Appellate Case: 18-4123 Document: 010110602990 Date Filed: 11/10/2021 Page: 1
`FILED
`United States Court of Appeals
`Tenth Circuit
`
`November 10, 2021
`
`Christopher M. Wolpert
`Clerk of Court
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`PUBLISH
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`UNITED STATES COURT OF APPEALS
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`FOR THE TENTH CIRCUIT
`_________________________________
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`Plaintiff Counter Defendants -
`Appellants/Cross-Appellees,
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`LKL ASSOCIATES, INC., a Utah
`corporation; HEBER RENTALS, a Utah
`limited liability company,
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`
`
`
`v.
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`UNION PACIFIC RAILROAD
`COMPANY, a Delaware corporation,
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`
`
`
`–––––––––––––––––––––––––––––––––––
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`LKL ASSOCIATES, INC., a Utah
`corporation; HEBER RENTALS, a Utah
`limited liability company,
`
`
`
`
`v.
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`UNION PACIFIC RAILROAD
`COMPANY, a Delaware corporation,
`
`
`
`
`Defendant Counterclaimant -
`Appellee/Cross-Appellant.
`
`Plaintiff Counter Defendants -
`Appellees,
`
`
`
`
`
`
`
`
`No. 18-4123
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`No. 18-4130
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`Defendant Counterclaimant -
`Appellant.
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`_________________________________
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`Appeal from the United States District Court
`for the District of Utah
`(D.C. No. 2:15-CV-00347-BSJ)
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`Appellate Case: 18-4123 Document: 010110602990 Date Filed: 11/10/2021 Page: 2
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`_________________________________
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`Sean Connelly, Connelly Law LLC, Denver, Colorado (David R. Nielson, Kevin M.
`Bischoff, and Michael D. Lichfield, Skoubye, Nielson & Johansen, LLC, Salt Lake City,
`Utah, with him on the briefs) for Plaintiff Counter Defendants-Appellants/Cross-
`Appellees.
`
`
`J. Scott Ballenger, Latham & Watkins LLP, Washington, D.C. (William M. Friedman
`and Eric J. Konopka, Latham & Watkins LLP, Washington, D.C., and Julianne P. Blanch
`and Adam E. Weinacker, Parsons Behle & Latimer, Salt Lake City, Utah, with him on the
`briefs), for Defendant Counterclaimant-Appellee/Cross-Appellant.
`_________________________________
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`Before HOLMES, BRISCOE, and EID, Circuit Judges.
`_________________________________
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`EID, Circuit Judge.
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`_________________________________
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`For almost 18 years, the Union Pacific Railroad (“Union Pacific”) charged Heber
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`Rentals, LC (“Heber”) and L.K.L. Associates, Inc. (“L.K.L.”) rent under a lease that
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`allowed L.K.L. to continue operating a building materials supply business on land that is
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`owned in fee by Heber—and leased to L.K.L.—but encumbered by Union Pacific’s right
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`of way. After the Supreme Court stated in 2014 that railroad rights of way like Union
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`Pacific’s were “nonpossessory” easements, L.K.L. and Heber stopped paying rent and
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`filed suit against Union Pacific. In addition to requesting declaratory relief, L.K.L. and
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`Heber sought to have their leases rescinded and to receive restitution for rent already
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`paid. Union Pacific brought counterclaims arising out of their nonpayment.
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`On summary judgment, the district court held that Union Pacific’s easement, while
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`nonpossessory, gave it exclusive use and possession rights “insofar as Union Pacific
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`elects to use the land subject to its easement for a railroad purpose.” App’x Vol. XVI
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`at 2760. Although it found that the lease agreements served no railroad purpose, it
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`denied the rescission claim as “untimely and redundant.” Id. at 2758. In a follow-up
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`order, it ruled that L.K.L. and Heber had abandoned their remaining claims. The district
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`court also rejected all of Union Pacific’s counterclaims.
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`Both parties appeal, contesting the scope of the easement, their respective property
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`rights, and the claims that were rejected or deemed abandoned below. We agree with
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`Union Pacific that its right of way includes the unqualified right to exclude L.K.L. and
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`Heber, but we agree with L.K.L. and Heber that their leases were invalid. Even if the
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`incidental use doctrine applies, neither the leases nor the underlying business conduct
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`furthered a railroad purpose, as the easement requires. Exercising jurisdiction under
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`28 U.S.C. § 1291, we REVERSE the district court’s declaratory judgment rulings to the
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`extent they are inconsistent with this opinion. However, we AFFIRM the district court’s
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`ruling that the rescission claim was time-barred. We AFFIRM its rejection of Union
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`Pacific’s counterclaim for breach of contract but REVERSE its rejection of Union
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`Pacific’s other substantive counterclaims. Finally, we REVERSE the district court’s
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`finding of abandonment and REMAND for further proceedings consistent with this
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`opinion.
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`I.
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`Between 1871 and 1873, the Utah Southern Railroad Company (“Utah Southern”)
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`built a railroad track between Salt Lake County and Utah County, Utah. The Department
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`of the Interior recognized Utah Southern’s right of way across the public lands of the
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`United States, to the extent of 100 feet on each side of the central line of that track,
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`pursuant to the General Railroad Right-of-Way Act of 1875 (the “1875 Act”), 18 Stat.
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`482, 43 U.S.C. §§ 934–939.
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`In 1987, Union Pacific succeeded to Utah Southern’s right of way by acquiring
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`full ownership of the relevant section of track. Meanwhile, the underlying fee interest in
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`some of the land encumbered by that right of way passed from the United States to Utah
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`to Heber, and Heber leased the land to L.K.L. Heber’s property begins at a fence located
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`less than 50 feet west of the track’s central line, and a building on its property falls partly
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`within the easement area. This zone of overlap between Heber’s fee and Union Pacific’s
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`easement launched this litigation.1
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`The parties coexisted without contact until 1997, when Union Pacific informed
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`L.K.L. and Heber that their property fell on the railroad’s right of way. Union Pacific
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`asserted that Heber could not use or occupy the property without signing a lease
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`agreement. The railroad sent a letter to Heber demanding that it “immediately remove
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`from the railroad’s property all personal property, including buildings, equipment and
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`materials, and refrain from further encroachment upon the railroad’s property until such
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`time that an agreement has been executed and payment made in full.” App’x Vol. XI
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`at 1727 (emphasis omitted). The railroad also sent a sheriff to get its message across.
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`In January 1997, Heber agreed to lease a portion of its own property back from
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`Union Pacific because the land was located within Union Pacific’s right of way. One
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`1 Before the district court, there was some dispute concerning whether Heber’s
`property was encumbered by the easement. We assume such overlap exists, but our
`ruling about the scope of Union Pacific’s easement is not determined or affected by
`Heber’s ownership status.
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`year later, L.K.L. signed a direct lease with Union Pacific and the lease between Heber
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`and Union Pacific was canceled. Ultimately, L.K.L. and Heber paid Union Pacific at
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`least $8,884.00 and $120,010.69, respectively, in lease payments. L.K.L. stopped
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`making these payments in 2015, having interpreted the Supreme Court’s decision in
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`Marvin M. Brandt Revocable Trust v. United States to mean that the 1875 Act did not
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`grant Union Pacific the rights to exclusive use and possession that it purported to exercise
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`in dealing with L.K.L. and Heber. 572 U.S. 93 (2014). This lawsuit followed.
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`On April 16, 2015, L.K.L. and Heber filed suit in Utah state court to rescind the
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`leases and recover their payments on the ground that the parties had been “operating
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`under the mistaken belief that Union Pacific possessed an exclusive right of way.” App’x
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`Vol. I at 41. In addition to state law claims for rescission due to mutual and unilateral
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`mistake, L.K.L. and Heber brought claims for breach of contract, intentional interference
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`with economic relations, unjust enrichment, quiet title, and declarations about whether
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`the lease was a valid contract and the nature of the parties’ property rights. Union Pacific
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`removed the case to federal court and filed counterclaims for breach of contract,
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`encroachment/trespass, ejectment, and a different declaration concerning the parties’
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`property rights.
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`While the parties agreed that the 1875 Act granted Union Pacific an easement,
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`they fundamentally disagreed about the nature and scope of that easement. L.K.L. and
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`Heber argued that the 1875 Act granted only a nonpossessory easement and that their
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`leases were invalid to the extent they purported to transfer possessory rights that Union
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`Pacific never had. On the other hand, Union Pacific argued that railroad easements have
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`always been understood to confer an exclusive right to the surface of the right of way, so
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`it had the right to exclude L.K.L. and Heber and then lease them back their property.
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`As the case developed and expenses accumulated, counsel for L.K.L. and Heber
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`asked the district court to decide the easement’s scope. As counsel suggested several
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`times, legal certainty on that front would avoid the need for protracted litigation of their
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`other claims. Counsel told the court that a ruling on the nature of the easement would
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`“resolve this whole case.” App’x Vol. XX at 3409. Counsel further explained that if the
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`easement issue was decided against them, they were “done,” but that if the question was
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`decided in his clients’ favor, “we can look and see if there are issues.” Id. at 3438.
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`Counsel also told the court that once this pivotal issue was determined, all other issues
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`would “fall by the wayside, one way or the other.” Id. at 3439. Receptive to an efficient
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`resolution, the court confirmed the arrangement with counsel: “Now you say this is a
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`pivotal question, decide that and everything goes away.” Id. at 3441. Counsel
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`confirmed: “It’s a pure legal question. That’s my interpretation, it’s all going to go
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`away.” Id. Based on this discussion, and the district court’s instructions, L.K.L. and
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`Heber filed a new motion for summary judgment that focused on the easement’s scope
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`and requested judgment only with respect to the rescission claim, part of the declaratory
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`judgment claim, and Union Pacific’s counterclaims. The motion added that “[i]f the
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`above relief is granted, Plaintiffs further request that all of their remaining claims be
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`dismissed as moot.” App’x Vol. IX at 1475.
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`Ruling on that motion, and starting with the core legal question concerning the
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`easement’s scope, the district court concluded that “Union Pacific received a non-
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`possessory easement under the 1875 Act” and was entitled to possession only “under a
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`limiting condition . . . the power to possess for a railroad purpose.” App’x Vol. XVI
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`at 2754. As such, L.K.L. and Heber could “occupy and utilize . . . property encumbered
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`by the right of way,” without paying a lease, “insofar as [they did] not interfere with
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`Union Pacific’s election, now or in the future, to use and possess for a railroad purpose.”
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`Id.
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`Acknowledging that the “parameters of ‘railroad purpose’ may not be defined with
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`specificity,” the district court held that the leases served no railroad purpose because they
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`were “wholly unnecessary and irrelevant to Union Pacific’s ability to preserve the safety
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`and availability of the right of way.” Id. at 2756. The court reasoned that “[i]t would be
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`an impermissibly expansive reading of the 1875 Act to find that it allows Union Pacific
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`to enter into lease agreements under which Union Pacific receives payments in exchange
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`for letting Plaintiffs engage in business that does not serve a railroad purpose.” Id.
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`at 2757. The court declined to apply the “incidental use doctrine” urged by Union Pacific
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`to broadly interpret what constitutes a railroad purpose. Id. at 2758 n.77 (“[T]he court
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`finds nothing in the text, history, or purpose of the 1875 Act that suggests such a broad
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`interpretation of railroad purpose is appropriately applied to rights of way granted under
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`the 1875 Act.”).
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`The district court went on to reject the rescission claim on two grounds. First, the
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`court determined that the claim was untimely under the applicable three-year statute of
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`limitations because Brandt did not change anything with respect to the legal challenges
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`that L.K.L. and Heber could have already made under known facts. Second, the district
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`court deemed the rescission claim redundant because the underlying lease contract was
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`void and unenforceable for having failed to serve a railroad purpose.
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`Next, the court denied the declaratory relief requested by L.K.L. and Heber as “in
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`excess of the necessities of the case,” but reiterated its interpretation of Union Pacific’s
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`easement. Id. at 2759. Finally, the court turned to the counterclaims. It rejected Union
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`Pacific’s requested declaratory relief for conflicting with its view of the law. The court
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`also granted summary judgment against Union Pacific on (1) its breach of contract claim
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`because there was no enforceable contract; (2) its encroachment/trespass claim because
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`there was no interest to be trespassed or encroached upon; and (3) its ejectment claim
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`because it was premature in that “Union Pacific [had] not indicated that it [wanted] to use
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`the [disputed] property for a railroad purpose.” Id. at 2760.
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`Concerned that the district court had closed the case but left several of their claims
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`unresolved, L.K.L. and Heber moved to amend the judgment. At the motion hearing, the
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`court explained that it had considered all claims not discussed in its ruling to be
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`abandoned because of counsel’s earlier “oral representations.” App’x Vol. XX at 3447.
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`The court shared its impression that counsel had viewed this as a “one-issue case” and
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`invited the court to moot all other claims by deciding those at issue in the latest summary
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`judgment motion. Id. at 3448. Counsel offered a different interpretation of his
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`comments, comparing the impact of deciding the easement’s scope to a “trickle-down
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`effect or domino effect” that would expedite the other issues’ resolution. Id. However,
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`counsel did agree to abandon count seven of the complaint, the claim to quiet title.
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`Counsel proceeded to argue the merits of the potentially abandoned claims with the
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`district court. The district court reserved judgment.
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`The district court ultimately amended its judgment to find that L.K.L. and Heber
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`abandoned all claims other than those discussed in the prior order. Interpreting counsel’s
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`statements to the court as negotiating the abandonment of those claims to resolve the case
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`in a “simplified manner,” the court declined to allow L.K.L. and Heber to “revive their
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`abandoned claims simply because they [were] unsatisfied with the outcome of their
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`motion.” App’x Vol. XVII at 2895. L.K.L. and Heber appeal in Case No. 18-4123.
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`Union Pacific cross-appeals in Case No. 18-4130.
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`II.
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`We review the grant of summary judgment de novo. See Gutierrez v. Cobos, 841
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`F.3d 895, 900 (10th Cir. 2016). A court “shall grant summary judgment if the movant
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`shows that there is no genuine dispute as to any material fact and the movant is entitled to
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`judgment as a matter of law.” Fed. R. Civ. P. 56(a). Here, no facts are in dispute, so we
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`proceed to the questions of law this appeal presents. See Gutierrez, 841 F.3d at 900 (“We
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`review summary judgment de novo, applying the same legal standard as the district
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`court.”).
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`The first issue in this case is whether a railroad’s 1875 Act right of way includes
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`the right to exclude others. We begin with the text. See, e.g., Hardt v. Reliance Standard
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`Life Ins. Co., 560 U.S. 242, 251 (2010). In analyzing the statutory language, we assume
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`“that the ordinary meaning of that language accurately expresses the legislative purpose.”
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`Gross v. FBL Fin. Servs., Inc., 557 U.S. 167, 175 (2009) (internal quotation marks
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`omitted).
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`In relevant part, the 1875 Act provides: “The right of way through the public lands
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`of the United States is granted to any railroad company . . . to the extent of one hundred
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`feet on each side of the central line of said road.” 43 U.S.C. § 934. That this right of way
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`grants railroads only an easement and not a fee interest is undisputed. The Supreme
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`Court said as much in Brandt, echoing far older precedent. There, the Court reaffirmed
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`its 1942 finding that it was “‘clear from the language of the [1875] Act, its legislative
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`history, its early administrative interpretation and the construction placed upon it by
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`Congress in subsequent enactments’ that the railroad had obtained ‘only an easement in
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`its rights of way acquired under the Act of 1875.’” 572 U.S. at 104 (quoting Great N. Ry.
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`Co. v. United States, 315 U.S. 262, 277 (1942)); see also United States v. Union Pac.
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`R.R. Co., 353 U.S. 112, 119 (1957) (noting the Court’s conclusion in Great Northern
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`that, after 1871, “only an easement for railroad purposes was granted”).
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`The Court in Brandt also used common law principles to define the essential
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`features of an easement—mainly, that it is a “nonpossessory right to enter and use land in
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`the possession of another and obligates the possessor not to interfere with the uses
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`authorized by the easement.” 572 U.S. at 105 (quoting Restatement (Third) of Property:
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`Servitudes § 1.2(1) (Am. Law Inst. 1998)). But the Court left unresolved the degree of
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`exclusivity this right of way affords the grantee.
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`L.K.L. and Heber focus on Brandt’s recitation of a basic property law principle—
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`that easements are a nonpossessory property interest—to advance their argument that, as
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`a “nonpossessory” easement holder, Union Pacific had no right to exclude the alleged fee
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`owner and its lessee. Under this theory, the 1875 Act granted only a right of passage. As
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`such, L.K.L. and Heber argue that, as the alleged fee owner and its lessee, they can
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`occupy Union Pacific’s right of way without authorization. But Union Pacific contends
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`that railroad easements have always been understood to confer an exclusive right to the
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`surface of the right of way. Union Pacific is correct. An 1875 Act easement allows the
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`grantee to exclude everyone—including the grantor and fee owner.
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`The Third Restatement explains that a nonpossessory easement can still provide
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`the grantee exclusivity. It states that the “degree of exclusivity of the rights conferred by
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`an easement or profit is highly variable.” Restatement (Third) of Property: Servitudes
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`§ 1.2 cmt. c (Am. Law Inst. 2000). “At one extreme, the holder of the easement or profit
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`has no right to exclude anyone from making any use that does not unreasonably interfere
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`with the uses authorized by the servitude.” Id. On the other end of the spectrum, “the
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`holder of the easement or profit has the right to exclude everyone, including the servient
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`owner, from making any use of the land within the easement boundaries.” Id. Therefore,
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`an easement can grant its holder exclusive rights, including the right to exclude the fee
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`owner from the encumbered property. And that is what a railroad’s right of way under
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`the 1875 Act does.
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`Looking to the text, Section 2 of the Act states that “[a]ny railroad company
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`whose right of way . . . passes through any canyon, pass, or defile, shall not prevent any
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`other railroad company from the use and occupancy of the” same corridor. 43 U.S.C.
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`§ 935. By stipulating that a railroad could not exclude its competitors from physically
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`narrow passages otherwise within the easement area, Congress carved a textually narrow
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`exception that proved the general rule of exclusion.
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`In the statute’s next sentence, Congress slightly expands the list of entities
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`permitted to operate within the railroad’s easement under these conditions, reaffirming
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`the norm of exclusion: “the location of such right of way through any canyon, pass, or
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`defile shall not cause the disuse of any wagon or other public highway located therein on
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`March 3, 1875.” 43 U.S.C. § 935. Because Congress understood the 1875 Act right of
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`way to confer an exclusive easement—one in which the grantee had the right to exclude
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`everyone, including the fee owner—it needed to add these provisions in Section 2 if it
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`intended for anyone else to use the right of way without receiving explicit permission
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`from the grantee. The 1875 Act thus created an exception to prevent railroads from
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`monopolizing narrow physical passages. But at the same time that it saved rival railroads
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`and public roads from exclusion, it made no such reference to the servient estate’s rights.
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`That a railroad’s right of way confers an exclusive easement is supported by
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`Supreme Court precedent. The Court has said that “[a] railroad right of way is a very
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`substantial thing. It is more than a mere right of passage.” W. Union Tel. Co. v. Pa. R.R.
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`Co., 195 U.S. 540, 570 (1904). The Court further observed that “if a railroad’s right of
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`way was an easement it was ‘one having the attributes of the fee, perpetuity and exclusive
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`use and possession.’” Id. (quoting New Mexico v. United States Tr. Co. of New York,
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`172 U.S. 171, 183 (1898)).2 The Court has also favorably cited the Iowa Supreme
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`2 Although both New Mexico and Western Union involve a prior statute and were
`decided at a time that the Supreme Court took a broader view of railroad rights-of-way,
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`Court’s explanation that a railroad easement “is not that spoken of in the old law books,
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`but is peculiar to the use of a railroad . . . . The exclusive use of the surface is acquired.”
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`New Mexico, 172 U.S. at 183 (quoting Smith v. Hall, 103 Iowa 95, 96–97 (1897)). In
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`other words, although the right acquired by a railroad is “technically an easement,” it
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`“requires for its enjoyment a use of the land permanent in its nature and practically
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`exclusive.” Id. (quoting Hazen v. Boston & Me. R.R., 68 Mass. 574, 580 (1854)).
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`Our precedent echoes these characteristics. In Wyoming v. Udall, we said that
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`easements, “so far as railroads are concerned,” entail “a right in perpetuity to exclusive
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`use and possession.” 379 F.2d 635, 640 (10th Cir. 1967) (citing Midland Valley R.R. Co.
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`v. Sutter, 28 F.2d 163, 168 (8th Cir. 1928)). Then, speaking about the 1875 Act in Boise
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`Cascade Corp. v. Union Pac. R.R. Co., we noted that “[t]he whole of the granted right of
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`way must be presumed to be necessary for the purposes of the railroad, as against a claim
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`by an individual of an exclusive right of possession for private purposes.” 630 F.2d 720,
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`724 (10th Cir. 1980) (quoting N. Pac. Ry. Co. v. Townsend, 190 U.S. 267, 272 (1903)).
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`L.K.L. and Heber tell us that Brandt stands for the narrow proposition that “the
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`1875 Act granted an easement and nothing more.” Reply Br. at 5. And so in seeking an
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`“exclusive easement—the right to exclude everyone,” L.K.L. and Heber would have us
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`believe that Union Pacific seeks a right similar to “a fee interest made on an implied
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`condition of reverter,” which the Supreme Court rejected in Brandt and Great Northern.
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`they are instructive to the extent they describe an intrinsic aspect of all railroad rights of
`way—whether granted pre-1871 or under the 1875 Act, whether described as a fee
`interest or a nonpossessory easement.
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`Id. at 10–11. But we do not read these precedents as foreclosing our decision today.
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`After all, an exclusive easement is distinct from a fee interest. As long as the grantor has
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`not “clearly and unequivocally relinquished all interest in the subject area,” courts can
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`certainly find that an exclusive easement is not a fee. Jon W. Bruce & James W. Ely, Jr.,
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`The Law of Easements & Licenses in Land § 1:28 (2019). This is a meaningful
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`distinction. “The advantage to the grantor of a court’s finding a truly exclusive easement
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`rather than a fee is that the grantor can regain use of the area in question if the easement
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`is abandoned or otherwise terminated.” Id. Indeed, it was this distinction that was
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`crucial to resolving Brandt.
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`In Brandt, the Court held that because the 1875 Act granted only an easement—
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`and not an implied reversionary interest, a type of fee—Brandt’s land “became
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`unburdened of the easement” when the Wyoming and Colorado Railroad abandoned its
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`right of way in 2004. 572 U.S. at 106. The Court’s holding turned on whether the right
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`of way granted under the 1875 Act was an easement or “something more than an
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`easement.” Id. at 102. The difference between an easement and a possessory interest
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`played an equally important role in Great Northern.
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`In 1907, Great Northern Railway succeeded to an 1875 Act right of way that ran
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`through public lands in Glacier County, Montana. After resources were discovered in
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`this area, Great Northern sought to access the gas, oil, and minerals beneath its right of
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`way. The Government sued to enjoin the railroad from doing so, claiming that the
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`railroad only had an easement and the United States retained all interests beneath the
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`surface. Because the Court found the 1875 Act granted only an easement, it ruled that
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`Great Northern had no right to the underlying oil and minerals. Great Northern, 315 U.S.
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`at 279. This holding aligns with settled principles of property law because an easement,
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`as a nonpossessory interest in land, generally limits use of the burdened property to a
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`particular purpose. Restatement (Third) of Property: Servitudes § 1.2 cmt. d (Am. Law
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`Inst. 2000). To drill for minerals beneath the right of way would have exceeded the
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`easement’s boundaries.
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`But the distinction between an easement and fee title has no bearing on Union
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`Pacific’s right to exclusive occupancy in this case. The fact that an easement can confer
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`exclusivity on its holder is clear. Exclusivity is thus consistent with Brandt’s guidance
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`that a right of way under the 1875 Act is nothing more than an easement. As discussed,
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`the difference between a fee and an easement plays a pivotal role in determining
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`ownership when a right of way has been abandoned—as in Brandt—or when there are
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`questions about the rights to subsurface oil and minerals—as in Great Northern. “[T]hat
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`the 1875 Act granted a fundamentally different interest in the rights of way than did the
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`predecessor statutes,” Brandt, 572 U.S. at 106, is not relevant to whether a railroad with
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`an 1875 Act easement has the right to exclude. As a result, we hold that Union Pacific
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`had the right to exclude L.K.L. and Heber from property they possessed in fee to the
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`extent that Union Pacific’s 1875 Act right of way traversed that property. A railroad
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`easement is exclusive in character.
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`III.
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`If Union Pacific can exclude L.K.L. and Heber from its right of way, the question
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`becomes whether it may lease the lands its right of way encumbers and, if so, under what
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`circumstances. The district court required a “railroad purpose” to sustain any use of the
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`property by the railroad, as well as any third-party use authorized by the railroad. It held
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`the leases with Union Pacific were unenforceable because they served no railroad
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`purpose. However, the district court refused to apply the “incidental use doctrine” urged
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`by Union Pacific, which gives a broad interpretation to the railroad purpose requirement.
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`On appeal, Union Pacific argues that we should remand so the district court can apply
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`that doctrine in the first instance. But we need not go so far. We hold that, even if the
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`incidental use doctrine does apply, neither the leases nor the underlying business conduct
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`served a railroad purpose, so the leases were invalid.3 We need not define the minimum
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`3 The partial dissent agrees that the leases are invalid but reaches this conclusion
`on a “more fundamental” ground: that Union Pacific’s property interest is nonpossessory
`and incapable of being leased. Op. at 1. The partial dissent reads Brandt as making clear
`that an 1875 Act easement is nonpossessory, and reads the Restatement as making clear
`that the landlord-tenant relationship created by a lease requires transferring a possessory
`interest. Id. at 13 (“Because the 1875 Right-of-Way affords Union Pacific only an
`easement, and because, as the Supreme Court recognized in Brandt, easements are
`necessarily nonpossessory, it is impossible for Union Pacific to lease its interest in the
`easement.”). We agree, of course, with the first step of the partial dissent’s syllogism.
`An 1875 Act right of way is an easement. However, we think the partial dissent errs in
`its second presumption by letting general Restatement principles triumph over established
`principles of railroad easements. See Morissette v. United States, 342 U.S. 246, 263
`(1952) (“[W]here Congress borrows terms of art in which are accumulated the legal
`tradition and meaning of centuries of practice, it presumably knows and adopts the cluster
`of ideas that were attached to each borrowed word in the body of learning from which it
`was taken and the meaning its use will convey to the judicial mind unless otherwise
`instructed.”). The understanding that railroad easements may be leased is longstanding
`and basically uncontroverted. See Danaya C. Wright & Jeffrey M. Hester, Pipes, Wires,
`and Bicycles: Rails-to-Trails, Utility Licenses, and the Shifting Scope of Railroad
`Easements from the Nineteenth to the Twenty-First Centuries, 27 Ecology L.Q. 351, 421–
`25 (2000) (collecting cases). Unlike the partial dissent, we do not think that Brandt
`altered this status quo by saying that 1875 Act rights of way are easements, which was
`already plain after Great Northern.
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`nexus between a contemplated property use and traditional railroad objectives that is
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`necessary to find a railroad purpose because it is apparent that there is no such nexus here
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`at all.
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`The Supreme Court has made clear that the right of way granted by the 1875 Act
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`must be used for railroad purposes. In Union Pacific, the Court noted its conclusion that,
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`after 1871, “only an easement for railroad purposes was granted.” 353 U.S. at 119. In
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`Brandt, the Court affirmed that observation. 572 U.S. at 104. Our precedent also reflects
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`this view. See Chi. & Nw. Ry. Co. v. Cont’l Oil Co., 253 F.2d 468, 472 (10th Cir. 1958)
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`(“Upon the filing of the location map, the railroad acquired an easement for railroad
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`purposes” under the 1875 Act). Even the parties agreed below, and maintain on appeal,
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`that Union Pacific’s easement may only be used for a railroad purpose. As the district
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`court explained, “Union Pacific’s right of way is a function of limited purpose and use.”
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`App’x Vol. XVI at 2760.
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`As for what a “railroad purpose” is, we agree with our sister circuit that “a railroad
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`right of way confers more than a right to simply run trains over the land.” Barahona v.
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`Union Pac. R.R. Co., 881 F.3d 1122, 1134 (9th Cir. 2018). Looking to the text of the
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`1875 Act confirms this conclusion. Section 1 provides qualifying railroad companies
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`three interests: (1) a “right of way through the public lands of the United States . . . to the
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`extent of one hundred feet on each side of the central line of said road”; (2