Sometimes God truly is in the details. Monday’s Metro crash killed 9 people and injured 76. Because the trains allided* in DC rather than in nearby Maryland, no damages caps limit payouts in injured riders’ liability suits. Maryland caps the total damages paid to negligence casualties at $200,000. The first suit filed in this crash requests nearly five times that amount, for injuries relatively minor compared to the victims crushed in the second car.
The onslaught began Wednesday, when the parents of 15-year-old Davonne Flanagan accused the District of “negligent maintenance” and “negligent operation.” Davonne, who was in the first car of the striking train, fractured his leg. His parents are seeking $950,000.
Metro started the crash rhetoric with flimsy finger-pointing at Jeanice McMillan, the operator who died in the crash. If McMillan’s negligence had caused the crash, Metro would still be liable under agency theory. But the paper trail revealed since Monday provides evidence of a more pervasive, insidious negligence:
In fact, McMillan’s train, we have learned, might have had faulty brakes. We have learned that federal officials warned Metro five years ago that 1000-series trains were not safe, had lousy brakes and were “un-crashworthy.”
D.C. Del. Eleanor Holmes Norton spoke with National Transportation Safety Board member Debbie Hersman and Metro chief John Catoe on Tuesday and said — with an unfortunate choice of words: “What was striking about my conversations with these two top officials was their agreement that the most seriously damaged car, the striking car, was part of the ‘1000 series’ that had received an NTSB ‘urgent safety recommendation’ for phase-out or retrofitting. . . .”
In plain language, federal officials told Metro these trains were barely fit for passengers in 2004. The feds investigated a crash in Shady Grove in 2004 and another brake failure in Woodley Park a year later and issued an “urgent” warning.
Metro might try to blame the manufacturers who supplied the faulty cars and brake equipment. But the memos alleging over-used cars and too-old equipment mean even that argument is couched in very little credibility. So the suits will likely succeed.
But it seems that Metro couldn’t replace the un-crashworthy cars. Apparently Metro shares a tax shelter relationship with a private bank, which supplied cars and materials through private companies in return for the tax exempt status Metro itself enjoys as a public utility. Like the incident-requiring nature of the law itself, Metro materials are not ripe for replacing unless the materials themselves are damaged.
The National Transportation Safety Board recommended in March 2006 that Metro either accelerate retirement of the 30-year-old, Rohr 1000-series railcars or retrofit the cars to better withstand collisions. That recommendation came after NTSB’s investigation into a 2004 collision in the Metro system.
In a Jan. 10, 2007, response to NTSB, Metro officials wrote: “WMATA is constrained by tax advantage leases, which require that WMATA keep the 1000 Series cars in service at least until the end of 2014. The 296 Rohr railcars make up over a third of WMATA’s current rail fleet and have performed well for over thirty years.”
Metro said it would replace the cars in 2015.
Carol Kissal, chief financial officer at Metro, said in an interview that the decision not to replace the cars until 2015, and ignore the NTSB recommendation, was primarily based on the expectation that the cars would be used until the end of their 40-year life, and not because of restrictions from the leasing deals.
She said the leasing agreements didn’t explicitly prohibit Metro from retiring older cars. But most other cars that Metro could have used to replace the 1000-series cars were themselves under leasing arrangements that could not be terminated, Kissal said. “We could have replaced the asset, under most of the tax contracts,” said Kissal. “But we did not have any free, clear, unencumbered assets to replace it with.”
She said Metro had no ability to terminate the leasing deals, unless the assets themselves were damaged.
The final blow for metro?
Such lawsuits are typically covered by insurance coverage. But Metro’s board learned Thursday the transit system’s insurance policy was set to expire at midnight Tuesday. Normally the agency would have been able to renew the policy with set costs, but Chief Financial Officer Carol Kissal said the crash would end those rates and bring on higher but yet to be determined insurance premiums.
Oh, DC. Don’t you know that transparency is always the best strategy? If those memos had been public the market would have insisted that we replace dangerous cars and admittedly faulty rail. Costs would have been steep at the time, but cheaper than the increase in your premiums after insurers see that you clearly do not take steps to protect yourself from accident liability they will have to cover.
The market is the best insurance. Keep information transparent and communication free. How many times do we have to learn these obvious lessons before we start changing our behavior? Be rational — do yourself a favor and respond to incentives!
A more interesting question concerns the incentives this tax structure provides for Metro itself. If WMATA cannot replace the cars it knows are dangerous, does its insurance reflect that? Evidently Metro has reaped huge benefits from its tax-sharing relationships. Its capital gains from this venture will cover new, hiked premiums and settlement fees with crash victims. But what a shame that the dollar-and-cent incentives direct the Metro to find and share a tax shelter, rather than to protect the very public whose taxes shelter the Metro’s existence itself.
*Grammar lesson du jour: a “collision” requires that two objects both move towards each other, causing crash; if only one object crashes into a still object that is an “allision.”