Minnesota by Burlington Northern Railroad v. Big Stone-Grant Industrial Development & Transportation, L.L.C.

990 F. Supp. 731, 1997 U.S. Dist. LEXIS 21733, 1997 WL 819753
CourtDistrict Court, D. Minnesota
DecidedFebruary 14, 1997
DocketNo. 3-95-239
StatusPublished

This text of 990 F. Supp. 731 (Minnesota by Burlington Northern Railroad v. Big Stone-Grant Industrial Development & Transportation, L.L.C.) is published on Counsel Stack Legal Research, covering District Court, D. Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Minnesota by Burlington Northern Railroad v. Big Stone-Grant Industrial Development & Transportation, L.L.C., 990 F. Supp. 731, 1997 U.S. Dist. LEXIS 21733, 1997 WL 819753 (mnd 1997).

Opinion

MEMORANDUM OPINION AND ORDER

DAVIS, District Judge.

This ease arises out of the proposed construction of a new line of railroad track that would connect two “spurs” of the Plaintiff Burlington Northern Railroad Company’s (“BN”) existing tracks. Defendant Big Stone-Grant Industrial Development and Transportation, L.L.C. (“Big Stone”) proposed to build the new track in order to serve new industries that would locate in a new industrial park, which would be located in South Dakota. BN asserts that the construction of the new track would cause a rival railroad company, the Twin Cities and Western Railroad Company (“TCW’), to breach its contracts with BN. BN brought this declaratory judgment action alleging intentional interference with contractual relations, and a claim under the Minnesota Environmental Rights Act, Minn.Stat. § 116B.01-.13 (“MERA”). BN has since withdrawn its MERA claim, thus the only matter before the Court is the tortious interference with contract claim. For the reasons discussed herein, the Court will grant BN’s motion for summary judgment and deny Big Stone’s motion for summary judgment.

Factual Background

BN owns a railroad line extending from Appleton, Minnesota to Milbank, South Dakota. The line was originally built by the Chicago, Milwaukee and St. Paul Railway Company (“Milwaukee”) which extended to the Pacific Northwest. Milwaukee operated on this railroad line until 1980 when it ended operations from the Minnesota border at Or-tonville to Seattle, Washington. This portion of the line became part of the bankruptcy estate of Milwaukee. BN purchased the South Dakota segment of the line, which runs from Milbank, South Dakota to Orton-ville, Minnesota. In 1985, the Soo Line Railroad (“Soo Line”) purchased the Minnesota segment of the line, which runs from Orton-ville to Appleton, Minnesota. BN purchased this segment in 1992.

1. Trackage Agreements

In 1982, BN granted Milwaukee “overhead trackage” rights for the South Dakota segment of BN’s line (“1982 Agreement”). Milwaukee’s successor, Soo Line, subsequently assigned these overhead trackage rights to TCW. The 1982 Agreement allows TCW to use the line, but does not allow TCW to “originate or terminate any freight upon any segment of the joint line, or serve any industry, team or house tracks now connected to or which may in the future be connected to the joint line.” 1982 Agreement, Section 2.1. [733]*733The Ottertail Power site is currently served by BN, and is located on and connected to the South Dakota segment by a spur which is owned by the power plant.

In 1991, TCW was granted local trackage rights to the Minnesota segment by Soo-Line (“1991 Agreement”). BN became Soo Line’s successor to the 1991 Agreement when it purchased the Minnesota segment from Soo Line. The 1991 Agreement grants TCW the right to the non-exclusive use of the “joint line” for operations of its trains including “the right to serve or switch any industries, now located upon the Joint Line, team or house tracks now connected to or which may in the future be connected to the Joint Line.” 1991 Agreement, Section 2.2.

2. Proposed New Railroad Line

In January 1995, Big Stone petitioned the Interstate Commerce Commission (“ICC”) for approval for the construction of a railroad line. Big Stone seeks to extend a line from what is referred to as the Cannery Spur. The Cannery Spur extends from the BN’s main line on the Minnesota segment just east of the Minnesota/South Dakota border. Big Stone seeks to extend the line from the Cannery Spur, along an abandoned portion of the old Milwaukee line, across the South Dakota segment of BN’s line, to join the Ottertail Power Spur north of the South Dakota segment.

The purpose of the new line is to allow TCW to provide rail service to industries that may locate in an industrial park to be formed by Big Stone. This industrial park is to be located near the Ottertail Power Plant. The new line would also allow TCW to serve the Ottertail Power Plant.

In response to Big Stone’s petition to the ICC, BN commenced this declaratory judgment action. BN seeks a declaration from this Court that Big Stone would tortiously interfere with BN’s trackage rights agreements with TCW by inducing TCW to provide service to an industry located on or connected to the South Dakota segment in violation of the 1982 Agreement, and by inducing TCW to serve an industry not located on the Minnesota segment, in violation of the 1991 Agreement. Both parties have moved this Court for summary judgment, seeking an interpretation of both the 1982 and 1991 Agreements.

Standard for Summary Judgment

Summary judgment is appropriate if there is no genuine issue of material fact and a party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Unigroup, Inc. v. O’Rourke Storage & Transfer Co., 980 F.2d 1217, 1219-20 (8th Cir.1992). As the Supreme Court has stated, “[sjummary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole.” Celotex, 477 U.S. at 327,106 S.Ct. at 2554.

Under Minnesota law, the elements of a tortious interference with contract claim are 1) the existence of a contract; 2) the alleged wrongdoer’s knowledge of the contract; 3) the intentional procurement of the contract’s breach; 4) without justification; and 5) damages. Lipka v. Minnesota School Employee’s Ass’n, 537 N.W.2d 624, 631 (Minn.Ct.App.1995) aff'd 550 N.W.2d 618 (Minn.1996). BN seeks a declaratory judgment that Big Stone would tortiously interfere with BN’s Agreements with TCW if the new- line were constructed and TCW would be allowed to serve industries on the new line. Big Stone concedes the first two elements. The parties agree that the issues for this Court to determine are whether the 1982 and 1991 Agreements would be breached if the new line were constructed and TCW were allowed to serve industries on the new line.

Standard for Contract Interpretation

In Republic Nat. Life Ins. v. Lorraine Realty, the Minnesota Supreme Court summarized Minnesota law concerning contract interpretation.

Whether there is ambiguity in a contract is a legal determination in the first instance ... Ambiguity exists if it is susceptible to more than one construction ... When examining instruments, courts are to ascertain and give effect to- the intent of the [734]*734parties ,if that can be done consistently ■with established legal principles ... Intent is “ascertained, not by a process of dissection in which words or phrases are isolated from their context, but rather from a process of synthesis in which the words and phrases are given a meaning in accordance with the obvious purpose of the contract as a whole” ... Where language is found to be ambiguous, courts may resort to extrinsic evidence.

Id, 279 N.W.2d 349

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Texas & Pac. Ry. v. Gulf, Etc., Ry.
270 U.S. 266 (Supreme Court, 1926)
Republic National Life Insurance Co. v. Lorraine Realty Corp.
279 N.W.2d 349 (Supreme Court of Minnesota, 1979)
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386 U.S. 942 (Supreme Court, 1967)

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Bluebook (online)
990 F. Supp. 731, 1997 U.S. Dist. LEXIS 21733, 1997 WL 819753, Counsel Stack Legal Research, https://law.counselstack.com/opinion/minnesota-by-burlington-northern-railroad-v-big-stone-grant-industrial-mnd-1997.