Freight railroad files lawsuit over Southwest light-rail route

Planners of the Southwest light-rail project are facing another legal challenge, this time from a freight rail company that is slated to share a portion of the nearly 15-mile route between Minneapolis and Eden Prairie.

Glencoe-based Twin Cities & Western Railroad (TC&W) filed suit Tuesday in U.S. District Court in Minneapolis, claiming agreements crafted by the Metropolitan Council outlining how freight and light-rail trains will operate alongside one another are in breach of previous contracts, federal interstate commerce laws and the U.S. Constitution.

The lawsuit names the Met Council, which is planning and building the $1.9 billion Southwest line, as well as the Hennepin County Regional Railroad Authority and Canadian Pacific Railway as defendants.

TC&W officials say the agreements "will substantially and unreasonably interfere" with their ability to serve their customers — farmers and manufacturers in western Minnesota and South Dakota that depend on rail to haul their goods to market.

The railroad wants the agreements thrown out, an undetermined amount of financial damages and attorneys fees, plus a jury trial to determine it all.

But Met Council Chairwoman Alene Tchourumoff said the intent of the regional planning body "has always been to work in partnership with TC&W." This effort has involved "multiple offers to TC&W [that] were always responsive to their interests, as well as the shippers who rely on those tracks, while balancing our responsibility to the public," she said in a statement Wednesday.

After negotiations stalled last year, the council offered TC&W $11.9 million in exchange for assurances from the railroad to cooperate during Southwest's construction and release all potential legal claims. Another $230,000 was put on the table to cover TC&W's expenses. The railroad formally rejected the offer last week, characterizing it as "highhanded."

The agreements with TC&W and Canadian Pacific are critical because they pave the way for the council to apply for $929 million in funding from the Federal Transit Administration. Construction of the Southwest line is expected to begin later this year, with passenger service starting in 2023.

In addition to the federal lawsuit, TC&W has filed a challenge with the Surface Transportation Board, a federal agency that is reviewing the council's freight agreements related to Southwest.

One agreement calls for Hennepin County to assume "common carrier" responsibilities along the route, which involves controlling which rail carriers use the track. Initially, TC&W was expected to take them over before negotiations broke down.

Hennepin County Commissioner Peter McLaughlin, who heads the rail authority, said TC&W's allegations lack merit.

"I don't know what [TC&W] is complaining about; they're going to get all new track out of the deal," he said.

Canadian Pacific declined to comment.

Part of the area in dispute is the Kenilworth corridor, a popular recreational area for bicyclists and pedestrians near Lake of the Isles and Cedar Lake owned by Hennepin County. TC&W trains use the corridor, but plans call for it to share it with light-rail trains that would travel in a shallow tunnel part of the way.

That arrangement prompted a 2014 federal lawsuit by neighbors, who alleged the Met Council violated federal environmental laws in choosing the light-rail route. The lawsuit, which was dismissed earlier this year, has been appealed by the group, called the Lakes and Parks Alliance.

Janet Moore • 612-673-7752 Twitter: @MooreStrib