A monumental victory for the Swinomish Indian Tribe was announced this spring when a judge in the Western District of Washington ordered BNSF Railway Company to pay nearly $400 million in profits damages to the Swinomish Indian Tribe for trespassing on Indian lands. The offense occurred when BNSF repeatedly exceeded the terms of a right-of-way agreement between the company and the Swinomish that had allowed BNSF to cross lands held in trust for the tribe. This award serves as a warning to entities that hold rights-of-way across Indian trust land, as well as use such land without a valid right-of-way.
In 1991, BNSF entered into a right-of-way agreement with the Swinomish Indian Tribe pursuant to the 1948 Indian Rights-of-Way Act (25 U.S.C. §§ 323-328). The agreement required BNSF to inform the tribe of the type of cargo to be transported across the Swinomish Reservation. In addition, the company was limited to operating two trains a day across the reservation, each of 25 cars or less, unless otherwise approved by the tribe in writing.
In the fall of 2011, the Swinomish learned that BNSF was planning to increase traffic by sending 100-car trains across the reservation. The tribe sent two letters to the company to remind them of the agreement’s traffic limits and the requirement of tribal consent to any increase. In September 2012, BNSF began shipping 100-car trains across the reservation without a written amendment signed by the parties.
Over the next few years, discussions took place between the tribe and the rail company about the potential to amend the agreement and allow more trains and cars to cross the reservation, but the tribe never approved BNSF’s decision to elevate traffic or waived the right to approve the increase. While these discussions took place, 100-car trains regularly traversed tribal land. In March 2015, the Swinomish asked BNSF to comply with the terms of the easement agreement. The rail company replied that it would continue running the trains to meet its common carrier obligation.[1] The tribe sued BNSF for breach of the agreement.
The court held that BNSF had breached the right-of-way agreement with the tribe by escalating traffic without written approval. The court further found that BNSF’s actions constituted a willful, conscious, and knowing trespass over tribal lands. As a result, BNSF was ordered to pay nearly $400 million in damages to the Swinomish—disgorging BNSF of net profits earned from the increased rail commerce.
The nearly $400 million disgorgement of damages to the tribe should serve as a warning to anyone who exercises rights-of-way in Indian Country. If an entity willfully, consciously, and knowingly violates the terms of a right-of-way agreement on Indian trust land, it may be required to pay its ill-gotten profits to the Indian trust landowner. Furthermore, if an entity operates a right-of-way in Indian Country without an agreement, or under an expired agreement, a court might find that a willful, conscious, and knowing trespass which would also result in disgorgement of profits.
[1] BNSF argued that serving its customers took precedence over its agreement with the tribe due to the company’s common carrier duty under federal law. The court held that BNSF’s common carrier duty did not override the tribe’s rights under the 1948 Act.
