Date: 07-08-2025

Case Style:

Joe R. Whatley, Jr. v. Canadian Pacific Railroad Company; Soo Line Railroad Company

Case Number: 16-cv-00074

Judge: Daniel M. Trayno

Court: United States District Court for the District of North Dakota

Plaintiff's Attorney: Joe Wetch,
Robert Keach, Paul McDonald, Lindsay Milne. Adam Prescott. MIke Siedband, John Woodcock

Defendant's Attorney: Leah Boomsma and Stacey Drentlaw, Paul Humming, Mark Rosenberg

Description: Fargo, North Dakota personal injury lawyers represented the Plaintiff on multiple wrongful death claims.

On June 29, 2013, a Canadian Pacific train carrying crude oil left New Town,
North Dakota, bound for an oil refinery in New Brunswick, Canada. World Fuel
Entities (“WFE”) was the shipper. Canadian Pacific transported the cars as far as
Quebec and then turned them over to the Montreal Maine & Atlantic Railway
(“MMA”). On the evening of July 5, while still en route, MMA parked the train
overnight, set the hand brakes improperly, and left it unattended. Early the next
morning, the lead locomotive—which provided additional braking force—caug
fire due to a non-standard repair and was shut down. The unattended train began
rolling downhill toward the town of Lac-Mégantic. There, sixty-three of its seventy-
two cars derailed, spilling their crude oil and causing a series of massive explosions
that took the lives of forty-seven people and destroyed the center of town. MMA’s
negligence is the undisputed sole cause of the derailment and disaster.
Shortly thereafter, MMA filed for Chapter 11 bankruptcy in the United States
Bankruptcy Court for the District of Maine. Its approved bankruptcy plan
established a trust “for the sole purpose of liquidating and distributing” its assets to
wrongful death claimants. Whatley, the plaintiff here, serves as trustee. Around the
same time, various parties, including the shipper, WFE, entered into settlement
agreements with MMA. Canadian Pacific did not settle.

MMA’s approved bankruptcy plan addressed the rights and liabilities of
“Non-Settling Defendants” as well as of “Released Parties” who had executed
settlement agreements with MMA. Canadian Pacific was a non-settling defendant
and WFE was a released party. Under the plan, non-settling defendants were barred
from asserting a derailment-related claim against the released parties. The
bankruptcy plan also included a judgment reduction provision. This provision
ensured that non-settling defendants would not be responsible for more than their
proportionate share of the liability, despite the released parties’ immunity from suit.
The provision instructed future trial courts to reduce any initial damages award
against a non-settling defendant by a formula-determined “Judgement Reduction
Amount.”

A released party, WFE executed a separate settlement agreement. In that
settlement agreement, WFE assigned to MMA all of WFE’s liability for derailment-
related claims, as well as “any and all rights, at law or contractual, of indemnification
and/or contribution” that WFE had or may have had, including its rights under the
Carmack Amendment. See 49 U.S.C. § 11706(a)(1) (providing that certain
qualifying rail carriers “are liable to the person entitled to recover under the receipt-4-
or bill of lading” “for the actual loss or injury to the property caused by . . . the
receiving rail carrier”). MMA then transferred those rights to the trust.

Outcome: In 2016, Whatley sued Canadian Pacific, asserting WFE’s assigned Carmack Amendment claims. The district court ultimately determined that Canadian Pacific
was liable under the Carmack Amendment for the value of the train’s crude oil cargo. Whatley and Canadian Pacific submitted a joint stipulation to the district court. This joint stipulation contained two key provisions: (1) that the crude oil cargo had been worth one of three possible, specified amounts and (2) that the district court “shall decide whether the Judgment Reduction Provision applies in this action, and if so how, prior to entry of final judgment . . . .” The district court adopted the joint stipulation “in its entirety.” Canadian Pacific accordingly moved to apply the judgment reduction provision and Whatley cross-moved for the value of the crude oil and for prejudgment interest. In a single order resolving both motions, the district court found the value of the crude oil to be $3,950,464 and granted Whatley that amount, along with prejudgment interest. However—despite accepting the parties’
joint stipulation in its entirety—the district court declined to address whether the judgment reduction provision applied, concluding that it was “a matter properly reserved to the Bankruptcy Court” that had approved the plan. Canadian Pacific filed a motion for reconsideration, asking the court to reconsider its decision not to apply the judgment reduction provision, which the court denied.

Reverssed and remanded.

Plaintiff's Experts:

Defendant's Experts:

Comments: