Indiana Harbor Belt R.R. Co. v. American Cyanamid Co.

USCOA 7th Cir - 1990

Facts:

• D loaded 20k gallons of liquid acrylonitrile (a toxic, flammable chemical used in textile manufacturing) into a railroad car tank.
• When the car reached P's railroad switching station, they noticed that the chemical was pouring out of the tank.
• The EPA required P to spend ~$1M to clean up the spill. P sued D to recover the money spent in clean-up, claiming that the shipper is strictly liable for shipping the chemical since it is an ultra-hazardous activity.

Procedural History:

• Trial court found for P, strict liability applied.
• 7th Cir COA reversed and remanded, no strict liability.

Issues:

• What factors should be applied to determine if an activity is abnormally dangerous?

Holding/Rule:

• Section 520 of the Restatement sets out several factors to consider in determining if an activity is abnormally dangerous…
• Existence of a high degree of risk of some harm to the person, land, or chattels of others
• Likelihood that the harm that results from it will be great
• Inability to eliminate the risk by the exercise of reasonable care
• Extent to which the activity is not a matter of common usage
• Inappropriateness of the activity to the place where it is carried out
• Extent to which its value to the community is outweighed by its dangerous attributes

Reasoning:

• Cases that impose strict liability for the storage of a dangerous chemical can be distinguished from this one because the storer has more control than the shipper.
• A negligence regime is perfectly adequate to remedy and deter in situations like this.
• The chemical is not corrosive, and no one suggested that the leak was caused by the inherent properties of the chemical. Someone just didn't tighten the cap, a lack of due care.
• D could not have avoided the major cities since railways are a hub and spoke system where the hubs are in major cities. Rerouting through lesser populated areas would have been prohibitively expensive and time-consuming. Additionally, it might also be more dangerous since it has to travel farther and across inferior track.
• The manufacturer of a product is not considered to be engaged in an abnormally dangerous activity merely because the product becomes dangerous when it is handled or used in some way after it leaves his premises, even if the danger is foreseeable.

Dissent:

• None.

Notes:

• Other activities that have been held to be abnormally dangerous (strict liability)…
• Transportation and storage of toxic chemicals and inflammable liquids
• Pile driving
• Crop dusting
• Fumigation with toxic gases
• Testing of rockets
• Fireworks displays
• Operation of hazardous waste disposal sites
• Operation of oil wells
• Storage of large quantities of water and other liquids
• However, in some instances, these activities have been held not to be abnormally dangerous enough to impose strict liability.