Indiana Harbor Belt R. Co. v. American Cyanamid Co.

• Citation: 916 F.2d 1174
• Decision Date: 18 October 1990
• Docket Number: Nos. 89-3703,89-3757,s. 89-3703
• Parties: , 59 USLW 2295, 21 Envtl. L. Rep. 20,360 INDIANA HARBOR BELT RAILROAD COMPANY, Plaintiff-Appellee, Cross-Appellant, v. AMERICAN CYANAMID COMPANY, Defendant-Appellant, Cross-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)

Page 1174

916 F.2d 1174

32 ERC 1228, 59 USLW 2295, 21 Envtl.

L. Rep. 20,360

INDIANA HARBOR BELT RAILROAD COMPANY, Plaintiff-Appellee, Cross-Appellant, v. AMERICAN CYANAMID COMPANY, Defendant-Appellant, Cross-Appellee.

Nos. 89-3703, 89-3757.

United States Court of Appeals, Seventh Circuit.

Argued Sept. 7, 1990.

Decided Oct. 18, 1990.

Anna M. Kelly, Roger A. Serpe, Chicago, Ill., for plaintiff-appellee, cross-appellant.

Thomas D. Allen, Ruth E. VanDemark, Iren J. Ustel, Wildman, Harrold, Allen & Dixon, Chicago, Ill., for defendant-appellant, cross-appellee, American Cyanamid Company.

Robert L. Landess, Daniel P. Hogan, Ross & Hardies, Chicago, Ill., for defendant, cross-appellee, Missouri Pacific Railroad Company.

John M. Christian, Jan Feldman, Stanley V. Figura, Phelan, Pope & John, Chicago, Ill., for amicus curiae Chemical Industries Council of Illinois.

David G. Norrell, Eric P. Heichel, Kirkland & Ellis, Washington, D.C., for amici curiae Chemical Mfrs. Ass'n, Nat. Agricultural Chemicals Ass'n, Fertilizer Institute, Chlorine Institute, Compressed Gas Ass'n, Nat. Propane Gas Ass'n, Nat. Indus. Transp. League, American Petroleum Institute.

Martin W. Bercovici, Kris A. Monteith, Keller & Heckman, Washington, D.C., for amici curiae American Fiber Mfrs. Ass'n, Inc., Rubber Mfrs. Ass'n, Inc., Soc. of Plastics Industry, Inc.

Before POSNER, MANION and KANNE, Circuit Judges.

POSNER, Circuit Judge.

American Cyanamid Company, the defendant in this diversity tort suit governed by Illinois law, is a major manufacturer of chemicals, including acrylonitrile, a chemical used in large quantities in making acrylic fibers, plastics, dyes, pharmaceutical chemicals, and other intermediate and final goods. On January 2, 1979, at its manufacturing plant in Louisiana, Cyanamid loaded 20,000 gallons of liquid acrylonitrile into a railroad tank car that it had leased from the North American Car Corporation. The next day, a train of the Missouri Pacific Railroad picked up the car at Cyanamid's siding. The car's ultimate destination was a Cyanamid plant in New Jersey served by Conrail rather than by Missouri Pacific. The Missouri Pacific train carried the car north to the Blue Island railroad yard of Indiana Harbor Belt Railroad, the plaintiff in this case, a small switching line that has a contract with Conrail to switch cars from other lines to Conrail, in this case for travel east. The Blue Island yard is in the Village of Riverdale, which is just south of Chicago and part of the Chicago metropolitan area.

The car arrived in the Blue Island yard on the morning of January 9, 1979. Several hours after it arrived, employees of the switching line noticed fluid gushing from the bottom outlet of the car. The lid on the outlet was broken. After two hours, the line's supervisor of equipment was able to stop the leak by closing a shut-off valve controlled from the top of the car. No one was sure at the time just how much of the contents of the car had leaked, but it was feared that all 20,000 gallons had, and since acrylonitrile is flammable at a temperature of 30? Fahrenheit or above, highly toxic, and possibly carcinogenic (Acrylonitrile, 9 International Toxicity Update, no. 3, May-June 1989, at 2, 4), the local authorities ordered the homes near the yard evacuated. The evacuation lasted only a few hours, until the car was moved to a remote part of the yard and it was discovered that only about a quarter of the acrylonitrile had leaked. Concerned nevertheless that there had been some contamination of soil and water, the Illinois Department of Environmental Protection ordered the switching line to take decontamination measures that cost the line $981,022.75, which it sought to recover by this suit.

One count of the two-count complaint charges Cyanamid with having maintained the leased tank car negligently. The other count asserts that the transportation of acrylonitrile in bulk through the Chicago metropolitan area is an abnormally dangerous activity, for the consequences of which the shipper (Cyanamid) is strictly liable to the switching line, which bore the financial brunt of those consequences because of the decontamination measures that it was forced to take. After the district judge denied Cyanamid's motion to dismiss the strict liability count, 517 F.Supp. 314 (N.D.Ill.1981), the switching line moved for summary judgment on that count--and won. 662 F.Supp. 635 (N.D.Ill.1987). The judge directed the entry of judgment for $981,022.75 under Fed.R.Civ.P. 54(b) to permit Cyanamid to take an immediate appeal even though the negligence count remained pending. We threw out the appeal on the ground that the negligence and strict liability counts were not separate claims but merely separate theories involving the same facts, making Rule 54(b) inapplicable. 860 F.2d 1441 (7th Cir.1988). The district judge then, over the switching line's objection, dismissed the negligence claim with prejudice, thus terminating proceedings in the district court and clearing the way for Cyanamid to file an appeal of which we would have jurisdiction. There is no doubt about our appellate jurisdiction this time. Whether or not the judge was correct to dismiss the negligence claim merely to terminate the lawsuit so that Cyanamid could appeal (the only ground he gave for the dismissal), he did it, and by doing so produced an incontestably final judgment. The switching line has cross-appealed, challenging the dismissal of the negligence count.

The question whether the shipper of a hazardous chemical by rail should be strictly liable for the consequences of a spill or other accident to the shipment en route is a novel one in Illinois, despite the switching line's contention that the question has been answered in its favor by two decisions of the Illinois Appellate Court that the district judge cited in granting summary judgment. In both Fallon v. Indian Trail School, 148 Ill.App.3d 931, 934, 102 Ill.Dec. 479, 481, 500 N.E.2d 101, 103 (1986), and Continental Building Corp. v. Union Oil Co., 152 Ill.App.3d 513, 516, 105 Ill.Dec. 502, 504-05, 504 N.E.2d 787, 789-90 (1987), the Illinois Appellate Court cited the district court's first opinion in this case with approval and described it as having held that the transportation of acrylonitrile in the Chicago metropolitan area is an abnormally dangerous activity, for which the shipper is strictly liable. These discussions are dicta. The cases did not involve acrylonitrile--or for that matter transportation--and in both cases the court held that the defendant was not strictly liable. The discussions were careless dicta, too, because the district court had not in its first opinion, the one they cited, held that acrylonitrile was in fact abnormally dangerous. It merely had declined to grant a motion to dismiss the strict liability count for failure to state a claim. We do not wish to sound too censorious; this court has twice made the same mistake in interpreting the district court's first opinion. Martin v. Harrington & Richardson, Inc., 743 F.2d 1200, 1203 (7th Cir.1984); City of Bloomington v. Westinghouse Elec. Corp., 891 F.2d 611, 615 (7th Cir.1989). But mistake it is. The dicta in Fallon and Continental cannot be considered reliable predictors of how the Supreme Court of Illinois would rule if confronted with the issue in this case. We are not required to follow even the holdings of intermediate state appellate courts if persuaded that they are not reliable predictors of the view the state's highest court would take. Williams v. Lane, 826 F.2d 654, 662-63 (7th Cir.1987); Williams, McCarthy, Kinley, Rudy & Picha v. Northwestern National Ins. Group, 750 F.2d 619, 624-25 (7th Cir.1984); Klippel v. U-Haul Co., 759 F.2d 1176, 1181 (4th Cir.1985). No court is required to follow another court's dicta. Cf. Wood v. Armco, Inc., 814 F.2d 211, 213-14 (5th Cir.1987). Here they are not even considered or well-reasoned dicta, founded as they are on the misreading of an opinion.

The parties agree that the question whether placing acrylonitrile in a rail shipment that will pass through a metropolitan area subjects the shipper to strict liability is, as recommended in Restatement (Second) of Torts Sec. 520, comment l (1977), a question of law, so that we owe no particular deference to the conclusion of the district court. They also agree (and for this proposition, at least, there is substantial support in the Fallon and Continental opinions) that the Supreme Court of Illinois would treat as authoritative the provisions of the Restatement governing abnormally dangerous activities. The key provision is section 520, which sets forth six factors to be considered in deciding whether an activity is abnormally dangerous and the actor therefore strictly liable.

The roots of section 520 are in nineteenth-century cases. The most famous one is Rylands v. Fletcher, 1 Ex. 265, aff'd, L.R. 3 H.L. 300 (1868), but a more illuminating one in the present context is Guille v. Swan, 19 Johns. (N.Y.) 381 (1822). A man took off in a hot-air balloon and landed, without intending to, in a vegetable garden in New York City. A crowd that had been anxiously watching his involuntary descent trampled the vegetables in their endeavor to rescue him when he landed. The owner of the garden sued the balloonist for the resulting damage, and won. Yet the balloonist had not been careless. In the then state of ballooning it was impossible to make a pinpoint landing.

Guille is a paradigmatic case for strict liability. (a) The risk (probability) of harm was great, and (b) the harm that would ensue if the risk materialized could be, although luckily was not, great (the balloonist could have crashed into the crowd rather than into the vegetables). The confluence of these two factors established the urgency of seeking to prevent such accidents. (c) Yet such accidents could not be prevented by the exercise of due care; the technology of care in ballooning was...