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Official Blog of the AALS Section on Contracts

Court Orders Railway to Pay Swinomish Tribe $400 Million

Prior opinions in this case had already cleared away a number of issues.

Did BNSF Railway Company (BNSF) violate a Right-of-Way Easement Agreement (the Easement Agreement)?
Yes.

Were the claims of  the Swinomish Indian Tribal Community (the Tribe) barred under the Interstate Commerce Commission Termination Act?
No.

Did BNSF breach contractual obligations set forth in the Easement Agreement?
Yes.

Did the Tribe arbitrarily refuse to consent to BNSF’s unilateral decision to increase rail traffic?
Not.

Did BNSF engage in conscious, willful, and knowing trespass from 2012 to 2021?
Yes.

Swinomish logoSo, in Swinomish Indian Tribal Community v. BNSF Railway Company, the only thing left to determine was damages. The proper remedy in this case was the disgorgement of net profits. Those profits amounted to about $450 million, but the court agreed to subtract about $50 million, representing one-third of long-term fixed costs associated with the trespassing shipments.  The court then discounted the damages by an addition $35 million, representing net profits that could have been realized on the legitimate use of the rail network. However, the court then calculated that the Tribe was entitled to an additional $32 million, representing additional after-tax profits that BNSF earned on the revenues it netted through its trespass.  That brought the total judgment to just under $400 million.

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