On the heels of the $20 million agreement announced on March 21 between the federal government and the Durango & Silverton Narrow Gauge Railroad Company, Burg Simpson Eldredge Hersh & Jardine and Durango-based Duthie Savastano Brungard announced they wrapped up the class action complaint brought against the railroad on behalf of their clients.
Both lawsuits stemmed from the historic railroad’s role in sparking the 416 Fire near Durango in June 2018, which lasted six months, burned up more than 54,000 acres of federal lands and caused other damage.
Confidentiality provisions of the civil settlement prevent the firms from discussing specifics, but according to one of the case’s lead attorneys Tom Henderson, a shareholder at Burg Simpson, the case has brought justice to the 38 parties, which included businesses and individuals impacted by the 416 Fire. “I hoped to achieve justice for my clients and I believe justice has been achieved by virtue of settlement,” said Henderson.
For Henderson, it also concludes a fascinating legal case that involved a deep dive into pre-statehood law, Colorado history and ultimately helping his clients.
On June 1, 2018, a wildfire in the San Juan National Forest broke out, burning more than 54,000 acres of federal lands and causing trickle-down impacts on the local ecosystem including mud, flood and debris flows. No structures were burned in the fire and most of the acreage impacted was in the national forest.
While some of his clients were directly impacted by the fire and evacuation, Henderson explained, many were most impacted by the subsequent mudslides, floods and debris that damaged homes and property and had the potential to injure anyone in the path.
Federal fire investigators later concluded that the 416 Fire was started by sparks from a historic coal-burning locomotive owned and operated by the Durango & Silverton Narrow Gauge Railroad Company. Private investigators reached the same conclusion, according to the U.S. Department of Justice.
Later in 2018, Henderson and the case’s other lead attorney, Bobby Duthie, filed a lawsuit against the train operators, American Heritage Railways, the Durango & Silverton Narrow Gauge Railroad Company and its operator Allen Harper claiming that running the coal-powered train in increasingly dry conditions was negligent and reckless. Federal prosecutors filed a separate complaint against the train in July 2019 seeking damages for the cost of fighting the blaze and restoring the burnt land.
The civil case was originally scheduled for trial in the fall of 2020, Henderson explained, but was postponed due to the pandemic. It was rescheduled, then once again postponed in 2021 and finally rescheduled for a three-month trial that was supposed to start in January this year. The case never made it in front of a jury, however, after Henderson’s clients reached an agreement in principle with the defendants that was contingent on the federal lawsuit also settling.
After an agreement and consent decree between the U.S. government and the train was announced on March 21, the civil action officially came to a close. “That was really kind of the final ‘i’ to be dotted and ‘t’ to be crossed,” said Henderson.
The federal agreement requires the railroad to pay a lump sum of $15 million within 45 days and an additional $5 million plus interest over the next 10 years. It also requires that the train make a series of changes to prevent future fires including hiring a full-time fire management officer, limiting operations during extreme fire risk conditions and carrying wildfire insurance.
“It’s a true win-win for the community,” said Henderson. “The train will continue to operate based on the [federal] settlement and the community will continue to thrive and our clients have received some justice.”
While it’s now wrapped up, it wasn’t a run-of-the-mill case, according to Henderson.
For one, a key legal argument brought against the train came from a law predating Colorado statehood. The law, which holds companies operating trains in Colorado liable for “all damages by fire” started by the train, was created when railroads were expanding west in the mid-1800s. The coal powered locomotives, similar to some used in 2018 by the Narrow Gauge Railroad Company, would often puff out coal embers that could spark fires. After Colorado became a state in 1876, the territorial statute was passed into law but it largely disappeared from case law in the early 1900s after trains transitioned away from coal power. One of Henderson’s associates tracked down an original copy of the law which had to be handled with protective latex gloves, a first for the firm. “We ended up learning this little history lesson,” Henderson added.
“The state court judge in our case said when the statute used the words ‘damaged by fire,’ that meant that only items that were burned were entitled to use that,” explained Henderson, meaning his clients’ damages from indirect impacts of the fire weren’t covered by the historic law. “We of course disagreed with that interpretation, but nonetheless that was one cool aspect of the case for law nerds.”
Another unusual aspect, Henderson said, was the backlash his clients faced from others in the community for participating in the lawsuit. Henderson isn’t a rookie when it comes to representing plaintiffs in civil cases, but said he had never seen such pushback against clients. According to Henderson, some of his clients experienced harassment and calls to boycott their businesses after newspapers published the names of lawsuit participants.
In his opinion, the tension came down to Durango’s strong ties to the railroad.
Durango was founded by the Denver & Rio Grande Railway in 1880. Two years later, the tracks connecting to the nearby mining town Silverton were finished and trains have run along the winding mountain line ever since. While it was originally used to haul ores from mountain mines to larger junctions, The Durango & Silverton Narrow Gauge Railroad Company, which operates historic trains along the route, mostly carries tourists now.
The importance of trains to many in Durango is everywhere you look, explained Henderson. The city’s logo features an old-fashioned looking train and the Silverton-Durango tracks run through the city center. The train’s whistle can regularly be heard downtown, alerting traffic and reminding visitors and residents that the town’s history still runs through modern life.
There’s an economic factor as well, said Henderson. With the train drawing tourists to the mountain town, some in the community feared that by suing the train’s operating company, the case’s plaintiffs would put the train out of business, which would hit the local economy. “In those people’s minds, you were going to cause Durango to literally go out of business because you were going to take the train out of Durango and without the train, Durango would not survive as a city,” Henderson explained.
While he appreciates the importance of the train in the community, Henderson is proud that his clients stuck with the litigation and were able to receive justice.
“The little guy should not blunder to big corporate America,” he said. “Don’t be deterred by the fact that there are bigger, more powerful ‘powers that be’ out there. Stick with it, keep with it and you can effect change.”