Union Pacific Railroad sued Metra Monday in an escalation of an ongoing compensation dispute between the two railroads.
Union Pacific alleges Metra owes it close to $2.3 million in the lawsuit, which it filed in federal court in Chicago.
The dispute between the two railroads — which spurred Metra to sue Union Pacific earlier this year — centers around Metra’s use of Union Pacific tracks on three busy commuter lines: the Union Pacific North, Northwest and West lines.
For decades, Metra paid UP to operate commuter rail service on those three lines. In 2019, UP started trying to wind down its operations on the commuter lines.
This spring, Metra finally took over operations on the three lines. But the railroads still can’t agree on how much Metra will pay to use the freight tracks.
A long-standing agreement governing rates between Metra and Union Pacific expired after multiple extensions on June 30, according to the lawsuit. But the parties have not been able to come to an agreement on a new contract.
Last week, Metra scored a win in the conflict via a U.S. Surface Transportation Board decision that granted the commuter railroad the right to use Union Pacific’s tracks.
But the STB’s decision did not rule on how much Metra should pay to use the tracks.
According to the lawsuit, Union Pacific issued what it calls a “Condition of Entry” for Metra to use its tracks, setting what it described as “market-level” payment rates to take effect when the parties’ previous agreement expired this summer.
In its own lawsuit against the freight railroad, Metra previously described the new rates as “commercially unreasonable and monopolistic” and alleged the freight railroad was asking it to increase its payments by more than 100%.
On Monday, Metra filed a motion to voluntarily dismiss its suit against Union Pacific.
Michael Gillis, a spokesperson for Metra, said the railroad had done so “in the interest of being a good steward of taxpayer dollars.”
“Metra has dismissed this case to focus its resources on negotiating the terms and conditions for its use of the UP lines consistent with the recent STB decision granting Metra trackage rights on the lines,” Gillis said. He declined to comment on the lawsuit filed by UP.
While it granted Metra the rights to use the Union Pacific tracks, the STB did not issue a decision regarding payments between the parties.
“The Board expects and encourages Metra and UP to undertake a concerted, good faith effort to reach agreement on terms and compensation for Metra’s use of the UP Lines,” the regulator’s decision reads. “If the parties cannot reach an agreement, the Board will establish the compensation and conditions of use in accordance with the statute.”
Meanwhile, UP alleges Metra still owes it money at least from the time period between the expiration of the parties’ agreement this summer and the issuance of the STB decision last week.
The lawsuit alleges that Metra paid UP around $7.7 million in July, which the railroad said reflected pricing under the expired agreement. Metra actually owes around $10 million, UP argued.
“The rail lines are Union Pacific’s private property, and the Court’s and the STB’s interim-relief decisions established that Union Pacific had no statutory or contractual obligation to grant Metra access on any particular terms after June 30,” the lawsuit argues.
“Thus, just as a Cubs fan accepts the terms on the back of his ticket by using it to enter Wrigley Field, Metra accepted the COE’s terms by accessing Union Pacific’s property to run its commuter trains. Shouting ‘I don’t accept!’ while doing so has no legal effect.”
In a statement, Union Pacific spokesperson Kristen South said the railroad “has always been committed to ensuring that the commuter service provided to millions of Chicago riders will continue” and that it “looks forward to working with Metra on a fair and reasonable resolution to the matter.”
Union Pacific has asked the court to declare its COE a valid contract and award it damages from Metra.