House transport bill would end Amtrak’s forced arbitration

Amtrak’s policy for passengers to seek arbitration rather than sue started in 2019 after it was forced into multimillion-dollar settlements

Work crews prepare to clear a highway after an Amtrak train derailment in December 2017 in DuPont, Wash.  (Stephen Brashear/Getty Images)
Work crews prepare to clear a highway after an Amtrak train derailment in December 2017 in DuPont, Wash. (Stephen Brashear/Getty Images)
Posted June 16, 2020 at 1:02pm

Tucked in the $494 billion, five-year highway bill that the House Transportation and Infrastructure Committee is set to mark up Wednesday is a measure that would end Amtrak’s controversial policy of barring passengers from suing if they’re hurt or killed in crashes.

Amtrak’s forced arbitration policy, imposed in January 2019 after the government-supported passenger rail company was forced into multimillion-dollar court settlements, has been an irritant for congressional Democrats.

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“It’s simply outrageous that Amtrak would adopt such an anti-consumer policy, which, in fine print, forces passengers to waive their legal rights for any reason, including catastrophic injury or wrongful death,” said House Transportation and Infrastructure Chairman Peter A. DeFazio, D-Ore., who said he asked Amtrak’s then-CEO Richard Anderson about the policy last fall. He said Anderson’s explanation “fell short.”

“Simply put, Amtrak’s arbitration policy goes too far in limiting opportunities for customers and the American public to hold Amtrak accountable,” he said.

Republicans disagree and aren’t thrilled that the measure ending the process has been included in the bill. 

A spokesman for Rep. Sam Graves, R-Mo., the ranking Republican on the panel, said Republicans “don’t believe this provision is necessary.”

“Arbitration is a useful dispute resolution mechanism that provides fair and quick resolution of cases without cluttering up the courts,” he said. “It also usually means limits on what the attorneys can collect, so this will be a boon for trial lawyers.”

In a letter to Sen. Richard Blumenthal, D-Conn., and 13 others last year, Anderson defended the process, saying they avoid “unnecessary discovery and other time-consuming proceedings, and the often years-long wait for a trial date on overcrowded court dockets.”

He said criticism of the policy was “misrepresented by advocacy groups, who are obviously interested in maintaining the status quo and their lucrative fees associated with sometimes wasteful and protracted litigation."

He wrote that litigation has cost the company about $11 million over the last five years in legal fees. 

Cutting costs

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

The highway bill isn’t the first bill aimed at thwarting Amtrak’s forced arbitration policy.

In March, Reps. Conor Lamb, D-Pa., and Denny Heck, D-Wash., introduced a bill that would end the policy, with Blumenthal introducing a Senate alternative. Neither bill has progressed; the House highway bill, which will be marked up next Wednesday, may be the best shot Democrats have at ending the policy, though the overall bill’s prospects look grim in the Senate. 

Remington Gregg, counsel for civil justice and consumer rights at Public Citizen, said the rail line has justified the new policy by arguing it is required by Congress to find cost-saving measures. “And prohibiting people from going to court is a way to save money,” he said.

Public Citizen has fought the provision, arguing that such arbitration policies often dissuade people from pursuing damages. “Arbitration is not about having a cheaper and faster system,” he said. “It’s about suppressing claims.”

He said the policy is egregious because the federal government spends so much supporting Amtrak, which is basically the only national passenger rail. Those who need to take the train are essentially forced into accepting the policy; there are no other real alternatives. 

'Only game'

“Amtrak is the only game in town,” he said. “And the only game in town is subsidized by me and you.”

But beyond that, he said, there are already caps on Amtrak’s liability. Under federal law, Amtrak is only responsible for $295 million in liability. 

“So that means whether 10 people are killed when a train derails or 50 people are, you split up the $295 million,” he said. “Congress already put into place mechanisms to protect Amtrak. It shouldn’t be up to Amtrak to decide it wants to find other ways to get around accountability. That’s not how access to justice works.”

The forced arbitration policy became the subject of a heated exchange in November, when House Transportation and Infrastructure Committee member Stephen F. Lynch, D-Mass., grilled Richard Anderson sharply about the policy, questioning whether such forced arbitration clauses created a disincentive for rigorous safety precautions “because it limits the rights of individual injured passengers or workers.” 

“To ride on Amtrak, they’ve got to accept mandatory arbitration,” Lynch said. “They don’t have a choice. You can’t renegotiate what’s on the back of the ticket.”

Anderson argued that railroad workers are also subject to binding arbitration under federal law.

But Lynch said the comparisons weren’t appropriate. “These are passengers,” he said. The two spoke over each other, with Anderson at one point asking, “are you going to let me finish?” and Lynch replying, “I’m not sure.” Anderson pushed the microphone away, checking his watch and phone in reply.

Anderson was replaced as Amtrak CEO and president on March 2 by William J. Flynn.

An Amtrak spokesperson said  the company continues “to stand behind our arbitration process.”