Indiana Harbor Belt R.R. v. American Cyanamid Co.
916 F.2d 1174 (1990)
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Rule of Law:
Strict liability for an abnormally dangerous activity is not imposed on a shipper of hazardous materials when the risk of harm can be eliminated by the exercise of reasonable care. The determination focuses on the inherent danger of the activity itself (transportation), not the hazardous properties of the substance being transported.
Facts:
- American Cyanamid Company, a chemical manufacturer, loaded 20,000 gallons of liquid acrylonitrile into a leased railroad tank car at its plant in Louisiana on January 2, 1979.
- The tank car was transported by the Missouri Pacific Railroad to the Indiana Harbor Belt Railroad's (IHB) switching yard in Riverdale, Illinois, a part of the Chicago metropolitan area, arriving on January 9, 1979.
- Several hours after its arrival, IHB employees discovered that fluid was gushing from a broken lid on the car's bottom outlet.
- Approximately one-quarter of the acrylonitrile leaked before an IHB supervisor was able to close a valve and stop the spill.
- Due to the chemical's flammable and toxic nature, local authorities ordered the temporary evacuation of nearby homes.
- The Illinois Department of Environmental Protection ordered IHB to conduct decontamination measures, which cost the railroad nearly one million dollars.
Procedural Posture:
- Indiana Harbor Belt Railroad sued American Cyanamid Company in the U.S. District Court for the Northern District of Illinois, asserting claims of negligence and strict liability.
- The district court denied Cyanamid's motion to dismiss the strict liability count.
- The district court granted summary judgment in favor of Indiana Harbor Belt Railroad on the strict liability count and entered a judgment for $981,022.75.
- Cyanamid (appellant) attempted an immediate appeal, but the U.S. Court of Appeals for the Seventh Circuit dismissed it, finding the judgment was not properly appealable under Fed. R. Civ. P. 54(b).
- On remand, the district court dismissed the pending negligence count with prejudice in order to create a final, appealable order.
- American Cyanamid (appellant) appealed the summary judgment ruling to the U.S. Court of Appeals for the Seventh Circuit, and Indiana Harbor Belt Railroad (appellee) filed a cross-appeal challenging the dismissal of its negligence count.
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Issue:
Does the rail transport of acrylonitrile, a hazardous chemical, through a metropolitan area constitute an abnormally dangerous activity for which the shipper is strictly liable for damages caused by a leak?
Opinions:
Majority - Posner, Circuit Judge.
No, the rail transport of acrylonitrile through a metropolitan area is not an abnormally dangerous activity subjecting the shipper to strict liability. Strict liability is inappropriate when the risks of an activity can be prevented by the exercise of due care. The court reasoned that negligence is the baseline tort regime, and a switch to strict liability is only justified for activities whose inherent dangers cannot be eliminated by being careful. Here, the leak was caused by carelessness in the maintenance or handling of the tank car, not by an inherent, unavoidable property of transporting acrylonitrile. The court distinguished this from activities like blasting with dynamite, where risk remains high even with utmost care. Furthermore, the court emphasized that the focus of the inquiry is on the 'activity' (transportation), not the 'substance' (acrylonitrile). Imposing strict liability on the shipper is also inefficient, as the carrier, not the shipper, is in the best position to control the transportation route and ensure safety, and rerouting all hazardous materials around major rail hubs like Chicago is not a feasible solution.
Analysis:
This decision significantly narrows the application of strict liability for abnormally dangerous activities in the context of shipping hazardous materials. By focusing on whether due care can eliminate the risk, the court shifts most transportation accident cases from a strict liability framework to a negligence framework. The ruling establishes that the hazardous nature of a substance alone is insufficient to render its transportation an abnormally dangerous activity. This precedent makes it more difficult for plaintiffs to hold manufacturers and shippers strictly liable for spills, requiring them instead to prove a specific act of negligence by a party involved in the transportation process.
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