The Law School Authority

Indiana Harbor Belt R.R. Co. v. American Cyanamid Co. Case Brief

Summary of Indiana Harbor Belt R.R. Co. vs American Cyanamid Co., U. S. Ct.  Of App.  [1990]

Relevant Facts: American DF is a major manufacturer of chemicals, including acrylonitrile, used in plastics, dyes, etc. Acrylonitrile is flammable at 30 degrees F, highly toxic, and carcinogenic. American loaded 20,000 gal. onto a RR tank car. Missouri RR picked up the car and carried it north to Pl  Ind Harbor’s yard, which is a small switching line, to await Conrail’s train.  After the car arrived employees noticed fluid gushing from an outlet under the car.  The lid on the outlet was broken.  Nearby homes were evacuated and the flow was stemmed from the top of the car.  It was discovered that 4000 gal. had leaked out, Df was ordered to clean the soil and water from contamination.  The cost was $981,022.75, which it sought to recover in this suit.

Legal Issue(s): Whether the shipper of a hazardous chemical by rail should be strictly liable for the consequences of a spill or other accident to the shipment en route ?

Court’s Holding:

Procedure: Trial ct found that strict liability applied and granted summary for PL; reversed and remanded with directions.

Law or Rule(s): An activity is deemed ultra hazardous when: the risk of harm is great; and the harm that would ensue if the risk materialized could be great; such could be prevented by the exercise of due care; the activity is not a matter in common usage(highly valuable vs unavoidable risk); the activity was inappropriate to the place in which it took place; the value to the community of the activity is not great enough to offset its unavoidable risks.

Court Rationale: The parties agree placing acrylonitrile in a rail shipment subjects the shipper to strict liability and that the S.Ct would treat R(2d) as the authority in determining whether the activity is abnormally dangerous and the actor strictly liable. But negligence is the baseline common law regime in tort liability.  Precedent determines that the storer of dangerous chemicals has more control than the shipper, so that is little help.  There is no reason given why negligence is not adequate to remedy and deter, at reasonable cost, the accidental spillage of acrylonitrile.  It is not corrosive, or destructive.  It won’t otherwise weaken or damage a tank car’s valves.  The leak was caused by carelessness, whether American Car, Cyanamid, Ind Harbor, Missouri, or a combination of failures to maintain the car and prevent spillage.  The relevant activity here is transportation not manufacturing and shipping.  Under products liability law the manufacturer is not considered to be engaged in an abnormally dangerous activity b/c the product becomes dangerous when it is handled or used after it leaves his premises, even if the danger is foreseeable.

Plaintiff’s Argument: Ind – Cyanamid introduced the product into the stream of commerce that happened to pass through the Chicago area.

Defendant’s Argument: Am. – Ind was in control of the car that was in working order from Louisiana all the way to Chicago, where it began to leak.

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