Wednesday, November 13, 2013 at 8:00 AM
After a legal battle that dragged on for more than four decades, a group of Cleveland railroad workers and their heirs will be sharing a multi-million-dollar award. ideastream’s David C. Barnett says it’s the surprising conclusion of a story that has its roots in the rise and fall of a corporate giant.
It was six years ago when Virginia McNabb took the stand to testify on behalf of her father, who died in 1989. He had worked in Cleveland-area rail yards his entire career, and was part of a group of workers who sued the Penn Central Transportation company. They claimed the company had cheated them out of seniority and healthcare benefits. McNabb reads her own words from the court transcript.
McNABB: My dad worked hard. He taught me: If you go to work, and you do right by them, they are going to do right by you.
McNabb was just a teenager when the case began. Looking up from the page, she says she knew continuing to pursue it over all this time was the right thing to do, but she never dreamed it would take more than 40 years. She admits there were times when she got discouraged.
McNABB: How could you win a case that just kept going and going? I didn’t have much hope.
For a century, the railroads had been corporate super powers, and in 1969 Penn Central was one of the biggest. Cleveland attorney Mark Griffin says it’s hard to find anything comparable today.
MARK GRIFFIN: I think if you put Google and Facebook and probably Exxon all together, that would be the corporate equivalent.
If you wanted to travel across the country, you took a train. If you wanted to ship packages nationwide, you did it by rail. Lumber, steel, petroleum and the other raw materials that built America were hauled by locomotive. And railroad historian Ken Prendergast says Cleveland was a major rail hub.
KEN PRENDERGAST: Cleveland had roughly 90 to 100 trains a day coming in and out of Union Terminal.
And all those trains needed dozens of people like Virginia McNabb’s dad out in the yards, guiding the locomotives onto the right track. Other workers, like John Gallagher, inspected the passenger cars as they passed through town.
JOHN GALLAGHER: When the train came in they had four car inspectors --- two from each end. It was like an army of ants going over the train. We had people inside doing cleaning, outside putting water in --- the whole bit.
But, America’s transportation picture changed drastically with the creation of the Federal Aid Highway Act of 1956, described in this promotional film.
SOUND: “The most talked about phase of the Act is the Interstate Highway System, a 41,000 mile network of our most important roads. These new highways will have a far-reaching economic impact on the entire nation.”
Historian Ken Prendergast says that impact was devastating for the railroads. Cars and trucks proved to be strong competition.
KEN PRENDERGAST: The passenger business was in free-fall and the freight business was very much in decline.
To save money, PennCentral began reorganizing its operations, much to the surprise of some long-time employees. Phil Franz, who worked for 14 years in the accounting office, says he was demoted, with little warning.
PHIL FRANZ: I was assigned a job from 11:00 at night until 7:00 in the morning. The guy who was assigned to me as a boss had one year’s seniority with the railroad and didn’t have the slightest idea of what I was supposed to do.
Feeling their rights had been violated, 32 railroad workers – including Franz and John Gallagher - decided to sue PennCentral. In 1969, attorney Charles Tricarichi filed the lawsuit in U.S. District Court in Cleveland. The following year, Penn Central went bankrupt --- an early sign that this case wasn’t going to be resolved quickly. About ten years later, Tricarichi’s daughter, Carla, joined the legal team, right out of law school.
CARLA TRICARICHI: I became a lawyer 30 years ago, so this case has followed me throughout my career.
After the bankruptcy, the assets of PennCentral were divided up, and the legal case was inherited by Cincinnati-based American Premier Underwriters, owned by industrialist Carl Lindner. Judges and arbitrators kept ruling in favor of the workers, but the company kept offering counter-arguments and the case continued to crawl through the courts.
CARLA TRICARICHI: I think that they thought that they would continue to throw roadblocks in our way, and that would discourage us. And frankly, it was very discouraging, and it was very expensive.
Tricarichi says the lawsuit ate up a lot of money, what with traveling to out-of-state hearings and combing through old, dusty document repositories. After a while, that started taking a toll.
CARLA TRICARICHI: In addition to being away, and having my kids say, “Oh, is it the railroad case again?”, I could not sustain the cost on my normal income, so my husband and I took out an equity line of credit on our house, so that we could pay for the expenses.
Randy Hart and Mark Griffin have been her co-counsels on the case for the past eight years.
RANDY HART: Mark and I were six, I think, when this case began (the two laugh). So, for us, this is the longest case we have ever had. Cases generally get resolved in a couple years. And so, for Carla to be in this case, like, forever --- it’s a long time.
SOUND: Knocking on door of house
This past July, a federal appeals court in Cincinnati made one last ruling in favor of the workers, bringing an end to what one judge called “a Dickensian odyssey through the legal system”.
CARLA TRICARICHI: Hi, Mr. Gallagher!
Late last month, Carla Tricarichi paid a visit to John Gallagher on the west side of Cleveland to deliver a hard-won gift.
CARLA TRICARICHI: We received a check several days ago for you, Mr. Gallagher. And this is from something called American Premier Underwriters, which is the successor to PennCentral Company. And this is the first bit of compensation you’ve seen in 44 years, so I want to hand it to you, and congratulate you for being patient.
The 85-year-old grasps his walker and slowly pulls himself out of his living room chair to receive the payment. He looks at it, and then he looks at Carla Tricarichi.
JOHN GALLAGHER: As far as that check is concerned, all I wanted was closure, okay? Thank you very much.
She reaches over and kisses him. (sound) Across town, Phil Franz has already deposited his share of the settlement. He’s paid-off his car and wants to leave some money for his three kids. He’s thinking about inviting some friends over and having a bonfire with all the legal paperwork he’s accumulated over the decades. Virginia McNabb’s father died 24 years ago at the age of 79. She says his portion of the proceeds will help pay-off some medical bills.
VIRGINIA McNABB: So, it’s almost like Dad is helping me.
Carla Tricarichi says the memory of her dad helped sustain her… through the years in court… through the miles on the road… through the boxes of dusty files…and through all the losses along the way to victory. She suspects her closure is going to take a little more time.
CARLA TRICARICHI: With the exception of two workers, none of the original people --- including the lawyers --- have survived to see the end of the case. For us, I guess it’s a great result. But, it’s a little bit of a loss too, because you have this adversary, and it sort of …consumes you. So, we have to, sort of, move away from that.
As it turned out, if that adversary had settled with the workers back when the case was first filed, their total payout would have been – adjusted for inflation - just north of $500,000, but over the course of four decades the interest blew it up to nearly $15 million. The lead attorney in the case for American Premier Underwriters didn’t respond to interview requests for this story.
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