The St. Augustine Record, Peter Willott / AP

The 1997 law that limits compensation to victims of railway accidents

Analysis: By capping damages, Amtrak 'reform' hobbles judges' ability to compensate victims of mass railway accidents

The victims of Tuesday's tragic railway derailment in Philadelphia may find themselves twice victimized when they attempt to recover damages from Amtrak, thanks to a 1997 law that caps damages to all passengers injured in a major railway accident to $200 million.

The Amtrak Reform and Accountability Act (ARAA), passed to save the railway from bankruptcy, was lauded by then-President Bill Clinton as the “most comprehensive restructuring of Amtrak since the early 1980s.”

Legal analysts and plaintiffs' attorneys say it was a bailout.

“Amtrak was days away from insolvency when Congress stepped in and provided funding," said Paul R. Kiesel, lead counsel for victims of the 2008 Metrolink railway collision in Southern California, which left 24 people dead and 109 injured.

The law included a controversial provision that capped the total amount of compensatory damages, including medical expenses and lost wages, to all passengers involved in a single railway accident at $200 million – regardless of the railroad company’s culpability. The measure was billed as part of a broader movement for tort reform, an effort to curb frivolous lawsuits.

The provision, which does not account for inflation, was aimed at keeping railroad companies in operation when hit with major lawsuits, say tort law experts.

“They essentially traded off the right of the victim to obtain full compensation for the economic viability of Amtrak,” said John Goldberg, the Eli Goldston Professor of Law at Harvard law school. “If damages exceed the liability cap, someone is out of luck and won’t get full compensation. That’s a controversial policy judgment Congress made, one they have yet to make in other cases.”

A spokesperson for the Association of American Railroads contacted by Al Jazeera declined to comment on the statute.

Kiesel said that while $200 million may seem like a significant amount of money, in cases involving mass casualties, the figure falls woefully short.

"You're talking about medical costs that are required to sustain lives in a critical care environment for however many decades. In our litigation, there was one young woman whose medical expenses over the course of her lifetime were calculated at $19 million," he said.

He added, "You take one victim and start multiplying by several hundred victims, you can see why this liability cap becomes problematic."

Railway lobby

The railroad industry is a powerful force in Washington. In 2010, it contributed nearly $1.9 million to members of the House Transportation and Infrastructure Committee, according to OpenSecrets.org.

That may explain why efforts to raise the statutory cap in 2010 and 2011 failed, says Kiesel. "Attempts to raise the liability caps never gained any traction partly due to the industry's strong lobbying," he said. 

According to Maplight, during the 2014 election cycle, the political action committees of the top railroad and oil companies contributed, on average, two times the number of funds to members of the House Subcommittee on Railroads, Pipelines and Hazardous Materials, compared to other members of the House.

Former Senator Kay Bailey Hutchison, sponsor of the 1997 law and then-ranking member of the Senate transportation committee, received more than $350,000 in campaign contributions from the railway industry over the course of her political career, according to OpenSecrets.org.

The consequences of the law are left to America's’ judges and juries to sort out.

“Assuming damages exceed the liability cap, the judge is going to make some tough decisions about how to deal with the shortfall," Goldberg said. "The judge will have to make judgments about who should get less than they otherwise deserve.” 

'Sophie's choice'

The 2008 Metrolink tragedy highlighted the predicament faced by judges. The Metrolink train collided with an oncoming freight train after an engineer missed a stop signal because he was texting someone.

The judge who presided over the case determined that an additional $64 million beyond the liability cap was needed to properly compensate victims.

“He had the unenviable task of divvying up the money, which was nowhere near what it was going to take to compensate families for their damages,” Kiesel told Al Jazeera.

In a poignant opinion, Judge Peter D. Lichtman spoke at length about the internal struggle he faced in determining how to divide damages among victims.

"[I]mpossible decisions had to be made. What was given to one victim had to be taken from another. Essentially a Sophie's Choice had to be made on a daily basis. One Sophie's Choice is enough for a lifetime, but over 120 of them defies description,” the opinion read.

Addressing the victims, a contrite Lichtman said, “You then returned to the Court and asked for more bandages and were told there were none to give. You were then instructed to cut the bandages in halves, quarters, eighths, or even sixteenths, but that under no circumstances would you receive more bandages.”

Lichtman told the victims that the decision to rank their injuries was not based in a failure to appreciate the victim’s predicament. “Nothing could be further from the truth,” he stressed. 

Tort reform

The liability cap plays out against the broader backdrop of tort reform efforts in Washington D.C.

Goldberg says that liability caps are a “regressive way” of addressing the problems raised by proponents of tort reform.

“If there's too much liability harming industry, it’s not clear why the injury victims of the world should solve that problem," he said. "What these cases reflect is perhaps the need to provide better health insurance policies to address exorbitant healthcare costs. Or perhaps we can protect damages covering medical care and lost wages while limiting pain and suffering. This way, people get their bills paid.”

With wire services

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