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Metrolink offers $200-million settlement in Chatsworth rail disaster

The offer, which matches the liability cap established under federal law for passenger train accidents, may be challenged as inadequate by victims of the 2008 crash.

August 26, 2010|By Rich Connell, Los Angeles Times

Metrolink and its former train operating contractor on Wednesday offered to pay $200 million to victims of the 2008 Chatsworth rail disaster that killed 25 people, setting the stage for one of the costliest rail accident settlements in the nation's history.

The proposed settlement fund, if approved by the courts, would relieve Metrolink and private contractor Connex Railroad of any additional liability, which federal law currently caps at a total of $200 million for passenger rail accidents.

But attorneys for the victims of the commuter train crash said the costs will far exceed that amount, and it's unclear who would cover those costs. A Ventura County congressman has said he expects to introduce legislation that would raise the $200-million liability limit, given the severity of the accident, which also injured 135 riders.

"It is a tragedy that the members of our community, who place their lives in the hands of the commuter rail system, are denied full justice when injured or killed due to the carelessness of the operators," the victims' attorney group said in a statement. "It is unfortunate that it has taken 24 months for Metrolink, and Connex/Veolia, a $50-billion French company, to seek the protection offered by an arbitrary federal limitation on damages which protects billion-dollar companies at the expense of victims."

The five-county commuter system said the settlement plan, coming weeks before the second anniversary of the crash and just months before a trial on damage claims was to begin, conforms to federal law and would speed up financial relief to injured victims and survivors of those killed.

"It provides compensation to the victims on an expedited basis, potentially years faster than if the case was fully litigated," said Metrolink board Chairman Keith Millhouse.

Connex said in a statement that the settlement fund is intended to "provide financial recovery to victims of the accident in the full amount available to passengers of a commuter rail accident in the U.S."

But victims' attorneys criticized the offer for coming too slowly and portrayed it as a legal maneuver to avoid full financial responsibility.

The head-on crash was caused by a contract Metrolink engineer — employed by Connex, a subsidiary of a French-owned conglomerate — who ran a red light while text-messaging on a cellphone, according to the National Transportation Safety Board.

The delay in offering the funds was caused by the complexities of dealing with insurance companies, attorneys and multiple parties, said Metrolink board member Richard Katz.

"The question all along was how do we get this money to victims faster," he said. "There was a lot of pressure working against doing something even now."

The settlement fund is expected to be drawn from insurance payments and contributions by Metrolink and Connex, although a breakdown was not released. Metrolink had $150 million in liability coverage at the time of the crash.

Assuming the settlement fund is approved by the courts, payments to victims could be negotiated by the parties and approved by judges.

"The courts get together and decide on an equitable distribution of funds," said Millhouse, an attorney. "While it is limited funds, it is the maximum under the law."

Plaintiffs' attorneys claimed past and future medical costs for victims could exceed what will be available, meaning some would have to turn to publicly supported programs for long-term help. Some plaintiffs' attorneys have said privately that estimates of the total damages and future medical costs for victims could be $400 million to $600 million.

"It's going be the taxpayers who have to cover the difference if the passengers can't," said Paul R. Kiesel, an attorney coordinating the 76 plaintiffs' law firms in the case. "It becomes an obligation of the government."

As an example, plaintiffs' lawyers pointed to 24-year-old construction worker Curtis Whitney, who had no insurance and suffered spinal injuries in the crash. Whitney has undergone multiple surgeries and already has run up $600,000 in medical bills, according to his attorney, Ed Pfiester, a lead co-counsel in the case.

Whitney's mother, Cheryl, said in a statement that "the reckless wrongdoers are trying to escape paying the full amount of his medical expenses."

Pfiester said a legal challenge or legislative effort to amend the federal liability cap probably would be focused on Connex and its parent company, Veolia Environment, not taxpayer-funded Metrolink.

Rep. Elton Gallegly (R- Simi Valley), in whose Ventura County district many of the victims live, said he is reviewing the matter and probably will introduce legislation that could adjust the liability cap.

The Chatsworth crash is the first accident to bump up against the $200-million liability limit, which Congress adopted in 1997 to keep passenger rail financially viable.

"I recognize one can't possibly compensate people for their losses, but we have to work within the parameters of the law," Millhouse said. He said Metrolink believes the liability cap will withstand a legal challenge.

rich.connell@latimes.com

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