Rail Operator Files Suit Against Town of North Judson

Posted on October 28, 2016
Author Tyler Maffitt, WKVI

The Chesapeake and Indiana Railroad Company has filed suit against the Town of North Judson for what it alleges is several violations of contract, confidentiality, and the law.

Company representatives said in a statement on Friday they don’t believe the town government is working in good faith to resolve what they say is more than $1-million in contract obligations owed to the railroad company.

The lawsuit filed Friday involves a little more than 30 miles of railroad traveling through Porter, LaPorte, and Starke Counties. It’s also used by the Hoosier Valley Railroad Museum for local tourism activities.

A company called CSX sold the rail line to the Town of North Judson which eventually sold the line to the Chesapeake and Indiana Railroad Company in 2004. That relationship was ended this year with a new operator selected this summer.

The Chesapeake and Indiana Railroad Company is attributing the deterioration of their relationship with the Town of North Judson to its insistence proper safety and insurance parameters outlined in the contract be followed.

Company officials say they contacted the town numerous times to inform them the Hoosier Valley Railroad Museum was carrying insufficient insurance and was unsafely operating the line following an injury reported in 2011. Company President Powell Felix said in a statement that Chesapeake is concerned the museum continues to do so.

According to the suit, the company says it is entitled to book value for upgrades and improvements the company made to non-removable parts of the rail line. That arrangement applies if the town does not renew or cancels its agreement with the company.

Further, the company claims the recent bid process to select a new operator included the aid of the HVRM and shared confidential and proprietary secrets – something the company alleges is a violation of federal law.

Felix says he has deep concerns for the safety of individuals riding the HVRM tour train, claiming town officials have demonstrated poor judgment, and elaborating that the taxpayers of North Judson should not have to bare the cost of future incidents.

Felix says that the company has “no choice” but to protect its business interests and those of its customers. The company anticipates the allegations could cost North Judson millions of dollars.

Officials with the Town of North Judson and Town Attorney Rachel Arndt were not immediately available for comment. This is a developing story. Check back for future updates.