Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, May 9, 1993 TAG: 9305090048
SECTION: VIRGINIA PAGE: A-8 EDITION: METRO
SOURCE: DANIEL HOWES STAFF WRITER
DATELINE: LENGTH: Long
Why?
Union officials and attorneys who represent injured workers say injuries are more severe because railroads, deregulated in the late '70s, have cut thousands from their payrolls to become more competitive. They also blame efforts to force trained workers to perform new, unfamiliar tasks, increasing the risks of injury.
Railroad officials and defense lawyers put it more bluntly: Plaintiffs' attorneys, armed with the 1908 Federal Employers' Liability Act, see big bucks in the deep pockets of the country's major railroads.
Of the $910 million paid out to FELA plaintiffs in 1991, the last year for which national figures are available, nearly $200 million went to plaintiffs' attorneys. Lawyers typically take 25 percent of the settlement, plus expenses; the percentage can rise to 40 percent if cases are appealed.
Railroads paid another $115 million in medical expenses for injured workers, according to the Association of American Railroads, and spent $173 million on internal administrative costs and outside legal fees.
Total FELA cost to the railroad industry in 1991: $1.2 billion.
"Anyway you look at it, injuries are declining, verdicts are rising - and so are the costs," said a spokeswoman for the Washington-based railroad trade group.
Last year, Norfolk Southern Corp. alone paid $77.5 million in verdicts and settlements to injured employees, officials said. In 1991, it shelled out $94.8 million; in '90, $96.2 million; in '89, $87.3 million; and in '88, it spent $98.2 million to settle claims.
FELA - commonly known as "feela" in railroad circles - allows workers to sue their employers for on-the-job injuries. Injured workers must prove the railroad was negligent, though lawyers familiar with both sides said the standard of proof generally is low. But a railroad may marshal evidence to prove the employee also was negligent, undercutting a worker's claim against the company.
Under FELA, which the nation's railroads would like to replace with a no-fault workers compensation system, there are no schedules of benefits as commonly found in state workers compensation laws. Nor are there guarantees that a worker may, in fact, be compensated for an injury.
FELA's unlimited awards often can end up being a gold mine for plaintiffs' attorneys. In Virginia, by comparison, the General Assembly placed a $1 million ceiling on medical malpractice lawsuits; the statewide average for automobile accidents involving back injuries is $105,000, according to Virginia Lawyers Weekly.
But under FELA, a back injury can be worth millions. Last month, a Roanoke Circuit Court jury awarded Ralph Hodges $4.7 million for a back injury he sustained in 1987 while working for Norfolk Southern Corp.
More typical, though, are personal-injury settlements averaging $49,000, said Rush Loving Jr., an Alexandria-based consultant who studies FELA cases nationwide. He, too, blames the skyrocketing payout rate in FELA cases on sympathetic juries, increased public attention to occupational illness issues, and aggressive marketing by plaintiffs' lawyers who are "working harder to increase the yield."
Key law firms around the country, often with longstanding ties to railroad unions, advertise in newspapers published where large numbers of railroad workers live and work. Some firms go so far as to fly clients to other cities for medical examinations, even surgery, by doctors with ties to the law firms.
The payouts continue to rise. And increasingly, it seems, juries around the country are helping.
In 1990, juries in 10 FELA cases awarded more than $1 million each to plaintiffs, according to rail industry statistics. In 1991, the last year for which figures are available, 13 verdicts in excess of $1 million were handed down.
The railroad industry, keen to reverse what it considers a disturbing upward trend in FELA payouts, has tried to fight back.
In 1988, a proposal to use Amtrak workers as a test case for a no-fault workers compensation system prompted the first congressional hearing on FELA in 50 years. A year later, a House subcommittee conducted its own FELA-related hearings.
In 1990, bills calling for the replacement of FELA with a state workers compensation system for rail employees were introduced in the House and Senate. The bills died, and both sponsors lost their bids for re-election.
Nationwide strikes in '91 and '92 focused railroad industry attention on labor agreements. The '92 stoppage, amounting to a nationwide lockout of rail employees, soured relations between the railroads and many in Congress. Now, with a Democrat in the White House for the first time in 12 years, the industry is rethinking its FELA strategy.
A few railroads have taken their own measures.
CSX Transportation Inc., a unit of CSX Corp. in Richmond, and Philadelphia-based Consolidated Rail Corp. instituted programs in 1990 that continue wage payments to injured workers so long as they make progress toward rehabilitation.
Generally, employees who accept the payments are not barred from suing their employer. Yet some lawyers and union officials, adamantly opposed to the programs, advise clients to refuse the payments.
Wage continuation "is discouraged by FELA lawyers because then they don't have as good an argument to make" when an apparently injured employee still is being paid, Loving said.
CSX maintained a wage continuation program until early this year before replacing it with a system administered by its claims department. The new program advances money to injured workers with the understanding it will be deducted from any future legal judgments against the railroad.
Norfolk Southern, considered especially hard-nosed with FELA cases, sees too much potential for abuse in wage continuation programs. It, too, gives advances to injured employees; the funds are not taxed because they are considered part of a personal-injury settlement.
Dan Anderson, Roanoke-based general chairman for the International Brotherhood of Firemen and Oilers, supports wage continuation for the CSX employees he represents. "It's some advantage to individual members who don't get into financial straits when they get hurt."
The downside, he said, is that injured workers often are ostracized by company officials. "If you do get hurt, you're on the outside looking in. They're more aggressive, more safety conscious. But pity the guy who gets hurt. A large portion of people who get hurt [while working for CSX] get fired. Norfolk Southern does it, too."
Railroad lawyers say FELA "end-of-the-line" settlements - deals in which the worker is declared disabled and can no longer work for the railroad - generally include a condition requiring the employee to resign.
But about 70 percent of the Norfolk Southern FELA cases in which employees receive compensation also end up with the workers returning to their jobs, according to a company source who asked not to be identified.
Still, the threat of dismissal, Anderson said, is enough for some workers to think twice before filing FELA claims against their employer.
The maintenance shops in Roanoke and Chattanooga, Tenn., "are full of the walking wounded. These people are afraid to report an injury because of the repercussions."
Staff writer Laurence Hammack contributed to this report.
by CNB