Va. Utility Broadband Case Could Portend More Landowner Suits
A landowners' challenge to a Virginia easements law is gaining attention as other states consider similar laws to make it easier for power companies to add broadband lines to land where they have electric facilities. Virginia’s 2020 law allows utilities to proceed without permission or additional compensation to landowners. The U.S. District Court in Charlottesville dismissed constitutional claims against Virginia in Grano v. Rappahannock Electric Cooperative (REC) last month, but the landowners haven’t given up and are considering appeal, said their lawyer Joshua Baker of Waldo and Lyle, in an interview.
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The Granos don’t want REC to string fiber on electric poles on their farm in Culpeper County, Virginia, said Baker. What motivated the retirees was not how much REC would pay but rather “a blatant overstepping of the bounds of what the government can do with your property rights,” the lawyer said. Their lawsuit seeks to have the law declared an unconstitutional taking, he said: “The Granos are standing up for the constitutional property rights of all Virginians. This is not about stopping broadband.”
REC “is committed to expanding broadband to Virginia’s rural areas, and the Grano litigation has unfortunately hindered that process,” a spokesperson said Friday in a written statement. “REC will continue to support this initiative as authorized under applicable law.” Virginia Attorney General Mark Herring (D) and the law’s sponsor Virginia Sen. Lynwood Lewis (D) didn’t comment.
“We will be entering a litigation cycle in any state which has passed a statute like this to see what the property right and compensation state of affairs will be,” predicted Wilkinson Barker attorney Ray Gifford. “The fight over these changes to the scope of easements is going to have to be sorted out by the courts,” emailed the former Colorado Public Utilities Commission chair. “The Virginia law is written in a clever fashion to try to avoid Takings Clause implications, but they are inevitable.” Lawsuits come whenever a state changes “a bundle of rights possessed either by providers or landowners,” he said.
“If your state legislature is considering similar legislation,” emailed NARUC General Counsel Brad Ramsay, “a prudent lawyer would follow this lawsuit to see if the plaintiffs get any traction with their ‘takings without just compensation claim.’” NARUC passed a resolution last month urging states to lower barriers for utility broadband (see 2111090001 and 2111020047).
The Granos are weighing whether to take their claims against Virginia to state court as directed by the district judge in case 3:20-cv-00065 (see 2111080044), or to appeal the dismissal to the 4th U.S. Circuit Court of Appeals, said Baker. Going through state courts could take at least three years, and Baker said some case law says the Granos don’t have to try in state court before seeking federal relief, he said. The district court didn’t dismiss a contracts clause claim against REC, so that case continues, he noted.
Before the state enacted the utility broadband law, the landowners had been in talks with REC about selling easement rights to put up the fiber, Baker said. After refusing because they didn’t want “any more traffic through that easement,” the Granos were alarmed to hear that REC wouldn’t have to compensate them when the Virginia law took effect, nor would it have to give any notice or seek permission, said Baker. “That is not what property rights in the United States of America are supposed to be.”
Baker disagrees with those who argue that adding a broadband line to existing electric facilities isn’t a big imposition. The Supreme Court found in 1982 case Loretto v. Teleprompter that running one single cable wire was a taking in violation of the Fifth Amendment, he said. The Virginia law “authorizes an unlimited number of cables and operators to go into that easement,” said Baker: REC’s proposed fiber line could be the first of many.
Virginia could expand broadband without violating the Constitution, said Baker. “Wired options aren’t probably the future of communications.” Tesla’s Starlink might be a better way to cover rural areas, he said. Or Virginia could put fiber on right of way it owns like state roads, he said. REC is allowed by law -- but hasn’t yet tried -- to force its way onto the Granos’ property, he said, but the co-op is installing fiber on neighbors’ properties.
Virginia could face more suits like this, said Baker: “A number of folks have been in touch with us after seeing coverage of this case.”
“Many states have already resolved the challenges electric co-ops face in using their easements to also deliver broadband service,” emailed Chris Mitchell, the Institute for Local Self-Reliance's director-Community Broadband Networks Initiative. “States should be removing all barriers to electric co-ops delivering services, including potential challenges with easements. In my experience, the real estate industry has some concerns about how easements are dealt with, but they have been amenable to compromises and working solutions in the states where this has come up because they also want to see broadband expand to everyone.”