Montreal, Maine and Atlantic Railway lawsuit blames owner of crude oil for Lac-Megantic disaster

Posted Jan. 31, 2014, at 4:35 p.m.
Last modified Jan. 31, 2014, at 6:26 p.m.

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Workers look at the derailed oil cars in the downtown core in the town of Lac-Megantic, Quebec, in July 2013.
CHRISTINNE MUSCHI | REUTERS
Workers look at the derailed oil cars in the downtown core in the town of Lac-Megantic, Quebec, in July 2013.
Robert Keach, the Bernstein Shur attorney that was appointed the trustee overseeing Montreal, Maine and Atlantic Railway as the company works its way through bankruptcy, talks about a hearing on motions in the bankruptcy that was held in September 2013 at Federal Court in Bangor.
Robert Keach, the Bernstein Shur attorney that was appointed the trustee overseeing Montreal, Maine and Atlantic Railway as the company works its way through bankruptcy, talks about a hearing on motions in the bankruptcy that was held in September 2013 at Federal Court in Bangor. Buy Photo

BANGOR, Maine — The trustee overseeing the bankrupt Montreal, Maine and Atlantic Railway has sued the companies that owned and arranged for the transportation of the crude oil that MMA was carrying at the time of the deadly July train derailment in Lac-Megantic, Quebec.

Robert Keach, a bankruptcy attorney serving as MMA’s trustee during its Chapter 11 proceedings, argues in the lawsuit, which he filed in U.S. Bankruptcy Court on Thursday, that if it were not for the “negligence” of World Fuel Services Inc., which owned the oil, and Western Petroleum Co., which leased the tank cars and arranged for the oil’s transportation, the derailment and explosion on July 6 that killed 47 people and destroyed a significant portion of downtown Lac-Megantic could have been avoided.

World Fuel Services is based in Miami, Fla., while Western Petroleum is based in Wayzata, Minn. The suit names three other affiliated entities, as well.

Keach argues that the 72 oil tank cars, which MMA took possession of in Montreal, were mislabeled as a hazardous material with a “low danger.” According to the lawsuit, tests completed after the explosion and ensuing fire confirmed that the crude oil MMA was carrying was, in fact, “highly volatile” and, therefore, a much higher danger than perceived.

The crude oil originated in the Bakken fields of North Dakota.

“Had Defendants properly classified, identified, and labelled the Train’s crude oil cargo, [Montreal, Maine and Atlantic Railway] could and would have taken steps that would have avoided the Derailment,” the lawsuit claims.

In addition, Keach argues that Western Petroleum “knew or should have known” that the tank cars it provided to carry the crude oil were “prone to rupture upon derailment” and, therefore, “unsafe and unsuitable” for the transport of the “highly volatile” material they were carrying.

“Defendants owed a duty to the public at large and to [Montreal, Maine and Atlantic Railway] specifically to take reasonable measures to avoid or mitigate the dangers associated with the transport of their crude oil and to exercise reasonable care to ensure that the Train could be operated in a safe manner to eliminate or reduce the risk of a derailment or minimize the damage that would result in the event of a derailment,” the lawsuit reads.

In shirking those duties, Keach argues, World Fuel Services and Western Petroleum caused MMA “to suffer substantial injuries,” including the costs and potential claims associated with the numerous lawsuits filed against the railroad in the disaster’s wake and the destruction of its business operations. MMA filed for bankruptcy in August as a result of the Lac-Megantic disaster.

The suit seeks monetary damages in “an amount to be determined at trial.”

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