Canadian National Railway Beats Mississippi Toxic Spill Suit

Canadian National Railway won dismissal of claims arising from a toxic spill caused by a derailment of a railcar in Mississippi being transported by a subsidiary.

The plaintiffs, who are residents living near the spill site, failed to show that there are sufficient contacts between Canadian National and Mississippi to establish jurisdiction, the U.S. District Court for the Northern District of Mississippi said.

The plaintiffs sued Canadian National and its subsidiary, Illinois Central Railroad, alleging the railcar was being transported by Illinois Central and/or Canadian National on tracks owned by both when it derailed in March 2015 near Minter City, Miss., spilling 17,000 gallons of resin oil heavies.

But the evidence only establishes that Illinois Central is the owner of the tracks and railroad right-of-way, the court said.

Canadian National is a Canadian company not registered to do business in Mississippi. It has no employees in Mississippi, owns no land or tracks in Mississippi, and doesn’t maintain an agent for service there.

Illinois Central is an Illinois corporation with its principal place of business in that state. It maintains its own articles of incorporation and corporate records, conducts meetings with its board of directors, and makes required corporate filings.

From 1998 until July 2004, Illinois Central did business under the name Canadian National/Illinois Central Railroad. It now operates under the trade name CN and uses a CN logo.

The plaintiffs argued that Canadian National is subject to suit in Mississippi based on its operation of a CN web portal, Illinois Central’s use of the CN logo, and its alleged direction of cleanup activities.

The U.S. Court of Appeals for the Fifth Circuit has ruled that internet presence in a state isn’t enough to establish general jurisdiction, the court said.

And while presenting a unified image to the public by using the CN logo may be relevant to an alter-ego theory of general jurisdiction, the residents never made such an argument, the court said.

The residents also failed to introduce evidence that Canadian National was sufficiently involved in the cleanup to confer jurisdiction in the state, the court said.

Finally, the court said, while the residents alleged Canadian National had “administrative oversight” over Illinois Central’s police force in Mississippi, they introduced no evidence as to what this oversight entailed.

Judge Debra M. Brown issued the Nov. 14 opinion.

Merkel & Cocke PA and Watkins & Eager PLLC represent the plaintiffs.

Upshaw, Williams, Biggers, Beckham & Riddick represents Canadian National.

The case is Melton Props., LLC v. Ill. Cent. R.R., 2019 BL 438330, N.D. Miss., No. 18-CV-79, 11/14/19.