Lawyers for the Oregon International Port of Coos Bay filed a lawsuit Monday against the Central Oregon & Pacific Railroad.

The port is seeking a jury trial and demanding no less than $15 million in damages over the railroad’s decision to shut down the Coos Bay short line in September.

Documents filed in U.S. District Court do not contend the railroad had no right to close the line, but rather it didn’t give enough notice. The dispute relates to a contract signed two years ago between the port and CORP over the railroad leasing the North Spit rail spur. According to the lease, the railroad cannot “take any action to suspend or discontinue its operations on the Lease Premises, without first giving the Lessor One Hundred Eighty (180) days’ notice. ...”

CORP announced Sept. 21 it was closing the railroad immediately.

The port also is contending in court documents that when Union Pacific Railroad donated the Coos Bay Rail Bridge to the port, the agency gained control of the lease, dating back to 1994,  governing its use. The lease requires CORP to obtain a written agreement from the port before suspending or ending operations, the complaint said.

The railroad has 20 days to respond to this lawsuit once it is served with the official court documents. General counsel, Scott Williams of CORP’s parent company RailAmerica, said he had read through the port’s complaint Monday. The railroad still is weighing its options.

“I’m not going to respond in the news media,” he said.

As to not giving 180 days’ notice before ending rail service, Williams reiterated the railroad’s first comment issued Sept. 21.

“You saw we filed an embargo. The reason why we did it was for safety purposes,” he said.

At the time, the railroad issued a press release saying the tracks would be closed due to unsafe conditions in three of its nine tunnels on the Coos Bay line to Eugene.

The rail line closure not only put a financial crunch on industrial companies relying on rail, but the port, too, will lose money.

The project to build the rail spur, which opened less than a year ago, cost almost $5 million. The port took out a $1.2 million loan for construction and still owes $886,000 on it, according to the port’s finance director, Donna Nichols. In using the tracks, CORP was paying a tariff, which would have put about $15,000 into port coffers this year.

“The rail spur tariffs were never meant to pay the debt service. They were to pay for insurance and build the bank to pay for future maintenance,” Nichols said.

Then there’s the rail bridge. The port owes money on that, too, for phase 1 of the ongoing rehabilitation project. It originally took out a $246,000 loan for that, paying $20,000 annually over past five years.

“If the rail actually closes, I’m hoping we can use those tariff monies to pay off the loan,” she added.

The railroad last paid tariffs in July, meaning the port still is owed money for August and September.

While the lawsuit moves through the courts, federal lawmakers are working on the rail situation in Washington. U.S. Sen. Gordon Smith, R-Ore., is scheduled today to speak at an oversight hearing on the Surface Transportation Board and Regulation related to railroads. He plans to give testimony and question witnesses about the impact of the rail line closure and its future, according to his staff. The port’s executive director, Jeffrey Bishop, also is there today for the hearing.

Port officials said little about the lawsuit Monday. The port’s director of marketing and communications, Martin Callery, did say the port had one goal in filing the lawsuit.

“Our intent is to restore service on the Coos Bay line.”

Court Complaint