ON TRACK WITH RAILWAY CLAIM SERVICES, Inc.

Volume 16 Issue 2                                                                                                              April 2009

 

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

 

Ø                              BACKGROUND CHECKS

H                             HIGH COURT REVISITS PUNITIVE DAMAGES

                                STUDY:  240,500 KILLED IN DISASTERS IN 2008

Ø                              NTSB – TRANSPORTATION FATALITIES DOWN

Ø                              DOT – TRAFFIC DEATHS DROP TO LOWEST SINCE 1994

Ø                              LONG-TERM SAFETY TRENDS IN THE RAIL INDUSTRY

Ø                              FRA DEMOGRAPHIC REPORT ON RAIL TRESPASSER FATALITIES

Ø                              RAILROAD RETIREMENT FINANCES ARE SOUND

Ø                              NON-RAILROAD, BUT INTERESTING – A 30-YEAR-OLD LAWSUIT OVER $134 ENDS

Ø                              QUOTES FROM HISTORY

Ø                              FRA RELEASES DEMOGRAPHIC REPORT OF RAIL TRESPASSER FATALITIES

Ø                              SOUTHEASTERN CLAIMS ASSOCIATION 84TH ANNUAL CONFERENCE – JUNE 16-19, 2009

Ø                              GENERAL CLAIMS CONFERENCE, 32ND ANNUAL MEETING

Ø                              RAILROAD CLAIMS AND LIABILITY SEMINAR, JULY 15-17, 2009

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.

HIGH COURT REVISITS PUNITIVE DAMAGES

Washington , DC – March 31, 2009.  The Supreme Court used an Oregon case it had already reviewed twice to leave in place a ruling by the Oregon Supreme Court in favor of Mayola Williams of Northeast Portland .  The state court had repeatedly upheld a verdict against Altria Group Inc.’s Philip Morris USA in a fraud trial in 1999. 

The judgment has grown to more than $155 Million with interest, and Williams stands to collect between $60 Million and $65 Million, before taxes and payments to her lawyers.

The justices heard arguments in the case in December, but by letting the Oregon verdict stand they did not rule on the legal issues that include punitive damages.  Business interests had once hoped that the high court would use the case to set firm limits on the award of punitive damages, intended to punish a defendant for its behavior and deter repeat offenders.

The case has bounced around the appellate courts since 1999, when Williams’ attorneys convinced a jury that Philip Morris should be held accountable for misleading people into thinking cigarettes were not dangerous or addictive.  William’s husband Jesse was a janitor in Portland who started smoking while in the Army in the 1950s, and died in 1997, six months after he was diagnosed with lung cancer. 

His widow was awarded $800,000 in actual damages.  The punitive damages are about 97 times greater.  A state court previously cut the compensatory award to $521,000.  The Oregon high court made its first decision in 2002, refusing to hear an appeal from Philip Morris.  Then the U.S. Supreme Court rejected the judgment of nearly $80 Million, saying in another case that damages generally should be held to no more than nine times actual damages.  It declined, however, to make that a firm rule.

Next, the Oregon Supreme Court upheld the punitive damages, citing “extraordinary reprehensible conduct” by Philip Morris officials.

Then came the U.S. Supreme Court’s second take on the case.  In 2007, the court said in a 5-4 decision that jurors may punish a defendant only for harm done to someone who is suing, not other smokers who could make similar claims. 

The state court was told to reconsider the award in the context of instructions for the trial jury that Philip Morris proposed and the trial judge rejected.

In January, the Oregon court said there were other defects in the instructions that violated Oregon law, and supported the trial judge’s decision not to give the proposed instructions to the jury

The case is Phillip Morris USA v. Williams, 07-1216.

STUDY: 240,500 KILLED IN DISASTERS in 2008

Zurich:   Cyclone Nargis and the Sichuan earthquake made 2008 one of the worst for disasters since 1970,  both in terms of lives lost and economic damage, according to a report released by insurance company Swiss Re.  Some 240,500 people lost their lives in natural and man-made disaster in 2008, the study found.  Most died in Asia, where cyclone Nargis killed 138,000 people when it hit Myanmar last May.  An earthquake in China 's Sichuan province the same month claimed 70,000 lives, according to the report.

The death toll was one of the highest in decades. More people died only in 1970 and 1976, with a tropical storm in the Bay of Bengal and a quake in China being the main killers in those two years respectively.

Swiss Re put the economic damage caused by disasters last year at $269 billion, with the earthquake in Sichuan accounting for almost half of this.

Insured losses amounted to $52.5 billion, more than three-quarters of which occurred in the United States , the company said.

 

NTSB – TRANSPORTATION FATALITIES DOWN

  According to preliminary figures, 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 motorcycle fatalities were marked by a 6 percent increase -- the single largest increase in any specific category across all the included modes of transportation.

 

DOT – TRAFFIC DEATHS DROP TO LOWEST SINCE 1994  

See full size image  When the U.S. Department of Transportation (DOT) looked at their accrued records, their information provided a slightly different report.  Traffic deaths in the USA last year dropped to the lowest level since 1994, and deaths per 100 million miles traveled are the lowest on record, according to the DOT.

In 2007, there were 41,059 highway fatalities overall, which is 1,649 fewer deaths than the previous year..  The traffic fatality rate dropped to 1.37 deaths per 100 million vehicle miles traveled.

According to the DOT 2.40 million people were injured last year in traffic crashes, 84,000 fewer than the year before, and the lowest total since the National Highway Traffic Safety Administration (NHTSA) began compiling injury data in 1988.  Alcohol related traffic deaths (those involving a driver or motorcyclist with a blood alcohol concentration of .08 or higher) fell by 3.7 % to 12,998.

Amid the encouraging news for drivers, a troubling trend continues:  Motorcycle fatalities rose for the 10th straight year, to 5,154, the highest total since NHTSA began collecting fatality crash data in 1975.

Motorcyclist fatalities now account for an alarming 13% of total traffic fatalities according to the DOT. 

California recorded the largest decline in highway deaths with 266 fewer fatalities in 2007 vs. 2006.  South Dakota and Vermont had 24% declines, the largest percentage reductions.

USA reported in June 2008, based upon its independent reporting, that highway fatalities in the first half of 2008 had fallen in 35 to 37 states that provided preliminary statistics.

LONG-TERM SAFETY TRENDS IN THE RAIL INDUSTRY

Washington , DC – According to the National Transportation Safety Board the railroad industry has had improving safety trends since 1980.  Over the last almost thirty years employee fatalities are down 82 percent and grade crossing fatalities are down 59.  http://ntsb.gov/speeches/rosenker/mvr081006.html, NTSB Press Contact: Ted Lopatkiewicz, (202) 314-6100, lopatt@ntsb.gov


FRA DEMOGRAPHIC REPORT ON RAIL TRESPASSER FATALITIES

Trespassers account for the largest number of fatalities in the railroad industry – approximately 500 per year. In order to better understand who is trespassing, their locations, and the reasons they are on railroad property, the Federal Railroad Administration (FRA) issued a report using three years of reported trespasser fatalities.  Medical examiners and coroners across the country were surveyed, and based on the best information available from those who elected to participate in the study, the average trespasser is most often a 38-year-old Caucasian male under the influence of alcohol and/or drugs, with a median household income of $36,000.  More than 25 percent did not graduate from high school, and 18 percent were determined to be suicides. The report, Rail-Trespasser Fatalities: Developing Demographic Profiles, includes a state-by-state breakdown and shows California and Texas recording the highest number of such events.  The report strongly recommends additional demographic analysis to reinforce and expand on these results in order to develop targeted educational and outreach programs and law enforcement initiatives to reduce the number of rail trespassing incidents.  The report is available at http://www.fra.dot.gov/downloads/safety/tdreport_final.pdf. Contact: Rob Kulat (202) 493-6024.

Trespasser casualties increased slightly from January through November 2008, when there were 827 trespasser deaths and injuries reported to the FRA.  During the same period in 2007 there were 817 reported deaths and injuries.  For more information on this check the Federal Railroad Administration website (http://www.fra.dot.gov/). 

                                                                                                       

RRB Seal links to home pageRAILROAD RETIREMENT FINANCES ARE SOUND

There is good reason to be concerned about the current banking crisis, the roller-coaster stock market, the contraction of credit markets, and the growing federal deficit and federal debt.

But, according to the latest actuarial report, there is no reason to be concerned about the financial health of the Railroad Retirement system or the Railroad Retirement Unemployment Insurance system.

The latest actuarial report on the finances of the Railroad Retirement system proclaims it to be in "generally favorable" financial health, with no cash-flow problems anticipated during the next 25 years.

As for the Railroad Retirement Unemployment Insurance system, the latest actuarial report shows it to be in "generally favorable" health through 2018.  In fact, even with projected increases in the daily benefit rate, the experience-based contribution rates (paid entirely by railroad employers) are expected to keep the unemployment insurance system solvent over the long term.

The annual actuarial reports are required by Congress, along with recommendations for any financing changes that may be advisable, to ensure the long-term solvency of both the Railroad Retirement system and the Railroad Retirement Unemployment Insurance system.

Assets of the Railroad Retirement system are held by the Railroad Retirement Investment Trust, which has lost some money this year, as have all funds with money invested in the stock market.  But the losses this year are less than the 16 percent positive return realized last year, according to the Railroad Retirement Board.

Moreover the Railroad Retirement Investment Trust has minimal exposure to the kind of investments that have been causing the financial difficulties of financial institutions, according to the Railroad Retirement Board.

Additionally, the Railroad Retirement financing changes ordered by Congress in 2001 provide for a payroll tax adjustment to ensure the fund remains actuarially sound for the long-term -- and it is the railroad carriers who would face the burden of higher payroll taxes rather than employees.

More information on Railroad Retirement and Railroad Retirement Unemployment Insurance, as well as the Railroad Retirement Investment Trust, is available at www.rrb.gov.

 

NON-RAILROAD, BUT INTERESTING – A 30-YEAR-OLD LAWSUIT OVER $134 ENDS: RULING THROWS OUT $1M JUDGMENT AWARDED TO 9,547 CLASS MEMBERS

 According to an article published in the Salt Lake Tribune in September of 2008, after more than three decades, one of Utah 's longest-running civil lawsuits appears to be at an end.

On Tuesday, the state 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 reverses 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.

Both Geri Ann Baptista, a spokeswoman for Washington Mutual Bank, which indirectly acquired Prudential in the 1990s, and attorney Joseph Palmer, who has been on the case for 33 years, said they are pleased with the ruling.

Lawyers for the plaintiffs could not be reached for comment.

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 the class-action suit in Utah 's 3rd District Court 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 state. 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.

For more information on this the reader can go to:  http://www.sltrib.com 

 QUOTES FROM HISTORY

  1. America will never be destroyed from the outside.  If we falter and lose our freedoms, it will be because we destroyed ourselves.  Abraham Lincoln
  2. The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.  Winston Churchill
  3. Our constitution protects aliens, drunks and U.S. Senators.  Will Rogers

FRA RELEASES DEMOGRAPHIC REPORT OF RAIL TRESPASSER FATALITIES

 

According to a report issued by the Federal Railroad Administration (FRA) on March 21, 2008, trespassers account for the largest number of fatalities in the railroad industry – approximately 500 per year.  The report uses three years of reported trespasser fatalities. According to the report, medical examiners and coroners across the country were surveyed.  Based on the best information available from those who elected to participate in the study, the average trespasser is most often a 38-year-old Caucasian male under the influence of alcohol and/or drugs, with a median household income of $36,000.  More than 25 percent did not graduate from high school, and 18 percent were determined to be suicides. 

 

The report, Rail-Trespasser Fatalities: Developing Demographic Profiles, includes a state-by-state breakdown and shows California and Texas recording the highest number of such events.  The report strongly recommends additional demographic analysis to reinforce and expand on these results in order to develop targeted educational and outreach programs and law enforcement initiatives to reduce the number of rail trespassing incidents. 

 

The report is available at: http://www.fra.dot.gov/downloads/safety/tdreport_final.pdf. Contact: Rob Kulat (202) 493-6024.

 

SOUTHEASTERN CLAIMS ASSOCIATION 84TH ANNUAL CONFERENCE – JUNE 16-19, 2009

The Southeastern Claims Association’s 84th annual conference will be held at The Francis Marion Hotel, in Charleston , South Carolina , June 16-19, 2009.  The hotel is offering a special in-season rate of $149.00, which is available the weekend before and after the conference, for those interested in extending their visit in Charleston .  The reservation deadline is May 15, 2009, and the hotel may be contacted (toll free) at (877) 756-2121, or at http://www.francismarionhotel.com.

The Southeastern Claims Association presents professional, high quality presentations for the rail and utility industries.  This conference remains the choice of many railroad claims professionals annually.  All pertinent information is available on the Southeastern Claims Association website:  http://southeasternclaims.us.  Come and enjoy the conference….and Charleston , truly one of America ’s most charming cities.

GENERAL CLAIMS CONFERENCE, 32ND ANNUAL MEETING

The AAR General Claims Conference Executive Committee held its winter meeting by teleconference on January 30, 2009, and in light of cost-cutting measures by industry members, decided it would be prudent to postpone this year’s previously scheduled General Claims Conference, which had been scheduled for September 30, through October 2, 2009 at the Westin Hotel in Kansas City , Missouri . 

Despite the economic downturn, the Executive Committee is optimistic about the long-term outlook for the future.  The General Claims Conference remains one of the foremost educational claim, legal, and industry partner experiences.  Further plans for the conference are now scheduled for 2010.

RAILROAD CLAIMS AND LIABILITY SEMINAR, JULY 15-17, 2009

The 16th Annual Railroad Claims and Liability Seminar will be hosted by Massachusetts Bay Commuter Railroad Company in Boston , Massachusetts at the Sheraton Boston July 15-17, 2009.  Attendees are invited to start the conference on July 15 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 16 at 8:15 am and will continue on the 17th.

This seminar is attended by 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 Michael Morningstar at 617-222-8034, or email:  mike.morningstar@mbcr.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

Trespasser — Bilateral Above-The-Knee Amputations.  $4.2 Million Gross Verdict.  This 44-year old male trespasser was struck by a UP train on the railroad right-of-way near Dexter , MO on July 6, 2003, resulting in amputation of both legs above the knees.  At the hospital, following the accident, plaintiff’s blood alcohol reading was 0.234.  Plaintiff contended that he would not have been injured if the railroad had applied the emergency brake earlier and had sounded a warning when the crew first saw him on the tracks.  The railroad contended that plaintiff’s own actions were the cause of the injuries and that the horn had been sounded immediately when he was seen by the crew.  The case was tried in the St. Louis Circuit Court for six days.  When the case was given to the jury, the parties entered into a high/low agreement of $750,000/$250,000.  After three hours of deliberation, the jury returned a verdict of $4.2 Million, assessing the plaintiff with 85% fault.  This resulted in a payout to the plaintiff in the amount of $630,000, within the range of the high/low agreement.  Clanton Perry v. Union Pacific Railroad Company

FELA – Remote Controlled Train Stops Suddenly When Battery Falls From Remote Control Unit.  A 28-year old CSX engineer claimed disabling injuries sustained when he was thrown from a car because of slack action when the remote control unit failed.  This failure was caused when the battery became dislodged from the remote control unit.  At the time, the engineer was operating a 16-car train at the Osborn Yard in Louisville , KY.   When the battery fell from the remote control unit, the train went into emergency, throwing plaintiff off the car he was riding.  Plaintiff was rendered temporarily unconscious.  The railroad denied liability, claiming that plaintiff’s injuries were pre-existing.  Jury awarded a total of $2.3 Million.  John McLaughlin v. CSX Transportation Company

FELA – Repetitive Stress Claim Rejected by Texas Jury.  The plaintiff a forty-year railroad trainman, claimed a rotator cuff tear was caused by years of railroad work.  He further claimed that the railroad, Union Pacific, had failed to implement ergonomic training in his department, though this training was given to other departments.  He further claimed that the railroad discouraged injury reporting.  The jury deliberated for 1 ½ hours before delivering a defense verdict.  Conrad Lindquist v. Union Pacific Railroad.

FELA – Whole Body Vibration Claim Accepted by Texas Jury.  What Texas juries giveth, Texas juries taketh away.  Plaintiff in this case worked for the ATSF for 31 years prior to retiring in 2004.  Shortly after retiring, he filed a lawsuit against ATSF alleging that the railroad was negligent in providing him with locomotives which were rough-riding and exposed him to whole body vibration.  According to the plaintiff, his injuries included degenerative changes in his low back.  The railroad denied liability, claiming that plaintiff’s age, failure to follow safety rules, and off-duty activities caused any problems he had.  The jury deliberated for 2 ½ hours before returning a verdict in favor of the plaintiff in the amount of $1.2 Million.  Robert Cook v. BNSF Railway.

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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.