Hot Topics in Crossing Litigation

By Robert L. Pottroff

This paper addresses three topics in crossing litigation that have seen a number of developments in recent years. Those topics are punitive damages, reflectorization, and a type of crossing signal and equipment malfunction known as a bobble.€

I. Punitive Damages

Punitive damages are an important tool for enforcing victims€™ rights in cases involving personal injuries at railroad crossings. Punitive damages also protect public safety by providing incentives to railroad companies to be aware of their obligations when railroad conduct impacts private individuals using railroad grade crossings. This section will discuss fundamental elements of common law claims for punitive damages involving cases where punitive damages were upheld. The basis for punitive damages will necessarily vary from state to state. No attempt will be made to address various limitations on punitive damages imposed by legislatures that may have been imposed after the cases cited herein were decided.

A. Wightman v. Consolidated Rail Corp. and Barber v. Union Pacific R. Co.

Two recent cases involving railroad grade crossing accidents awarded substantial punitive damages, which were upheld on appeal. In Wightman v. Consolidated Rail Corp., 86 Ohio St. 3d 431, 715 N.E.2d 546 (1999), cert denied, 529 U.S. 1012, 120 S.Ct. 1286 (2000), an award of $15,000,000 in punitive damages was assessed against Consolidated Rail Corporation. In Barber v. Union Pacific R. Co., 356 Ark. 268, 149 S.W.3d 325 (2004), cert denied, ___ U.S. ___, 125 S.Ct. 320 (2004), an award of $25,000,000 in punitive damages was assessed against Union Pacific Railroad Company.

Wightman is a 1999 decision affirming an award of $15 million in punitive damages. The factual foundation for the award in Wightman was a stopped freight train two hundred eight feet from the grade crossing, causing crossing gates and lights to activate. The stopped freight train had been waiting near the crossing approximately 90 minutes. The stopped freight train€™s conductor and brakeman saw that the gate arms were down and that highway traffic was proceeding around the crossing gate arms. The conductor and brakeman recognized the dangerous situation, but decided not to post a flagman at the crossing. The crew of the stopped freight train saw one train go through the crossing without incident, and the crew was then advised of another train approaching the crossing. A sixteen year old female driver and passenger approached the crossing, and followed a car over the crossing €“ the two were struck and killed by a train traveling close to 60 miles per hour. The jury determined that Conrail should pay punitive damages.

The Ohio Supreme Court in Wightman noted that [t]he trial judge believed a deterrent effect was necessary for Conrail because it was unwilling to accept responsibility for the collision. The trial judge found that Conrail€™s trial strategy €˜reflects a corporate attitude which clearly fails to recognize that the extremely dangerous practice which produced this catastrophic collision needs to be changed.€™€ 715 N.E.2d at 553. The factors that the Ohio Supreme Court looked at to justify the award were [a] substantial harm, a continuing risk, a deterrent effect, and an economically viable company.€ 715 N.E.2d at 553.

Literally and figuratively, we are dealing with the difference between a scratch and a cataclysm €“ the difference between a practice that might affect the value of an automobile by ten percent, and a practice that could result in massive property damage, physical injuries, and untold psychological pain. Conrail evinced a disregard of the danger it posed to the health and safety of motorists.€ 715 N.E.2d at 554.

According to the trial judge, this tragic case has done little to persuade Conrail to change, citing Conrail€™s €˜corporate attitude which clearly fails to recognize that the extremely dangerous practice which produced the catastrophic collision needs to be changed.€™€ 715 N.E.2d at 554.
The judge opined that €˜had the appropriate prosecuting authorities been made aware of all the facts and circumstances surrounding this tragic and unnecessary collision, those authorities would have been compelled to consider criminal prosecution, possibly for involuntary manslaughter.€™€ 715 N.E.2d at 555.

In considering the three guideposts set forth by the court in BMW, we find that Conrail had fair notice of the conduct that would subject it to punishment as well as the severity of the possible punishment. The award in this case was not grossly excessive and did not violate Conrail€™s due process rights.€
On January 19,1998, a garbage truck being driven by Chris Barber in the State of Arkansas was struck by one of Union Pacific€™s freight trains, causing substantial injuries to Mr. Barber. The trial court in Barber ruled that the Plaintiffs would be entitled to jury instruction on spoliation of evidence. The Defendant railroad sought a motion in limine as to the Barbers€™ excessive-speed, which was granted. However, the court denied the railroad€™s motion in limine as to Plaintiffs€™ claims of negligent failure to issue a €˜slow order.€™ The jury found that Union Pacific acted with malice or in reckless disregard of the consequences, thereby establishing liability€ for punitive damages. 149 S.W.3d at 334.

During the phase for jury assessment of the amount of punitive damages, the only evidence presented to the jury was that the net worth of the Union Pacific was $9.6 billion. The jury returned a punitive damages verdict of $25,000.000 against Union Pacific. The Barber court noted that in Arkansas, near-miss evidence is admissible €™upon a showing that the events arose out of the same or substantially similar circumstances.€™€ 149 S.W.3d at 337.

Overgrown vegetation played a significant role in the Barber case. The evidence in this case reveals that the vegetation at Crossing 123 was severely overgrown. The overgrown vegetation on the south side of the train tracks blocked the view of anyone driving north over the crossing. In addition, drivers had to inch forward to a point where their vehicles were almost touching the track in order to get a clear view down the track. Moreover, by the time a person was able to adequately check the track for trains, he or she was in the zone of danger.€ 149 S.W.3d at 341.

In examining whether there was sufficient evidence to support the award of punitive damages, the Barber court noted that an award of punitive damages is justified only where the evidence indicates that the defendant acted wantonly in causing the injury or with such a conscious indifference to the consequences that malice may be inferred.€ 149 S.W.3d at 343. In other words, in order to support this element of damages by way of punishment, it must appear that the negligent party knew, or had reason to believe, that his act of negligence was about to inflict injury, and that he continued in his course with a conscious indifference to the consequences, from which malice may be inferred.€ 149 S.W.3d at 343. In order to warrant a submission of the question of punitive damages, there must be an element of willfulness or such reckless conduct on the part of the defendant as is equivalent thereto. 149 S.W.3d at 343.

An assistant foreman for the Union Pacific testified in Barber testified that the railroad had stopped replacing all the bad ties on the railroad line, and instituted a cluster-buster tie replacement program. In a cluster-buster, the tie-gang would only replace one or two ties in a string of bad ties. Mr. Savage explained that the railroad then issued a slow order for the portions of track where the cluster-buster replacement was being performed. In connection with his work as a tie-gang foreman, Mr. Savage complained to his supervisor, Mac McCartney, about the 123 Crossing. Mr. McCartney went to the crossing, but stated that he was not in charge of fixing crossings. Mr. Savage was concerned that the overgrown vegetation at the crossing would prevent his men from seeing a train and that one of his vehicles crossing the tracks would get hit by a train. Mr. McCartney suggested that Mr. Savage place a flagger at the crossing before they attempted to cross it. According to Mr. Savage, one or two men would stand at the crossing and direct the vehicles to cross when it was safe. He also testified that in working for Union Pacific there was never any response to complaints about overgrown vegetation. 149 S.W.3d at 344.

A retired locomotive engineer also testified that he had informed the train master that the crossing in question was a hazard to railroad employees and the public. Mayor Willetta Carroll testified of her attempts to convey information to Union Pacific concerning the overgrown and unsafe crossing.

In addition to the evidence regarding the unsafe crossing, the following jury instruction was read to the Barber jury: In this case, the plaintiffs contend that by intentional conduct the defendant railroad failed to preserve voice tapes and track inspection records that should have been preserved. Therefore, you may, but are not required, to infer that the contents of the voice tapes and track inspection records would have been unfavorable to the defendant.

Based on the evidence detailed above, we conclude that there was ample evidence that Crossing 123 was hazardous and that Union Pacific was on notice of its condition. Here, direct evidence reflects that Union Pacific was notified of an imminent danger at Crossing 123. In addition, through the spoliation instruction, the jury was at liberty to infer that the destroyed voice tapes and track records contained remarks about the near misses testified to at trial and the dangerous condition presented by the overgrown vegetation. We conclude that the evidence in this case was sufficient to allow the jury to conclude that Union Pacific likely knew or ought to have known, in light of the surrounding circumstances, that allowing the vegetation to remain overgrown and allowing trains to pass through Crossing 123 at close to sixty miles per hour would naturally or probably result in injury, and that Union Pacific continued such conduct in reckless disregard of the consequences from which malice could be inferred. 149 S.W.3d at 346.

B. Other Cases Affirming Punitive Damages against Railroads for Crossing Accidents

The Appellate Court of Illinois for the Fourth District upheld a $170,000 punitive damage award for a grade crossing accident. In Hazelwood v. Illinois Central Gulf Railroad, 114 Ill.App.3d 703, 450 N.E.2d 1199 (1983), the court noted that under Illinois law, the question of whether there is sufficient basis for punitive damages is a question of law. 450 N.E.2d at 1205. Punitive damages should only be allowed where the defendant has acted willfully or with such extreme negligence as to indicate a reckless disregard for the safety of others. (Kelsay.) Such a conscious disregard for the safety of others may be termed willful and wanton and gives rise to the imposition of punitive damages. Id. Under Illinois law, punitive damages and the associated punishment it brings promote three purposes: (1) to act as retribution against the defendant; (2) to deter the defendant from committing similar wrongs in the future; and (3) to deter others from similar conduct. 450 N.E.2d at 1207.

In Hazelwood, the plaintiff introduced evidence that the grade crossing where he was injured was located on a heavily traveled road; that the crossing was in an unsafe condition; and that the crossing had been in that condition for several years. Hazelwood also introduced evidence to show that the railroad knew of the condition of the crossing. 450 N.E.2d at 1202.

In Robinson v. Seaboard System Railroad, Inc., 87 N.C.App. 512, 361 S.E.2d 909 (1987), the Court affirmed an award of $105,000 in punitive damages. In Robinson, there was testimony that the railroads operating rule required cars left standing on tracks were to be at least 100 feet from public or private crossings, but that the cars that caused the collision were approximately 30 feet from the crossing.

In Stromquist v. Burlington Northern, Inc., 112 Ill.App.3d 37, 444 N.E.2d 1113 (1983), the Court affirmed an award of $100,000 in punitive damages. In Stromquist, there was evidence to support a finding that the railroad had made a conscious, studied decision over a period of years not to upgrade safety devices at the 12th Avenue crossing. This decision was reached in spite of repeated notice, in one form or another, that reason existed to doubt the sufficiency of the cross-buck warning devices. Indeed, there was evidence from which the jury could have concluded that the railroad callously chose to jeopardize the public safety at the 12th Avenue crossing unless and until it was permitted to close 10th Avenue. To deliberately hold the public safety hostage and to demand a ransom before performing a duty imposed by law are acts which illustrate the particularly reprehensible want of care which will sustain an award of punitive damages. 444 N.E.2d at 1117.

The above cases represent the majority of the significant decisions within the past 20 years in the United States that address railroad grade crossing accidents where punitive damages were upheld. The above cases will provide guidance and support to those seeking to hold railroads accountable for their breach of duties to members of the public.

II. Reflectorization

A. Introduction

On March 4, 2005, the Final Rule on Reflectorization of Rail Freight Rolling Stock (hereafter the Rule) went into effect. The Rule was published on January 3, 2005 in the Federal Register, at Volume 70, Number 1, and will be codified at 49 CFR Part 224.

The Rule sets forth duties and procedures for railroad companies placing retroreflective material on locomotives and freight cars that operate over public or private highway-rail grade crossings. There are some exceptions to the Rule, such as for rapid transit equipment operating in urban areas not connected to the general railroad system, and locomotives and passenger cars used exclusively in passenger service. See, Section 224.3 of the Rule.

B. Preemption

The Rule specifically provides under section 224.13 for preemption of state based claims:

Under 49 U.S.C. 20106, issuance of this part preempts any State law, rule, regulation, or order covering the same subject matter, except an additional or more stringent law, rule, regulation, or order that is necessary to eliminate or reduce an essentially local safety hazard; that is not incompatible with a law, rule, regulation, or order of the United States Government; and that does not unreasonably burden interstate commerce.

In the background and supplementary information published in the Federal Register in conjunction with publication of the Rule, the Federal Railroad Administration noted the following, pertaining to the issue of preemption:

This section, which has not changed from that proposed in the NPRM, informs the public as to FRAs intention regarding the preemption effect of the final rule. While the presence or absence of such a section does not conclusively establish the preemptive effect of a final rule, it informs the public concerning the statutory provisions which govern the preemptive effect of the rule and FRAs intentions concerning preemption. This section points out that the preemptive effect of this rule is governed by 49 U.S.C. 20106 (section 20106). Section 20106 provides that all regulations prescribed by the Secretary relating to railroad safety preempt any State law, regulation, or order covering the same subject matter, except a provision necessary to eliminate or reduce an essentially local safety hazard that is not incompatible with a Federal law, regulation, or order, and that does not unreasonably burden interstate commerce. . . . . For example, FRA intends to preempt any State law or common law theory of liability which might attempt to impose a duty on freight rolling stock owners to apply additional retroreflective material other than that specified in this part, to apply retroreflective material on a different schedule than that specified in this part, or to inspect or maintain retroreflective material on a more frequent basis than that specified in this part. Inference of any duties not specifically set forth in this part may cause the costs of the rule to outweigh the safety benefits of the rule in direct conflict with the Congressional mandate of 49 U.S.C. 20148 (requiring that FRA initiate a rulemaking proceeding prescribing regulations requiring enhanced visibility standards for railroad cars if such regulations would likely improve safety in a cost-effective manner). In response to the NPRM, RSI specifically requested that FRA expressly state in the preamble to the final rule that FRA could not envision any set of circumstances where an additional State requirement could be justified under the local hazard exception contained in section 20106. Although FRA cannot envision any set of circumstances where an additional State requirement could be justified under the local hazard exception, FRA cannot anticipate every possible factual scenario that could exist. Also, it is important to note that although FRA can express its intention regarding preemption, the courts will make the final determination of preemption.

Preemption does not appear to exist for claims prior to implementation of the Rule. In Nye v. CSX Transportation, Inc., 300 F.Supp.2d 529 (N.D.Ohio 2004), a federal district addressed a claim by a railroad that there was implied preemption because of nonaction by the FRA to mandate reflectorization on railroad cars. In 1994, Congress passed legislation directing the Federal Railway Administration to examine railroad car visibility, and to adopt regulations. The railroad argued that because no regulations were in effect as of the date of Nyes accident, that there was implied preemption. The federal district court rejected the railroads argument, finding there was no implied preemption on reflectorization for Nyes claims.

Express preemption clauses of congressional acts are the best evidence of congressional preemptive intent. Sprietsma v. Mercury Marine, 537 U.S. 51, 123 S.Ct. 518 (2002). The United States Supreme Courts ruling in Sprietsma declined to find negative preemption of state claims, based upon the failure of a federal agency to promulgate regulations. Likewise, the Court found that the statutory scheme as a whole did not implicitly preempt common-law claims. Id. The U.S. Supreme Courts decision in Sprietsma is one key starting point when addressing claims by railroads of negative preemption.

When considering possible reflectorization issues that may not be preempted by the Rule, one should examine the list of penalties for violation of the Rule, set forth in Appendix A to Part 224 Schedule of Civil Penalties. If a potential claim is not included within the schedule of civil penalties, then it may arguably not be covered by the Rule, and thus not be preempted.

C. Inspection, Repair and Replacement

Section 224.109 addresses inspection, repair, and replacement of retroreflective sheeting on locomotives and freight cars. Retroreflective sheeting must be inspected at the same time a car undergoes a single car air brake test required under Sec. 232.305 of this chapter. If more than 20% is damaged, obscured, or missing, the inspective railroad or contractor must promptly notify the car owner, and the inspecting railroad or contractor must promptly notify the owner of the car. Copies of inspection records are to be retained for two years.

The term obscured is defined in the regulations to mean concealed or hidden (i.e. covered up, as where a layer of paint or dense chemical residue blocks all incoming light); this term does not refer to ordinary accumulations of dirt, grime, or ice resulting from the normal railroad operating environment.

Thus, the Rule arguably does not include keeping the retroreflective material clean or free from ice, and a common law claim against a railroad for failure to keep the retroreflective material clean or free from ice would seem to survive any preemption challenge.

D. Application of the Retroreflective Sheeting

The Rule sets forth various details about the timing and manner of applying the retroreflective sheeting.

Section 224.103 establishes the characteristics of retroreflective sheeting. Section 224.105 establishes the sheeting dimensions and quantity. Section 224.106 establishes the location for placement of retroreflective sheeting. Section 224.107 establishes the implementation schedule for applying the retroreflective sheeting. There is a five year installation period for locomotives, and a ten year installation period for freight cars. All freight cars must be equipped by May 31, 2015. All locomotives must be equipped by May 31, 2010.

Section 224.107 further provides that when a car subject to the Rule is not properly equipped, then the retroreflective sheeting must be applied at the earliest of two occasions occurring after May 31, 2005: (A) when the car is repainted or rebuilt; or (B) within nine months after the car first undergoes a single car air brake test as prescribed by Section 232.305 of Part 232. For locomotives, the sheeting must be applied not later than the first biennial inspection performed pursuant to Section 229.29 of Part 232 occurring after May 31, 2005, but in any event no later than May 31, 2010. Any new locomotives or cars built after May 31, 2005 must be fitted with retroreflective sheeting.

There is a special procedure for railroads to comply with a reflectorization schedule other than set forth above, if the railroad elects to comply with a special reflectorization schedule in Table 3 of Subpart B. Such election requires the railroad company to submit a reflectorization Compliance Report, if such procedure is elected.

III. Bobbles

A. Introduction

Grade crossing signals and equipment, like any other human designed and engineered products, are sometimes subject to inadequacies that can result in death and serious injury to members of the public. In some instances, those inadequacies are identified by government or manufacturers, and notices are sent to those responsible for implementing changes or upgrades. When the notices result in changes and upgrades, the crossings are made safer. If the notices do not reach the parties responsible for making the changes and upgrades, or if the notices go unheeded, the danger may remain uncorrected and the crossing signals and equipment pose continuing danger to the public.

There are occasions when a signal unit at a railroad crossing allows the crossing arm to go up and then come back down while a train is approaching the crossing. This includes that time when a train is within the approach circuit or island circuit. The phenomenon is referred to as bobble problems or pick problems.

B. Factual Scenario

A motorist approaches a crossing that is guarded by a stop arm which crosses the motorists lane of traffic. A train approaches the crossing and a collision ultimately ensues. The railroad claims that the motorist drove around the end of the stop arm and was hit while crossing the tracks. News reports suggest that the motorist was trying to beat the train. Tests run after the accident seem to suggest that the crossing arm was operating correctly. The accident report suggests that the motorist was at fault, failing to stop and yield to the stop arm protecting the crossing. The family of the decedent motorist cannot believe that their loved one could have possibly attempted to drive around a functioning gate. The local attorney who may not have any railroad expertise reviews the accident report, conducts some limited investigation and either declines the case or discourages the family from pursuing a difficult liability case. The loss is tragic. Sound familiar? There may be another side to the story.

The motorist approaches that same crossing and stops behind the crossing arm. The arm goes up. The motorist begins to cross the tracks. Just as the front of the vehicle gets past the crossing arm, it starts to go down. The motorist gets struck by the train on the tracks, with fatal consequences. By now the arm is back down. Persons then on the scene note that the arms are down. Any attorney contacted regarding a similar factual scenario needs to be aware that there is an issue regarding bobble problems. There is growing legal awareness and recognition of such problems and the railroad practitioner should be able to pursue discovery avenues on this issue. It is the purpose of this presentation to assist in that regard.

Even if an attempt is made by the motorist to drive around a lowered automatic gate arm, there may be relief. For reference, see Stone v. CSX Transportation, Inc., 37 F.Supp.2d 789 (1999). False activations of warning signals are common. In some situations, they are so common that gates may be down and lights flashing indicating the imminent arrival of a train, even though no train is actually coming. In such situations, residents of the area become accustomed to these false activations and learn to ignore them. It is key to establish a genuine issue of fact as to the railroads actual knowledge of false activation of a warning signal in order to avoid summary judgment. If one can show a history of frequent false activations, summary judgment can be precluded on the issue of whether negligence claims fall under a local safety hazard exception to the Railroad Safety Act preemption. Stone stands for the proposition that once a railroad receives a credible report of false activation of grade crossing warning signals, summary judgment can be avoided and recovery can be sought on various theories of negligence or gross negligence, i.e. failure to flag the crossing, failure to issue slow orders, failure to respond to frequent signal malfunctions, failure to perform proper maintenance and inspections, etc.

C. Technical Basis for Bobble Problems

Harmon Industries, Inc., and its successor, GE Transportation Systems Global Signaling, LLC, have issued notices regarding crossing signals and equipment, such as Engineering Service Bulletins (ESB), Field Service Bulletins (FSB), and Public Improvement Announcements (PIA), just to name a few. ESB 00-001 is one example of a bulletin that refers to a bobble condition, where a PMD-2s transfer logic failed allowing a crossing to momentarily clear as a train approached a crossing.

D. Notice or Constructive Knowledge by Railroad/Duty of Railroad

Courts often hold that if a railroad does not have actual or constructive knowledge of the failure of crossing signals and equipment, the railroad defendant will not be held liable. See, Robinson v. Missouri Pac. R.R. Co., 16 F.3d 1083 (10th Cir. 1994); Robin Express Transfer, Inc. v. Canton R.R. Co., 26 Md.App. 321, 338 A.2d 335 (Md. 1975); Applegate v. Chicago & N.W. Ry. Co., 334 Ill.App. 141, 78 N.E.2d 793 (1948); Goldscheiter v. Baltimore & O.R. Co., 153 Pa.Super. 141, 33 A.2d 477 (1943); Teague v. St. Louis Southwestern Ry. Co., 36 F.2d 217 (5th Cir. 1929).

Technical notices from the crossing signal and equipment manufacturers can provide evidentiary support for a showing that the railroad company had actual or constructive notice of deficiencies that have been identified in the crossing signals and equipment.

In the majority of states, railroads have a duty to exercise reasonable care to maintain grade crossing signals and equipment in working order. See generally, Southern R. Co. v. Georgia Kraft Co., 188 Ga.App. 623, 373 S.E.2d 774 (1988); Osuna v. Southern P. Railroad, 641 S.W.2d 229 (Tex. 1982); Atchison, T. & S.F.R.Co. v. Messmore, 339 P.2d 779 (Okla. 1959). One state applies a strict liability standard on railroad companies for malfunctioning railroad crossing equipment. See, Jones v. Missouri Pac. R. Co., 546 So.2d 632 (La.App. 1989). However, the strict liability approach in Louisiana seems to be the exception to the rule.

E. Negligent Maintenance not Preempted

Perhaps the most important question is whether maintenance of grade crossing signals and equipment is an issue preempted by federal law. The clear majority of decisions on this subject hold that maintenance of grade crossing signals and equipment is not a subject that is preempted by federal law.

Kiemele v. Soo Line Railroad Company, 93 F.3d 472 (8th Cir. 1996) (if crossbucks lost their reflectivity, they were not operating, and railroad would not be entitled to benefit of federal preemption); Michael v. Norfolk Southern Ry. Co., 74 F.3d 271 (11th Cir. 1996)(negligent maintenance of devices or failure to warn public of defective devices not preempted); Anderson v. Wisconsin Central Transp. Co., 327 F.Supp.2d 969 (E.D.Wisc. 2004)(claim that lights were not properly maintained is not preempted this is a post Shanklin decision); Thompson v. CSX Transportation, Inc., 1999 WL 33542043 (S.D.Miss.); National Railroad Passenger Corp. v. H & P, Incorporated, 949 F.Supp. 1556 (M.D.Ala. 1996). But see, Fifth Third Bank v. CSX Corporation, 306 F.Supp.2d 841 (N.D.Ind. 2004) (suggesting that the rationale of Kiemele was overruled by Shanklin).

F. Miscellaneous =Bobble Notes

For appropriate jury instruction defining false activation, see Wright v. CSX Transportation, Inc. 375 F.3d 1252 (2004) where railroad could be held liable if it failed to properly repair warning system. See Randall v. Norfolk Southern Railway Co., 800 N.E.2d 951 (2004) for a discussion of false activation terms as specifically defined in 49 CFR Sec 234.5.

See also Mills v. Norfolk Southern Railway Company, 242 Ga.App. 324, 526 S.E.2d 585 (1999), where plaintiff alleged prior similar occurrences of automatic crossing warning device failures. The Court held that the prior similar occurrences had sufficient substantial similarity to the activation failure in question to be admissible on the issue of prior notice. Proximate cause was left to the jury.

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