Class certified in case alleging railroad pressed victims to settle.

After railroad accidents, Union Pacific Railroad employees contacted people who were injured or the families of those killed, gave them legal advice, and pressured them to settle for smaller amounts than they would have pursued with a lawyer's help, according to a lawsuit filed in Arkansas and recently certified as a class action. The court found that this approach was a "uniform, company-wide policy and practice." (Vickers v. Union P. R.R., No. CV-05-5-2 (Ark., Lafayette Co. Cir. certified Apr. 11, 2008).)

Union Pacific claims personnel--who are neither lawyers nor licensed insurance adjusters--typically contacted injured people within 24 to 48 hours of the incident; set up face-to-face meetings with them, often in their homes or the emergency room; explained and filled out legal documents; and settled their claims. These personnel were trained in this approach, the lawsuit argues.

The plaintiffs claim that these practices constitute unauthorized practice of law and violate the Arkansas Deceptive Trade Practices Act.

The Union Pacific employees would "establish a relationship of trust and confidence without truly sharing the nature and extent of the adversarial position of the corporation to the claimant," wrote Circuit Judge Jim Hudson in the certification order. "Nor did the corporation through its employee agents disclose the nature and extent of the corporation's financial interest in settling the claim for as little money as possible or that the corporation's financial interest was in conflict with the financial interest of the claimant."

"There's a difference in value between a case where the claimant is represented by an experienced, knowledgeable lawyer and where someone is unrepresented by a lawyer," said Thomas Jones of Kansas City, Missouri, who represents the plaintiffs. "The difference is money that we believe Union Pacific saves by carrying out this pattern and practice of conduct."

The class, estimated to include approximately 300 members, is made up of unrepresented, non-railroad-employees in Arkansas who settled personal injury or wrongful death claims with Union Pacific between 1992 and 2005.

Vickers illustrates why some cases need to proceed as classes rather than individual lawsuits, Jones said. "If these plaintiffs needed to pursue their causes of action individually, most would not be able to do so due to the cost of pursuing each claim individually.

"Many claimants already feel taken advantage of," he said. "However, the average person is not experienced or sophisticated with legal matters and may not understand exactly how to exercise their legal rights. They just know something's not right about how they were treated."

Hudson wrote, "[Union Pacific's] alleged wrongful conduct pertaining to claims settlement practices arose from a corporate policy, which was applied uniformly across the state of Arkansas and which affects all class members."

But has the company been applying this policy outside Arkansas as well? Jones noted that Union Pacific operates in 23 states. "One would expect that these corporate practices would be consistent from state to state," he said.

Union Pacific has indicated its intent to appeal the class certification order to the Arkansas Supreme Court. However, Jones said, "Arkansas is fortunate to have a very well-developed bank of case law on class actions and an extremely capable, well-respected supreme court in determining cases on class action certification."

On May 29, Hudson issued an order approving the notice of class action and rights of class members and directing plaintiff counsel to notify the class promptly.