# Amicus Curiae Brief — Norfolk Southern R. Co. v. Shanklin > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385014_0331%3A15 ## Record - **Collection:** Supreme Court brief - **Document type:** Amicus Curiae Brief - **Published:** January 1, 2000 - **Citation:** 529 U.S. 344 ## Text No. 99-312 CLERK In The Supreme Court of the United States ¢ NORFOLK SOUTHERN RAILWAY COMPANY, Petitioner, DEDRA SHANKLIN, INDIVIDUALLY AND AS NEXT FRIEND OF JESSIE GUY SHANKLIN, Respondent. + On Writ Of Certiorari To The United States Court Of Appéals For The Sixth Circuit ¢ BRIEF OF THE ANGELS ON TRACK FOUNDATION, THE COALITION FOR SAFER CROSSINGS, ACTIVE PEOPLE AGAINST RAILROAD TRAGEDIES (APART), HANDS ACROSS THE RAILS, RAILWATCH, AND THE NATIONAL ASSOCIATION OF RAILROAD SAFETY CONSULTANTS AND INVESTIGATORS, AS AMICUS CURIAE IN SUPPORT OF RESPONDENT S Rosert L. Porrrorr, Esquire* Norsert C. Marek, Jr., Esquire Myers Potrrorr & BAL 320 Sunset Manhattan, Kansas 66502 (785) 539-4656 * Counsel of Record TABLE OF CONTENTS Page eee ee Ce I so oc ccececnccsccessceeans ii INTEmees OF AMICUS CURIAE........cscscccecss 1 SUMMARY OF ARGUMENT ...........cccscscceess 2 NE 5A Wak eens es enkssawenenaeccasbnkannesa 3 I. Lights and gates provide crossing protection that is 90% effective in preventing accidents .. 3 Il. Lights and gates provide the most cost effective crossing protection available .................. 7 Ill. CFR 646.214[b][3] defines “adequate crossing protection” as lights and gates................ 11 IV. Installation of lights and gates has been an affordable option available to the four largest railroads in the United States since 1980 ...... 16 V. The Railroad industry made a knowing and intelligent decision to opt for short-term profits by ignoring all state common law duties to upgrade railroad crossings .................... 19 VI. Railroads should not be given the power to create their own preemption defense by manip- ulating the federal funding program.......... 23 PUREED ab ubdenen sadaneensneeensecascnweenes 27 ii TABLE OF AUTHORITIES Page CASES CSX Transp., Inc. v. Easterwood, 507 U.S. 658 (1993) oe Leer PET TTT TET TTT TT TTT TTL TTT 15, 18, 23, 27 CSX Transportation, Inc. v. Palank, 743 So. 2d 556 (Pla. App. 1999) .....cccccccvecvccceccvccsevccccces 17 Shots v. CSX Transportation, Inc., 38 F.3d 304 (7th Eh ED Sued UanSwARSeeeracdteceseesessesvecceses 13 St. Louis Southwestern R.R., Co. v. Malone Freight Lines, Inc., 39 F.3d 864 (8th Cir. 1994)............. 23 STATUTES AND REGULATIONS Federal Railroad Safety Act of 1970 (FRSA), Pub. L. No. 91-458, 84 Stat. 971, codified as amended OR Ge Dis Ge OF GO es vce cecssenvccvcccccccscces 7 Highway Safety Act of 1973, Pub. L. No. 93-87, 87 Stat. 282, codified as amended at 23 U.S.C. 130 Et Pad pr ee eee ee 2, 7, 11, 14 Staggers Rail Act of 1980, Public Law 96-448, 96th Congress, 49 USC 10101, October 14, 1980........ 17 23 C.F.R. § 646.214(b)(3)(i) ........-.--6-. 11, 13, 14, 15 MISCELLANEOUS U.S. Dep’t of Transportation, Railroad-Highway Safety Part I: A Comprehensive Statement of the Problem (1971 Report to Congress) PB206792, (Nov., 1971).........-+++ee- 7, 8, 9, 13, 18 “ee TABLE OF AUTHORITIES - Continued Page U.S. Dep’t of Transportation, Railroad-Highway Safety Part II: Recommendations for Resolving the Problem (1972) (1972 Report to Congress), Fee SP EP cdbeicccoccessesencsess 7, 9, 10, 11, 15, 25 United States Department of Transportation, Fed- eral Aid Highway Program Manual............... 14 Federal Highway Administration, U.S. Dep’t of Transportation, Manual on Uniform Traffic Control Devices for Streets and Highways SP MUSE Vovcccccccessccceeede 11, 15, 25, 26, 27 Railroad-Highway Grade Crossing Handbook, Sec- ond Edition, FHWA-TW-86-215, Thomas O. Will- ett, Director, Office of Engineering, Federal Highway Administration, September, 1986... .3, 5, 6, 12 Railroad-Highway Grade Crossing Handbook, FHWA-TS-78-214, Dr. R. M. Olson, Federal Highway Administration, August 1978............ 18 The Achievement of Grade Crossing Protection, W. J. Hedley, Assistant Chief Engineer, Wabash I al eee eee 3 Factors Influencing Safety at Highway-Rail Grade Crossings, David W. Schoppert and Dan W. Hoyt, sponsored by the American Association of State Highway Officials in Cooperation with the Bureau of Public Roads. (1968) (NCHRP A Study of Railroad Grade Crossing Protection in Houston, C. McEachern, Proc. Inst. Traffic Eng. ..... 4 iv TABLE OF AUTHORITIES - Continued Page Results Accomplished by the Use of the Grade Crossing Protection Fund Established by the Illinois Legislature Beginning September 1, 1955, and Administered by the Illinois Com- merce Commission, R.B. Thomas, Illinois Com- CE, GE oct ccuceadsucbaabacewsoeteuss 4 Accident Reduction at Crossings Protected Under Crossing Protection Fund, California Public Utilities Comm., San Francisco (Aug. 26, 1965) ..... 5 Traffic Control and Roadway Elements: Their Relationship to Highway Safety, Schoppert, D. W., Automotive Safety Found. (1963) ........... 5 Effectiveness of Automatic Crossing Gates in Southern California, 1954 - Through 1963, L.C. Young, California Public Utilities Comm., Los Angeles, (Oct. 1, 1964). ...........2 eee eeee eee eeeees 5 In the United States District Court for the Western District of Oklahoma, Brenda Burks, et al. vs. Mis- souri Pacific Railroad Company et al., Case Number CIV-98-204-A, Depositions of Richard Reynolds and Clifford Shoemaker........... 6, 12, 24 In the Circuit Court of Jackson County, Missouri at Kansas City, Kimberly R. Alcorn vs. Union Pacific Railroad Company, et al., Case Number CV-97-31927, Videotaped Deposition of Clifford GmOMNNG ooo cccccccccccccccccceccceccssees 6, 12, 16 In the District Court of Caddo County, State of Okla- homa, Steve and Violet Myers, et al. v. Missouri Pacific Railroad Company et al., Case Number CJ-97-46, Deposition of Clifford Shoemaker............ 12, 21, 22 Vv TABLE OF AUTHORITIES - Continued Page In The District Court Of Canadian County, State Of Oklahoma, Brenda and Eugene Spence, et al. vs. Missouri Pacific Railroad Company et al., Case No. CJ-97-1-01 Deposition of Clifford Shoemaker ...... 22 In The District Court Of Pierce County, North Dakota, Gene Graumann, et al., vs. Burlington Northern Santa Fe Corporation, et ai., Case No. 98-C-2020, Deposition of Spencer Arndt........ 24, 25 Report of Harvey Levine, Ph.D. submitted in In the Circuit Court of Jackson County, Missouri at Kansas City, Kimberly R. Alcorn vs. Union Pacific Railroad Company, et al., Case Number PE chcétesddoncenscssvidsantateaontind 16, 18 Report of Harvey Levine, Ph.D. submitted in State Of Minnesota, In The District Court Of Polk County, Ninth Judicial District, Toni Weaver, et al. v. Burlington Northern Santa Fe Corporation, et al., GD See, GG ohn dobdscecedenncaketuienens 12, 17 Report of Harvey Levine, Ph.D. submitted in In the United States District Court For the Western District of Tennessee Eastern Division, Dwayne E. Mitchell v. Rickey D. Kelley, et al., Western Divi- sion, Defendants, Case No. 93-1220 T........... 16, 25 Harvey Levine, Ph.D., The Other Side of Staggers, Traffic World, Vol. 260, No. 9, page 35 (Nov. 29, GUOU cs dad enwtanctstsecssagenencenndedbbansiandess 16 Memo of Stephen Trimble addressed to all NARTC members dated March 26, 1990 attached as an exhibit to Plaintiffs’ response to Defendants’ Motion for Summary Judgment in CD occccncvccccccdacenéccsdaupanesebetdehas 19, 20 vi TABLE OF AUTHORITIES - Continued . age Letter to Stephen Trimble, dated April 17, 1990 ..19, 20 Union Pacific Railroad Grade Crossing Resource Manual Chapter 6, Section C page V-C-1 and V-C-2, exhibit 4 of Richard Reynolds deposition fy BR coc cccccccccccoccccecccesenessecseseesees< 20 Affidavit of Robert A. Schuetze, Esquire attached as an exhibit to Plaintiffs’ response to Defen- dants’ Motion for Summary Judgment in Weaver .... 20 Affidavit of William H. Wendling, submitted in In the Circuit Court of Jackson County, Missouri, c' Kansas City, Mark Griffin, et al. vs. Kansas City Southern Railway, Case No. CV93-26148 ........... 13 Affidavit of Merrick C. Walton submitted in In the District Court of Labette County, Kansas, Miika M. Monohon, et al., vs. Union Pacific Railroad Co., Case No. 96-C-27-O5G 2... ccccccccccccccccccsccess 19 Operation Lifesaver, Inc., Hand-out Section 3 attached as an exhibit to Plaintiffs’ response to Defendants’ Motion for Summary Judgment in PD. . ise eedddeb dees benbent etenenenens 21, 22, 23 Gregory A. Malkasian, Regulatory Issues — Crossing Safety in Oregon, Published in Proceedings of the International Symposium on Railroad-High- way Grade Crossing Research and Safety 1990 fin Beem. TENE. « oc cccccccececacssesses 23, 24 INTEREST OF AMICUS CURIAE This brief is written on behalf of the following con- cerned groups: The Angels On Track Foundation a non- profit corporation. A foundation with the mission of providing financial support to communities to improve railroad crossing safety in the state of Ohio and to pro- vide information to communities on other sources of funding that can be used to improve crossing safety. The Coalition for Safer Crossings, whose goal is to contribute to a higher level of safety at railroad grade crossings. The organization also seeks to provide information to the public on how to prevent accidents at railroad grade crossings before they happen. Active People Against Rail- road Tragedies (APART) a nonprofit corporation dedi- cated to railroad safety whose goals include attaining active warning systems, crossing gates, lights and bells where needed at railroad crossings. Hands Across the Rails a group dedicated to safety whose motto is “Lights and Gates for Fifty States.” Railwatch a nonprofit corpo- ration dedicated to educating the public about rail safety and holding the nation’s railroads accountable for their dismal safety record. Railwatch is supported by cities, counties, school districts, emergency management dis- tricts, local officials, victims of train accidents and their families, shippers and other concerned citizens through- out the United States. The National Association of Rail- road Safety Consultants and Investigators a nonprofit corporation. NARSCI is an independent organization of people interested in railroad safety who actively work or consult in railroad safety matters. These groups have agreed to lend their backing to the preparation of this brief because they believe that affirming the Sixth Circuit will lead to greater safety at railroad grade crossings and encourage the installation of lights and gates at grade crossings. + SUMMARY OF THE ARGUMENT Lights and gates is undeniably the most effective and cost efficient method of providing crossing safety to the motoring public. Congress, the FRA and the FHWA all acknowledged this fact in the formulation and enactment of the 1973 Federal Highway Safety Act. Therefore, in crafting legislation and regulations, “adequate protection” at hazardous railroad grade crossings was defined as lights and gates. Unfortunately, many of this country’s crossings did not even meet the minimum requirements for appropriate signing in the early 1970's. Accordingly, some funding was also made available for “correcting deficiencies” at those crossings that did not have the mini- mum required signing and pavement markings. The rail industry seized upon the opportunity to use this federal funding program as a conduit to immunize railroads from lawsuits based upon their common law duties to provide reasonably safe crossings. Despite deregulation and the profitability that followed, the industry has adopted a uniform position that railroads will not independently fund the installation of lights and gates. In fact, they 1 Pursuant to Supreme Court Rule 37.3, letters from the parties consenting to the filing of this brief have been filed with the Clerk of the Court. This brief was funded by amicus, Grant L. Davis, Esq., and Thomas C. Jones, Esq., of the Law Offices of Lantz Welch, P.C., and was written entirely by counsel representing the interested parties. eT continue to ignore basic sign maintenance so as to qualify for funding of crossbuck replacements. The industry also actively promotes the dissemination of misleading infor- mation about the effectiveness of lights and gates. It is respectfully requested that this Court identify the industry’s manipulation of a federal funding program and affirm each state’s right to protect its citizens through a case by case application of the tirve-proven common law. oe ARGUMENT I. LIGHTS AND GATES PROVIDE CROSSING PRO- TECTION THAT IS 90% EFFECTIVE IN PREVENT- ING ACCIDENTS. The effectiveness of lights and gates in the preven- tion of accidents at railroad crossings has been recog- nized for over a half a century. One of the first, and most comprehensive, studies of the effectiveness of various warning devices at railroad crossings was conducted by W.]. Hedley, Assistant Chief Engineer of the Wabash Rail- road. His study, “The Achievement of Grade Crossing Protection,” was originally published in 1949.2 Hedley’s work showed lights and gates to be 96% effective.> In 2 The Achievement of Grade Crossing Protection, W. J. Hedley, Assistant Chief Engineer, Wabash Railroad (1949). 3 Railroad-Highway Grade Crossing Handbook, Second Edition, FHWA-TW-86-215, Thomas O. Willett, Director, Office of Engineering, Federal Highway Administration, September, 1986 page 104. Appendix 2. 1968, the American Association of State Highway Offi- cials in cooperation with the Bureau of Public Roads published the National Cooperative Highway Research Program Report 50 entitled Factors Influencing Safety at Highway-Rail Grade Crossings.* The NCHRP Report 50, reviewed Hedley’s study and numerous other studies, including the following: 1. “A Study of Railroad Grade Crossing Protec- tion in Houston (1960);”° 2. “Results Accomplished by the Use of the Grade Crossing Protection Fund Established by the Illinois Legislature Beginning Sep- tember 1, 1955, and Administered by the Illinois Commerce Commission (1965);” 3. “Improved Railroad Crossing Protection and Coordination of Traffic Signals with Train Movements.” 4 Factors Influencing Safety at Highway-Rail Grade Crossings, David W. Schoppert and Dan W. Hoyt, sponsored by the American Association of State Highway Officials in Cooperation with the Bureau of Public Roads (1968) (NCHRP Report 50) Appendix 1. 5 A Study of Railroad Grade Crossing Protection in Houston, C. McEachern, Proc. Inst. Traffic Eng., pp. 168-172 (1960). 6 Results Accomplished by the Use of the Grade Crossing Protection Fund Established by the Illinois Legislature Beginning September 1, 1955, and Administered by the Illinois Commerce Commission, R.B. Thomas, Illinois Commerce Comm. 13 pp. (1965). 4. “Accident Reduction at Crossings Protected Under Crossing Protection Fund (1965);7 5. “Traffic Control and Roadway Elements: Their Relationship to Highway Safety (1963);"8 and the 6. “Effectiveness of Automatic Crossing Gates in Southern California, 1954 Through 1963 (1964).”9 NCHRP Report 50 noted that “the ideal protection, disregarding economy, is often said to be grade separa- tion.” However, a closer look at accident rates and econ- omies of scale led to the conclusion that “this seems to indicate that grade separation may not be the answer, especially when automatic protection provides a 90% reduction in accidents.”!° In 1986 the Railroad-Highway Grade Crossing Handbook, 2nd Ed.,!! published by the Federal Highway Administration acknowledged the exis- tence of various studies concerning the effectiveness of lights and gates. Table 34, “Effectiveness of Active ” Accident Reduction at Crossings Protected Under Crossing Protection Fund, California Public Utilities Comm., San Francisco (Aug. 26, 1965). ® Traffic Control and Roadway Elements: Their Relationship to Highway Safety, Schoppert, D.W., Automotive Safety Found., pp. 61-64 (1963). z Effectiveness of Automatic Crossing Gates in Southern California, 1954-Through 1963, L.C. Young, California Public Utilities Comm., Los Angeles, 3 pp. (Oct. 1, 1964). 1° NCHRP Report 50 page 79. Appendix 1. " Railroad-Highway Grade Crossing Handbook, 2nd Ed. Crossing Warning Devices”, contains the results of three of the studies regarding the effectiveness of active warn- ing devices. The average effectiveness of ligh's and gates at railroad crossings based upon an average of the results of those three studies is 89%. Virtually all credible studies conducted on this issue have confirmed that lights and gates at grade crossings are 90% effective guarding devices for the prevention of accidents. In fact, Clifford Shoemaker, Director of Public Projects for the Union Pacific Railroad who is considered as an expert on the subject in the industry!3, admitted that lights and gates are 90% effective in preventing accidents at railroad crossings. !4 12 pp. 104 of the Railroad-Highway Grade Crossing Handbook, 2nd Ed. Appendix 2. 13 In the United States District Court for the Western District of Oklahoma, Brenda Burks, et al. vs. Missouri Pacific Railroad Company et al., Case Number CIV-98-204-A, (hereinafter Burks) Deposition of Richard Reynolds, taken on October 29, 1998, page 95, line 20 through line 24. Appendix 4. 14 Burks, Volume III of the Deposition of Clifford Shoemaker, taken on December 10, 1998, page 383, line 8 through page 384, line 24. Appendix 6. See also In the Circuit Court of Jackson County, Missouri at Kansas City, Kimberly R. Alcorn vs. Union Pacific Railroad Company, et al., Case Number CV-97-31927,(hereinafter Alcorn) Videotaped Deposition of Clifford Shoemaker, taken May 11, 1999, page 11, line 18 through page 12, line 11. Appendix 5. Il. LIGHTS AND GATES PROVIDE THE MOST COST EFFECTIVE CROSSING PROTECTION AVAILABLE. Two years after NCHRP Report 50 suggested the need for “intensive research” to be conducted on the cost effectiveness of train activated protection (lights and gates) at crossings versus grade separation, Congress adopted the Federal Highway Safety Act of 1970.15 This legislation marked the beginning of an extensive research project by the Federal Highway Administration and the Federal Railroad Administration culminating in the prep- aration of two joint reports prepared for consideration by Congress. Those reports were: 1) Report to Congress. Railroad-Highway Safety, Part 1: A Comprehensive State- ment of the Problem,’ and 2) Report to Congress. Rail- road-Highway Safety Part II: Recommendations for Resolving the Problem.’” In the 1971 Report to Con- gress,1® the FRA and FWHA analyzed the current prob- lem with accidents at grade crossings. In their economic analysis of safety problems at grade crossings, the FHWA 1S Federal Railroad Safety Act of 1970 (FRSA), Pub. L. No. 91-458, 84 Stat. 971, codified as amended at 45 U.S.C. 421 et seq., and the Highway Safety Act of 1973, Pub. L. No. 93-87, 87 Stat. 282, codified as amended at 23 U.S.C. 130. 16 U.S. Dep’t of Transportation, Railroad-Highway Safety Part I: A Comprehensive Statement of the Problem (1971 Report to Congress) PB206792, (Nov., 1971). 17 U.S. Dep’t of Transportation, Railroad-Highway Safety Part II: Recommendations for Resolving the Problem (1972) (1972 Report to Congress), PB 213 115. 18 1971 Report to Congress, at Section III], “THE CURRENT PROBLEM,” pp. 23-36. and the FRA made it clear that there are only three types of “warranted improvements” contained in their analysis. Those included 1) new grade separation; 2) reconstruc- tion of existing grade separations; and 3) installation of automatic grade crossing protective devices (lights and gates).!9 In that report, Table 67° provides the results of the economic analysis for protective device improve- ments at grade crossings. That table specifically indicates that the protection improvements include “flashing lights and automatic gates.” There is no reference to crossbuck reflectorization programs contained in the economic anal- ysis of “warranted improvements” in this report. The only reference to crossbuck reflectorization programs is a reference that the railroads have a continuing duty to maintain grade crossing protection facilities. The report recognizes that “reflectorization of crossing signs has been an ongoing program for several years.”?! The 1972 Report to Congress included an Executive Summary.*? The Executive Summary specified that the economic anal- ysis in the report was limited to grade separation struc- tures and flashing lights and automatic gates.2**> The Federal Highway Administration and Federal Railroad Administration unequivocally recommended crossing protection through the installation of lights and gates by stating the following: 19 id. see page 32. 20 id. at page 35. 21 id. see page 40. 22 id. see page vi. 23 id. see page vi. mi ga “An economic analysis was used in this study to identify various levels of improvement and to evaluate the reduction in nationwide losses at public grade crossings that would result from each. For purposes of the economic analysis, the types of improvement considered were limited to flashing lights, automatic gates, and grade separation structures. The cost benefit analysis indicates that grade crossing protection will return both greater overall benefits and much greater safety benefits for a given level of investment than will grade separation. Accordingly, any new federal initiative should concentrate on grade crossing protection, while grade separations and similar elimination-type projects should continue to be included in other highway programs.” Chapter X, “PUBLIC GRADE CROSSING IMPROVE- MENT NEEDS,” in the 1972 Report to Congress II,?4 contains the economic analysis of federal funding for grade crossing improvements. That economic analysis is limited to grade separation and crossing improvements that include flashing lights and automatic gates. The 1972 Report specifically indicates that it was not “possible to include in the economic analysis other possible types of improvements such as passive device improvements.”25 The entire discussion of “passive device improvements” is contained in one paragraph on page 90 of the 1972 Report. That one paragraph reads as follows: 24 id. pages 74-92. 25 id. page 75. 10 It is not possible at this time to make a benefit-cost analysis of improved passive devices, such as pavement markings and sign- ing at and in advance of the crossing. The inven- tory conducted for this study indicated that there are 11,365 crossings at which there are no signs. In addition, it is known that there are many crossings that have a crossbuck sign on only one highway approach. The inventory did not record those crossings with missing or oth- erwise deficient advance warning signs. As a first step in improving grade crossing safety, each railroad and each responsible public agency which does not already have one should undertake a program of passive device improve- ment. Such programs should also include the removal of obstacles from the crossing quad- rants, i.e., those which impair visibility, to improve safety. The estimated cost to correct these deficiencies in passive signing and mark- ings alone may be on the order of $10 million. The analysis of “passive device improvements” such as crossbuck reflectorization programs was limited to one paragraph out of the two reports submitted to Congress in 1971 and 1972. In that one paragraph, the Federal Railroad Administration and Federal Highway Adminis- tration limited the discussion to such passive device improvement programs which are necessary to correct “deficiencies in passive signings and markings.” The con- clusion concerning the analysis of crossing improvement needs in Chapter X in Report II is as follows: Any new initiative should concentrate on grade crossing protection while grade separa- tions and similar elimination-type projects 11 should continue to be included in other high- way programs. For a given level of investment much greater safety benefit can be obtained from a program of grade crossing protection than from a program including both protection and elimination of crossings by grade separa- tions and the like. The ratio of benefits to costs for a given level of investment is much greater for protection than for grade separations and the initial cost of protection is much less than the initial cost of grade separations. That conclusion went on to clarify that expenditures for other improvements such as “passive device improve- ment” should be undertaken by the public agencies and the railroads to make sure that all crossings meet the minimum requirements of MUTCD. After considering the reports to Congress the Highway Safety Act of 1973 was passed. Ill. 23 C.RR. § 646.214(b)(3) DEFINES “ADEQUATE CROSSING PROTECTION” AS LIGHTS AND GATES If certain potentially hazardous conditions exist at any given crossing, the installation of lights and gates is mandated. 23 C.F.R. § 646.214(b)(3)(i) defines “adequate warning devices” as devices which include “automatic gates with flashing light signals.” 23 C.F.R. § 646.214(b)(3)(ii) provides that gates may not be neces- sary if a diagnostic team justifies that “gates are not appropriate.” Nothing in 23 C.F.R. § 646.214(b)(3) indi- cates that something less than flashing lights could ever meet the definition of “adequate warning devices.” In recent years, most of the installations of active warning 12 devices at crossings include lights and gates.7° The reason for the inclusion of automatic gates with an active instal- lation is obvious. It only costs about $15,000 to add gates to an active installation that railroads are currently instal- ling for somewhere in the neighborhood of $150,000.77 The effectiveness of gates added to a lights-only installa- tion is also verified in the Railroad-Highway Grade Crossing Handbook.”* The addition of relatively low-cost gates to a flashing lights installation increases the instal- lation’s effectiveness by 67%.?? Obviously, the expendi- ture of an additional $15,000 to make an active warning installation 67% more effective is clearly a wise expendi- ture. The cost of this increased effectiveness is 10% of the entire installation. 26 Alcorn, Videotaped Deposition of Clifford Shoemaker, taken May 11, 1999, page 19, lines 11-15, and page 20, lines 9-17. Appendix 5. 27 In the District Court of Caddo County, State of Oklahoma, Steve and Violet Myers, et al. v. Missouri Pacific Railroad Company et al., Case Number CJ-97-46, (hereinafter Myers) Deposition of Clifford Shoemaker taken on April 1, 1999, page 40 line 19, Appendix 8. Burks, Volume I of the Deposition of Clifford Shoemaker, taken on November 12, 1998, page 29 line 18, Appendix 6. Report of Harvey Levine, Ph.D. submitted in State Of Minnesota, In The District Court Of Polk County, Ninth Judicial District, Toni Weaver, et al. v. Burlington Northern Santa Fe Corporation, et al., Case No. C9-99-22 (hereinafter Weaver). Appendix 10. 28 See Railroad-Highway Grade Crossing Handbook, 2nd Ed., page 104, Table 34, Appendix 2. 29 That is the average of the three studies referenced in the Railroad Grade Crossing Handbook, 2nd Ed., Appendix 2. PO lm ——— 13 The railroad industry has attempted to bootleg “pas- sive protection improvements” into the definition of “adequate warning devices” under 23 C.F.R. § 646.214(b)(3)(i) in an attempt to immunize railroads from liability under the banner of federal preemption. That position is not supported by the legislative history, interpretation of the regulation itself, nor the Federal Highway Administration’s implementation of the Federal Highway Safety Act. According to Wm. H. Wendling a former official of the Federal Highway Administration, the FHWA’s cross- buck program was separate and distinct from programs to erect lights and gates. Crossbucks only provided mini- mum protection as mandated by law at all crossings as opposed to a determination of adequate protection at an individual crossing.*® Judge Posner reached the same conclusion in Shots v. CSX Transportation, Inc., 38 F.3d 304 (7th Cir. 1994). He noted that the Secretary of Transporta- tion would have engaged in an “extraordinary act of irresponsibility” if he precluded liability by providing funds for minimum protection without determining what adequate protection was at an individual crossing.) Mr. Wendling’s affidavit confirms that the Secretary was act- ing responsibly in his treatment of the crossbuck pro- gram. 3° William H. Wendling Affidavit submitted in In the Circuit Court of Jackson County, Missouri, at Kansas City, Mark Griffin, et al. vs. Kansas City Southern Railway. Case No. CV93-26148. (Wendling Affidavit) Appendix 18. 31 Shots at 309. 14 As mentioned in the previous section, “passive device improvement” was included in the 1972 Report to Congress II only as an indication that many crossings needed programs that were designed to correct “deficien- cies in passive signings and markings.” 23 C.F.R. § 646.214(b)(4) allows the FHWA approval over any fed- eral expenditures for such passive device improvements. The legislative history of the Federal Highway Safety Act of 1973 makes it clear that Congress intended to have appropriate signage at all 170,000 passive crossings. Con- gress had already targeted 29,000 of those 170,000 passive crossings for upgrading to “train actuated protection” as recommended in the 1971 Report to Congress.*? The numbers referenced in the legislative history makes it clear that the massive signage programs designed for “passive device improvement” was intended to establish minimum compliance for all passive crossings and that at least 29,000 of those passive crossings were also targeted to be upgraded with lights and gates. As further confirm- ation of this fact, the Federal Highway Administration published the Federal Aid Highway Program Manual.** The manual specified that the first priority under the new Highway Safety Act of 1973 required “as a minimum” the states and railroads needed to “institute an improvement program to provide signing and pavement markings in 32 Federal-Aid Highway Act of 1973, Legislative History p. 1892. Appendix 19. 33 United States Department of Transportation, Federal Aid Highway Program Manual. (Attached as exhibit 1 to the Wendling Affidavit) Appendix 18. a 15 compliance with the Manual on Uniform Traffic Control Devices at all grade crossings.”*4 The issue on whether compliance with the MUTCD can rise to the level of federal preemption has already been answered in CSX Transp., Inc. v. Easterwood, 507 U.S. 658, 669 (1993) wherein the court rejected the notion that compliance with the MUTCD somehow gave rise to fed- eral preemption of any claims based upon the adequacy of grade crossing protection devices. “The MUTCD pro- vides a description of, rather than a prescription for, the allocation of responsibility for grade crossing safety between the Federal and State Governments and between States and railroads.”%5 23 C.F.R. § 646.214(b)(4) and the Federal Highway Administration’s characterization of these projects as being designed to obtain minimal com- pliance with the MUTCD is totally consistent with the 1972 Report to Congress. The report, the regulation and the implementation all address the need for “correcting deficiencies” in passive devices at thousands of railroad crossings. The lack of any cost-benefit analysis on those projects further supports the conclusion that such “pas- sive devices improvements” were intended solely to bring all crossings into minimal compliance with the MUTCD.% 34 id. at Vol. 6, Chap. 8, Sec. 2, p. 6. Appendix 18. 35 id. at 669. 36 See page 75 Report to Congress II. 16 IV. INSTALLATION OF LIGHTS AND GATES HAS BEEN AN AFFORDABLE OPTION AVAILABLE FOR THE FOUR LARGEST RAILROADS IN THE UNITED STATES SINCE 1980. Harvey Levine was the prior Vice President of Eco- nomics for the Association of American Railroads. He spent eighteen years with the Association of American Railroads working on economic policy and economic analysis for the railroad industry.*” After retiring from his work for the Association of American Railroads, Harvey Levine’s interest in crossing safety led him to analyze grade crossing policies of the country’s major railroads. Levine's analysis of the Union Pacific Railroad,** the Bur- lington Northern Santa Fe Railroad Company® and the Norfolk Southern® are contained at Appendix 9, 10, and 11. These railroads and the CSX are the four “mega railroads” which now account for 95% of the industry’s traffic.4! The economic decisions of these “mega rail- roads” reveal a clear industry-wide choice to prefer short- term profits to crossing safety. One of the purposes of the 37 Attachment 1 to the report of Harvey Levine, Ph.D. submitted in Alcorn and attached as Exhibit 5 to the Deposition of Harvey Levine, Ph.D. taken on August 17, 1999. Appendix 9. 38 id. 39 Report of Harvey Levine, Ph.D. Appendix 10. 40 Report of Harvey Levine, Ph.D. submitted in In the United States District Court For the Western District of Tennessee Eastern Division, Dwayne E. Mitchell v. Rickey D. Kelley, et al., Western Division, Defendants, Case No. 93-1220 T (hereinafter Mitchell). Appendix 11. 41 Harvey Levine, Ph.D., The Other Side of Staggers, Traffic World, Vol. 260, No. 9, page 35 (Nov. 29, 1999). Appendix 12. 17 Staggers Act,4?2 which deregulated the industry, was to increase the profitability of the railroads so that they could better maintain and improve their infrastructure, which, in turn, would increase public safety.4* However, the “mega railroads” Harvey Levine reviewed were already very profitable prior to deregulation and then became even more profitable following deregulation. Despite the enormous profits generated by deregulation, these railroads refused to independently fund crossing safety improvement programs. The railroads’ unified position contravened one of Congress’s fundamental motivations for passing legislation to deregulate the industry.“ The American public, who was to benefit from Staggers, has not seen additional expenditures of railroad income on crossing safety. Conclusions similar to Levine’s can be drawn from a review of CSX Transportation, Inc. v. Palank, 743 So. 2d 556 (Fla. App. 1999). In that case, the Florida Court of Appeals upheld a punitive damage award of $50,000,000 based upon the conscious decisions of CSX to divert over two billion dollars ($2,000,000,000) from safety and main- tenance expenditures to maximize corporate profit and extend the railroad’s market share.*5 Harvey Levine's analysis of the other three “mega railroads” reveals the #2 Staggers Rail Act of 1980, Public Law 96-448, 96th Congress, 49 USC 10101, October 14, 1980. 48 Report of Harvey Levine Ph.D. on BNSF submitted in Weaver, page 3. Appendix 10. * BNSF report Appendix 10; UP report Appendix 9; NS report Appendix 11. 45 Palank at 560 and 564. 18 same conscious decision-making. In fact, a jury in Jackson County, Missouri recently assessed $120,000,000 in puni- tive damages for this same conscious disregard for cross- ing safety.4© The 1971 Report to Congress contains an extensive history of legal responsibilities for financing grade crossing safety improvements at Appendix 1 of that report. A review of that Appendix clearly establishes that states and railroads both have financial responsibilities for crossing safety.4” The concept of joint responsibilities was confirmed in Easterwood.** In 1978, the first edition of the Railroad Grade Crossing Handbook clearly provided that: “Financial conditions of some major rail- roads is such that their interest in grade crossing improvements is maintained. It may be expected that as the financial condition of an individual railroad deteriorates or improves, the com- pany’s commitment to grade crossing improve- ment financing will change. Therefore, no single generalized statement applies to all railroads’ ability to or interest in participating in grade crossing improvements.”4? In spite of record profits and growth, the four mega railroads that now exist in the United States have elected 46 Alcorn v. Union Pacific Railroad Co., In the Circuit Court of Jackson County, Missouri at Kansas City, Case No. CV 97-31927, Div. 10. 47 See Appendix 1 of the 1971 Report to Congress. 48 Easterwood at 669. 49 Railroad-Highway Grade Crossing Handbook, FHWA- TS-78-214, Dr. R. M. Olson, Federal Highway Administration, August 1978 p.67. Appendix 3. 19 to not spend any of their funds on independent programs for grade crossing safety improvements. V. THE RAILROAD INDUSTRY MADE A KNOWING AND INTELLIGENT DECISION TO OPT FOR SHORT-TERM PROFITS BY IGNORING ALL STATE COMMON LAW DUTIES TO UPGRADE RAILROAD CROSSINGS. In 1989, the National Association of Railroad Trial Counsel Executive Committee formed a “Special Advi- sory Committee on Grade Crossing Litigation.”5° The purpose of that committee was to establish a preemption defense to all claims that railroads have a duty to provide any additional grade crossing warning devices. The work of this committee was financed by the financial backing of the Burlington Northern Railroad; the Santa Fe Rail- road Company, Norfolk Southern Railroad, the Union Pacific Railroad Company, the Southern Pacific Railroad and the CSX.5! The committee prepared a model brief that was intended to “overturn the longstanding law in many states that allocate the duty and responsibility for °° Memo of Stephen Trimble addressed to all NARTC members dated March 26, 1990 attached as an exhibit to Plaintiffs’ response to Defendants’ Motion for Summary Judgment in Weaver. Appendix 13. 51 See Letter to Stephen Trimble, dated April 17, 1990. Mr. Trimble was the Chairman of the Special Advisory Committee on Grade Crossing Litigation. The letter was also sent to Henry Moffett, Head of the National Association of Railroad Trial Counsel (NARTC). Appendix 14. See Affidavit of Merrick C. Walton in In the District Court of Labette County, Kansas, Miika M. Monohon, et al., vs. Union Pacific Railroad Co., Case No. 98-C-27- OS. Appendix 15. 20 grade crossing safety to the railroads.”°? Shortly after the dissemination of the model brief, it became obvious that members of the National Association of Railroad Trial Counsel began shopping for “good facts and good judges who are receptive to preemption arguments.”°% The Union Pacific Railroad has a specific policy which emphasizes that the Union Pacific Railroad will not independently fund grade crossing improvement pro- grams which upgrade crossings to include lights and gates.>4 The Burlington Northern Santa Fe Railroad Com- pany has had a similar policy in effect for years.°° The refusal of major railroads to finance crossing improvement projects is not unique to the Union Pacific Railroad nor the Burlington Northern Santa Fe Railroad Company. In fact, all four of the largest railroads in the United States participate in the Operation Lifesaver, Inc. program. That program holds itself out as an indepen- dent public information program dedicated to reducing 52 Memo of Stephen Trimble addressed to all NARTC members dated March 26, 1990. Appendix 13. 53 Letter to Stephen Trimble dated April 17, 1990. Appendix 14. 54 See Union Pacific Railroad Grade Crossing Resource Manual Chapter 6, Section C page V-C-1 and V-C-2, exhibit 4 of Richard Reynolds deposition in Burks, Deposition of Richard Reynolds, taken on October 29, 1998, page 137, line 23-25, page 138, line 1-24, page 141, lines 17-25, page 142, lines 1-17, page 143, lines 23-25, page 144, lines 1-7, page 147, lines 19-23. Appendix 4. 55 See Affidavit of Robert A. Schuetze, Esquire attached as an exhibit to Plaintiffs’ response to Defendants’ Motion for Summary Judgment in Weaver. Appendix 21. 21 crossing accidents. However, Operation Lifesaver, Inc. is governed by an eleven-member Board of Directors>© who are “financially, legally and ethically responsible for all activities of the corporation.”57 That eleven-member board is comprised of personnel associated with the rail industry with the exception of one member.** Operation Lifesaver’s Position Statement reads as follows: To enhance highway-rail grade crossing safety, Operation Lifesaver, Inc. endorses the concept of reducing the number of crossings through consolidation, elimination, grade sep- aration and restricting the number of new cross- ings. Conspicuously missing from the Position Statement of Operation Lifesaver, Inc. is the support for the installa- tion of lights and gates at grade crossings. The most cost- effective means of crossing protection endorsed by the FRA and FHWA is not endorsed by the industry’s “public education program.” In fact, Operation Lifesaver, Inc. teaches its presenters to NEVER refer to a crossing as “protected” or “unprotected” or “guarded” or “unguarded” because “this implies that crossings with gates, lights and bells somehow protects the motorist when in fact they are merely warning devices that are too 56 See Operation Lifesaver, Inc., Hand-out Section 3 attached as an exhibit to Plaintiffs’ response to Defendants’ Motion for Summary Judgment in Weaver. Appendix 16. 57 id. Appendix 8 and 16. 58 Myers, Deposition of Clifford Shoemaker taken on April 1, 1999, pages 59-61. Appendix 8. 22 often disregarded.”5? The program stresses that Opera- tion Lifesaver, Inc. presenters are not spokespersons for Operation Lifesaver, Inc. and that they should avoid spec- ific questions about rail policy and technology. However, when they are asked, “why aren’t there gates and lights at every crossing,” the following response is suggested: Most people think that gates and lights are the answer to preventing tragedies at grade crossings. Unfortunately, these active warning devices often are not enough because drivers sometimes choose to disregard them; in fact, over half of all grade crossing crashes at public crossings occur where active warning devices (gates, lights, bells) exist. This scripted response is clearly misleading because it answers a specific question about lights and gates with statistics that include all active warning devices including antiquated systems that are in excess of fifty years old. In reality, Clifford Shoemaker, one of the board members of Operation Lifesaver, Inc.,© admits that only about 20% of all accidents occur at crossings with lights and gates despite the fact that 85% of the traffic encounters between cars and trains occur at those crossings.®! Operation 59 See Operation Lifesaver, Inc., Hand-out Section 3. Appendix 16. 60 Myers, Deposition of Clifford Shoemaker taken on April 1, 1999, page 59. Appendix 8. 61 Myers, Deposition of Clifford Shoemaker taken on April 1, 1999, page 146 and In The District Court Of Canadian County, State Of Oklahoma, Brenda and Eugene Spence, et al. vs. Missouri Pacific Railroad Company et al., Case No. No. CJ-97-1-01 (hereinafter Spence) Deposition of Clifford Shoemaker taken on October 21, 1999, page 159. Appendix 8 and 7. >. 23 Lifesaver, Inc. presenters are specifically advised to teli the public that “flashing red lights and gates don’t elimi- nate collisions, either.”? This industry “public educa- tion” program is misleading at best, if not a totally fraudulent misrepresentation of the facts. The “public education” program of Operation Life- saver, Inc. adopts the industry’s position that it is entirely the government's responsibility to place lights and gates at grade crossings.® That position mirrors the position of the National Association of Railroad Trial Counsel, but totally ignores the holding in Easterwood, which rejected this blanket preemption argument. VI. RAILROADS SHOULD NOT BE GIVEN THE POWER TO CREATE THEIR OWN PREEMPTION DEFENSE BY MANIPULATING THE FEDERAL FUNDING PROGRAM. It has been noted that the installation of lights and gates by major railroads (Class 1 railroads) using limited federal funds are characterized by unreasonable delays and excessively high costs.® It has also been suggested 62 Operation Lifesaver, Inc. Presenters’ Manual, Section 3. Appendix 16. 63 Operation Lifesaver, Inc., Hand-out Section 3. Appendix 16. 64 Gregory A. Malkasian, Regulatory Issues — Crossing Safety in Oregon, Published in Proceedings of the International Symposium on Railroad-Highway Grade Crossing Research and Safety 1990 in Knoxville, Tennessee. Appendix 17. See also St. Louis Southwestern R.R., Co. v. Malone Freight Lines, Inc., 39 F.3d 864 (8th Cir. 1994) (referencing a fifteen month delay in the erection of lights and gates). 24 that federal funds which could be used for the installa- tion of lights and gates are too frequently diverted to other projects which have the net result of lessening the number of lights and gates which can be installed under the federal funding program.® The Union Pacific Rail- road admittedly uses federal funding to supplement its maintenance budget by applying for funding of cross- buck replacements, lens replacement programs and cross- ing surface improvement programs.® These expenditures would otherwise be ordinary expenses that should come out of the railroad maintenance budget.*? The Union Pacific Railroad is not alone in this methodology of utiliz- ing federal funds to supplement their own maintenance budget. The Burlington Northern Santa Fe Railroad Com- pany openly admits that they do not do anything to inspect crossbucks to determine when they have exceeded their useful life.* They do not even attempt to maintain the reflective qualities on their crossbucks. In fact, the Burlington Northern Santa Fe Railroad Company waits for the state to determine that the crossbucks have fallen into such a state of disrepair that they no longer 6 id. at 63. Appendix 17. 6 Burks, Volume II of the Deposition of Clifford Shoemaker, taken on December 9, 1998, pages 314-319. Appendix 6. 67 id. Appendix 6. 68 In The District Court Of Pierce County, North Dakota, Gene Graumann, et al., vs. Burlington Northern Santa Fe Corporation, et al., Case No. 98-C-2020, Deposition of Spencer Arndt taken on July 15, 1999 page 81, lines 12-21, page 86 lines 5-15, pages 93-95, and pages 107-108. Appendix 20. 25 comply with the MUTCD as “reflectorized.”™ By waiting for an entire rail corridor to become a legally deficient safety hazard, the railroad qualifies for federal funding to replace all crossbucks in that corridor.”° Despite record profits recognized from operating rev- enues, the major railroads still refuse to participate in research and development costs as recommended in the 1972 Report to Congress.”! They refuse to use competitive bidding to bring down the costs of installing lights and gates and further refuse to supplement the federal spend- ing programs with any of their own profits. By diverting funds that could otherwise be used for lights and gates, the railroads are also effectively diluting the overall effec- tiveness of the federal lights and gates program. Current practices allow the major railroads to divert funds from lights and gates installations, use their own forces to install lights and gates at unreasonably high prices, create excessive delays in installation so that funds are subject to being more readily diverted and refuse to supplement the federal program with any of their own funds. These industry practices have impeded the installation of lights and gates. At the current rate, it will take in excess of One Hundred Years to provide lights and gates at all crossings in Tennessee.’? Impeding the installation of the most cost- © id. Appendix 20. 70 id. Appendix 20. 71 See page 68 Report to Congress II. Burks, Volume II of the Deposition of Clifford Shoemaker, taken on December 9, 1998, pages 201-203, and 219. Appendix 6. 72 Report of Harvey Levine, Ph.D. in Mitchell. Appendix 11. 26 effective form of crossing protection has never been one of the goals of Congress or the FHWA. Manipulation of the federal funding program is sim- ple. Any railroad can ignore sign maintenance until pas- sive signs exceed their useful life and become non- compliant with the Manual on Uniform Traffic Control Devices. The reward for this intentional neglect of sign maintenance is the receipt of federal funding to supple- ment your maintenance budget. The added bonus for such conduct is the potential for gaining immunity from being sued for your intentional decision to ignore your common law duty to upgrade crossings. Now that virtually every crossing in the United States has obtained some type of passive warning sign funded with federal money intended to “correct deficien- cies” at crossings, the railroads have almost completed their plan to gain blanket immunity for their election to ignore common law duties. The last step remaining is for the United States Supreme Court to accept the industry’s argument that all state law claims of inadequate warning devices at all railroad crossings are preempted by the use of federal funds used to make those crossings meet mini- mum compliance standards of the MUTCD. This brief is offered in support of those safety organizations and vic- tims’ groups who respectfully request this Court to thwart the industry’s plan to obtain blanket immunity. ¢ 27 CONCLUSION On behalf of the crossing safety organizations and victims groups joining in this brief, it is requested that the United States District Court for the 6th Circuit Court of Appeals Decision be affirmed. Affirming the Court of Appeals would do the following: 1. add confirmation that adequate crossing protection for hazardous crossings is lights and gates; 2. remove some incentive for manipulating the federal funding process in hopes of obtain- ing preemption of state law claims; 3. reaffirm the Easterwood opinion that mini- mum compliance with MUTCD does not preempt state law claims for improved crossing safety; and 4. allow states to protect their citizens when something less than “adequate crossing pro- tection” exists at a hazardous crossing. Respectfully submitted: Rosert L. Potrrorr Norsert C. Marek, Jr. Myers Porrorr & BALL 320 Sunset Manhattan, Kansas 66502 App. i APPENDIX INDEX Appendix 1 — Factors Influencing Safety at High- way-Rail Grade Crossings, David W. Schoppert and Dan W. Hoyt, sponsored by the American Association of State Hig:.way Officials in Coop- eration with the Bureau of Public Roads. Appendix 2 - Railroad-Highway Grade Crossing Handbook, Second Edition, FHWA-TW-86-215, Thomas O. Willett, Director, Office of Engineer- ing, Federal Highway Administration, Septem- BSR, BOGS 2 ccccccccccscccecccsccesssecccecess App. 13 Appendix 3 - Railroad-Highway Grade Crossing Handbook, FHWA-TS-78-214, Dr. R.M. Olson, Federal Highway Administration, August BGTD .cccccccccccccccscdescccesccceccoseccecs App. 15 Appendix 4 —- In the United States District Court for the Western District of Oklahoma, Brenda Burks, et al. vs. Missouri Pacific Railroad Com- pany et al., Case No. CIV-98-204-A (hereinafter Burks) Deposition of Richard Reynolds, taken on October 29, 1998 and Deposition Exhibit ]. cccvccccccccvcscccccccccvescccccecesscevess App. 17 Appendix 5 - In the Circuit Court of Jackson County, Missouri at Kansas City, Kimberly R. Alcorn vs. Union Pacific Railroad Company, et al., Case No. CV-97-31927 (hereinafter Alcorn) Videotaped Deposition Transcript of Clifford Shoemaker, taken May 11, 1999............. App. 25 Appendix 6 — Burks, Volume I, II and III of the Deposition of Clifford Shoemaker, taken on November 12, 1998, December 9, 1998 and December 10, 1998 .............-4eeeeeeeeees App. 29 App. ii = 7 — In the District Court of Canadian ounty, State of Oklahoma, Brenda and Eugene Spence, et al. vs. Missouri Pacific Railroad Com- pany et al.. Case No. CJ-97-1-01 (hereinafter Spence) Deposition of Clifford Shoemaker taken on October 21, 1999 .................. App. 43 Appendix 8 - In the District Court of Caddo County, State of Oklahoma, Steve and Violet Myers, et al. v. Missouri Pacific Railroad Com- pany, et al., Case No. CJ-97-46 (hereinafter Myers) Deposition of Clifford Shoemaker taken on April 1, 1999...............050005s App. 45 Appendix 9 — Report of Harvey Levine, Ph.D. submitted in Alcorn and attached as Exhibit 5 to the Deposition of Harvey Levine, Ph.D. taken GR AMBUE 17, TORR. occccccccccccccsccscceces App. 50 Appendix 10 — Report of Harvey Levine, Ph.D. submitted in State of Minnesota, In the District Court of Polk County, Ninth Judicial District, Toni Weaver, et al. v. Burlington Northern Santa Fe Corporation, et al., Case No. C9-99-22 (here- IAEOS WHURUEE) «cc cccccccccscccsceseccecceces App. 84 Appendix 11 — Report of Harvey Levine, Ph.D. submitted in In the United States District Court for the Western District of Tennessee Eastern Division, Dwayne E. Mitchell, Plaintiff v. Rickey D. Kelley, et al. Case No. 93-1220 T ........ App. 126 Appendix 12 - Harvey Levine, Ph.D., The Other Side of Staggers, Traffic World, Vol. 260, No. 9 (November 29, 1999)...........20cceeeeeeees App. 152 Appendix 13 - Memo of Stephen Trimble addressed to all NARTC members, dated March 26, 1999 and attached Report of the Special Advisory Committee on Grade Crossing Litiga- _ PRYTTTITITITITITITILTT TTT T TTT App. 156 App. iii Appendix 14 - Letter to Stephen Trimble, dated SEES Tip TROR bevavsviesescsasaccccceccecsss App. Appendix 15 —- Merrick C. Walton Affidavit sub- mitted in In the District Court of Labette County, Kansas, Miika M. Monohon, et al. vs. Union Pacific Railroad Co., Case No. 98-C-27- DP. neucdkdeceuraksbdanedsices theses cen App. Appendix 16 —- Operation Lifesaver, Inc., Hand- et PPPPTTTITITITT TTT CLT TTT ee App. Appendix 17 - Gregory A. Malkasian, Regulatory Issues — Crossing Safety in Oregon, Published in Proceedings of the International Symposium on Railroad-Highway Grade Crossing Research and Safety 1990 in Knoxville, Tennessee ....App. Appendix 18 —- William H. Wendling Affidavit submitted in In the Circuit Court of Jackson County, Missouri, at Kansas City, Mark Griffin, et al. vs. Kansas City Southern Railway. Case DUO. CVF SONS on cc cccccccsscccccvcccccccee App. Appendix 19 — Federal-Aid Highway Act of 1973, Legislative History page 1892............... App. ——- 20 — In the District Court of Pierce ounty, North Dakota Gene Graumann, et al. vs. Burlington Northern Santa Fe Corporation, et al. Case No. 98-C-2020, Deposition of Spencer Arndt taken on July 15, 1999...... App. Appendix 21 — Affidavit of Robert Schuetze. ..App. 164 166 169 177 185 197 198 208 APPENDIX 1 App. 1 NATIONAL COOPERATIVE HIGHWAY 50 RESEARCH PROGRAM REPORT FACTORS INFLUENCING SAFETY AT HIGHWAY-RAIL GRADE CROSSINGS HIGHWAY RESEARCH BOARD NATIONAL RESEARCH COUNCIL NATIONAL ACADEMY OF SCIENCES - NATIONAL ACADEMY OF ENGINEERING a result of the crossing should be considered in establish- ing warrants for the various types of protection. Acci- dents reported by the railroads to the public utility commission may not provide the entire picture of cross- ing effectiveness to the highway user. Johnson (29) presents a method for determining the maximum safe speed at railroad grade crossings depen- dent on the visibility at the crossing and the speed of the trains. Sight triangles, speed, and distance formulas are utilized. Three assumptions were made, as follows: 1. The safe speed of a vehicle depends on the visi- bility and speed of the train, along with general assump- tions for reaction, acceleration, and deceleration. 2. When a vehicle is a specified distance from a grade crossing, and a train is sighted, there is a speed range that is too fast for a driver to stop and too slow for a driver to beat the train to the crossing. 3. There is a critical speed at which it is safe under all conditions assuming a perception-reaction time, vehi- cle deceleration rate, and a vehicle acceleration rate. App. 2 It was stated that three possible things can happen when a train and a vehicle approach a crossing. The vehicle may stop, accelerate, or collide with the train. The solu- tion to the advisory speed included: 1. Vehicle length. 2. Distance from the driver’s eye to the front bumper. Perception-reaction time. Deceleration (15 ft/sec? for a truck). 20 ft of clearance allowed if stopping. 50 ft of clearance allowed if accelerating. Na - Constant train speed. One of the most interesting factors brought out in an analysis by the California Public Utilities Commission (3) is that 70 percent of the fatal accidents involved a high- way vehicle approaching the train from the fireman’s side of the locomotive. It was suggested that this might be due to the driver sitting on the left side of the vehicle and not having equal vision to the right. The ideal protection, disregarding economy, is often said to be grade separation. A report by Kaiser (31) states that in Ohio twice as many deaths resulted from acci- dents at bridges as from accidents at railroad crossings. He further stated that 1 in 21 accidents at grade crossings were fatal, whereas 1 in 24 at structures were fatal. The incidence of fatal accidents in subways was 1 in 13. This seems to indicate that grade separation may not be the answer, especially when automatic protection provides a 90 percent reduction in accidents. App. 3 The absence of supporting data in previous research and the existence of arbitrary warrants are evidence of the need for cooperative data collection and analysis. It appears that because of arbitrary warrants and the strong public opinion, due to spectacular accidents, the return realized for money spent on protection devices may not be equivalent to the benefit received from them. The need for conservation of the national resources and expenditure of funds where they will provide the greatest rate of return dictates that intensive research be conducted in this area. TABLE A-8 DECREASES ACCOMPLISHED BY AUTOMATIC GATE INSTALLATIONS DECREASE (%) TRAIN- VEHICLE STUDY ACCI- DATE PERIOD DENTS DEATHS INJURIES Dec. 18, 1961 1951-60 62 85 83 Apr. 1, 1963 1951-62 60 90 84 Oct. 1, 1964 1954-63 57 89 88 App. 4 TABLE A-9 SUMMARY OF EFFECTIVENESS OF AUTOMATIC GATES AT GRADE CROSSINGS, BY TYPE OF PROTECTION PRIOR TO GATE INSTALLATION (75) ACCIDENTS PER CROSSING YEAR PRIOR PROTECTION BEFORE? AFTER? Crossbucks 0.427 0.122 Watchman 1.789 0.265 Wigwag 0.589 0.268 Flashing light signals 0.531 0.300 Manual gates 0.693 0.188 @ Before and after installation of automatic gates. TABLE A-10 EFFECTIVENESS OF AUTOMATIC GATES AT GRADE CROSSINGS, BY TYPE OF PROTECTION PRIOR TO GATE INSTALLATION (13) ACCIDENTS PER CROSSING YEAR PRIOR PROTECTION BEFORE AFTER Crossbucks 0.267 0.160 Watchman 1.021 0.155 Wigwag 0.649 0.111 Flashing light signals 0.658 0.151 Manual gates 0.344 0.039 App. 5 TABLE A-11 RESULTS OF STOP-SIGN OBSERVANCE AT RAILROAD CROSSINGS AND NEARBY INTERSECTION VEHICLES AT INTER- AT RAIL- SECTION ROADS NO. % NO. % Full stop 178 31.7 257 + =15.4 Almost stop (0-3 mph) 312 55.6 1,021 61.2 Entered slowly (4-15 mph) 67 12.0 329 =—:19.7 Entered fast (over 15 mph) 4 0.7 61 3.7 Total 561 100 1,668 100 REFERENCES 1. “Accident Reduction at Crossings Protected Under Crossing Protection Fund.” California Public Util- ities Comm., San Francisco (Aug. 26, 1965). 2. AtBricnut, C. 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New York Public Service Comm., Albany (1960) 28 PP- Peasopy, L. E., and Dimmickx, T. B., “Accident Hazards at Grade Crossings.” Pub. Roads, Vol. 22, No. 6, pp. 123-130 (Aug. 1941). “Prevention of Rail-Highway Grade Crossing Acci- dents Involving Railway Trains and Motor Vehicles.” Interstate Commerce Comm., Docket No. 33440, Washington, D. C. (Jan. 22, 1964). “Program Planned to Cut Accidents at Rail Cross- ings.” Automotive News, Vol. 37, No. 3841, p. 80 (Dec. 11, 1961). “Rail-Highway Grade Crossing Accidents, 1935-1954.” Bur. of Transport Econ. and Statistics, Interstate Commerce Comm., Washington, D. C., 123 PP: 47. 48. 49. 50. 51. 52. 53. 54. 55. 56. App. 10 “Rail-Highway Grade Crossing Accidents, 1955-1963.” Bur. of Transport Econ. and Statistics, Interstate Cor erce Comm., Washington, D. C. “Railroad Crossing Accidents on State Highways, Calendar Year 1963.” Colorado Dept. of Highways, Denver (Oct. 1964). “Railroad Crossing Protection Study.” Traffic Eng. Dept., City of Amarillo, Tex. (Feb. 1964). “Railroad Crossing Study.” Traffic Eng. Dept., City of Amarillo, Tex. (Aug. 18, 1960). “Railroad Crossings on the State and Federal Aid Highway Systems of New Hampshire.” New Hamp- shire Dept. of Public Works and Highways (Nov. 1964) 26 pp. “Railroad Grade Crossing Survey.” Contra Costa County (Calif.) Highway Dept. (1953) (unpubl.) “Railroad Grade Crossing Hazard Rating Study on North Carolina Secondary Rural Roads, Parts I and II.” North Carolina State Highway and Public Works Comm. (Sept. 1951). “Railway Crossings in Japan.” Japanese Minisiry of Transportation, Tokyo (1957). “Recommended Standards and Practices for Rail- road-Highway Grade Crossing Protection.” Bull. No. 5, Assn. of American Railroads, Washington, D. C. (1955) 30 pp. “Relative Hazards at Railroad Grade Crossings on State and Federal-Aid Highway Systems, 1954.” Tech: Rep. No. 56-3, Oregon Highway Comm. (1956) 113 PP- “Relative Hazards at Railroad Grade Crossings on State and Federal-Aid Highway Systems, 1957.” Tech. 57. 58. 59. 61. 62. 63. 65. App. 11 Rep. No. 59-5. Oregon Highway Comm. (1959) 111 PP- “Report on Railway-Highway Grade Crossings.” South Carolina State Highway Dept. (1963) 44 pp. Rivers, J., and Gurnett, G., “Effect of Gates on Vehi- cle-Train Accidents at RR Crossings.” (1955) (unpubl.) Roturock, C. A., “Hazard Evaluation Formulae for Railroad Grade Crossings.” Proc. Southeastern Assn. of State Highway Officials (1947). Roturock, C. A., “Railway Grade Crossing Priorities in West Virginia.” West Virginia State Road Comm., Charleston (1948). Scuoppert, D. W., “Traffic Control and Roadway Ele- ments: Their Relationship to Highway Safety.” Auto- motive Safety Found., pp. 61-64 (1963). Suuttz, T. G. “Evaluation of Safety at Railroad-High- way Grade Crossings.” Purdue Univ. (June 1965) 105 PP- “Sodium Lights Show Railroad Crossing.” Amer. City, Vol. 57, No. 1, p. 93 (Jan. 1942). “Speed with Safety at Railroad Crossings.” Research for Industry, Vol. 15, No. 1, p. 14. Stanford Res. Inst., Menlo Park, Calif. (Jan.-Feb. 1963). STEPHENS, B. M., “Factors to Be Considered in Classi- fying Highway-Railway Crossings with Respect to Public Safety.” AREA Proc., Vol. 54, No. 504, pp. 489-491 (Nov. 1952). “Summary, Highway Railroad Grade Crossing Acci- dents in the State of Iowa.” Iowa State Commerce Comm., Des Moines (1958). 67. 68. 69. 70. 71. 72. 73. 74. 75. App. 12 Swanson, C. O., “Railway-Highway Grade Crossing Motor Vehicle Traffic Accidents in Illinois - 1961.” Illinois Div. of Highways (Feb. 1, 1963) 35 pp. Swanson, C. O., “Railway-Higiiway Grade Crossing Motor Vehicle Traffic Accidents in Illinois - 1962.” Illinois Div. of Highways (July 22, 1963) 10 pp. Tarset, T. V., “Improved Railroad Crossing Protec- tion and Coordination of Traffic Signals with Train Movements.” Los Angeles Dept. of Public Utilities and Transportation. Tuomas, R. B., “Results Accomplished by the Use of the Grade Crossing Protection Fund Established by the Illinois Legislature Beginning September 1, 1955, and Administered by the Illinois Commerce Com- mission.” Illinois Commerce Comm. (1965) 13 pp. Traffic Safety Memo No. 113. National Safety Council. (July 1963). VANDERSTEMPEL, T. M., “Protection Problems at Rail- road Grade Crossings.” Traffic Quart., Vol. 14, No. 4, pp. 541-550 (Oct. 1960). Wesster, L., “Analysis of Railroad Crossing and Accident Data for the State of Ohio During the Ten- Year Period, 1949 Through 1958.” Armour Res. Found., Illinois Inst. of Tech. (Sept. 1, 1961). Wise, H. F., Assoc., “Railroads and Planning in Met- ropolitan Stockton.” A report to City Planning Dept., Stockton, Calif. (Mar. 1955) 100 pp. Youne, L. C., “Effectiveness of Automatic Crossing Gates in Southern California, 1954 Through 1963.” California Public Utilities Comm., Los Angeles (Oct. 1, 1964) 3 pp. APPENDIX 2 App. 13 (LOGO) RAILROAD-HIGHWAY GRADE CROSSING en ee. sosmenu HANDBOOK of Transportation Federal Highway - SECOND EDITION Administration FHWA-TS-86-215 SEPTEMBER 1986 * * ° Chapter IV Identification of Alternatives Driving tasks differ somewhat at crossings with active devices than at crossings with passive devices only. Passive devices indicate that a crossing is present and a highway user must look for an approaching train and take appropriate action. At crossings with active devices, a motorist is told when a train is approaching. The motor- ist must take appropriate action when the devices are activated. Crossing traffic control devices that are train activated normally incorporate some “fail-safe” design principles. As discussed in a following section on train detection, the warning system is designed to give the indication of an approaching train whenever the system has failed. Active traffic control devices have proven to be an effective method of improving safety and operations at railroad — highway grade crossings. Effectiveness is the percentage reduction in accidents due to a crossing improvement. Utilizing data contained in the U.S. DOT/ AAR National Rail-Highway Crossing Inventory and the Railroad Accident/Incident Reporting System data bases, effectiveness factors have been developed for active devices. The effectiveness factors are shown in Table 34 along with results obtained from a California study and App. 14 from a study by William J. Hedley covering 23 years of experience on th. Wabash Railroad. The effectiveness factors presented in Table 34 were developed from “before and after” accident experience of groups of crossings actually improved. The same effec- tiveness would not necessarily be experienced at any other crossing where the same improvements (changes) were made. It should be remembered that in those studies the crossings were selected for improvement by compe- tent authorities as a precondition to performance of the work. Similar effectiveness could be anticipated under similar conditions. Table 34. Effectiveness of Active Crossing Warning Devices Effectiveness Factors (Percent) 1980 1974 1952 Category U.S. DOT California Hedley Passive to Flashing 70 64 63 Lights Passive to Automatic 83 88 96 Gates Flashing Lights to 69 66 68 Automatic Gates Source: Ref. 4, 12, and 20 * * * APPENDIX 3 App. 15 FHWA-TS-78-214 RAILROAD - HIGHWAY GRADE CROSSING HANDBOOK TECHNOLOGY SHARING REPORT U.S. DEPARTMENT OF TRANSPORTATION Federal Highway Administration AUGUST 1978 Reprinted JUNE 1979 Reprinted December 1979 [LOGO] * » * Federal funds currently available for maintenance of con- trol devices at grade crossings. Funds for this purpose must be generated from other sources. 3.3.2 Special State Funds State legislation regarding grade crossing improve- ments varies widely with regard to funding, cost sharing and jurisdictional agencies and their authority. Special funding for grade crossing improvements has been authorized in less than one-half of the States. The list changes with each State legislative session. In general, State funds are made available for grade crossings not included in the Federal-Aid system. In several instances, funds are made available to defray a part of the railroad’s maintenance cost of traffic control systems. No attempt will be made to describe these special funds. App. 16 3.3.4 Railroad Funding Status As mentioned in Chapter 1, Federal Highway regula- tions, national legislation, and court decisions have decreased the railroads’ financial obligations for grade crossing improvements. Although the railroads’ contribu- tion to the installation of control devices has decreased, the railroads’ total financial obligation to crossing safety has increased. This requirement for increased railroad financing arises largely from the increase in the number of crossings that have train-actuated devices, which increases the railroad cost of maintenance. The financial condition of individual railroads varies significantly. Some railroads are operating under bank- ruptcy. Other railroads are financially strained to remain in business. The financial conditions of some major rail- roads is such that their interest in grade crossing improvements is maintained. It may be expected that as the financial condition of an individual railroad deterio- rates or improves the company’s commitment to grade crossing improvement financing will change. Therefore, no single generalized statement applies to all railroads’ ability to, or interest in, participating in grade crossing improvements. APPENDIX 4 App. 17 IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF OKLAHOMA BRENDA BURKS, as personal representative of the estate of Brian Burks, individually and as Next Friend of WRYAN BURKS, Plaintiffs, Case Number: ) ) ) ) ) os, CIV 98-204-A MISSOURI PACIFIC RAILROAD ) COMPANY, a Delaware ) corporation d/b/a UNION ) PACIFIC RAILROAD COMPANY, ) and/or UNION PACIFIC ) RAILROAD COMPANY, ) Defendant. ) DEPOSITION OF RICHARD REYNOLDS TAKEN ON BEHALF OF THE PLAINTIFFS OCTOBER 29, 1998 9:00 A.M. IRVING, TEXAS * * * Have you done any investigations independently to try to determine how many lives could be saved with lights and gates? A No. Q Have you done any investigations to determine how expensive it is to put up lights and gates? A No. Again, that’s an engineering function. App. 18 Q If I understand correctly, you believe Cliff Shoe- maker is the expert on the question of lights and gates at grade crossings as far as Union Pacific is concerned? A Yes. Q You respect his opinion? * * * Q And you, also, are aware that the Union Pacific does not seek to put up lights and gates unless that public money is available? [p. 138] A Unless that agency has authorized it. Q Authorized it and gotten public funding? A Well, that comes with the authorization of that agency. Q You say there’s something — you slapped, a book. Where at in the book does it talk about this? A Okay. MR. POTTROFF: For the record the book, so inarticulately phrased by Plaintiff’s Counsel, is Plaintiff’s Exhibit Number 4. THE WITNESS: Okay. Chapter 5, and it’s 5-C-1. The selection on Page V-C-2. The third paragraph says, the selection of traffic control devices at grade crossings is determined by public agencies having jurisdictional responsibility at specific locations. And then, further down, in one, two, three, four, fifth paragraph, last sentence — oh, no, sixth paragraph, last sentence. As a result, the Union Pacific is not responsible App. 19 for determining need or selection of devices at grade crossings. We abide by the Federal Highway Administration guidelines and the Manual on Uniform Traffic Control Devices. + * * Is it your understanding, then, as the person who chairs the most powerful committee in the Railroad, Union Pacific Railroad, on grade crossing safety that your railroad has no independent duty to determine what crossing should get lights and gates? MS. CALVERT: Objection. That calls for a legal conclusion. Q (By Mr. Pottroff) I don’t want your legal conclu- sion. I would like your opinion based upon how [p. 142] you're operating your committee you’re operating your committee. Is it a presumption that you’re making that you have no duty as a railroad to determine if lights and gates ought to go up at any given crossing? A Well, we make recommendations to the given authorities in the state. We would like for you to do an analysis of this crossing. We feel like through something we look at, maybe, collisions, near hits, whatever the situation is, we would recommend that they do a study on that, an analysis of that crossing. We have made those recommendations, yes. Q So all you recommend is that the Government come in and look at something? App. 20 A The agency who controls that roadway, who’s going to have to be the agency that authorizes and tells us what kind of device to put there and all that, yes. * * t Q If, indeed, the Government by way of the United States Supreme Court has said, Railroad, you also need to be evaluating your crossings. If that occurred, can you tell me whether or not the Union Pacific has done any- thing since 1993 to begin an evaluation process of its own crossings to determine the need for lights and gates? MS. CALVERT: Again, your interpretation con- tains legal opinions, and I’m going to object on that grounds. THE WITNESS: Ask the law department and ask Cliff Shoemaker. Q (By Mr. Pottroff) Okay. A_ If it was done, it will be done by them. Q From the law department, I don’t want to know. From the engineering, I don’t want to know. From your experience, has the Railroad done anything to begin [p. 144] doing this evaluation process? A Independently - Q Correct. A - no. When we want to do it, we contact the agency. They bring out their traffic engineer and we jointly do it with them. We do not do it independently. We always bring in the agency involved. App. 21 * * * [p. 147] Q Has there been any discussion in your committee about the installation of lights and gates at crossings and having them paid for by the Union Pacific Railroad? A No to all of your statement. Q Okay. A Yes. We talk about installation. Cliff gives a * * Plaintiff's Exhibit 4 Union Pacific Railroad (LOGO) Grade Crossing Resource Manual PB20876 Effective: August 1, 1998 Grade Crossing Safety Policies and Programs * * * C. Traffic Control Device Upgrade Policy This Policy contains the requirements for upgrading Traffic Control Devices at grade crossings. The Union Pacific has a specific policy for the upgrading of passive traffic control devices to active traffic control App. 22 devices and the upgrading of existing active traffic con- trol devices at grade crossings. This policy is consistent with Federal Highway Administration (FHWA) guide- lines and in accordance with the Manual on Uniform Traffic Control Devices. Information is covered in the following sequence: 1.0 Definitions 2.0 Requirements 3.0 Reference Material 1.0 Definitions The Federal Highway Administration’s (FHWA) Rail- road-Highway Grade Crossing Handbook contains the following definitions: e Active Traffic Control Device Those traffic control devices activated by the approach or presence of a train, such as flashing light signals, automatic gates and similar devices, as well as manually operated devices and crossing watchmen, all of which display to motorists, posi- tive warning of the approach or presence of a train. e Passive Traffic Control Device Those types of traffic control devices, including signs, markings and other devices, located at or in advance of grade crossings to indicate the pres- ence of a crossing but which do not change aspect upon the approach or presence of a train. App. 23 2.0 Requirements Chapter 8 of the Manual on Uniform Traffic Control Devices (MUTCD) describes appropriate traffic control systems for railroad — highway grade crossings. Section 8A-1 states: “The determination of need and selection of devices at a grade crossing is made by the public agency with juris- dictional authority.” Section 8D-1 states: “The selection of traffic control devices at a grade cross- ing is determined by public agencies having jurisdictional responsibility at specific locations.” Active grade crossing traffic control systems range from: 1. Post mounted flashing light signals; to 2. Automatic gates combined with: (a) Post mounted flashing light signals; (b) Cantilever flashing light signals; or (c) Combination of the above. Any of the foregoing may or may not incorporate a bell. Due to the large number of significant variables which must be considered, there is no single standard system of active traffic control devices universally applicable for grade crossings. Based on an engineering and traffic investigation, a determination is made whether any active traffic control system is required at a crossing and, if so, what type is appropriate. Before a new or modified grade crossing traffic control system is installed, approval App. 24 is required from the appropriate agency within a given State. It is Union Pacific’s policy to abide by Federal Highway Administration (FHWA) guidelines and the Manual on Uniform Traffic Control Devices. As a result, Union Pacific is not responsible for determining need and selec- tion of devices at a grade crossing. 3.0 Reference Material Manual on Uniform Traffic Control Devices, 1988 Edition Railroad-Highway Grade Crossing Handbook, Second Edition, September 1986. APPENDIX 5 App. 25 IN THE CIRCUIT COURT OF JACKSON COUNTY, MISSOURI KIMBERLY R. ALCORN, Case No. CV97-31927 Plaintiff, VIDEOTAPED CLIFFORD SHOEMAKER COMPANY, et al., Defendants TAKEN ON BEHALF PLAINTIFF V. UNION PACIFIC RAILROAD etl ll le de ed a VIDEOTAPED DEPOSITION OF CLIFFORD SHOE- MAKER, 1416 Dodge Street, Omaha, Nebraska, taken at 10:17 a.m: on May 11, 1999, by Rhonda S. Sansom, CSR, RPR and General Notary Public in and for the State of Nebraska, taken at 8944 H Street, Omaha, Nebraska. * * * [p. 11] more information about its own tracks than the federal government does? A. In terms of railroad-specific items, I would agree with that, which is the reason we share that information with the various governmental agencies. Q. Would you agree that Union Pacific does not have a program to go out and evaluate public crossings, independent of government agencies, to determine whether lights and gates should be installed? MR. WILLIAMS: Object to the form of the ques- tion. App. 26 THE WITNESS: Yes, I believe that was part of a previous response. We do not do that unilaterally or independently. BY MR. DAVIS: Q. Would you agree that 90 percent of all crossing collisions would not occur if gates were installed? MR. WILLIAMS: Object to the form of the ques- tion. THE WITNESS: I would agree that from a prob- ability standpoint gates and lights will reduce the proba- bility of somewhere in the 85 to 90 [p. 12] percentile factor; however, if all crossings were equipped with gates and lights, then I would disagree in that over half the accidents that occur today nationally occur at signalized crossings. So obviously, if every crossing was signalized, then any incident would be at a signalized crossing. So in terms of probability of reducing accidents, I agree; in terms of saying at a given location it would reduce incidents flatly by 90 percent, I couldn’t agree to that. MR. DAVIS: I’m going to object to the second part of the question as being nonresponsive after you answered the question about whether or not 90 percent of all fatalities at passive crossings could be prevented by lights and gates. But now I want to talk to you more about it. App. 27 * * + Q. And lights without gates is not the normal prac- tice these days, is it? MR. WILLIAMS: Object to the form of the ques- tion. THE WITNESS: There’s many installations where flashing lights without gates are appropriate, and that’s still being installed. But it’s true, the majority of them do include gates nowadays. BY MR. DAVIS: Q. Do any - well, systemwide — let me strike that. So if we just include the ones with gates and lights, then it would be 85 to 90 percent. Correct? MR. WILLIAMS: Object to the form of the ques- tion. THE WITNESS: Again, that was part of the sec- ond qualifier, I believe, in my response. [p. 20] In a global sense, yes, you would expect accidents to be reduced by about 85 to 90 percent; how- ever, you can’t say that necessarily for a given location. Again, a sizable number of incidents — fatalities and personal injuries — occur at gated crossings. BY MR. DAVIS: Q. Would you agree that very few of the signals put in with state or federal funds involve lights without gates because most states have adopted an all-gate policy in recent years? App. 28 A. In recent - MR. WILLIAMS: Object to the form of the ques- tion. THE WITNESS: In recent years, I would agree with that. BY MR. DAVIS: Q. Is it true that Union Pacific has never paid for a public crossing in Missouri to be upgraded from passive to lights and gates by itself, on its own? MR. WILLIAMS: Object to the form of the ques- tion. THE WITNESS: That, I don’t know. I * * s App. 29 [p. 1] IN {HE UNITED STATES DISTRICT COURT WESTERN DISTRICT OF OKLAHOMA BRENDA BURKS, Plaintiff, vs. Case No. CIV98-204-A MISSOURI PACIFIC RAILROAD COMPANY, et al., Defendants. DEPOSITION The deposition of Clifford Shoemaker, * * * [p. 4] CLIFFORD SHOEMAKER, of lawful age, having been first duly sworn on his oath to state the truth, and nothing but the truth, deposes and savs: DIRECT EXAMINATION BY MR. POTTROFF: Q. Would you state your full name for the record, please? A. Clifford Shoemaker, S-h-o-e-m-a-k-e-r, (spelling). Q. What’s your current position with the Union Pacific Railroad? A. Director of industry and public projects. Q. You've had that title since about 19887 App. 30 * * * [p. 29] activation at the crossing regardless of train speed. Q. If you have one of those installations out there that have just lights and you’re going to add gates, approximately what kind of cost would you get into there? A. It’s almost the same cost as a brand new installa- tion because typically if it’s an older flasher unit you’re going to gut the whole thing and put all new circuitry in. And the circuitry is what cost the money. Gates will cost fifteen, twenty thousand dollars just for the gate mecha- nism, so that’s a comparatively lower cost, but the warn- ing circuits, switching the circuits out, the battery backup and the cables and everything that goes along with it is where the money’s at. Q. If you were just to add gates to an existing unit, fifteen to twenty thousand? A. If you don’t do anything to the circuits, that’s correct. App. 31 [p. 142] IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF OKLAHOMA BRENDA BURKS, as personal Representative of the Estate of Brian Burks, individually and as Next Friend of WRYAN BURKS, Plaintiff, -Vs- MISSOURI PACIFIC RAILROAD COMPANY, a Delaware corporation, d/b/a UNION PACIFIC RAILROAD COMPANY, and/or UNION PACIFIC RAILROAD COMPANY, Defendant. No. CIV-98-204-A i ee es * * * VOLUME II CONTINUATION OF THE DEPOSITION OF CLIFFORD SHOEMAKER TAKEN ON BEHALF OF THE PLAINTIFF IN OKLAHOMA CITY, OKLAHOMA ON DECEMBER 39, 1998 The Honorable Ronald L. Howland, Presiding REPORTED BY: Rebecca S. Young, CSR, RPR * * . [p. 201] didn’t know of any research and development projects within your engineering department to try to further develop these alternate technologies, magnetic, App. 32 radio, those type of advance warning technologies. Are you aware of any such research and development efforts in the Union Pacific railroad? A Well, of course, we don’t supply materials, per se. We're not in the development business. But what we do do is work with inventors, people that have ideas, that it makes some sense to work with them to get that testing accomplished, such as we are doing with the EVA Company. Q Okay. How do you — how does the Union Pacific go about promoting the input of inventors or these ideal- ists out there that think they’ve got an idea on how to save lives at grade crossings? A If it comes to us up front, I will usually sit down and talk to the inventor, or whoever it may be, and give them input as to what the needs are of a system, such as those outlined in the Manual on Uni- form Traffic Control Devices. There are several criteria in there that must be met before any device is placed on a public roadway. And so it has to be relatively consistent with that, although certainly it encourages research on trying to develop a better mousetrap, so to speak. [p. 202] So you go through the preliminary pro- cesses, but once they get through that, if it appears to meet that need, then there are mechanical issues, repeti- tive usage of equipment under different weather and weather conditions, we'll say, and different operating conditions, and it has to meet some very rigid operating conditions, and to ensure that that’s worked out. App. 33 And quite often we'll send them back to their labs to do external testings, ASTM testing, for example, to show that it’s at least as credible and reliable as existing equipment. And then if it gets past all those stages and it appears to be appropriate for use, we'll work with a public agency which has to approve such testing, such as a state highway department typically, to generate a possible test site. For example, the EVA system, we have selected a crossing in Washington county, which is north of Omaha a ways, where the county engineer and the state department of roads have agreed, once we get through the mechanical side of things, that if that passes muster, if you will, that we are agreeable to installing a com- plete system as a test. We will work with inventors through that process. [p. 203] Q Why doesn’t the Union Pacific have its own research and development department in the area of grade crossing technology? A Again, number one, we do not build or specify the materials. These are all through the public agencies, as these are highway traffic control device, not railroad control. But that aside, we do work with and have research people available to work with inventors, developers, manufacturers, to field test or lab test different equip- ment and different ideas that may come about, and/or we refer them to an agency who does have that capable, App. 34 such as the US DOT Volpe Center in Cambridge, Massa- chusetts, such as the Rail Research Lab at Pueblo, Colo- rado, or whatever is appropriate for the given project. * * + But on the other hand, if it becomes — the situation develops where you've got an awful lot of false indica- tions, that’s not desirable, so then you may look at some other technology. Q Okay. I keep going off into interesting conversa- tions with you, Cliff. Back to the question on in-house versus outside research and development, are you aware if there has ever been discussion within the Union Pacific Railroad to establishing an in-house research and devel- opment team for crossing safety? A Not purely for that topic, that I’m aware of. * * * [p. 314] crossbucks up with higher grade retro-reflective materials on the crossbucks? A To study the possible impacts of the different signing. I talked to Joe Kyle about that just the last few days. They are doing a human factors study on that, to see if that change in signing has any significant driver behavioral change. Q That's, in essence, replacing crossbucks that the railroad already had the responsibility for maintaining? A Correct. App. 35 Q But the benefits that are obtained by the railroad is that they get new crossbucks paid for by federal money, 90 percent? A Correct. Q And they get to argue that now those crossings are preempted. If somebody gets in an accident at that crossing, the preemption argument can be made that indeed this crossing has been upgraded according to some state or federal standard; therefore the argument that it needs to be upgraded cannot be made. MR. HART: I’m going to object. It calls for a legal conclusion. A That's not the intent of the project. The project is to evaluate the effectiveness of a brighter [p. 315] sign and also putting stripes on the mast to create more of a goalpost effect, if you will, of passive crossings, and just see if there’s any significant change in driver behavior. That’s the intent of the study. Q (By Mr. Pottroff) But you’ve been advised of sec- ondary benefit to the railroad of the preemption argu- ment being available. MR. HART: Objection. Leading. Q (By Mr. Pottroff) Is that correct? A That could be an argument. That’s not the trust of the project. Q But’you are aware that is an argument that’s made when those type of projects are completed? A I’ve heard that legal argument. App. 36 Q And that’s an argument that’s used in open court by the railroads’ lawyers once those projects have been completed? MR. HART: Objection. Leading. A I’ve heard that in some cases. I’m not sure if it’s routinely used in open court, as you imply, but I’ve heard it. Q (By Mr. Pottroff) The other projects that will have the effect of taking money out of lights and gates pro- grams and putting them into other hazard eliminations would be crossing surface repairs, correct? [p. 316] A Replacements. Q_ Those are projects which the railroad would have had to have paid for themselves as regular maintenance repair items if there wouldn’t have been federal money taken out of the federal aid program, correct? MR. HART: I object to the characterization of the program and of your characterization of the law in regard to it. A It’s the states’ option as to how they spend those dollars. And, yes, by statute, the railroad is typically required to maintain the crossing surfaces. Or if the state elects to upgrade the nature of that roadway to some level above what it was being maintained at, they certainly have that option. The argument being or the logic being, in a federal memorandum some time ago back in the seventies, when that first came about, is that the driver could theoretically be taking rore time being concerned with App. 37 the geometrics, if you will, of the crossing, and not spending enough time on the warning device. Typically, in fact, by federal law, the warning devices have to be addressed or already in place before the dollars can be spent on the surface. But usually it’s as a package, not just a surface. Q (By Mr. Pottroff) But my point is, those are - [p. 317] those funds are being spent on items that are the total responsibility of the railroad, in any event. MR. HART: Going back to duty, again, I’m going to have to object. Are we going to save this for the judge? Q (By Mr. Pottroff) You know what the railroad is responsible for, ties, ballast, right-of-way, crossing sur- face. A Except for on the limited number of times - we'll talk Oklahoma, but it’s pretty true elsewhere - when they do use federal monies for the surface, they also are renewing the approaches, doing some geomet- ric changes, whether it be a vertical curve or curve of the gutter, or some other work to improve the highway system as a whole, and the crossing certainly is just a part of that system, but there are federal funds occa- sionally used for that. Q I understand that they are used for that on occa- sion. My point is, if the federal funds weren’t used on it, it would be the railroad’s responsibility to spend their money on crossing surfaces. A To the limits of the statute that covers that, that’s correct. App. 38 Q And so these federal monies that are actually coming out of the lights and gates kitty are to pay for cressing surfaces that would have otherwise been the [p. 318] responsibility of the railroad? A Not exactly, they’re taken out of the optional kitty, if you want to call it that. The money that has to be spent on lights and gates or warning systems is spent for that purpose. The optional money, the state can use it for bridges, they can use it for crossing surfaces, they can use it for almost anything they want pertinent to safety. Q Railroads are actively soliciting the use of those funds for crossing surfaces and state-wide or corridor- wide crossbuck programs and lens replacement pro- grams, are they not? MR. HART: Objection. It’s leading. It’s argu- mentative. Q (By Mr. Pottroff) Union Pacific, in particular the people that work for you. A Generally speaking, again, if it’s part of a pack- age deal, we might encourage the surface, but we don’t go after surface projects as standalone projects. We do encourage corridor projects, including passive signing upgrades. For the price of one signal installation, you might address 100 crossings with passive signing. And if the test that Joe Kyle has lined up is successful, then it was an excellent project. Q What about lens replacement programs? Those are [p. 319] those, as I understand it, programs where you want federal assistance to go upgrade from the old 8-inch App. 39 roundel to a 12-inch lens, which is the more state-of-the- art lens. A We have had some of those state-wide pro- grams, that’s correct. Q And that is money taken out under the hazard prevention part of the federal funding program? A It could be out of either side. Q Okay. A And, again, for a fraction of the cost for one new installation, you might do 10 or 20 crossings, enhancing the safety if crossings already had signals but maybe they weren’t state-of-the-art. Q But if what you told me before was correct, that was already the responsibility of the railroad to keep upgrading their crossings, from a maintenance point of view, to get rid of obsolete equipment when it becomes obsolete. A Eight-inch lenses are not obsolete. They are still a current standard. He have opted, at Union Pacific, to do a lot of that at our own expense. Q Current standard for whom? A The guidelines as described in the MUTCD, which are the devices that are available — current device available to put at public crossings. App. 40 IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF OKLAHOMA BRENDA BURKS, as personal) representative of the Estate) of Brian Burks, individually) and as Next Friend of) WYRAN BURKS,) ) Plaintiff,) ) vs.) No. CIV-98-204-A ) MISSOURI PACIFIC RAILROAD) COMPANY, a Delaware) corporation, d/b/a UNION) PACIFIC RAILROAD COMPANY) and/or UNION PACIFIC) RAILROAD COMPANY,) ) Defendant.) VOLUME III OF THE DEPOSITION OF CLIFFORD SHOEMAKER TAKEN ON BEHALF OF THE PLAINTIFF IN OKLAHOMA CITY, OKLAHOMA ON DECEMBER 10, 1998 The Honorable Ronald L. Holland, Presiding REPORTED BY: Judy Thompson, CSR . » * App. 41 [p. 383] signals.” How long has that message been in the Operation Life- saver presentations, if you know? A A long time, certainly since the beginning of the Trainers’ Guide, this guide we’re looking at now. And that’s been a true statement for many years. Q If I were an ordinary citizen with no knowledge about grade crossings, would you want me to come away with the belief that crossings with gates and lights are more dangerous than crossings without them? A_ No. There’s no hidden message in this document. It’s simply to advise the drivers there is a responsibility that they have, as well as the other people involved in the grade crossing, highway-rail program, and that is to heed the warnings. But they also have the responsibility to look for trains, to listen for trains and so forth, regardless of what type of device is out there. Statistically, this is nothing to do with Operation Lifesaver, we discussed this yesterday, that flashing lights and gates or flashers alone will have, in the global sense, an effect of reducing acci- dents under most conditions. [p. 384] Certainly, where the signals have been installed in the past, you have a higher, we'll call it exposure, that being more trains and more vehicles. And also we discussed if you assume, say, a 90 percent proba- bility of reducing accidents, if you push a gazillion vehi- cles through one crossing, and you still only expect 90 percent reduction, you're still going to have that 10 per- cent. But because I believe the successfulness of the joint program we've discussed, allowing the state highway App. 42 agencies to select the priorities where they have the high- est probability of incidents, and that’s where the signals have gone in for many years, we're still reducing the accidents. But because of increased traffic flow, more incidents are going to occur at signalized crossings. Cer- tainly, if you signalize every crossing in the country, which you have suggested, possibly, then any incident you had would be at a signalized crossing. So statistics are statistics. But the message here is no hidden messages and that drivers need to be aware of the potential danger of all crossings whether they’re signals or not. Q The fact then that’s represented in the * * * APPENDIX 7 App. 43 IN THE DISTRICT COURT OF CANADIAN COUNTY STATE OF OKLAHOMA BRENDA AND EUGENE SPENCE, individually, Plaintiffs, vs. MISSOURI PACIFIC RAILROAD COMPANY, a Delaware corporation, d/b/a UNION PACIFIC RAILROAD COMPANY, and KERRY S. KNUTSEN, and/or UNION PACIFIC RAILROAD COMPANY, Defendants, Case No. CJ-97-1 Consolidated with: CJ-98-287 and TRAVIS SPENCE, an incompetent person by and through his guardians, BRENDA AND EUGENE SPENCE Plaintiffs, vs. MISSOURI PACIFIC RAILROAD COMPANY, a Delaware Corporation, d/b/a UNION PACIFIC RAILROAD COMPANY, and KERRY S. KNUTSEN, and/or UNION PACIFIC RAILROAD COMPANY, Defendants. i ee ee ee ee App. 44 DEPOSITION OF CLIFFORD SHOEMAKER TAKEN ON BEHALF OF THE PLAINTIFFS OCTOBER 21, 1999 TULSA, OKLAHOMA * * * [p. 159] Q Are you aware of what percentage of traffic, that’s potential encounters between trains and cars, go through that 25 percent of the crossings? A Somewhere around 80 percent, if I recall the numbers. Q So 80 percent of the traffic is going through that 25 percent of the crossings? A 70 to 80. Somewhere in that - I don’t remember the exact number, but certainly a majority of the traffic. That is correct. Q And half of the accidents are then occurring where lights and gates don’t exist? A The reverse of what I said earlier. That’s correct. Q And those accidents are preventable to the tune of 90 percent by the installation of lights and gates? A Theoretically, based on probability indices. Q Now, those crossings that have lights and gates, there’s any number of reasons why accidents occur there? A Just like there’s any number of reasons why they occur at passive crossings. Q And as long as there’s crossings, we will have some accidents at the crossings? * * * APPENDIX 8 App. 45 IN THE DISTRICT COURT OF CADDO COUNTY STATE OF OKLAHOMA STEVE MYERS and VIOLET MYERS, individually, personally, and in Behalf of the Estate of LESA MYERS, and MELISSA ROBERTS and STEVE MYERS, runnin, Case No. CJ-97-49 Consolidated with Case No. C]-97-46 VS. MISSOURI PACIFIC RAILROAD COMPANY d/b/a UNION PACIFIC RAILROAD COMPANY, and/or UNION PACIFIC RAILROAD COMPANY, and JIM Q. COLLINS, Defendants. Nm me ee ee ee eee ee ee DEPOSITION OF CLIFFORD SHOEMAKER TAKEN ON BEHALF OF THE PLAINTIFFS ; APRIL 1, 1999 9:00 A.M. OMAHA, NEBRASKA * * * Q How much does it cost, if you know, and you can give me an approximation, to add just gates to a light installation? A Just the gates, themselves, if somebody who knows circuitry changes, are about, oh, say, $15-, $16,000 per gate mechanism. = App. 46 Q Now, is that per gate, would be one for each said [sic] of the road, then? * * * [p. 59] hierarchy or tenure, or anything like that, that determines who’s going to be next on the Board of Opera- tion Lifesaver? A_ To a degree, yes. The AAR does have a represen- tative, and Mr. Dettman is the current representative. Prior to that was Paul Oakley, O-a-k-l-e-y. Amtrak has a representative. The Program Development Council provides three members; the current chair of the PDC, the past chair, and the chair-elect - Q Okay. A - are Board of Director Members. Q All right. You said the PDC? A Program Development Council. Q Okay. A That’s the third group down on the chart. Q Okay. A So currently, Eddie Gilbert from Norfolk South- ern is the current chair of the PDC, therefore, he’s on the Board. I am the immediate past chair of the PDC and on the Board, and Lynn Johnson from CSX is the chair-elect for the PDC, so he is on the Board. App. 47 Another hierarchy is the Railroad Progress Institute, that they have a member on the Board [p. 60] continu- ously. ASHTO has a full-time member and, currently, Otto Sonnefield. (All phonetic.) he happens to be the chairman this year, and then, Erick Jacobson is on the Board, and that’s because we have an opening, a standing member on the Board that happens to be a state coordinator for Operation Lifesaver, and that will rotate. Q You try to keep one coordinator on? A Correct. Q Okay. A To provide interface with the state activities to the Board. The rest of them will have a short line repre- sentative. Again, right now, it’s Ronnie McCaron, (Pho- netic.) with Wisconsin Central, is the current member, and that rotates different carriers periodically. We try to have at least one commuter or passenger operation besides Amtrak, and that currently is Richard, Rick Tidwell, from Metro, the Chicago operations. Q Chicago. A But that’s kind of how it is set up. We've got the - RPI being the manufacturers side of things, the supply side, plus Amtrak, plus short line, plus a commuter oper- ation, plus the highway agencies. By - I [p. 61] don’t know if it’s Constitution or what —- Federal Highway and Federal Rail folks cannot sit on the Board. Q Okay. App. 48 A In fact, that was probably the eleventh. We asked Jolene Molitoris (All phonetic.) to be on. She accepted, and then she had to turn around and leave, because her constitution, or bylaws, or whatever, don’t allow for them to sit on a - Q On Operation Lifesaver? A Whatever. On any board, I guess. Q Okay. A But ASHTO does allow it. Of course, ASHTO is the trade organization, if you will, for the state highway departments. Q Right. A Not unlike the AAR is for the railroads. Q Do you know if Otto - what is his name, Schoen- A Sonnefield. Q -Sonnefield has any specific expertise in railroad grade crossing safety or some niche in ASHTO that is railroad related? A Yes. He does. Q Tell me what that is to the best of your knowl- edge. * * * [p. 146] A Correct. Q And that they’re important aids in warning you of dangers. App. 49 A Correct. Q But over half of the collisions occur at crossings equipped with automatic signals. A Correct. Q Do you believe that that imparts to the public the message that over half of the collisions occur at crossings with gates? A I don’t interpret it that way. Q No, because you know exactly what the word choices were, don’t you? A Yes. And I know that the statistics are. Q The world [sic] choices was automatic signals, because it’s not true that over half the crossing accidents occur at ones with automatic gates. A That's very true. Q In fact - A Absolutely true. I agree. Q In fact, a very fraction occur at crossings with A It’s something, like, 10 — between 10 and 20 per- Q But the public, if they listened to this * » * APPENDIX 9 App. 50 DEPOSITION EXHIBIT 5 THE UNION PACIFIC RAILROAD AND GRADE-CROSSING SAFETY A Report By Dr. Harvey A. Levine Transportation Economist Levine Consulting Services 10904 Earlsgate Lane Rockville, Maryland 20852 August 1999 App. 51 This report addresses the issue as to whether eco- nomic practices and policies of the Union Pacific Railroad (UP) have advers«'y affected the adequacy of safety at that railroad’s grade crossings. (Attachment No. 1 is a statement of the author’s qualifications.) Based on an analysis of empirical evidence since the Staggers Rail Act of 1980, the report concludes that: While the UP could well have afforded to provide adequate safety facilities at all of its passive grade crossings, and that while the benefits to society from such installations would have outweighed the costs, the railroad shirked its public responsibility by choosing solely economic gains over saving lives. Thus, in the case of grade crossings, the UP has displayed a conscious disregard for safety. I. The UP has an inherent public responsibility to provide for safe grade crossings. Unlike most other companies in the United States, the UP has an inherent public nature.1 While privately owned the UP was birthed and developed in the mid-1800s with massive public aide.2 Then in 1887, the federal government regulated railroads in a manner dif- ferent than other industries and has continued to treat railroads as a rather unique industry. Railroads are immune from antitrust laws affecting other industries.% They benefit from special anti-strike legislation,* bank- ruptcy provisions> and public-assistance.® Railroad employees fall under their own workers’ compensation,” unemployment insurance,® and retircment systems,? rather than being under state programs and federal social App. 52 security. And the country’s National Transportation Pol- icy,° and a host of other transportation legislation reflect the public nature of railroads. The public nature of the UP is not a one-way street as the railroad has obligations to the public which licensed and is affected by it. From an economic viewpoint, the UP has a common-carrier obligation and must provide joint rates, through routes, non-discriminatory service and rea- sonable rates. From a societal perspective, the UP must provide reasonably safe facilities and operations, not- withstanding federal assistance. In fact, five years after the initiation of federal assistance for grade-crossing facilities, the Federal Highway Administration (FHWA) affirmed that railroads have responsibility for improving grade-crossing safety. More specifically, in 1978 the FHWA stated that: It may be expected that as the financial condition of an individual railroad deteriorates or improves, the company’s commitment to grade crossing improve- ment financing will change. Therefore, no single generalized statement applies to all railroads’ ability to, or interest in, participating in grade crossing improvements. '2 The FHWA’s position reflected public policy in this coun- try — that limited public funding supplements, rather than supplants, corporate public responsibility. This is patently obvious in the case of the UP - the country’s largest railroad, with 34,000 miles of road operated.’ 32,000 public grade crossings,’* and 432 billion ton-miles of traffic! —- impeding the free movement of people and goods. With trains outweighing automobiles by a 3,000- to-1 ratio’® and taking a mile or so to stop, it is incumbent App. 53 upon the UP to provide adequate safety to those crossing its publicly-vested track structure. If it were not for the railroad, there would be no grade-crossing accidents. Recently, the UP’s responsibility to provide safe crossings was again recognized by the federal govern- ment - this time, by the Surface Transportation Board (STB) in its review of the UP’s acquisition of the Southern Pacific Railroad (SP) in 1996. In conducting its environ- mental impact analysis, the STB recognized that upgraded facilities were desirable at a number of post- acquisition UP grade crossings, including the installation of signals and gates. In response, the UP agreed to fund such facilities in among other areas, the cities of Reno, Nevada and Wichita, Kansas. In these situations, the UP voluntarily funded such facilities.!” II. The root goal of the Staggers Rail Act of 1980 was to eliminate the capital shortfall of railroads, thus enabling them to provide adequate and safe ser- vice. The year 1980 was adopted as the base year for statistical analysis for three reasons. First, the Staggers Rail Act was enacted in that year,’® deregulating much of the economic behavior of railroads and culminating [sic] a series of favorable railroad legislation enacted during the 1970s.19 Second, the Staggers Rail Act recognized that railroad earnings were insufficient to generate funds for necessary capital improvements,2° somewhat excusing the industry for past investment shortfalls, but indicating that the anticipated turnaround of railroad finances App. 54 would require the fulfillment of economic and social obli- gations. More specifically, the Rail Transportation Policy section of the Staggers Rail Act identified expected bene- fits of railroad deregulation which would accrue to four parties as follows: 1. Customers: Shippers were to receive reasonable rates, sound transportation, and the avoidance of undue concentration of market power. 2. Shareholders: Investors were to realize adequate returns. 3. Labor: Employees were to receive fair wages and safe and suitable working conditions. 4. General Public: The public was to enjoy a rail transportation system without detriment to the pub- lic health and safety. Finally, using 1980 as a base year provides enough of a record to identify trends, eliminate anomalies, account for the impact of railroad mergers, and thus identify the economic behavior of the UP over an adequate time period. III. At the time of the enactment of the Staggers Rail Act, unlike most railroads in the country the UP was financially sound. The record is well documented that the railroad industry was in the financial doldrums in the decades following World War II.?! In 1976, Conrail (with substan- tial federal aide was created out of six bankrupt rail- roads. Other bankrupt railroads were partially abandoned and partially merged into other operating systems. Overall railroad earnings were at extremely App. 55 depressed levels and maintenance was often deferred. The Staggers Rail Act concluded that railroad earnings were the lowest of any transportation mode and insufficient to generate funds for necessary capital improvements, and that without the legislation railroads would experience a capi- tal shortfall of $16-$20 billion by 1985.23 However, the UP was an exception to the dire financial condition of the railroad industry. For example, as shown below, the UP enjoyed rates of return on equity (ROE) which were far above the industry as a whole. As stated in the UP Corporation’s (UPC) 1980 annual Year ROE: All Railroads ROE: UP24 1978 1.3% 10.3% 1979 5.4% 10.2% 1980 6.0% 10.7% report, Union Pacific Railroad posted an increase in earnings in 1980 for the fifth consecutive year. In 1980, the UP real- ized operating revenue of $2.0 billion, earned railroad income of $214 million, and made capital expenditures of $423 million. Of the 35 Class I railroads operating in 1980, the UP ranked third in traffic volume, fifth in oper- ating revenue, seventh in miles of road owned, and first in railroad earnings.?6 IV. In spite of its financial health, the UP reacted to the Staggers Rail Act by focussing on massive cost cutting. The UP applied its new-found economic freedoms under the Staggers Rail Act to conduct a program of massive cost cutting. In its 1982 annual report, the UPC stated that, On the cost cutting side, UPRR continued to be App. 56 an industry leader. In 1980, the UP’s cost of producing a ton-mile of traffic was 2.19 cents.?” while in 199678 the figure dropped to 1.55 cents,?? equating to a 0.64 cent reduction, or a 29% decline in operating costs over the 16 years. Equally startling is that the 29% cost reduction was made in spite of an 88% increase in railroad inflation.» In essence, the 1.55-cent cost in 1996 is equivalent to 0.82 cents in 1980 dollars (inflation index of 100/188 x 1.55 cents), so that in inflation-adjusted terms, the UP’s cost savings in 1996 compared with 1980 is 1.37 cents (2.19 cents minus 0.82 cents), equating to a 63% reduction in operating costs. The UP’s cost savings in the single year of 1996 can be calculated in both reported and inflation- adjusted terms as follows: 1. Reported: 6.64 cents savings x 332.861.334.000 ton-miles*! = $2.1 billion 2. Inflation- 1.37 cents avoidance x Adjusted 332.861.334.000 ton-miles = $4.6 bil- lion Similar calculations can be made for all other years between 1980 and 1996, but these calculations would require adjustments for the inclusion of special charges (non-reoccurring costs) which were reported by the UP as operating expenses. Furthermore, similar calculations can also be made for the years 1997 and 1998, but the results would distort the overall trend because they would include the inefficiencies related to the acquisition of the SP. For the purpose of this report, it is sufficient to conclude that the UP’s emphasis on cost cutting since deregulation in 1980 resulted in the avoidance of tens of billions of dollars in operating expenses. App. 57 V. At the heart of the UP cost cutting was a significant reduction of its labor force. Because the UP acquired various other railroads since 1980, employment reductions must account for the addi- tion of other railroads’ employees, including: (1) pur- chase of Missouri Pacific and Western Pacific railroads in 1982, (2) acquisition of Missouri-Kansas-Texas Railroad in 1988. (3) purchase of remaining stock in Chicago & North Western Railroad in 1995, and (4) acquisition of Southern Pacific Railroad in 1996. After adjusting employment levels for these purchases, the result of the changes in UP employment from 1980 to 1998 was a reduction of 21,647 employees.32 What is astonishing about the termination of 21,647 positions is that UP traffic increased by 31.4% during the 18-year period between 1980 and 1998.39 If UP had retained the terminated employees and in 1998 pro- vided them with the average annual compensation of $72,480,%4 the railroad would have incurred an additional operating expense of $1.6 billion in that single year. UP maintenance-of-way employees were not excluded from the employee reductions. As shown in Attachment No. 2, from 1980 to 1998 the UP terminated 4,192 employees under the classification of Maintenance of Way and Structures, resulting is [sic] a savings of $2.6 billion in compensation — measured by the dollars saved in each year. If measured by the value of current dollars, the savings would be substantially more. Thus, the reduc- tion in force was a significant part of UP’s cost-cutting program. Other cost savings were realized by the aban- donment and sale of light-density lines, economies of scale and density associated with mergers, efficiencies App. 58 associated with new technology, and measures to increase productivity. VI. The monies saved by the UP in the post-Staggers Rail Act years were used to benefit company exec- utives, other employees, shareholders and ship- pers. Ther [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385014_0331%3A15. Public record. Not legal advice.