Passenger Rail Risk Management Issues Allison I. Fultz Kaplan Kirsch & Rockwell LLP Washington, DC 2013 APTA RISK MANAGEMENT SEMINAR Cincinnati, OH June 10, 2013

Overview Today’s Topics: System Safety FRA – Rail System Safety Planning FTA – Transit Safety Planning Operator Safety and Situational Awareness Passenger Rail Hours of Service Use of Handheld Electronic Devices Shared Use of Freight Corridors Rail System Safety Plans – Rail Safety Improvement Act of 2008 Transit System Safety Plans – Moving Ahead for Progress in the 21st Century Act – MAP-21 Operator Safety – Rail Safety Improvement Act Shared Used of Freight Corridors – Liability Limitations at 49 USC and by contract with freight railroad Primarily from passenger rail perspective, but some issues encompass bus operations – FTA Transit System Safety addresses all modes Use of cameras to monitor operators

Overview Policy, Law and Regulation: Approach to safety – increasing emphasis on risk reduction and avoidance rather than protecting against aftereffects of incident Rail Safety Improvement Act of 2008 (RSIA) Moving Ahead for Progress in the 21st Century Act (MAP-21) Shared Use: Allocation of risk Policy, law and regulation – system safety and operator requirements Shared use – some statutory criteria, but largely contract matter

System Safety - FRA FRA program: RSIA – new requirements for system safety programs Applies to commuter and intercity passenger rail operators FTA program: MAP-21 – new authority for FTA to develop and enforce nationwide safety standards for transit systems Applies to all transit modes, except those regulated by FRA

System Safety - FRA Railroad Safety Risk Reduction Programs (RSIA Sec. 103, codified at 49 U.S.C. 20156) - FRA Notice of Proposed Rulemaking (77 Fed. Reg. 55,372, Sept. 7, 2012), 49 CFR Part 270 Goal: to improve safety by reducing the number and rates of accidents, incidents, injuries, and fatalities System Safety Program (SSP) in FRA’s proposed rule Risk-based hazard analysis Technology implementation plan Fatigue management plan FRA expects to issue final rule this summer. Emphasize that this rule applies to commuter rail operators, not to heavy rail, light rail, or systems that are not regulated by FRA

System Safety - FRA 49 U.S.C. 20156: Requires each commuter rail operator to develop a railroad safety risk reduction program (system safety program) that systematically evaluates railroad safety risks on its system and manages those risks in order to reduce the numbers and rates of railroad accidents, incidents, injuries, and fatalities Conduct risk analysis Mitigate aspects of system that increase risks to railroad safety Enhance aspects of system that decrease risks to railroad safety

System Safety - FRA Required components of SSP: Risk mitigation plan Technology implementation plan Fatigue management plan

System Safety - FRA Risk analysis: Identify and analyze: Operating rules and practices Infrastructure Equipment Employee levels and schedules Safety culture Management structure Employee training Other matters, including those not covered by railroad safety regulations or other Federal regulations, that impact railroad safety Comprehensive risk analysis required pursuant to 39 USC 20156(c): Mix of objective (operating rules and practices, employee levels and schedules), subjective (safety culture) and mixed (condition of infrastructure and equipment) analysis Permits each system to identify characteristics unique to its circumstances Examines physical, operational and cultural elements Other matters could include, for example, behavior of passengers and other members of the surrounding community

System Safety - FRA Technology implementation plan: 10-year plan to develop, adopt, implement, maintain and use technology to reduce safety risks Analyze safety impact, feasibility and costs-benefits Provide implementation schedule Identify PTC implementation schedule Elements may include: Processor-based technologies Positive train control systems (PTC) Electronically controlled pneumatic brakes, Rail integrity inspection systems and rail integrity warning systems Switch position monitors and indicators Trespasser prevention technology Highway- rail grade crossing technology Other new or novel railroad safety technology, as appropriate

System Safety - FRA Fatigue management plan Plan designed to reduce the fatigue experienced by safety-related railroad employees and to reduce the likelihood of accidents, incidents, injuries, and fatalities caused by fatigue 2 year updates Elements: Targeted fatigue countermeasures aimed at differing conditions throughout system Employee training Scheduling practices Alertness strategies Later in presentation, will address specific rules aimed at employee fatigue and situational awareness Hours of service Use of handheld electronic devices SSP intended to incorporate regulatory requirements into agency’s broader safety plan – context will vary in each instance

System Safety - FRA Protection of risk analysis information from discovery in litigation or disclosure under FOIA: RSIA Sec. 109 (codified at 49 U.S.C. 20118-20119) Protection would apply to: Information generated by railroad in course of conducting risk analysis Statement of mitigation measures identified to address those risks NPRM proposes to shield information compiled or collected solely for the purpose of developing, implementing or evaluating a SSP FRA analyzed provisions applicable to other federal safety programs to guide development

System Safety - FRA Implementation Involvement of labor – agency must make good faith effort to reach agreement with all directly affected employees on contents of SSP FRA has authority to impose civil penalties for failure to submit, certify or comply with SSP

System Safety - FTA Transit System Safety MAP-21, Sec. 20021 (codified at 49 U.S.C. 5329) Closes regulatory gap in safety oversight of transit systems Applies to: Heavy rail, light rail, streetcar, bus and ferry FTA authority to Issue safety regulations Inspect, monitor and enforce New FTA Office of Transit Safety and Oversight Rulemaking pending Pre-existing regulatory gap – As artifact of development of local transit systems, transit system safety was matter of state oversight MAP-21 gives FTA for first time – authority to establish and enforce national safety standards

System Safety - FTA FTA framework Emphasis on mitigating risks to prevent accidents – all hazards approach Safety Management System (SMS) Policy: Define management and employee responsibilities Risk management: Analyze risks, identify strategies to mitigate or eliminate Assurance: Inspection and data to ensure performance of risk controls Promotion: Create safety culture through communication and employee training Similar to FRA – emphasis on mitigating risks to PREVENT accidents Not similar to FRA – Safety Management Systems framework – more performance-based than prescriptive However, this may ultimately be distinction without difference – FRA SSPs require means of measuring success of program implementation

System Safety - FTA FTA: National Public Transportation Safety Plan (MAP-21 Sec. 20021(b), codified at 49 U.S.C. 5329) Develop safety performance criteria for all modes of transportation: Minimum safety performance standards for vehicles not already regulated by other DOT or other Federal agency Incorporate pass/fail safety criteria into Bus Testing Program Safety certification program for state and agency personnel responsible for safety oversight Definition of state of good repair

System Safety - FTA Individual agency: Public Transportation Agency Safety Plan (MAP-21 Sec. 20021(b), codified at 49 U.S.C. 5329) Develop agency safety plan and certify that plan meets FTA requirements: Strategies for identifying risks and mitigating or eliminating exposure to hazards Trained safety officer to report directly to general manager Performance targets based on national safety performance criteria Establish staffing levels Staff training and certification program

System Safety - FTA State Safety Oversight (SSO) Program (MAP-21 Secs. 20021(b), 20030(e), codified at 49 U.S.C. 5329, 5330): Applies to states that have rail systems not already regulated by FRA State must establish SSO program establishing state responsibility for oversight of rail fixed guideway transportation safety in accordance with federal law SSO must encompass agency’s capacity, organizational structure, financing, and activities. Establish State Safety Oversight agency SSO agency may not derive any funds from any transit agency it oversees Prohibition on funding from transit agencies – FTA aims to eliminate any conflict of interest SSO agency will be funded by FTA and sources other than any agency it oversees

System Safety - FTA State Safety Oversight (SSO) Program, cont’d: Up to 80% federal funding $21.9 m available – 78 Fed. Reg. 28,014 (May 13, 2013) Implements SMS in collaboration with states in advance of rulemaking

System Safety - FTA Enforcement: FTA has authority to: Inspect, audit and issue directives Issue subpoenas and conduct discovery Prescribe recordkeeping requirements Investigate accidents in cooperation with NTSB Require more frequent oversight Require that formula grant funds be used to correct safety deficiencies before being allocated to other projects FTA does not have authority to impose civil penalties Other means of ensuring compliance

System Safety Looking ahead: FRA and FTA safety programs clearly two separate regimes FRA final rule anticipated this summer FTA rulemaking not yet initiated Office of Transit Safety and Oversight to begin working with states and agencies Separate regimes – Established through different legislative efforts Many agencies will be subject to both

System Safety Resources FTA MAP-21 website: www.fta.dot.gov/map21/index.html FTA Office of Transit Safety and Oversight: www.fta.dot.gov/tso.html February 7, 2013 Dear Colleague Letter to states outlining actions necessary to establish and finance SSO agency, at: http://www.fta.dot.gov/newsroom/12910_15057.html Notice of availability of funding to establish SSO agencies: 78 Fed. Reg. 28,014 (May 13, 2013) Separate regimes – Established through different legislative efforts Many agencies will be subject to both

Operator Safety Important element of FRA-mandated System Safety Plans Focus on individual’s role in maintaining safe operating environment Situational awareness Alertness Minimizing distractions We’ll cover Hours of service rules for passenger rail operating employees Rules governing the use of personal electronic devices Moving back to the realm of FRA regulation -

Operator Safety Hours of Service regulations for passenger operators (RSIA Sec. 108, codified at 49 U.S.C. 20116, 21102, 21109) FRA Final Rule (76 Fed. Reg. 50,360, Aug. 12, 2011) – in effect since Oct. 15, 2011 Commuter and freight operations differ significantly: Scheduling practices Patterns of operation Conditions of operation Studies have shown fatigue to be a contributing factor in rail accidents attributable to human error Reducing rail employee fatigue a significant goal of RSIA First significant revision to regulations governing rail employee work hours in 40 years First time passenger rail operations have been regulated separately from freight

Operator Safety Personnel governed by new legislation: “Train employees”: a railroad’s personnel engaged in or connected to the movement of a train “Signal employees”: a railroad’s personnel or those of a contractor (expansion of class of covered personnel) who are engaged in signal activities

Operator Safety On-duty and related time limitations: Time spent by a train employee on duty or in other mandatory service (i.e., deadhead or limbo time) cannot exceed 276 hours per month Time spent by a train employee on duty cannot exceed 12 hours A train employee cannot go on duty unless that employee has had at least 10 consecutive hours off duty during the preceding 24 hours For every 6 consecutive days a train employee is on duty for some period of each day, the employee must have at least 48 hours off duty at the employee’s home terminal New rule requires 10 rather than 8 hours off duty during previous 24 hours

Operator Safety New concept: Requires railroads to perform fatigue modeling to determine effect of working schedules on fatigue: Analyze the risk of fatigue during night time duty hours Implement fatigue mitigation plans on the basis of the completed models Train employees in fatigue mitigation

Operator Safety Restrictions on handheld electronic devices FRA Final Rule, 75 Fed. Reg. 59,580 (September 27, 2010), amending 49 CFR Part 220 Effort to reduce distractions, increase situational awareness Electronic device Personal electronic devices Devices supplied by the railroad for an authorized business purpose Electronic device includes cell phones, laptops, GPS devices, and electronic book-reading devices, but excludes (a) electronic control systems and information displays within a locomotive cab . . . necessary to operate a train or control switching operations and (b) digital watches whose only purpose is as a timepiece. Personal electronic devices distinguished from those supplied by the railroad for an authorized business purpose Restrictions on devices supplied by RR not necessarily less stringent – these devices may be used in certain circumstances

Operator Safety Rule restricts a railroad operating employee’s use of electronic devices when the use of such a device would affect the employee’s or another employee’s performance of safety-related duties Both locomotive engineers and other categories of railroad operating employees are generally prohibited from using any electronic device: (1) when they are on a moving train, (2) when any crewmember is on the ground or riding rolling equipment during a switching operation, or (3) when any railroad employee is assisting in preparation of the train for movement Devices must be off when any employee is in a locomotive while train is moving or while any operating employee is performing a safety-related task Some exceptions apply

Operator Safety Exceptions, including: To respond to an emergency situation involving the operation of the railroad or encountered while performing a duty for the railroad Deadheading employees not in controlling locomotive Use of medical device consistent with railroad’s standards of medical fitness for duty Enforcement: FRA may assess civil penalties Railroad may impose more stringent requirements Enforcement - FRA may assess civil penalties against RR and against employee as well if employee’s actions were willful violation If RR imposes more stringent requirements, must first satisfy requirements of rule and inform employees of distinction between FRA requirements and RR’s requirements Inward-facing cameras: Not included within scope of rule, but no FRA regulation prohibits Metrolink has successfully implemented video monitoring and prevailed in state and federal litigation aimed at halting implementation

Shared Use of Freight Corridors Use of freight rail corridors by commuter rail operators: Federal statutory limitation on liability Allocation of liability Environmental issues Separation of operations

Shared Use of Freight Corridors $200 million limitation on liability – 49 U.S.C. 28103: Applies to damages arising out of the operation of rail passenger transportation Caps total aggregate awards to all passengers as the result of a single accident or incident at $200 million Encompasses punitive damages, but only if such damages are recoverable under state law Cap has not yet been tested in litigation Insurance available, but has at times been difficult to obtain Discussion of establishing risk pool

Shared Use of Freight Corridors Direct negotiations with freight railroads: Allocation of liability – RRs assume but-for standard Environmental liability Acquisition due diligence Allocation of liability during construction and shared operations Separation of operations Temporal separation Positive train control Allocation of liability – Railroads typically take a but-for stance in allowing passenger operations on their corridors, and will demand stringent liability and indemnification obligations from agencies Frequent hard-fought negotiating point Environmental liability – RRs not amenable to shouldering cost of remediation of past releases During construction of any passenger facilities, agency typically responsible for any release it causes, cost of removing contaminated material During shared use of corridor, may be able to negotiate cap on agency’s liability – recognition of past and current use Separation of operations – Temporal separation – operating windows Anticipate that implementation of positive train control may allow more scheduling flexibility – remains to be seen

QUESTIONS? Allison I. Fultz Kaplan Kirsch & Rockwell LLP Washington, DC (202) 955-5600 afultz@kaplankirsch.com www.kaplankirsch.com