Railroad Parent Companies Dismissed In Vinyl Chloride Derailment Case

In litigation arising from a train derailment and resulting release of more than 20,000 gallons of the chemical vinyl chloride, the U.S. District Court for the District of New Jersey granted summary judgment to two railroad parent companies.  The court concluded that the plaintiffs could not keep the two railroads, which held a voting interest in the switching and terminal company that actually owned and operated the part of the railroad where the derailment occurred, in the case.  The plaintiffs had merely alleged that the railroad parent companies “jointly and severally owned, maintained, operated, managed and controlled” the bridge where the derailment occurred and the train.  The court emphasized that the plaintiffs presented no evidence of any independent act or omission on the part of either parent railroad company that would subject it to direct liability arising from the derailment and thus no facts indicating that either company owed a duty of care to the plaintiffs.  The plaintiffs raised an argument in their opposition to summary judgment arguing that one of the parent railroad companies was independently liable for negligence because one of that company’s employees heard the bridge signal transmit an error message the previous night and failed to report the message, but the court concluded that the plaintiffs could not raise a new claim for the first time in opposition to a motion for summary judgment.

The court also rejected the plaintiffs’ arguments that the corporate veils should be pierced on a theory of vicarious liability.