ON TRACK WITH RAILWAY CLAIM SERVICES, Inc.

Volume 9 Issue 1                                                               January 2003

 RAILWAY CLAIM SERVICES, INC. Our 15th  Year of Service

FROM THE EDITOR

RAILROAD ACCIDENT HISTORY

QUOTABLE QUOTES CREDITED

QUOTABLE QUOTES UNCREDITED

THIS AND THAT ACROSS THE COUNTRY

TRIALS WITH INDUSTRY IMPORTANCE

DEFENSE FORUMS ISSUES

DOT-FRA, 49 CFR Part 225, REPORTING THRESHOLD NOTICE

CONTRACTS, CONTRACTS, CONTRACTS

QUARTERLY TOPIC

POINTS OF LEGAL INTEREST

RCSI INFORMATION

FROM THE EDITOR:

PERSONAL NOTE: One of Railway Claim Services, Inc.’s (RCSI) family has been very ill for the last several months. Michael A. Redden, the editor of this newsletter for the last several years, has undergone heart and bypass surgery and has been making a slow progress toward recovery. Mike is an exceptionally talented individual and a wonderful person, and we miss him very much. Hopefully we can carry the banner forward, at least in this forum, RCSI’s quarterly newsletter, and provide you the reader with some of the things Mike did so well in previous issues. We will see.

RAILROAD ACCIDENT HISTORY: The first person reported to have been killed in an American railroad accident occurred on June 17, 1831, on the South Carolina Road when the railroad’s locomotive exploded and killed the fireman.

The first accident to kill a passenger happened on the Camden & Amboy, on November 11, 1833 near Hightstown, New Jersey. Interestingly another passenger on this train was ex-president John Quincy Adams. Yet another passenger on this train-of-the-first-passenger-death was Cornelius “Commodore” Vanderbilt. Vanderbilt was severely injured, and hovered near death for a month after the accident. This had been Vanderbilt’s first train ride, as he had a distrust and hatred for this “new” mode of transportation. Oddly, in spite of his early hatred of railroads, Vanderbilt was to become the greatest of the railroad barons. At the age of sixty-eight, with an $11,000,000 personal fortune made from steamboats, the Commodore turned to railroads in 1862. By the time Vanderbilt died in 1877 he controlled the vast New York Central system.

Railroads in America did not have any serious multiple-fatality accidents during the early years of railroading, from 1829 through 1853. Slow track conditions and day-only operations kept the number of accidents low during the early years. Prior to 1853 no more than six people were killed in a single accident. Then on May 6, 1853 forty-six people were killed in a head-on collision at Secaucus, New Jersey. The year 1853 was the watershed year for serious accidents, with several occurring that year. Forty-six people killed remained the highest total number people killed until the Camp Hill, Pennsylvania “horror” of July 17, 1856 when a violent head-on collision of a North Pennsylvania Railroad excursion train killed sixty-six. Camp Hill then held the ghastly claim for the worst disaster in American railroad history. More next issue.

QUOTABLES QUOTES CREDITED

It is no use to wait for your ship to come in unless you have sent one out. Anonymous

Minds are like parachutes---they only function when open. Thomas Dewar

By the time we realize our parents were right, we have children who think we are wrong. Guillermo Hernandez

Life is long. You’ll have lots of opportunities, lots of different things to do, and you don’t have to them all at once. You can, you just don’t sleep very much. Cokie Roberts

It is not the same to talk of bulls as to be in the bullring. Spanish Proverb

Intellectuals solve problems; geniuses prevent them. Albert Einstein

We are all here for a spell; get all the good laughs you can. Will Rogers

Be who you are and say what you feel ‘cause people who mind don’t matter and people who matter don’t mind. Theodor Seuss Geisel

Never deprive someone of hope; it might be all they have. H. Jackson Brown, Jr.

QUOTABLE QUOTES UNCREDITED

I will always cherish the initial misconception I had about you.

I got the bill for my surgery. Now I know why those doctors were wearing masks.

Some people don’t have much to say but you have to listen a long time to find it out.

I drink to make other people more interesting.

Experts are like asparagus, you buy them by the bunch.

Better to associate with the thief than the liar. You know the thief will sooner or later steal from you, but you will never know when a liar will ply his vice.

RAILROAD TRIVA (Answers on page 4)

1) Which major U.S. railroad has kept its original name since the mid 1800's?

2) What does the acronym AMTRAK stand for?

3) What made “The Little Engine That Could” strong enough to get over the mountain?

THIS AND THAT ACROSS THE COUNTRY

In a new report A.M. Best Co. estimates the property-casualty insurance industry will incur more than $121 billion in net losses related to asbestos and environmental claims.

According to the report, this is the largest increase in A&E losses to date seen in 2001. Insured asbestos losses are expected to reach $65 billion, while environmental losses are expected to reach $56 billion. These findings are based on Best’s proprietary data combined with data reported to the National Association of Insurance Commissioners for year-end 2001.

Best’s outlook for the insurance industry’s exposure to accelerating asbestos losses remains negative, based on the assumption that the industry’s unfunded asbestos position is roughly $28 billion, and that its unfunded environmental exposures are approximately $25 billion.

Norfolk Southern persuaded the U.S. Supreme Court to hear arguments against paying otherwise healthy claimants for their fear of developing an asbestos-related illness (Ayers v. NS).

TRIALS WITH INDUSTRY IMPORTANCE

Wright v. CSX Transportation, 5:01-cv-324-4 (M.D. Ga. Oct. 1, 2002) - An Atlanta law firm has successfully defended CSXT in a $12 million wrongful-death claim that stemmed from a triple fatality at a Vienna, Georgia railroad crossing.

Defense counsel relied, in part, on data stored by a "black box" that General Motors Inc. began installing in some of its vehicles in 1990. It was the first railroad crossing accident case in the United States to go to trial using GM's black box data as evidence, said Matt Williams, a partner at Atlanta's Casey Gilson Leibel, who defended CSX.

The Macon jury "decided the railroad played no part" in causing the accident, which killed the teen-ager's brother, father and stepmother. The jury deliberated a day at the end of a two-week trial before delivering its verdict.

The information obtained from the black box indicated that the car was going 11 mph as Wright crossed the triple set of tracks and then stopped immediately prior to impact, according to Williams. Attorney Williams said that it also indicated -- based on calculations by a Georgia state trooper who downloaded the data -- that Wright coasted past the flashing signal without stopping. If he had never slowed, but maintained that 11 mph, he wouldn't have been hit; all he had to do was go another 12 feet and he was clear," Williams said.

"This black box is what helps us understand how all this unfolded. I do not know of a jury trial where the data has been used. I know there has not been one in this country where it was used in a grade-crossing accident."

Williams said obtaining black box data from GM was not an issue in the CSX litigation. Since Flournoy's suit two years ago, GM has granted a license to a private firm to sell software that will download and read black box data, he said. "There was no need to get involved with GM."

John Morris v. Union Pacific Railroad Company, October 21, 2002 – After a two-week trial in El Dorado, Arkansas, a federal jury awarded a Waldo, Arkansas man $8 million. Plaintiff John Morris claimed he suffered injuries on November 8, 1999, after his wrecker service was called to haul away a truck that had collided with a train on Union Pacific tracks.

The attorney for Morris asked jurors to award between $9 million and $12.5 million, plus punitive damages, but the jury did not award punitive damages. Two months before the trial U. S. District Judge Harry Barnes sanctioned UP for destroying audiotapes between the train engineers and dispatchers. UP offered proof that such tapes are routinely taped over every 90 days, but Barnes found that the tapes were destroyed in bad faith. The sanctions required the railroad to pay attorneys fees and costs and called for a special jury instruction notifying jurors that the tapes were destroyed in bad faith.

DEFENSE FORUMS ISSUES

In October 2002 The American Tort Reform Association (ATRA) released a list of what it calls "judicial hellholes", eleven jurisdictions that attract lawsuits from around the country because they are perceived as being plaintiff friendly.

ATRA based the list on the responses of its members, which include employers, public entities and trade associations. Jefferson County, Texas, St. Clair County and Madison County, Illinois were among those cited as having reputations as venues favored by trial attorneys for bringing mass tort actions.

DOT-FRA, 49 CFR Part 225, FRA-1998-4898, Notice No. 5, from the Federal Register: December 30, 2002, Volume 67, Number 250, Rules and Regulations, Page 79533-79536, - “The monetary threshold for reporting rail equipment accident/incidents remains at $6,700 for 2003.”

ANSWERS TO RAILROAD TRIVIA

1) Union Pacific, the largest railroad in North America, has held the same name since the mid 1800's.

2) According to the official Amtrak Web site, Amtrak is short for "American Track."

3) Courage

CONTRACTS, CONTRACTS, CONTRACTS……., a few words on this from Dave Gardner, the old claim professor

Okay, here’s the scenario.   You have a tree on your property with a limb that is growing dangerously close to your tracks.  You contract with Uncle Bub’s Tree Service to remove the offending limb.  Uncle Bub is busy so he subs the job out to Bubba the Handyman.  Bubba comes onto your property, climbs the wrong tree, cuts off a limb that falls across an entrance to your property.  Bubba leaves the limb where it falls.  Naturally, someone trips over the limb that night, causing grievous bodily injury. 

Here are three questions:  Who is at fault?  Who is liable?  Who pays?

Unless you have the proper contract in place, with clearly defined indemnity language and insurance requirements, the answers are: you, You & YOU.

The example cited above is fanciful, but is based on fact.  We at RCSI see several claims each year with similar circumstances, some even more extreme.  Many times when we ask for a copy of the contract, we are told that the work was performed on the basis of a work order and/or no contract was executed.  Occasionally, there is a contract, but with such vague language regarding indemnity that it is useless in defending the railroad from a claim.  Sometimes, the contract is good, but the insurance requirements were not enforced and there is no coverage in place for the railroad. It is not good enough for the contractor to just have information that the contractor has insurance, the railroad must be named as an additional insured.

Anytime a third party comes onto your property, you should be protected.  We at RCSI are available to assist with your contract and/or insurance questions.  You should never needlessly shoulder liability exposure.

QUARTERLY TOPIC – Adapted by permission from Parrish D. Gross, Claims Representative, AMTRAK, Beech Grove, IN, from his Article in the December 2000 issue of The Bulletin

In 1997 the National Transportation Safety Board (NTSB) asked the vehicle manufacturers and the National Highway Traffic Safety Administration (NHTSA) to work together in gathering data from vehicle crashes using recording devices to help improve safety. As a result of this collaboration, General Motors expanded the information contained in the airbag sensor module in both deployment and non-deployment collisions. Currently, existing technology allows data retrieval from most 2000-2003 model years GM vehicles, some 1999 vehicles and a few 1998 vehicles.

Specifically, the technology is called Crash Data Retrieval (CDR). In similar fashion to the event recorder evolution for trains whereby more and more information has become available, the CDR technology is now able to provide the following data:

Vehicle Speed (5 seconds before impact)

Throttle Position (5 seconds before impact)

Engine RPM(5 seconds before impact)

Brake Status (5 seconds before impact)

Change in Velocity

Seat Belt Switch (On/Off)

Warning Light Status (On/Off)

Passenger Airbag (Enabled/Disabled)

Diagnostic Trouble Codes

This data is stored in the SDM, and will remain in memory even if the vehicle battery is disconnected or destroyed. The SDM data can be retrieved on site via laptop computer or the sensor module may be removed and the data may be downloaded at a later time. Once an event takes place, the data is frozen in the unit and cannot be erased, altered or cleared by anyone. It is important to realize the data can be retrieved in both deployment and near deployment events of the airbag. This is of tremendous significance in the investigation of a grade crossing collision. When a vehicle collides with a train, the air bag will most certainly deploy with all SDM data becoming available. The SDM must be replaced if the airbag deploys. However, many crossing collisions involve the train striking the vehicle on either the driver or passenger’s side and there is a good chance the frontal airbag(s) will not deploy. The pre-crash data from the vehicle will still be available despite the non-deployment of the airbag. If the airbag does not deploy, the event or data is cleared after the ignition has been cycled 250 times. This is roughly two months worth of driving.

The NTSB and NHTSA are currently using this technology to help reconstruct vehicular accidents. Law enforcement is expected to begin using the CDR technology in the near future to help in their investigations. With the assistance from outside consulting firms, insurance companies are beginning to use the technology more and more in their investigations. It is definitely worth the time to determine if an involved vehicle is equipped with an airbag module. If it is, a request should be made to the local law enforcement agency or the insurance company in writing to obtain the vehicular data. Even if the request is not honored, it will let them know that you are aware of the information and it should be preserved for pending litigation. FELA investigations involving company vehicles will also be impacted by this technology. Determining the make, model and year of the vehicle and whether it is equipped with the CDR technology will become increasingly important. The airbag module data will prove to be an added source of what trained railroad claim agents are searching for in their investigations: facts. Once established, these additional facts will lead to a quality investigation with some comparative negligence issues.

With the last thought in mind, it is important to realize how the data obtained applies to the other aspects of your investigation and the applicable body of laws. For example, if the vehicular speed limit on the road in question is 55mph and the speed from the vehicle’s SDM five seconds prior to impact is 70mph, then you have a potentially sound argument for comparative negligence. If the brake status switch shows as “on” three seconds prior to impact, you can certainly argue the driver either saw or heard the train. Perhaps the locomotive download shows a horn indication three seconds prior to impact. You have just pieced together a critical element in the investigation: the driver’s acknowledgement of the train’s approach. Finally, the passenger side air bag switch was disconnected. You research and learn from the automobile dealer that the passenger side airbag switch was disengaged at the owner’s request. Could a jury possibly construe this to be comparative negligence in the passenger’s death?

Another example would be what the data from the SDM says about the driver’s seatbelt. In the State of Ohio, as in other states, modified comparative negligence is the standard, “plaintiff cannot recover if negligence exceeds that of the defendant(s), and damages are reduced according to negligence.” And in Ohio, juries are allowed to assess negligence on a driver if the seatbelt is not worn. If the seat belt data from the airbag module confirms non-usage of the driver’s seatbelt, your case just took a turn for the better. For the railroad, the ultimate result from all the SDM data would be a jury finding more than 50% negligence by the plaintiff thus barring any recovery. A jury assessing a combined 40% negligence due to the speed and seatbelt issues would not bar recovery, but the compensatory damages would be reduced accordingly.

Better yet, in the states where 1% contributory negligence on plaintiff’s behalf bars any recovery, scientific data showing excessive vehicular speed would prove to be a difficult hurdle for the plaintiff to overcome. Short of going to trial in either a modified comparative negligence state or a contributory negligence state, the pure existence of the airbag module data will surely have a positive effect on your settlement negotiations. If the data suggests driver error, you now have a powerful argument in your corner. On the other hand, if the data shows no error (other than not looking for the train) or violation of any laws, you have a better understanding of evaluating the risks associated with trial.

In conclusion, the advent of this new CDR technology will add to the list of things to do for the railroad claim agent. It will cost money for the railroad to hire an expert to testify about the results of the air bag module data. The certainty of how courts will view this new scientific information is unknown. What is important to remember is that the information does exist and is certain to continue to be developed as this technology grows. The amount of knowledge to be gained from the SDM and how it relates to an investigation will assist in putting together all the pieces of the puzzle. Obtain the information and you are sure to gain valuable insight about the accident. Use the results to better your evaluation and negotiation strategies. As fact finders with a mission to uncover all the details, we have a new tool at our disposal.

POINTS OF LEGAL INTEREST

FELA – Statute of Limitations, NC Appeals Court Affirms Grant of Summary Judgment to NS. The plaintiff worked for NS for nineteen years, and during that time he claimed to have been exposed to asbestos dust. According to plaintiff’s testimony he began to be concerned that the exposure was a hazard to his health in the 1980’s. During 1993 or 1994 he began to experience stomach problems, and prior to 1994 plaintiff began to experience breathing difficulties. In 1994 plaintiff sought medical treatment for his stomach problems. After consulting the attorney, plaintiff was evaluated by a doctor who examined him in late 1999 and diagnosed asbestosis. That visit and treatment was plaintiff’s first treatment for breathing difficulties. Plaintiff filed suit under FELA on March 8, 2000.

NS filed for summary judgment on grounds that the claim was barred by FELA’s three-year limitation period. The trial court granted the motion, finding the case indistinguishable from Vincent v. CSX Transportation, Inc., 552 S.E.2d 643, disc, review denied, 557 S.E.2d 537 (2001). The appeals court affirmed the judgment. It pointed out that plaintiff’s breathing and stomach difficulties had manifested themselves by 1993 or 1994 and that plaintiff attributed them to workplace exposure. Consequently, the court ruled, under Vincent plaintiff had a duty to investigate whether in fact he had suffered such an injury. The court then concluded that the evidence failed to show a genuine issue of fact as to whether plaintiff fulfilled that duty. Gordon E. Pinczkowski v. Norfolk Southern Railway Co., Court of Appeals of North Carolina, Case No. COAOI-1445. Randall E. Appleton and William A. Parker for plaintiff Reid L. Phillips and Clinton R. Pinyan for defendant.

FELA - Train Runs into Parked Train, Conductor Injured - $2.25 Million Verdict - Missouri. The plaintiff Randy Courter was injured in a train collision near Slater, Missouri on March 16, 2001. The plaintiff sustained injuries to his right leg and lower back that required arthroscopic surgery on both sites of injury. He was thirty-nine years old at the time of injury and had worked for the defendants for nine months. The claimant/plaintiff claimed total and permanent disability as a result of the accident. The jury awarded the plaintiff $2,250,000. Randall Courter v. Kansas City Southern Railway and Gateway Western Railway Company, St. Louis City (MO) Circuit Court. Paul Brown and Anthony Franks, Thompson Coburn, St. Louis, MO for the defense.

FELA – Spiked Switch Alleged, Switchman Injured — $675,000 Settlement – Louisiana. Stanley Smith, a switchman with CN/IC was attempting to line a switch to place cars into an industry siding when he allegedly injured his lower back. Smith claimed that at the time of the April 20, 2000 incident, the switch had no yellow tags or any other warning device to advise the plaintiff that it was spiked. Smith said that when he went to line the switch, it jammed causing severe and permanently disabling injuries to his lower back. The defendants claimed the plaintiff failed to inspect the switch joints and to see the spike before attempting to line it, and that he failed to mitigate his damages by returning to gainful employment. Both defendants denied spiking the switch and blamed each other and the plaintiff for the accident. At the time of injury, Smith was twenty-eight, and his yearly net earnings were about $28,000 a year. This claim was settled for $675,000. Stanley Smith v. Illinois Central Rail road Company d/b/a Canadian National/Illinois Central Railroad Company (CN/IC) and Trak-Work, Inc., U.S. District Court, Eastern District of Louisiana, Case No, 00-3597. David Kelly for CN/IC. Mike Vondenstein for Trac-Work, Inc.

Crossings — Cars on Side Track Obscure Approaching Train on Arkansas Main Line Track — State Appeals Court Affirms Grant of Summary Judgment to Railroad. According to Court documents, this accident occurred in Rogers, Arkansas, on November 30, 2000 when the plaintiff approached a railroad crossing that consisted of one north-south main line track and two parallel sidetracks. The crossing was had flasher light signals properly erected. As the plaintiff approached the crossing several boxcars were parked approximately 60-75 feet north of the crossing. The crossing signal lights were flashing and the bells were ringing. However, the plaintiff continued through the crossing and was struck by a southbound train proceeding down the main line track. The plaintiff sustained injuries for which he later filed suit, making several allegations of negligence: (1) failure to provide a watchman or guard; (2) failure to timely and properly sound the train horn or signal; (3) failure to keep a proper lookout; (4) violation of internal railroad rules regulating the parking of boxcars near crossings (which called for leaving boxcars no closer than 250 feet to a crossing); and (5) excessive speed under the conditions. The railroad sought summary judgment, supported by affidavits and deposition testimony to the effect that at the time of the collision the train involved had parked seven cars on the side track and was backing southward at 23 mph with its lights and bells on. The train’s event recorder established that the horn was sounded for some 35 seconds before impact. The trial court granted summary judgment to the railroad. The appeals court affirmed the judgment, concluding that plaintiff’s actions in not looking to the north until after he was on the track (as well as failing to hear any warning sounded or see any flashing lights) and failing to stop as required by law was the proximate cause of the collision. Pedro Barriga, et al. v. Arkansas and Missouri Railroad Co., Court of Appeals of Arkansas, Case No. CA 02-195.

Hazardous Materials —$220 Million Settlement – Louisiana. CSX Transportation Company paid $220 Million to settle claims that it failed to prevent a leak of a hazardous chemical from a train car parked in one of its operating yards, forcing the evacuation of nearby residents. In September 1987, a tank car containing Butadiene, was in a New Orleans interchange yard operated by CSX. The car was in an interchange yard, but before CSX picked the car up it developed a leak and Butadiene leaked from the car. The leaking Butadiene found an ignition source, which resulted in a fire. An eight-block radius around the area of the yard was evacuated in the emergency, and residents were not able to return for up to two days. In 1998, attorneys on behalf of area residents filed a class action lawsuit against CSX and several other companies involved — Philips Petroleum, General American Transportation, Inc., GATX Terminals Corp., Mitsui and Co., Illinois Central Railroad Co., Alabama Great Southern Railroad Co., AMF-BRE Inc., and Nova Chemicals, Inc. Plaintiff Attorneys argued that CSX should have posted guards around the train cars to prevent leakage because CSX was aware that these cars had leaked on occasion. CSX contended that a faulty gasket on a train car was the cause of the leak, that it did not own the rail car in question, that it did not install the defective gasket, and that its employees donned asbestos suits and acted to quickly separate unaffected cars from the burning tank car. Plaintiff attorneys alleged that the affected displaced residents suffered watery eyes, skin rashes, headaches, and fear of cancer. The plaintiffs also alleged they had to be evacuated from their homes while cleanup and toxic-aftermath testing were done. According to the National Jury Verdict Reporter, a special Master will decide how to apportion the monies to the class members. In September 1997, a jury found the companies negligent, awarding plaintiffs at that time $3.4 BILLION. CSX’s share of that liability was originally designated as $2.5 billion, but was reduced to $850,000,000. In 1999, six of the defendants— Philips Petroleum, General American Transportation. Inc., GATX Terminals Corp., Mitsui and Company, Illinois Central Railroad Co. and Alabama Great Southern Railroad Co.— settled with the plaintiffs for $215,000,000. The remaining two companies— AMF-BRD Inc. and Nova Chemicals Inc. Harry Hardin, Jones, Walker, Waechter, et al., New Orleans. LA for CSX.

Visit the Railway Claim Services, Inc. Web page. 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?

For more information contact:

Dave Gardner (dave_gardner@railway-claim-services.com)

Randal Little (randal_little@railway-claim-services.com)

52 South Main Street

Lexington , Tennessee 38351

1-800-786-5204         

FAX (731) 967-1788