Employees Accuse Railroad of Collaborating With Law Firm to Reduce Claim Amounts
A class action suit filed on March 26, 2001 in U.S. District court claims that Burlington Northern Santa Fe Railway Company (NYSE:BNI) secretly conspired with lawyers representing railroad workers in hearing-loss claims.
According to the suit, Burlington Northern entered into a secret deal that facilitated easy settlements for awards drastically smaller than those of similar claims in actual court cases. In exchange, Burlington Northern received the lawyers' cooperation and an agreement not to take the claims of present and future clients to court.
The workers, represented by Steve Berman of the Seattle-based law firm Hagens Berman, and Sim Osborn, also of Seattle, allege in the suit that Burlington Northern collaborated with Portland, Oregon-based law firm Bricker Zakovics Querin Thompson & Ritchey PC (BZQ) in more than 4,000 settlements. The suit claims hearing-loss settlement amounts were decided by a secret, predetermined 'matrix,' saving Burlington Northern hundreds of millions of dollars in claims while illegally curbing employees' rights.
'This suit states these claims were handled two to three hundred at a time during weekend meetings, and that no meaningful consideration was given to any of the cases,' said Steve Berman, managing partner of Hagens Berman. 'We allege that this action was grossly unjust to the workers and, we believe, patently illegal.'
If certified as a class action, the suit would represent more than 4,000 railway workers who used BZQ to handle hearing-loss claims.
The complaint alleges that named-plaintiff Norman Harding, a thirty-year employee, suffered a profound hearing loss and was induced to settle his claim for $65,000. He was never advised that juries were awarding sums of between $200,000 to $1 million for similar claims. In addition, the suit states that Harding's lawyers never told him his settlement amount was derived from the matrix.
Harding's disease is progressive and has advanced to the point that he is unable to use a telephone or to attend family gatherings.
According to the suit, the hearing-loss matrix was based on a scale ranging from 'profound hearing loss' to 'minimal loss.' This matrix was used to determine the amount of money that an employee would receive based on the severity of the hearing loss. The suit states that these amounts were up to ten times less than awards given to similar hearing-loss claims that went to trial.
The suit also alleges that BZQ and Burlington Northern acted jointly to conceal the scheme from the law firm's clients, failing to inform them of the settlement schedule and that the amounts offered were far below similar claims decided in court. BZQ also neglected to inform hearing-loss plaintiffs that their claims would not go to court, according to the suit.
The complaint alleges that when one employee could not get BZQ to commit to try his case, he hired a different lawyer and won $150,000 in a jury trial, an amount five times what he would have received under the matrix. To conceal the conspiracy, BZQ and Burlington Northern refused to release clients' files, even when those clients were not bound by confidentiality agreements, the suit states.
BZQ specializes in representing injured railroad workers and is listed by several railroad workers' unions as 'designated council,' meaning that the union approves the firm as counsel for injured railroad workers who are union members.
According to the suit, Burlington Northern knew as early as 1966 that hearing loss from excessive noise was an occupational hazard for railway workers, but failed to acknowledge the issue. The suit charges that Burlington Northern did not address the hearing-loss issue for fear of prompting employee claims. Later, when Burlington Northern became concerned that it faced hundreds of millions of dollars in exposure because of hearing-loss claims, it coordinated the matrix scheme as way to reduce liability, the lawsuit claims.
The suit seeks compensatory damages for the plaintiffs as well as attorneys' fees.
Steve Berman is managing partner of Hagens Berman in Seattle. Recently cited as one of the nation's top 100 attorneys by The National Law Journal, Berman is a nationally recognized expert in class action litigation. Berman represented Washington State, 12 other states and Puerto Rico in lawsuits against the tobacco industry that resulted in the largest settlement in the history of litigation. Berman also served as counsel in several other high-profile cases including the Washington Public Power Supply litigation, which resulted in a settlement exceeding $850 million. Other cases include litigation involving the Exxon Valdez oil spill; Louisiana Pacific Siding; The Boeing Company; Morrison Knudsen; Piper Jaffray; Nordstrom; Boston Chicken; and Noah's Bagels. More information is available at www.hagens-berman.com.
Simeon Osborn is the managing partner in the law firm of Osborn & Smith which specializes in personal injury, aircraft litigation and civil litigation. Osborn has more than 17 years of experience in litigation and has developed a reputation for success. Osborn successfully represented several clients in a recent Longview, Washington railway accident as well as actions against the Port of Seattle in a recent shooting in the SeaTac Airport parking garage. Osborn was selected for inclusion in the biannual Best Lawyers in America list, given the highest rating by his peers in the Martindale-Hubbell survey, included in the Washington Law & Politics' Super Lawyers list and listed in the Bar Registry of Preeminent Lawyers. Osborn has argued cases to the Washington State Supreme Court and the Washington State Court of Appeals and serves on the Western Trial Lawyers' Board of Governors. Osborn received his law degree from University of Puget Sound in 1984.
EDITORS NOTE: Accredited media may request copies of the complaint and background material by contacting Mark Firmani at 206/443-9357 or firstname.lastname@example.org.