Free Lunch by David Cay Johnston Read Free Book Online Page B

Miami.
    CSX said it was disappointed that the
Supreme Court would not give it a chance to show that the jury and the Florida judges were wrong. CSX even suggested the
proper punitive damage was zero. Kathy Burns, one of the CSX publicists, called the punitive damage award “unwarranted and
excessive.”
    Lobbyists from CSX and other companies had, in the meantime, descended on
Tallahassee to persuade the state legislature that big punitive damage awards were bad for business. Today Angelica Palank could
not get $50 million in punitive damages because of a law signed by Governor Jeb Bush. It severely limited any future damage
awards no matter how awful the misconduct.
    Even with the award that the courts left standing,
the cold calculus that cutting safety is immensely profitable remains in place. The total damages to the Palank family, both to
compensate them and to punish the company, came to a bit more than $56 million. The money paid to all of the others, who settled
without litigation, was a fraction of this. Viewed in the context of what CSX saved, however, even the total damages were not
punishment at all, just a minor cost of doing business. For every dollar CSX saved by cutting corners on safety it only had to give
back four cents.
    We teach children that crime does not pay, but the grown-up truth is that
“borderline criminal” behavior can pay handsomely.
    From the perspective of CSX, or any
railroad, the economics of shortchanging safety continue to make sense. Two years after the Palank case ended, James E. Hall, a
former chairman of the National Transportation Safety Board, told The New York Times that the loss of lives in rail accidents reveals “a systemic failure…It’s been something that has just not grabbed the attention,
unfortunately, of the public.” He was speaking of deaths at rail crossings, but his point is equally valid across the
board.
    Although many travelers worry more, as Sergeant Palank did, about dying in a plane
crash or being hit by an 18-wheel rig on the highway, since the year 2000 Americans have been dying at the rate of about one per
day at railroad crossings. A few of these deaths are suicides by train or the bloody product of fools driving around signal arms.
Some are also the result of crossing arms that fail to activate. Others occur because signal arms sometimes bob back up after
coming down, endangering even careful drivers and their passengers. At crossings with no signals, foliage that the railroads have
not trimmed in accordance with the rules add to the death toll as people drive unaware onto tracks just as millions of pounds of
steel bear down on them.
    In Britain only about 18 people per year die at rail crossings. Major
crossings have fencelike barriers that cars cannot flit around. Even after taking into account that America has five times as many
people as the United Kingdom, the death rate at crossings in America is four times that of Britain.
    Between 1995 and 2000 derailments increased 28 percent, nearly triple the 10 percent increase in freight
hauled. Yet even with more accidents and more deaths, the economics of cutting spending on safety are compelling from the
railroad’s perspective. The fines imposed for safety violations in the United States are minor, more like parking tickets than
deterrents. The maximum fine is $20,000. The average fine is about $1,600. So the railroads play the percentages, weighing risk
versus cost. Risk wins easily.
    Most switches are safe. And not every unsafe switch will fail.
Keeping every one of the thousands of switches around the country in proper repair is very costly, especially as a competitive
market drives transportation prices down. After all, the jury-rigged repair of the backward Orlon switch held for years. Those
switches that do fail will probably damage cargo, not kill people. Even killing people doesn’t cost the railroads very much. As the
CSX case