BNSF Ry. Co. v. Union Pac. R.R. Co.
| Decision Date | 06 June 2022 |
| Docket Number | 2:09-cv-5062-EFS |
| Parties | BNSF RAILWAY COMPANY, Plaintiff, v. UNION PACIFIC RAILROAD COMPANY, and PORT OF BENTON, Plaintiff-Intervenors, v. TRI-CITY & OLYMPIA RAILROAD COMPANY, LLC, Defendant. |
| Court | U.S. District Court — District of Washington |
ORDER DENYING DEFENDANT'S MOTION TO AMEND PERMANENT INJUNCTION
Before the Court is Defendant Tri-City & Olympia Railroad Company, LLC (TCRY)'s Motion to Amend Permanent Injunction, ECF No. 374. TCRY requests that the Court amend the Permanent Injunction previously entered by the Court on December 14, 2011, to require Plaintiff BNSF Railway Company (BNSF) and Plaintiff-Intervenor Union Pacific Railroad Company (UP) to each pay a $95/car “maintenance charge ” or “tariff.” TCRY also asks the Court to apply the $95/car tariff retroactively going back to the Permanent Injunction's date of entry, as reimbursement for the cars already carried over the subject trackage.
BNSF UP, and Plaintiff-Intervenor Port of Benton (the “Port”) each oppose TCRY's requested amendments.[1] Having considered the parties' filings and oral arguments, as well as the record as a whole, the Court is fully informed and denies TCRY's motion.
On November 6, 1947, the U.S. government entered into an agreement with BNSF and UP's predecessors-in-interest to establish service to the Hanford Nuclear Reservation (the “1947 Agreement”). The 1947 Agreement provided that each railroad company would pay $50, 000 to cover the costs of constructing a portion of what is referred to herein as the “Richland Trackage.”[3] In return, each railroad company was granted “equal joint” operating rights over those government-owned tracks “free of rental or any other charge.”[4] In 1961, the U.S. government entered into another agreement with the railroads (the “1961 Agreement”). The effect of the 1961 Agreement was to extend the railroads' operating rights to the rest of the Richland Trackage.[5] For purposes of this case, the key effect of the 1947 and 1961 Agreements-together with their amendments-was to grant BNSF and UP the right to operate directly on the entirety of the Richland Trackage.
In 1998, the Port received ownership of the Richland Trackage through an indenture from the U.S. government. That indenture provides that the 1947 Agreement, the 1961 Agreement, and the 1979 permit agreement each govern access to the Richland Trackage. The indenture was also conditioned on the Port being bound by the obligations and considerations set forth in those same agreements.
In 2002, TCRY and the Port executed a lease assigning to TCRY the Port's rights and responsibilities to operate and maintain the Richland Trackage (the Railroad Lease).[6] To ensure continued compliance with the terms of the indenture, the Railroad Lease included a provision that TCRY “shall not take any actions which will amend, modify, terminate or invalidate any existing contracts which the Port has with any other railroad carrier, without the Port's prior written consent.”[7]
Also in 2002, TCRY and the Port executed a ground lease of a manufacturing mall (the “Ground Lease”). The stated purpose of the Ground Lease in 2002 was “to support the [TCRY]'s operation of the Port of Benton Railroad and to provide a materials . . . lay-down yard for materials to be used by Bechtel Corporation in the construction of the vitrification plant on the Hanford Site.”[8] When the Port and TCRY amended the Ground Lease in 2006, however, the stated purpose changed. It was no longer designed to support TCRY's operations of the Richland Trackage. Under the new Ground Lease, TCRY's only allowed use of the property was to sublease it to the Bechtel Corporation, and the Ground Lease's stated purpose was now “to provide an area for a laydown yard, which [TCRY] will sublease to the Bechtel Corporation.”[9]
In 2009, after BNSF informed TCRY that it intended to exercise its rights to directly operate on the Richland Trackage, TCRY erected a barrier physically blocking a BNSF locomotive from reaching BNSF customers along the Richland Trackage. BNSF quickly filed suit, seeking declaratory and injunctive relief to enforce its rights under the 1947 and 1961 Agreements.[10] UP intervened early the next month.[11]
In August 2009, the Court granted BNSF's motion for a preliminary injunction, prohibiting TCRY from blocking BNSF's access to the Richland Trackage and requiring TCRY to charge only its customary fee.[12] In March 2010, the Port intervened.[13] In a July 2011 order, the Court found that under the 1947 and 1961 Agreements, BNSF and UP have “equal joint” rights to operate directly upon the Richland Trackage, and that TCRY took its lease of the Richland Trackage subject to BNSF and UP's rights.[14] Still, the parties disagreed as to where BNSF and UP's rights began and ended.
On December 14, 2011, the Court granted summary judgment in favor of BNSF, again finding that the “United States granted BNSF and UP's predecessors-in-interest full rights to operate on the Richland Trackage, and TCRY took possession of the Richland Trackage subject to these rights.”[15] The Court issued the Permanent Injunction, which requires TCRY to (1) “allow both BNSF and UP to directly serve customers along the Richland Trackage, ” and (2) ”coordinate train scheduling and dispatching with both BNSF and UP.”[16] In order to effectuate the Permanent Injunction, the Court also ordered BNSF, UP, and TCRY to confer and “draft a comprehensive operational plan (COP), consistent with the Court's ruling.”[17] And on February 14, 2012, upon receipt and consideration of the parties' various proposed COPs and related arguments, the Court adopted BNSF's proposed COP.[18] Neither the Permanent Injunction nor the COP addressed maintenance costs.
In July 2012, BNSF brought a motion seeking to have the Court hold TCRY in contempt for denying BNSF access to the Port's industrial spur tracks.[19] The Court denied the motion in August 2012, finding that the dispute should have first been submitted to the Port to attempt to resolve the rights of the parties pursuant to the Port's authority in paragraph 10 of the COP.[20] Since then, until TCRY's current motion, there had been no further action in this case.
This case has not been TCRY's only litigation with BNSF, UP, and the Port. In August 2016, TCRY's majority owner filed suit in state court against the Port, alleging that “by allowing BNSF to use its tracks rent free, and without paying for the impact to the tracks from wear and tear, the Port has made an unconstitutional gift of public funds in violation of article VIII, section 7 of the Washington Constitution.”[21] The superior court's dismissal of TCRY's claims was affirmed by both Washington's court of appeals and supreme court.[22]
In 2016, TCRY also filed a complaint against the Port with the U.S. Railroad Retirement Board, alleging that the Port was a “covered employer” and defrauding the government by not making required payments under the Railroad Retirement Act and the Railroad Unemployment Insurance Act.[23] This action also proved unsuccessful.[24] In 2017, TCRY filed a qui tam action in this Court against the Port (Case No. 2:17-cv-0191-TOR), which included claims based on BNSF and UP's use of the Richland Trackage and the Port not approving proposing tariffs.[25] The Court dismissed each of TCRY's federal claims, saying in one of its orders, “Even if the Port had the authority to approve tariffs, Plaintiffs do not point to any provision . . . requiring the Port to approve tariffs.”[26] The Court granted leave for the parties to refile their state-law claims in state court.
In 2020, TCRY refiled in state court, alleging the Port breached the Railroad Lease by, among other things, refusing to timely approve tariffs and not allowing TCRY to negotiate directly with UP and BNSF.[27] Then, in August 2020, the Port filed an unlawful detainer action, which was consolidated with the breach of contract matter.[28] On May 18, 2022-after TCRY filed the subject motion in this Court-the state court granted summary judgment for the Port, dismissing TCRY's claims, finding TCRY breached the Railroad Lease as a matter of law, terminating TCRY's tenancy in the Richland Trackage, and directing for issuance of a writ of restitution.[29] F. TCRY's Motion to Amend the Permanent Injunction
In January 2022, TCRY filed the instant motion.[30] In its motion, briefing, and proposed order, TCRY requests that the Court (1) amend the Permanent Injunction “to include the required payment of TCRY's Railroad Maintenance Charge of $95 per railcar by the BNSF or UP for railcars that they directly carry over the Richland Trackage, ” and (2) order BNSF and UP to reimburse TCRY “in accordance with the Railroad Maintenance Charge for the number of railcars that they directly carried over the Richland Trackage since the Permanent Injunction was entered on December 14th, 2011.”[31]
The Court first addresses which legal standard applies for purposes of deciding TCRY's motion. TCRY cites Federal Rule of Civil Procedure 60(b)(5) as the basis for its request that the Court amend the Permanent Injunction.[32] BNSF however, contends that TCRY's motion is truly seeking a new, independent permanent injunction and must be analyzed as such.[33] BNSF points out that under the existing Permanent Injunction, TCRY is the enjoined party, and BNSF argues that TCRY is seeking relief that is “diametrically opposed” to...
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