AT&T TO SETTLE FIBER OPTIC CABLE CLASS ACTION
TO PAY LANDOWNERS $45,000 PER MILE
Contact:
Nels Ackerson, (202) 628-1100; nackerson@ackersonlaw.com.
For Immediate Release
Washington, DC, May 12, 1999 – AT&T today agreed to pay landowners $45,000 per
mile, plus additional benefits, to settle class action claims where AT&T has installed fiber optic
cables on abandoned railroad right-of-way property. The figure of $45,000 is the average
payment per mile, which is net to the landowners.
AT&T will also pay the landowners’
attorneys fees and all class action costs.
The settlement, announced today in a federal court in Indianapolis, is part of a nationwide
class action involving thousands of miles of operating and abandoned railroad and utility
corridors where AT&T maintains its fiber optic cable network. Today’s announcement covers
abandoned railroad lines in Indiana, but is part of a process to settle all claims against AT&T
nationally on abandoned railroad lines, according to attorneys representing the landowners. The
same attorneys represent landowners in similar nationwide landowner class actions against
other major telecommunications companies.
AT&T, MCI WorldCom, Sprint, Qwest and other telecommunications companies are
engaged in fierce competition to establish and expand their nationwide presence and the
interconnectivity of their fiber optic cable networks. The landowner class actions against
AT&T and other telecommunications companies, filed by the same attorneys, cover fiber optic
cable corridors in every state and include a substantial part of the entire industry’s fiber optic
network.
AT&T is the first company to agree to a landowner class action settlement. It is the first
of many state-by-state settlements that are anticipated by AT&T and attorneys for the
landowners in the ongoing nationwide class action proceedings.
Nels Ackerson, a Washington, D.C. attorney who is co-lead counsel for the landowners,
complimented AT&T for reaching this settlement. “AT&T is leading the industry in correcting
its errors concerning the rights of landowners,” Ackerson said. “At the same time, AT&T is
protecting its core business from a great risk, while its competitors are still exposed.”
“We negotiated hard for this result for landowners,” added Henry J. Price, an
Indianapolis attorney who, along with Ackerson, serves as co-lead counsel for the class. “I
compliment AT&T for seeing the benefits of a fair and just settlement,” he said.
In return for the settlement’s financial benefits to landowners, AT&T will obtain legal
security for its fiber optic cable network in the future, and it will avoid risks that its core business
might be disrupted if a court were to restrict AT&T’s use or maintenance of fiber optic cable on
land where it has not obtained legal rights from legitimate landowners.
AT&T and other companies have installed much of their fiber optic cable on railroad and
utility corridors under agreements with railroads and utility companies. That method of
building a fiber optic network is fast and relatively inexpensive.
However, railroads and
utilities often do not own the land, but have easements that permit them to use the corridor only
for their specific, limited purposes.
Although the specific terms of today’s settlement apply only to abandoned railroad
right-of-way land in one state, lawyers representing the landowners said they anticipate that the
same principles will guide ongoing settlement negotiations regarding AT&T’s corridors in the
other states, first on abandoned railroad lines and then on operating railroad and utility lines.
Vera Hinshaw, a landowner who is a class representative, was pleased. “This is a fair
settlement and a wonderful breakthrough for landowners,” she said. “For years these companies
have simply taken land that we own and used it. They’ve even threatened us with huge
damages if we accidentally interfered with their use. I’m glad AT&T now has stepped up to do
what’s right, and I hope this is a wake-up call for other companies.”
Besides AT&T’s cable, there is also an MCI WorldCom cable on railroad right-of-way
land next to Mrs. Hinshaw’s home. “MCI WorldCom has never asked us for permission or
offered to pay for what they’ve taken,” she said.
Companies that fail to gain from landowners the legal rights to use the land where they
place their cable are acting at their peril, according to the landowners’ attorneys. Ackerson
explained, “Companies like MCI WorldCom, Sprint and Qwest, collectively, face hundreds of
millions of dollars of potential liability for trespass, slander of title and unjust enrichment, and
even worse, their most valuable assets and their core businesses may be vulnerable to loss or
interruption.”
Attorneys representing landowners have organized nationally to handle this litigation.
They have formed a leadership group consisting of the four law firms, with Ackerson serving as
chair. The lead firms have offices in Washington, Indianapolis, Minneapolis, Boston, San
Francisco, Los Angeles, and Dallas. Attorneys have been retained by the group in twenty states
to help pursue landowners’ remedies against telecommunications companies, railroads and
others.
The attorneys have prosecuted landowner class action litigation against railroads
and telecommunications companies for many years. They have advised right-of-way
landowners and landowner organizations in more than forty states, and their earlier cases,
including state supreme court and federal court of appeals decisions, have established precedents
favorable to landowners in several jurisdictions. Among the most important are decisions that
railroads owning only right-of-way easements cannot transfer rights to use the land for other
purposes, that class actions are appropriate to address these issues, and that a nationwide class
action may be maintained by corridor landowners. The landowners’ attorneys have also
testified on related policy issues on several occasions before committees of Congress and state
legislatures, and have spoken to landowner groups nationally on the subject.
In response to increasing recognition of the problem, some telecommunications
companies recently have begun to “perfect” title by systematically negotiating parcel-by-parcel
easements even after paying railroads or utilities for supposed rights to occupy an entire corridor.
That is an expensive process and has not even been attempted by many companies.
Parcel-by-parcel negotiations place landowners at a disadvantage, according to the
landowners’ attorneys, because small landowners are forced to negotiate with companies that
have far greater knowledge and resources. Landowners often are persuaded to sell rights on
their land for a fraction of its value, the landowners’ attorneys claim, either because they do not
know their rights or because they do not realize that for fiber optic cable purposes corridor value
may be much greater than the value of land next to the corridor. The attorneys believe their
class action process has leveled the litigation playing field for landowners.
The Ackerson Group, Chartered
700 Thirteenth Street, NW, Suite 525
Washington, DC 20005
Attn. Nels Ackerson
Koonz, McKenney, Johnson, DePaolis &
Lightfoot, P.C.
2020 K St., NW, Suite 500
Washington, DC 20006
Attn. Roger C. Johnson
Price, Potter & Mellowitz
301 Massachusetts Ave.
Indianapolis, IN 46204
Attn. Henry J. Price
Zelle, Hofmann, Voelbel & Gette, LLP
33 South Sixth Street
City Center, Suite 4400
Minneapolis, MN 55402
Attn. John Buck Massopust