Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-arwd-1_06-cv-01002/USCOURTS-arwd-1_06-cv-01002-0/pdf.json

Parties Involved:
Albemarle Corporation
Counter Defendant
Louisiana and Northwest Railroad Company
Counter Claimant

Document Text:

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IN THE UNITED STATES DISTRICT COURT 

WESTERN DISTRICT OF ARKANSAS

EL DORADO DIVISION

ALBEMARLE CORPORATION PLAINTIFF

 

 

VS. Case No. 06-CV-1002

LOUISIANA AND NORTHWEST 

RAILROAD COMPANY DEFENDANT

FINDINGS OF FACT AND CONCLUSIONS OF LAW and PRELIMINARY

INJUNCTION

Before the Court is Defendant Louisiana and Northwest

Railroad Company’s (“LNW”) Motion to Dissolve or Modify Temporary

Restraining Order (Doc. 3). Plaintiff Albemarle Corporation

(“Albemarle”) has responded. (Doc 10). The Court finds this

motion ripe for consideration, and upon consideration, for the

following reasons, finds the motion should be and hereby is

granted in part and denied in part. 

I. Procedural Background

On the afternoon of December 21, 2005, Albemarle filed a

petition for temporary restraining order and other injunctive

relief in the Circuit Court of Columbia County, Arkansas. The

petition sought injunctive and declaratory relief with respect to

several agreements, to which Albemarle and LNW were parties,

covering pipelines and rail service. A few hours after the

petition was filed, the Columbia County Circuit Court issued a

temporary restraining order, ex parte, in favor of Albemarle and

against LNW. The TRO required that the parties maintain the

status quo as their business relationship existed on and prior to

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November 22, 2005, that LNW not interfere with certain of

Albemarle’s pipelines that crossed under LNW’s rail tracks, that

LNW not remove or disrupt the location, condition or Albemarle’s

ability to use and fully utilize certain sidetracks, that LNW

continue to provide to Albemarle the same kind and quality of

switching and weighing services on Albemarle’s property and

within Albemarle’s facility that it has previously provided to

Albemarle in an amount and frequency equal to within a

commercially reasonable variation from the service provided to

Albemarle on and before November 22, 2005, and that LNW take no

action meant to result in or actually resulting in a frustration

of Albemarle’s continued business operations. The TRO was issued

without a bond. 

LNW filed a notice of removal with this Court on January 6,

2006. LNW also promptly filed a motion to dissolve or modify the

temporary restraining order. After removal, LNW filed its answer

to Albemarle’s petition. LNW also filed counterclaims against

Albemarle, seeking declaratory relief and damages for the alleged

wrongful entry of the TRO. Two other motions are pending before

the Court: (1) Albemarle’s motion to sever and remand and (2)

Albemarle’s motion to transfer this case to the Surface

Transportation Board (STB). The Court will address these two

motions in a separate order of even date. In these findings of

fact and conclusions of law, the Court will only consider LNW’s

request for the modification of the injunctive relief. 

On January 19, 2006, a hearing was held before this Court on

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LNW’s motion to dissolve or modify temporary restraining order. 

Appearing on behalf of LNW was John Dewey Watson of the Little

Rock, Arkansas, law firm of Friday, Eldredge & Clark. Appearing

on behalf of Albemarle was Jim Julian of the Little Rock,

Arkansas, law firm of Chisenhall, Nestrud & Julian, and Ronny J.

Bell of the Bell Law Firm of Magnolia, Arkansas. 

The Court now enters its findings of fact and conclusions of

law in this matter pursuant to Rule 52(a) of the Federal Rules of

Civil Procedure.

II. Findings of Fact

Albemarle operates two production facilities in Columbia

County, Arkansas: The South Plant and the West Plant. The West

Plant is located approximately seven miles west of Magnolia,

Arkansas. The South Plant is located approximately three miles

south of Magnolia. Pipelines run between the two plants and from

the plants to subsurface brine wells. These pipelines cross

under LNW’s rail tracks. Since 1969, Albemarle and LNW have

entered into certain agreements concerning the pipelines. 

Specifically, these agreements (referred to collectively as “the

pipeline agreements”) are as follows:

(A) An agreement dated January 11, 1969, concerning a four

(4) inch natural gas pipeline crossing underneath LMW’s

tracks in the Northwest Quarter (NE 1/4) of Section 1,

Township 18 South, Range 21 West, Columbia County,

Arkansas.

(B) An agreement dated January 11, 1969, concerning a ten

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(10) inch brine pipeline transporting tail brine,

crossing underneath LNW’s tracks Northwest Quarter (NE

1/4) of Section 1, Township 18 South, Range 21 West,

Columbia County, Arkansas.

(C) An agreement dated January 11, 1969, concerning a ten

(10) inch brine pipeline transporting tail brine,

crossing underneath LNW’s tracks Northwest Quarter (NE

1/4) of Section 19, Township 18 South, Range 21 West,

Columbia County, Arkansas. 

(D) An agreement dated March 17, 1969, concerning a six (6)

inch natural gas pipeline installed at a point 1427

feet northwest of point of switch on spur to

Albemarle’s plant.

(E) An agreement dated October 20, 1969, concerning a ten

(10) inch brine pipeline that crosses underneath LNW’s

tracks in the Northeast Quarter (NE 1/4) of Section 1,

Township 18 South, Range 21 West, Columbia County,

Arkansas.

(F) An agreement dated March 1, 1990, concerning a six (6)

inch pipeline located in the East 1/2 Northeast 1/4,

Section 1, Township 18 South, Range 21 West, Columbia

County Arkansas. 

[AND](G) A letter agreement dated August 30, 2001, concerning a

three (3) inch gas pipeline and a fiber optic cable

located in the East 1/2 Northeast 1/4, Section 1,

Township 18 South, Range 21 West, Columbia County,

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Arkansas.

LNW provides railroad service to Albemarle at its Columbia

County plants. LNW is the exclusive provider of rail service to

Albemarle’s South Plant. LNW provides sidetracks for Albemarle

to store railcars. Albemarle uses the sidetracks at issue in

this lawsuit for the storage of both raw materials and finished

products that are received and shipped via rail car. The

sidetracks are covered by the following agreements (referred to

collectively as “the sidetrack agreements”):

(A) A track Lease Agreement, dated October 26, 1976,

concerning the side track known as the Kerlin Passing

Track.

(B) An agreement for industry track, dated November 5,

1976, concerning a sidetrack in Section 18, Township 18

South, Range 20 West, Columbia County, Arkansas.

(C) A track lease agreement dated November 1, 1984,

concerning the sidetrack known as the Switch Track.

(D) A track lease agreement, dated November 1, 1984,

concerning the sidetrack known as the Track “C.”

(E) A track lease agreement, dated August 1, 1999,

concerning the two sidetracks known respectively as

Track “A” and Track “B.”

[AND](F) A track lease agreement, dated August 1, 1999,

concerning a sidetrack described as “A sidetrack at

State Line, AR/LA beginning at Mile Post 25.00 and

extending southward on the east side of, and parallel

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to, the Railroad Company’s main track to Mile Post

25.18, a distance of approximately 950 track feet” with

said sidetrack is located in Claiborne Parish,

Louisiana.

LNW also provides switching and weighing services to

Albemarle. From the record, it is unclear to what extent these

agreements were memorialized. However, LNW now contends that

these services are covered by Tariff 8002-E.

On November 23, 2005, LNW delivered a letter to Albemarle. 

By this letter, LNW sought to terminate the pipeline and

sidetrack agreements. The letter proposed new terms for these

agreements. Further, the letter demanded new terms for the

switching services which LNW provided to Albemarle. The new

switching terms, as set forth in the November 23 letter, are

similar to those found in a document titled “Freight Tariff LNW

8002-E.” 

III. Conclusions of Law

Pursuant to 28 U.S.C. § 1450, whenever an action is removed

from a State court to a district court any injunction entered in

the action prior to removal remains in full effect until

dissolved or modified by the district court. However, the

Federal Rules govern the future of the proceedings. Palmisano v.

Allina Health Systems, Inc., 190 F.3d 881, 885 (8th Cir. 1999).

Rule 65 of the Federal Rules of Civil Procedure governs the

issuance of a preliminary injunction. When a court considers the

issuance of a preliminary injunction it must consider and balance

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four factors: (1) the threat of irreparable harm to the movant

absent the injunction; (2) the hardship that the injunction’s

issuance would inflict on the non moving party; (3) the

possibility of success on the merits; and (4) the public

interest. Pottgen v. Missouri State High School Activities

Association, 40 F.3d 926 (8th Cir. 1994). The burden of

establishing the propriety of a preliminary injunction is on the

party seeking it, and injunctive relief is an extraordinary

remedy which requires proof that there is no adequate remedy at

law. Dataphase Systems, Inc. v. C.L. Systems, Inc., 640 F.2d

109, 114 (8th Cir. 1981). 

Because, by separate Order entered of even date, the Court

is referring certain parts of this lawsuit to the Surface

Transportation Board (STB), and because the Court believes it

does not have the authority to pass on (by granting injunctive

relief or otherwise) the reasonableness of the rates charged by

LNW or other matters within the jurisdiction of the STB, the

Court will limit this award of injunctive relief to the dispute

over the pipeline agreements. 

A. Irreparable harm 

Albemarle has shown a sufficient risk of irreparable harm as

to warrant injunctive relief. The record from Columbia County

Circuit Court contains the Affidavit of Danny Wood where he avers

that Albemarle’s ability to use the pipelines is critical to its

ability to operate its production facilities, discontinuing the

pipelines would result in workforce reduction and danger to the

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environment, and the removal of the pipelines could have adverse

effects on the environment.

B. Hardship to the Defendant

The hardship to LNW in granting this injunctive relief is

slight. There is no indication from the record evidence that the

pieplines are interfering in any way with LNW’s railroad right of

way.

C. Probability of Success

Albemarle has demonstrated a sufficient probability of

success to warrant injunctive relief. Albemarle has shown

documents which suggest that it has a fee or easement in the

lands where the pipelines cross under LNW’s railtracks and LNW’s

interest in the lands is limited to a right-of-way.

D. Public Interest

The Court finds the public interest balances in favor of

granting the preliminary injunction.

Upon consideration, based on the arguments and submissions

of the parties, the Court finds Albemarle has met its burden in

showing that it is entitled to relief pendente lite against LNW. 

IV. Conclusion

In the light of the above findings, the Court finds that

LNW’s Motion to Dissolve or Modify Temporary Restraining Order

should be and hereby is granted in part and denied in part. 

 A preliminary injunction, superceding and modifying the

temporary injunction issued by the Circuit Court of Columbia

County, Arkansas, is hereby issued in this matter, to wit: 

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LNW shall not remove or otherwise disrupt the location and

operation of the various pipelines that Albemarle owns and

operates that run beneath the railroad track owned by LNW,

including but not limited to, those pipelines described in the

following agreements:

(A) An agreement dated January 11, 1969, concerning a four

(4) inch natural gas pipeline crossing underneath LMW’s

tracks in the Northwest Quarter (NE 1/4) of Section 1,

Township 18 South, Range 21 West, Columbia County,

Arkansas.

(B) An agreement dated January 11, 1969 concerning a ten

(10) inch brine pipeline transporting tail brine,

crossing underneath LNW’s tracks Northwest Quarter (NE

1/4) of Section 1, Township 18 South, Range 21 West,

Columbia County, Arkansas.

(C) An agreement dated January 11, 1969 concerning a ten

(10) inch brine pipeline transporting tail brine,

crossing underneath LNW’s tracks Northwest Quarter (NE

1/4) of Section 19, Township 18 South, Range 21 West,

Columbia County, Arkansas. 

(D) An agreement dated March 17, 1969, concerning a six (6)

inch natural gas pipeline installed at a point 1427

feet northwest of point of switch on spur to

Albemarle’s plant.

(E) An agreement dated October 20, 1969, concerning a ten

(10) inch brine pipeline that crosses underneath LNW’s

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tracks in the Northeast Quarter (NE 1/4) of Section 1,

Township 18 South, Range 21 West, Columbia County,

Arkansas.

(F) An agreement dated March 1, 1990, concerning a six (6)

inch pipeline located in the East 1/2 Northeast 1/4,

Section 1, Township 18 South, Range 21 West, Columbia

County Arkansas. 

[AND](G) A letter agreement dated August 30, 2001, concerning a

three (3) inch gas pipeline and a fiber optic cable

located in the East 1⁄2 Northeast 1/4, Section 1,

Township 18 South, Range 21 West, Columbia County,

Arkansas.

This preliminary injunction shall remain in force and effect

until further order of this Court.

Pursuant to Federal Rule of Civil Procedure 65(c) Albemarle

shall post a security in the amount of one million dollars

($1,000,000.00). This security shall cover the injunctive relief

granted herein, as well as the potential damages LNW may recover

from Albemarle in the event that the STB finds the rates

currently charged by LNW to Albemarle are reasonable or sets the

rates at an amount higher than Albemarle has currently paid. LNW

may accept and deposit current payments made under the rates

effective prior to November 23, 2005, from Albemarle relating to

the tariffs or charges for shipping, weighing and sidetrack

service. LNW’s acceptance and deposit of these payments shall

not be deemed a waiver of LNW’s right to increased payments under

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the new tariff or otherwise.

IT IS SO ORDERED this 23rd day of January, 2006.

 /s/ Harry F. Barnes 

Hon. Harry F. Barnes

U.S. District Judge

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