Tag Archives: railroad crossings

Change for Railroad Rights-of-way?

The 7th Circuit Court of Appeals made a recent ruling that could end up eliminating one of the biggest rights-of-way issues that slow down fiber construction projects. In the case of CSX Transportation v. Zayo Group, LLC, the court ruled that the easement that CSX owns for its railroad tracks only applies to the surface of the Earth and that the railroad right-of-way does not extend either above or below the tracks.

The court said specifically that the installation of underground fiber lines or overhead fiber lines that are tall enough not to interfere with trains does not constitute “continuous trespass”. This ruling means that Zayo is free to place the fiber without the railroad company’s permission and that Zayo doesn’t have to pay any one-time or ongoing fees for the rights-of-way.

The court said that the right-of-way still belongs to the actual landowner. That’s an important distinction, because most railroad lines were granted an easement to build the railroad lines, and were not given outright ownership of the land. The land under the tracks is still owned by a local government or a private landowner. Since most fiber crossings for railroads happen where the railroad tracks cross a public road, then the state, county, or city that maintains that road still owns the actual rights-of-way and can grant it to a fiber overbuilder just like they grant rights-of-way along all public roads.

CSX had argued that the property rights related to railroad tracks do not fall under the jurisdiction of the State of Indiana, but the court disagreed. The lawsuit was originally filed when CSX alleged that Zayo had illegally trespassed in ten different situations where the company had crossed railroad tracks with fiber without paying the railroad. The court ruled that CSX didn’t have legal standing to make assertions of criminal trespass. The court further said that CSX failed to demonstrate that its railroad easements were exclusive to only railroad use, and that even if it could be construed that the railroad had that right on the surface, it couldn’t make that same claim for the ground below the easement or the air above the easement. The court said that the Zayo fibers did not disturb the railroad’s business in any way.

It’s likely that this ruling will be appealed. But if this ruling stands, it will be a big deal for companies that build networks. We’ve heard a lot of talk over the last year about the FCC wanting to override local jurisdiction for providing rights-of-way along public roads. While there are some horror stories of local government rights-of-way along roads taking too long, most permits are handled pretty routinely and are not the giant mess being claimed by the FCC. The real rights-of-way problems come when trying to build networks to cross railroad tracks, bridges, interstate highway underpasses, or parklands. Each of these situations can add both time and cost to a fiber construction project.

Railroad crossings can be a particular problem, because a large fiber project in a rural county might need to pass railroad tracks at multiple locations. It’s often not easy to determine who owns a given stretch of track, and in many cases the tracks are owned by companies that bought the easements from a defunct railroad or abandoned line. There can be big fees to cross at a single location, and I’ve seen fees as high as $20,000 to cross a single set of tracks. The even bigger problem is the delays. It’s not unusual for the paperwork for a rail crossing to stretch to well over a year.

A few years ago, the Virginia legislature tried to solve this problem by putting a shot clock on the approval for a railroad crossing and by limiting the fees. Unfortunately, that law was eventually knocked down by a court. Perhaps this ruling, made at the Appeals Court level, will have some staying power.

A Troublesome Right-of-Way Dispute

The Virginia Supreme Court issued a ruling against Cox Communications that should trouble anybody building a fiber network that must cross railroad tracks. The case involves a dispute brought by the Norfolk Southern Railroad that challenged a new right-of-way law related to railroads.

The disputed law was unanimously passed in the General Assembly in 2023. The law requires that railroads respond and approve requests for fiber crossings across railroad tracks within 35 days or else file a dispute with the State Corporation Commission. The law sets the maximum fee for a right-of-way at $2,000 plus up to $5,000 to compensate a railroad for implementation costs.

Cox Communications invoked the new law in the spring of 2024 by requesting three underground railroad crossings in New Kent County. Norfolk Southern asked for a fee that exceeds the State’s cap and Cox refused to pay more than the amount established by law. Norfolk Southern appealed at the SCC, which declined to hear the case.

Norfolk Southern appealed to the Virginia Supreme Court. They claimed that the low rates established by the State equate to a taking of property for the benefit of Cox Communications, a for-profit corporation.

The Supreme Court agreed with Norfolk Southern. The Court said that the law violated the application of Code § 56-16.3 and violated Article I, Section 11 of the Constitution of Virginia. This part of the Constitution provides that property can only be taken for ‘public use’ and the party asking to take the property must prove the public use. The Court said that economic development and Cox’s private benefit do not justify a taking.

An article in the Cardinal News quotes Senator Bill Stanley, the lead proponent of the bill in the Senate, who called the decision wrong and disappointing. He says the State gave the land to railroads for the public benefit, but that railroads now seek to protect it as their own property against public benefit.

For those not familiar with legal language, the real dispute is about the fee. The railroad was ready to grant Cox a right-of-way for a fee higher than $7,000, and the railroad says it is a ‘taking’ for it to be required to the lower fee determined by the legislature.

This is an issue that plays out daily across the country where railroads charge high fees to allow fiber or other utilities to cross a railroad right-of-way. The Virginia law was trying to put a dollar limit on the cost of such rights-of-way and also trying to speed up the process. The Virginia court ruling made it clear that the legislature doesn’t have the right to put a cap on railroad fees.

Hopefully, this doesn’t make the entire law invalid and the 35-day response time will stay in place. If not, the legislature ought to act to close that gap.

The other issue that is not mentioned in the dispute is that Cox wants to place a buried conduit under the railroad tracks. From a practical perspective it’s impossible to believe that a conduit can in any way diminish the railroad’s property or operations. I can better understand why a fiber owner needs an easement to bury conduit on private land because the landowner might someday want to build something on that location. But railroad rights-of-ways are almost entirely for the purpose of laying track, and a buried conduit doesn’t stop that purpose. I know every lawyer reading this will give me several reasons why property laws are structured this way, but I also know that every fiber network owner is as perplexed by this as I am.