CSX Transportation, Inc. v Zayo Group, LLC, 25-1670
U.S. Court of Appeals, Seventh Circuit Civil Property Law
Holdings
- Seventh Circuit holds railroad easements under Indiana law don't include right to exclude third parties from air/ground space absent operational disruption.
- Court rejects continuing-trespass theory, holding limitations periods run from initial cable installation, not from ongoing presence of infrastructure.
- Essential reading for utility, telecom, and railroad counsel litigating easement scope, licensing rights, and trespass statute-of-limitations disputes under Indiana law.
Summary
CSX Transportation sued Zayo Group in the Southern District of Indiana over Zayo's installation of fiber optic cables beneath and near CSX's railroad corridors, asserting trespass, unjust enrichment, unpaid rent, and declaratory judgment claims. The district court granted partial summary judgment to Zayo on several claims, holding CSX lacked the property rights it asserted for easement-based properties and that many claims were time-barred under a permanent-injury (not continuing-trespass) theory. After further dismissals, the parties settled and stipulated to dismissal of remaining claims to allow CSX to appeal the dispositive pretrial rulings.
The Seventh Circuit affirmed across the board. Applying Indiana property law, the court held that CSX's railroad easements—defined by their purpose of enabling railroad operations—do not inherently carry the right to exclude third parties from the air above or ground below the tracks, nor the derivative right to charge licensing fees, so long as the third party's use does not disrupt rail operations. These rights remain with the servient estate owner. The court also held that Zayo's installations constituted permanent, not continuing, injuries under Indiana's dual-injury framework, because the scope of harm was discernible at the time of each installation; thus claims involving installations predating the relevant limitations periods were time-barred. Finally, while the court agreed the district court mischaracterized its easement-based dismissal as jurisdictional rather than a merits ruling, it affirmed without modifying the judgment because the judgment itself was silent on the with/without-prejudice question.
For practitioners, the decision clarifies the default scope of railroad easements under Indiana law and reinforces that trespass claims involving fixed infrastructure installations accrue at installation, not continuously, absent unpredictable recurring harm.
In short
1. The scope of CSX's railroad easements does not necessarily include the right to exclude third parties from the air above and the ground below its railroad corridor, at least where those third parties do not disrupt CSX's railroad operations; that right remains with the non-railroad servient estate owner. (affirmed)
2. CSX's railroad easements do not necessarily include the right to license the air above and the ground below its railroad corridor; that right remains with the owner of the servient estate. (affirmed)
3. Zayo's cable installations made before the applicable limitations periods do not constitute 'continuing' injuries under Indiana law; the limitations periods began running upon each initial installation, so CSX's criminal trespass and licensing theft claims for installations before November 2019 and civil trespass and rent claims for installations before November 2015 are time-barred. (affirmed)
4. The district court erred in framing its dismissal of CSX's easement-based criminal trespass, civil trespass to land, and rent claims as a lack-of-standing (jurisdictional) ruling rather than a merits ruling, because CSX's assertion of a colorable property right was sufficient for Article III injury-in-fact; however, because the final judgment was silent as to whether dismissal was with or without prejudice and incorporated the substantive merits determination, the court affirmed without modifying the judgment. (affirmed)
This summary was drafted by AI and verified against the slip opinion. It may contain errors and is not legal advice — always read the original before relying on it.