A Virginia law meant to speed broadband deployment across railroad lines has hit its first guardrail, in the form of a state Supreme Court ruling.
The court, drawing a distinction between a “public benefit” and a “public use,” ruled that Cox Communications cannot use the 2023 law to impose eminent domain on railways’ property while trying to reach the commonwealth’s more remote areas.
Cox, a private, for-profit company, attempted to use the law to cross Norfolk Southern lines in eastern Virginia last year. But the law, which “authorizes a private broadband service provider to take railroad property for nonpublic use,” violates an article in the state constitution and a separate law, both of which deal with eminent domain, Virginia Supreme Court Justice Teresa Chafin wrote for the court in an opinion released Thursday.
“Cox … is not a government entity, public service corporation, or public service company,” Chafin wrote. “Therefore, Cox cannot exercise the power of eminent domain for a ‘public use’ … We acknowledge that the expansion of an existing broadband network may benefit the members of the public who would be served by the expansion. Nevertheless, a taking for a ‘public benefit’ is not necessarily a taking for a ‘public use.’”
The General Assembly unanimously passed the law dealing with fiber optic broadband lines crossing railroads, and Gov. Glenn Youngkin signed it after complaints from electric cooperatives that Norfolk Southern was stalling attempts to reach remote locations.
The law requires railways to respond to crossing requests within 35 days. It also caps fees that the railroad could charge broadband companies — $2,000 per crossing, plus $5,000 reimbursement for railroad expenses — and establishes the State Corporation Commission as arbiter in disputes.
Cox Communications attempted to use the law in spring 2024 at three New Kent County locations but refused to pay Norfolk Southern’s requested fee, which exceeded the legislature’s cap, Chafin wrote. The railroad took its case to the SCC, which declined to hear the matter, writing that Norfolk Southern had not shown it would face “undue hardship” from the underground crossings.
From there, Norfolk Southern appealed to the Virginia Supreme Court, arguing that Cox is a private, for-profit company taking the property for a nonpublic use, under a law which eliminated the broadband provider’s constitutional burden to prove a public use.
“We agree with both of Norfolk Southern’s arguments,” Chafin wrote for the court. “By essentially ignoring the public use requirement set forth in Article I, Section 11 of the Constitution of Virginia and Code § 1-219.1, [the new law] Code § 56-16.3 permits Cox to take Norfolk Southern’s property for a private purpose.”
CSX Transportation had also appealed a Cox notice of crossing in Chesapeake. In an unpublished order, the court found in CSX’s favor, calling the “operative facts” of the two cases “indistinguishable” and reversing the SCC’s decision.
State Sen. Bill Stanley, R-Franklin County, the bill’s lead patron on the Senate side, called the ruling “unfortunate” and “just plain wrong.” He added that there was irony in the opinion: The state gave the railroads the land that they are using, for the “public benefit,” and they now seek to protect it “as their own,” Stanley wrote in a text message exchange. The railroads seek to hurt the rural areas that made them successful a century ago, he wrote.
“And now if this decision is left to stand, then the greedy railroad companies … will now continue to choose their own private greed over the public need when it comes to broadband deployment in our rural and urban parts of Virginia,” Stanley wrote. “And, the result will continue to be that the families, schools and businesses in these regions will be denied the critical access they need to modern technology and information systems that will allow them to catch up and compete with the rest of the Commonwealth.”
Stanley said that the issue will be a top priority for him and other legislators, either in special session or in next year’s regular session.
“The railroads may have won a battle today with this ruling, but they will ultimately lose the war when it comes to bringing broadband access to our region,” he wrote.
A Norfolk Southern spokeswoman did not reply to a request for comment.
Cox, through a spokeswoman, said that it remains committed to connecting all Virginians to high-speed internet and will work with the railroads to ensure it accesses customers on both sides of all railroad crossings.
The decision may impact related cases in federal court. Norfolk Southern and CSX Transportation had filed federal lawsuits against Cox in the U.S. Eastern District of Virginia’s Richmond division. U.S. District Judge David Novak had issued a stay in those cases, pending the state Supreme Court decision.
Novak had previously dismissed a similar suit that a railroad industry group filed challenging the law on the railroads’ behalf. In that case, he ruled that a 2023 complaint by the Association of American Railroads was invalid, because the group had no standing.
The judge wrote, however, that a plaintiff with standing could file some of the association’s claims, including 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.
That decision too is under appeal, in the 4th U.S. Circuit Court of Appeals in Richmond.
It was unclear Thursday what impact the ruling will have on the electric cooperatives, who first reached out to Stanley and other legislators about the time lags and high fees. Ray LaMura, president of the Virginia Cable Telecommunications Association-Broadband Association of Virginia, said via text message that his organization is having legal analysis prepared.
Gary Wood, CEO of Central Virginia Electric Cooperative and its Firefly Broadband, declined to take a public stance on whether the decision would apply to Firefly, should it have a similar case related to eminent domain.
“We have continued to work with all railroads to secure agreements to cross their tracks where necessary, and though we continue to pay higher fees, we are continuing to cross tracks and make universal broadband access to the public a reality across our service area,” he texted. “We appreciate the coordination we have received from the railroads to help us meet this public goal.”
Clarification 11:19 a.m. May 23, 2025: An earlier version of this article noted that the state supreme court had not published an opinion on a similar appeal from CSX Transportation. There was, however, an unpublished order in the case, finding in favor of CSX.
