The federal government owned a substantial tract of forest land. In 1873, pursuant to the State School Land Grant Program in effect at the time, it transferred a 40 acre tract to the Regents of the University of California. The Regents held the land until 1993, when it sold the land for logging purposes through a public bidding process. The bid documents indicated that "there may not be any legal current surface access" to the land. By the time the Regents sold the land, the federal government had transferred the property surrounding the parcel to private parties. On one side, a private party owned property separating the 40 acre tract from a highway.

The parties who bought the property from the Regents claimed that an easement by necessity had arisen in 1873 and still benefitted their parcel.

Held: An easement arose in favor of the state in 1873, but it was extinguished when surrounding property passed into private hands and it became possible for the Regents to acquire an easement by eminent domain. Since the Regents chose not to do so, there is no easement of any kind at this time. Plaintiffs are landlocked.

The court cited to a U.S. Supreme Court decision, Leo Sheep Co. V. U.S., 440 U.S. 608 (1979) which had concluded that the federal government cannot obtain an easement by necessity because it can always use its eminent domain power to acquire access. Leo Sheep did not apply to the instant case originally, however, because the argued dominant tenant was an agency of the state government, not the federal government. Since the state government could not obtain an easement by eminent domain over the federal government lands, it had an easement by necessity as of the severance of the parcels in 1873. In State of Utah v. Andrus, 486 F.Supp. 995 (1979), the court had ruled that because the clear purpose of the federal grant to the state under the State School Land Grant Program was to give the state an economically viable parcel, grant of a landlocked parcel necessarily carried with it an easement by necessity across balance of federally owned tract.

In response to the present owner's claim that the tract remained "economically non-viable" so long as it was landlocked, and that refusal to recognize the easement still frustrated the purposes of the original federal grant, the court pointed out that the present owner had bid on the property despite the Regent's warning about access, and that it had to outbid eight other bidders.

Comment 1: Did all of the bidders assume that an easement of necessity existed?

Comment 2: Note that the Andrus case emphasized that the easement by necessity arose across the federal government land because the fundamental purpose of the grant was to create an economically viable parcel. This does not necessarily mean that every severance of federal land will give rise to easements by necessity.

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