1997 Fourth Quarter Release

ON TRACK WITH
RAILWAY CLAIM SERVICES, Inc.
Volume 3 Issue 4                          4th Quarter, 1997

 

 

FROM THE DIRECTOR

Lexington, TN (10/97) – This issue of the newsletter comes just before the 1997 "Short Line" convention in Dallas, which is itself the week after the AAR General Claims Conference in San Antonio.  It is good that we can gather in an organized fashion such as these to learn from our associates in the industry; to learn from those in similar roles, or sometimes different roles.  This will be Railway Claim Services, Inc.'s 9th consecutive ASRRA national convention.  We have learned so much, and we thank you for the opportunity to serve. 

We live and work in a unique time.  The railroad industry and those industries that serve the railroad industry are undergoing an evolution of unimaginable proportions.  Providers are getting better, and because of it railroading is getting better, for customers, employees, owners and all associated with railroads. 

As railroads depend upon a solid customer base, so do we providers depend upon the railroads we serve.  And that we will never forget.   Railway Claim Services, Inc.'s success is dependent upon the quality of our work.  Thanks for allowing us to grow with you. I look forward to seeing you in Dallas.

FELA – A Brief Introductory

First of all, FELA does not really stand for "Federal Employment for Lawyers Act".  While this does seem true in practice, the actual meaning is the "Federal Employers' Liability Act".  The FELA was enacted by Congress in 1908 and predates by three years (Wisconsin in 1911) all existing workers compensation legislation.  In order to understand FELA, one must go back in time to the turn of the century and examine the circumstances that led up to its enactment.  In 1901, the United States of America consisted of 45 states.  The nation's economy was agrarian based.  Airplanes were science fiction.  Automobiles were only a rumor.  Paved roads were a rarity.  The railroad was king.  Any product moving overland for any distance moved by rail.  Anytime people traveled any distance, they traveled by rail.  Other than farming, the railroads and the industries set up in support of the railroads were the largest source of employment in the United States.  By themselves, the railroads directly employed 10% of the nation's labor force.  The owners of the railroads weren't businessmen or business owners, they were "Barons".  They lived and acted like royalty.  And, for the most part, they treated their employees and their customers like serfs.  This cavalier attitude on the part of the railroad barons alienated and infuriated the general public.  The barons, however, controlled enormous amounts of money and the political power that that money assures.  Around the turn of the century, bowing to public pressure, many states experimented with some type of no-fault workers compensation legislation.  The political might of the rail industry derailed each and every attempt at such legislation.  The public outcry continued to grow.

In 1894, an essay entitled "The Octopus, A History of the Construction, Conspiracies, Extortions, Robberies and Villainous Acts of Subsidized Railroads" was written by John R. Robinson.  This, along with other books and critical newspaper articles kept a steady and mounting pressure on politicians.  In 1901, President William McKinley was felled by an assassin's bullet.  He was succeeded by one of the most dynamic and independent presidents that this country has ever known, Theodore Roosevelt, also known as the "Trust Buster".  All the money and power of the rail barons could not prevent Teddy from taking action in some form.   Still violently opposed to the concept of "no-fault", the railroads threw their support behind a liability based compensation package.  That package was, and is, the FELA.  While far from perfect, the FELA was a starting point for the protection of workers injured while working.  In 1911, the first true workers compensation legislation was passed in the State of Wisconsin.  At that time, the railroads had several opportunities available to them.  They could have elected to fall under the provisions of the state workers compensation acts as they applied.  They could have elected to adopt the provisions of the Wisconsin workers compensation act as a revamped version of the FELA.  Or, they could elect to remain with the liability based FELA as written.  In 1911, American society was far less litigious than it is today.  Railroading, while dangerous, was no more dangerous than farming, construction or factory work.  Under FELA, lawsuits were far fewer than today, jury awards were much lower, and the few attorneys around were reluctant to spend their time on unproductive ventures.  The rail barons at the time examined their options and came to the conclusion that their bottom line was less affected by FELA than it would be otherwise with no-fault compensation.  From a business point of view, this was the correct decision for the times, and remained so for the next half century.

In the 1950's, the tide began to turn.  By the 1970's, the tide was out and the railroads were left high and dry.  America now had a nationwide interstate highway system that, in effect, subsidized the competing truck lines.  The public had the option of safe and rapid air travel.  And it seemed that every family in the nation had access to at least one automobile.  The earlier excesses of the rail barons had led to strict regulation of their industry.  Burgeoning technological advances had rendered their equipment and tracks obsolete.  The steam locomotive gave was to diesel electric.  The standard 40-foot boxcar had been replaced by the 40-foot tractor-trailer.  The captive customer now had the option to ship by truck.  Ninety-pound jointed rail had to be replaced.  All these required expensive capital outlays in a period of diminished market share.  The railroads now commanded little power and less political influence.  The 1970's saw the merger of many lines, and the failure of others.  FELA had matured.  Our society had become overly litigious.  Lawsuits were now commonplace, jury awards magnanimous, and attorneys specializing in FELA could be found in the yellow pages of any telephone book in the country.

In 1997, FELA, as a form of workers compensation, is obsolete, unjust and unevenly applied.  In theory it is unjust to the employee.  In practice, it is unjust to the railroad.  In theory, an injured railroad employee is owed nothing for a work-related injury unless he can prove some fault on the part of the railroad.  Of course, in today's society where no one is responsible for their own actions, the mere fact that a person has suffered an injury is in itself seen as proof that some other person or entity is at fault.  And, if that other entity is a faceless corporation, then By God, they should be made to pay!  The current situation with the FELA should be entitled "The Sins of Our Fathers".  The railroads helped to create the FELA in lieu of a more equitable no-fault system.  The railroads had opportunities to reform the FELA along the lines of the LHWCA (Longshore and Harbor Workers Compensation Act), but failed to do so. 

Now, the political power is held, not by the rail barons, but by the legal (sic) barons.  Attorneys control the Judicial Branch of our government.   Attorneys are disproportionately represented in the Legislative Branch.  The President, Vice-President and First Lady are attorneys.  FELA is an unjust system for compensating injured workers in our industry, but it is a system that will never be repealed.  FELA was created out of a sense of selfishness on the part of the industry and is perpetuated out of a sense of selfishness on the part of the plaintiff's bar.    Long live the FELA.

VERDICTS & POINTS OF LEGAL INTEREST

Following the last newsletter, I received a couple of calls suggesting that I present a more balanced view of FELA verdicts.  It seems that all I mention here are those verdicts that go against the railroads.  It was suggested that I write up some claims in which the railroads prevail.  Good idea.  It isn't all Doom and Gloom.  There are instances where defense counsel for the railroads fight the good fight and win.  An outright win is rare, but the attorneys in the white hats are frequently able to reduce the jury awards, or obtain jury verdicts less than that previously offered by the railroads in direct settlement.  I promise to cover some of those instances in this newsletter.  But, before I get to that, I must mention the outrageous award levied against  CSX Transportation last month in New Orleans.  Two point five Billion Dollars.  That's $2,500,000,000.00.  How many people had to die to justify a verdict that high?  Actually there were no deaths.  Well, how many people were seriously injured?  Again, the answer is – None.  There was property damage, but it was minimal.  What, then, was the claim.  Basically, on September 9, 1987, a railroad tank car containing butadiene began to leak and burn in the CSX yard in New Orleans.  Fire officials decided that the safest course of action was to allow the fire to burn itself out.  While there was no immediate danger, approximately 8,000 residents near the yard were evacuated from their homes for approximately 36 hours.  Attorneys representing those residents claimed that they had sustained mental anguish, inconvenience and physical pain and suffering as a result of the evacuation.  A New Orleans jury accepted that argument and awarded $2.5 Billion against CSX and another $1 Billion against other companies involved with the tank car.  Needless to say, this verdict is being appealed and will likely be drastically reduced.

FELA - BNSF –  A carman claims injury because he was provided with an improper tool with which to remove a cross key.  He was forced to use a steel bar rather than a newly available hydraulic ram.  Testimony from fellow workers and from defense ergonomic expert indicated that a steel bar was the tool of choice for this particular operation.  Defense verdict.  White v. Burlington Northern Railroad Company, Shelby County (TN) Circuit Court.

FELA – CR – This 38 year old Conrail employee lost both legs and his right arm when he was run over by a train that moved unexpectedly while he was walking between two cars.  He claims no prior warning and no safety measures in effect to prevent such an occurrence.  The jury awarded $6.5 million, reduced by 29% for the employee's own negligence for a net verdict of $4.5 million.  Blasena v. Consolidated Rail Corp., U.S.D.C., New Jersey.

FELA – UP – Engineer struck in the head by a beer bottle thrown into the locomotive cab window.  Knocked him out of his seat.  Claimed head and back injuries.  He sues the railroad and the juvenile who threw the bottle.  The jury finds the juvenile 5% at fault for throwing the bottle and the UP 95% at fault for not having air conditioners in the locomotives so that the bulletproof windows could have been closed.  The jury awarded $1.6 million. Richard Weaver v. Union Pacific RR, USDC, Southern District of Texas.

FELA – ATSF – This 51 year old trainman stepped on a hose next to the rail while detraining from a locomotive in the switchyard.  He suffered a knee injury and underwent arthroscopic surgery that left him unable to return to work.  The jury disregarded the fact that expert testimony attributed much of problem to advanced preexisting arthritis.  They awarded $2.8 million.  Manuel Calderon v. ATSF, Los Angeles County (CA) Superior Court.

FELA – CSX – Another knee case.  This switchman injured his left knee while attempting to throw a switch.  Although he was not permanently disabled, he as forced to seek a more sedentary job.  This Kentucky jury awarded $270,000.  Darrell Brown v. CSX, USDC, Eastern District of Kentucky.

FELA – PTRA – This 51-year-old engineer claims cumulative trauma to his back from a defective seat in the locomotive.  As a result of his injury is was permanently disabled from returning to work.  The jury evidently found more fault with his story that they did with the locomotive seat.  Defense verdict.  Jaffery Salmons v. Port Terminal Railroad Association, Harris County (TX) District Court.

FELA – SP – This is an important case as it further defines the courts views on psychological injury and the "zone of danger" as addressed in Gottshall.  This engineer has approximately 17 years experience as a hostler and yard engineer for the DRGW.  Following the merger with SP, there was a need for more road engineers.  The plaintiff made about 15 road trips as a trainee and was then told that he was not qualified to operate a train through mountainous territory without a supervisor present in the locomotive.  He returned to his yard job.  About 4 months later, he was called to take a train from Grand Junction to Denver.  Knowing he was unqualified, both he and his conductor requested a pilot.  Their request was refused.  He was ordered to take the train.  Although the trip was without incident, he was terrified during the entire trip.  Two days later, he was ordered to make a return trip to Grand Junction.  This time, he was accompanied by a road foreman of engines.  As he approached a long tunnel, he received a restrictive signal.  He slowed the train and entered the tunnel.  As he came to the end of the tunnel, his conductor and the road foreman saw the end of a stopped train just outside the end of the tunnel.  Someone yelled "Train!".  He placed the train into emergency and dove into the floor of the locomotive.  The two trains came together at a very slow speed and with little damage.  The entire crew was suspended for 90 days as a result of the accident.  The plaintiff began to experience nightmares.  He suffered panic attacks at the sight or sound of a train.  When he returned to work, he experienced a loss of confidence.  He lacked confidence and the ability to make decisions.  He was fearful and combative with co-workers and supervisors.  While operating a train, a water bottle that had been inadvertently placed on the engine heater, exploded.  The engine compartment filled with steam and the hot water burned his leg.  He placed the train into emergency.  The burn to his leg, while serious, affected him less than the psychological impact of the incident.  He was examined by a psychologist and a psychiatrist.  The diagnosis was ADD, aggravated by the incidents and PTSD.  He was removed from service and remained out of service for approximately 2 years.  When released by his own doctor to return to work, the railroad's chief medical officer refused to allow him to do so.  During the trial, plaintiff's attorney argued that the plaintiff clearly came within the Gottshall "zone of danger" because he absolutely believed himself to be in imminent peril of immediate physical harm, even though there was no physical injury.  This case was complicated by the fact that there were two physical injuries, although neither was disabling.  The plaintiff was unable to return to work due to his mental condition.  There was testimony relating to the psychological injury, but no interrogatory was submitted to the jury to specifically address the existence of a "zone of danger".  This is a pivotal case, and one you should ask your legal counsel to review if faced with a claim of emotional distress in conjunction with a physical injury.  The total award from the jury was $1.5 million.  The cite is,  Dan Bolton v. Southern Pacific Railroad Co., Denver (CO) District Court.

BITS AND PIECES

RCSI welcomes your input.  If you have any questions or comments of interest to our industry, please contact Dave Gardner at (901) 967-1796 or FAX your message to (901) 967-1788.

Railway Claim Services, Inc. is the recognized leader in independent railroad claims management, which includes investigation, negotiations, and all those things in between.  If RCSI is not already a partner in your loss control and claims management program are you accepting too much risk?

Railway Claim Services, Inc.  52 South Main Street  Lexington, Tennessee
Phone (901) 967-1796                   Fax (901) 967-1788

 

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