek to represent. (Id. at ¶¶ 6-9.)

Named Plaintiffs, citizens of ten different states, own real estate in their states of residence across which a portion of one or more of the Defendants' fiber optic cable runs. (Id. at ¶ 5.) Plaintiff Don Wayne McDaniel and Plaintiffs Mary and E.J. Driskill are citizens of Arkansas. (Id. at ¶ 5(a)-(b).) Plaintiff Todd Smith is a citizen of California. (Id. at ¶ 5(c).) Plaintiff Daniel McKenzie is a citizen of Florida. (Id. at ¶ 5(d).) Plaintiffs Randy C. and Diane J. Snyder are citizens of Illinois. (Id. at ¶ 5(e).) Plaintiff Robert J. Snyder is a citizen of Indiana. (Id. at ¶ 5(f).) Plaintiff Patricia Ann Polston is a citizen of Missouri. (Id. at ¶ 5(g).) Plaintiffs Elizabeth Ware and John Butcher are citizens of Nevada. (Id. at ¶ 5(h)-(I).) Plaintiff Wendell C. Hull is a citizen of New Mexico. (Id. at ¶ 5(j).) Plaintiff Flynn Ranch of Townsend, Inc. is a Montana corporation (its principal place of business is not alleged). (Id. at ¶ 5(k).) Plaintiff Billings Memorial, L.L.C., is an Oregon limited liability company. (Id. at ¶ 5(l).) Plaintiffs have not identified Billings Memorial's members; as noted above, they must do so in order to satisfy the court that it has jurisdiction.

II. The Allegations

Plaintiffs allege that "[a]t a period presently unknown but believed to be the late 1980's," Defendants installed some 16,420 linear miles*fn3 of fiber optic cable in land owned by members of the putative class (set out in the section below). (Compl. ¶ 15; Plaintiffs' Motion for Class Certification on Limited Issues Pursuant to Rules 23(C)(4), (B)(1)(A) and (B)(3), FED. R. CIV. P.

(hereinafter, "Pltfs.' Class Mem."), p. 9.) Plaintiffs allege that Defendants installed the cables without the permission or knowledge of putative class members, and did not seek the approval of or pay any compensation to those members since that installation. (Compl. ¶ 15.) According to Plaintiffs, Defendants are without easements or any other lawful right to enter the class members' lands to install, maintain, and operate fiber optic cable; Defendants knew they had no authority; Defendants concealed their entry from the members; and Defendants continue their occupation at the time of this suit. (Id. at ¶¶ 16-18, 24.)

As the court understands the record, Defendants would readily admit that they did not obtain permission from, and have not paid, the putative class members for the right to install fiber optic cable on their lands.*fn4 According to Defendants, they have not installed fiber optic cable in land owned by any class member, but rather installed the cables in the rights-of-way owned by various railroad companies whose permission Defendants did receive and to whom Defendants have paid compensation. (Reply Memorandum in Support of Defendants' Motion to Deny Class Certification and Opposing Plaintiffs' Motion for Class Certification (hereinafter, "Defs.' Class Reply,") p. 32.) These rights-of-way consist of a myriad of parcels in the ten states involved in this case. The railroads own some of these rights-of-way in fee simple; others are easements created by deeds of conveyance from the federal and state governments as well as private parties. (Id. at 8-9.)

PROCEDURAL HISTORY

On February 18, 2005, Plaintiffs filed this suit for "continuing" trespass and unjust enrichment against Defendants under this court's diversity jurisdiction. On June 29, 2005, invoking FED. R. CIV. P. 23(b)(1)(A) or 23(b)(3), Plaintiffs moved for certification of a class defined as:

All present and former owners of land in the states of Arkansas, California, Florida, Illinois, Missouri, Montana, Nevada, New Mexico, and Oregon adjacent to or underlying a railroad right-of-way on which [D]efendants have installed and operated fiber optic cable, excluding the United States of America, the [D]efendants and any of their predecessors and affiliates, and any railroad. (Plaintiffs' Motion for Class Certification on Limited Issues (hereinafter, "Pltfs.' Class Mot."), p. 1.) Rather than certifying the entire case (or even an individual cause of action) for class treatment, Plaintiffs, invoking Rule 23(c)(4)(A), seek class treatment for six issues:

(1) Whether Defendants have [entered] and continue to intentionally enter upon lands burdened by railroad rights-of-way by installing, operating, and maintaining fiber optic cable on the land without authority;

(2) Whether Defendants have any legal privilege allowing them to intentionally enter upon, remain, or use the lands;

(3) Whether Defendants profited and continue to profit from their continuing use of fiber optic cable for telecommunications system, which crosses the lands burdened by railroad rights-of-way;

(4) The time period within which any putative subclass member may bring actions for continuing trespass or quasi-contract/unjust enrichment under the laws of their respective states;

(5) Whether defendants are liable to any members of each subclass for actual damages and punitive damages for continuing trespass or quasi-contract/unjust enrichment under the laws of their respective states;

(6) The unitary measure of damages, if any, payable to any members of each landsubclass for continuing trespass or quasi-contract/unjust enrichment under the laws of their respective states.

(Id. at 2-3.) Pursuant to Rule 23(c)(4)(B), Plaintiffs request that the court certify ten subclasses so that these issues may be adjudicated according to the law of each state in which putative class members own property. That is to say, Plaintiffs McDaniel and the Driskells would represent a subclass of Arkansas landowners; Plaintiff Smith would represent a subclass of California landowners; Plaintiff McKenzie would represent a subclass of Florida landowners.*fn5 (Id. at 2.)

In this lawsuit, Plaintiffs seek compensatory damages in excess of $75,000 for each Plaintiff class member, plus punitive damages, fees, and costs. (Compl. ¶¶ 28-29, 31.) Plaintiffs also request "[t]hat [D]efendants be preliminarily and permanently enjoined from trespassing upon the lands of [P]laintiffs and members of the [P]laintiff Class to use and maintain their fiber optic cables." (Id. at 30.)

Prior to Plaintiffs' motion for class certification, on April 19, 2005, Defendants moved to dismiss all non-Illinois named Plaintiffs for lack of subject matter jurisdiction or improper venue under the local action doctrine.*fn6 On May 26, 2005, Defendants moved to drop these same parties under FED. R. CIV. P. 21. The court will ...


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