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Trial set for May in federal lawsuit accusing Durango railroad of starting 416 Fire

Jury to determine if D&SNG and its parent company are on the hook for millions in firefighting costs
A jury trial is set to begin in May that will decide the Durango & Silverton Narrow Gauge Railroad’s liability for damages from the 416 Fire. The federal government seeks to recoup about $25 million from the railroad and its parent company, Florida-based American Heritage Railways Inc., for firefighting and forest restoration costs. (Shane Benjamin/Durango Herald file)

The Durango & Silverton Narrow Gauge Railroad and the U.S. government are scheduled for trial more than two years after the government first filed its case seeking $25 million in damages for the 416 Fire.

U.S. District Judge Robert Blackburn ordered the 10-day jury trial for May 2-13 in a yet-to-be-determined location. It marks the third time the trial has been scheduled since 2020.

Blackburn first set the trial for November 2020, but it was postponed until September 2021 amid the coronavirus pandemic. The trial was again pushed back to May 2022 as the pandemic continues to affect the court system.

In his order, Blackburn noted he was leaning toward holding the trial in Durango at the La Plata County Courthouse as long as it could be conducted safely with the coronavirus still circulating. Blackburn wrote that the court will make a decision in early 2022 when more information is available.

Attorneys for the D&SNG have sought to move the trial to Durango from its initial location in Denver, citing local interest and involvement in the proceedings.

“Conducting the trial in Durango is appropriate as it would allow the citizens of the area affected by the 416 Fire to serve as jurors and hear this matter,” D&SNG attorneys wrote in a court filing in September 2020.

Richard Waltz, an attorney for the two defendants, D&SNG and American Heritage Railways Inc., the Florida-based parent company of D&SNG, declined to comment.

The Harpers, who own and operate D&SNG, could not be reached for comment.

Blackburn denied the initial request in November 2020 without explanation, ruling that the trial would be held at the Alfred A. Arraj U.S. Courthouse in Denver.

D&SNG’s attorneys renewed their efforts to change the location of the trial with a filing in July, arguing that COVID-19 vaccinations and other health measures have allowed businesses and courts to resume operations.

Lawyers with the U.S. Attorney’s Office representing the U.S. Forest Service and the federal government have opposed the move.

“Defendants have not carried their burden to show that the existing forum is inconvenient, and the balance of factors does not tip strongly in favor of a transfer,” wrote Matthew Kirsch, the acting United States Attorney for the District of Colorado at the time.

Attorneys with the U.S. Attorney’s Office for the District of Colorado could not be reached for comment.

Blackburn’s order scheduling the trial comes after American Heritage Railways sought a summary judgment in the case, which would allow Blackburn to determine the case in favor of the railroad without a full trial.

In their filing, lawyers for American Heritage Railways claimed that the corporation is not a “railroad company” and was not “operating its line of road” and therefore not liable under Colorado’s railroad company liability law.

“(The federal government) has not asserted ... that American Heritage Railways, Inc. is somehow vicariously liable for the actions of D&SNGRC. Rather, the Complaint alleges that each Defendant is separately liable as a railroad company, and as an operator of a line of road,” Waltz wrote in the filing.

Attorneys for the federal government, which is seeking to recoup firefighting and forest rehabilitation costs and other damages, have brought their case in part under Colorado’s Railroad Statute, which says railroad companies operating their “line of road” with Colorado are liable for all damages from fires caused by the railroad operations.

More than a year after the 416 Fire, the Forest Service announced in July 2019 a cinder from the smokestack of one of D&SNG’s coal-burning locomotives ignited the roughly 54,000-acre fire north of Durango.

Blackburn rejected American Heritage Railways’ attempt to sidestep a jury trial.

In his decision, Blackburn wrote:

“American Heritage Railways, Inc. points out that while it is parent company of D&SNGRC, D&SNGRC owns all the engines, equipment, rolling stock, rail lines, rights-of-way, buildings, and property associated with the Durango & Silverton Narrow Gauge Railroad. Unlike, D&SNGRC, American Heritage Railways, Inc. is not authorized to operate a railroad by the Colorado Public Utilities Commission. Despite these acknowledged facts, my review of statutory language, history, interpretation, and purpose of the Railroad Statute convinces me that what constitutes a ‘railroad company’ thereunder is not as narrow a concept as American Heritage Railways, Inc. proposes.”

When the trial commences in May, each side will field seven expert witnesses who will try to prove their case.

A jury will ultimately decide if D&SNG and American Heritage Railways Inc. should foot the enormous bill from the 416 Fire after decades in which taxpayers have paid half the costs for fires started by D&SNG, according to documents obtained in a 2018 Forest Service Freedom of Information Act request.


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