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Exploding Trains in the Wake of the Crude-by-Rail Boom: The Distribution of Liability in Crude Train Derailments

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Document pages: 38 pages

Abstract: American crude oil production has reached an all-time high, with hundreds of millions of barrels of crude oil being delivered to market each year. As a consequence, the transportation system has been stressed to the max to meet the crude oil delivery needs of energy producers, with the burden largely being born by the U.S. rail transportation network. Large volumes of crude oil are carried through the United States by train from production points, such as the Bakken Formation in North Dakota, to refinery locations throughout the country. This market phenomena has created risks to health and safety from crude trail derailments, which often result in large explosions that cause harm to persons and property. The threat of crude train derailments has also placed pressure on the legal system to respond and adapt to new safety concerns. Specifically, the disperse structure of the crude-by-rail industry, which involves the combined efforts of multiple different actors, has caused confusion about the source of liability in the event of derailments. Additionally, the effect of federal preemption of state law causes of action relating to rail safety and hazardous materials transportation has caused confusion about the possibility for plaintiff recovery in the event of injury from a crude train derailment. In part to clarify the uncertain legal terrain for crude-by-rail transportation, the U.S. Department of Transportation recently enacted a comprehensive suite of regulations to govern all aspects of the crude-by-rail industry, ranging from crude oil labeling and packaging, train speed limits, train breaking standards, tank car equipment specifications, and crude oil chemical testing and reporting. This comment argues that recently enacted U.S. Department of Transportation regulations help clarify liability in the event of a crude train derailment by creating and enhancing standards of care for which industry actors must comply. Additionally, this comment argues that the increased standards of care created by the new U.S. Department of Transportation regulations modestly increase the chances for plaintiff recovery. Finally, this comment argues that, despite the increased standards of care created by the new regulations, plaintiffs will continue to face a difficult environment for recovery given the effects of federal preemption of state law causes of action, thus typically limiting recovery to instances of negligence per se. This comment concludes by considering the questions that courts will ultimately be required to answer in effort to delineate the contours of federal preemption of state law causes of action relating to crude train derailments.

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