Railroad Liability For Corporate Counsel: What Manufacturers Should Know

• Published date: 20 April 2022
• Subject Matter: Litigation, Mediation & Arbitration, Personal Injury, Professional Negligence
• Law Firm: Greensfelder, Hemker & Gale
• Author: Mr Paul E. Petruska and Andrew M. Voss

The summons seems strange. Your company has been sued along with a railroad, and it includes a claim under the Federal Employers Liability Act (FELA).¹ Your company is a manufacturer, with two relatively small service tracks. You have no railroad employees and no locomotives, and the petition only contains a FELA claim against the railroad.

If you believe you are safe, you are wrong. The above fact pattern is just one example of how a non-railroad entity can be dragged into the strange world of FELA litigation. Under FELA, a railroad employee can seek recovery for an on-the-job injury in civil court with no limitation on damages.

It would be an extremely rare case where a Class I railroad would service a manufacturer's tracks without a contract. The contract will almost uniformly include an indemnification provision and an obligation to purchase a railroad protective policy.

The contract at issue may be 10 years old, 30 years old, or even 60 years old. The contract may have been signed by a completely different railroad that is a fourth-line predecessor to the current railroad servicing the track. In 99 percent of these cases, the contract will apply, and the railroad will tender its defense to the manufacturer. If the manufacturer refuses to accept the defense, the railroad will file a counterclaim for contractual indemnification.

Now the manufacturer has to consider the impact of potential FELA liability. Railroad employees make a very good living. It would not be uncommon for an engineer or conductor to make over $100,000 a year. It also would not be uncommon for an engineer or conductor to claim they would work until they reach age 70. With 10 or more years of potential lost earnings, the plaintiff's attorney may easily suggest economic damages exceeding $1 million.

To make matters worse, the FELA causation standard is much lower than a standard common law negligence claim. Under Rogers v. Mo. Pac. R. Co., 352 U.S. 500 (1957), causation is established if the railroad's negligence 'played any part, even...