ON TRACK WITH RAILWAY CLAIM SERVICES, Inc.

Volume 14 Issue 2                                                                                                                     April 2007

 

RAILWAY CLAIM SERVICES, INC.                                                                         Our 20th Year of Service

    BACKGROUND CHECKS

FEDERAL RAILROAD SAFETY ACT PREEMPTION IN SERIOUS JEOPARDY

STUDY ESTIMATES TOTAL COST OF TORT SYSTEM

QUOTE FROM HISTORY

CLASS ACTION ARISING FROM LEAKING STRYEN MONOMER SETTLES FOR  $2 MILLION

U. S. SUPREME COURT LIMITS SCOPE OF PUNITIVES

THE 14TH ANNUAL RAILROAD LIABILITY SEMINAR

COLLECTIONS?

RAILWAY CLAIM SERVICES, INC. WEBSITE

U.S. SUPREME COURT DECISION ON CAUSATION IN FELA CASES

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 , Fax 731-967-1390 , or via email 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. 

FEDERAL RAILROAD SAFETY ACT PREEMPTION IN SERIOUS JEOPARDY

On March 27, 2007 , the U.S. House of Representatives passed an amendment (“the Thompson Amendment”) to the Federal Railroad Safety Act that eliminates most of the preemption established under the Federal Safety Act, as well as the Easterwood and Shanklin U.S. Supreme Court decisions.   In addition, it eliminates federal court jurisdiction.    The Amendment provides:

Sec. 3   No Preemptions of State Law

(a)      Nothing in section 20106 of title 49, US Code, preempts a State cause of action, or any damages recoverable in such an action, including negligence, recklessness, and intentional misconduct claims, unless compliance with State law would make compliance with Federal requirements impossible.   Nothing in section 21016 of title 49 US Code confers Federal jurisdiction of a question for such a cause of action.

(b)      Secretarial power – section 20106 of title 49, US Code, preempts only positive laws, regulations, or orders by executive or legislative branch officials that expressly address railroad safety or security.   The Secretary and the Secretary of Transportation have the power to preempt such positive enactments by substantially subsuming the same subject matter, pursuant to proper administrative procedures. 

This Amendment is now part of the Rail Security Bill and the only way it can be stopped is in the Senate/House Conference Committee.  

STUDY ESTIMATES TOTAL COST OF TORT SYSTEM

According to a study of U. S. Tort costs released on March 27, 2007 , the U.S. civil justice system costs the national economy $865 billion a year.

“Jackpot Justice,” prepared by the Pacific Research Institute, a San Francisco-based free-market think tank, took into account what its authors considered to be both direct and indirect costs of the tort system.

Among the indirect costs attributed to the tort system are those associated with so-called defensive medicine and “lost sales of new products from less innovation.” Those lost sales alone amounted to $367.1 billion, according to the survey.

The National Association of Manufacturers hailed the study, which was released by the American Justice Partnership in partnership with Pacific Research Institute. “This study represents the most ominous figures to date on the adverse economic impact of our runaway tort system,” said National Association of Manufacturers President John Engler in a statement. The American Justice Partnership is a coalition of tort reform organizations founded by the NAM in 2005.

A spokeswoman for the American Association for Justice, a Washington-based organization that represents the trial bar, called the study “more propaganda from big corporations seeking to evade accountability.”

 

QUOTE FROM HISTORY

“ . . . that from these honored dead we take increased devotion to that cause for which they gave the last full measure of devotion -- that we here highly resolve that these dead shall not have died in vain -- that this nation, under God, shall have a new birth of freedom -- and that government of the people, by the people, for the people, shall not perish from the earth.”  Abraham Lincoln, Gettysburg , Pennsylvania , November 19, 18 63

CLASS ACTION ARISING FROM LEAKING STRYEN MONOMER SETTLES FOR  $2 MILLION 

When a railcar containing 24,000 gallons of styrene monomer leaked vapors into the air in Cincinnati in August 2005 some 800 homes and businesses located near the rail station in the vicinity of the Lukken Airport were evacuated or forced to refrain from using their air conditioners. The evacuation lasted three days in some instances. Plaintiffs filed suit against the shipper, Westlake Chemical, along with three other entities involved in transportation of the car. Plaintiffs faulted defendants for allowing the car to sit unmonitored in a well-populated area for between six and nine months inasmuch as they knew, or should have known, that the hazardous and combustible chemical employed a stabilizer with a limited life.

The class action settled for $2 million.  Adult plaintiffs in Subclass A (those residents of Zone I who were either evacuated or remained in their homes for at least one day) received $600 per day up to a maximum of $1,800. Minor plaintiffs in Subclass A received $200 per day up to a $600 maximum. Adult members of Subclass B (those who were merely inconvenienced by the leak) received $175 per day to a maximum of $525. Minor members of Subclass B received $60 per day to a maximum of $180.  Defendants reached a confidential agreement as to how to fund the settlement (which included some $600,000 in attorney fees). Hamilton County (OH) Common Pleas Court , Case No. A057 105.

U. S. SUPREME COURT LIMITS SCOPE OF PUNITIVES

The U.S. Supreme Court decision in February 2007 to overturn a $79.5 million punitive damages award against a tobacco company may not represent a total victory for businesses, say some tort reform advocates.

That's because the 5-4 majority in Philip Morris USA vs. Mayola Williams held that juries can take into account evidence of harm allegedly inflicted by a defendant on people other than the named plaintiffs in determining the "reprehensibility" of the defendant's misconduct.

However, wrote Associate Justice Stephen Breyer for the majority, "a jury may not go further" and use punitive damages to punish a defendant directly for harm to others not named in the suit. "Given the risks of unfairness...it is constitutionally important for a court to provide assurance that a jury will ask the right question," wrote Justice Breyer. The risks of arbitrariness, inadequate notice and imposing one state's policies on other states made it "particularly important" that states avoid a procedure "that unnecessarily deprives juries of proper legal guidance," he wrote for the majority.

The case involved a suit brought against Philip Morris by Mrs. Williams, the widow of a longtime smoker. A jury awarded Mrs. Williams $821,000 in compensatory damages and $79.5 million in punitive damages after her attorney asked jurors to think about how many other people had been harmed by cigarette smoking in Oregon over 40 years.  Punitive damages that were nearly 100 times the amount awarded in compensatory damages appeared to violate an earlier ruling by the Supreme Court that punitive damage awards in excess of single-digit multiples of the underlying compensatory damages were generally unacceptable.  But the Oregon Supreme Court disagreed, and reinstated the $79.5 million in punitive damages.

Philip Morris appealed to the U.S. Supreme Court, asking the justices to decide whether the trial court should have told jurors they could not punish the defendant for injury to people not before the court and whether the nearly 100-to-1 punitive/compensatory ratio was "grossly excessive."

The nation's highest court returned the case to the Oregon Supreme Court.  In doing so, it declined to answer the second question and said the Oregon Supreme Court's actions could result in a new trial or change in the amount of punitive damages awarded.

"I think that the bottom line is there's going to be more litigation. This is moderately good news for potential tort defendants, with the emphasis on moderately," said Michael Krauss, a tort law expert and law professor at the George Mason University School of Law in Arlington , Va.   "The moderately good news is that court says explicitly for the first time that the amount of punitive awards can only be a function of the harm done to the plaintiff."

"That's new—they've never said that before. That is a pro-defendant statement," Mr. Krauss said.

But "they did qualify this—they reiterated that harm done to other than the plaintiffs is admissible for the purpose of deciding whether punitives should be awarded, not for the purpose of deciding how much should be awarded," he said.

"This distinction is going to be a very difficult one to make," said Victor Schwartz, general counsel of the American Tort Reform Assn. in Washington . "Once the bell rings, it's hard not to hear it.  It could muddy the waters because it's a distinction in the reality of the jury world that may not make an actual difference."

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Do not worry about tomorrow, for tomorrow will worry about itself. Each day has enough trouble of its own. Matthew 6:34

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THE 14TH ANNUAL RAILROAD LIABILITY SEMINAR

It is not too early to mark your calendar for the 14th Annual, Railroad Liability Seminar to be held at Samoset Resort in  beautiful Rockport , Maine ; June 26-29, 2007 .  You can make reservations by calling 800-341-1650   This seminar is attended by claims managers from all railroads, regional and short line railroad staff, as well as legal and insurance company representatives.  Over the years this seminar has proven beneficial to Accounting Managers, Insurance and Legal Departments, and Risk & Claims Managers to name a few.   For more information please contact Norma J. Griffiths, Manager Claims Montreal Maine & Atlantic Railway, Documentation & Reporting, Montreal, Maine & Atlantic Railway, Ltd., 15 Iron Road , Hermon , ME    04401 , 207-848-4273 -Phone, 207-848-4232 -Fax, 207-745-8099 -Cell.

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

U.S. Supreme Court Decision on Causation in FELA Cases – On January 10, 2007 The US Supreme Court issued its’ decision in Norfolk Southern Railway Company v. Sorrell.  The Court held, contrary to the Missouri Supreme Court and pattern instructions, that the instruction on standard of negligence is the same for the employer railroad and the employee. Thus, the employee is not held to a lower standard. Below is the summary and a link to the decision.  This is a huge decision for the industry.

Norfolk Southern Ry. Co. v. Sorrell

Date decided: 01/10/07

No. 05-746

Full text:  HERE 

EMPLOYMENT LAW (Under the Federal Employers’ Liability Act, A Single Standard of Causation Applies When Determining Railroad Negligence and Railroad Employee Contributory Negligence)

The United States Supreme Court unanimously held (opinion by Roberts; concurrences by Souter and Ginsburg) that when determining liability under the Federal Employers’ Liability Act, the same causation standard applies for railroad negligence and railroad employee contributory negligence.

Respondent Timothy Sorrell was injured during the course of his employment for Petitioner Norfolk Southern Railway Company ( Norfolk ).   Sorrell sought recovery in Missouri state court under the Federal Employers’ Liability Act (FELA), which makes railroads liable for employee injuries resulting from the railroad’s negligence, but reduces awards based on the employee’s contributory negligence.   Norfolk Southern objected to the jury instruction containing different standards for determining the railroad’s negligence and Sorrell’s contributory negligence.   The Circuit Court of the City of St. Louis overruled the objection and the jury returned a verdict for Sorrell for $1.5 million.   The Missouri Court of Appeals (Court of

Appeals) affirmed, holding that the same causation standards need not apply.   The United States Supreme Court (the Court) held that a single standard of causation applies when determining railroad negligence and employee contributory negligence under FELA, and vacated and remanded the case to the Court of Appeals to determine whether the error was harmless.

The Court stated that FELA claim elements derive from common law, which prescribes the same causation standards for contributory negligence and negligence.   The Court noted that different standards would confuse juries and complicate reducing damages proportionally.  

Preemption –  The Illinois District Court held that 49 C.F. R. § 222.21 preempts a complaint alleging failure to properly sound a horn. In the first case to rely on the new horn regulations The Illinois District Court ruled that 49 C.F. R. § 222.21 preempts a complaint alleging failure to properly sound a horn, and removal is proper because all remaining claims are closely related. Kuntz v. Illinois Central Railroad Company, No. 06-0554-JLF, 2006 U.S. Dist. LEXIS 83232 (N.D. III. Nov. 15, 2006 ), Attorney Kurt Reitz of Thompson Coburn for the Illinois Central Railroad.

FELA -  Pennsylvania Employee release for settlement results in a jury verdict for injury not disclosed at time of execution of the release.  After the verdict arising from a claim for a back injury the parties executed a settlement agreement, and the plaintiff was paid in exchange for a full release from liability for all other work-related injuries. Less than four months after signing the release, plaintiff filed another FELA lawsuit alleging that he had developed carpal tunnel syndrome as a result of his “repeated operation of unsafe, improperly maintained and defective railroad switches and other equipment as well as engaging in other job-related activities.” The railroad filed a motion for summary judgment based on the release arguing that plaintiff knew or should have known that he had carpal tunnel syndrome at the time he signed the release. The trial court denied the motion and the case proceeded to trial. The jury returned a defense verdict based upon the release and the plaintiff appealed. The Superior Court of Pennsylvania affirmed:

Under FELA jurisprudence, to the extent a release of claims related to work-related injuries or risks of injuries known to the employee at the time he signs the release, it does not violate FELA or its remedial goals. Consequently, it was proper for both the jury instruction and verdict interrogatories to condition the validity and applicability of the release in question on [plaintiff’s] knowledge at the time of signing. Based on the evidence before it, the jury determined that the negotiated release barred [plaintiff’s] claim.

2006 Pa. Super. LEXIS 2989 at HN7.Conway v. Delaware and Hudson Railway Company, Inc. No, 2004 MDA 2004, 2006 Pa. Super. LEXIS 2989 ( Sept. 12, 2006 ),

Trespassers – Ten Year-Old Walks on Railroad Right-of-Way, foot severed – Alabama Supreme Court Affirms Grant of Summary Judgment to Defense. Near a populated area in Birmingham, Alabama, on August 2000 the then ten year-old plaintiff left his home to play with a nine year-old friend. According to plaintiff the boys decided to walk along NS right of way enroute to a park.  As the boys walked along the tracks a train approached, then slowed to a stop. Testimony was presented that after the train stopped the boys began to walk towards plaintiff’s house, but when the boys passed an open hopper car, the plaintiff’s friend climbed the ladder on the car.  The plaintiff then stood with his right foot on the rail in order to reach his friend and pull him down. The train then began to move and the friend fell on top of the plaintiff, whose foot was still on the rail.  The plaintiff’s right foot was severed.

The plaintiff filed suit, asserting claims for negligence, wantonness and outrage.  According to the plaintiff, the railroad knew that children would trespass, citing a high rate of pedestrian casualties in the area and that in the past a trespasser-abatement program had been used in the area.  The plaintiff also claimed that the engineer failed to blow the horn before releasing the brakes. Finally, the plaintiff faulted the defendant for stopping the train in such a densely populated area.

The railroad sought summary judgment, arguing that the only duty it owed was to avoid wantonly or negligently injuring the trespassing children once it discovered that they were in a position of peril.  It also argued that the boys’ contributory negligence was the sole cause of plaintiff’s injury.  In an order without factual findings or legal analysis, the trial court granted the defense motion.  The Supreme Court of Alabama affirmed the judgment.  James E. Laster, Jr. v. Norfolk Southern Railway Co., Inc., Supreme Court of Alabama No. 1050532.

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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) 967-1390 .

Visit the Railway Claim Services, Inc. webpage located at  HYPERLINK http://www.railway-claim-services.com 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: 731-967-1390 or visit us on the Web at  www.railway-claim-services.com

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