The United States Court of Appeals for the Seventh Circuit recently ruled in favor of Zayo Group, LLC, affirming a lower court's decision that CSX Transportation, Inc. did not have standing to claim property rights over fiber optic cables installed by Zayo. This case, CSX Transportation, Inc. v. Zayo Group, LLC (Docket No. 25-1670), has significant implications for utility companies and railroad operators regarding property rights and easements.
The dispute began when CSX, which operates railroad lines across Indiana, claimed that Zayo installed fiber optic cables under its tracks without permission or payment. CSX argued that its easements granted it the right to exclude third parties from using the land above and below its tracks and to charge licensing fees for such installations. Zayo, a public utility providing telecommunications services, countered that it had not violated any property rights.
The case reached the Seventh Circuit after CSX filed a lawsuit in November 2021 in the United States District Court for the Southern District of Indiana. CSX's claims included various counts such as criminal trespass, civil trespass, and unjust enrichment, among others. However, the district court dismissed many of these claims, stating that CSX lacked standing to assert its property rights and that some claims were barred by the statute of limitations.
On August 7, 2026, the Seventh Circuit, led by Circuit Judge Pryor, upheld the district court's decision. The court ruled that CSX's easements did not necessarily include the right to exclude Zayo from installing fiber optic cables. The court stated, "the scope of CSX’s railroad easements does not include the right to exclude third parties from the air above and the ground below its railroad corridor, at least to the extent those third parties are not disrupting CSX’s railroad operations." This ruling clarified the limitations of railroad easements under Indiana law.
The court's opinion emphasized that CSX's easements are intended for the operation of a railroad and do not grant exclusive rights over the land above and below the tracks. The ruling noted that Zayo's installations did not disrupt CSX's operations, which further supported the decision. The court concluded that CSX's claims related to the installations were not valid under Indiana law.
This ruling has significant implications for both CSX and Zayo, as well as other utility companies and railroad operators. It establishes that railroad easements do not automatically confer exclusive rights over the land surrounding the tracks, particularly for installations that do not interfere with railroad operations. This decision may influence how utility companies approach installations near railroad corridors in the future.
Looking ahead, CSX has the option to appeal the ruling, although the court's decision is a substantial setback for the company. There is no indication of any related cases pending that would directly impact this ruling. However, the outcome of this case could set a precedent for future disputes involving property rights and easements between utility companies and railroad operators.