Pejepscot Indus. Park, Inc. v. Maine Cent. R. Co.

• Decision Date: 22 December 2003
• Docket Number: No. CIV. 99-112-P-C.,CIV. 99-112-P-C.
• Citation: 297 F.Supp.2d 326
• Parties: PEJEPSCOT INDUSTRIAL PARK, INC. d/b/a Grimmel Industries, Plaintiff, v. MAINE CENTRAL RAILROAD CO., et al., Defendants.
• Court: U.S. District Court — District of Maine

297 F.Supp.2d 326

PEJEPSCOT INDUSTRIAL PARK, INC. d/b/a Grimmel Industries, Plaintiff, v. MAINE CENTRAL RAILROAD CO., et al., Defendants.

No. CIV. 99-112-P-C.

United States District Court, D. Maine.

December 22, 2003.

James T. Kilbreth, Verrill & Dana, Daniel L. Rosenthal, Verrill & Dana, Rita H. Logan, Verrill & Dana, Portland, ME, for Plaintiff.

Eric L. Hirschhorn, Winston & Strawn, LLP, Washington, DC, Glen L. Porter, Eaton, Peabody, Bradford & Veague, Bangor, ME, for Defendants.

MEMORANDUM OF DECISION AND ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS

GENE CARTER, Senior District Judge.

In its First Amended Complaint (Docket Item No. 21), Plaintiff Pejepscot Industrial Park, Inc. d/b/a Grimmel Industries ("Grimmel") seeks a declaration of ownership rights to a railroad spur (Count I) and an injunction preventing destruction of the spur and interference with Grimmel's right to repair, maintain, and use the spur (Count II). The First Amended Complaint further alleges unlawful refusal to provide rail service, in violation of 49 U.S.C. § 11101 (Count III); breach of duty to Grimmel as third-party beneficiary of the freight easement agreement between Maine Central Railroad Company, Springfield Terminal Railway Company, and the State of Maine (Count IV); breach of contract (Count V); and tortious interference with business advantage and expectancies (Count VI). Defendants Maine Central Railroad Company, Springfield Terminal Railway Company, and Guilford Transportation Industries, Inc. now move to dismiss Counts IV, V, and VI of the First Amended Complaint on the ground that such counts fail to state claims on which relief can be granted. Defendants' Motion to Dismiss State Law Claims (Docket Item No. 45). Defendants assert that each of these counts is preempted by the Interstate Commerce Commission Termination Act of 1995 (the "ICCTA"), Pub.L. No. 104-88, 109 Stat. 803 (1995) (codified at scattered sections of the U.S.C., including §§ 10101-16106 (1997)). Alternatively, Defendants move to dismiss Count IV because Grimmel is not an intended beneficiary of the freight easement agreement at issue in that count, as well as Count VI on the basis that Grimmel has failed to plead fraud with particularity. For the reasons set forth below, the Court will deny Defendants' motion to dismiss with respect to Count V, but will dismiss Counts IV and VI.

I. FACTS

Defendant Maine Central Railroad Company ("MEC") is a common carrier providing railroad freight services. First Amended Complaint ¶ 2. Defendant Springfield Terminal Railway ("ST") also provides common carrier freight service by railroad. Id. ¶ 3. Defendant Guilford Transportation ("Guilford") owns MEC and ST and is itself a common carrier. Id. ¶ 4. The dispute among the parties involves a 3000-foot railroad spur located in Topsham, Maine. In January 1992, Grimmel purchased an abandoned paper mill formerly owned and operated by Pejepscot Paper Company, incorporated as Pejepscot Industrial Park, and engaged in the business of salvaging, selling, and shipping scrap metal. Id. ¶ 7. The spur in question runs across Grimmel's land and the adjacent land owned by Eastbrook Timber Company ("Eastbrook") to a main railroad track. Id. ¶ 8. Eastbrook has no operations at its site; thus, at this time the spur serves only Grimmel. Id. ¶ 9.

The main railroad track to which the spur connects traverses from Brunswick/Topsham to Lewiston and is commonly known as the "Lewiston Industrial Track." Id. ¶ 10. MEC's predecessors acquired the track in 1937. Id. In February 1991, MEC executed a deed (the "Deed") granting to the State of Maine (the "State") portions of the Lewiston Industrial Track. Id. Ex. 1, Ex. A. Among the parcels granted was the Lewiston Lower Road Branch, which lies within Brunswick, Topsham, and Lisbon, Maine and is the portion of the line to which the spur connects. Id. ¶ 11 and Ex. 1, Deed Ex. A.

As part of the sale of the Lewiston Industrial Track, MEC, along with ST, entered into a Freight Easement Agreement with the State. Id. ¶ 13 and Ex. 2. Pursuant to the Freight Easement Agreement, Defendants reserved "from the Lines conveyed to the State ... a rail freight easement for the purpose of providing common carrier rail freight service to all shippers and shippers' facilities on the Lines." Id. ¶ 14 and Ex. 2, § 1.1. Further, the Freight Easement Agreement provides that "[t]he conveyance of the Lines by MEC to the State excludes any and all rights and obligations of the MEC under federal law to provide, directly or through ST, common carrier rail freight service and the MEC retains all such rights and obligations to provide said service to all shippers and shippers' facilities located on the Lines." Id. ¶ 14 and Ex. 2, § 1.2.

By 1994, Grimmel's operations were in full swing and Grimmel was prepared to ship scrap metal out of Maine. Id. ¶ 15. The most efficient and least expensive method of such shipment is by rail. Id. Thus, Grimmel requested that Defendants provide common carrier freight service at Grimmel's Pejepscot Industrial Park. Id. Defendants refused to provide service, asserting no appropriate rail cars were available. Id. ¶ 16. After shipping the product out of Portland for a time by other means, Grimmel again requested rail service at the Pejepscot industrial facility. Id. ¶ 22. Defendants provided Grimmel with rail service rates which Grimmel accepted. Id. ¶ 23. Apparently before any product was shipped by rail, Defendants again refused to provide service to Grimmel. Id. ¶ 24. Thereafter, Grimmel began negotiations with the State over repairs to the Lewiston Lower Road Branch track and the provision of rail service to Grimmel upon MEC's formal abandonment of rail service on the Lewiston Industrial Track line. Id. ¶ 25.

In June 1998, MEC filed with the Surface Transportation Board (the "STB") a Notice of Exemption for abandonment and discontinuance of service over the Lewiston Industrial Track line. Id. ¶ 26 and Ex. 5. In its Notice of Exemption, MEC represented to the Board that the Lewiston Lower Road Branch portion of the line was already owned by the State. Id. ¶ 27 and Ex. 5 at 3. It further represented that "the State of Maine, or a third party acting in conjunction therewith, will acquire the remainder of the Line and/or operating rights over the same post-abandonment." Id. ¶ 27 and Ex. 5 at 3. MEC maintained that "no salvage operations will be undertaken" after abandonment. Id. ¶ 27 and Ex. 5, Ex. D at 4. MEC also represented that "[t]he proposed abandonment will not affect carrier operations in the area." Id. ¶ 27 and Ex. 5, Ex. D at 5.

The STB permitted abandonment of the line. Id. ¶ 28. Thereafter, Defendants informed Grimmel that they intended to rip up the spur and sell it for scrap. Id. Destruction of the spur will entirely cut off Grimmel's ability to obtain rail service from whichever rail carrier operates the main rail line after MEC abandons it. Id. ¶ 29. The State of Maine has agreed to upgrade the Lewiston Lower Road Branch so that Grimmel may be provided rail service, so long as Grimmel upgrades the spur. Id. ¶ 30. In July 1999, however, after Grimmel had requested MEC's consent to repair and upgrade the spur at Grimmel's own expense, so that Grimmel could have access to rail service on the Lewiston Lower Road Branch, MEC refused to allow Grimmel to repair the spur. Id. ¶ 31-32. Thus, Grimmel will be unable to obtain rail service when the main rail line is restored. Id. ¶ 32.

II. Standard

Defendants' motion to dismiss invokes Fed.R.Civ.P. 12(b)(6). "When presented with a motion to dismiss, the district court must take as true the well-pleaded facts as they appear in the complaint, extending the plaintiff every reasonable inference in his favor." Medina-Claudio v. Rodriguez-Mateo, 292 F.3d 31, 34 (1st Cir.2002) (citation and internal punctuation omitted). The defendant is entitled to dismissal for failure to state a claim only when "the allegations are such that the plaintiff can prove no set of facts to support the claim for relief." Clorox Co. Puerto Rico v. Proctor & Gamble Commercial Co., 228 F.3d 24, 30 (1st Cir.2000) (citation and internal punctuation omitted); see also Tobin v. University of Maine Sys., 59 F.Supp.2d 87, 89 (D.Me.1999). If factual allegations in the complaint are based on documents whose authenticity is not challenged, the court may look to those documents in addition to the complaint itself. Alternative Energy, Inc. v. St. Paul Fire & Marine Ins. Co., 267 F.3d 30, 33-34 (1st Cir.2001).

III. Discussion

Count III of the First Amended Complaint is the only count therein grounded upon the ICCTA. The Court previously referred Count III to the STB for a determination of the parties' rights under the primary jurisdiction doctrine.¹ The STB concluded that Defendants were obligated to provide a rate for the transportation of automobile shredder residue following a specific request for rates from Grimmel on May 22, 1997.² According to the STB, Defendants' failure to provide a rate resulted in a violation of their common carrier obligations under 49 U.S.C. § 11101 shortly after that date, and the violation continued until May 21, 1998, when automobile shredder residue became an exempt commodity under the ICCTA.³ Pejepscot Indus. Park, Inc.—Declaratory Order, STB Finance Docket No. 33989 (STB served November 7, 2003) at 4 (Docket Item No. 58). Defendants filed a cross-petition before the STB seeking an order declaring that federal law preempts the state law remedies sought by Grimmel in Counts IV and VI. The STB declined to rule on the preemption issue because this Court had reserved the matter to itself by only referring Count III to the STB. Pejepscot Indus. Park, Inc.—Declaratory Order, STB Finance Docket No. 33989 (STB served May 15, 2003) at 14-15 (Docket Item No. 30). However, in keeping with its helpful practice of bringing potentially relevant STB and ICC precedent to the...