A federal judge has dismissed a lawsuit that disputed a Virginia law governing internet service providers’ ability to string fiber across railroad lines.
The lawsuit, which the Association of American Railroads filed last year on behalf of Norfolk Southern and CSX, was a response to a new state law that reduced the approval process time and costs to ISPs, particularly the state’s electric cooperatives, that were trying to reach rural customers across railway tracks.
The law itself was a response to what legislators and cooperatives’ representatives have said was stonewalling from the railroads, who were dragging out the process of getting fiber to customers, even after the COVID-19 pandemic showed a dire need for connectivity in emergency situations.
Judge David Novak in the Eastern District of Virginia dismissed the association’s case, while leaving open the possibility that Norfolk Southern and CSX could file suit on their own, but only on a portion of the lawsuit.
The Association of American Railroads, an industry group, did not have standing to file the suit, the Richmond-based Novak wrote in an opinion filed April 15. While potential plaintiffs such as Norfolk Southern could make a case against State Corporation Commissioner Jehmal Hudson, whose office would administer the law, a suit against the two other defendants — Michael Rolband, director of the Virginia Department of Environmental Quality, and Virginia Department of Transportation Commissioner Stephen Brich — is barred under sovereign immunity, Novak ruled.
The judge dismissed four of the case’s six counts without prejudice, meaning they can be refiled, but not by the industry group. Among them is a contention that federal law on the subject renders the recent state law “void and unenforceable,” and a claim that the law violates the U.S. Constitution’s “takings clause” by failing to provide the railroads with the possibility of “just compensation,” based on market value.
Also dismissed without prejudice were claims alleging that the defendants interfered with an existing contract between the railroads and the states, violating the Virginia Constitution, and that the defendants, through the law, stepped on a longstanding process of contracting with railroads regarding their crossings.
It was unclear Tuesday whether the association will appeal or whether Norfolk Southern and CSX will file under their own names. Neither they nor the Association of American Railroads replied to messages late Tuesday afternoon. Sen. Bill Stanley, R-Franklin County, the law’s leading patron on the Senate side, was skeptical that he would see the railroads bring it back up on their own steam.
“I always expect an appeal,” Stanley, a trial lawyer, said in a text message exchange. “Especially from the big folks when they lose. But it is an extensive and well thought out opinion. The judge touched every base.”
Ultimately, the ruling sets a path forward to provide broadband access to Virginians in far-flung rural areas, said Stanley.
“The bill I sponsored that is now law was carefully drafted to balance both the essential need to bring 21st century fiber optic cable to all Virginians regardless of their zip code, with the ensconced property rights of the railroads during the cable installation process,” he wrote.
“The Court today found that this new law that the General Assembly overwhelmingly passed last year is both fair, just, and constitutional. This is not only a victory for our great local electric co-ops that have worked so hard to bring broadband to the far reaches of the Commonwealth, but also is a major victory for our rural and urban areas to be able to finally access broadband in their homes and businesses in the very near future — a technology that so many of our suburban communities now take for granted. I hope that the railroads will now be a good and willing partner with our Virginia co-ops so we can finish this critical task.”
Casey Logan, chief executive officer at Chase City-based Mecklenburg Electric Cooperative, said the state’s electric co-ops applauded the ruling.
“This law unanimously passed in 2023 and was the product of a bipartisan effort to take swift action to ensure that every Virginia family is connected to broadband and that railroad crossings are accomplished safely, in accordance with relevant regulations,” he said through a spokeswoman.
Novak dismissed two other counts with prejudice, meaning they cannot be refiled. One alleged an unconstitutional taking of “private property for private use, rather than public use.” According to the other count, the defendants violated the 14th Amendment’s due process clause by denying the railroads adequate notice and opportunity to challenge the “property deprivation.”
“So while a potential opening for other plaintiffs technically exists, like the railroads, it doesn’t assure them of future success,” Stanley said in the text exchange.
Novak, ruling that the VDOT and VDEQ officials could not be held liable, quoted Bruce Springsteen in a footnote.
“Here, Brich and Rolband take no actions under Va. Code § 56-16.3 that cause injury to railroads,” he wrote. “Broadband providers’ obtainment of permits from Brich and Rolband may frequently be necessary, but never qualifies as sufficient to kickstart a crossing. This fact pattern contrasts with the marriage process, where individuals can just go ‘down to the courthouse,’ and an official’s grant of a license will generally ‘put it all to rest.’” 18
Footnote 18 read:
“See Bruce Springsteen, ‘The River’ (https://brucespringsteen.net/track/the-river/) (‘And for my nineteenth birthday I got a union card and a wedding coat / We went down to the courthouse / and the judge put it all to rest / No wedding day smiles no walk down the aisle / No flowers no wedding dress’).”