Va. Officials: 4th Circuit Should Uphold Law Easing Broadband Over Railroads

The railroad industry is too early to challenge a 2023 Virginia law that gave ISPs access rights to railroad properties, said Virginia State Corporation Commission Judge Jehmal Hudson and other state officials in a response brief Wednesday at the 4th U.S. Circuit Court of Appeals. The Association of American Railroads (AAR) is appealing a U.S. District Court for Eastern Virginia decision to dismiss its lawsuit against the state officials for lack of standing and other reasons (see 2407220018). The Virginia appellees urged the 4th Circuit to affirm the district court’s judgment.

The contested Virginia law allows broadband providers to obtain a license to cross and occupy railroad property for a one-time $2,000 fee and direct expenses of not more than $5,000, paid to the railroad. Among other provisions, the law requires that railroad companies approve ISP applications within 35 days unless they seek relief from the Virginia commission.

Virginia legislators wrote the law because many parts of the state lack broadband access, Hudson and the other state officials said in case 24-1399. “To expand broadband access to rural communities, broadband cables must cross railroad property, which cuts long swathes across the Commonwealth. Lengthy delays and exorbitant fees for such crossings were impeding the expansion of broadband access. The statute therefore authorizes the use of the eminent domain power -- the same mechanism by which the railroads were built -- for broadband expansion." However, the law also ensures railroads will be adequately compensated and that broadband crossings won't impede railroad operations or affect safety, the Virginia appellees said.

AAR doesn't "come close to showing that 'no set of circumstances exists under which the Act would be valid,' as it must for its facial pre-enforcement challenge," said the Virginia officials, citing the U.S. Supreme Court's 1987 decision in U.S. v. Salerno. The district court correctly dismissed the association’s takings claim, the officials said. That clause in the Fifth Amendment guarantees adequate compensation but doesn't prohibit eminent domain, said the appellees. "And given the wide variety of railroad property rights and the value of those rights, the adequacy of compensation cannot be decided as a facial matter without the participation of the actual landowners."

It’s also too soon to consider public safety concerns, said the Virginia appellees: AAR's "speculation regarding problems that could hypothetically arise with the application of [the Virginia law] can be addressed if and when such problems actually occur.” The question of “whether particular applications of the law may unreasonably interfere with rail transportation is a fact-specific inquiry that cannot be brought under representational standing because it” requires individual railroad members' participation, said the state officials.

The appellees disagreed that the Interstate Commerce Commission Termination Act (ICCTA) preempts the law. The 1995 U.S. statute’s "express facial preemption of laws that govern 'rail transportation' does not apply here,” they said. "Traffic and utilities must routinely cross railroad property. Courts and the Surface Transportation Board (STB) have long held that ICCTA does not facially preempt provisions governing such crossings.”

Meanwhile, an ICCTA test for unlawful discrimination against rail carriers doesn’t apply because ICCTA exempts states exercising their police powers, said the state officials: Besides, the Virginia law doesn’t discriminate against them, as AAR failed to show how the law treats railroads differently from any similarly situated entities. “Railroads, by their nature, are unlike most other property owners,” said the appellees. They “occupy a unique position with respect to broadband development into rural areas: railroad land creates lengthy, interconnected, and unsurpassable tracts across Virginia that would make broadband access impossible without multiple crossings.”