Tort liability driving away possible MARC operators

Transit

Tort liability driving away possible MARC operators

by Miriam Schoenbaum • December 13, 2010 2:40 pm

The Maryland Transit Administration has no cap on tort liability, and that is the reason Maryland had to recently cancel bidding on a contract to operate MARC's Camden and Brunswick lines.

MARC Camden Line train. Photo by skew-t on Flickr.

In May 2009, the MTA invited bids on a contract for operation and maintenance of the two lines. Last month, the bidding was canceled. There had been only one bidder, namely Keolis, the company that has been operating VRE since July.

At a recent MARC Riders Advisory Council meeting, Simon Taylor, the MTA's chief of staff, explained that liability requirements were the main obstacle for bidders.

If you get hit by a Maryland State Highway Administration snow plow, tort liability is limited by the Maryland Tort Claims Act to $200,000 to a single claimant for injuries arising from a single incident or occurrence.

If you get hit by a speeding police car and its driver in Maryland, tort liability is similarly limited to $200,000 by the Local Government Tort Claims Act.

Yet if you get hit by an MTA bus or MARC train, the MTA's tort liability is unlimited.

CSX, which owns the tracks the Brunswick and Camden Lines operate on, requires MARC to carry $500 million per incident in liability insurance. MARC currently self-insures up to $5 million and would have required the winning bidder to carry $5 million in insurance as well.

Potential bidders had apparently found this requirement too difficult to meet. But the MTA is forming a rescoping group, Taylor added, with a mandate to identify possible changes in the request for proposals that might encourage more bidders.

Meanwhile, CSX will continue to operate the Brunswick and Camden Lines through June 2012. After that, the MTA may exercise options with CSX for 4 three-month extensions, through June 2013. The MTA is paying CSX approximately $1 million extra per year for not getting CSX out of MARC operations and maintenance on schedule.

The obvious question is why the MTA requires so much liability insurance in the first place, when so little tort liability exists in seemingly analogous situations.

In Collier v. Nesbitt (1989), a court held that the Maryland Tort Claims Act does not apply to the MTA, because Section 7-702 of the Maryland Transportation Article is "a general waiver of sovereign immunity for the MTA", and the Maryland Tort Claims Act applies only "where no specific sovereign immunity waiver otherwise exists."

To make the law more equitable, the Maryland Department of Transportation has at least twice introduced legislation in the General Assembly to cap the MTA's tort liability.

In 2005, SB 154 would have capped the MTA's liability for the tort of an entity under contract to the MTA at the limits of the Maryland Tort Claims Act. But the bill received an unfavorable report from the Judicial Proceedings committee.

In 2007, HB 1130 would have capped the MTA's liability at $1 million for a single claimant for a single incident. This bill was withdrawn.

So try and try again? Let's hope so. This time a bill might pass, and Brunswick and Camden Line MARC riders could feel more confident that their trains will still be running on July 1, 2013.

17 comments

Tags: law, MARC, Maryland, MTA

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Miriam Schoenbaum lives in Montgomery County's Agricultural Reserve. She serves on the MARC Riders' Advisory Council and is a Vice-President of the Action Committee for Transit.

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Subsidizing transit on the backs of those that it injures? There's a winning approach.

by MB on Dec 13, 2010 2:51 pm

I don't know that I like the idea of tort claims being limited to $200k (un-indexed to inflation, I'll add), whether for a transit provider, a police department, or a snowplow.

Does it make someone near-whole to pay them only $200k for whole-body paralysis at the hands of a government employee who was acting negligently or recklessly? What if a head-of-household makes $200k a year to support a family and is injured such that he can never work again? Will $200k compensate that?

I understand that tort claims acts often are what allow a victim to sue at all, because governmental actors would otherwise often be immune.

Yet, acts with such a limit (or private-actor tort reform measures in general) that prevent a victim from being made whole are cruel in my opinion.

It would be better to keep the liability and insure against it, distributing the costs of such mistakes to everyone, rather than putting it on the back of the lone unfortunate soul who did nothing wrong but finds himself shit out of luck.

by Joey on Dec 13, 2010 3:19 pm

So we should be happy that the 12 year old who was hit by the cop was statutorily limited in his compensation, and hope the train company can get the same deal? Seriously?

by jcm on Dec 13, 2010 3:30 pm

MARC trains get to be pretty full. Imagine a train that crashes and pancakes, killing 10 and injuring 50. Wrongful death suits _start_ at $1 million. So a $5 million "per incident" insurance cap is not going to go very far at all.

I, for one, think it's TERRIBLE that if I get run over and killed by a Maryland snowplow driver driving recklessly, all my heirs will get is a paltry $200,000. That cap (if there is a cap) should be at least a million.

by Simon on Dec 13, 2010 3:48 pm

@jcm: I am not happy at all that the 12-year-old who was hit by a police car is statutorily limited to $200,000 in his compensation. Indeed, I think it's shameful. I'm all in favor of the General Assembly raising the limit in the Maryland Tort Claims Act.

Meanwhile, though, it's not equitable that if a person gets hit by one kind of state vehicle, tort liability is capped at $200,000, and if a person gets hit by a different kind of state vehicle, tort liability isn't capped at all.

And, as a MARC rider, I can only hope that MARC will be able to get enough bidders on a contract to operate and maintain the Brunswick and Camden Lines if the operators have to carry so much liability insurance.

If the MTA's tort liability were capped at $1 million, people who got hit by a train would still be better off than people who got hit by a police car or snow plow, and MARC might have a better chance of finding an operator. CSX does not want to do it any more.

by Miriam Schoenbaum on Dec 13, 2010 3:54 pm

@Simon:

CSX requires insurance for $500 million per incident, not $5 million.

Under HB 1130 in 2007, MTA's statutory cap would have been $1 million per person per incident, but that bill didn't go anywhere.

by Miriam Schoenbaum on Dec 13, 2010 4:01 pm

Correct me if I'm wrong, but are not claims arising from passenger rail service capped at $200 million per incident? That's a federal law--part of Amtrak's 1997 reauthorization--that applies to all passenger rail operators. It came into play in the Metrolink Chatsworth crash in California. The trial lawyers attempted to bust the cap--unsuccessfully, as far as I know. The states are free to exercise sovereign immunity to enact a lower cap on state-funded and state-operated services, if they see fit.

by Paul on Dec 13, 2010 4:10 pm

@ Miriam Schoenbaum I think I've figured out what is going on. The problem isn't that MD is requiring the operator to insure the second $5M in liability. That would cost the operator very little - likely less than $100K per year. The problem is that MD excluding the operator from the self insurance if the cause is negligence. This makes the self insurance portion effectively useless for the operator, so they'd need to buy insurance for that portion. That first $5M in coverage is much more expensive.

The solution isn't to cap individual liability. The solution is to changes the terms of the self insurance to include negligence.

by jcm on Dec 13, 2010 4:16 pm

@jcm: Yes, the first $5 million. Do you think it's unreasonable of the MTA to want to exclude the operator from MARC's self-insurance if the cause is the operator's negligence? I don't.

by Miriam Schoenbaum on Dec 13, 2010 4:24 pm

@ Miriam Schoenbaum The entire point of buying insurance is to protect you from things like employee negligence. Excluding that makes the $5M in self-insurance basically worthless.

Saying "we're not covering the first $5M" isn't unreasonable, as long as you're willing to pay the operator well enough to buy insurance or self insure himself. It is unreasonable to expect an operating cost in line with a self insured owner if you won't let the operator use that self insurance, though. It sounds like that's what MTA is doing.

Would capping liability at $1M per claimant per incident even change the operator's premium? I suspect not.

by jcm on Dec 13, 2010 4:56 pm

As an attorney, I appalled that MD would limit it's potential liability in this manner. This vitcimizes innocents, twice. Once by the initial incident, the second by the state.

MTA should not limit the damages a person can collect for employee negligence.

by Redline SOS on Dec 13, 2010 4:56 pm

@jcm: I suspect, but I don't know for a fact, that MARC currently self-insures up to $5 million, even in the case of the negligence of the operator, because the operator is CSX. I haven't seen the current operating contract, but in the previous operating contract, MTA was liable for pretty much anything CSX did, no matter how negligent. In the contract MTA canceled bidding on, they were presumably hoping to have a somewhat more equitable distribution of liability in case of negligence.

And yes, of course, the question for potential bidders was whether the contract paid enough to cover $5 million in liability insurance. Evidently only Keolis thought it did.

Could MTA offer more? Or would they agree to continue to cover their operator's negligence? Or, if MTA's liability were capped at $1 million per person per incident, would the operator's liability insurance be more affordable? I don't know. I'm sure that there isn't one single way to solve this problem, but I do hope that it is solved, somehow.

by Miriam Schoenbaum on Dec 13, 2010 5:14 pm

Wow, just wow. I can't believe I'm reading something so poorly reasoned. Lets just limit liability for negligence everywhere! If actually paying for the social cost of accidents gets in the way of an on time trains, well then by golly lets externalize those costs to the losers who happen to be the victims. There lives suck anyway right? Why bring the rest of us down.

I swear, this site is generally good, but every once in a while one of these authors posts a long winded observation followed by a non-sequiter. No attempt was even made to justify the need for a tort cap, its just assumed that such a policy is good because other parts of the government have limited liability. At least *try* to make an argument next time. Just a pathetic post.

by Donald on Dec 13, 2010 5:14 pm

MD cannot complain about "partisan gridlock" with all the levers of power being held by the same party.

by SJE on Dec 13, 2010 5:43 pm

@Donald, +1

by Joey on Dec 13, 2010 6:33 pm

by David desJardins on Dec 13, 2010 9:30 pm

Freight railroads have been terrified of passenger service and liability issues, particularly since the Ricky Gates incident in which a Conrail engineer (running on Northeast Corridor trackage rights) blew past a red signal, ended up on the wrong track and was rear ended by a 120 mph Amtrak train. The railroads, whose tracks are obviously essential for any passenger service, have taken a hard line on liability ever since. The startup of VRE was delayed for years over this issue, and CSX can be expected to be deeply concerned about this under the new operating contract. MARC, always short of funds, will be just as motivated to pass the liability anywhere else it can so the paucity of bidders comes as no surprise.

by intermodal commuter on Dec 14, 2010 12:11 pm