786 F. Supp. 2d 398
D. Me.2011Background
- CN and Twin Rivers sought a preliminary injunction to enforce an easement over MMA’s Van Buren/Madawaska tracks to service the Twin Rivers mill.
- MMA moved to dismiss or stay litigation and compel arbitration under the TRA; CN disputed the scope of arbitration and the easement reach.
- Three agreements (Easement, Trackage Rights Agreement, Junction Settlement Agreement) from 2001 were at issue; CN paid BAR $5 million for those rights.
- Dispute centers on whether CN has direct physical access to the mill or only access to Milepost 0.0, with ongoing transloading arrangements bypassing MMA.
- The court held the arbitration clause is not applicable to disputes under the Easement; preliminary injunction and arbitration motions denied.
- CN and Twin Rivers argued irreparable harm and public interest in preserving competition and mill viability; MMA argued status quo and switching limitations.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Arbitration scope and incorporation | CN argues TRA arbitration applies to TRA disputes and is incorporated by reference into the Easement. | MMA contends TRA governs all disputes and is incorporated to the Easement, requiring arbitration for CN claims. | Arbitration clause not applicable to Easement disputes; limited incorporation only. |
| Likelihood of success on mutual mistake reform | CN contends Milepost 0.0 was a mutual mistake intended to reach the mill directly. | MMA argues no mutual mistake; language unambiguous and no switching/yard-sharing agreement exist. | CN failed to show likelihood of proving mutual mistake by clear and convincing evidence. |
| Irreparable harm | CN and Twin Rivers claim irreparable harm from loss of property rights and goodwill; transloading as temporary fix is insufficient. | MMA claims harms are quantifiable and do not amount to irreparable injury; status quo remains possible. | Irreparable harm not established; harms are quantifiable where applicable. |
| Balance of harms and public interest | CN/Twin Rivers contend injunction favors competition, mill viability, and regional economy. | MMA emphasizes disruption to its operations and financial stability, with adverse public policy effects. | Balance and public interest not tipping in CN/Twin Rivers’ favor; not enough to warrant injunction. |
Key Cases Cited
- Howard v. Surface Transportation Board, 389 F.3d 259 (1st Cir. 2004) (issue not binding on easement geographic scope; addressed bankruptcy power rather than contract terms)
- SC Testing Technologies, Inc. v. Department of Environmental Protection, 688 A.2d 421 (Me. 1996) (contract incorporation by reference limited to purpose; MOA about inclusion of extraneous writings)
- K-Mart Corp. v. Oriental Plaza, Inc., 875 F.2d 907 (1st Cir. 1989) (irreparable harm concepts in real estate-related injuries; not controlling here)
- Iantosca v. Step Plan Servs., Inc., 604 F.3d 24 (1st Cir. 2010) (four-part preliminary injunction standard; emphasis on likelihood of success factor)
- Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7 (S. Ct. 2008) (irreparable harm requirement; standard for preliminary injunctions)