Railroad & Shipper Liability to Third-Parties

1. Railroad & Shipper Liability to Third-Parties Lee A. Miller Kimberly L. Johnson

2. www.ArthurChapman.com Midwest Shortline & Regional Railroads Annual Conference

3. Lee A. Miller Midwest Shortline & Regional Railroads Annual Conference

4. Kimberly L. Johnson Midwest Shortline & Regional Railroads Annual Conference

5. James F. Mewborn Midwest Shortline & Regional Railroads Annual Conference

6. Duty of Care • Existence of a duty is a question of law is determined by the Court • Duty may be created by contract, statutes and regulations, and by common law • Existence of a duty of care is typically based upon specific facts of case, based upon: • Knowledge of representatives of the parties • Standards in the industry • Policies or procedures of the parties Midwest Shortline & Regional Railroads Annual Conference

7. Duty of Care • A railroad’s duty of care to Consignees depends upon whether it is an initial/originating carrier, an intermediate/connecting carrier, or a destination/delivery carrier Midwest Shortline & Regional Railroads Annual Conference

8. Duty of Care • Initial/Originating Carrier • Furnishes the railcar to be loaded • Intermediate/Connecting Carrier • Receives railcar from another carrier and delivers to subsequent carrier • Destination/Delivery Carrier • Delivers loaded railcar to consignee Midwest Shortline & Regional Railroads Annual Conference

9. Initial/Originating Carrier • Usually provides an empty railcar and picks it up when loaded • Owes to Consignee and its employees a duty to exercise ordinary care to furnish a car in such condition that it can be loaded and unloaded with reasonable safety • Courts typically impose a higher duty to inspect upon carrier providing the railcar Midwest Shortline & Regional Railroads Annual Conference

10. Initial/Originating Carrier • Duty requires • More than mere “running” inspection (running railcars between two inspectors looking into cars from the ground) • Must perform a “reasonable” inspection and must supply a reasonably fit car free of latent defects that present unreasonable risks to the customer and its employees. • “Reasonable inspection”—usually a fact question for a jury Midwest Shortline & Regional Railroads Annual Conference

11. Connecting and Delivery Carriers • Duty to perform reasonable exterior inspection • More than just a “casual glance” • No duty to discover latent (hidden) defects • Duty to remedy or warn of defects Midwest Shortline & Regional Railroads Annual Conference

12. Loaded & Sealed Railcars • Carriers involved only in moving railcar to its destination have no affirmative duty to break the seal to inspect contents to ensure it was properly loaded unless on notice that railcar may not have been properly loaded • BUT must perform reasonable exterior inspection • Exception: if carrier creates a defect—it has a duty to discover and remedy it • Exception: if carrier has knowledge of defect—duty to remedy or warn Midwest Shortline & Regional Railroads Annual Conference

13. Loaded But Unsealed Railcars • Duty of carrier depends upon whether defect is visible from a reasonable exterior inspection • Originating carrier may have duty to inspect loaded, but unsealed, railcar (concluded by at least one court) Midwest Shortline & Regional Railroads Annual Conference

14. Shipper Liability • Duty to exercise reasonable care to load the shipment in a manner reasonably safe for unloading • Duty to inspect railcar for defects before loading Midwest Shortline & Regional Railroads Annual Conference

15. Shared Liability • Possible for shipper, initial/originating carrier, connecting carrier, and destination carrier to all be found negligent for a single injury Midwest Shortline & Regional Railroads Annual Conference

16. Duties to Third-Parties • Duty under FELA: Three methods by which a plaintiff can establish his “employment” with the rail carrier for FELA purposes even while he is nominally employed by another: • Borrowed servant of the railroad at the time of his injury; • Acting for two masters simultaneously; and • Sub-servant of a company that was in turn a servant of the railroad Midwest Shortline & Regional Railroads Annual Conference

17. Duties to Third-Parties • The test of employment is whether the railroad has control of the employee or the right to control the employee • Does not require that a railroad have full supervisory control—only requires that a railroad, through its employees, plays “a significant supervisory role” as to the work of the injured employee Midwest Shortline & Regional Railroads Annual Conference

18. Duties to Third-Parties • Non-railroad employee has no cause of action against the railroad under the Safety Appliance Act Midwest Shortline & Regional Railroads Annual Conference

19. Investigation of Third-Party Injury Claims • car number, the shipment date, the identities of the shipper and consignee, and the waybill number • railcar history documents: purchase, repairs • movement history of railcar • shipping agreements • side track agreements • agreements between railroad and employer of injured third-party • post-accident inspection records • damage prevention records • field manager records pertaining to shipper/consignee • shipper records • carrier inspection records • carrier loading rules and regulations • defect reporting guidelines for third-parties • witness interviews Midwest Shortline & Regional Railroads Annual Conference

20. Questions & Answers Midwest Shortline & Regional Railroads Annual Conference

21. Railroad & Shipper Liability to Third-Parties Thank You for Attending!