## Facts

- Level 3 Communications, LLC and Wiltel Communications, LLC operated a nationwide network of underground fiber-optic cables.
- A cable located near the intersection of Reedyville Road and Hunt Church Road in Roundhill, Kentucky connected terminals in Louisville, Kentucky and Portland, Tennessee.
- On October 3, 2012, TNT Construction, Inc. performed excavation work near that intersection and severed the cable and damaged a conduit bank.
- Level 3 asserted the affected systems had capacity of 18,816 DS-3s (approximately 44.7 Mbps each) and that some users experienced service interruption until repair; TNT asserted all traffic was automatically rerouted with no service interruption.
- Level 3 restored service 6.3 hours after the cut.
- Level 3 sought $61,288.98 in repair costs (not challenged on the motion) and $3,308,605.44 for loss of use.
- Level 3 calculated loss-of-use damages using a hypothetical rental model: the asserted cost to rent substitute DS-3 capacity from another carrier for the 6.3-hour period, based on other carriers’ DS-3 rates between Louisville and Portland.

## Issues

1. Under Kentucky law, may a property owner recover loss-of-use damages for a temporary outage of a fiber-optic cable even if redundancy prevented (or reduced) customer disruption and the owner did not prove lost profits, lost customers, or refunds?
2. If loss-of-use damages are available, may they be measured by a hypothetical rental value for substitute telecommunications capacity when the plaintiff did not rent substitute capacity and the asserted short-term market is not supported by the record?

## Decision

- The court granted in part and denied in part TNT’s motion for partial summary judgment.
- The court denied the motion to the extent it sought a categorical bar to any loss-of-use damages; Level 3 could pursue loss-of-use damages for the period the cable was unusable.
- The court granted the motion to the extent Level 3 sought to recover loss-of-use damages under its multi-million-dollar hypothetical rental model, finding the proposed measure too speculative and insufficiently supported.

## Legal Principles

- Kentucky law permits recovery for temporary injury to property of both repair costs and the reasonable value of loss of use during the repair period, if proven with reasonable certainty.
- Loss-of-use damages are not limited to lost-profit theories; mitigation that prevents customer impact does not, by itself, eliminate the compensable loss associated with the temporary unavailability of the damaged asset.
- Rental value may be an appropriate measure of loss of use, but the claimed amount must be grounded in evidence showing a reasonable, non-speculative basis (including support for any asserted market for short-term substitute use and the fit between the claimed substitute and the loss).
- Summary judgment is appropriate to exclude a specific damages model that lacks a sufficient factual and legal foundation, even when some category of damages remains potentially recoverable.

## Conclusion

The court held that Kentucky law can allow loss-of-use damages for a temporarily disabled fiber-optic cable despite operational redundancy, but it excluded Level 3’s outsized, hypothetical rental-based valuation as too speculative, leaving only a potentially provable, reasonable loss-of-use measure for trial.


Level 3 Commc’ns, LLC v. TNT Constr., Inc., 220 F. Supp. 3d 812 (W.D. Ky. 2016)