(The following story by Bennett Hall appeared on the Corvallis Gazette-Times website on August 28.)
CORVALLIS, Ore. — Two months after the Willamette & Pacific Railroad halted service on a dilapidated stretch or track in south Benton County, several shippers have filed suit to reopen the line.
The W&P embargoed the Bailey Branch on June 16, citing five derailments in five weeks. Bruce Carswell, the shortline railroad’s president, said the move was a first step toward asking the federal Surface Transportation Board for approval to permanently abandon the 23-mile branch line, which runs south from Corvallis and ends at the Hull-Oakes Lumber Mill in Dawson.
Hull-Oakes Lumber was one of nine shippers that signed onto the lawsuit. Others include Venell Farms, Mid-Valley Agricultural Products and Western Pulp Products. All lost weekly rail service when the line was shut down.
Filed in Benton County Circuit Court, the suit names the Willamette & Pacific as well as its parent company, Genessee & Wyoming Inc., and the Union Pacific Railroad as defendants. The W&P leases the tracks from Union Pacific.
The lawsuit seeks up to $425,000 in damages for the shippers, but the group’s attorney said that’s not the main object of the legal action.
“What we are first seeking is really an injunction to end the embargo, get the line repaired and resume service as soon as possible,” said Alex C. Boal of Churchill Leonard Lawyers in Salem.
Spokesmen for the Willamette & Pacific and Union Pacific railroads declined to comment on the lawsuit.
The Portland & Western began operating the Bailey Branch along with other shortline tracks in 1993, when it began leasing the lines from the Southern Pacific Railroad. Those leases were transferred to Union Pacific when the UP bought out Southern Pacific in 1996.
Over the years, all parties agree, the line has deteriorated and is now in woeful shape. Before the embargo, speeds on parts of the Bailey Branch were limited to 5 mph as a safety measure.
With just 11 shippers on the branch, freight volumes and revenues are relatively low, and P&W officials argue the line doesn’t bring in enough money to justify the cost of repairs. The line has twice been bailed out by the state, which has kicked in about $350,000 in the last few years for emergency tie replacement and other work.
The railroad has been threatening for years to abandon the line, but it has always backed down in the face of strong opposition from the shippers and their allies in county, state and federal government.
The embargo is the closest the railroad has come so far to permanently shutting down the Bailey Branch.
In their lawsuit, the shippers offer three alternate justifications for their claim:
• Breach of contract. The lease agreement requires the Willamette & Pacific to maintain the line in the condition it was in when the lease took effect in 1993, and the W&P has not done so, the lawsuit maintains. As continuous users of the line, the plaintiffs are intended beneficiaries of the lease agreement and so should be covered by it.
• Breach of implied contract. When the state appropriated funds for emergency repairs to the line, the Willamette & Pacific imposed a $49-per-carload surcharge on the shippers to pay for ongoing maintenance. The surcharge created a new obligation for the W&P to maintain the track in a safe condition, which it has failed to do, according to the lawsuit.
• Promissory estoppel. The railroad told the shippers the surcharge would enable it it keep the line open. Based on those promises, the shippers entered into contracts promising to deliver or receive goods via rail. The embargo has forced the shippers to violate those contracts.
Boal said he’s confident his clients have legal standing under all three alternative claims, whichever one the court decides to consider.
“Basicallly, we’re alleging that the Willamette & Pacific had a duty to keep the track maintained,” Boal said. “Their justification for embargoing the line is that the line is no longer safe to operate.”
The railroads have until late next month to respond to the lawsuit.