Victims of Tuesday’s Amtrak derailment who try to seek financial compensation will face a legal quagmire because of a little-known federal law that limits how much money passenger rail companies must pay in damages.
The “aggregate allowable awards” for all defendants “arising from a single accident or incident” cannot exceed $200 million.
For a mass-casualty incident like Tuesday’s derailment, that’s unlikely to cover all the potential claims, experts said.
“This is going to turn into a huge legal mess for the victims. Many of them are not going to get compensated adequately,” said Joanne Doroshow of the Center for Justice and Democracy at New York Law School.
It was a major issue after a Metrolink train collided with a freight train in Los Angeles in 2008, killing 25 people and injuring dozens more, Doroshow said, adding that what was paid out to those victims fell well short of what was needed.
A superior court judge, in doling out the $200 million after that accident, described it as a “Sophie’s choice,” meaning impossibly difficult.
“There is not enough money to compensate the victims for future medical care and past pain and suffering,” Judge Peter Lichtman wrote in his 2011 ruling.
Paul Kiesel, the lead attorney for the victims in that case, said the $200 million limit is an arbitrary number Congress chose in 1997 to keep Amtrak solvent. The cap doesn’t take into account fault or cause.
When the provision was debated, opponents of the limit argued that, “given the current cost-cutting climate at Amtrak and elsewhere, the threat of a large punitive damage award is needed now more than ever to prevent rail passenger transportation providers from placing profits ahead of safety,” according to talking points provided to the Clinton White House at the time.
Industry advocates argue that eliminating the cap could bankrupt passenger rail.
Ross Capon, who ran the National Association of Railroad Passengers for 40 years, said an inflation adjustment would be appropriate, but that opening up that debate is a risk to the perennially attacked Amtrak.
“Eliminating the cap will make it virtually impossible to run passenger trains because no one can afford the insurance,” he said.
In 2010, Sens. Dianne Feinstein and Barbara Boxer, both California Democrats, and then-Rep. Elton Gallegly (R-Calif.) introduced legislation to raise the limit to $500 million in cases of gross negligence.
Sources on Capitol Hill believe the issue will be revisited when Congress debates a broader Amtrak reauthorization bill this year.
Juan Magdaleno, the brother of Aida Magdaleno, 19, who died in the 2008 Metrolink crash, was the lead plaintiff for the victims’ lawsuit.
“We can’t bring my sister back. For us, the money, it doesn’t matter, but the issue for me, what I see is these families that have loved ones still alive, they are still suffering,” Magdaleno said Thursday. “That should have been the responsibility of these national corporations coming in. They just got a slap on the hand.”