Metro Legal Costs Jump Due To 2009 Crash
The Washington Examiner
WASHINGTON (AP) — Metro has paid out $173 million for legal claims in the past five years, and last year alone the payments jumped 54 percent as the agency started to settle lawsuits stemming from the deadly 2009 Fort Totten crash, records show.
The transit agency’s annual claims payments hovered near $30 million between 2008 and 2011, until the fiscal year that ended in June, when the payments rose to $48.5 million. The payout represents about 3 percent of the agency’s annual operating budget. That could buy the equivalent of more than 80 top-of-the-line hybrid buses, 24 new rail cars or replace the Dupont Circle escalators four times.
The settlement costs from the Red Line crash that killed nine and injured some 80 others are not over. Victims of the crash had until June 22, 2012, to file their cases. And some settlements agreed to last year were not finalized by July 1, meaning the payments will show up on future books.
Metro estimated its systemwide liability at the end of June to be $140.4 million, with the expectation it would have to pay out $30.8 million this year.
“If you normalize for the Red Line claims, the variance reflects a small increase from the prior year and certainly below levels in 2009,” Metro spokeswoman Caroline Lukas said in an email.
She said the agency develops appropriate coverage plans to cover its liability. “The Red Line claims aside, the amounts are consistent with those other major transit properties and are the cost of business,” she added.
The transit agency lays out a financial case every year for why it needs more money to fill its budget holes, but it doesn’t cite the cost of legal claims. The agency typically does not talk about pending cases or settlements. But every time a worker gets hurt, or a rider or bystander is injured in a crash, it’s not just a safety issue; it’s a budget issue.
Payments for legal claims typically show up on an agency’s books well after the actual incident.
It’s not clear how much the Fort Totten crash will ultimately cost. The settlements are confidential. Also, Metro is one of four defendants, so it shares the cost of the settlements completed to varying degrees, depending on what the four groups agree to pay.
But the Fort Totten case is not the only legal case for Metro. A deadly 2008 bus crash that killed a California executive and injured his wife, their two kids and their taxi driver ended in an undisclosed settlement in 2010. The costs also include worker compensation claims, claims arising from construction of the system and other damages.
The agency has been named in 61 federal suits filed this year, court records show, though it can claim immunity from some claims, such as slip-and-fall cases.
Metro, like any agency, has insurance to cover some of its legal costs. But the $48.5 million total was not covered by insurance. The amount doesn’t include the additional cost of the insurance that the agency has borne in the form of additional coverage and higher premiums due to the crash, nor the legal fees for Metro’s attorneys and court costs.
Insurance costs are about an additional $12 million a year, said Metro Chief Financial Officer Carol Dillon Kissal.
(Copyright 2012 by The Associated Press. All Rights Reserved.)