Trackage Rights Dispute

Twin Rivers Paper Company, LLC (“TR”) owns and operates a large paper mill in Madawaska, Maine, alongside a line of railroad owned by MMA. For years, MMA serviced the mill by rail. MMA loaded TR paper into rail cars, hauled the cars 24 miles eastward and over the St. John River into to St. Leonard, NB, Canada, and passed them on to TR’s carrier of choice: Canadian National Railroad (CN”). The latter hand-off was governed by a commercial agreement between MMA and CN. When that hand-off agreement expired on October 31, 2010, CN sought to exercise a ten-year-old agreement it had signed with MMA’s predecessor whereby CN thought it had the right to travel westward over that same 24 miles of track to reach and service the mill itself. When CN and MMA looked closely at the agreement, however, they noticed that CN’s so-called trackage rights stopped 1,700 feet short of the mill.

CN filed a Complaint and motion for preliminary injunction in state court, claiming that the 1,700-foot shortfall was a scrivener’s error. The relevant milepost was slightly misplaced. The parties had assumed the mill was located at “Milepost 0.0.” It wasn’t.

MMA argued that the shortfall must have been intentional. Milepost 0.0 sat at the edge of the switching yard. The drafters of the deal had manifestly intended to allow CN close to – but not into – the TR mill. MMA would still “switch” the traffic at the mill itself.

The case was removed to federal court, and the United States District Court ordered an evidentiary hearing. On 18 days’ notice, MMA produced 26,000 thousand pages of documents, retained two experts, filed a dozen briefs, and prepared a half dozen witnesses for trial.

After a 3-day evidentiary hearing, U.S. District Judge Woodcock issued a 77-page decision stating it was “highly unlikely” that CN would prevail, making innumerable findings of fact in MMA’s favor, and denying the motion. The 1,700-foot shortfall was intentional.