SUGARMAN The Personal Injury Law Firm
617-542-1000

Amtrak’s New Arbitration Clause Disregards Passengers’ Rights

Posted by David P. McCormack

Meet David

David’s technical and analytical approach to personal injury cases has served his clients well for over 15 years. Recognized for his commitment and intensity, David has consistently been recognized by his peers, and has successfully argued in front of the Massachusetts Supreme Judicial Court. Meet David

O

On January 7, 2020 a Complaint was filed that states Amtrak’s new arbitration clause in their “Terms and Conditions” violates the Constitution. The new clause forces passengers to give up their First Amendment right to petition courts for grievances against the government. The Complaint also states that Amtrak overstepped its authority and the judicial branch.  

How does a passenger railroad company end up violating the Constitution?  

Here’s a quick history lesson: The Federal Arbitration Act (FAA) was passed in 1925. It allows companies to force mandatory arbitration and bans class-action suits.  

Amtrak’s new clause from January 2019 does just this. It prevents people from filing personal injury lawsuits against Amtrak, and it requires passengers to take their complaints to an arbitrator instead of going before a judge and jury. Once the arbitrator makes the decision, there is no way to appeal the ruling. It also prohibits passengers from joining a class action lawsuit against Amtrak.  

You’ll find similar clauses in credit card contracts, insurance contracts and more. Arbitration is popular among corporate defendants, and it’s not hard to see why. Vox investigative reporters found that just 1.8% of plaintiffs were awarded monetary damages.  

(Some states have tried to protect consumers by fighting against arbitration agreements like this, but the Federal Arbitration Act often overrides these laws.)  

Amtrak’s arbitration clause was revised shortly after the 2015 derailment in Philadelphia. That accident resulted in eight deaths and hundreds of injuries. The train was traveling at nearly double the speed limit before it went off track. A $265 million court settlement was awarded to the victims. There is a statutory cap of $295 million on damages that Amtrak can face from a single accident. Despite the cap, Amtrak wishes to avoid being held liable for its negligence at all.  

The National Railroad Passenger Corporation (Amtrak) is created, owned, and controlled by the federal government. When Amtrak was created, Congress decided it should be operated for-profit. Congress did not approve Amtrak to revise the arbitration clause. Amtrak's private process for mandatory arbitration disregards separation of power in the government. This could lead to a privatized justice system for any claim against the federal government.  

Julia Duncan at the American Association for Justice stated, "It is one of the most anti-consumer and passenger clauses I've ever seen.”  

Now, Americans are left without justice, and corporations get away with illegal behavior.  

SUGARMAN has a team of dedicated personal injury attorneys who represent those who have been injured. If you have been hurt in an accident and wish to speak to one of our attorneys regarding liability, please fill out a Contact Form, call us at (617) 542-1000 or e-mail info@sugarman.com.