New Controversial Virginia Law Aimed at Easing Broadband Expansion Challenged by Railroads

One of the goals of the recent federal investment in infrastructure is ensuring universal broadband internet access.  While the Virginia General Assembly was largely quiet on the eminent domain front this year, it did pass a bill to help facilitate broadband expansion efforts.  However, the new law has already come under challenge by a group of railroads, who argue, among other things, that the law takes their property without adequate compensation.

The law, Va. Code § 56-16.3, provides for a quick, structured method for broadband service providers to negotiate rights to cross or otherwise use railroad property in the construction of their works.  Typically, this would involve placing a communications line either over or under railroad tracks.  The statute requires a broadband service provider wishing to cross railroad property to file an application with the railroad company that includes plans showing the location of the crossing together with payment of a set license fee, which will usually be $2,000.  The railroad then has 15 days to request additional information, and the broadband service provider must respond to any request within 10 days.  The railroad can petition the State Corporation Commission for relief on the ground that the set license fee is inadequate compensation for the crossing, the crossing will cause undue hardship to the railroad, or the crossing will create the imminent likelihood of danger to the public health or safety.  If the railroad does not appeal within 35 days of receipt of the application, the application is approved.

An interest group representing railroad companies in Virginia filed suit in federal court against various state officials seeking a declaration that the statute is unenforceable and an injunction prohibiting enforcement of the statute.  The railroads argue that the statute is preempted by the federal Interstate Commerce Commission Termination Act, which generally preempts state laws concerning the establishment or abandonment of railroad facilities.  The railroads also argue that the statute violates the Fifth Amendment’s Takings Clause and the Virginia Constitution by restricting availability of just compensation and authorizing the taking of private property for private uses.  Finally, the railroads argue that the statute violates federal law and the Virginia Constitution by shifting the burden of proof regarding public use from the condemning authority to the landowner. 

The case, Association of American Railroads v. Hudson, et al., Civil Action No. 1:23-cv-00815, is currently pending in the U.S. District Court for the Eastern District of Virginia.  Given the importance of the goal of expanding broadband access in the state, it seems likely that, if the lawsuit succeeds in striking down the law, the General Assembly will revisit the area in future sessions.

Matt Hull is a Pender & Coward shareholder focusing his practice on eminent domain, right of way, and uniform relocation act matters, local government, and waterfront property law.