1999 Second Quarter Release

ON  TRACK   WITH   RAILWAY  CLAIM  SERVICES,   Inc.
Volume 5 Issue 2                                                                                                     2nd Quarter, 1999

 

RAILWAY CLAIM SERVICES

10 Years of Service

 

As a longtime member of the railroad fraternity, I must confess that I sometimes lose my objectivity in rail related matters. When blocked by a train at a crossing, for instance, rather than tap my fingers on the steering wheel, impatiently waiting for the train to pass, I watch the train. The number and type of locomotives. The number and type of cars. Sticking brakes? Dragging equipment? Did the engineer sound the proper signal? Did the warning devices at the crossing activate properly? There are a number of things for me to do to occupy my time during this time. I’m in the minority, though. Or at least it seems that way. There are two current developments that seem to indicate that the majority of the motoring public is anything but content to watch a passing train. In March, the Illinois Senate passed two bills that would increase the penalties for railroads whose trains block crossings for extended periods of time. One bill would impose a jail sentence of up to 30 days for railroad executives cited by the Illinois Commerce Commission for repeatedly blocking crossings. The other bill would limit the time trains could block a crossing during rush hours to 10 minutes, even if the train is moving. In California, the Los Angeles City Attorney has warned the Burlington Northern Santa Fe that if its trains continue to block roads in the Wilmington area, he will file criminal charges. A city ordinance forbids railroads from blocking traffic for more than 5 minutes. The charges would be misdemeanor charges. Each delay would be punishable by 6 months in the county jail and a fine of $1,000. In 1998, the City Attorney filed similar charges against the Union Pacific. The railroad pleaded no contest and was required to donate $10,000 to a local charity.

SURVEILLANCE – YEA/NAY?

Thanks to everyone who called in response to the article in last quarter’s newsletter. From the response, it would appear that there is a lot on interest in this topic. I will explore this in more detail in a future edition. One point I would like to add before temporarily closing this what I will call inadvertent surveillance. Many businesses now have surveillance cameras. If in your observations of the claimant, you find him loading bags of cement onto his truck from the back of the local hardware store, check to see if there are any cameras that are already catching this action. The hardware store may have a camera on their dock to prevent theft, or there may be a gas station across the street with cameras that may have recorded this event. If you do find that someone else has video that could help your cause, have your attorney immediately place them on notice that you want a copy of the tape. In most instances, the owner of the tape will not willingly provide you with a copy, unless ordered to do so by the courts. TV news programs are notorious in this regard. Inadvertent surveillance is a rare occurrence. The most common type would be videotape of a sports event (such as a softball game), family gathering, or something else along those lines. Its rarity is reflected in its value. It is difficult for the plaintiff to attack either the motivation or the content of the tape. The jurors do not see these tapes as an invasion of the plaintiff’s privacy on the part of the defendant. As I said, it will be a rare instance when you have one of these tapes available, but their value makes your diligence in looking for them well worth the time.

PENNSYLVANIA CASE LAW – TRESPASSERS

On January 29, 1999, a federal jury in Scranton, Pa. Returned a defense verdict in favor of the United States of America, owner-operator of a steam excursion train which struck and killed two brother aged 12 and 16 years old who were trying to free their ATV from where it had become stuck on the inside rail in a 5 degree curve. The Court had dismissed claims against the Delaware Lackawanna Railroad and Lackawanna County Railroad Authority, the owner and operator of the same rail line earlier by motion. Under Pennsylvania Law, a railroad owes a very slight duty of care to a trespasser (regardless of age): to avoid wanton or willful injury. Only if a railroad knows or has reason to know that trespassers are openly, notoriously, and continuously trespassing on a very narrow area of its land does the railroad have to act reasonably. On July 9, 1995, shortly after its grand opening, Steamtown began running a steam excursion 14 miles from Scranton to Moscow, Pa. which consisted of a restored steam locomotive and nine vintage coaches carrying 572 passengers. The crew were employees and volunteers of the U.S. National Park Service. After the train reached Moscow, Pa., the locomotive and tender uncoupled and ran around to the hind end for the trip back to Scranton. The tracks between Moscow and Scranton are 1.5% average downgrade with many curves as the right of way follows a stream. On the return trip, the tender would make it difficult for the crew to see the tracks ahead, especially on curves. In the locomotive cab was an engineer and fireman whose job it was to feed the coal into the firebox. About half way to Scranton, in Dunmore, Pa. two brothers were riding their two ATV’s along the right of way and decided to cross the tracks. There was no crossing in this area. One of the bikes became stuck in a 5-degree right hand curve and both boys dismounted to free it from the rail. Both were wearing helmets and both bikes were running at the time. As the steam engine approached the curve traveling 20 mph, the fireman (who had a 300 foot sight distance to the accident scene) noticed that the steam pressure had dropped indicating that the fire needed more coal. After he stood up to shovel in more coal, the accident occurred. Neither crewman saw the trespassers prior to impact. The area of the accident was an open wooded area with access roads throughout. About a year before this accident, the railroad operator of the line removed dirt build up from between the rails deposited by heavy rains. Local police had testified that they had broken up beer parties in the field adjacent to the accident site but that they never informed the railroad of these incidents. Many ATV riders testified that they had crossed over the track at the location of the accident but not in the presence of railroad personnel. No trespassing signs were routinely torn down by young vandals. Although the railroad had seen trespassers at other locations along the 14-mile stretch of track, there were no prior incidents of trespass reported to the railroad at the location of the accident. The plaintiffs were the parents of the two boys. They sued the railroad owner and the operator of the rail line, and the U.S.A. who owned and operated the train in question. The Court granted summary to the railroad owner under the Political Subdivision Tort Claims Act and the railroad operator/maintainer on lack of breach of duty. The case went to trial against the U.S. At trial, plaintiff presented evidence of prior trespassers but no witness testified that they did so in the presence of railroad personnel. The parents denied knowing where their sons rode their ATV’s and denied knowing the rail line was active. Experts testified that the train crew should have blown its whistle and slowed down for the curve due to limited visibility. An audiologist testified that a whistle would have been heard when the train was 245 feet from impact had it been blown. Defense put on the train crew and track inspectors who testified that they were not aware of trespassers at the scene of the accident. The Chairman of the NORAC Operating Rules Committee testified that no operating rule was broken. A train accident reconstructionist testified that the train could not have stopped before impact even if the crew had seen the boys and that the train itself was visible to the boys for 18 seconds prior to impact. The jury deliberated 5 hours before answering "no" to the first question on the jury questionnaire: "Did the U.S. know or have reason to know that trespassers were crossing openly, notoriously, and continuously at the accident scene?" Thanks to Christopher Hoare of the firm of Marshall, Dennehey, Warner, Coleman & Groggin, P.C., Philadelphia, PA (cjh@mdwcg.com) for this case.

VALIDITY OF INSURANCE POLICY EXCLUSIONS – POLLUTION

On January 20, 1999 the Louisiana Supreme Court ruled in Ducote v. Koch Pipeline that a "total" pollution exclusion was unambiguous and excluded personal injury claims resulting from the release of ammonia. Significantly, this decision applies to claims of a third-party nature arising from the sudden and accidental (rupture) release of a "pollutant," and reverses a line of Louisiana cases refusing to exclude coverage on public policy grounds unless an "active industrial polluter" is involved. Briefly, Ramona Ducote, an employee of Alexander & Ainsworth, was injured while cutting grass when his equipment struck a pipeline, causing the release of anhydrous ammonia. Ducote sued Koch Pipeline, the
operator/owner of the pipeline, who in turn filed third-party claims against Ducote's employer and others, including several insurers under the Louisiana Direct Action Statute. Common policy exclusions raised by the insurers contained the following language:
Bodily injury or property damage which would not have occurred in whole or in part but for the actual, alleged or

threatened discharge, dispersal, seepage, migration, release or escape of pollutants at any time.
The policies also defined "pollutants" as:
.....any solid, liquid, gaseous, or thermal irritant or contaminant including smoke, vapor, soot, fumes, acid, alkalis,

chemicals and waste. Waste includes material to be recycled, reconditioned or reclaimed.
The trial court ruled in favor of the policyholders, holding that the pollution exclusions did not exclude coverage for the claims at issue. Similarly, the Louisiana Third Circuit Court of Appeal affirmed, refusing to even cite much less construe the language, but holding that pollution exclusions simply do not apply to "accidental releases" by businesses which are not "active industrial polluters." The Louisiana Supreme Court refused to interpret the policies, specifically the exclusionary language, in an "unreasonable or a strained manner" beyond what is "reasonably contemplated" so as to achieve an "absurd conclusion." Rather, the Court applied general rules of contract interpretation in determining the parties' intent and, citing Louisiana authority on point, stated that the "rule of strict construction does not authorize a 'perversion of language'.... for the purpose of creating an ambiguity where none exists....." More important, the Louisiana Supreme Court found no support for the "active industrial polluter" requirement relied upon by the lower courts, and held that the plain language excluded coverage whether the release was "intentional or accidental, a one-time event or part of an on-going pattern of pollution." In conclusion the Louisiana Supreme Court emphasized that a contract, with language "facially unambiguous" can be construed within the four corners of the instrument without looking to extrinsic evidence. Because the pollution exclusionary language was clear and unambiguous on its face, the claims at issue were excluded.
The Ducote decision from the Louisiana Supreme Court is in the minority of holdings refusing to differentiate between third-party claims for BI and/or PD arising from accidental circumstances as compared to the traditional environmental exposures. Nevertheless, Louisiana is the situs of frequent incidents involving exposure to chemical releases and class action lawsuits, made more difficult by the nuances of that state's direct action statute. This represents a major victory for insurers relying upon pollution language to define and restrict coverage obligations. We also take comfort in the "pro-industry" nature of this decision from the Louisiana Supreme Court, and are guardedly optimistic that this portends the attitude that the plaintiff's bar will confront as some of the recent fiascoes find their way up the appellate channels for review by justices willing to apply legal principles fairly and reasonably. Thanks to Scott Carey of the firm of Bates, Meckler, Bulger & Tilson, Chicago, IL (
scott.carey@bmbt.com) for this case.

POINTS OF LEGAL INTEREST

McQuaid v. CSX Transportation, USCD, E.D. Tennessee, March 1999. This case provides an avenue for dealing with the plaintiff’s expert witnesses, primarily on the grounds of their credibility. Alleged expert Ken Heathington of Tennessee is a frequent witness in railroad lawsuits. In this instance, defense attorneys subpoenaed documents to establish Heathington’s revenues in connection with railroad grade crossing cases. When Heathington advised the defense lawyers that he had no intention of complying with the subpoena, they filed a motion to enforce it. After a telephonic hearing, the federal trial judge in Knoxville issued an order in which he approved enforcement of the subpoena, saying "In this case, there is information before the court that Dr. Heathington has testified at trial and by deposition in numerous railroad grade crossing cases. His financial interest and/or potential bias is a matter that the defendant is entitled to explore. To that end, the court finds that Dr. Heathington must comply with the Subpoena Duces Tecum by supplying the documents requested in the subpoena.". Rather than comply, Heathington withdrew as an expert witness.

 

Gadsden v. Port Authority Trans-Hudson Corp., 140 F. 3d 207 (2nd Cir. 1998). This case addresses one of the fundamental provisions of the FELA, namely prior notice. Under the FELA, the railroad must have prior notice of a safety hazard in order to be held accountable. In this instance, Harold Gadsden, an employee of the Port Authority, injured his lower back while mounting a hi-rail vehicle. He claimed that the handhold and footboard were awkwardly and negligently positioned, requiring him to stretch his body to reach them. He argued that if they had been more conveniently located, he would not have been injured. The railroad argued that it had no notice that the handholds and footboards represented a safety hazard, consequently the accident was not foreseeable or negligent and Gadsden had no cause of action under the FELA. The federal district court granted a summary judgement to the railroad. On appeal, the federal appeals court reversed the decision and ordered a jury trial, stating "The evidence was sufficient for a reasonable jury to conclude that the lack or lower or additional handholds and footboards made this an unsafe workplace.". They continued, "A jury could find that PATH had actual or constructive knowledge of the location of the handholds and footboards that are in plain view on the vehicles.".

 

Illinois Central Railroad Company v. Fordice, 30 F. Supp. 2d 945 (S. D. Miss. 1997). Are train crews required to submit to drug and alcohol testing following grade crossing accidents? No. So says the Mississippi U. S. District Court. In this case an Illinois Central train was involved in a fatal grade crossing accident in Rankin County, Mississippi. The local sheriff required the train crew to submit to drug and alcohol testing under Mississippi’s Implied Consent Law. Although the crew’s tests showed no evidence of drug or alcohol use, the railroad felt that this set a bad precedent. The railroad felt that fitness for duty issues, regulated by the Federal Railroad Safety Act, should be subject only to federal law and any conflicting state laws preempted. The railroad filed a lawsuit in federal court asking for an interpretation. The federal court ruled that train crews are not subject to state laws requiring drug and alcohol testing, but can be subject to state laws if they engage in reckless or criminal behavior.

BITS AND PIECES – EYE ON THE NET

Here are a few websites you may find of interest:

http://www.railmall.com – This site is currently under construction. When completed, it promises to be a shopping mall for all things railroad related. Not a fan site, but a working site with links to suppliers and providers of railroad related services. It sounds like it will be a very worthwhile stop on the information highway.

http://www.railway-technology.com/ - This may be a preview of what the former site may become. It is a European listing for suppliers and service providers. While it may not be applicable to your company, it is an example of what a good railroad based website can be.

http://www.railwatch.org/home.htmThe best explanation of this website is in their own words, "RailWatch is a non-profit organization supported by local officials, victims of railroad accidents, other concerned citizens and shippers from around the country. RailWatch is dedicated to educating the public about rail safety issues and to hold the nation’s railroads accountable for their actions." Definitely not a fan site. While their view of our industry is adversarial, it is a view that often finds its way into the media.

http://www.catalog.com/hop/ - Trespassers are a problem for all railroads. We have dedicated much space in our newsletters to this problem and the steps the railroads can take to alleviate this exposure. In days past, trespassers were primarily dispossessed persons, using the rails as free transportation. Nowadays, there is a new breed of trespasser, the "Train Hopper". They consider train hopping is a sport and have a website dedicated to furthering this activity. Check this website for a good scare.

http://www.usnartc.org – This is the home of the National Association of Railroad Trial Counsel. If your corporate counsel is not a member of the NARTC, you should request that they visit this site and give serious consideration to joining. The NARTC is an invaluable source for case law, expert witnesses, jury instructions, etc. The cost of membership is very reasonable for the benefits accorded.

http://www.supt.org/links.htmThis is the website for the American Association of Railroad Superintendents. You don’t have to be a railroad superintendent to be a member, and they have an excellent site. Loads of information and links to almost everyone in our business.

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.

Visit the Railway Claim Services, Inc. webpage. It’s located at www.railway-claim-services.com

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

800-786-5204

FAX (901) 967-1788

Email           dave_gardner@railway-claim-services.com

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