ON TRACK WITH RAILWAY CLAIM SERVICES, Inc.

Volume 16 Issue 1                                                    January 2009

 

RAILWAY CLAIM SERVICES, INC.                     Our 22nd Year of Service

 

Ø                  BACKGROUND CHECKS

Ø                  U.S. SUPREME COURT TO RE-VISIT PUNITIVIE DAMAGES

Ø                  NTSB REPORTS FATALITIES ARE DOWN, 2006 to 2007

Ø                  A 30-YEAR-OLD LAWSUIT OVER $134 ENDS

Ø                   PRE -EMPTION CHALLENGE – FAR REACHING IMPACT?

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 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. 

U.S. SUPREME COURT TO RE-VISIT PUNITIVIE DAMAGES

On December 3, 2008 U.S. Supreme Court Justice John Roberts indicated that the Court may use an Oregon case it has already reviewed twice to provide more guidance on when a punitive damage award is so disproportionate to the underlying compensatory award that it violates the Constitution's due process provision.

The chief justice’s comments came after the court heard oral arguments in Philip Morris USA vs. Mayola Williams.  The case involves an Oregon court's award of $79.5 million in punitive damages to the widow of a longtime smoker.  The punitive award came atop compensatory damages of less than $822,000, an amount later reduced by state court to less than $522,000.

Philip Morris appealed the case to the U.S. Supreme Court, which ruled in 2003 that the Oregon Supreme Court should review the punitive award under standards it had set in State Farm Mutual Automobile Insurance Co. vs. Curtis Campbell et ux, in which it said punitive damages that exceed single-digit multiples of compensatory damages are generally unacceptable.  The Oregon Supreme Court upheld the punitive damages award, leading to another appeal and another opinion from the U.S. Supreme Court telling the state court to review the award in the light of due process protections.

The Oregon Supreme Court, however, decided that it did not have to follow the federal standard because Philip Morris had allegedly proposed a flawed jury instruction at the original trial.  By doing so, Philip Morris forfeited its federal claim, the state high court ruled.

Philip Morris again appealed to the Supreme Court, seeking review of both the ability of Oregon to avoid the federal standard by applying a state procedural rule and whether the punitive damage award was so excessive as to be unconstitutional. The high court agreed only to review whether Oregon could trump a federal standard by applying the state jury instruction rule.

But after nearly an hour of arguments on December 3, Chief Justice Roberts suggested that the high court might be willing to address the question of excessiveness in the punitive damage award as well as the state vs. federal standard question. To do so, the parties would have to submit new briefs addressing that question, with the high court deciding whether to review the issue later in its term.

NTSB REPORTS FATALITIES ARE DOWN, 2006 to 2007

According to preliminary figures released during the third quarter of 2008, overall transportation fatalities in the United States fell 4 percent year over year from 2006 to 2007. 

Overall, there were 43,193 transportation fatalities recorded in 2007 versus 45,085 in 2006.  Highway fatalities, the segment that accounts for nearly 95 percent of all transportation deaths, also dipped in 2007 from the previous year.

Within that category, however, motorcycle fatalities were marked by a 6 percent increase -- the single largest increase in any specific category across all the included modes of transportation.

A 30-YEAR-OLD LAWSUIT OVER $134 ENDS

In September 2008, after more than three decades, one of Utah 's (and the nations’) longest-running civil lawsuits appears to be at an end.  The Utah Supreme Court ruled that Richard and Nancy Madsen, who made advance payments to a mortgage company to cover taxes and insurance, are not entitled to interest on that money.

The unanimous decision reversed a judgment of $134 in interest for the Madsens, who filed a class-action suit in 1975 against their mortgage company, Prudential Federal Savings and Loan Association.

The ruling also throws out a judgment of about $1 million awarded to 9,547 class members, who claimed they were owed an average of $105 in interest on their advance payments.

The Madsens financed the 1964 purchase of their Holladay home by borrowing money from Prudential. Their contract required them to make monthly payments for taxes and insurance into an account held by Prudential, which paid no interest on the balance.

The Madsens filed a class-action suit claiming unjust enrichment by Prudential and seeking interest on their account. Prudential responded that its contract with the Madsens contained no provision to pay them interest and that federal law preempted a state law claim for payment.

For more than 30 years, the case wound its way through the legal system, going from state court to federal court and back again.  Except for several long-standing water-rights disputes dating back to the 1950s, it is the oldest active civil case in the Utah .  Richard Madsen died in 2006. Nancy Madsen became the lead plaintiff.

The Utah Supreme Court's ruling says that Prudential had no obligation to pay interest under federal regulations in effect when the Madsens took out their loan.  And when state law conflicts with federal law, the federal law prevails, the high court said.

PRE -EMPTION CHALLENGE – FAR REACHING IMPACT?

Legal experts are divided over whether a U.S. Supreme Court decision involving cigarette advertising could reach beyond tobacco.   At issue in the case decided in December of 2008 (Altria Group Inc. et al. vs. Good et al.) was whether a federal law that regulates cigarette advertising pre-empted state anti-fraud statutes.  The U.S. Supreme Court held 5-4 that it does not.

The case centered on the alleged promotion of "light" cigarettes as allegedly less harmful than regular cigarettes under the Federal Cigarette Labeling and Advertising Act. The act holds that no "requirement or prohibition based on smoking and health shall be imposed under state law with respect to the advertising or promotion of any cigarettes the packages of which are labeled in conformity" with the law.

A group of Maine residents sued Richmond, Virginia-based Altria, the parent company of Philip Morris USA, alleging that the cigarette maker violated the Maine Unfair Trade Practices Act by fraudulently advertising that light cigarettes delivered less tar and nicotine than regular cigarettes. A U.S. District Court granted summary judgment for Altria, holding that the federal law trumped the state statute. But a three-judge panel of the 1st U.S. Circuit Court of Appeals in Boston overturned that decision in August 2007.

Altria appealed to the Supreme Court, which sided with the Maine consumers. The majority noted that while the text of an express pre-emption clause in a federal statute may be read more than one way, courts usually "accept the reading that disfavors pre-emption." The court also said that Federal Trade Commission decisions regarding statements of tar and nicotine content in cigarettes do not implicitly pre-empt state deceptive trade practices laws such as the Maine statute.

The court's decision could encourage plaintiffs to file consumer fraud complaints in cases that might otherwise be product liability actions, said Glenn Lammi, chief counsel-legal studies division at the Washington Legal Foundation, which had filed a brief in support of Altria.

"Depending on how lower courts interpret and apply it in other situations, it could have a broader impact beyond tobacco," in terms of federal pre-emption, said Mr. Lammi.  "The underlying facts of the case involve situations where the federal government was involved as a regulator. It permitted these claims by the tobacco company that cigarettes were `light' and then the companies get sued for the fact that smokers smoke harder."

But the president of the Chicago-based Defense Research Institute said he doubted the decision would have a great effect on many types of litigation.

See the full story in Business Insurance at:  http://www.businessinsurance.com/cgi-bin/article.pl?articleId=26837&a=a&bt=Chemical

 

 QUOTES FROM HISTORY

It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so.  Mark Twain (November 30, 1835 – April 21, 1910)

If you hold a cat by the tail you learn things you cannot learn any other way.  (Mark Twain)

On account of being a democracy and run by the people, we are the only nation in the world that has to keep a government four years, no matter what it does.  Will Rogers  (November 4, 1879August 15, 1935)

The more you read and observe about this Politics thing, you got to admit that each party is worse than the other. The one that's out always looks the best.  Will Rogers

Be thankful we're not getting all the government we're paying for.  Will Rogers

Diplomacy is the art of saying “Nice doggie” until you can find a rock. Will Rogers

 

THE 84th ANNUAL SOUTHEASTERN CLAIMS ASSOCIATION CONFERENCE                                                

The 84TH Annual Southeastern Claims Association Conference will be hosted by PECO Energy Company, on June 16-19, 2009, at the Francis Marion Hotel , in Charleston , South Carolina .  Further information and registration can be found at the Southeastern Claims Association website:  http://southeasternclaims.us/.  This is always a great claims event, and the setting does not get any better than historic Charleston , South Carolina .  As the saying goes, “Come for the conference, but stay for the many things Charleston has to offer.”  You will not be disappointed with either.

This seminar is attended by claims professionals from all of the utilities, but primarily railroad and public power companies.  Claims and legal presentations cover these fields. 

The hotel reservation deadline for the special in-season rate is May 15, 2009.  So, please make plans to attend this conference.  

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

Whole Body Vibration Claim by BNSF Locomotive Engineer is not sustained by a Texas Jury. The plaintiff had worked for Burlington Northern as a locomotive engineer for over thirty years.  In a lawsuit brought by the plaintiff, she claimed that cumulative trauma as a locomotive engineer had resulted in a herniated disc in the cervical spine, which would require surgery in the future.  She also asserted that the injury would necessitated that she retire several years earlier than anticipated.  She claimed that bad locomotive seats, bad railroad tracks, and bad suspension on railroad equipment caused the condition.  BNSF argued that the levels of whole body vibration were not dangerous and that the ride plaintiff experienced was reasonably safe.  BNSF also disputed causation, contending that plaintiff’s physical conditions resulted from an age-related degenerative condition and not railroad employment.  Following a two week trial, the jury deliberated twenty-five minutes before returning a defense verdict.  Marie Survant v. BNSF Railway Co., Hardin C1. (TX) 356th District Court No.44814. Gilbert T. Adams, Beaumont, TX for plaintiff.

Track Conditions, Inadequate Shock Absorbers and Worn Pads Resulted in Cumulative Trauma Injuries claim by locomotive engineer results in Texas Verdict.  The plaintiff claimed that he began his employment with BNSF in 1997, and in 1998 he began to experience severe back pain.  A herniated disc at L5-Sl was diagnosed and surgery was undertaken.  He then claimed that he experienced pain in the ribs in 2003, and then multiple disc herniations, including one at T11-12, which required additional surgeries, to include a thoracic fusion.  The locomotive engineer plaintiff also claimed that in 2003 severe degenerative disc disease and cervical spondylosis were also diagnosed, and in 2004 he underwent bilateral hip replacement.  In his law suit he plaintiff alleged that the railroad failed to furnish him with a reasonably safe place in which to work, failed to provide safe equipment, failed to maintain its track and equipment and violated the Locomotive Inspection Act by allowing excessive lateral and vertical motion and vibration in the locomotive cabin.  BNSF denied liability.  After a six-day trial, the jury returned a verdict in favor of plaintiff for $600,000.  Homer “Gene” Heath v. Burlington Northern Santa Fe Railway Co., Potter Co. (TX) 47th District Court No. 91,285-A

Whole Body Vibration and Poor Seating Claim by BNSF Locomotive Engineer Results in Kansas Verdict.  The plaintiff, now age fifty-eight, worked for defendant as a locomotive engineer before retiring with a disability after thirty-four years.  In his suit the plaintiff asserted that early retirement was necessitated by injury due to seats which were not ergonomically appropriate so that whole body vibration resulted.   BNSF denied liability causation and damages.  The jury returned a verdict in favor of plaintiff for $1,769,812.   Gilliand v. BNSF Railway Co., Wyandotte Co. (KS) District Court No. 07CV1066.

Whole Body Vibration Claim by BNSF Locomotive Engineer Results in Texas Verdict.   The plaintiff retired from ATSF in 2004 with thirty one years of service.  Thereafter he filed suit and alleged that the railroad was negligent, alleging , the locomotives on which he rode were rough riding and exposed him to whole body vibrations.  In his complaint he alleged that the seats provided were insufficient for the railroad environment, which resulted in degenerative changes in the low back over the course of his career.  BNSF denied liability, taking the position that there was nothing wrong with its seats or its engines.  BNSF claimed that any back injuries were the result of degenerative disc disease brought on by age and genetics.  Alternatively, BNSF asserted that plaintiffs smoking habit and failure to follow safety rules contributed to his back problems.  The jury returned a verdict  in favor of the plaintiff for $1.204 million. Robert A. Cook v. BNSF Railway Co., Hardin Co. (TX) 356th District Court No. 43,920.

Whole Body Vibration Claim by BNSF Brakeman and Locomotive Engineer Results in Montana Settlement.   According to the complaint, in 2007, after twenty eight years of service, the plaintiff became occupationally disabled due to a spinal problem.  The plaintiff asserted claims under FELA, the Locomotive Inspection Act, and the Safety Appliance Act. The plaintiff claimed that over the course of his career his spine was subjected to the cumulative effects of shocks, jolts, vibration, and excess lateral and vertical movement as the result of inadequate, defective and negligently maintained locomotives, including cab seats, and tracks and roadbeds.  BNSF denied liability and claimed that there was no evidence of negligence.  BNSF also claimed that plaintiff failed to exercise due care for his own safety.  BNSF also asserted that the plaintiff had suffered from a pre-existing condition.  The case settled for a confidential sum on the third day of trial.  Randal l Barrett v. Burlington Northern Santa Fe Railway, Yellowstone Co. (MT) District Court No. DVO6-646.

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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.