IICA Information Shortcuts
File_16x16 Overview User2_16x16 Officers  Agreement Edit_16x16 Signatories Support1_16x16 Arbitrators Folder Cases


Intra-Industry Claims Agreement Arbitration Award No. 5

Gary Stewart vs. Norfolk & Western Railway Company

Facts

This arbitration arises out of an accident which occurred on December 28, 1976. The facts are undisputed. Plaintiff, an industry employee of Edgewater Steel Company, Oakmont, Pennsylvania, was riding on the front of a high end gondola car, NW 99592, with his back facing the direction of travel. An electromagnet was suspended above the tracks ahead of him. By the time he noticed the electromagnet, it was too late and he was unable to extricate himself in time from being crushed between the moving car and stationary electromagnet. He sustained severe injury to his left leg.

Suit was filed on December 28, 1978, naming Norfolk & Western Railway Company (hereinafter "NW") as the only defendant. NW was unaware of the accident prior to the lawsuit. The plaintiff's theory of liability was design defect and strict products liability. His expert was prepared to testify that although the car conformed with federal and AAR standards, it should have been equipped with a catwalk and grab bar extending across the end of the car so that the plaintiff could have quickly walked from the place where he was riding (AR end) to the other side (AL end) and thereby avoid the accident. It appears to be conceded by the involved railroads that there was, in fact, no design defect according to generally accepted railroad standards.

Investigation and defense of this case was formally tendered to Consolidated Rail Corporation (hereinafter "Conrail") under the IICA by letter dated April 24, 1979. Conrail denied tender in letter dated May 8, 1979.

NW 99592 was loaded by Tube City Iron & Metal and handled by Union Railroad in Switching Service to Conrail for delivery to Edgewater Steel. NW did not participate in the movement. Apparently, NW's involvement was solely as owner of the involved car. Conrail, NW and Union are all signatories to the IICA.

Settlement was ultimately reached for $50,000. Attorneys' fees were $27,725 and legal costs were $2,637.60. Total costs, therefore, were $80,362.60.

Carrier Contentions

  1. NW:

    NW contends that the IICA is applicable because plaintiff's complaint alleged a DEFECT as that term is used and defined in the IICA. It asserts that the IICA applies whenever the plaintiff alleges a DEFECT, regardless of whether or not a DEFECT actually exists. NW urges that any condition of a CAR is a DEFECT if the condition was alleged to be the cause of the ACCIDENT. NW also urges it is not necessary that the plaintiff actually use the term "DEFECT" in stating the cause of the ACCIDENT. Since the AAR MECHANICAL Division General Committee has not found (and admittedly would not, if asked)) the existence of a design defect, Rule 14(b) does not apply. Therefore, NW concludes that Rule 17 applies, and that Conrail, as the only line-haul carrier involved in the MOVEMENT must bear all costs arising from the ACCIDENT.

  2. CONRAIL:

    Conrail urges that the IICA does not contemplate apportionment in cases of claims involving design defects and strict products liability. It urges that only "actual defects" are included (i.e., in its words "something ((that)) was broken or did not work as it should have worked"). It further urges that Rule 14 does not alter their conclusion.*

Conclusions

The IICA was adopted to avoid unnecessary litigation costs and to resolve issues of indemnity or comparative liability between railroads in cases involving personal injury to outsiders resulting from defects in interchanged railroad cars. (See History, p. 1). To the extent that the injury occurred during a MOVEMENT and not while the car was IN TRANSIT or due to some other specific limitation under the rules, the IICA is comprehensive.

Rule 14, and particularly subsection (b) of that rule, clearly shows that the agreement was intended to cover allegations of design defect. Strict products liability, for all practical purposes, is synonymous with design defect. Under Rule 14(b), full responsibility for costs rests with the CARRIER placing the CAR in service, which, in this was, was NW. However, this rule is limited to cases involving actual design defects, rather than alleged design defects and the final decision as to the existence of a design or construction defect is left to the expertise of the AAR Mechanical Division. Conrail has not submitted this case for review by the AAR Mechanical Division, and it is doubtful that it would or, if it did, that it would succeed in convincing the AAR Mechanical Division that the car was defective within the contemplation of 14(b). In fact, the record shows that the car met all applicable Federal and AAR standards. Accordingly, NW cannot be held responsible under Rule 14(b).

Conrail apparently argues by implication that since this case involves allegations of design defect and strict products liability which do not fit within Rule 14, it is not within the IICA at all. This argument overlooks Rule 1(a) which defines an ACCIDENT as: (1) any occurrence alleged to have caused personal injury to OTHER PARTIES: and (2) which occurs while the car is not IN TRANSIT: and (3) which is alleged to have been caused by a DEFECT. Rule 1(f) defines DEFECT as any condition of a car which is alleged to have been the cause of an ACCIDENT leading to claim(s) or lawsuit(s).

Clearly this case involves a DEFECT as that term is defined and understood under Rule 1(f). Thus, all three conditions for an ACCIDENT under Rule 1(a) are met.

In any case involving an ACCIDENT as defined under Rule 1(a), costs are apportioned under Rule 17 unless responsibility can be fixed with one particular carrier under some other rule. It has already been shown why Rule 14(b) does not apply and Conrail has provided no other rule upon which liability can be fixed. Thus, all costs must be apportioned per Rule 17. In this case Conrail is the only CARRIER to participate in the line-haul and, therefore, must bear all costs.

Thomas D. Boynton, Arbitrator
Asst. General Claims Manager
Southern Pacific Transportation Co.

October 6, 1982

*Conrail does not address the issue of whether the fact that the ACCIDENT occurred during a switching move takes it out of the IICA as an IN TRANSIT ACCIDENT within contemplation of the Preamble and Rules 1(a) and 1(g). Because Conrail has not raised the issue, we cannot and do not decide it here.