The U.S. Court of Appeals for the Seventh Circuit has affirmed dismissal of claims brought by CSX Transportation, Inc. against Zayo Group, LLC. The court says railroads can’t charge fiber providers for access without the property right to do so. According to the court, under Indiana law, a railroad that holds only an easement generally does not possess the right to exclude third parties from installing fiber optic facilities above or below its railroad corridor when those facilities do not interfere with railroad operations. The court rejected CSX’s argument that its railroad easements implicitly granted broad exclusionary and licensing rights over subsurface and airspace uses. Instead, the court concluded that the purpose of a railroad easement is limited to operating a railroad, while all other property rights remain with the underlying landowner unless expressly conveyed. As a result, CSX could not recover licensing fees from Zayo for fiber installations located beneath or adjacent to railroad rights-of-way where CSX possessed only easement interests.
The court also rejected CSX’s attempt to revive older claims under a “continuing trespass” theory. CSX argued that Zayo’s fiber facilities constituted ongoing trespasses because the facilities remained in place and required periodic maintenance. The Seventh Circuit disagreed, holding that any alleged injury became apparent when the facilities were initially installed and that subsequent maintenance activities did not convert the installations into continuing trespasses. Additionally, claims relating to installations occurring outside Indiana’s applicable statutes of limitation remained time-barred.
