Beaufort News

Lawsuit over Port Royal railroad easements settled for $33 million

A class-action lawsuit by property owners along an abandoned railroad line between Port Royal and Yemassee has been settled for $33 million, according to the suit's lead attorney.

The 260 property owners, who hold a total of 303 parcels, will receive payments ranging from $5,000 to $1 million, according to attorney Tom Stewart of Kansas City. The settlement was completed after a hearing Wednesday.

The lawsuit was filed against the federal government in March 2010 by Sharon Raulerson and other property owners. It said easements along the Port Royal Railroad should have been returned to property owners after the railroad was abandoned. Instead, the railroad and easements were sold by the State Ports Authority to the Beaufort-Jasper Water & Sewer Authority. The water utility said at the time that the acquisition was needed because BJWSA has many large pipes installed in the right of way that would be at risk if the right of way were to disappear or be acquired for development.

BJWSA is also working with local and regional agencies and governments to build a walking and biking trail along the right of way.

The case moved swiftly through the court system, Stewart said, because the federal government said the railroad from Port Royal to Yemassee was an easement; therefore, the attorneys did not need to prove that easement existed. Attorneys from both sides spent about a year on a joint appraisal of the land.

The federal government has agreed to pay the fair-market value of the property, as of May 2009, along with interest and attorney fees. The plaintiffs' attorneys will receive 33 percent, or about $11 million, of the property owners' awards.

Stewart said property owners should be paid within 60 days.

At least three other lawsuits related to the property are pending, according to court records:

  • Stewart filed a lawsuit Jan. 17, almost identical to the class-action suit, on behalf of the owners of another 33 properties. Property owners who did not "opt-in" to the original class-action lawsuit can sue until the statute of limitations runs out in 2015, Stewart said. However, Stewart said he believed most affected property owners have been included in one lawsuit or another.
  • Another similar lawsuit that includes a smaller group of land owners, filed by Thor Hearne from Arent Fox LLP of Clayton, Mo., also is moving ahead. Hearne said the joint appraisal process started about nine months ago. He expects a settlement with "sizable" payments to his clients.
  • Another set of property owners filed a class-action suit against BJWSA on Jan. 17. The suit alleges the authority only had rights to use the surface of the railroad track, but was acting as if it had the right to allow utilities installed above and below ground.
  • The lawsuit says BJWSA should reimburse property owners for the land under the surface and for any money the authority received for allowing above-ground utilities, such as power lines.

    BJWSA spokesman Matthew Brady said the suit is being looked over by an attorney for the authority, and "we will have a better understanding of all the issues involved over the next few months."

    The authority has not installed utilities underneath the railway easements since purchasing the land in 2009, he said. Some underground utility lines, however, were in place before that.

    BJWSA has agreed to allow SCE&G to run utilities above the easements, but Brady did not know Monday how much that agreement cost. Newspaper accounts from 2008 indicate an easement would be sold to SCE&G to offset costs of the $3 million land purchase.

    Related content

    1. Attorney offers to file federal claim for property owners by abandoned rail line, May 18, 2010
    2. Railroad demolition is chugging along, June 10, 2012
    3. Port Royal railroad deal nearly complete; water utility wants to protect lines, May 19, 2008
    4. Water and sewer authority to acquire railroad right of way, May 18, 2008
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