Judge again rejects CSX lawsuit

A U.S. district judge in Johnstown has rejected a request by residents of Hyndman Borough to reinstate their lawsuit against CSX Transportation Inc. seeking money damages as a result of a derailment that forced more than 1,000 residents from their homes.

Judge Kim R. Gibson in December dismissed a class-action lawsuit filed by four borough residents who had to flee their homes during the early morning of Aug. 2, 2017, after a CSX freight train derailed in the borough.

A huge fire erupted that spewed fumes into the air and led officials to go door-to-door, telling residents to leave their homes.

The fire continued for two days, and many residents had to find accommodations away from their homes for many additional days.

Several lawsuits were filed in the Bedford County Court of Common Pleas against CSX, including the request for class-action status by residents Denora Diehl, Robert Cook, Jennifer Queen and Lorlei Gordon.

CSX, based in Jacksonville, Fla., transferred the lawsuit to the U.S. District Court in Johnstown, a move that is permitted because it involved parties from different states.

Gibson, in summing up the case, indicated that the lawsuit involved possible damages of more than $5 million.

The railroad asked Gibson to dismiss the case under Pennsylvania’s economic loss doctrine.

Under Pennsylvania law, legal action for negligence cannot be brought for solely economic damages — without physical injury or property damage — the judge said.

The lawsuit filed by the residents discussed the fumes, the fire, their unattended pets, spoiled food, missed work and out-of-pocket expenses as well as fear, anxiety, anguish and loss of use of their properties.

Gibson ruled that the fear and anxiety had not “physically manifested itself,” and he concluded that the lawsuit was barred under Pennsylvania law.

Attorney Bryan Neiderhiser of Indiana filed a petition asking the judge to reconsider his decision, pointing out the Pennsylvania Supreme Court in 2018 approved an exception to the economic loss doctrine allowing employees of a Pennsylvania company to sue after their personal data was hacked.

That lawsuit focused on the company’s negligence in protecting their personnel information and concluded the employees could sue because the company breached its “common law duty” to protect its workers.”

Neiderhiser argued that CSX owed the residents of Hyndman “a duty of care to operate their trains and maintain all related equipment in a safe, legal way,” according to applicable industry and regulatory standards.”

The residents’ lawsuit contended the CSX freight train — more than 2 miles long — had brake problems and was negligently operated.

Neiderhiser contended the judge by not considering the 2018 case had made an “error of law.”

CSX opposed the request to reinstate the lawsuit by contending the residents were improperly raising new arguments by bringing up the 2018 Supreme Court decision and by now contending the railroad owed the residents a common law duty.

Gibson in an opinion stated he “did not commit a clear error of law” when he ruled the class-action lawsuit was barred by the economic loss doctrine.

The 2018 case, he stated, “did not change the doctrine as it relates to the present case.”

In the state Supreme Court decision, he explained, “The court held an employer has a legal duty to exercise reasonable care to safeguard its employees sensitive personal information stored by the employer and that the economic loss doctrine did not preclude claims alleging a breach of such duty.”

That case, Gibson stated, “did not clarify or change the existing law for (civil) actions stemming from mental suffering or property damage, like those at issue in this case.”