Second Ave. Sagas

Taking a legal risk and losing $7 million

Written by

Benjamin Kabak

in

With so many moving vehicles around New York City, New York City Transit’s vehicles get into their fare share of accidents. Sometimes, pedestrians get clipped; sometimes, buses and other surface vehicles collide; sometimes, people who aren’t supposed to be in the subway tunnels find themselves being chased down by a train. The MTA then winds up on the defending end of numerous lawsuits and often choose to settle. Yesterday, though, the MTA rolled the dice and lost a $7.5 million judgment to victims of a 2005 bus crash.

According to a 1010 WINS report, Brenda Whaley won $7.25 million and Amanda Wade walked away with $250,000 in their case against the MTA. The Authority alleged that the two had run a red light while Whaley and Wade indicated that the bus had run the red light. While lawyers were willing to settle for $3 million, the jury saddled the MTA with a $7.5 million verdict. The authority will apply the award. Sometimes, that $4 million gamble doesn’t pay.

Despite this verdict, overall, Transit has had great success recently in fighting their personal injury claims. In 2009, those injured filed 2720 claims against Transit, and only 216 of those went to trial. The agency won 65 percent of those trials, and since 2005, the agency has a similar percentage of the 870 cases to go to trial. Overall, NYC Transit has paid out $244.8 million in injury claims over the last five years.

Meanwhile, for a different take on the MTA’s legal liability, take a read through this tale from Peter at Ink Lake. He served as the foreman on a jury tasked with determining whether the authority should be liable for injuries a mugger sustained after he ran into a tunnel to escape the police and had his foot severed by a train. There, the jury found for the MTA. Recently, a 16-year-old graffiti tagger lost his leg when a subway train hit while he was trespassing inside a tunnel. There is no word yet if he plans to file suit.

Comments

18 responses to “Taking a legal risk and losing $7 million”

  1. paulb

    Seven and a half million dollars. Wait a minute. Buses are driven by human beings. Human beings are imperfect, and as long as buses are driven by human beings there will be accidents, although probably fewer than if computers were at the wheel. The bus driver wasn’t intoxicated, taking unreported meds, texting, talking on a cell phone? Make that g*d**n jury come up with the $7.5 million themselves.

    Thanks for listening.

    Reply
    1. Boris

      Yes, it’s hard to see why different legal standards are used for MTA drivers and other individual drivers driving their own or company cars. I always wonder why victims or relatives of victims of “regular” negligent driving accidents don’t file civil suits with million-dollar awards.

      Reply
      1. AK

        They do. Frequently. If you go to Florida, every other billboard is for a personal injury lawyer who files just the kind of suits you describe. In fact, in most every state, thousands of suits are brought every year, which is not surprising given the over 6 million auto accidents that occur in the U.S. every year.

        Reply
        1. Rhywun

          I am reminded of the medical-malpractice lawyer ads that are all over the subways. Crazy-high awards are largely the result of what lawyers can get away with, and of sympathetic jurors who are happy to reward victims with huge amounts of cash. I can hardly fault the various parties for gaming the system for as much cash as they can, but the downstream effect to the rest of society is much higher fares, medical costs, and taxes. I am all for guilty parties making reasonable restitution to victims when they are negligent, but today’s gargantuan awards are largely based on “emotion”.

          Reply
          1. AK

            Well, to be honest, we don’t see the type of “gargantuan” awards we once did, since the U.S. Supreme Court limited “punitive” damage claims in Philip Morris USA v. Williams, 549 U.S. 346 (2007). You are certainly right that there are downstream effects to tort cases. However, it is also unquestionably true that strong tort law creates an enormous incentive to perform jobs well, with more attentive care. I think the GOP is right to call for (and Obama correct to agree with) “tort reform”, but it’s certainly not easy to peg a dollar figure that represents equilibrium between the downstream (negative) effects and the benefits of the U.S. tort system.

            Reply
            1. Rhywun

              Sure it’s hard. That’s why I am not a lawyer 🙂

              There’s really no solution. I am totally against placing (now discredited) “Rockefeller”-style automatic judgements on these sorts of cases, as was done in support of The Drug War. No one is smart enough to place the correct value on another person’s livelihood.

              But my gut still tells me many of these awards are just too high. Especially when a public agency with a (theoretically) bottomless wallet is the defendant.

              Reply
        2. Boris

          Maybe the lack of suits is particular to New York. Over on Streetsblog, they keep a detailed record of all reported negligent driving cases, and I have yet to see one civil suit reported against someone other than a transit agency. Usually the NYPD just says there is no criminality involved, end of story. Maybe if the car is insured, there are some payments to the victim, but I’ve never heard of a civil case. After all, would we really have 300 pedestrian deaths a year if drivers were aware that killing someone can ruin their savings, lives and careers?

          Reply
          1. Alon Levy

            Boris, drivers can lose a lot more in criminal cases. Hell, murderers can lose even more, and still they kill people.

            For maximum deterrence, you’d want punishment to be universal more than severe. With gang crime, some of the most effective programs have been ones in which the police jail people for every crime for just a few days. Ruining a few people’s lives isn’t worth it because people just think it won’t happen to them. With a crime of negligence, it’s especially useless: people routinely overrate their driving ability, and can plausibly think they’ll never run someone over no matter what.

            Civil lawsuits aren’t really going to help much here, because most people aren’t worth suing. Unless you were run over by a millionaire, the amount of money you can extract in a lawsuit is not much higher than lawyer fees.

            Reply
    2. AK

      The entire tort law regime is set up to compensate the victims of human imperfection. This makes intuitive sense because the victims shoulder an enormous burden for society’s preditable missteps. The fact that “accidents” occur as part of life doesn’t mean that the negligence of a given party should go unpunished.

      Reply
  2. Russell Warshay

    When an MTA bus is involved in an accident, and it is the fault of the other party, does the MTA ever sue them for several million dollars?

    Reply
    1. AK

      MTA buses are insured. You can’t “double-dip.” Moreover, because we have a no-fault insurance scheme set up in New York State, litigation for damage to vehicles is practically unheard of. For an overview of no-fault regimes, see:

      http://en.wikipedia.org/wiki/No-fault_insurance

      Reply
      1. pea-jay

        Wait a second…doesnt the MTA like any prudent public agency have tort insurance? Many jurisdictions carry that coverage to protect against devastating payouts. I work for a county government and we carry that. Of course if the agency is frequently negligent, then that will be reflected in the premiums, but I would *have* to believe an agency like MTA would have some sort of coverage and that would be factored into the cost of doing business.

        Reply
        1. AK

          It would be unthinkable for the MTA not to have tort insurance (though I don’t have a source to confirm that they do). Even then, it is smart, as Ben and others have noted, to settle in many cases, since larger payouts at trial lead to higher insurance premiums.

          Reply
          1. pete

            The MTA doesn’t buy insurance on the market, its self insured as “First Mutual Transportation Assurance Company”. So the MTA doesn’t really have insurance or premiums to pay in the first place.

            Reply
            1. AK

              Very interesting. Would love to see the MTA’s economic analysis which led to that decision. Given that the City of New York contracts in the private market for billions upon billions of dollars in coverage (and was able to add massive amounts of coverage for Ground Zero rescue personnel within within minutes of the 9/11 attack), it seems that MTA could also benefit from private markets (although the private market looks nothing like it did in 2001, given AIG’s collapse).

              Reply
  3. BG

    Maybe this gamble didn’t work out, but that’s the point of taking risks . . . it is entirely possible that an MTA no-settle policy could work out better in the long run if they win more than they lose (though the added cost of lawyers to fight could add to the case for settling–which then just further increases the incentives to sue).

    Reply
  4. CharlesH

    Benjamin – I speak as an attorney who represents those injured because of the negligence of others. Your entry really doesn’t explain much about the TA, its legal system and its response to lawsuits.

    1. Where did you get the numbers cited as to settlement amounts, win/loss % and amount paid? As far as I know, the TA is notoriously closemouthed when it comes to tort claims and what it actually pays out.

    2. The 2009 number is clearly incorrect. If the number cited is correct as to the number of claims filed, then the 216 number as to completed cases cannot be correct. It takes three to six years for a claim against Transit to work its way through the system from the Notice of Claim stage to trial/settlement. (The case itself is 5 years old.) Unlike the City, the TA does not have an early settlement unit that takes viable claims and values them properly, fairly and quickly. Matters that should be settled are not; instead they are dragged on and on.

    3. Among those of us that deal with the TA in the Courts regularly as plaintiffs, there is a sense that the TA does not play by the rules. Documents are frequently lost or produced only after multiple court orders and documents and witnesses are mysteriously found at the last minute. Quite often, judges who are assigned to City and Transit parts will give them breaks that they will give no other defendant. Why? Because they are the City; they are Transit.

    4. We do not know what sort of injuries were suffered by the plaintiffs in the case (although a check of the court records would certainly begin to flesh out the injuries). We do know, from the newspaper, that a jury had found the bus liable for running a red light at the corner of Ocean Parkway and Avenue U. It would appear that the bus operator did something wrong and, I think we would all agree, victims are entitled to compensation for their injuries.

    Cases are valued by how the victims were injured. Testimony as to surgery, past, present and future pain and suffering and lost wages are heard by the jury which then decides, on the basis of testimony, from experts as to the validity of the amount. You wrote “apply” when I think you meant appeal. Once the jury decides, there is additional motion practice in front of the trial judge where the amount may be adjusted (usually downward). Once that happens, there is an appeal where the amount may be adjusted (usually downward). The chances of the TA paying this seven million dollar are far less than certain. The TA is “self insured.” This “First Mutual” is an unknown entity. Perhaps, your reader can explain how, why and with certainty he knows this.

    5. Your readers are misinformed as to some key points of our system. Huge verdicts are rendered all the time against all sorts of motor vehicle operators. They are always based on the injuries suffered. There are little or no punitives in NY in this context. But, and this is the most important thing – the TA has a duty to provide safe equipment, operators and service. It does so remarkably well most of the time. When it fails, when its employees make mistakes (we call them accidents), when it hires an employee who should not be in a position to harm people, it needs to compensate those who are injured by those actions. Today’s awards are not based on emotion, they are compensation for injuries suffered.

    Reply
  5. Does the MTA have a liability problem? :: Second Ave. Sagas

    […] man lost control of his wheelchair and ended up in the tracks. Earlier this year, the MTA lost a $7 million judgment in a case in which the jury found a bus driver at fault in an collision with another vehicle. […]

    Reply

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