ON TRACK WITH RAILWAY CLAIM SERVICES, Inc.

Volume 15 Issue 3                                                    July 2008

 RAILWAY CLAIM SERVICES, INC.                     Our 21st Year of Service

Ø                  BACKGROUND CHECKS

Ø                  LOS ANGELES JURY CONVICTS MAN OF ELEVEN MURDERS IN METROLINK ACCIDENT

Ø                  PUNITIVE DAMAGES RE-VISTED BY U.S. SUPREME COURT – EXXON VALDEZ DECISION

Ø                  BUMBING BANDIT BLOTTER

Ø                  COURT REAFFIRMS PRIVATE PARTIES CANNOT OBTAIN EMAIL WITH A CIVIL SUBPOENA

Ø                  QUOTES FROM HISTORY

Ø                  THE 15th ANNUAL RAILROAD LIABILITY SEMINAR

Ø                  COLLECTIONS?

Ø                  RAILWAY CLAIM SERVICES, INC. WEBSITE

Ø                  POINTS OF LEGAL INTEREST

Ø                  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 Brenda Cox of RCSI at 731-967-1796, Fax 731-967-1390, or via email at coxb@railway-claim-services.com. 

Background checks are required for new employees under the HazMat 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. 

LOS ANGELES JURY CONVICTS MAN OF ELEVEN MURDERS IN METROLINK ACCIDENT

On June 26, 2008 Juan Alvarez, who claimed he was attempting suicide when he triggered a January 26, 2005 rail accident, was convicted by a Los Angeles County Superior Court Jury of eleven counts of first-degree murder and could face the death penalty.

A Metrolink train struck the vehicle, derailed and then struck another Metrolink train heading in the opposite direction and a parked freight train.  In addition to the eleven deaths, about one hundred eighty people were injured.  Prosecutors denounced Alvarez’s claim of being suicidal as a lie and said he was trying to cause a calamity to get the attention of his estranged wife.  Prosecutors said he started the day with thoughts of killing his wife and then killed the rail passengers because she wasn’t available.

Alvarez caused the accident by leaving a gasoline-drenched sport-utility vehicle on railroad tracks in Glendale .  Alvarez admitted causing the accident but claimed he had intended to kill himself, then changed his mind and was unable to get the SUV off the tracks.

PUNITIVE DAMAGES RE-VISTED BY U.S. SUPREME COURT – EXXON VALDEZ DECISION

On June 25, 2008 The U.S. Supreme Court threw out the $2.5 billion punitive damages award that Exxon Mobil Corp had been ordered to pay for the 1989 Exxon Valdez oil spill off Alaska , the nation's worst tanker spill.

By a 5-3 vote, the high court ruled that the punitive damages award should be slashed, limited by the circumstances of the case to an amount equal to the total relevant compensatory damages of $507.5 million.  The justices overturned a ruling by a U.S. Court of Appeals that had awarded the record punitive damages to about 32,000 commercial fishermen, Alaska natives, property owners and others harmed by the nation's worst tanker spill.  

In the majority opinion, Justice David Souter concluded the $2.5 billion in punitive damages was excessive under federal maritime law, and should be cut to the amount of actual harm.

The Exxon Valdez supertanker ran aground in Alaska 's Prince William Sound in March 1989, spilling about 11 million gallons of crude oil. The spilled oil spread to more than 1,200 miles of coastline, closed fisheries and killed thousands of marine mammals and hundreds of thousands of sea birds.  A federal jury in Alaska awarded $5 billion in punitive damages in 1994.  A federal judge later reduced the punitive damages to $4.5 billion, and the appeals court further cut it to $2.5 billion.

Justice Souter wrote:  "We ... hold that the federal statutory law does not bar a punitive award on top of damages for economic loss, but that the award here should be limited to an amount equal to compensatory damages," he said.

The case was decided by eight Supreme Court members.

Dissenting Justices John Paul Stevens, Ruth Bader Ginsburg and Stephen Breyer would have upheld the award. Justices Stevens and Ginsburg said Congress, not the court, should set limits on punitive damages under maritime law.

BUMBLING BANDIT BLOTTER

South Carolina law enforcement officials were able to recover $4 Million worth of stolen excavators, bulldozers, backhoes and other similar equipment after two thieves attempted to launder their stolen Caterpillar Inc. backhoes with each other.

According to the National Equipment Register ( NER ), which interviewed a senior special agent involved in the investigation, the suspects swapped their stolen backhoes, with neither realizing that both pieces of equipment were "hot".  One of the suspects then sold one of the backhoes to an innocent purchaser and the buyer latter attempted to buy a fuel cap by contacting the local Caterpillar dealership.

After supplying Caterpillar with the equipment's product identification number, the dealership determined that the backhoe was reported stolen and contacted law enforcement officials.

Law enforcement officials were able to recover thirty one machines that were stolen in North Carolina , South Carolina , and West Virginia .  Eight suspects are allegedly involved, according to the special agent.

NER 's database, which is used by insurers in claims involving stolen equipment, was one method officials used to identify the stolen machines and their rightful owners.

From the NEC Website (http://www.nerusa.com/):  Complete national statistics do not exist, but existing figures suggest a huge problem that it is getting worse. Reports to Insurance Services Office, Inc. (ISO) show an increase of up to 20% in the value of equipment thefts every year since 1996 and show theft as the most common cause of loss for heavy equipment – over 50% of all causes of loss. Inland Marine theft losses alone reported to ISO in 2000 were over $127 million. Some national surveys have suggested that the total figure could be as much as $1 billion each year in losses and indirect costs, such as rentals, downtime, wasted management time and project overrun penalties. Perhaps the most worrying statistic for owners and insurers is that as little as 10 – 15% of stolen equipment is ever recovered.

COURT REAFFIRMS PRIVATE PARTIES CANNOT OBTAIN EMAIL WITH A CIVIL SUBPOENA

A U. S. District Court for The Eastern District of Virginia, Alexandria Division, reaffirmed on April 18, 2008 that the Electronic Communications Privacy Act (ECPA) does not permit an Internet service provider to disclose the content of stored emails to a private party in response to a civil discovery subpoena.  One would have thought this principle was well established, but apparently a reminder is sometimes necessary.  Cori and Kerri Rigsby, insurance adjusters for a State Farm contractor, allegedly used their AOL accounts to email Thomas and Pamela McIntosh with information they believed showed that State Farm had engaged in fraud in assessing the McIntoshes' Hurricane Katrina damage claim.  During discovery, the Rigsbys asked a federal court to quash State Farm’s subpoena to AOL , claiming, among other things, that it violated ECPA.  A magistrate granted the motion to quash and the district court affirmed, finding that § 2703(b) "pertains exclusively to criminal investigations, not civil discovery matters."  It further found ECPA "protect[ed] the Rigsbys' stored e-mails because the Rigsbys [had] a legitimate interest in the confidentiality of their personal emails being stored electronically by AOL " and that disclosure to State Farm did not fall into the exceptions located in § 2702(b) of ECPA, which allow voluntary disclosure by an ISP in certain delineated circumstances.

 QUOTES FROM HISTORY

Those who desire to give up freedom in order to gain security will not have, nor do they deserve, either one.  Benjamin Franklin (1706-1790)

Freedom is never voluntarily given by the oppressor; it must be demanded by the oppressed.  Martin Luther King, Jr. (1929-1968)

Freedom has its life in the hearts, the actions, the spirit of men and so it must be daily earned and refreshed - else like a flower cut from its life-giving roots, it will wither and die.  Dwight D. Eisenhower (1890-1969)

You have to love a nation that celebrates its independence every July 4, not with a parade of guns, tanks, and soldiers who file by the White House in a show of strength and muscle, but with family picnics where kids throw Frisbees, the potato salad gets iffy, and the flies die from happiness. You may think you have overeaten, but it is patriotism.  Erma Bombeck (1927-1996)

THE 15th ANNUAL RAILROAD LIABILITY SEMINAR, HOSTED BY:                                                            

The 15th Annual Railroad Liability Seminar will be hosted by Watco Companies, Inc. in Kansas City , Kansas , at The Intercontinental at the Plaza.  Attendees are invited to start the conference on July 22 by networking at a golf outing, which will be followed back at the hotel by registration and then a cocktail reception at 6:00 pm.  The program which includes authoritative and timely topics begins July 23 at 8:15 am and will continue on the 24th, concluding with a night at the ballpark with the Royals vs. Tampa Bay .

This seminar is attended by rail operators, regional and short line railroad staff in accounting, insurance, legal departments, human resources, risk, and claims representatives.  Please make plans to attend this important conference.

For information about registration, a registration form for the seminar, or to be a sponsor please contact Lori Magee

Director of Claims/Risk Management of Watco Companies, Inc. Her phone number and email address are:  620-231-2230 and lmagee@watcocompanies.com.

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 text 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

Crossing Accident Verdict involving a passenger in a vehicle – Tennessee $1.155 in Total Damages – 30% ($346,500) responsibility of NS. Willie Harris was the passenger in a vehicle that was struck by a Norfolk Southern train at a crossing in East Tennessee .  Plaintiff Harris sued the driver, Norfolk Southern, and Carter County, Tennessee.  After a seven-day trial, and nine hours of deliberation the Carter County, Tennessee Circuit Court returned a verdict for the plaintiff, with 65% of the fault apportioned to the driver, 30% to Norfolk Southern, and 5% to the county.  Willie Harris v. Norfolk Southern Co., et al, Carter Co. (TN) Circuit Court.

Crossings Accident – Judge Grants Motion for Summary Judgment – Upheld on Appeal by Mississippi Appeals Court . On June 20, 2000, the plaintiffs decedent husband, a tractor-trailer operator, was hit by a Kansas City Southern train resulting in the death of the truck driver.  According to the engineer he blew the train’s whistle repeatedly and put the train in emergency to avoid the accident.  The investigation conducted after the accident identified only one known non-party eyewitness, Classie Ward, who stated in an affidavit that she observed decedent moving very slowly over the railroad tracks.   In her statement and subsequent Affidavit Ward opined that Thomas should have been able to see the train and should have been able to avoid the accident by not passing over the railroad tracks in question.

A lawsuit ensure on December 4, 2001, alleging that the railroad allowed the line of sight at the crossing to become obstructed.  After Discovery the defense filed a motion for summary judgment on October 22, 2004.  Plaintiff produced two affidavits in opposition to the motion for summary judgment, one of which was a lay person, which was later found  inadmissible because the affiant was not qualified to render an opinion under Daubert v. Merrell Dow Pharmaceuticals, 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993).  Plaintiff also presented an affidavit of a reconstruction expert which The Court also inadmissible, citing that there was no genuine issue of material fact and granted summary judgment on behalf of the defense.

On Appeal to the Mississippi Court of Appeals the judgment was affirmed.  The Court of Appeals stated that the plaintiff’s investigator’s witness had no training or expertise as an accident reconstructionist.  The court concluded that he was unqualified to offer an expert opinion (Daubert).  “A lay witness is someone who offers opinion testimony regarding something they know from first-hand knowledge, not something they concluded . . .” The affidavit was found to have been properly excluded by the trial court.

With respect to the affidavit from the electrical engineer which included how much time decedent had to move his truck across the subject railroad tracks given the speed of the train, the length of decedent’s truck, and the speed of decedent’s truck, the appeals court concluded that such testimony was clearly an attempt at accident reconstruction for which the witness had no experience or training whatsoever, as he admitted during his deposition. Since he was not qualified to render the expert opinion in question the court found no abuse of discretion in the refusal to admit his affidavit.  Finally, the court concluded that the affidavit from the accident reconstructionist was untimely since it was submitted after the court ordered a moratorium on discovery. KilhulIen v. Kansas City Southern Ry., Court of Appeals of Mississippi No. 2006-CA-01564-COA.  Charles E. Ross, William B. Lovett, for defendants.

Crossings – Motorist Strikes the 126th Car of Kansas City Southern Train – Court Grants Defense Motion for Summary Judgment.  The plaintiff collided with the side of a 126 car coal train at 1 a.m. in Carson , Texas .  As a result of this accident the plaintiff suffered fractures of both feet, both ankles, both legs and the pelvis.  She filed suit against the railroad, its crew and the power company asserting that the collision took place because the crossing signals were not working and the train failed to signal its presence.  The plaintiff also claimed that the train failed to stop and render assistance after the incident.  According to plaintiff, the railroad negligently maintained the crossing.  The railroad denied liability, arguing that both the crew’s testimony and inspection reports showed that the signals were working, and pointed to a police report which concluded that plaintiff ignored the crossing signals.  The railroad provided evidence that its crewmembers were unaware of the incident until they were informed by a third-party via radio, at which point they contacted law enforcement and then returned to the scene.  The district court granted summary judgment to the defense. Keshia L. Smith, etc., et al v. Kansas City Southern Railway, et al, U.S. District Court E.D. Texas No. 06-cv-00291-LED-JDL. Keshia Smith, pro se. Maurice Owens, Jr., Paul O. Wickes, of Hunton & Williams, Dallas , TX for railroad.

Third Party Exposure HazMat Claim – Spouse of Tie Treatment Plant Workers Blames Stomach Cancer on Tie Plant Exposure — Texas Jury Returns Defense Verdict to BNSF.  Linda Faust, the plaintiff, whose husband worked at a BNSF tie treatment plant from 1980 until the plant was acquired by Koppers, Inc. in 1995 was diagnosed with stomach cancer in 1998.  She sued BNSF, asserting that she was exposed to polycyclic aromatic hydrocarbons (PAHs) and dioxin by way of her husband’s boots and clothing.  The defense denied liability, claiming that plaintiff’s calculations were based on “junk science” and that the level of such chemicals in the town in which plaintiff and her husband lived was at “background level.”  BNSF presented expert testimony that there was no reliable scientific evidence linking stomach cancer to the chemicals at issue.  BNSF expert testimony pointed to plaintiff’s nineteen-year history of smoking a pack of cigarettes per day and her history of infection with the stomach bacterial Heliobacterpylori. 

Following a six-week trial the case went to the jury on instructions that included the following, “. . . in order to prove specific causation for exposure from the Somerville Tie Plant, the Plaintiff must exclude, with reasonable certainty, other plausible causes of Linda Faust’s stomach cancer, such as her history of smoking cigarettes and her Heliobacterpylori infection.”  The jury returned a defense verdict.  Linda Faust, et al v. Burlington Northern Santa Fe Railway Co., Tarrant Co. (TX) 96th District Court No. 96-212928-OS.  Doug Poole, William R. Floyd, Heather Patterson of McLeod, Alexander, Powel & Apffel, Galveston , TX for defendant.

Third Party Exposure HazMat Claim – Texas Prison Inmate Says Place of Incarceration Was close to an accident sit involving a release of HazMat – Complaint Against Union Pacific Dismissed.  The plaintiff, a Texas prison inmate, was incarcerated at the Bi-State Justice Center , when on October 15, 2005 a Union Pacific Railroad train collided with the rear of another standing UP train in the UP rail yard in Texarkana , Arkansas .  The collision, which was about half a mile from the Justice Center , resulted in the puncture of a railroad tank car containing propylene, a compressed flammable gas. There was damage to homes in the area.  The Justice Center was not evacuated.  The plaintiff sued the railroad in U.S. District Court asserting claims for nuisance and negligence.

The case was referred to a magistrate judge who found that there was no subject matter jurisdiction in that claims of nuisance and negligence were not ordinarily appropriate in federal court.  The plaintiff was given an opportunity to amend his complaint, but no amendment was filed.  The magistrate judge recommended dismissal.  The district court adopted that recommendation and the case was dismissed on March 10, 2008.  Mark A. Dolph v. Union Pacific Railroad Co., U.S. District Court E.D. Texas No.5:07-cv-131.

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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 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.