By being greedy, the Railroad Industry wound up shooting itself in the Caboose.
It happened in a case where Hoey & Farina litigator Rick Haydu got a jury verdict of $225,000 for an Injured Railroader named Doug.
Doug was hit by a car when the driver – a lady named Brenda – crashed through crossing gates on an icy road.
Brenda, a housewife whose husband worked as an elevator repairman, had an insurance policy worth only $100,000. Her insurance company agreed to pay the entire $100,000 to Doug. That left Doug's employer (which I will refer to as "the Railroad") as the only defendant.
After the witnesses testified at trial, the Judge instructed the jury that, under the FELA., they had to decide whether the accident was caused by the Railroad's negligence, and whether Doug was also negligent in causing the accident. If Doug was also negligent, the Judge explained, the jury had to decide how much (on a percentage basis) the accident was caused by the negligence of the Railroad, and how much was caused by Doug's negligence.
Deliberating on the evidence, the jury decided that (1) Doug suffered $450,000 in damages; (2) the Railroad and Doug were both negligent; and (3) they were both 50% responsible for causing the accident. Since the jury decided that the accident was 50% caused by negligence of the Railroad, and 50% by Doug's negligence, the FELA says that the Railroad had to pay for half the damages suffered by Doug. Applying the FELA, the jury decided that the Railroad should pay $225,000 to Doug.
The remaining fight was on how to handle the $100,000 settlement paid by Brenda's insurance company before the trial (since Doug had already been paid for $100,000 of the $225,000 in damages that the jury decided was owed to Doug).
Rick argued that, under an Illinois law, the Railroad was only entitled to a dollar-for-dollar credit for the $100,000 settlement. In other words, since amount of "damages" suffered by Doug was $225,000 (after the jury reduced the total amount of damages based on what it concluded was Doug's own partial fault in causing the accident), Rick argued that the Railroad should pay $125,000 to Doug.
The Railroad, on the other hand, said it should only have to pay a tiny portion of this verdict.
COMPARE JURY INSTRUCTIONS
To understand the Railroad's scheme, you have to compare the "jury instructions" that the Railroad asked for (which the Trial Judge rejected), and the instructions that the Trial Judge actually gave to the Jury. As instructed by the Judge, the Jury calculated the amount of the verdict by going through these steps:
After deciding that negligence by the Railroad was one cause of the accident, the Jury calculated the total amount of money required to fully compensate Doug for his injuries.
The Jury decided whether any negligence by Doug was also one of the causes of the accident.
After deciding that Doug was negligent along with the Railroad, the Jury – using percentages – figured out how much of the accident was caused by the Railroad's negligence, and how much was caused by Doug's negligence. And finally,
- The amount of money required to compensate Doug for his injuries was reduced by the degree (based on percentages) that the accident was also caused by Doug's own negligence.
The final result was a verdict ordering the Railroad to pay $225,000 to Doug. Then, under the Illinois law, the Railroad was given a dollar-for-dollar credit for the $100,000 settlement – meaning that the Railroad was ordered by the Judge to pay $125,000 to Doug.
The Railroad argued that it should pay much less than $125,000. According to the Railroad, here is how Judges should handle FELA cases when there is a pre-trial settlement by a Non-Railroad Defendant:
First, according to the Railroad, the
And last year, the U.S. Supreme Court ruled that a Railroad is liable for 100% of the damages caused when the Railroad negligently injures an employee (reduced only for the percentage that the injury may have been partially caused by the employee's negligence). According to the Supreme Court, the Railroad isn't entitled to any additional reductions – even if the accident was also caused by some other company or person, like Brenda. The Court of Appeals – agreeing with part of the Railroad Industry's arguments – decided that there should be a single "uniform" rule, applied throughout the country, for handling FELA cases where there is a settlement with a Non-Railroad Defendant. But the Court ruled against the Railroad Industry on what this "uniform" rule should be.
Ruling against the Railroad Industry, the Court of Appeals explained that the FELA makes a Railroad liable for all the damages it causes when it negligently injures one of its employees, and that the only reduction provided by the FELA is for the negligence of the injured employee. In other words, the FELA doesn't permit schemes by Railroads for any additional reductions in the liability imposed by Congress.
When there is a settlement with a Non-Railroad Defendant, the Court of Appeals explained, a negligent Railroad is only entitled to a dollar-for-dollar credit against the verdict for the amount of the settlement paid by the Non-Railroad Defendant. In other words, the Trial Judge in Doug's case was right in ruling that the Railroad was only entitled to a dollar-for-dollar credit for the $100,000 settlement paid by Brenda's insurance company.
The Railroad Industry wound up with a "uniform" national rule, but not the rule it wanted.
By being greedy -- as part of a scheme to evade liability under the FELA -- the Railroad Industry wound up shooting itself in the Caboose.