Lexington, TN (10/97) – This issue of the newsletter comes just
before the 1997 "Short Line" convention in Dallas, which is itself the week
after the AAR General Claims Conference in San Antonio. It is good that we can
gather in an organized fashion such as these to learn from our associates in the industry;
to learn from those in similar roles, or sometimes different roles. This will be
Railway Claim Services, Inc.'s 9th consecutive ASRRA national convention. We have
learned so much, and we thank you for the opportunity to serve.
We live and work in a unique time. The railroad industry and those
industries that serve the railroad industry are undergoing an evolution of unimaginable
proportions. Providers are getting better, and because of it railroading is getting
better, for customers, employees, owners and all associated with railroads.
As railroads depend upon a solid customer base, so do we providers depend
upon the railroads we serve. And that we will never forget. Railway
Claim Services, Inc.'s success is dependent upon the quality of our work. Thanks for
allowing us to grow with you. I look forward to seeing you in Dallas.
FELA – A Brief Introductory
First of all, FELA does not really stand for "Federal Employment for
Lawyers Act". While this does seem true in practice, the actual meaning is the
"Federal Employers' Liability Act". The FELA was enacted by Congress in
1908 and predates by three years (Wisconsin in 1911) all existing workers compensation
legislation. In order to understand FELA, one must go back in time to the turn of
the century and examine the circumstances that led up to its enactment. In 1901, the
United States of America consisted of 45 states. The nation's economy was agrarian
based. Airplanes were science fiction. Automobiles were only a rumor.
Paved roads were a rarity. The railroad was king. Any product moving overland
for any distance moved by rail. Anytime people traveled any distance, they traveled
by rail. Other than farming, the railroads and the industries set up in support of
the railroads were the largest source of employment in the United States. By
themselves, the railroads directly employed 10% of the nation's labor force. The
owners of the railroads weren't businessmen or business owners, they were
"Barons". They lived and acted like royalty. And, for the most part,
they treated their employees and their customers like serfs. This cavalier attitude
on the part of the railroad barons alienated and infuriated the general public. The
barons, however, controlled enormous amounts of money and the political power that that
money assures. Around the turn of the century, bowing to public pressure, many
states experimented with some type of no-fault workers compensation legislation. The
political might of the rail industry derailed each and every attempt at such
legislation. The public outcry continued to grow.
In 1894, an essay entitled "The Octopus, A History of the
Construction, Conspiracies, Extortions, Robberies and Villainous Acts of Subsidized
Railroads" was written by John R. Robinson. This, along with other books and
critical newspaper articles kept a steady and mounting pressure on politicians. In
1901, President William McKinley was felled by an assassin's bullet. He was
succeeded by one of the most dynamic and independent presidents that this country has ever
known, Theodore Roosevelt, also known as the "Trust Buster". All the money
and power of the rail barons could not prevent Teddy from taking action in some form.
Still violently opposed to the concept of "no-fault", the railroads threw
their support behind a liability based compensation package. That package was, and
is, the FELA. While far from perfect, the FELA was a starting point for the
protection of workers injured while working. In 1911, the first true workers
compensation legislation was passed in the State of Wisconsin. At that time, the
railroads had several opportunities available to them. They could have elected to
fall under the provisions of the state workers compensation acts as they applied.
They could have elected to adopt the provisions of the Wisconsin workers compensation act
as a revamped version of the FELA. Or, they could elect to remain with the liability
based FELA as written. In 1911, American society was far less litigious than it is
today. Railroading, while dangerous, was no more dangerous than farming,
construction or factory work. Under FELA, lawsuits were far fewer than today, jury
awards were much lower, and the few attorneys around were reluctant to spend their time on
unproductive ventures. The rail barons at the time examined their options and came
to the conclusion that their bottom line was less affected by FELA than it would be
otherwise with no-fault compensation. From a business point of view, this was the
correct decision for the times, and remained so for the next half century.
In the 1950's, the tide began to turn. By the 1970's, the tide was
out and the railroads were left high and dry. America now had a nationwide
interstate highway system that, in effect, subsidized the competing truck lines. The
public had the option of safe and rapid air travel. And it seemed that every family
in the nation had access to at least one automobile. The earlier excesses of the
rail barons had led to strict regulation of their industry. Burgeoning technological
advances had rendered their equipment and tracks obsolete. The steam locomotive gave
was to diesel electric. The standard 40-foot boxcar had been replaced by the 40-foot
tractor-trailer. The captive customer now had the option to ship by truck.
Ninety-pound jointed rail had to be replaced. All these required expensive capital
outlays in a period of diminished market share. The railroads now commanded little
power and less political influence. The 1970's saw the merger of many lines, and the
failure of others. FELA had matured. Our society had become overly
litigious. Lawsuits were now commonplace, jury awards magnanimous, and attorneys
specializing in FELA could be found in the yellow pages of any telephone book in the
country.
In 1997, FELA, as a form of workers compensation, is obsolete, unjust and
unevenly applied. In theory it is unjust to the employee. In practice, it is
unjust to the railroad. In theory, an injured railroad employee is owed nothing for
a work-related injury unless he can prove some fault on the part of the railroad. Of
course, in today's society where no one is responsible for their own actions, the mere
fact that a person has suffered an injury is in itself seen as proof that some other
person or entity is at fault. And, if that other entity is a faceless corporation,
then By God, they should be made to pay! The current situation with the FELA should
be entitled "The Sins of Our Fathers". The railroads helped to create the
FELA in lieu of a more equitable no-fault system. The railroads had opportunities to
reform the FELA along the lines of the LHWCA (Longshore and Harbor Workers Compensation
Act), but failed to do so.
Now, the political power is held, not by the rail barons, but by the legal
(sic) barons. Attorneys control the Judicial Branch of our government.
Attorneys are disproportionately represented in the Legislative Branch. The
President, Vice-President and First Lady are attorneys. FELA is an unjust system for
compensating injured workers in our industry, but it is a system that will never be
repealed. FELA was created out of a sense of selfishness on the part of the industry
and is perpetuated out of a sense of selfishness on the part of the plaintiff's bar.
Long live the FELA.
Following the last newsletter, I received a couple of calls suggesting that I present a
more balanced view of FELA verdicts. It seems that all I mention here are those
verdicts that go against the railroads. It was suggested that I write up some claims
in which the railroads prevail. Good idea. It isn't all Doom and Gloom.
There are instances where defense counsel for the railroads fight the good fight and
win. An outright win is rare, but the attorneys in the white hats are frequently
able to reduce the jury awards, or obtain jury verdicts less than that previously offered
by the railroads in direct settlement. I promise to cover some of those instances in
this newsletter. But, before I get to that, I must mention the outrageous award
levied against CSX Transportation last month in New Orleans. Two point five
Billion Dollars. That's $2,500,000,000.00. How many people had to die to
justify a verdict that high? Actually there were no deaths. Well, how many
people were seriously injured? Again, the answer is – None. There was
property damage, but it was minimal. What, then, was the claim. Basically, on
September 9, 1987, a railroad tank car containing butadiene began to leak and burn in the
CSX yard in New Orleans. Fire officials decided that the safest course of action was
to allow the fire to burn itself out. While there was no immediate danger,
approximately 8,000 residents near the yard were evacuated from their homes for
approximately 36 hours. Attorneys representing those residents claimed that they had
sustained mental anguish, inconvenience and physical pain and suffering as a result of the
evacuation. A New Orleans jury accepted that argument and awarded $2.5 Billion
against CSX and another $1 Billion against other companies involved with the tank
car. Needless to say, this verdict is being appealed and will likely be drastically
reduced.
FELA - BNSF – A carman claims injury because he was
provided with an improper tool with which to remove a cross key. He was forced to
use a steel bar rather than a newly available hydraulic ram. Testimony from fellow
workers and from defense ergonomic expert indicated that a steel bar was the tool of
choice for this particular operation. Defense verdict. White v. Burlington
Northern Railroad Company, Shelby County (TN) Circuit Court.
FELA – CR – This 38 year old Conrail employee lost both legs
and his right arm when he was run over by a train that moved unexpectedly while he was
walking between two cars. He claims no prior warning and no safety measures in
effect to prevent such an occurrence. The jury awarded $6.5 million, reduced by 29%
for the employee's own negligence for a net verdict of $4.5 million. Blasena v.
Consolidated Rail Corp., U.S.D.C., New Jersey.
FELA – UP – Engineer struck in the head by a beer bottle
thrown into the locomotive cab window. Knocked him out of his seat. Claimed
head and back injuries. He sues the railroad and the juvenile who threw the
bottle. The jury finds the juvenile 5% at fault for throwing the bottle and the UP
95% at fault for not having air conditioners in the locomotives so that the bulletproof
windows could have been closed. The jury awarded $1.6 million. Richard Weaver v.
Union Pacific RR, USDC, Southern District of Texas.
FELA – ATSF – This 51 year old trainman stepped on a hose
next to the rail while detraining from a locomotive in the switchyard. He suffered a
knee injury and underwent arthroscopic surgery that left him unable to return to
work. The jury disregarded the fact that expert testimony attributed much of problem
to advanced preexisting arthritis. They awarded $2.8 million. Manuel Calderon
v. ATSF, Los Angeles County (CA) Superior Court.
FELA – CSX – Another knee case. This switchman injured
his left knee while attempting to throw a switch. Although he was not permanently
disabled, he as forced to seek a more sedentary job. This Kentucky jury awarded
$270,000. Darrell Brown v. CSX, USDC, Eastern District of Kentucky.
FELA – PTRA – This 51-year-old engineer claims cumulative
trauma to his back from a defective seat in the locomotive. As a result of his
injury is was permanently disabled from returning to work. The jury evidently found
more fault with his story that they did with the locomotive seat. Defense
verdict. Jaffery Salmons v. Port Terminal Railroad Association, Harris County (TX)
District Court.
FELA – SP – This is an important case as it further defines
the courts views on psychological injury and the "zone of danger" as addressed
in Gottshall. This engineer has approximately 17 years experience as a hostler and
yard engineer for the DRGW. Following the merger with SP, there was a need for more
road engineers. The plaintiff made about 15 road trips as a trainee and was then
told that he was not qualified to operate a train through mountainous territory without a
supervisor present in the locomotive. He returned to his yard job. About 4
months later, he was called to take a train from Grand Junction to Denver. Knowing
he was unqualified, both he and his conductor requested a pilot. Their request was
refused. He was ordered to take the train. Although the trip was without
incident, he was terrified during the entire trip. Two days later, he was ordered to
make a return trip to Grand Junction. This time, he was accompanied by a road
foreman of engines. As he approached a long tunnel, he received a restrictive
signal. He slowed the train and entered the tunnel. As he came to the end of
the tunnel, his conductor and the road foreman saw the end of a stopped train just outside
the end of the tunnel. Someone yelled "Train!". He placed the train
into emergency and dove into the floor of the locomotive. The two trains came
together at a very slow speed and with little damage. The entire crew was suspended
for 90 days as a result of the accident. The plaintiff began to experience
nightmares. He suffered panic attacks at the sight or sound of a train. When
he returned to work, he experienced a loss of confidence. He lacked confidence and
the ability to make decisions. He was fearful and combative with co-workers and
supervisors. While operating a train, a water bottle that had been inadvertently
placed on the engine heater, exploded. The engine compartment filled with steam and
the hot water burned his leg. He placed the train into emergency. The burn to
his leg, while serious, affected him less than the psychological impact of the
incident. He was examined by a psychologist and a psychiatrist. The diagnosis
was ADD, aggravated by the incidents and PTSD. He was removed from service and
remained out of service for approximately 2 years. When released by his own doctor
to return to work, the railroad's chief medical officer refused to allow him to do
so. During the trial, plaintiff's attorney argued that the plaintiff clearly came
within the Gottshall "zone of danger" because he absolutely believed himself to
be in imminent peril of immediate physical harm, even though there was no physical
injury. This case was complicated by the fact that there were two physical injuries,
although neither was disabling. The plaintiff was unable to return to work due to
his mental condition. There was testimony relating to the psychological injury, but
no interrogatory was submitted to the jury to specifically address the existence of a
"zone of danger". This is a pivotal case, and one you should ask your
legal counsel to review if faced with a claim of emotional distress in conjunction with a
physical injury. The total award from the jury was $1.5 million. The cite
is, Dan Bolton v. Southern Pacific Railroad Co., Denver (CO) District Court.
RCSI welcomes your input. If you have any questions or comments of interest to
our industry, please contact Dave Gardner at (901) 967-1796 or FAX your message to (901)
967-1788.
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?
Railway Claim Services, Inc. 52 South Main Street Lexington, Tennessee
Phone (901) 967-1796
Fax (901) 967-1788
