Durango Train Company Agrees to Pay $20 Million to Settle Federal ‘416 Fire’ Lawsuit

The Durango & Silverton Narrow Gauge Railroad Company has agreed to pay $20 million to the federal government for damages caused by a devastating wildfire near Durango in 2018, according to a March 21 announcement from the U.S. Attorney’s Office for the District of Colorado.

In July 2019, the federal government sued the railroad company, which operates an iconic antique train that carries tourists between Durango and Silverton, for damages caused by the “416 Fire.” The wildfire began June 1, 2018 in the San Juan National Forest and burned for about six months, damaging more than 54,000 acres of federal lands.

Federal fire investigators concluded the fire was caused by particles emitted from a smokestack on a coal-fired train engine owned and operated by the railroad, which corroborated findings by private fire investigators, according to the U.S. Department of Justice. Since the lawsuit was filed, the railroad has switched from coal-fired engines to oil-based engines.

The government sued the company under a state statute that says train companies operating in Colorado are liable for all damages from fires resulting from their operations. The government sought approximately $25 million in damages and firefighting costs. According to the Durango Herald, the case was slated for a 10-day jury trial in May. The railroad denies it caused the fire, and the settlement is not an admission of the company’s liability, the DOJ press release notes.

Under the proposed settlement, which must still be approved by a federal judge, the railroad will pay the government a lump sum of $15 million within 45 days then pay the additional $5 million plus interest over a 10-year period.

The agreement also requires the company to modify its operations and take measures to prevent wildfires. These include adhering to an Industrial Fire Restrictions Plan limiting train operations when fire risk is elevated, submitting fire prevention plans to the U.S. Forest Service each year, hiring a staff member and consultant to oversee and advise on fire mitigation measures and maintaining at least $3 million in wildfire insurance coverage.

“The Durango & Silverton Railroad represents an important historic and cultural icon in southwest Colorado,” U.S. Attorney Cole Finegan said in the news release. “We intend for this settlement to enable the Railroad to continue to operate, but in a manner that will avoid causing future catastrophic wildfires. In addition, this agreement ensures fair compensation for the damages caused by the 416 Fire.” 

The proposed settlement doesn’t resolve all of the train company’s legal woes stemming from the 416 Fire. Since 2018, the railroad has been embroiled in a lawsuit filed by local business and property owners who suffered fire-related damages.

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