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Judge urges dueling railways to compromise

CAPTION Conductor Jarrad Clark throws a switch on the Montreal, Maine and Atlantic railway so engineer Rick Cameron could change tracks in Presque Isle during their bi-weekly Job 120 trip to Presque Isle Thursday, March 18, 2010. (Bangor Daily News/John Clarke Russ) (WEB EDITION PHOTO)
By Matt Wickenheiser, BDN Staff

PORTLAND, Maine — A federal judge heard arguments Tuesday in a contentious railway rights case concerning access to a paper mill in Madawaska.

U.S. District Judge John Woodcock took the case under advisement. At issue was a request by Canadian National Railway Co. for a preliminary injunction, allowing it access to the Twin Rivers Paper Co. on tracks owned by the Montreal, Maine & Atlantic Railway while the case progresses in court.

Noting arguments made by both rail companies and the mill, formerly known as Fraser Papers, Woodcock said each of the businesses gave “apocalyptic views” of an “economic hell to pay” if he didn’t side with their argument. Twin Rivers and CN are arguing for access to the mill through the rail spur; MM&A is arguing against it.

At the end of the hearing, Woodcock told the parties he could make a decision in the case, which would result in one party winning and the other losing. Instead, he urged the parties work together on a compromise.

“The stakes here are high. We have a lot of people working against each other,” said Woodcock, “but they can also work with each other.”

CN spokesman Patrick Waldron said his company in 2001 obtained what’s essentially an easement to access the mill from the MM&A’s predecessor, the Bangor and Aroostook Railroad. Under an agreement that recently expired, MM&A provided switching services and physical access to the mill, taking freight cars to and from CN on the spur.

Waldron said the mill wants CN to handle all the traffic, right up to the mill’s doorstep.

“We’re trying to provide a complete rail service that the Twin Rivers mill has requested,” he said.

While MM&A has been providing the switching services at the mill, CN attorney George Marcus argued Tuesday that his client always had the right to access the mill directly, and now wanted to assert that right on MM&A tracks.

He urged Woodcock to issue an order allowing his client physical access on the tracks, in order to preserve competition in the market.

MM&A attorney Timothy Shannon argued that while CN had commercial access to the mill, it never had physical access. The $5 million agreement in 2001 allowed CN to access tracks to a point 1,780 feet from the mill, he said. Marcus argued that was a mistake made by both CN and the Bangor and Aroostook. The railways believed access right up to the mill had been granted, he said.

Shannon asserted that his client owned the tracks, and the mill and CN are trying to relegate MM&A to “lowly subcontractor” status, rather than as a competitive business with property rights.

Shannon also suggested the case belonged in front of an arbitrator with in-depth rail law experience, and noted that CN never had physical access to the mill. The requests for preliminary relief were overblown, he said.

“There is no emergency, the trains are moving,” he said.

Relations between Twin and MM&A deteriorated over the past several years. Mill executives claimed that MM&A failed to maintain the company’s railroad tracks and missed delivery and pickup deadlines — often forcing the coated and uncoated paper maker to hire trucks on the fly to make shipments — because of miscommunication or insufficient numbers of railroad runs.

MM&A officials countered that they were trying to meet demand, but that the mill’s use of trucks and downturn in production made running more trains uneconomical and helped create the conditions that led to the company’s seeking to abandon about 233 miles of track earlier this year.

MM&A officials also said that the mill’s decision to split traffic between them and CN helped cause the railroad’s financial woes. The state of Maine is in the process of buying the tracks for $20.1 million, and plans to rehabilitate and lease them to third-party operators.

The spur in question is not part of that deal.

Bill Peterson, director of human resources for Twin Rivers, said that when MM&A announced their plan to abandon the line, the mill looked elsewhere for freight service.

“We need the most efficient, cost-effective rail service we can get,” said Peterson. “Does it matter to us whether it’s the MM&A or the CN? No, as long as we have the service we need to get it to our customer in a timely way.”

Peterson said Twin Rivers was under the impression that CN had rights to use the rail spur, and that was why the mill was intervening in the suit, to support that case.



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