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PIERCE v. BURLINGTON NORTHERN R. CO.

June 11, 1987

RALPH AND SANDRA PIERCE, PLAINTIFFS,
v.
BURLINGTON NORTHERN RAILROAD COMPANY, A CORPORATION, DEFENDANT, BURLINGTON NORTHERN RAILROAD COMPANY, A CORPORATION, THIRD PARTY PLAINTIFF, V. CONSOLIDATED RAIL CORPORATION, THIRD PARTY DEFENDANT.



The opinion of the court was delivered by: Mihm, District Judge.

MEMORANDUM AND ORDER

Burlington Northern filed a third-party action against Conrail for contribution (Count I) and for damages to the Burlington Northern's own property (Count II). In this third-party action, Burlington Northern alleges that the derailment was caused by a defect in one of the freight cars on the train, which car was owned by Conrail. The third-party action alleges that the defective freight car was not properly inspected or maintained by Conrail and that Conrail failed to warn Burlington Northern of the defect in the car. This case is presently before the Court upon the Motion of the Third-Party Defendant, Consolidated Rail Corporation, for summary judgment.

Without differentiating between the two counts in the Third-Party Complaint, Consolidated Rail, the owner of the freight car, filed this Motion for Summary Judgment on the grounds that the American Association of Railroads (AAR) Interchange Rules assign the responsibility for the condition of the freight cars on the using carrier, in this instance, Burlington Northern. The crux of Conrail's argument is Rule No. 1 of the AAR Interchange Rules, which provides:

"1. CARE OF FOREIGN FREIGHT CARS.

  Rule 1.(a) Each railroad is responsible for the
  condition of all cars on its line, and must give
  to all equal care as to inspection and
  lubrication."

According to Conrail, the AAR Interchange Rules allocate responsibility between railroads who use each other's railroad equipment. Because Burlington Northern accepted the freight car in interchange on January 23, 1985, after having an opportunity to inspect it, this Court should not allow Burlington to impose responsibility for any loss due to a defect in the car upon Conrail, who did not have an opportunity to inspect or maintain the railroad car after the January 23, 1985 interchange date. In support of this position, Conrail relies upon the cases of Toledo, Peoria & Western Railroad v. Burlington Northern, Inc., 67 Ill. App.3d 928, 24 Ill.Dec. 796, 385 N.E.2d 937 (3rd Dist. 1979) and Torres v. Southern Pacific Transportation Co., 584 F.2d 900 (9th Cir. 1978).

Burlington Northern responds by arguing that Conrail's reliance upon the Toledo case is misplaced, since the actual holding of that case was that the owner railroad was not liable in strict liability or negligence because the alleged defect in the design of the railroad car was not, as a matter of law, an unreasonably dangerous condition. Burlington Northern also argues that the AAR rules are not a contractual bar to the maintenance of the contribution action between the railroads, and the Court should not read the rules as nullifying the terms of the Illinois Contribution Among Joint Tortfeasors Act, Ill.Rev.Stat., ch. 70, § 301 et seq.

The issue involved in this Motion for Summary Judgment is whether Burlington can maintain either one or both of its claims against Conrail in light of the fact that both parties are signatories to the AAR Interchange Rules. It is difficult to ascertain the exact application of these rules.

General Rule A reads:

  "1.  These rules are formulated . . . as a guide
  to the fair and proper handling of all matters
  contained therein for the interchange of freight
  traffic, with the intent of:
  (a) Making car owners responsible for and
  therefore chargeable with the repairs to their
  cars necessitated by ordinary wear and tear and
  fair service, Safety requirements and by the
  Standards of the Association of American
  Railroads.
  (b) Placing responsibility with and providing a
  means of settlement for damage

  to any car, occurring through unfair useage or
  improper ...

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