Town Claims Second Party Operates Grafton & Upton Railroad Terminal

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Day three of the federal trial against the Grafton & Upton Railroad Photo Credit: Richard Price

GRAFTON, Mass.— The lawyer for the town of Grafton argued in federal court Thursday that the propane transfer operation being built by the Grafton & Upton Railroad is largely controlled by a second company, possibly removing it from federal pre-emption.

Ginny S. Kremer of Bowman & Penski, the lawyer for Grafton, cross examined Jon Delli Priscoli about a trans-load agreement contract the railroad has with Spicer Gas that specializes in liquid propane. This was the third day of the trial, in which the town is seeking to prevent Delli Priscoli from bringing in  four 120-foot, 80,000 gallon propane tanks to its North Grafton depot for the operation.

Federal pre-emption allows only railroads, when transportation is involved, to operate outside of state and local laws.

Kremer claimed that the interests of the second company would be excluded from that umbrella.

The Grafton & Upton Railroad is building a propane transfer terminal 100 yards from a CSX rail line but also near a watershed, single family homes, and an elementary school. Kremer argued the trans-load contract hands over significant control of day-to-day operations to Jonathan Holstein, vice-president of Spicer Gas and a series of his sister companies.

Kremer, during cross examination, asked Delli Priscoli if Patriot Gas, a company that markets propane fuel and  owned by Holstein, was also marketing for his railroad. Delli Priscoli said no, that the company role was as a “guarantor” that would deliver a minimum of 800 propane rail cars to his yard in the first year to assure he will “break even."

But John A. Mavricos, the railroad’s lawyer,  argued that the contracts with Holstein’s companies were open-ended, which gave ultimate control of the operation, and the employees who work on the site, to the railroad. It also allowed Delli Priscoli’s company to bring in other propane wholesalers to off-load at the Westborough Road site.

Mavricos also called Theodore Lenoff, an expert from the National Fire Protection Agency who co-authored the fire safety analysis manual for propane fuel, to the stand. Lenoff testified he reviewed the site drawings for the Grafton & Upton Railroad and signed off that they were in compliance.

Lenoff also testified that if liquid propane were to leak out of a tank. it would vaporize as a “white cloud” of water. He said it would have to be minus 40 degrees Fahrenheit or colder for propane to maintain its current state. When Mavricos asked what the likelihood was of the fuel to seep into nearby water, Lenoff said it was extremely unlikely.

The trial will continue Friday morning at 9 a.m. when Holstein is expected to take the stand.

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Comments (15)

Throwmamafromthetrain:

I am all for the town making sure the railroad thoroughly complies with any and all regulations. The way Priscoli intimidated local citizens with lawsuits shows how he intends to operate.

JackHamiltonBC75:

This has nothing to do with natural gas, it could be sand, sugar, or coal. The RR has the right and obligation to transport products. Along with that right and obligation comes the right to have those products unloaded and processed for over the road transportation. What purpose does a RR serve if they can't unload product? They don't own the materials, or have expertise in managing such products. They are the carrier and as such will always sub out non RR related activities. I'll be surprised if the RR loses on this. I'd hate to have that storage facility near my house, but that's not the point of law being argued.

jenvacca:

I still don't get it. Trying to follow this story but it is clear to me that this is a separate business venture. It us not a railroad. It is a propane business. why would he be exempt under railroad laws anyway??

Red Tempo:

Jen,
Railroads are permitted by federal law to subcontract transload activities. Thus it is not relevant that the subcontractor that G&U intends to hire is a separate business or not. As long as the transload activities are conducted on behalf of a railroad company, they qualify as railroad activities regardless of whether the activities are performed by railroad personnel or not. I hope this helps you to understand this issue better and I hope that we have not wasted the town's money on incompetent legal representation. All the best, Red.

grommit:

Wow...the plot thickens! Some random observations:
1) a google search for "liquid propane disasters" seems to reveal that - yes - liquid propane disasters do occur, with explosive burning. There is even one case where the rail car exploded in a fire ball.
2) Does the RR control the propane or does the business partner? Interesting point of law to be resolved there.
3) If we lose, will the RR come after us for compensatory damages? After all, all of this legal wrangling and project delays is costing him lots of money.
4) If we WIN, can we sue the RR for compensation. Will the RR have to dismantle the propane inftastructure? Maybe we can use that infrastructure for a real cool jungle gym. Ooh...my grandkids would love that!

crosswire:

Google- Rural Gas Service + Millbury Ma to see how close an LP gas disaster was. Grafton FD responded to the incident that day. The facility involved was a mole hill compared to the proposed North Grafton facility. Anyone who wants to ask about it? Contact Millbury Fire Dept. The are still people associated with that incident in and around Millbury to this day.

AladdinsLamp:

Finally, our attorney is arguing law.
It's interesting that many manufacturers have side rail line tracks to receive in raw materials, but they have no preemption rights. So I wonder why a propane business is considered a railroad business when in light of the testimonial fact, that the railroad has built a side rail line to serve the sub-leased independent propane business?
I wouldn't think that a railroad can automatically lease out federal preemption laws, just because there is a profit.

Luther Manning:

Is the Grafton Building inspector expected to testify ? And the MA State Fire Marshall ?

How close to the facility are nearby homes ?

LM

BobH:

I heard the Building Inspector testified the first day. I think maybe just to establish the issuing of the cease and desist order.

Chris L.:

Unfortunately, the argument here is not yet about things that could go wrong with propane and its proximity to homes and a school.

It all comes down to a matter of whether the railroad and/or its partner companies have preamption rights, right? I think the railroad might have the upper hand here, based on a similar case that I read about in Alexandria, VA.
(http://alexandriava.gov/special/transloading/info/default.aspx?id=18546)

I guess we'll see. "It could be worse..."

Crazysoup:

If you want a good visual on the power of a gas explosion, Google Sissonville, West Virginia....they had a pretty substantial explosion on December 11, 2012. Plenty of pictures and first hand reports...........

Lightning:

HA ...BOOM! The cloud that will quickly vaporize from a leak or rupture of a tank or piping will be a highly FLAMMABLE GAS!!! Many such disasters around US every year. You do not want to be close & especially down hill or down wind from the leak! I always recommend a wind direction flag high up to guide the responders to such an event. No local fire company can work such an event! A local air port or military base may have such a crew & Haz Mat truck to work that type of event! The fire crew is better off staying back & evacuating locals! Also of course calling in a Haz Mat crew, but let it burn out! If it is cooking an adjacent tank, get the Hell out of that area (Long way) !!!!

Harpoon1212:

Maybe we should have our own expert witness to rebutt their expert witness. The State Fire marshall was not happy and it will be interesting to hear his testimony.

madman:

BOOM

fredma:

What is the blast radius for this white cloud of vapor. Has there been any type of study on that affect to the residencial area concerned

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