Central Montana Rail v. BNSF Railway Co.

MEMORANDUM ***

BNSF Railway Company appeals from the district court’s denial of its motion to compel arbitration, pursuant to the -Federal Arbitration Act, of Central Montana Rail’s (“CMR”) breach of contract and tort claims against BNSF in connection with the parties’ competition to do business *459 with a third party, a gram elevator operator.

At issue is whether an arbitration agreement between BNSF and CMR encompasses CMR’s three claims for damages against BNSF. We conclude that the district court was correct in finding that the dispute between the parties is not significantly related to the contract containing the arbitration agreement.

In or around 1980, BNSF purchased roughly 70 miles of track near Geraldine, Montana then sought to abandon it. This was directly contrary to an agreement BNSF had made with Montana. Montana sued BNSF in state court for breach of its agreement. In 1984 the parties entered into a settlement agreement which contemplated that BNSF would transfer the line to Montana and Montana would obtain a short line railroad operator to perform rail services on the line. As part of the settlement agreement it was further provided:

In March 1985, Montana…