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Case Studies

Court Grants Historic $18.79 Million Judgment Against Railroad Giant

What happens when railroad tracks interfere with business operations?  U.S. District Judge James Dever ordered Norfolk Southern to pay for all costs related to moving a rail line and subsequently awarded a historic $18.79 million in damages.

The message reinforced by the amount of the judgment is clear. Legitimate legal disputes with a viable business interest come under the Court’s close scrutiny. The case also is seen as benefiting the struggling economy in Eastern North Carolina by protecting the property rights of one of the region’s largest employers.

The Claim
Our client, PCS Phosphate Company (a division of global agrochemical giant PotashCorp), operates the world's largest integrated phosphate mine and processing plant near Aurora, North Carolina. Norfolk Southern owns and operates the Lee Creek Rail Line, which provides rail access for shipments to and from the Aurora facility.

In 1999, PCS Phosphate notified Norfolk Southern that the rail line would soon interfere with mining operations and had to be moved. Legal agreements between the two companies assigned complete responsibility and cost for the project to the railroad. Norfolk Southern refused to comply with the request, and PCS Phosphate relocated the line at its own expense in order to stay in business. When the relocation project was completed in 2007, the costs totaled nearly $15 million. PCS Phosphate asked Parker Poe to file suit to recover costs and damages from Norfolk Southern.

Historic Judgment
U.S. District Judge James Dever ruled in favor of PCS Phosphate and agreed that Norfolk Southern breached its contract and the easement covenants. The judge then granted a judgment of $18.79 million for PCS Phosphate that covered all expenses related to the relocation project,  interest and damages. It is believed to be one of the largest monetary judgments in North Carolina history.

The Outcome
The outcome has implications that exceed even the dollar amount of the historic verdict. Parker Poe attorneys Bruce Thompson and Charles Raynal, successful litigators, channeled their experience dealing with regulatory agencies, land use, zoning issues and public policy matters into a successful outcome for PCS Phosphate.