Background
Close Armstrong, LLC and other landowners in Indiana sought to limit the scope of a sixty-year-old easement held by Trunkline Gas Company, which granted the company rights to construct and maintain a natural gas pipeline. The landowners wanted to remove the easement burden to participate in a federal conservation program. Trunkline counterclaimed, asserting it retained the right to lay additional pipelines anywhere on the properties under a floating easement. The district court granted partial summary judgment to Trunkline in two phases, finding the easement was floating and that unexercised future rights were not fixed to a specific location.
The court’s reasoning
The Seventh Circuit reviewed the case under diversity jurisdiction, applying Indiana state law. The court first addressed the landowners’ request to certify the question of whether floating easements must be fixed to a defined location. The court declined certification, noting that while timing was a factor, the most important consideration was whether the federal court was genuinely uncertain about the state law. The court concluded it was not uncertain, as Indiana law clearly distinguishes between exercised and unexercised rights. The court held that while exercised floating easements may become fixed, unexercised, future, and movable rights cannot be fixed under Indiana law. The court rejected the landowners’ arguments based on past conduct or acquiescence, noting that such evidence only applies to fixing easements that have already been exercised.
What it means going forward
The decision confirms that utility companies holding floating easements retain the right to lay additional pipelines or alter routes in the future without those rights being fixed to a specific location until they are actually exercised. This preserves the flexibility of the easement for the holder but limits the landowner’s ability to restrict future use based on current non-use.