(The following article by James Quirk Jr. was posted on the Burlington Hawkeye website on May 8.)
BURLINGTON, Iowa — The city of Burlington and BNSF Railway are six months from their face–off in court.
When the two parties clash at 9 a.m. Nov. 14 in the U.S. District Court in Davenport, Scott Power, the city’s attorney, will attempt to prove that BNSF breached an 1858 agreement that stipulated the railroad could use riverfront property for its operations as long as it maintained its local shops in the city.
BNSF will attempt to prove that a 1985 agreement supersedes the 1858 agreement. The more recent agreement between the city and railroad grants the railroad indefinite use of the riverfront property for railroad purposes, but says nothing about BNSF having to maintain its principal shops in the city.
The railroad has eliminated or transferred about 400 local locomotive shops jobs over the past several years.
Since the city filed suit against the railroad on March 4, 2004, in the Iowa District Court for Des Moines County, there have been 15 separate filings on the matter, which was later moved to the U.S. District Court in Davenport.
On April 1, 2004, the railroad filed its notice of removal with the U.S. District Court and also requested an extension of time to prepare its answer to the city’s allegations, which was granted.
On May 10, 2004, the railroad filed its answer, which didn’t mention the 1985 agreement, but did say the Surface Transportation Board has “exclusive jurisdiction over transportation by rail carriers … and (preempts) the remedies provided under federal or state law.”
Power said last year the Surface Transportation Board in Washington, D.C., is known to be a friendly forum for railroads, but it’s not yet known whether the U.S. District Court will decide to turn the matter over to the board.
In its amended answer filed Nov. 29, BNSF added the 1985 agreement as part of its defense, stating it “served as an accord and satisfaction of any prior agreement between the city and defendant and its predecessors in interest affecting the real property.”
When the City Council announced during a March 4, 2004, press conference it was taking BNSF to court for breaching the 1858 agreement, members said their goal was to bring the jobs back.
Mayor Mike Edwards has stated the council hopes a judge will order the railroad to start paying rent for using the riverfront property. Edwards said he hopes the amount convinces BNSF it is more beneficial to return the lost jobs.
Although city officials never said how much rent money they expect to receive from BNSF for using the property, the city’s amended petition to the court filed Jan. 3 gives the impression it’s not small potatoes.
An added sentence in the petition states: “The amount in controversy exceeds the minimum jurisdictional amount necessary to maintain this action in United States District Court.”
Section 1332 of Title 28 in the U.S. Code states, “The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000.”
The most recent filing, dated April 5, was BNSF’s answer to the city’s amended petition, which doesn’t deny that the matter deals with an amount of money that exceeds the U.S. District Court’s minimum.
“It’s clearly a breach of contract and we do need to defend the citizens’ interests,” Councilman Bill Ell said Friday.