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Uhl et al. v. Thoroughbred Technology and Telecommunications, Inc.

(S.D. Ind., 7th Cir.) Zelle Hofmann attorneys and their co-counsel obtained approval of a creative class action settlement in this fiber optic right-of-way case. The plaintiff alleges that the defendant telecommunications company's (T-Cubed) plans to install fiber optic cable on or next to railroad companies' rights-of-way which run through his and class members' property, without their permission, amounted to a slander of their title and a trespass. The district court certified a settlement class and approved a settlement reached by the parties.

Under the settlement, "Cable Side" class members-on whose property the cable ultimately is laid-will be paid $6,000 per linear mile and a percentage of T-Cubed's revenue from the sale, lease, and license of the conduits it installs along the corridors. They will also receive ownership interests in a new company, Class Corridor, described below. The "Non-Cable Side" owners-whose property ultimately would not be used by T-Cubed-will not receive direct cash payments, but will receive the same kind of ownership interests in Class Corridor, and will benefit financially in their capacity as shareholders.

All class members (Cable Side and Non-Cable Side), will transfer easements to the new company, Class Corridor. T-Cubed, for its part, must give Class Corridor assets including dark optical fiber and an option for Class Corridor to purchase a conduit from T-Cubed. In addition, if T-Cubed leases or sells four or more conduit systems to a telecommunications company, T-Cubed will pay either $316 per fiber mile or up to 16 dark fibers to Class Corridor. T-Cubed will also transfer non-cash telecommunication assets to Class Corridor, permitting it either to own and manage a telecommunications company or to take a specified sum of money. Finally, Class Corridor will convey all Cable Side easements to T-Cubed once T-Cubed determines which side of the corridor it will use for its cables. If T-Cubed fails to install a telecommunication system along the railway, the easements will terminate four years after the effective date of the approval of the settlement. As noted above, class members will be entitled to share in any revenues that Class Corridor may earn from the telecommunication assets. They will own 100% of the company at a rate of one membership share for each ten linear feet of real estate owned by that class member, along with apportioned voting rights. Shareholder distributions are within the discretion of the Class Corridor Board of Directors and will be made as reasonably determined.

This settlement was upheld by the Seventh Circuit over the objections of a class member intervenor.

© 2008 Zelle Hofmann/ Not Certified by the Texas Board of Legal Specialization
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