November 2, 2011

Railroad's parent sues Maine trade publication

Pan Am Systems alleges libel on the part of Yarmouth-based Atlantic Northeast Rails & Ports and its editor.

By Tux Turkel
Staff Writer

The parent company that operates a regional freight railroad covering most of northern New England has sued a small, Yarmouth-based trade publication for libel.

Pan Am Systems Inc. of Dover, N.H., has filed a lawsuit in U.S. District Court in Bangor against Atlantic Northeast Rails & Ports and its editor, Chalmers "Chop" Hardenbergh.

In its complaint, Pan Am claims Hardenbergh published untrue information on multiple occasions about the company and its former chief executive, David Andrew Fink. Both Fink and Springfield Terminal Railway Co. of North Billerica, Mass., also are named as plaintiffs.

In a reply brief filed last month, Hardenbergh and his Portland attorney, Sigmund Schutz, asked the court to dismiss the claims. They called the suit "a constitutionally impermissible attempt to silence a journalistic voice."

Pan Am Systems was founded in 1977 as Guilford Transportation Industries. It is privately owned by Timothy Mellon, an heir to the Mellon banking fortune, and shareholders include Fink and his son, David Armstrong Fink.

The company's Pan Am Railways division owns subsidiaries including Boston and Maine Corp., Maine Central Railroad Co., Portland Terminal Co., and Springfield Terminal Railway Co. It operates a network from Schenectady, N.Y., to Mattawamkeag, Maine, and has lines in New Hampshire, Vermont and Connecticut.

In its complaint, Pan Am cites what it calls factual allegations made in past issues of Atlantic Northeast Rails & Ports. It cites stories dealing with operating safety, service and Fink's departure from Pan Am management earlier this year.

"The substance of the lawsuit is plainly set forth in the complaint," Pan Am's lawyer, Thad Zmistowski of Bangor, said in a written statement. "My clients have alleged that they have been defamed in print by the defendants on numerous occasions and that their reputation has been wrongfully attacked. We look forward to our day in court."

The complaint says Hardenbergh published defamatory information, and the coverage caused economic damages and harmed the plaintiff's reputation. It seeks unspecified punitive damages.

In his response, Hardenbergh says the railroad and its chief executive are highly visible figures and that the plaintiff's claims of malice would fail, "because they do not allege any facts sufficient to raise a plausible inference of negligence."

Hardenbergh started his weekly newsletter, which covers freight railroads and ports in New England and eastern Canada, in 1994. It now includes a website and e-bulletins and has 350 paid subscribers.

Hardenbergh has extensively covered Pan Am and has long voiced critical opinions about its service and operations. In an interview Tuesday, he declined to characterize his relationship with Pan Am or speculate on what triggered the suit, citing his lawyer's advice.

In his latest newsletter, Hardenbergh said he is facing substantial legal fees, even if the case is dismissed. He is soliciting contributions to a legal defense fund at the Preti Flaherty law firm.

Staff Writer Tux Turkel can be contacted at 791-6462 or at:


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