Sierra Railroad wins additional award in Patriot Rail lawsuit

A federal court has awarded Sierra Railroad Co. an additional $13.1 million in punitive damages in the railroad's dispute with Patriot Rail Co. L.L.C., Sierra officials announced late last week.

The damages were awarded due to "Patriot's willful misappropriation of Sierra's trade secrets" and are in addition to $39.6 million awarded to Sierra in May, they said in a press release. Patriot Rail officials didn't respond to an email seeking comments on the court decision.

In March, a jury found that Patriot Rail breached its non-disclosure agreement with Sierra, committed fraud, engaged in the theft of Sierra's trade secrets and interfered with Sierra's rail service contract at McClellan Business Park in Sacramento, Calif. Sierra was awarded $22.2 million in compensatory damages, and later, $17.4 million in punitive damages.

"This case has deeply impacted our companies," said Sierra President and Chief Executive Officer Michael Hart.

In 2012, SteelRiver Infrastructure Partners acquired Patriot Rail Corp. — with full knowledge of the pending lawsuit — and a year later changed Patriot's name to Patriot Rail Co. L.L.C., Sierra officials said. Neither Patriot Rail nor its new owner made any effort to dismiss the lawsuit, return the stolen McClellan operation to Sierra or otherwise compensate Sierra for illegal actions, according to Sierra's legal counsel.

Sierra owns the Sierra Northern Railway, Sierra Railroad Dinner Train, Zombie Train, Sacramento RiverTrain and the Skunk Train. Through its renewable energy division, the company also has developed the FastOx™ waste gasifier. The awards will enable Sierra to repay debts and advance the FastOx gasification technology as a way to create energy from waste, said Hart.