Judge tosses much of Paulsboro suit

PAULSBORO The borough and its schools cannot hold Conrail responsible for feared financial losses associated with a "stigma" stemming from the November 2012 train derailment and chemical spill, a federal judge in Camden has ruled.

U.S. District Judge Robert B. Kugler, in a decision filed Monday, supported the rail company's motion to dismiss the claim that it owed damages to Paulsboro for negative news accounts that could dissuade prospective homeowners or businesses from locating in town.

Kugler did, however, uphold other aspects of the suit filed last year by Paulsboro and its public schools. He determined that the claim that actions of the company disrupted the school district's curriculum through forced school closings could proceed.

The early morning derailment more than two years ago occurred when a Conrail train crossed the swing-style East Jefferson Street bridge against a red light. Seven cars derailed, four into the Mantua Creek, and one ruptured, spewing 20,000 gallons of toxic vinyl chloride into the air.

The National Transportation Safety Board last summer placed much blame on the rail company, finding, for instance, that the locks holding the bridge in place were not secured and that the bridge had a history of issues.

In his decision to dismiss Paulsboro's claim regarding bad publicity, Kugler wrote that the borough presented "no facts plausibly supporting an inference that defendants knew or should have known that media coverage of the derailment would reduce the value of real estate not actually contaminated with vinyl chloride."

Bradley Campbell, a former state Department of Environmental Protection commissioner who represents the town and schools, said: "We are very disappointed by Judge Kugler's decision, which fails to recognize the long-term impact of Conrail's negligence on the borough's and the school's finances."

Campbell said the schools would continue to pursue the remaining claims to ensure they received compensation. The borough's schools were closed for six days, and each day's loss of instruction time was valued in the suit at $134,223.

When the case was filed, damages were estimated at $5.9 million - about $5 million of which was for anticipated lost revenue, over more than a decade, because of lower property values and property tax revenue. Campbell said an amended complaint did not include such a figure and that Paulsboro was calculating damages based on more recent property tax assessments.

Conrail spokesman Michael Hotra said in an e-mail Tuesday: "We believe the judge's decision in this matter speaks for itself and have nothing further to add." - Angelo Fichera