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Canadian Pacific Railway denies fault in Lac-Mégantic disaster

Canadian Pacific Railway locomotives move cars at a railyard in Calgary, in a May 16, 2012 photo. (Jeff McIntosh/THE CANADIAN PRESS)

Canadian Pacific Railway Ltd. denies any responsibility for the 2013 oil train explosion in Lac-Mégantic, Que., saying the liability for the disaster that killed 47 people lies with the company that hauled the crude and the locomotive engineer.

CP filed its defence this week in response to a class-action lawsuit on behalf of 5,000 people and companies who lost loved ones, homes or businesses in July, 2013, when an unattended Montreal Maine and Atlantic Railway Inc. train of 72 tank cars carrying 7.7 million litres of oil derailed and exploded. Most of the town’s core was destroyed, and 2,000 people were forced to flee.

The lawsuit also names MM&A and its engineer, Thomas Harding.

CP hauled the oil train to Montreal from New Town, N.D., and said its responsibility ended when it handed the cargo over to MM&A, which was to carry it to the Irving Oil Ltd. refinery in Saint John.

“[T]here is a transfer of liability when traffic is interchanged from a carrier to a connecting carrier,” CP said in the court document, citing Association of American Railroads rules. “No CP locomotive or tank cars, no CP crew and no CP tracks were involved in the derailment.”

Joel Rochon, one of the plaintiffs’ lawyers, said CP’s liability stems from its partnership with the shipper, World Fuel Services, and its entities in the North Dakota rail hub that was the source of the oil.

The lawsuit alleges the oil shipment was mislabelled to conceal its volatility, a move that permitted the use of older, cheaper tank cars over the “poorly maintained and low-cost” MM&A route east of Montreal instead of a better-maintained line owned by Canadian National Railway Co.

“It was all about driving profits and cutting costs for CP – focusing on the bottom line to the detriment of communities along the railroad, including Lac-Mégantic,” Mr. Rochon said by phone.

“CP was very much involved in the process of moving the Bakken shale gas liquids … from North Dakota to the Irving refinery. So this is very much something that happened in conjunction with the shipper, World Fuel Services,” he said.

A CP spokesman said the company had no comment because the matter is before the courts.

None of the claims has been proven in court.

In its statement of defence, CP said it had no role in the selection of MM&A to handle the train. “In all cases … the shipper always selected the route,” CP said, adding that “common carrier” rules prevent a railway from refusing to haul legal cargo.

CP said it could not have foreseen that the lone MM&A engineer, Mr. Harding, would fail to apply enough brakes to the train and leave it unattended on a descending grade, nor that a fire in one locomotive would lead to its shutdown. This caused the train’s air brakes to gradually fail. The train rolled down the tracks and reached 105 kilometres an hour before crashing and exploding in the centre of town, investigators found.

Mr. Rochon said CP’s denials come as no surprise, given the company’s “very aggressive, recalcitrant position throughout the course of their defence of this action. It appears they are determined to drag this litigation out and not contribute to any settlement agreement.”

About 25 companies previously named in the lawsuit were dropped after they agreed to contribute to a $450-million fund for the victims. Contributors included Irving Oil, Shell Oil Co., World Fuel Services and the federal government, which gave $75-million.

CP refused to contribute to the fund, a move that left the Calgary-based company open to lawsuits.

MM&A is in bankruptcy protection, and its assets have been sold.

The case is scheduled to return to a Lac-Mégantic courtroom in July for pretrial procedures.

CP faces several legal battles over the crash, including a $409-million damages lawsuit filed by the province of Quebec and 10 insurance claims, according CP documents.

The town last year dropped its lawsuit against CP, saying the fight would be too long and expensive.

Mr. Harding and two other former MM&A employees have been charged with criminal negligence causing death. A jury trial is scheduled to begin in the fall.