US chem groups sue railroad over chlorine shipping

01 July 2009 18:06  [Source: ICIS news]

HOUSTON (ICIS news)--Union Pacific had no immediate comment on Wednesday regarding a lawsuit filed by two chemical trade groups alleging that the railroad is unfairly shifting liability to chemical companies for any spills of chlorine and other hazardous chemicals.

The American Chemistry Council (ACC) and the Chlorine Institute filed the lawsuit in Utah federal court, alleging that Union Pacific's adopted in March new shipping guidelines that unfairly assigned liability to companies that produce chlorine and other chemicals designated as poison inhalation hazards (PIH) or toxic inhalation hazards (TIH).

The new guidelines are already in effect for chlorine shipments by US Magnesium, the ACC and the Chlorine Institute said.

US Magnesium produces chlorine as part of its magnesium mining operations in Rowley, Utah, the trade groups said. Union Pacific is the only railroad that serves Rowley.

Union Pacific's provisions request that customers will not hold the railroad liable for any costs, fines, penalties or claims it could face by carrying chlorine or other PIH and TIH chemicals, the trade groups said.

This exemption even applied if the lawsuits or fines resulted from actions taken by Union Pacific, the trade groups said. For example, if Union Pacific had spilled chlorine, then the chemical company would be liable.

Since Union Pacific is the only railroad that serves Rowley, its provisions give US Magnesium little choice: either the mining company assumes the liability for any potential spills or it does not ship the chlorine, the trade groups said.

The Union Pacific policy violates federal regulations, since it eliminates any financial incentives for the railroad to safely deliver the chlorine, the trade groups alleged.

As such, the trade groups requested that the court issue a temporary restraining order, which would suspend the provisions until the lawsuit is resolved.

The US Surface Transportation Board recently ruled that Union Pacific has an oblication to serve companies such as US Magnesium.

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By: Al Greenwood
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