• April 19, 2013

Earlier this week, Mike Unger had a post on a “FELA case” (a.k.a. a railroad worker injury case).  In one of those anachronistic legal developments that, barnacle-like, graft themselves onto the law, many U.S. railroad workers do not get the benefit of state workers’ compensation statutes. Rather, their compensation model for workplace injuries falls under this early 20th Century federal law.

(Think about it: back then the general population was considerably less mobile vis-à-vis interstate travel, so their injury claims were very likely to be “intrastate” (confined within a single state) but railroad workers (and some other workers, like those whose livelihood is on “waterways“) were far more likely to be on the move, between states, among states, or, possibly even sustaining injuries over time in more than one state.  Rather than placing them in an ever-changing ambiguous legal limbo, it made sense to have a federal model for these itinerant workers.  (There were also mighty unions back in the day that might have had something to do with this statute, which is viewed as extremely favorable to railroad workers.)

Coincidentally, the U.S. Court of Appeals for the 8th Circuit issued a FELA-related decision this week dealing with a fight between a railroad and an operator of a rail yard over the expense of a significant workplace injury.  They settled the injury claim of an injured railroad worker (or, more accurately, of the injured railroad worker’s estate in bankruptcy), splitting the burden of the $1.15 million settlement 50/50.  Then came the real fight as the railroad argued that the rail yard should pay the railroad’s half of the underlying settlement.

It is something of a generic case but, at the same time, has some strangeness to it.

What makes the case somewhat puzzling is that the Arkansas District Court held that the rail yard’s view of the case was persuasive and it denied the railroad’s claim that it should be entitled to have the rail yard pay the railroad’s freight on the FELA claim.

On the other hand, when the railroad sought an order that it be paid its attorneys’ fees as a “prevailing party” or, alternately, under the “loss” provision in the parties’ Track Lease Agreement (TLA),” the District Court found that the rail yard was liable for half of the railroad’s fees and costs.  The railroad was not the prevailing party, of course, but, on the other hand, the TLA provided that the rail yard to indemnify the rail road for the railroad’s “losses” in connection with any injury of any party.

I am not entirely clear on how the language in the TLA provided for the rail yard to pay half of the railroad’s fees and costs, but I cannot help noticing that the two businesses split the initial settlement fifty-fifty and the courts appear to have essentially imposed that the businesses split the railroad’s legal fees fifty-fifty.  There is a certain symmetry there that businesses might want to explore at the outset rather than spending the time and money to fight it out in litigation, ending up in the same place except with the hassle of litigation and attorneys’ fees on top.

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