EAST ST. LOUIS – CSX Transportation moved to reprimand Lloyd’s of London on June 16, for alleging that the railroad intimidated a witness.
CSX counsel Charles Swartwout of Belleville claimed Lloyd’s substituted bombast and invective for merit in a motion for sanctions it filed on June 1.
“Lloyd’s knows this testimony is detrimental to its case and has filed this unserious motion in a desperate ploy to undermine CSX’s case in chief," Swartwout wrote.
The case concerns destruction of four locomotives that the port of Wilmington, North Carolina ordered in 2018.
National Railway Equipment in Mount Vernon, Illinois built the locomotives and put them on a train of CSX subsidiary Evansville Western.
The locomotives later switched to a CSX train.
In North Carolina, on Sept. 16, hurricane Florence flooded the tracks and swept the rails out from under the locomotives.
Lloyd’s paid National Railway Equipment $5,840,364 for the locomotives and $200,000 for expenses.
National Railway Equipment assigned its rights to Lloyd’s, which sued CSX.
Lloyd’s claimed CSX failed to heed warnings and basic common sense.
Lloyd’s claimed Wilmington closed the port and there was no reason for the train to proceed.
Lloyd’s sued in district court at Charlotte, but District Judge Robert Conrad found federal law specified venue at the point of origin.
He sent the complaint to Southern Illinois, where District Judge Stephen McGlynn took the assignment.
CSX moved for summary judgment last year, claiming its shipping agreement limited liability for freight damage to $10,000 per locomotive.
Swartwout claimed National Railway Equipment knowingly accepted the limit as part of the terms and conditions.
Lloyd’s counsel Robert Crowder of Los Angeles moved for summary judgment too.
“CSX betrayed the crew,” Crowder wrote.
He claimed they sustained injuries that ended their careers.
At a hearing in January, Crowder said no shipper would expect CSX to continue sending a train through a flash flood despite protests of its crew.
He said it amounted to intentional destruction of cargo.
McGlynn denied summary judgment to CSX in February, finding Lloyd’s raised fact issues about perfection of the liability limit.
On May 13, CSX counsel Daniel Wolff of Washington sent an indemnification demand to National Railway Equipment general counsel Hal Burgan.
He sought to recover any amount above $10,000.
He claimed National Railway Equipment exposed CSX to civil liability by settling its claim with Lloyd’s without CSX’s consent.
Crowder attached the declaration to his motion for reprimand.
He called Wolff’s demand a litigation threat in disguise.
He claimed Burgan manages National Railway Equipment’s litigation risks and corporate trial testimony.
He claimed Wolff telegraphed that if Lloyd’s wins, CSX would unleash its legal stable on National Railway Equipment.
He claimed the demand tainted the entire proceeding.
Swartwout responded by recommending reprimand.
He claimed CSX aimed to keep Lloyd’s from eliciting testimony that National Railway Equipment representatives gave at depositions.
“Lloyd’s suggestion of intimidation presumes that National Railway Equipment would lie on the stand, contravening its prior under oath corporate testimony,” he wrote.
“This is both insulting and without basis.”
He claimed that only when McGlynn denied judgment did CSX have reason to seek indemnification.
“No competent business makes legal demands of its business partners and customers unless and until it is necessary to do so,” he wrote.
McGlynn has set trial in October.