Court rules derailment federal issue

By Dale Wetzel, Associated Press
Published Wednesday, May 17, 2006

BISMARCK, N.D. – Federal courts should handle a batch of lawsuits filed after a Canadian Pacific train derailment sent an anhydrous ammonia cloud over Minot, killing one man and injuring hundreds, a federal appeals court ruled.

The decision may bar Minot residents from collecting any money damages from the Canadian Pacific resulting from the January 2002 accident, a lawyer said. The derailment broke open tanker cars that were carrying the chemical, which is a farm fertilizer.

“If the opinion is read broadly, and I fear that it will be, it’s basically the railroads’ get-out-of-jail free card,” said Collin Dobrovolny, a Minot attorney who represents a group of families suing the railroad. “They will have no responsibility, other than to pay a fine, for any derailments in the future.”

When the ruling was made public Tuesday, a Minnesota state court trial in a separate derailment lawsuit was halted, a day after lawyers gave opening arguments.

Tim Thornton, a Canadian Pacific attorney, said all Minnesota state court lawsuits against the Canadian Pacific have now been moved to federal court.

“The railroad has maintained since the beginning that these cases should be resolved pursuant to federal law governing railroads, and ... that resolution should take place in federal court,” Thornton said.

Tuesday’s decision, made by a three-judge panel of the 8th U.S. Circuit Court of Appeals, directly affected a sheaf of 31 lawsuits that were initially filed in a Minnesota state court.

The lawsuits contended the Canadian Pacific was negligent in inspecting a stretch of track where the derailment happened. The appeals court’s ruling says the Federal Railroad Administration regulates track inspections, and the federal courts have jurisdiction over those claims.

“It is clear the FRA regulations are intended to prevent negligent track inspection, and there is no indication the FRA meant to leave open a state law cause of action,” it says.

Appeals judges Kermit Bye, of Fargo; Lavenski Smith, of Little Rock, Ark.; and Arlen Beam, of Lincoln, Neb., heard the case. Bye wrote the panel’s unanimous opinion.

The lawsuits bounced from state to federal court, and were sent back to state court in Hennepin County, Minn., in March 2005 when U.S. District Judge Richard Kyle ruled the cases belonged there. Tuesday’s appeals ruling reversed Kyle’s decision, and sent the dispute back to federal court.

Last March, a federal class-action lawsuit against the railroad, filed in U.S. District Court in Bismarck, was dismissed on similar grounds.

U.S. District Judge Dan Hovland ruled the Canadian Pacific could not be made to pay damages to people injured in the derailment. Under the Federal Railroad Safety Act, the railroad may face regulatory penalties because of the accident, but the railroad is protected against private lawsuits, Hovland ruled.

Hovland acknowledged his decision carried a “harsh impact on injured individuals” and said Congress should examine the law’s effects.

“While the Federal Railroad Safety Act does provide for civil penalties to be imposed on noncompliant railroads, the legislation ... closes every available door and remedy for injured parties,” Hovland wrote. “As a result, the judicial system is left with a law that is inherently unfair to innocent bystanders and property owners who may be injured by the negligent actions of railroad companies.”