State sues BNSF to cover some MT rail costs

AP News
Posted: Nov 17, 2009 1:40 PM

Attorneys for Montana have filed a lawsuit against BNSF Railway Company, accusing it of failing to live up to a 1984 agreement that the state says requires the company to pay some grain shipping costs in central Montana.

Montana Attorney General Steve Bullock filed the suit on Nov. 10 in Fergus County, saying BNSF was in effect seeking to create a monopoly in central Montana.

The suit asks a state judge to force BNSF to resume the payments and also cover any damages.

BNSF spokesman Gus Melonas said Tuesday that he could not comment before consulting with the company's attorneys.

The case's origins are in the 1980 bankruptcy of the Chicago, Milwaukee, St. Paul and Pacific Railroad.

At the time, BNSF stepped in to take over many of the bankrupt company's lines in Montana, including one between Geraldine and Lewistown. Montana officials had said the Geraldine Line was essential for grain farmers in the central part of the state.

When BNSF later decided it did not want the line, the state sued and the two sides signed a settlement agreement in 1984.

As a result, the state designated a nonprofit company, Central Montana Railroad, to take over the Geraldine Line. And BNSF agreed to pay $250 per carload of grain shipped on the line.

The payments had since increased to $884 per carload.

Bullock spokesman Kevin O'Brien said that at the beginning of November, the railroad stopped making payments required under the 1984 agreement. In its lawsuit, the state describes BNSF's action as "predatory" and said it would give the company a shipping monopoly in central Montana.