(The following story by James Quirk Jr. appeared on The Hawk Eye website on March 23.)
BURLINGTON, Iowa — The settlement conference scheduled this Friday between the city of Burlington and BNSF Railway has been canceled, apparently for good, at the request of the railroad.
Scott Power, the city’s attorney in the lawsuit, and City Manager Bruce Slagle said Tuesday the city received a letter from a judge with the U.S. District Court for the Southern District of Iowa, Davenport, that said the settlement conference had been canceled.
The conference originally was scheduled for Monday, but later was moved to Friday in Rock Island, Ill.
“It was really at the request of the railroad,” Power said. “I haven’t talked to (Michael Thrall, attorney for BNSF) or the court. I just know it’s been canceled … I don’t think there’s an order on file yet, but I think it (settlement conference) is effectively dead.”
“We were more than willing to sit down and discuss it and see if there was some middle ground, but they (BNSF) chose not to talk,” Slagle said. “It’s going to trial.”
Slagle wouldn’t comment on whether the city expected BNSF to cancel the settlement conference.
Thrall could not be reached for comment Tuesday.
A hearing scheduled via telephone conference call on BNSF’s request to move a portion of the litigation before the federal Surface Transportation Board in Washington, however, remains set for Monday, Power said.
Directly after the hearing on whether to move the matter before the STB, which Power once categorized as “a friendly forum for a railroad,” both parties will conduct a final pretrial conference via telephone conference call, he said.
The trial is slated to unfold during a three–week period commencing on April 10.
Meanwhile in a Thursday filing, the railroad requested the court split the trial into two parts to receive evidence regarding BNSF’s counterclaim.
The lawsuit was filed by the city two years ago. It alleges BNSF breached an 1858 agreement that stipulates the railroad could use the city’s riverfront property as long as it maintains its principal locomotive shops in the city.
BNSF, during the past several years, has transferred or eliminated about 400 local jobs.
BNSF subsequently filed a counterclaim action that alleges the city breached a 1985 agreement that stipulates the railroad could use the riverfront property indefinitely as long as it’s for railroad purposes. The 1985 contract states nothing about the railroad having to maintain its principal shops in the city.
In its motion Thursday, BNSF states the city is “unilaterally seeking to extract annual rent from the railroad of literally hundreds of thousands of dollars.”
The city, in its resistance to BNSF’s motion to move the matter before the STB filed last week, states the fair rental value that the railroad should pay annually for using the riverfront property is $220,000.
“The city ill–advisedly has pursued its claims against the BNSF, holding the BNSF hostage to this frivolous litigation for over two years,” BNSF states in the Thursday filing. “In their counterclaim, BNSF seeks a declaratory judgment enforcing the 1985 articles of agreement and a judgment for the damages it has sustained as a result of the city’s breach of this agreement consisting of the attorney’s fees and costs BNSF has incurred in defending the city’s underlying claim in this action.
“In the interest of judicial economy and due to the nature of BNSF’s damage claim, BNSF requests the court bifurcate (split) the trial as to BNSF’s damage claim and have the damage claim for attorney’s fees and costs submitted to the court by motion.”
BNSF argues in the document that conducting a separate trial on its counterclaim damages “would significantly expedite the resolution of this litigation by eliminating the need for the submission of numerous evidentiary documents in support of the damage claim at the time of the trial on liability, reducing the parties’ cost and time in trial preparation, and avoiding the risk of revealing attorney–client privileged information.”