COMMENTARY FROM THE EDITOR

POINTS TO PONDER

MORE RAILROAD HISTORY

LIBERTY MUTUAL CLAIMS COST RESEARCH

SHORTLINES SEEK TAX RELIEF

THIS AND THAT ACROSS THE COUNTRY

QUOTABLE QUOTES

QUARTERLY TOPIC

POINTS OF LEGAL INTEREST

RCSI INFORMATION

COMMENTARY FROM THE EDITOR

Have you ever wondered why railroad employees are covered by the Federal Employers Liability Act (FELA), passed by Congress in 1908.  In 1907 there were 4,533 employee fatalities in the United States .  Of course technology is the most important difference between railroads in 1908 and railroads today.  In 1908 railroad service was at the top of the most dangerous industry, and there were no workers compensation laws (WC) in the USA .  Congress responded with the only remedies they knew at the time, which was a fault based statute.

However, times have changed.  We have gone from one extreme to another.  Railroads are now as safe as the average industry and the FELA is out of date.  In my opinion huge verdicts are rendered where they are not indicated, especially in select venues. 

When I started handling claims for the L&N Railroad in 1967 80% of my work involved outside claims such as crossing accidents, trespassers, licensees, etc.  Today most of the significant claims are FELA claims, and the administration and defense costs are considerable.  The very nature of the FELA makes for an adversarial relationship, which does not promote safety.  Although I have never worked with WC claims I cannot imagine that the cost for administering a WC program would approach that of FELA.  Michael A. Redden, Editor

POINTS TO PONDER

Life has two rules:  Number one, never quit; Number two, always remember rule number one.  Duke Ellington

Everyone is kneaded out of the same dough, but not baked in the same oven.  Jewish Proverb

Before you throw water over the embers of a relationship, be sure you don't need the warmth.  Tom Payne

Man cannot discover new oceans unless he has the courage to lose sight of the shore.  Andre Gide

Blessed are those who can give without remembering and take without forgetting.   Elizabeth Bibesco

Grace isn't a little prayer you chant before receiving a meal, it's a way to live.   Jackie Windspear

Words are like bullets; if they escape, you can't catch them again.   African Proverb

Life is an escalator:  You can move forward or backwards; you cannot remain still.  Patricia Russell-McCloud

He who slings mud, loses ground.    Anonymous

Personality can open doors, but only character can keep them open.    Elmer G. Letterman

By the time we realize our parts were right, we have children who think we're wrong.     Guillermo Hernandez

A person without a sense of humor is like a wagon without springs, jolted by every pebble in the road.   Henry Beech.

When life knocks you down, try to fall on your back because if you can look up, you can get up.   Les Brown

I decided to give up the past in order to live the future.   Gloria Attar

A wound heals but bad words never fade.   Philippine Proverb

A man of God in the will of God is immortal until his work on earth is done.  Unknown

Tact is the knack of making a point without making an enemy.   Howard W. Newton

MORE RAILROAD HISTORY (?)

Does the statement, "We've always done it that way" ring any bells...?
The US standard railroad gauge (distance between the rails) is 4 feet, 8.5 inches. That's an exceedingly odd number.
Why was that gauge used?
Because that's the way they built them in England , and English expatriates built the US Railroads.
Why did the English build them like that?
Because the first rail lines were built by the same people who built the pre-railroad tramways, and that's the gauge they used.
Why did "they" use that gauge then?
Because the people who built the tramways used the same jigs and tools that they used for building wagons, which used that wheel! spacing.
Okay! Why did the wagons have that particular odd wheel spacing?
Well, if they tried to use any other spacing, the wagon wheels would break on some of the old, long distance roads in England , because that's the spacing of the wheel ruts.
So who built those old rutted roads?
Imperial Rome built the first long distance roads in Europe (and England ) for their legions. The roads have been used ever since.
And the ruts in the roads?
Roman war chariots formed the initial ruts, which everyone else had to match for fear of destroying their wagon wheels. Since the chariots were made for Imperial Rome, they were all alike in the matter of wheel spacing.
The United States standard railroad gauge of 4 feet, 8.5 inches is derived from the original specifications for an Imperial Roman war chariot. And bureaucracies live forever.
So the next time you are handed a spec and told we have always done it that way and wonder what horse's rear end came up with that, you may be exactly right, because the Imperial Roman war chariots were made just wide enough to accommodate the back ends of two war horses.
Now the twist to the story...
When you see a Space Shuttle sitting on its launch pad, there are two big booster rockets attached to the sides of the main fuel tank. These are solid rocket boosters, or SRBs. The SRBs are made by Thiokol at their factory in Utah . The engineers who designed the SRBs would have preferred to make them a bit fatter, but the SRBs had to be shipped by train from the factory to the launch site.
The railroad line from the factory happens to run through a tunnel in the mountains. The SRBs had to fit through that tunnel. The tunnel is slightly wider than the railroad track, and the railroad track, as you now know, is about as wide as two horses' behinds.
So, a major Space Shuttle design feature of what is arguably the world's most advanced transportation system was determined over two thousand years ago by the width of a Horse's Rear End.

Okay, that’s the story, as has been widely circulated, and I for one have been quick to accept it as interesting and true, but it turns out to be an Urban Legend, or at least, mostly an Urban Legend.  Here's the cite:  http://www.snopes.com/history/american/gauge.htm  ....................  But, I liked it, and thought you might, so I included it.

LIBERTY MUTUAL CLAIM COST  RESEARCH   

The direct cost of claims from the 10 leading disabling work-related injuries and illnesses grew 8.3 % between 1998 and 2000 outpacing inflation, according to Liberty Mutual Insurance Company research.  Employers paid $42.5 billion in wage-loss and medical payments in 2000 and three types of injuries were responsible for 51% of the cost, the Boston-based insurer reported in its 2003 Workplace Safety Index.  Overexertion injuries nationwide cost employers $11.9 billion in direct cost in 2000, while falls on the same level cost $5.4 billion and bodily reaction, such as bending or slipping without falling cost $4.4 billion.

The cost of disabling workplace injuries defined as those injuries resulting in at least six days off work grew faster than inflation, said Karl Jacobson, a Liberty Mutual senior VP and one of the study's author, during a gathering recently Risk & Insurance Management Society Inc. Annual Conference and Exhibition.  Adjusted for inflation, the direct cost of claims from disabling workplace injuries still grew 2.5%, he said.  It's a big, big economic burden to businesses, and it's growing, he said.  By identifying the 10 leading causes of disabling workplace injuries, however, employers  can target the problems, Mr.  Jacobson said, noting that every employer is different.

The next seven leading causes of disabling workplace injuries in 2000 and their direct costs, in descending order, were:

·     Falls to a lower level, such as from a ladder or scaffold, $3.6 billion.

·     Being struck by an object, $3.5 billion

·     Repetitive motion, $2.8 billion

·     Highway accidents, $2.3 billion

·     Being caught in or compressed by equipment, $1.8 billion

·     Being struck against an object, such as walking into a door frame, $1.7 billion

·     Assault and violent acts, $500 million.

Although the top 10 disabling injuries represent 89% of the total direct costs paid by employers in 2000, they only represent 18% of all workers compensation claims filed in 2000, Jacobson said.  The full results of the Liberty Mutual Workplace Safety Index are available at www.libertymutual.com.

SHORT LINES SEEK TAX RELIEF

Short line rail advocates have renewed efforts on Capitol Hill to win assistance in rehabilitating their rail lines,  Representatives of small  and regional railroads are backing for Rep. Jerry Moran (R. Kan) that would provide tax incentives for short lines that invest in their infrastructure.  Under the Local Railroad Rehabilitation and Investment Act. (H/R/8760.)  Class II and III railroads would be eligible for tax credits equal to the amount they invest in track maintenance in a given year.  The railroad's credit could not exceed $10,000 per mile of track it owns or leases.

American Short Line and Regional Railroad association (ASLRRA) President Richard Timmons endorsed the bill at a recent House Transportation and Infrastructure Committee hearing estimating that the credits could generate $350 million for the small carriers.  Currently, about 3,500 miles of short line track cannot support new 286,000-pound rail cars and need to be rehabilitated Timmons said.  It would take nearly $7 billion to improve the nation's short line tracks to support the heavier cars.

"While we earn enough to maintain this track, we do not earn enough to make the investment necessary to make up for years of neglect that occurred when these lines were underperforming branch lines for the Class I's" Timmons told the committee.  At the end of the day, the short lines will pay the majority of this $7 billion.  But, we can't get to the end of the day without an initial shot of federal money," he said.  "We need to increase our traffic to generate the necessary investment income, but we can't increase the traffic if we don't make the investment.  It's a vicious circle that only federal assistance will help break."

Last year the short line industry backed a bill for Rep. Jack Quinn (R-N.Y.) that would have created a two-year, $350 million grant program to fund short line rehabilitation. That measure was approved by the House Transportation Committee, but never received a vote by the entire House after it became embroiled in a partisan squabble over Davis Bacon labor law protection.  The tax credit mechanism would avoid any Davis Bacon complications.

THIS AND THAT ACROSS THE COUNTRY               

(ASLRRA Meetings for the remainder of the year)

In regards to the American Short Line and Regional Railroad Association 2003 Railroad Liability Seminar, July 17-19-2003, Embassy Suites Napa Valley, Napa, California you can register by contacting Jacky Hardy.

jacklyn.hardy@railamerica.com.

2003 Southern Region Meeting, August 17, 2003 – August 19, 2003 .

2003 Central Pacific Region Meeting September 28, 2003 – September 30, 2003 .

2003 Eastern Region Meeting, October 19, 2003 – October 21, 2003

ASLRRA'S new address is 50 F Street, N.W., Suite 7020,Washington , DC    20001-1536

ASLRRA announced carloads were up 0.6% for the year.  Non-Class I railroads that reports to the AAR were up30.5% for the year as of April.  U.S. Intermodal traffic was up 8.7% for the year.  U.S. and Canadian intermodal traffic was up

as of April was up 0.5%, with 366.8 billion ton-miles compared to 364.9 billion ton-miles through the 13^th week of the year.

The Twenty-Sixth Annual Meeting of the AAR General Claims Conference will be held September 17-19, 2003 at Kananaskis Village , Alberta , Canada .  Registration Deadline is August 01, 2003 .  Canadian Pacific is the host railroad.  For further information or to register for the conference contact Roger L. Schrenk at:  Roger_Schrenk@cpr.ca, or 651-772-5917. Information about hotel amenities and area activities can be found at www.deltahotels.com.

Spoliation.  Spoliation is the destruction or meaningful alteration of evidence or potential evidence that interferes with a litigant’s ability to prove his or her case.  Three significant verdicts within the railroad industry, within the last twelve months, have made spoliation a hot issue.  We will try to address this more completely in future issues of this newsletter, but for now it is important to make sure that records following railroad accidents/injuries are retained in accordance with 49 C.F.R., Parts 200 through 268.  A finding of spoliation could result in a jury instruction to the jury that “. . . you may infer that the evidence is unfavorable to the party who could have produced it and did not.”

QUOTABLE QUOTES

I will always cherish the misconceptions I had about you.

I'm so miserable without you, it seems like you're here.

I drink to make other people more interesting.

Greed has no bounds.

Experts are like asparagus, you buy them by the bunch. 

If it walks like a duck, talks like a duck, and looks like a duck, it's a duck.

The Lord helps those who help themselves.

The truth doesn't come flying through the halls of justice; you have to drag it in by the heels

QUARTERLY TOPIC  -   "Handling Claims From A Hazardous Train Derailment"

The following is only a very BRIEF outline of this procedure.  But, hopefully it will provide “food for thought” and convey some of the issues involved in this type of situation.

Handling claims from a hazardous train derailment can be a challenge.  Establish liability first.  There could be negligence on a third party.  If not, the railroad is negligent.  When that has been determined, there are many things to do and I will attempt to hit the high points.  Of course, what you determine to pay depends on the seriousness of the derailment.  A derailment can cause injuries, death, property damage, evacuation, animal deaths and many other types of claims.

Select a convenient place to handle the claims.  A community center or vacant shopping center office are possibilities.

Run a notice in the paper concerning the dates and hours you will be open.  It's a good idea to remain open until 7:00 or 8:00 p.m. to catch the working folks.  After people return to their homes, one of the first things to do is establish the evacuated area through the local authorities. Obtain a map of the evacuated area and place it in a conspicuous place in the claims office. Document.  Document.  Document.  Make copies of driver licenses or other forms of identification and records to verify evacuees residence.  Have each claimant to fill out a form and list personal information and the damages they are alleging. 

Obtain a policeman or special agent for security.   That serves two purposes.  First, it serves as protection.  Second, it tends to defer anyone from filing a bogus claim or attempting to file two claims.   If animals or property are involved obtain the services of a veterinarian or county agent to assess the loss.  All claims are different but you must strive to be consistent.  Fortunately, most derailments consist only of evacuation.  Offer assistance where needed.  Pay the medical bills for goodwill.   There may be questions concerning the cause of the derailment but one thing for sure, the local residents are clear of any liability. 

On evacuation claims determine what you are going to pay as an inconvenience rate, per person, per night.  Overnight in a motel should require a receipt.  In fact, anything out of the ordinary should require a receipt.  Lost wages should be confirmed by each person on their company's letterhead.  Sometimes, if there is a large factory in the evacuated area, see if they will pay their employees and include it in their claim, if they have one.

On serious claims, personal injuries or fatalities, assign someone to handle those claims to a conclusion.  Obtain someone from the company that the hazardous material belongs to in order to verify any particular claim presented and hire an expert witness if necessary.  Do not entertain claims presented by someone trying to collect for a friend or relative who let them stay with them during the evacuation.  That could get out of hand.  If they feel obligated to someone they can pay them out of their settlement. How many claims people necessary for handling claims arising from the derailment will depend on the seriousness of the derailment.

And remember, if you need help, Railway Claim Services, Inc. stands ready to assist.  In the past year Railway Claim Services, Inc. provided claim services for six hazardous train derailments.  I have personally been involved in 14 of these accidents in my career, including the worse one at Waverly, Tennessee .  Sixteen people were killed, including the police and fire chiefs and many more sustained serious personal injuries.  Most sustained 2^nd and 3^rd degree burns.  There were eight target defendants but we never tried a case.

POINTS OF LEGAL INTEREST

Larry Eagan vs. CSX Transportation – U.S. District Court, District of Michigan at Flint , Case No. 01-CV-40096.  Conductor slipped on a metal "flag" sustaining a serious knee fracture and alleged, at age 50 he was permanently disabled.  Verdict for $2.3 million.

Marcus Mitchell vs. Union Pacific Railroad – Salt Lake City County (UT) District Court.  Carman suffers work-induced heart attack and permanent disability – Plaintiff alleged that he began experiencing chest pains while closing coal car dump doors, later suffering a heart attack.  Prior to trial the parties agreed on a high-low verdict.  Jury Verdict for Union Pacific Railroad.

Andy L. Yost vs. Burlington Northern and Santa Fe Railway Denver, CO District Court, Case No. 02-CV1093.  Employee alleges elbow injury in interaction with defective door.  Plaintiff alleged he was in the process of a locomotive door and he claimed the door handle and/or door latch mechanism was defective.  Alleged lost wages of $57,000.    Defense verdict for Burlington Northern and Santa Fe Railway.

Joe Jones vs. CSX Transportation – Pike County (KY) Circuit, Case No.00 CI1448.  Defective cabinet causes  radio to fall onto plaintiff's foot suffering injury to his big toe requiring three surgeries.  The radio fell because of a defect in the cabinet.  He was wearing protected boots   His liability theory covered both FELA and the Federal Boiler  Inspection Act.    $300,000 verdict.

David and Lisa Markley v. Outback Steakhouse, Inc., Delaware County Circuit Court, Indiana   (The following is from the Associated Press, June 27, 2003 )

MUNCIE, Ind. -- Jurors ordered the corporate owner of an Outback Steakhouse to pay $39 million to a couple severely injured when they were hit by an allegedly drunken driver who had just left the restaurant. 

David and Lisa Markley filed the complaint against the restaurant in 1999, two years after the accident.

The lawsuit alleged that the driver became intoxicated at a party celebrating the restaurant's grand opening. After he left the party, his car crossed a highway center line and collided with a motorcycle operated by David Markley.

Markley suffered broken bones that left him unable to return to his factory job. His wife, a passenger on the motorcycle, suffered internal and leg injuries that required more than 40 surgeries.

"She's in constant pain every day of her life," said the couple's attorney, Michael J. Alexander.

Attorneys for the restaurant chain said they expected to appeal Thursday's decision by the Delaware County Circuit Court.

Some witnesses said alcohol was served free to guests at the grand opening. Others said they paid a dime each for mixed drinks and beer.

The Muncie restaurant is one of more than 600 owned by Florida-based Outback Steakhouse Inc.

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.