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Sunday, March 29, 2020

Railroads avoid $6B Iowa class action over 2008 flood


By Erianne Leatherman | Jul 10, 2018


DES MOINES, Iowa (Legal Newsline) – The Iowa Supreme Court has upheld a district court ruling that prohibits a group of property owners from suing railways for damages related to a 2008 Iowa flood.

In the June 22 ruling, Justice Edward Mansfield said, “After careful review of the (Federal Interstate Commerce Commission Termination Act) and authorities interpreting it, we conclude this federal law does indeed preempt the property owners’ action alleging that the railroads’ design and operation of their railroad bridges resulted in flood damage to other properties."

In 2013, a group of property owners filed the class action lawsuit against the Cedar Rapids and Iowa City Railway Co., Union Pacific Railroad Co., Union Pacific Corp. and Alliant Energy Corp., alleging the companies were responsible for damage to their property caused by the 2008 flood. The lawsuit sought $6 billion in damages.

The companies own bridges that traverse the Cedar River that were washed out and “worsened the effects of the flooding for the other property owners,” the opinion said. The defendants parked railcars loaded with rocks on the bridges in an effort to weigh them down and prevent them from washing away during the flood, but two of the four bridges collapsed two days later and the railcars fell and clogged the Cedar River, allegedly causing or worsening the plaintiffs’ property damage, the opinion said. 

The lawsuit had been moved to U.S. District Court for the Northern District of Iowa on the basis that state law claims were preempted by federal law. That court agreed and the case was dismissed. However, the U.S. Court of Appeals for the 8th Circuit reversed and remanded it.

The court had to decide whether the plaintiffs’ state-law damage claims against the railways are preempted by the ICCTA.

Mansfield said that “not all state-law tort claims involving railroads are preempted by the ICCTA. But state tort claims like the ones alleged here that involve second-guessing of decisions made by railroads to keep their rail lines open are expressly preempted by Title 49 § 10501(b) of the ICCTA.”

Justices Brent Appel, David Wiggins and Daryl Hecht filed a dissenting opinion.

"Whether the United States Supreme Court wishes to more closely align the caselaw with congressional intent and the court’s traditional approach to preemption remains to be seen," Appel wrote. 

"In the absence of Supreme Court action, this case now sends a clear message to Congress, namely, that if Congress wishes to prevent preemption of nonregulatory state tort law and statutory law claims when it enacts economic deregulation, it had better state so expressly. 

"The limitations of ordinary language in economic deregulation legislation are no longer a reliable barrier to expansive approaches to implied preemption. For the above reasons, I would not run for the exit, but would reverse the holding of the district court."

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