ON TRACK WITH RAILWAY CLAIM SERVICES, Inc.

Volume 13 Issue 3 July 2006

RAILWAY CLAIM SERVICES, INC. Our 19th Year of Service

BACKGROUND CHECKS

QUOTES FROM HISTORY

ASBESTOS LITIGATION, WILL IT EVER PASS?

RAILROAD INDUSTRY ACCIDENT AND INJURY STATISTICAL INFORMATION

THE 13th ANNUAL RAILROAD LIABILITY SEMINAR

THIS AND THAT ACROSS THE COUNTRY

CORPORATE CLICHES

LEGAL FAIRNESS, AS A CONCEPT

TOO MANY ATTORNEYS?

COLLECTIONS?

RAILWAY CLAIM SERVICES, INC. WEBSITE

POINTS OF LEGAL INTEREST

RCSI INFORMATION

BACKGROUND CHECKS & 49 CFR PART 172

Railway Claim Services, Inc. (RCSI) can perform background checks for potential job applicants. RCSI can also check injury histories for employees. For further information contact Elizabeth Vineyard of RCSI at 731-967-1796, or via email at evineyard@railway-claim-services.com.

Background checks are required for new employees under the Haz Mat Security Plan implemented by CFR Part 172, Hazardous Materials: Security Requirements for Offerors and Transporters of Hazardous Materials. This rule states in part, “No later than the date of the first scheduled recurrent training after March 25, 2003, and in no case later than March 24, 2006, each hazmat employee must receive training that provides an awareness of security risks associated with hazardous materials transportation and methods designed to enhance transportation security”.

If your railroad has not yet implemented 49 CFR Part 172, Railway Claim Services can assist.

QUOTES FROM HISTORY

The arms we have been compelled by our enemies to assume we will, in defiance of every hazard, with unabating firmness and perseverance, employ for the preservation of our liberties being with one mind

resolved to die free rather than live slaves. Thomas Jefferson, 1775

The struggle of today, is not altogether for today--it is for a vast future also. Abraham Lincoln, December 3, 1861

If there must be trouble, let it be in my day, that my child may have peace. Thomas Paine (1737-1809)

 

ASBESTOS LITIGATION, WILL IT EVER PASS?

In May of 2006 Sen. Arlen Specter (Rep., PA) introduced a revised version of his legislation aimed at limiting asbestos injury litigation by creating a special $140 million fund for claimants, nearly a third of it financed by insurers.

Specter demanded prompt Senate action on the modified measure, which replaces a version that hit opposition early in the year and failed to move. Discussing the bill that would set an alternative claim handling process for asbestos suits, he said, “I plan on moving ahead with this bill and will do everything in my power to see that the Senate finishes its business on asbestos reform [this year].”

The senator, who is chairman of the Senate Judiciary Committee, made his remarks on the Senate floor. “I urge the leader [Sen. Bill Frist (R- Tenn .)] to schedule time for this important legislation in the coming months, and by introducing this bill today I am hopeful that we make a first big stride in that direction.

In general, the legislation creates a $140 billion trust fund that will fund an alternative claim handling process administered through a new unit of the Department of Labor. The insurance industry would contribute approximately $46 billion to the fund over its 27.5-year life, the bulk of it in the first five years the fund is in existence.

 

RAILROAD INDUSTRY ACCIDENT AND INJURY STATISTICAL INFORMATION

 

Railroad accidents and injuries to railroad workers continued to drop during the first quarter of 2006 vs. the first quarter of 2005. Even more significantly, this came on the heels of last year’s record decline.

The grade-crossing collisions total for comparable first quarter totals for the years 2005 vs. 2006 fell from 724 to 696. And, most significantly 2005’s total was an all-time low for grade crossing accidents occurring in one year.

Overall train accidents in 2005 decreased 7.9% to 13,388, including an 8.4% drop in derailments, according to figures compiled by the FRA (FEDERAL RAILROAD ADMINISTRATION : HOME). The railroad Industry Severity Rate dropped from 7.26, in the first quarter of 2005 to 4.17 in the first quarter of 2006.

There were 3,010 collisions between trains and cars at grade crossings in 2005, which represents 3.81 collisions per million train miles. That is the lowest annual rate recorded by the FRA. If the first quarter trend continues in 2006 this year’s annual totals will be even lower.

THE 13th ANNUAL RAILROAD LIABILITY SEMINAR

There is still time to register for the 13th Annual Railroad Liability Seminar, hosted by Omnitrax, in Denver, Colorado on July 19 and 20.  The conference starts on Tuesday evening, July 18th, with registration and a reception.  Follow the following links for more information. Click here for more details. Registration information can be found here. Sponsorship information can be found here. This year’s Seminar is going to be special. I encourage you to make plans to attend, and encourage others to attend as well. We hope to see you there.

THIS AND THAT ACROSS THE COUNTRY

West Virginia – From the Wall Street Journal (WSJ), June 2, 2006. According to the June 22, 2006 WSJ article, last year CSX turned the legal tables on Pittsburgh-based plaintiffs firm Peirce, Raimond & Coulter, filing a lawsuit against it and an employee alleging fraud, misrepresentation and negligence. CSX has long been a target of what the WSJ described in the article as “frivolous asbestos claims”.

The lawsuit that “turns the tables” began in early 2000, when CSX employee Ricky May learned that the Peirce firm was going to conduct an asbestos “screening” in June. Peirce is a big player in railway asbestos suits and has brought thousands of asbestos suits against CSX. Mr. May had already attended such a mass screening prior to 2000, and had tested negative for asbestosis.

Enter Robert Gilkison, a former CSX employee. According to the lawsuit, the Peirce firm occasionally hires retired rail employees as “runners,” or people who round up former colleagues for lawsuits. The suit alleges that, faced with Mr. May’s unfortunate good health, Mr. Gilkison suggested that Mr. May get someone who had previously tested positive for asbestosis to impersonate him at the June exam.

Mr. May then recruited Danny Jayne -- a CSX employee who’d been “diagnosed” with asbestosis in 1999 -- to sit for his June X-ray. Mr. Gilkison is alleged to have facilitated all this, allowing Mr. May to complete the necessary forms but then walking Mr. Jayne through the exam. Mr. Jayne later received a settlement of $7,000 from CSX, while Mr. May received $8,000.

According to the Journal, “The Peirce law firm was an avid user of the medical services of Dr. Ray Harron, a physician singled out in a federal court opinion last year for having ‘manufactured’ silicosis diagnoses. The good doctor learned this skill in the asbestos field, producing tens of thousands of asbestosis ‘diagnoses’ for eager law firms. That included a ‘positive’ diagnosis for Mr. Jayne -- casting doubt on whether even he was really sick. Suspecting foul play, CSX did some investigating and had a doctor verify that the May and Jayne X-rays were in fact of the same man. CSX last year filed suit against both claimants, and they later confessed to the scheme. Mr. May agreed to pay back his settlement; Mr. Jayne agreed to offer testimony. Mr. Gilkison has denied any wrongdoing.”

And this, according to the WSJ “. . . brings us to the current lawsuit focusing on the extent to which the Peirce law firm knew about this fraud. CSX claims that, after the screening, Mr. May got cold feet and asked Mr. Gilkison about dismissing the case. The railway also claims Mr. Gilkison talked to the Peirce firm about the fraud, but that Peirce lawyers proceeded with the lawsuit anyway. CSX is further claiming that Peirce keeps records of both its positive and negative screening applications and so would have known that Mr. May had already been screened and that the X-ray was not his own. At the very least, the railway has a good case that Peirce, as administrator of the screenings, failed in its obligations to quality control.”

The article concludes with the following: While Peirce has conceded in court documents that the scam took place, it insists it had no knowledge of the deception or what role Mr. Wilkinson played, and says it did not start keeping records of “negative” screenings until 2000. It has further argued that since Mr. Wilkinson was an “independent contractor” (rather than a salaried employee), the firm has no legal liability for his conduct. This is a convenient and not very persuasive distinction, to say the least.

TULSA, Okla. -- An Oklahoma couple was awarded nearly $13 million in a class-action lawsuit after a jury ruled that State Farm Fire & Casualty Co. intentionally underpaid claims from families whose homes were damaged by tornadoes seven years ago. Donald and Bridget Watkins were among 71 policyholders who sued the insurance company. The jury in Grady County, Okla., awarded the Watkinses $9.9 million in punitive damages and $3 million in actual damages.

In February 2003, a judge certified the class as all policyholders whose structural damage claims after the tornadoes were adjusted or denied by Bloomington, Ill.-based State Farm while using the opinion of Haag Engineering Co.

The lawsuit alleged in July 2001 that the insurance company "engaged in a wrongful scheme to delay, deny or underpay claims . . . by repeatedly and unilaterally engaging the services of Haag Engineering Co. to inspect brick and other structural damage to policyholders' homes."

State Farm knew that Haag was "predetermined" to dispute losses claimed by policyholders, the lawsuit argued.

State Farm spokesman Phil Supple said an appeal is planned, he said.

Missouri – (Thanks to Attorney Evan Karnes for sharing this unpublished opinion.) Norfolk Southern Railway Co. v. Sorrell, Certiorari granted: 05/15/06, No. 05-746 - FEDERAL EMPLOYER’S LIABILITY ACT (Proper Standard of Causation for Employee Contributory Negligence and Railroad Negligence for a Federal Employer’s Liability Act Claim in Missouri Are Standards Dictated by Missouri Approved Instructions)

The Missouri Court of Appeals found Missouri Approved Instructions binding in Missouri trial courts addressing Federal Employer’s Liability Act

(FELA) claims, applying different standards of causation for plaintiff’s contributory negligence and railroad negligence than those found under FELA.

Timothy Sorrell brought suit against his employer Norfolk Southern Railway

NS under FELA, seeking various damages for physical injuries, medical expenses, lost wages, and pain and suffering resulting from a job related injury. NS argued that FELA utilizes a pure comparative fault system, and requested that the jury apply the same standards of causation to Sorrell’s contributory negligence and NS’s negligence. The judge rejected this request, because the Missouri Approved Instructions (MAI), as permitted by the Missouri Supreme Court, impose different standards of causation for the two forms of negligence. Under the MAI, NS could be found negligent if it contributed in whole or in part to Sorrell’s injury, whereas Sorrell could be found negligent only if he directly contributed to his injury.

The trial court found in favor of Sorrell and awarded him $1,5000,000. The Missouri Court of Appeals did not address the proper federal comparative fault requirements, but instead affirmed upon a finding that the MAI was binding upon Missouri Courts. The Missouri Court of Appeals denied both NS’s motions for rehearing or transfer to the Missouri Supreme Court.

The Missouri Supreme Court denied NS’s Application for Transfer. The United States Supreme Court granted certiorari.

CORPORATE CLICHES

 

(From Fortune Magazine) You don’t have to be a rocket scientist to recognize that corporate America is a leading-edge recycler of tired phrases. To avoid being left out of the linguistic loop when colleagues touch base with you, try working in a word or two from the Devil’s Dictionary:

Team player: An employee who substitutes the thinking of the herd for his own good judgment.

Re-engineering: The principal slogan of the ‘90s, used to describe any and all corporate strategies.

Vision: Top management’s heroic guess about the future, easily printed on mugs, T-shirts and posters.

Paradigm shift: A euphemism companies use when they realize the rest of their industry has expanded in Guangdong, while they were investing in Orange County.

Restructuring: A simple plan instituted from above in which workers are right-sized, downsized, surplused or, in the business jargon of yore, fired.

Empowerment: A magic wand management waves to help survivors of restructuring suddenly feel in control of their futures.

 

LEGAL FAIRNESS, AS A CONCEPT

According to survey of corporate counsel conducted for the U.S. Chamber Institute for Legal Reform (ILR) earlier this year Delaware has the fairest civil justice system and West Virginia has the least fair.

The report by the Washington-based ILR ranked the rest of the top five states for legal fairness, in order, as Nebraska, Virginia, Iowa and Connecticut. Mississippi—which had ranked 50th in the ILR’s previous two surveys—improved to 48th after having enacted a series of civil justice reforms. Louisiana ranked 49th, Alabama ranked 47th and Hawaii ranked 46th.

The entire survey, conducted by Rochester, N.Y.-based Harris Interactive Inc. for the ILR, can be accessed at www.instituteforlegalreform.org.

TOO MANY ATTORNEYS?

When there are too many policemen, there can be no liberty.
When there are too many soldiers, there can be no peace.
When there are too many lawyers, there can be no justice…..Lin Yutang (1895-1976), Chinese-American writer, translator, and editor.

Makes sense doesn’t it? Too many practitioners in any profession dilutes the quality of service in that profession. There’s an old expression that goes something like this, “Too many cooks spoil the broth”. In my research for this article, I had multiple problems in coming up with exact numbers. The number of active attorneys in the United States is something over 1,000,000. The Nation’s law schools graduate an additional 47,500 each year. That’s a lot of attorneys out there looking for work.

The population of the United States, according to the U. S. Census Bureau is 296,410,404. Of that number, 25% are under the age of 18. Another 12.4% are over the age of 65. That means that there is one attorney for every 194 persons between the ages of 18 and 65.

One attorney for every 194 persons. That doesn’t seem too excessive. How does that compare with other professions?

Well, there are 3,800,000 teachers in the US. This includes pre-school, kindergarten, elementary, middle school and secondary school. That comes to one teacher for every 51 people between the ages of 18 and 65. Or, to look at it another way, it’s one lawyer for ever 3.8 teachers.

What about the folks who feed the nation? There are 690,000 farm workers in the United States. These people feed not only those persons between 18 and 65, but the whole lot. Still, using the same numbers, there is one farm worker for every 282 people between the ages of 18 and 65. Or, one and one-third lawyers for every farm worker.

The list goes on and on. There are about 150,000 dentists in the US. 192,000 EMT’s and paramedics. 77,000 medical scientists.

According to the website, www.power-of-attorneys.com/, the U.S. has seventy percent of the world’s lawyers but only five percent of the world’s population. We have thirty times more lawsuits than Japan, one of America’s primary trade competitors. Even though lawyers suffer approval ratings well below used car salesmen and are the butt of a never-ending barrage of lawyer jokes, lawyers are still swamped with clients.

I have a niece who is a sophomore at the University of Tennessee. I recently asked her what she intended to do with her life. She replied that she was thinking of going to law school. Seeing me roll my eyes, she told me that everyone reacted the same way. “Why, then,” I asked, “are you going to do that?” “That’s where the money is,” she replied.

Well, I couldn’t argue with that. I’d like to, but I couldn’t. The plain fact is that the cost of defending a lawsuit drives companies into settling claims even when there is no real liability. It is possible to spend $100,000 or more to get a defense verdict on a lawsuit that should never have been filed in the first place. It is also possible that you could even lose the lawsuit and have to pay not only the defense costs, but a jury verdict. The railroads have always tended to view FELA claims as a type of lottery. Whenever an employee is hired, he is given his lottery ticket. Every time he sustains an injury, he has the opportunity to cash that ticket.

The title of this article is “Too Many Attorneys?” It is posed as a question. Part of the quotation that follows the title says that “When there are too many lawyers, there can be no justice”. When I look at the legal system in this country today, I can see too many instances wherein justice has been thwarted. So, in answer to the question, my answer must be “YES”.

Further suggested reading found at: http://overlawyered.com/ and http://www.cala.com/ and then there’s http://www.ernietheattorney.net/

COLLECTIONS?

Problems collecting for damages? Increase your chances of collecting that money, or reducing the total you are legally obligated to pay. All without the cost and delays where litigation is involved. Let Railway Claim Services, Inc. handle these collection issues for you. You pay nothing if RCSI fails to collect or fails to reduce the bill for the submitted loss. Email or call Randal Little or Dave Gardner for further information. There is no cost if we are not successful.

 

 RAILWAY CLAIM SERVICES, INC. WEBSITE

Railway Claim Services, Inc. maintains a website containing useful information for our industry. If you haven’t visited our website recently, you may have missed some of the content recently added.

The Code of Federal Regulations, TITLE 49—Transportation, Subtitle B--OTHER REGULATIONS RELATING TO TRANSPORTATION, CHAPTER II--FEDERAL RAILROAD ADMINISTRATION, DEPARTMENT OF TRANSPORTATION. Please visit our website and click on the following link. http://www.railway-claim-services.com/waycar.htm

Railway Claim Services’ website has the complete General Code of Operating Rules posted for your reference. http://www.railway-claim-services.com/safety_first.htm

RCSI also has the entire test of the FELA posted on our website: http://www.railway-claim-services.com/waycar.htm

Also, The Occupational Safety & Health Act of 1970 is available at: http://www.railway-claim-services.com/waycar.htm

As a part of our ongoing efforts to provide RCSI clients with information vital to the safe and efficient operation, RCSI’s website contains the complete text of the Emergency Response Guidebook: http://www.railway-claim-services.com/waycar.htm

RCSI is always trying to upgrade our website and make it a place for you to find the information you need. If you have any suggestions, comments, or questions, please feel free to contact me at your convenience. We appreciate your feedback.

 POINTS OF LEGAL INTEREST

FELA - Norfolk Southern Employee Struck By BNSF Train – $4 Million Verdict. In November 2002, the then 53 year old NS employee/plaintiff was working on tracks on a highway overpass in Memphis when he stepped from an NS engine and was struck by a BNSF train traveling on an adjacent track. The impact allegedly caused the plaintiff to sustain a broken back, a shattered left leg, amnesia, a brain injury and vision problems. In his complaint, the plaintiff alleged that NS failed to provide a reasonably safe place to work. He asserted a negligence claim against BNSF. The case was tried over a three weeks, resulting in a $4 million for the plaintiff. Thomas David Jordan v. Norfolk Southern Railway, et al, Shelby County (TN) Circuit Court, Case No. _____. Everett Gibson, Memphis, TN for defendant.

Crossings - $8.7 Million Texas Verdict Reversed. The plaintiff’s decedent was struck and killed by a Georgetown Railroad Company train operated by Southern Pacific Railroad on April 24, 1004 when he tried to cross the Front Street grade crossing in Thorndale, Texas. The tracks involved were owned by Union Pacific and at the time of the accident were marked by cross buck signs. According to witnesses, a pile of crushed limestone, trees and vegetation in the area of the crossing obscured visibility along the tracks. The railroad asserted as an affirmative defense, the claim that inadequate warning claim were preempted by federal regulations inasmuch as federal funds were expended to install warning devices at the Front street crossing.

The trial court admitted documentary evidence regarding preemption for its consideration only and heard testimony on the issue outside the presence of the jury. On several occasions the trial court stated that it, rather than the jury would determine the pre­emption issue.

At the close of the evidence, the jury entered judgment in favor of plaintiff for $8,733,458.70, finding in part that the Front Street crossing was ex­tra-hazardous and that Union Pacific's negligence in failing to provide automatic signals, a flag man, "and/or" a stop sign was the proximate cause of the collision.

The railroad appealed. It faulted the trial court for rejecting its preemption defense. It also claimed that reversible error was committed when the issue of its alleged failure to eliminate sight restrictions was submitted to the jury as an independent basis of liability.

The appeals court rejected the first railroad argument, but agreed with the second and ordered a new trial. The court also rejected the railroad's assertion that the addition of reflectorized tape to the back of the crossbuck signs and their supporting pole constituted the installation of a warning device under a 1989 program. As to that claim, the appeals court noted that the installed item must meet the definition of a warning device by being either an active warning device or a passive warning device. Here, neither party contended that the tape was an active warning device. To be a passive warning device under 23 C.F.R. §646.204 the reflectorized tape must be a "traffic control device ... lo­cated at or in advance of [the Front Street Crossing] to indicate the presence of the crossing." The court noted plaintiff’s expert testified that: "The Tape reflects light so something becomes more visible and more easily seen, but the Tape has nothing to do with telling motorists to stop, to look, to observe, to turn right or anything of that nature. The Tape does not serve the function of a traffic control device." The court noted also that plaintiffs expert referenced a letter from the Di­rector of the Office of Transportation Operations for the Federal Highway Administration which stated that reflectorized tape is not considered a traffic control device. In concluding that the tape was not a passive warning device, the court noted as well that article 6370b of the Texas Revised Civil Statutes defines reflectorized tape separately from warning device.

A new trial was ordered; however, as the appeals court concluded that the railroads alleged negligence in failing to eliminate sight restrictions should not have been submitted to the jury. The court found that under Int'l& G.N. Ry. Co. v. Knight. 45 S.W.556 (Tex. 1898) a railroad's failure to eliminate sight restrictions could not be deemed to be negligence in law or fact. Although the Texas Supreme Court has not revisited that issue in 107 years the court noted, lower courts applying it had held that plaintiffs should take nothing if their only viable basis for negligence liability against a railroad is an alleged failure to eliminate sight restrictions, because such a failure is not an independent basis of liability. The ap­peals court concluded that it was bound to follow established precedent. Missouri Pacific Railroad Co. v. Limmer, Court of Appeals of Texas at Houston, Case No. 14-02-00688-CV. Kathleen H. Alsina, Michel A. Hatchell, and Harding J. Rome for defendant.

RCSI welcomes your input. If you have any questions or comments of interest to our industry, please contact either Dave Gardner or Randal Little at (731) 967-1796 or FAX your message to (731) 967-1788.

Visit the Railway Claim Services, Inc. webpage 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 further information contact:

 

dave_gardner@railway-claim-services.com or randal_little@railway-claim-services.com

 

Corporate Offices at: 52 South Main Street Lexington, Tennessee 38351

 

Phone: 800-786-5204, Fax: 731-967-1788 or visit us on the Web at www.railway-claim-services.com

 

Railway Claim Services, Inc. has offices THROUGHOUT THE UNITED STATES.