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Norfolk Southern Railway Co. v. Soo Line Railroad Co.

United States District Court, N.D. Indiana

September 27, 2019

Norfolk Southern Railway Company, Plaintiff,
v.
Soo Line Railroad Company, d/b/a Canadian Pacific Railway, et al. Defendants.

          OPINION AND ORDER

          JOSEPH S. VAN BOKKELEN, UNITED STATES DISTRICT JUDGE

         A. Legal Standard

         Norfolk Southern Railway Company sued Soo Line Railroad Company, Indiana Harbor Belt Railway Company, and The Consolidated Rail Corporation seeking declaratory judgment that Norfolk Southern has the right to terminate the Indiana Harbor Belt Interchange Agreement (“the Interchange Agreement”). Soo Line has moved to dismiss this case arguing that (1) the matter is not ripe because it lacks a case or controversy, and (2) this Court does not have primary jurisdiction.

         B. Background Facts

         In June 2005, all the parties in this lawsuit entered into the Interchange Agreement granting operating rights to Soo Line and Harbor Belt over a four-mile portion of track to permit for interchange between carriers.[1] Norfolk Southern and Consolidated Rail are signatories because they separately own the underlying four miles of tracks used for this interchange.

         The Interchange Agreement contains a clause allowing Soo Line or Harbor Belt to terminate the agreement. This clause does not explicitly give Norfolk Southern or Consolidated Rail an option for terminating the agreement.

         C. Case or Controversy

         1. Ripeness

         The rule on declaratory judgment requires that the case or controversy must deal with a real and substantial controversy with “sufficient immediacy and reality.” Md. Cas. Co., 312 U.S. at 273. The facts must not be hypothetical. Id.

         Soo Line claims there is no controversy here because the facts remain unsure as to whether Norfolk Southern will terminate the contract and when. The Court disagrees. Norfolk Southern has shown a clear intent to terminate the Interchange Agreement by filing this suit and by sending a notice of termination to Soo Line. The notice specifically states that, if the Court rules that Norfolk Southern has the right to terminate the contract, it will immediately do so upon judgment. These aren’t hypothetical facts where Norfolk Southern may terminate the Interchange Agreement in the future; instead Norfolk Southern is certain to terminate the Interchange Agreement if the Court finds it has the right to do so. Therefore, there is a controversy among the parties that is real and imminent.

         2. Injury

         For a case or controversy to exist, there must be an injury that is redressable. The injury cannot be speculative and must be likely to be redressed by a favorable decision. Simon v. E. Ky. Welfare Rights Org., 426 U.S. 26, 38 (1976). Here, Norfolk Southern alleges an injury that is redressable and not merely speculative:

[Soo Line’s] use of the line impacts the capacity available for either NSRC’s or another road’s use of the line; [Soo Line] competes directly with [Norfolk Southern] for traffic [Norfolk Southern] could otherwise seek in a changing competitive and economic rail traffic environment; and, under [Soo Line’s] interpretation, the [Interchange Agreement] would continue in perpetuity unless either [Soo Line] or the [Harbor Belt] decides to terminate. . . [Norfolk Southern] has the right to exercise reasonable business decisions to maximize its shareholder’s return, to strategically plan market expansion or new marketing options and to control competitors’ rights to use [Norfolk Southern’s] own ...

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