Indiana Harbor Belt R.R.Co.v.American Cyanamid Co.
United States Court of Appeals,Seventh Circuit,1990
916 F.2d 1174
POSNER,J.
American Cyanamid Company,the defendant in this diversity tort suit governed by Illinois law,is a major manufacturer of chemicals,including acrylonitrile,a chemical used in large quantities in making acrylic fibers,plastics,dyes,pharmaceutical chemicals,and other intermediate and final goods.On January 2,1979,at its manufacturing plant in Louisiana,Cyanamid loaded 20,000 gallons of liquid acrylonitrile into a railroad tank car that it had leased from the North American Car Corporation.The next day,a train of the Missouri Pacific Railroad picked up the car at Cyanamid’s siding.The car’s ultimate destination was a Cyanamid plant in New Jersey served by Conrail rather than by Missouri Pacific.The Missouri Pacific train carried the car north to the Blue Island railroad yard of Indiana Harbor Belt Railroad,the plaintiff in this case,a small switching line that has a contract with Contrail to switch cars from other lines to Conrail,in this case for travel east.The Blue Island yard is in the Village of Riverdale,which is just south of Chicago and part of the Chicago metropolitan area.
The car arrived in the Blue Island yard on the morning of January 9,1979.Several hours after it arrived,employees of the switching line noticed fluid gushing from the bottom outlet of the car.The lid on the outlet was broken.After two hours,the line’s supervisor of equipment was able to stop the leak by closing a shut-off valve controlled from the top of the car.No one was sure at the time just how much of the contents of the car had leaked,but it was feared that all 20,000 gallons had,and since acrylonitrile is flammable at a temperature of 30 degrees Fahrenheit or above,highly toxic,and possibly carcinogenic,the local authorities ordered the homes near the yard evacuated.The evacuation lasted only a few hours,until the car was moved to a remote part of the yard and it was discovered that only about a quarter of the acrylonitrile had leaked.Concerned nevertheless that there had been some contamination of soil and water,the Illinois Department of Environmental Protection ordered the switching line to take decontamination measures that cost the line $981,022.75,which it sought to recover by this suit.
One count of the two-count complaint charges Cyanamid with having maintained the leased tank car negligently.The other count asserts that the transportation of acrylonitrile in bulk through the Chicago metropolitan area is an abnormally dangerous activity,for the consequences of which the shipper (Cyanamid)is strictly liable to the switching line,which bore the financial brunt of those consequences because of the decontamination measures that it was forced to take.
[The trial court judge found that strict liability applied and granted summary judgment in favor of the plaintiff on that count.]
The question 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 is a novel one in Illinois….
The parties agree that the question whether placing acrylonitrile in a rail shipment that will pass through a metropolitan area subjects the shipper to strict liability is,as recommended in Restatement (Second) of Torts § 520,comment 1(1977),a question of law,so that we owe no particular deference to the conclusion of the district court.They also agree … that the Supreme Court of Illinois would treat as authoritative the provisions of the Restatement governing abnormally dangerous activities.The key provision is section 520,which sets forth six factors to be considered in deciding whether an activity is abnormally dangerous and the actor therefore strictly liable.
The roots of section 520 are in nineteenth-century cases.The most famous one is Rylands v.Fletcher,1 Ex.265,aff’d,L.R.3 H.L.300 (1868),but a more illuminating one in the present context is Guille v.Swan,19 Johns.(N.Y.) 381(1882).A man took off in a hot-air balloon and landed without intending to,in a vegetable garden in New York City.A crowd that had been anxiously watching his involuntary descent trampled the vegetables in their endeavor to rescue him when he landed.The owner of the garden sued the balloonist for the resulting damage,and won.Yet the balloonist had not been careless.In the state of ballooning it was impossible to make a pinpoint landing.
Guille is a paradigmatic case for strict liability.(a) The risk (probability) of harm was great,and (b) the harm that would ensue if the risk materialized could be,although luckily was not,great (the balloonist could have crashed into the crowd rather than into the vegetables).The confluence of these two factors es-tablished the urgency of seeking to prevent such accidents.(c) Yet such accidents could not be prevented by the exercise of due care;the technology of care in ballooning was insufficiently developed.(d) The activity was not a matter of common usage,so there was no presumption that it was a highly valuable activity despite its unavoidable riskiness.(e) The activity was inappropriate to the place in which it took place – densely populated New York City.The risk of serious harm to others (other than the balloonist himself,that is) could have been reduced by shifting the activity to the sparsely inhabited areas that surrounded the city in those days.(f) Reinforcing (g),the value to the community of the activity of recreational ballooning did not appear to be great enough to offset its unavoidable risks.
These are,of course,the six factors in section 520.They are related to each other in that each is a different fact of a common quest for a proper legal regime to govern accidents that negligence liability cannot adequately control the interrelations might be more perspicuous if the six factors were reordered.One might for example start with (c),inability to eliminate the risk of accident by the exercise of due care.The baseline common law regime of tort liability is negligence.When it is a workable regime,because the hazards of an activity can be avoided by being careful (which is to say,nonnegligent),there is no need to switch to strict liability.Sometimes,however,a particular type of accident cannot be prevented by taking care but can be avoided,or its consequences minimized,by shifting the activity in which the accident occurs to another locale,where the risk or harm of an accident will be less ((e)),or by reducing the scale of the activity in order to minimize the number of accidents caused by it ((f)).By making the actor strictly liable – by denying him in other words an excuse based on his inability to avoid accidents by being more careful – we give him an incentive,missing in a negligence regime,to experiment with methods of preventing accidents that involve not greater exertions of care,assumed to be futile,but instead relocating,changing,or reducing(perhaps to the vanishing point) the activity giving rise to the accident.The greater the risk of an accident ((a)) and the costs of an accident if one occurs ((b)),the more we want the actor to consider the possibility of making accident-reducing activity changes;the stronger,therefore,is the case for strict liability.Finally,if an activity is extremely common ((d)),like driving an automobile,it is unlikely either that its hazards are perceived as great or that there is no technology of care available to minimize them,so the case for strict liability is weakened.(https://www.daowen.com)
The largest class of cases in which strict liability has been imposed under the standard codified in the Second Restatement of Torts involves the use of dynamite and other explosives for demolition in residential or urban areas.Restatement,supra,§ 519,comment d.explosives are dangerous even when handled carefully,and we therefore want blasters to choose the location of the activity with care and also to explore the feasibility of using safer substitutes (such as a wrecking ball),as well as to be careful in the blasting itself.Blasting is not a commonplace activity like driving a car,or so superior to substitute methods of demolition that the imposition of liability is unlikely to have any effect except to raise the activity’s costs.
Against this background we turn to the particulars of acrylonitrile.Acrylonitrile is one of a large number of chemicals that are hazardous in the sense of being flammable,toxic,or both;acrylonitrile is both,as are many others.A table in the record,drawn from Glickman & Harvey,Statistical Trends in Railroad Ha-z ardous Material Safety,1978 to 1984,at pp.63-65 (Draft Final Report to the Env-i ronmental & Hazardous Material Studies Division of the Association of American Railroads,April 1986) (tab.4.1),contains a list of the 125 hazardous materials that are shipped in highest volume on the nation’s railroads.Acrylonitrile is the fiftythird most hazardous on the list.Number 1 is phosphorus (white or yellow),and among the other materials that rank higher than acrylonitrile on the hazard scale are anhydrous ammonia,liquefied petroleum gas,vinyl chloride,gasoline,crude petroleum,motor fuel antiknock compound,methyl and ethyl chloride,sulphuric acid,sodium metal,and chloroform.The plaintiff’s lawyer acknowledged at argument that the logic of the district court’s opinion dictated strict liability for all 52 materials that rank higher than acrylonitrile on the list,and quite possibly for the 72 that rank lower as well,since all are hazardous if spilled in quantity while being shipped by rail.Every shipper of any of these materials would therefore be strictly liable for the consequences of a spill or other accident that occurred while the material was being shipped through a metropolitan area.The plaintiff’s lawyer further acknowledged the irrelevance,on her view of the case,of the fact that Cyanamid had leased and filled the car that spilled the acrylonitrile;all she thought important is that Cyanamid introduced the product into the stream of commerce that happened to pass through the Chicago metropolitan area.Her concession may have been incautious.One might want to distinguish between the shipper who merely places his goods on his loading dock to be picked up by the carrier and the shipper who,as in this case,participates actively in the transportation.But the concession is illustrative of the potential scope of the district court’s decision.
Cases … that impose strict liability for the storage of a dangerous chemical provide a potentially helpful analogy to our case.But they can be distinguished on the ground that the storer … has more control than the shipper.
So we can get little help from precedent,and might as well apply section 520 to the acrylonitrile problem from the ground up.To begin with,we have been given no reason … for believing that a negligence regime is not perfectly adequate to remedy and deter,at reasonable cost,the accidental spillage of acrylonitrile from rail cars….[A]lthough acrylonitrile is flammable even at relatively low temperatures,and toxic,it is not so corrosive or otherwise destructive that it will eat through or otherwise damage or weaken a tank car’s valves although they are maintained with due (which essentially means,with average) care.No one suggests,therefore,that the leak in this case was caused by the inherent properties of acrylonitrile.It was caused by carelessness – whether that of the North American Car Corporation in failing to maintain or inspect the car properly,or that of Cyanamid in failing to maintain or inspect it,or that of the Missouri Pacific when it had custody of the car,or that of the switching line itself in failing to notice the ruptured lid,or some combination of these possible failures of care.Accidents that are due to a lack of care can be prevented by taking care;and when a lack of care can … be shown in court,such accidents are adequately deterred by the threat of liability for negligence….
The district judge and the plaintiff’s lawyer make much of the fact that the spill occurred in a densely inhabited metropolitan area.Only 4,000 gallons spilled;what if a 20,000 had done so? Isn’t the risk that this might happen even if everybody were careful sufficient to warrant giving the shipper an incentive to explore alternative routes? Strict liability would supply that incentive.But this argument overlooks the fact that,like other transportation networks,the railroad network is a hub-and-spoke system.And the hubs are in metropolitan areas.Chicago is one of the nation’s largest railroad hubs.In 1983,the latest date for which we have figures,Chicago’s railroad yards handled the third highest volume of hazardousmaterial shipments in the nation.East St.Louis,which is also in Illinois,handled the second highest volume.Office of Technology Assessment,Transportation of Hazardous Materials 53 (1986).With most hazardous chemicals (by volume of shipments) being at least as hazardous as acrylonitrile,it is unlikely – and certainly not demonstrated by the plaintiff – that they can be rerouted around all the metropolitan areas in the country,except at prohibitive cost.Even if it were feasible to reroute them one would hardly expect shippers,as distinct from carriers,to be the firms best situated to do the rerouting….
The difference between shipper and carrier points to a deep flaw in the plaintiff’s case.Unlike Guille … and unlike the storage cases,beginning with Rylands itself,here it is not the actors – that,the transporters of acrylonitrile and other chemicals – but the manufacturers,who are sought to be held strictly liable.A shipper can in the bill of lading designate the route of his shipment if he likes,but is it realistic to suppose that shippers will become students of railroading in order to lay out the safest route by which to ship their goods? Anyway,rerouting is no panacea.Often it will increase the length of the journey,or compel the use of poorer track,or both.When this happens,the probability of an accident is increased,even if the consequences of an accident if one occurs are reduced;so the expected accident cost,being the product of the probability of an accident and the harm if the accident occurs,may rise.Glickman,Analysis of a National Policy for Routing Hazardous Materials on Railroads (Department of Transportation,Research and Special Programs Administration,Transportation Systems Center,May 1980).It is easy to see how the accident in this case might have been prevented at reasonable cost by greater care on the part of those who handled the tank car of acrylonitrile.It is difficult to see how it might have been prevented at reasonable cost by a change in the activity of transporting the chemical.This is therefore not an apt case for strict liability.
In emphasizing the flammability and toxicity of acrylonitrile rather than the hazards of transporting it,as in failing to distinguish between active and the passive shipper,the plaintiff overlooks the fact that ultra-hazardousness or abnormal dangerousness is,in the contemplation of the law at least,a property not of substances,but of activities: not of acrylonitrile,but of the transportation of acrylonitrile by rail through populated areas.Natural gas is both flammable and poisonous,but the operation of a natural gas well is not an ultrahzardous activity.Whatever the situation under products liability law (section 402A of the Restatement),the manufacturer of a product is not considered to be engaged in an abnormally dangerous activity merely because the product becomes dangerous when it is handled or used in some way after it leaves his premises,even if the danger is foreseeable.The plaintiff does not suggest that Cyanamid should switch to making some less hazardous chemical that would substitute for acrylonitrile in the textiles and other goods in which acrylonitrile is used.Were this a feasible method of accident avoidance,there would be an argument for making manufacturers strictly liable for accidents that occur during the shipment of their products (how strong an argument we need not decide).Apparently it is not a feasible method.
The relevant activity is transportation,not manufacturing and shipping.This essential distinction the plaintiff ignores.But even if the plaintiff is treated as a transporter and not merely a shipper,it has not shown that the transportation of acrylonitril e in bulk by rail through populated areas is so hazardous an activity,even when due car e is exercised,that the law should seek to create – perhaps quixotically – incentives to relocate the activity to nonpopulated areas,or to reduce the scale of the activity,or to switch to transporting acrylonitrile by road rather than by rail,perhaps to set the stage for a replay of Siegler v.Kuhlman.It is no more realistic to propose to reroute the shipment of all hazardous materials around Chicago than it is to propose the relocation of homes adjacent to the Blue Island switching yard to more distant suburbs.It may be less realistic.Brutal though it may seem to say it,the inappropriate use to which land is being put in the Blue Island yard and neighborhood may be,not the transportation of hazardous chemicals,but residential living.The analogy is to building your home between the runways at O’Hare.
The briefs hew closely to the Restatement,whose approach to the issue of strict liability is mainly allocative rather than distributive.By this we mean that the emphasis is on picking a liability regime (negligence or strict liability) that will control the particular class of accidents in question most effectively,rather than on finding the deepest packet and placing liability there.At argument,however,the plaintiff’s lawyer invoked distributive considerations by pointing out that Cyanamid is a huge firm and the Indiana Harbor Belt Railroad a fifty-mile-long switching line that almost went broke in the winter of 1979,when the accident occurred.Well,so what? A corporation is not a living person but a set of contracts the terms of which determine who will bear the brunt of liability.Tracing the incidence of a cost is a complex undertaking which the plaintiff sensibly has made no effort to assume,since its legal relevance would be dubious.We add only that however small the plaintiff may be,it has mighty parents: it is a jointly owned subsidiary of Conrail and the Soo line.
The judgment is reversed (with no award of costs in this court) and the case remanded for further proceedings,consistent with this opinion,on the plaintiff’s claim for negligence.
Reversed and remanded,with directions.