Volume 13 Issue 1                                                                                                                  January 2006


RAILWAY CLAIM SERVICES, INC.                                  Our 19th Year of Service
















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 , or via email at 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. 


We hang the petty thieves and appoint the great ones to public office.  Aesop

When they call the roll in the senate, the senators do not know whether to answer “present” or “guilty”. Theodore Roosevelt"

The government is not the solution to our problems; the government is the problem."  Ronald Reagan in his first inaugural address.


The amounts of compensation subject to railroad retirement tier I and tier II payroll taxes will increase in 2006.  However, the tier I tax rate on employees and employers remains unchanged.  Under the Railroad Retirement and Survivors' Improvement Act of 2001, tier II tax rates are now determined annually by an average account benefits ratio.  Based on this ratio, the tier II tax rates on employees and employers will also remain unchanged in 2006.  Railroad unemployment insurance tax rates paid by employers will continue to include a 1.5 percent surcharge in 2006.

Tier I and Medicare Tax.--The railroad retirement tier I payroll tax rate on covered rail employees and employers for the year 2006 remains at 7.65 percent.  The railroad retirement tier I tax rate is the same as the social security tax, and for withholding and reporting purposes is divided into 6.20 percent for retirement and 1.45 percent for Medicare hospital insurance.  The maximum amount of an employee's earnings subject to the 6.20 percent rate will increase to $94,200 in 2006 from $90,000 in 2005, but there is no maximum on earnings subject to the 1.45 percent Medicare rate.  The increase in the amount of earnings subject to railroad retirement and social security taxes is based on indexing to increases in average national wages.

Tier II Tax.--The railroad retirement tier II tax rate on employees will remain at 4.4 percent in 2006, and the rate on employers will remain at 12.6 percent.  The maximum amount of earnings subject to railroad retirement tier II taxes, however, will increase to $69,900 in 2006 from $66,900 in 2005.  Tier II tax rates under the 2001 Railroad Retirement and Survivors' Improvement Act are based on an average account benefits ratio reflecting railroad retirement fund levels. Depending on this ratio, the tier II tax rate for employers can range between 8.2 percent and 22.1 percent, while the tier II rate for employees can be between 0 percent and 4.9 percent.

Unemployment Insurance Tax.--Employers, but not employees, also pay railroad unemployment insurance taxes, which are experience-rated by employer.  The basic tax rates range from a minimum of 0.65 percent to a maximum of 12 percent on monthly earnings up to $1,195 in 2006, up from $1,150 in 2005.  However, the Railroad Unemployment Insurance Act also provides for a surcharge in the event the Railroad Unemployment Insurance Account balance falls below an indexed threshold amount, and such a surcharge of 1.5 percent applied in 2004 and 2005.  Since the accrual balance of the Railroad Unemployment Insurance Account was $113.1 million on June 30, 2005 , which was less than the indexed threshold of $114.9 million, a surcharge of 1.5 percent will again be added to the basic tax rates in 2006, but will not increase the maximum 12 percent rate.

The unemployment insurance tax rates on railroad employers in 2006 therefore will range from 2.15 percent (the minimum basic rate of 0.65 percent plus the 1.5 percent surcharge) to a maximum of 12 percent on monthly compensation up to $1,195.

The 1.5 percent surcharge will not apply to new employers in 2006, and new employers will initially pay a tax rate of 4.03 percent, which represents the average rate paid by all employers in the period 2002-2004.

For 76 percent of covered employers, the unemployment insurance rate assessed will be 2.15 percent in 2006.


On November 3, 2005 The Association of American Railroads said that Federal Railroad Administration statistics show "significant gains for railroad safety in 2005." The AAR said data for this year's first eight months indicates an 11.6% gain in overall rail safety as measured by the train accident rate, and a 16.1% decline in employee injury rates from the same period in 2004--"the safest year for employees in the history of the railroad industry."

AAR President and CEO Edward R. Hamberger said that over the last 24 years, accident rates have declined by 63% and employee injury rates by 77%. "Much of this progress can be tied to the rail industry's investment in new technology and in employee training," said Hamberger.


Effective October 19, 2005 , The Federal Railroad Administration issued nationwide Emergency Order 24 requiring all railroads to modify operating rules and take other actions necessary to ensure that railroad employees who dispatch non-signal territory or who operate hand-operated main track switches in non-signaled territory restore those switch to the proper (normal) position after use.  Railroads must now retrain and periodically test employees on switch operating procedures, according to the order.  Employees must be briefed on using switches and must document every change in a switch's position.  The order instructs railroads to take "specific and immediate steps" within 30 days to end the problem of hand-operated track switches being left in the wrong position.


Transvestite:  A guy who likes to eat, drink and be Mary.

Deja Moo:  The felling that you've heard this bull before.  (Editor's note.  I think I can use this one.)


Washington - In November the House approved legislation that would take away a lawyer’s licenses if they file more than three frivolous lawsuits within the same judicial district.  Lawmakers approved the bill 228-184 in an effort to curb what advocates termed as “meritless claims” which crowd court calendars and raise insurance premiums.

Supporters said such lawsuits threaten small businesses, the economy and job creation.  The measure has the support of the White House, but the Senate is not expected to consider it this year.

Critics said the bill would scare off potential victims of corporate misconduct from filing legitimate lawsuits.  Specifically, the bill would require a losing plaintiff to pay attorneys' fees if a judge classifies a lawsuit as frivolous.

Lawmakers rejected a Democratic amendment that would have stripped the provision sanctioning lawyers and exempted cases involving discrimination charges.

### Don't tell me how hard you work, tell me how much you get done.  James Ling ###


ZURICH, Switzerland—Natural and man-made catastrophes have caused insured property losses of about $80 billion so far this year, making 2005 the costliest year ever for disasters, according to Swiss Reinsurance Co.

In its preliminary estimate of 2005 catastrophe losses, Swiss Re said natural and manmade disasters in 2005 caused financial losses of about $225 billion and resulted in the deaths of more than 112,000 people worldwide.

Swiss Re said about 90% of the total insured losses from disasters in 2005 were the result of storm and storm-related flood damage.

About $70 billion of insured catastrophe losses in 2005 occurred in regions surrounding the Gulf of Mexico , Swiss Re said in a statement.

Hurricane Katrina, which hit the Gulf of Mexico and caused damage and widespread flooding in several southern states in the United States , is estimated to have caused insured losses of about $45 billion, outstripping Hurricane Andrew in 1992 as the costliest catastrophe ever for insurers.


In October 2005 The Railroad Retirement Board Railroad said the employee count is back on track.   RRB said that railroads’ employee recruitment efforts, spurred more than a year ago by traffic growth and a large number of retirements, are paying off.  Rail industry employment continued to grow during 2005’s first six months, according to Railroad Retirement Board data.

As of June’s end, railroads employed 234,000 people — the industry’s highest figure since 2001’s end. The board recorded 227,000 employees in June 2004; 228,000 in December 2004; and 223,000 in December 2003.


Railway Claim Services, Inc.’s website contains useful information for our industry.  If you haven’t visited RCSI’s website recently, you may have missed some of the recently added content.

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 upgrading our website so it is a place for you to find the information you need.  If you have suggestions, comments, or questions, please feel free to contact RCSI Webmaster Dave Gardner.  We appreciate your feedback.


NEW YORK – As the first of the 75 million baby boomers reach age 60 in January, there's good news for the men.  They are catching up to women in life expectancy.

A new "Longevity Index" by Credit Suisse First Boston shows that while women still live four years longer on average, men are gaining twice as fast in the age race. Medical experts say women are working harder, smoking more and undergoing more stress, which leads to the No. 1 killer—heart disease.

The Longevity Index is designed to help insurance companies and pension funds hedge their risk as both men and women live longer—and cost more—in pension payments and lifetime annuity payments. Women can now expect an average 82.6 years of life, the index shows, while men can look forward to 78.1 years.

But over the last 10 years, the average annual rate of improvement for men has been 2%; for women, it's slightly less than 1%, the index shows.  For the 22 years covered by the index, the expected average lifetime for men has gone up by 3.7 years; women's climbed only 1.7 years.

While some male-dominated causes of death such as alcohol, drugs, firearms and AIDS have dropped in recent years, the biggest change has been in the toll taken by the traditional killers: heart disease and cancer.

Men's lung cancer rates have been declining since 1990, while women's were rising, statistics show.

The Credit Suisse index shows the greatest advances have been made in the 50-year-old age bracket, where heart disease frequently fells middle-agers.

Despite the gains, it's likely that women will continue to outlive men, said Robert Anderson, chief of mortality statistics at the National Center for Health Statistics. Because men engage in more risky behavior.


London – According to December news reports from London , the driver of a Sheffield to London express train was fired after he stripped naked at the controls of his locomotive and snapped a picture of himself in the buff.

According to early reports a spokesperson for Midland Main Line said:  “The driver was suspended straight away while we held a full investigation.”  The driver was later dismissed.   The driver, whose name was not disclosed, was believed to have used his camera-fitted mobile phone to snap the photo.  The photo was then sent on to a Midland Mainline railway employee, who informed railroad officials. (Editor:  We shall refrain from commenting on this one, although we would like to do so.)


Employee  - Torn Rotator Cuff –Jury Returns $4.7 Million Verdict in New York .   On November 9, 1999 , the plaintiff, a forty-seven year-old conductor, was attempting to remove an end-of-train device from the rear car of a CSX train when he claimed that it suddenly and unexpectedly dropped from the coupler causing his right arm to be pulled downward.  The employee continued to work, but alleged to have experienced some difficulty applying handbrakes on the same train.  Before marking off for the night, plaintiff reported the injury.  A torn rotator cuff was subsequently diagnosed.  Plaintiff re-tore the cuff on two other occasions and required a total of four surgical procedures.  According to his physician, plaintiff was left with a chronic rotator cuff tear which will require shoulder replacement in the future.  The jury found in plaintiff’s favor with respect to his negligence claim (as to the end-of-train device) and also in his favor on the SAA claim (with respect to the handbrakes).  The injury was apportioned ninety percent to the end-of-train devices and ten percent to the handbrakes.  Damages of $4.7 million were assessed.  Robinson v. CSX Transportation, Inc., Albany County (NY) Supreme Court, Case No.____. 

Employee - Torn Rotator Cuff – Defense Verdict.  According to testimony at trial the plaintiff, a fifty-five year-old conductor, was required to pop open the trap door between platforms in the train station. In order to do so, she would step on a plunger mechanism, lifting the door and pushing it against a wall. As she did so, the door bound up about halfway through the process.  Plaintiff’s shoulder slammed against it. She claimed to have suf­fered a torn right rotator cuff.  According to plaintiff, she was unable to return to railroad work in any capacity.  She faulted Amtrak for failing to properly maintain the door.  The defense denied liability and claimed that plaintiff’s own negligence in failing to follow rules which indicated that it should be expected that a trap door would bind.  Moreover, according to the railroad, it was the duty of the conductor and assistant conductor to inspect the equipment.  The rail­road also contested the cause of injury, asserting that plaintiff had degenerative changes in the shoulder prior to the in­cident.  According to The Massachusetts, Connecticut , Rhode Island Verdict Reporter, the jury deliberated for four hours before returning a defense verdict.  Linda Goyette v. National Railroad Passenger Corp., Suffolk County (MA) Superior Court, Case No. SUCV2002-00155. Edward P. Harrington, Boston , MA for defendant.

Employee – Torn Rotator Cuff – Defense Verdict.   According to testimony at trial the plaintiff, a forty-four year-old trainman/conductor, was carrying a lantern as he climbed down a railcar ladder at about 2:30 a.m. when he lost his footing and fell to the ground.  The fall allegedly resulted in a torn rotator cuff, injury to the elbow, and a carpal tunnel in­jury.  The employee-plaintiff claimed that he was unable to return to work as a result of the injury.  He alleged that the injury took place because he lighting was inadequate and he could not see where he was stepping. The employee acknowledged that he was issued a railroad lantern, but claimed that it did not provide sufficient light to see where he was walking, and that lighting in the yard did not meet industry stan­dards.  According to published accounts, the jury returned a defense verdict. Howard Richardson v. Winston-Salem Southbound Railway Co., Forsyth Co. (NC) Superior Court, Case No. 02- CVS -8503.  William W. Walker, Winston-Salem , NC for defendant.

Passenger - Commuter Train Fails To Stop After Passenger Suffers Heart Attack.  $3.9 Million.   On July 30, 2002 , the plaintiff’s decedent, a sixty-one year-old coastal scientist employed by the U.S. Geological Survey collapsed while riding an MBTA commuter train.  The circumstances of this event was widely reported, and covered as a national news event.  According to the information in the widely reported news story, the train continued to make scheduled stops despite pleas from other passengers that medical help was needed.  More than twenty minutes after the decedent collapsed, paramedics unsuccessfully used a defibrillator at the Back Bay Station to try to revive him.  MBTA settled the case for $3.9 million three weeks before trial.  Marlene V. Allen, Executrix of the Estate of James R. Allen, Ph.D., v. Mas­sachusetts Bay Transportation Authority; National Railroad Passenger Service; CSX Transportation, Inc., U.S. District Court, District of Massachusetts, Case No. 04-12080-PBS.

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) 967-1788 .

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:  731-967-1788 or visit us on the Web at www.railway-claim-services.com


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