Background
CSX alleged that Zayo installed fiber-optic cables above and below CSX railroad corridors in Indiana without CSX’s permission, safety review, or payment of CSX licensing fees. CSX holds differing interests in its corridors, including fee ownership and easements. This appeal concerned sites where CSX held only railroad easements.
The district court ruled that CSX could not pursue easement-based trespass and rent claims because Zayo’s installations did not interfere with CSX’s use of the railroad surface. It also dismissed CSX’s licensing-theft claim at easement sites and held that claims based on older installations were untimely. After the parties conditionally dismissed remaining claims, CSX appealed the pretrial rulings.
The Court’s Holding
The Seventh Circuit affirmed. Applying Indiana law, it held that a railroad easement’s purpose is operating a rail line to transport goods. An easement holder has broad authority to use the corridor surface for railroad operations, but does not necessarily have the right to exclude others from the air above or ground below the tracks when their use does not disrupt railroad operations. That right remains with the servient-estate owner.
For the same reason, CSX’s easements did not necessarily give it a right to charge Zayo licensing fees for cable installations above or below the tracks. The court also held that the installations were permanent injuries for limitations purposes, not continuing trespasses. Thus, claims based on installations before November 2019 under the two-year limitations period, and before November 2015 under the six-year period, were time-barred.
Key Takeaways
- Under Indiana law, a railroad easement does not automatically confer control over all airspace and subsurface areas of the corridor.
- Absent express easement language, a railroad cannot necessarily exclude or charge utilities for non-disruptive cables above or below its tracks.
- Periodic maintenance of installed fiber cables does not make the initial installation a continuing trespass for accrual purposes.
Why It Matters
The decision limits the property rights that railroads holding only easements may assert against utilities using subsurface or overhead portions of rail corridors in Indiana. It also underscores that the scope of a railroad easement turns on its operational purpose and whether the challenged use interferes with railroad operations.
The court noted that the district court should have treated the easement-based claims as failing on the merits rather than for lack of Article III standing, but affirmed because the final judgment required no modification.