A long-running battle between Canadian Pacific Railway Ltd. and the victims of a major toxic train derailment in North Dakota turned in favor of the victims recently when a federal appellate court upheld the constitutionality of Congress’ effort to allow the suits by victims to proceed in state courts. The railroad now wants the court to rehear the decision. The appeals court ruled that “there is no federal-question jurisdiction” and that ”the statute is constitutional.” This means the case is sent back to state courts.
The litigation involves a 2002 derailment of 31 cars of a Canadian Pacific freight train. The derailment, so violent that one car flew the length of a football field, released more than 220,000 gallons of anhydrous ammonia into the air. This exposed the area’s population to a cloud of toxic gas. As a result, one person died, 11 people sustained serious injuries and 322 people sustained major injuries. Victims filed a class action in federal court as well as individual suits in state courts. Many of the state court lawsuits were removed to federal court by the railroad. The federal district court, and then the Eighth Circuit on the first appeal, held that the Federal Railroad Safety Act (FRSA) pre-empted the state suits. Had those rulings stood, the plaintiffs would have been left without a remedy since the Act didn’t create a federal cause of action.
In 2007, while a second appeal was pending, Congress amended the FRSA to clarify that it did not preempt state law actions when a railroad has failed to comply with federal or state standards. The amendment was retroactive to the date of the North Dakota derailment. On the second appeal, Canadian Pacific challenged the amendment’s constitutionality, arguing that it violated separation of powers, due process, equal protection and the ex post facto clause. The United States intervened to defend the law, and 13 states filed an amicus brief supporting the law and the victims. A three-judge panel of the Eighth Circuit, voting 2-1, rejected all of the railroad’s arguments. The court’s majority opinion reads:
Contrary to CP’s claim that the amendment seeks ‘to impose unlimited liability [upon CP] for’ the Minot derailment case, the amendment merely gives injured parties the chance to seek recovery against railroads. Victims of railroad accidents must still prove their cases in court.
Before the amendment, Judge Kermit E. Bye, who wrote the opinion, said the Act had been interpreted to deny injured persons “the mere chance” to hold a railroad accountable when its negligence violated state and federal laws and regulations intended to further railroad safety. “It was rational for Congress to ‘clarify’ this result was not an intended purpose” of the Act, Judge Bye wrote for the majority. Canadian Pacific has settled many of the claims, but there are more than 100 claimants with pending lawsuits. The FRSA’s stated purpose is railroad safety and the Eighth Circuit was correct in its ruling upholding the law. This was a major victory for victims and for railroad safety.
Source: National Law Journal
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