Exceeding the Scope of an Easement: "Expanded Use" Within a Single Cable.

• Author: Neuman, Matthew

1. INTRODUCTION

   Most people likely do not give a second thought to the manner in which utilities reach their homes. Water, gas, electricity, cable, and internet service must all make their way from source to faucet, stove, light fixture, television, and entertainment device. A complex infrastructure system exists both below ground in pipes and conduits and above ground on utility poles. In cities, utility poles within generic utility easements are often adorned with a multitude of wires--of varying dimensions, levels, types, and ownership--constantly delivering electricity and information.

   At the core of this delivery system is the inconvenient fact that, in the journey from point A to point B, the pipe or wire must cross a vast parcel network of differentiated ownership often composed of owners who either do not want the intrusion or want to be fairly compensated for sharing their property with the intrusion. And in the famous "bundle of rights" that is property, "the right to exclude" gives the owner the prerogative to protest any invasion. (1)

   It is in this context that easements, the necessary envelope in which those critical utilities may pass across private ownership, come into existence primarily through negotiations or condemnation proceedings. In the end, the holder of the easement compensates the servient estate and a strip of land becomes burdened by the easement. As technology develops and companies evolve, a critical question emerges: to what extent may that easement holder use its easement?

   As developed in detail below, the facts of this case, despite intricacies when examined in detail, present a scenario that is rather straightforward. A utility, operating an expansive system of infrastructure, provides electrical service to rural areas. A change in operation requirements prompts the utility to add to its easement a new piece of infrastructure--a fiber-optic cable--for internal communication purposes. This event complies wholly with the terms of the easement. That piece of equipment may also be used in an additional commercial manner that does not impose any further burden on the servient estate than if the equipment is used only for internal communication purposes. The utility seizes the opportunity. Not only does the utility defray costs for the installation and upkeep of the necessary fiber-optic cable, but also the resulting commercial telecommunications service benefits an expanded audience of users. From the perspective of the landowner, despite a philosophical query concerning the forfeiture of a theoretical "stick" from the "bundle of rights," there is no physical difference within the easement.

   Part II of this Note explores the previous hypothetical in the facts of Bar-field v. Sho-Me Power Electric Cooperative, (2) a class action lawsuit involving the scope of easements under Missouri law. Part III provides a brief overview of the legal background of the case and the concept of "expanded use" of easements. Part IV analyzes the court's reasoning in the case. Part V illustrates how the outcome of the case is perhaps a stricter interpretation of "expanded use" under Missouri law than previous cases and proposes that considering "expanded use" in such a manner may be contrary to public policy.

2. FACTS AND HOLDING

   Sho-Me Power Electric Cooperative ("Sho-Me") traces its roots back to its formation in 1941 as an agriculture cooperative. (3) In 1947, Sho-Me incorporated as a public utility and provided wholesale and retail electric service; in 1992, the corporation converted into a rural electric cooperative ("REC"). (4) The purpose of a REC is to supply, promote, and facilitate expansion of electric energy in rural areas. (5) generate, manufacture, purchase, acquire, accumulate and transmit electric energy, and to distribute, sell, supply, and dispose of electric energy in rural areas to its members, to governmental agencies and political subdivisions, and to other persons not in excess of ten percent of the number of its members... . [It has the power to ] construct, purchase, take, receive, lease as lessee, or otherwise acquire, and to own, hold, use, equip, maintain, and operate, and to sell, assign, transfer, convey, exchange, lease as lessor, mortgage, pledge, or otherwise dispose of or encumber, electric transmission and distribution lines or systems . . . and any and all kinds and classes of real or personal property whatsoever, which shall be deemed necessary, convenient or appropriate to accomplish the purpose for which the cooperative is organized[, and]... to exercise the power of eminent domain in the manner provided by the laws of this state for the exercise of that power by corporations constricting or operating electric transmission and distribution lines or systems.

   Prior to 1992, Sho-Me obtained easements within thousands of parcels of land in the southern portion of Missouri. (6) The language of the easements gave Sho-Me the privilege to construct and operate electric transmission lines across these tracts. (7) The grants of these easements varied, but the district court determined the easements of interest in this dispute to be those that were either easements for an electric transmission line only, grants for an electric transmission line with unspecified appurtenances, or appurtenances including specific references to communications equipment. (8)

   Sho-Me initially communicated with distant power substations along its network of electric transmission lines using microwave radio frequencies, but the Federal Communications Commission ("FCC") directed in 1995 that utilities could no longer continue this practice. (9) As a result, Sho-Me installed fiberoptic cables (10) adjacent to its electrical cables for internal communications. (11) Sho-Me also established a subsidiary, Sho-Me Technologies, LLC, (12) to sell commercial telecommunications to the public utilizing the excess capacity on its fiber-optic cable. (13)

   The landholders subject to the Sho-Me easements filed a class action lawsuit against Sho-Me, alleging that the easements' language did not allow the use of the fiber-optic cable for commercial telecommunication. (14) Of the categories of easements recognized as lacking a reference to commercial telecommunications, the district court entered summary judgment in favor of the landowners and held Sho-Me liable for trespass and unjust enrichment. (15) A jury trial, pursued solely on the unjust enrichment claim, resulted in an award for the landowners in excess of $79,000,000. (16) Sho-Me appealed. (17) The U.S. Court of Appeals for the Eighth Circuit ultimately held that Sho-Me's use of the easements for public-serving telecommunication purposes exceeded the scope of its easements, so the trespass liability was affirmed; however, unjust enrichment was not an available remedy for a utility exceeding the scope of its easement. (18)

3. LEGAL BACKGROUND

   Section A of this Part provides a summary of the legal framework regarding easements in general. Section B then transitions into a discussion of how Missouri courts have treated expanded use--the use beyond the scope of an easement. (19) Expanded use is analyzed in the development of case law, in a 2006 statutory provision, and in the sparse application of that statute. Section C delves into an example where a Missouri court permissively allowed a more expansive use of an easement and a second example of when it did not. Finally, Section D examines the consequences of trespass in the context of the holder of an easement misusing his or her rights.

   1. A Primer on Missouri Easement Law

      Any legal discussion of an easement necessarily begins with the rights associated with the creation of that easement and its resulting characteristics. An easement is "a right only to one or more particular uses" of land. (20) Easements are of two varieties: appurtenant or in gross. (21) In the case of an easement appurtenant, the servient estate gives a benefit arising from the use of real property to the dominant estate receiving that advantage. (22) In other words, the dominant estate is the piece of land that is benefitted by the easement, and the servient estate is the piece of land that is burdened by the easement. Alternatively, an easement in gross exists without a dominant tenement; the right to use a piece of land is not dependent on the possession of any other tract of land. (23) An easement in gross is simply an easement that benefits another party. Easements in gross of a commercial nature are assignable or capable of transfer. (24)

      The traditional affirmative easement, an easement allowing some particular

      use of land, is created by grant. (25) The easement's conveyance, or granting language, is crucial in defining the scope for which the easement may be used. (26) The interpretation of an easement created by a deed is a question of law, treated similar to the interpretation of any contract, and the intention of the grantor must be discerned from the instrument. (27) That intention should come from the entirety of the instrument in accord with the common-sense meaning of the language present in the document. (28) If there is any uncertainty about an easement's scope, "[a]ny doubt... should be resolved in favor of the servient owner's free and untrammeled use of the land." (29)

      Although an easement is typically created by formal grant, that is not the only manner in which an easement may come into existence. (30) In some cases, a generic grant has no use restrictions; the result of such a grant is an easement "of unlimited reasonable use." (31) An easement by prescription is a separate means of establishing an easement, which occurs when "use... is shown to have been continuous, uninterrupted, visible and adverse for a period of ten years." (32) Easements may also be created through condemnation by certain entities for specific public uses when an agreement on compensation cannot be reached. (33)

      An easement may be...