Court Opinion

ID: 9497326
Source: CourtListenerOpinion
Date Created: 2023-08-05 16:48:48.781456+00
Date Added: 2024-06-11T17:58:08.003726
License: Public Domain

MAYER, Chief Judge,
dissenting.
I dissent because the objective evidence shows that Bonneville Power Authority (BPA) installed fiber optic cable with excess fibers which exceeded operational needs, mainly because it wanted to generate revenue by leasing the excess to telecommunications providers. The installation of a thirty-six fiber cable across the Tuthill Ranch (Tuthill) was not “necessary in connection” to maintaining the electrical power transmission lines. Therefore, this installation is outside the scope of the easement and is a taking compensable under the Fifth Amendment because BPA has permanently occupied physical space and deprived Tuthill of the right to exclude others.
Contrary to the court, the proper course is first to construe the easement to determine whether the challenged activity is within its bounds. See Toews v. United States, 376 F.3d 1371 (Fed.Cir.2004). If *1140BPA’s activity is within the scope of the easement, the takings analysis ends. If, however, its activities exceed the easement in a manner not contemplated by the parties, and BPA has physically occupied Tut-hill’s property, a takings claim exists. When evaluating a takings claim the court first “determines whether the plaintiff possesses a valid interest in the property affected by the governmental action, i.e., whether the plaintiff possessed a stick in the bundle of property rights. If so, the court proceeds to the second step, determining whether the governmental action at issue constituted a taking of that stick.” Boise Cascade Corp. v. United States, 296 F.3d 1339, 1343 (Fed.Cir.2002) (internal citations and quotations omitted).
We construe the scope of an easement from the parties’ intent, which we ascertain from the relevant instruments and the objective circumstances to which they refer. See Sunnyside Valley Irrigation Dist. v. Dickie, 149 Wash.2d 873, 73 P.3d 369, 372 (2003) (“The intent of the original parties to an easement is determined from the deed as a whole. If the plain language is unambiguous, extrinsic evidence will not be considered.”) (internal citations omitted). The language of this easement is plain and unambiguous. BPA was granted the “right to enter and erect, operate, maintain, repair, rebuild, and patrol one or more electrical power transmission lines and appurtenant signal lines, poles, towers, wires, cables, and appliances necessary in connection therewith.” (emphases added). The word “necessary” serves to limit the types of “appurtenant signal lines,” wires, and cables that BPA has a right to. Only those “appurtenant signal lines” that are required or indispensable to the building, operation and maintenance of the electrical power transmission lines are covered.
Both parties agree that upgrading to a fiber optic transmission system falls within the terms of the easement. See Sunnyside Valley, 73 P.3d at 374 (“[A]n easement can be expanded over time if the express terms of the easement manifest a clear intention by the original parties to modify the initial scope based on future demands.”). Tuthill has conceded that the installation of fiber optic cable with excess fibers would also fall under the terms of the easement if the excess fibers were needed for future electrical power transmission use. But the easement does not permit BPA to overbuild its fiber systems so that the excess can be leased to commercial interests.
In October 2001, the United States Department of Energy (DOE) Office of Inspector General’s Office of Audit Services released an investigative report entitled “Power Marketing Administrations Installation of Fiber Optics” (Audit Report). The Audit Report noted that Power Marketing Administrations (PMAs) were installing between 12 and 72 fibers per cable and “[s]ince the number of fibers varied widely, the object of [the] audit was to determine if the PMAs were installing fiber optic cable with excess fibers.” According to the Audit Report, BPA was installing cable with 36 and 72 fibers. The cable in dispute crossing the Tuthill Ranch contains 36 fibers with a significant number of them leased to a telecommunications company.
BPA claimed that cable with 36 or more fibers was needed to meet upcoming demands through the year 2025, to improve reliability, to provide needed redundancy and to support critical systems. But the Audit Report concluded that BPA had no convincing evidence to support this claim. The Inspector General’s “analysis of the material prepared by [BPA] showed that its rationale for its high-fiber count cable *1141was questionable.” The Audit Report concluded that BPA was installing fiber optic cable with excessive fibers which exceeded its operational needs as well as the operational needs of utilities with similar requirements. It said,
The principal reason Bonneville was installing cable with excess fibers was because other factors, such as revenue generation and local economic development, were considered instead of limiting the number of fibers to operational needs. Bonneville contended that it needed 72-fiber cable to meet its operational needs. Documents such as its 1986 Study of Fiber Optic Systems; its 1991 Fiber Optic Decision Paper; its 1995 Business Plan; and other documents, however, focused on the use of fiber optic communications as a means to increase revenues. Further, internal capital construction project reviews conducted from 1998 to 2000 showed that Bonneville considered aiding local economic development and interest by other parties in leasing fibers. Thus, it was clear that leasing played a significant part in Bonneville’s decision to acquire larger capacity cable with more fibers than necessary.
The Audit Report also provides an analysis of whether the excess fibers installed by BPA are needed for future use. The Report determined that it could not foresee any circumstance through the year 2025, where more than a 24-fiber cable would be required to meet operational needs. In fact, the Report looked at over 20 utilities similarly situated and found that none were installing more than 24 fibers for operational needs. The objective evidence leads to but one conclusion, BPA has deliberately installed more fibers than needed for use in connection with electrical power transmission so it can commercialize them, a use which is not within the scope of the easement.
Since BPA’s activities are not within the scope of the easement, we next examine whether a compensable taking exists. See Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 102 S.Ct. 3164, 73 L.Ed.2d 868 (1982). I disagree with the court’s belief that because the fiber optic lines are run within a cable and Tuthill has already been paid for the physical space that the cable occupies, there can be no taking. The court incorrectly presumes that cables with 12-24 fibers are the same size as a cable carrying a 36-fiber bundle. But cable size is inconsequential because regardless of whether the excess fibers occupy space within a cable covered under the easement or whether they are run outside, a distinct occupation of physical space has occurred that is compensable. Physical intrusion upon property by “wires are takings even if they occupy only relatively insubstantial amounts of space and do not seriously interfere with the landowner’s use of the rest of his land.” Loretto, 458 U.S. at 430, 102 S.Ct. 3164. Conversion of appurtenant signal lines necessary to maintaining electrical power transmission lines into commercial telecommunications systems is a new easement, not encompassed by the original one. See Toews, 376 F.3d at 1376-77 (“The landowner’s grant authorized one set of uses, not the other. Under the law, it is the landowner’s intention as expressed in the grant that defines the burden to which the land will be subject.”).
In stating that “Tuthill conceded that there would be no taking if either the BPA were using all of the fibers that it laid or the BPA laid fibers only for its own use and did not lease unused fibers to third parties,” ante at 1138, the court misconstrues Tuthill’s position. In an interrogatory response asking “[i]f BPA was using only a portion of the optic fibers within the cable that runs across your property for BPA’s energy control needs and not leas*1142ing any of the excess fiber to third parties, is it your contention in this lawsuit that the presence of the excess fiber would constitute a taking of your property without just compensation?” Tuthill responded by declaring that “[i]f the purpose of the line was to use the excess fiber in the future only for BPA’s energy control needs, then the fiber would not constitute a taking.” In that situation, of course there would be no taking because the additional occupied space, regardless of location, is expressly covered by the easement. By failing to first construe the scope of the easement, the court misses the point. It says that BPA’s installation of the fiber optic cables was certainly a physical invasion, but one for which Tuthill received full compensation in 1953. But the fact that Tuthill has received full compensation for the space the cable occupies is not pertinent because the additional space occupied by the excess fibers, no matter how small, is outside the scope of the easement and must be considered apart from the area occupied by the original wires and cables. And whether or not the burden on the servient estate has increased is irrelevant. See Loretto, 458 U.S. at 430, 102 S.Ct. 3164.