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December 4, 2019

Blumenthal leads effort to end Amtrak’s shield from lawsuits

By Ana Radelat | CT Mirror

Sen. Richard Blumenthal is leading a congressional pushback against Amtrak’s new ticketing policy, which prevents passengers from suing the railroad company.

Photo | Contributed
U.S. Sen. Richard Blumenthal.

Early this year, Amtrak changed the boilerplate language on its tickets to prevent passengers injured in Amtrak accidents or those with any other grievance from suing the company in court. Instead, those passengers will be forced into binding arbitration.

Initially, few noticed the change, which would also prevent class-action lawsuits against Amtrak.

But now the revised boilerplate language has gotten the attention of Congress.

Last week, Blumenthal led a group of 13 Senate Democrats, including presidential contenders Kamala Harris, D-Calif., Cory Booker, D-N.J., Bernie Sanders, I-Vt., and Elizabeth Warren, D-Mass., in a letter to Amtrak demanding it “immediately eliminate this anti-consumer arbitration and class action policy.”

The senators said that claims subject to forced arbitration “are relegated to private forums where powerful defendants, like Amtrak, can stack the deck against claimants and cover up wrongdoing.”

“Faced with these daunting odds, many potential claimants decline to file claims in the first place,” the senators wrote.

The lawmakers also said the closed-door nature of forced arbitration “lacks transparency” and prevents the public from learning about the causes of accidents that result in major injuries and death.

Amtrak President Richard Anderson wrote the senators a swift and defiant response saying that the rail company will continue its new policy.

Anderson said Amtrak did not develop its arbitration program in order to disadvantage passengers or escape liability or accountability for accidents, but to “expedite resolution of claims and to reduce unnecessary litigation costs.”

“Arbitration provides a resolution in less time – generally well within a year of filing – by avoiding unnecessary discovery and other time-consuming proceedings, and the often years-long wait for a trial date on overcrowded court dockets,” Anderson wrote. “Agreements to arbitrate are desirable precisely because they trade the procedures of the federal courts for the simplicity, informality, and expedition of arbitration.”

Anderson also provided the senators with an accounting of claims against Amtrak from 2015 through this year that shows a vast majority of claims against his company are resolved outside of litigation and those that are taken to court have cost the company about $11 million in legal fees.

“We believe arbitrating disputed passenger claims under our policy will reduce those costs significantly; that is money that can then be spent in safety programs and other passenger service and care programs,” Anderson wrote.

Blumenthal said Anderson’s is the “typical response” to criticisms about force arbitration.

“They say it costs less, it’s quicker, but the rights of plaintiffs are vastly undercut,” the senator said. “Amtrak should not be able to deny them a day in court.”

Blumenthal also said he and other Democrats who have asked Anderson to eliminate the new contract language on passenger tickets are not intent on banning arbitration.

“We’re just saying (arbitration) has to be mutually agreed to,” he said.

Federal regulations prohibit airlines from imposing a contract that precludes passengers from suing them in “any court of competent jurisdiction.”

But those regulations don’t apply to railroads.

Amtrak runs about 60 trains in Connecticut and sold nearly 1.8 million tickets in the state alone last year.

It changed its contract with passengers after victims of a 2015 derailment in Philadelphia that killed eight people and injured hundreds more won a $265 million court settlement against the company.

Blumenthal has introduced a bill, the Forced Arbitration Injustice Repeal (FAIR) Act, that would invalidate all agreements that requires the forced arbitration of an employment, consumer, or civil rights claim against a corporation.

Blumenthal’s bill has 38 Senate co-sponsors, but they are all Democrats and the legislation has yet to move in the GOP-controlled Senate.

However, Amtrak’s arbitration clause has also caused a stir in the U.S. House.

At a wide ranging hearing on Amtrak last month in the House Transportation Committee, top Democrats said they would consider legislation banning forced arbitration clauses for railroads that is similar to the existing ban on forced arbitration clauses for airlines.

Besides approving legislation banning forced arbitration, Congress can pressure Amtrak in other ways.

Each year, lawmakers approve enough federal subsidies for Amtrak to keep the railroad operating. Some of the biggest supporters of Amtrak’s funding are also the Democrats seeking an end to the forced arbitration clause.

Blumenthal said there’s another way to pressure Amtrak.

“And that’s bringing the arbitration clause to its customer’s attention,” he said.
 

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