Metra and its insurance company must pay nearly all of the $29.6 million in damages that a jury awarded this week to violinist Rachel Barton because of an agreement signed years ago in which the suburban commuter railroad promised to assume financial responsibility for such judgments, according to one defendant in the suit and local transit officials.
Metra officials would not comment Tuesday on whether fares will be increased or service cut as a result of the award to the 24-year-old classical musician whose leg was severed in a freak train accident four years ago. But at least one Metra board member said a fare hike could not be ruled out.
Gerald Porter, a Metra board member since the agency’s creation in 1984, said he doubted service cuts would be implemented “but I would imagine if (insurance) rates are raised, they have to be paid for one way or another.”
“You either have to cut costs or raise prices,” Porter said.
The Chicago & North Western railroad, which was later taken over by the Union Pacific, was operating Metra’s North Line when Barton’s accident occurred in 1995. Both the C&NW and the UP were indemnified–or protected from any losses emerging from certain legal claims–by Metra.
That means the Union Pacific is only on the hook for the $859,500 in punitive damages awarded in the Barton case, and Metra must pay the rest, railroad officials said.
“That is exactly what the legal arrangement we have with Metra boils down to under our purchase of service agreement,” said Ed Trandahl, a spokesman for the Union Pacific in Omaha. “Metra pays all compensatory; we pay punitive. It’s the same agreement the C&NW had (with Metra).”
In finding for Barton, jurors had to assign blame for the accident using Illinois’ comparative negligence law.
Using calculators and stacks of testimony, they determined that Barton was 4.5 percent accountable, while the C&NW was 62.5 percent to blame. Metra was 33 percent at fault, the jury found.
But because Metra had agreed to protect the Union Pacific from compensatory damage claims, the transit agency and its insurer, the Associated Insurance Group, are liable for $28.65 million in what the jury decided were actual losses. Metra, as a government agency, is immune from punitive damages.
“Paying the judgment–the whole thing except for some small change–is entirely Metra’s responsibility,” said one local transit official. “If this award stands, look for Metra’s insurance premiums to rocket into outer space.”
Exactly who would pick up the damage tab was on the minds of jurors when they decided to give Barton what amounted to one of the largest personal injury judgments in Cook County history.
“As far as punishing the railroad, we thought it didn’t have to be done with multimillions in dollars,” said juror Harry W. Murray, a biochemist. “The verdict was punishment enough. . . . We also felt that we didn’t want to do something that would impact on commuters. We all need the commuter system, and we didn’t want to put them out of business.”
Metra Chairman Jeffrey Ladd and Metra attorneys declined to comment, saying only that a decision whether to appeal was still being weighed.
Some members of the Barton jury, meanwhile, defended their decision as some criticism emerged about the size of the award.
Juror Alina Andrzejewski said that she was insulted by the statements of Metra and UP attorneys who blamed Barton entirely for the accident.
After reading a newspaper for the first time in more than a month and seeing that some legal experts felt the judgment was “crazy,” the 63-year-old Andrzejewski was even angrier.
“If we were crazy, we would have awarded her 10 times more than we did,” said Andrzejewski.
Other jurors said they tried to imagine how they would react if they had been in Barton’s position.
Under legislation enacted by the General Assembly to keep an even playing field with potential litigants, Metra does not have to publicly disclose how much money it is keeping in reserve to pay out legal expenses.
Although Metra is self-insured, it receives support in liability cases from a joint insurance fund–which also includes the CTA and Pace– operated by the Regional Transportation Authority.
Each transit agency contributes $2.5 million to the fund and can borrow up to $5 million for legal-related costs.
Metra is expected to request $5 million from the RTA for the Barton judgment and rely on insurance to pay the rest. Officials said the vast majority of claims are paid through the $5 million fund, minimizing the need for contributions from insurers.
Legal experts noted that normally punitive damages are much larger than compensatory damages–but just the opposite was true in the Barton case.
“My guess is that an appeals court would defer to the trial court and let the compensatory award stand,” said a personal injury attorney who observed parts of the Barton trial.”
Indemnification clauses are not unusual in business contracts that include multiple parties that may face liabilities, said Bruce Ottley, a law professor at DePaul University.
“But it is rare for the corporate body that is operating the service–in this case the UP–to receive the indemnification. Usually, it’s the other way around,” Ottley said.
He said that the uncommon arrangement may have been an incentive Metra offered to get the UP to operate Metra’s North Line.
