Long time coming: Swinomish Tribe stands up to railroad

Last week the Federal District Court in Seattle entered a final decision in a case brought by the Swinomish Tribe against BNSF Railway and ordered the railway to pay $395 million to the tribe for illegal trespass across tribal lands from 2012 to 2021. This amount represents the net profit the railway made while it intentionally violated limitations contained in an easement agreement the railway signed in 1991.

While the decision will likely be appealed and litigation will continue, it reflects the conclusion of yet another chapter in a tortuous relationship between railroad and Indian Tribe. So far, the Swinomish Tribe has successfully stood up to a railroad that has bullied them for 135 years.

Background

In 1889, over the repeated objections of the Swinomish Tribe, the then Great Northern railroad constructed a rail line across Swinomish Reservation lands without the consent of the Tribe or the federal government's Bureau of Indian Affairs. In 1977, the Department of Interior filed a lawsuit on behalf of the tribe and against the railroad asking for trespass damages and ejectment of the railroad from the reservation. According to Allan Olson, then the Tribe's attorney, the Tribe wasn't interested in having the railroad cross it lands – it bisected an important economic development area the tribe planned to develop and it provided no rail service to the Tribe.

In 1991, the Tribe entered into a settlement agreement with the railroad that provided trespass damages (back rent) for 100 years of prior use (from 1889 to 1989) in the amount of $125,000 and future rental payments starting at $10,000 per year. The rental amount was to be increased annually for inflation and every five years by an appraisal that reflected increased land values as the Tribe developed property around it. More importantly it also provided for a 40 year easement (right of way) with two options for an additional 20 years each and an agreement by BNSF not to increase rail traffic beyond its current use without Tribal consent. BNSF was prohibited from running more than one train per day with a maximum of 25 cars across the reservation in each direction. In return, the Tribe agreed not to "arbitrarily withhold permission" to a railroad request to increase the number of trains or cars.

But when the time came, the railroad didn't even ask. When Bakken crude oil from North Dakota started to ship to refineries in 2012, the railroad ignored the terms of the Swinomish agreement, claimed that "shipper needs" and the Interstate Commerce Commission Termination Act superseded the agreement and started shipping to Anacortes refineries without even contacting the Tribe. Similar to the original trespass, BNSF began running 100 car unit trains across the reservation in 2012, with the Tribe learning about the trespass in article that appeared in the Skagit Valley Herald. According to the judge in that case "Railroads had a history of taking land from Indian Tribes" and "the expression 'I got railroaded' existed for a reason."

Back in court in 2015

After unsuccessful efforts to reach agreement with BNSF, the Tribe initiated a lawsuit in 2015. It soon became apparent that BNSF had lost or not maintained any of its written records from the negotiation of the 1991 settlement agreement and that the railroad's lead attorney had passed away. It also became apparent that Olson, one of the Tribe's attorneys in the negotiations, was the only living person with any recollection of how the negotiations with the railroad transpired. Olson recalled, "three railroad attorneys deposed me for two days. It was pretty intense."

The court divided the case into two parts – a liability phase and a damages phase. In the liability phase, the District Court considered the railroad's claim that "shipper needs" and the ICCTA trumped the easement and the limitations on train size. In a 2017 summary judgement decision the court ruled in the Tribe's favor and in March of 2020 the Ninth Circuit Court of Appeals affirmed. For Indian Tribes and Reservation Trust Lands, the court found that the Federal Indian Right of Way Act controlled the enforcement of the 1991 easement – not the ICCTA and the Surface Transportation Board where the railway typically got its way.

In its March 2023 order, following the Ninth Circuit decision, the District Court ruled that "BNSF has not shown that it had good faith belief that its common carrier obligations overrode the easement limitations" and that "BNSF willfully, consciously and knowingly exceeded the limitations on its right of way access from 2012 to 2021." In these extreme and rare situations, damages are measured by the amount of "illgotten gain" rather than the value of the right of way itself. In a press release last year following the liability phase of the proceeding, Tribal Chairman Steve Edwards said that "the Tribe takes its agreements very seriously and it expects them to be honored."

In the damages phase of the litigation, concluded in early June, the only question was how to calculate the net profits that BNSF would be required to "disgorge" to the Tribe. The court entered its decision June 17, 2024. The judgment award includes the "disgorgement" of net profits for the years 2012 to 2021 in the amount of $362,267,169 and an additional $32,250,000 which represents the amount of money the railroad made from investing the money required to be disgorged. In a press release, Edwards stated "We know that this is a large amount of money. But that just reflects the enormous wrongful profits that BNSF gained by using the Tribe's land day after day, week after week, year after year over our objections."

The total amount of $394,517,169 will accrue interest at the statutory rate (currently about 5% annually) for unpaid judgements as of the date of the order. The total judgement will thus exceed $400 million in about three months and generate about $20 million per year until it has been paid. Olson believes if placed in an endowment fund, the judgement could reasonably be expected to earn $30 million to $40 million annually.