ST. LOUIS - A federal appeals court panel weighed competing legal arguments Thursday on how much railroads are protected from lawsuits.

A three-judge panel of the 8th U.S. Circuit Court of Appeals considered the constitutionality of a law change in a case stemming from a 2002 deadly derailment and chemical spill on the edge of Minot, N.D.

President Bush signed legislation last fall that says people can bring personal-injury lawsuits against railroads in state court under certain circumstances.

Some Minot residents whose lawsuits against Canadian Pacific Railway were thrown out of federal court are seeking to have their cases returned to Minnesota state court. The railroad says the law change is unconstitutional.

Attorneys for the U.S. government and the Minot residents told the judges on Thursday that the law is constitutional, and that the railroad's challenges are without merit.

"The cases are still pending, and it's the obligation of the court to apply the law as it exists today," said Kristy Albrecht, attorney for the Minot residents. She asked the judges to allow her to litigate their claims on the merits.

Canadian Pacific attorney Tim Thornton called the law revision a "flat-out, blatant directive" to judges, and a violation of separation of powers.

"Congress has tried to overrule you," he said. "It's telling you how to decide this case. That's a clear violation of separation of powers."

The judges did not indicate when they would issue a decision.

A Canadian Pacific Railway train derailed on the west edge of Minot on Jan. 18, 2002, sending a cloud of toxic anhydrous ammonia farm fertilizer over the city. It killed one man who tried to escape the fumes and sent others to the hospital with eye and lung problems. Hundreds of people sued in North Dakota and Minnesota, where the Calgary, Alberta-based railroad has its U.S. headquarters.

Congress changed the law dealing with what is known as railroad "pre-emption" from lawsuits after U.S. District Judge Dan Hovland dismissed a class action lawsuit stemming from the derailment. Hovland had ruled in March 2006 that the Federal Railroad Safety Act protects Canadian Pacific from such claims.

Plaintiffs appealed Hovland's ruling, but the appeal became moot when Hovland late last year approved terms of a $7 million voluntary settlement in the class action case.

The matter now before the appeals court panel involves some cases that were not part of the class action.