Lawyers spar over where Lac-Megantic wrongful death claims should be decided

Robert Keach
Contributed photo
Robert Keach
Posted Jan. 31, 2014, at 6:21 p.m.

PORTLAND, Maine — A federal judge heard arguments Friday in a case that centers on whether Maine or Illinois should be the place of jurisdiction for wrongful death claims associated with the July 2013 derailment and explosion of a Montreal, Maine and Atlantic Railway train in Lac-Megantic, Quebec.

At issue are 19 wrongful death claims filed in Illinois on behalf of the families of victims killed in the July 6 explosion that resulted from the derailment of a MMA train carrying crude oil.

Robert Keach, the trustee overseeing MMA during its bankruptcy proceedings, on Sept. 13 filed a motion to transfer those cases to the federal district court in Maine so as to consolidate the legal proceedings associated with MMA’s bankruptcy.

In the courtroom, which was crowded Friday with nearly 40 lawyers, U.S. District Court Judge Nancy Torresen posed questions to Keach; Daniel Cohn, a lawyer representing the victims’ families; and other parties in the case.

The wrongful death cases were initially filed in Illinois because the state imposes no cap on damage awards in wrongful death cases, whereas in Maine there’s a $500,000 cap, Cohn told the Bangor Daily News on Friday.

Cohn believes keeping the cases in Illinois gives his clients a better shot at receiving damages in a timely manner. On Wednesday, a Chicago law firm that Cohn works alongside in representing the victims filed a plan that would appoint former U.S. Sen. George J. Mitchell to oversee the allocation of available funds to the victims.

Illinois is a legitimate jurisdiction because it’s the home of some of the defendants named in the 19 wrongful death cases, including RailWorld Inc., the company that owned MMA, and Edward Burkhardt, RailWorld’s CEO, Cohn argued.

Other defendants named in the wrongful death claims include World Fuel Services Corp., which owned the oil MMA was carrying; Western Petroleum Co., which leased the tank cars that contained the oil; and Union Tank Car Co., which manufactured the tank cars.

MMA was named as a defendant in some of the initial wrongful death suits, but was later voluntarily dismissed by the plaintiffs. This was done because bankruptcy law dictates that any personal injury tort and wrongful death cases associated with a bankrupt company be settled by the district court in which the bankruptcy is being handled.

Cohn argued that because MMA was dropped as a defendant, the cases would not impact MMA’s bankruptcy and could remain in Illinois.

Keach called Cohn’s assertion that the cases would have no effect on MMA’s bankruptcy “dead wrong.”

“It’s to ignore reality in the extreme,” Keach said.

Keach argued that despite MMA being dropped as a defendant, existing case law supports his contention that the personal injury and wrongful death claims should still be handled where the bankruptcy is being handled.

Keach’s motion quotes a former case that says “proceedings ‘related to’ the bankruptcy include … suits between third parties which have an effect on the bankruptcy estate.”

After three hours of deliberations, Torresen called a recess for the day. There is no deadline for her to make a decision on the requested transference of the wrongful death cases to Maine.

In a related proceeding, MMA on Thursday filed a lawsuit against World Fuel Services Corp. and Western Petroleum Co., blaming the Lac-Megantic disaster on them and seeking damages.

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