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Railroad agrees to $20 million settlement in lawsuit over 416 Fire

The Durango & Silverton Narrow Gauge Railroad has agreed to pay $20 million and modify its operations to settle a federal lawsuit, prosecutors said.

DURANGO, Colo. —

The Durango & Silverton Narrow Gauge Railroad has agreed to pay $20 million and modify its operations to settle a lawsuit filed by the federal government in connection with a 2018 wildfire, the U.S. Attorney's Office in Denver said.

Under the settlement, the railroad will pay $20 million to compensate the United States for damages caused by the fire. The railroad will pay $15 million of that within 45 days, and the remaining $5 million, plus interest, over a 10-year period, according to the agreement.

The railroad also agreed to take other measures to reduce the risk of fire ignition, including agreeing to comply with a plan that places limits on its operations when fire risk is elevated, and prohibits operations when fire risk is extreme. Under that plan, the railroad will no longer operate coal-burning locomotives during periods of elevated fire risk. Prosecutors said since the lawsuit was filed, the railroad has started converting its locomotives to oil-based engines.  

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The 416 Fire started June 1, 2018. It burned for about six months across more than 54,000 acres of the San Juan National Forest. At the time, it was the sixth-largest wildfire in Colorado history. 

"The fire damaged natural habitat, caused erosion, and caused other natural resource damages on federal lands within the San Juan National Forest," prosecutors said in a release Monday. "It also threatened private residences, requiring emergency evacuations. The federal agencies, including the U.S. Forest Service and the Bureau of Land Management, that responded to and suppressed the fire incurred significant costs."

The office said federal investigators concluded the fire was caused by particles emitted from a smokestack on a coal-burning steam engine owned and operated by the railroad. Private fire investigators reached the same conclusion, the office said.

Federal prosecutors filed suit against the railroad in July 2019, seeking to recover damages from the fire. The lawsuit was based on a Colorado state statute that requires railroad operators to pay damages for fires caused by their operations, the office said. 

Previous coverage: Colorado railroad company faces multi-million dollar lawsuit for damages caused by 416 Fire

Previous coverage: Colorado rail company seeks to dismiss 416 Fire lawsuit

“The Durango & Silverton Railroad represents an important historic and cultural icon in southwest Colorado,” U.S. Attorney Cole Finegan said in a press 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.” 

Prosecutors said the railroad denies it caused the fire, and the settlement is not an admission of its liability.

A group from La Plata County filed a separate lawsuit against the company in 2018, saying homeowners were forced to leave and businesses lost money due to the fire. Prosecutors said those claims are being resolved separately. 

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