Opinion ID: 378132
Heading Depth: 2
Heading Rank: 1

Heading: Free Pass Issue

Text: 19 Plaintiff Thompson used his Amtrak pass to receive a free ticket for the trip involved in this case. At the time he received the ticket, he signed a request for the ticket which provided: 20 RELEASE FROM LIABILITY: The user of this pass ticket expressly assumes all risk of personal injury or death, loss of or damage to property, and delay in connection with this transportation, and relieves Amtrak or its agents from all liability therefor. I AGREE TO THE FOREGOING CONDITIONS. 21 Defendants claim this provision prevents Thompson from recovering for injuries due to defendants' negligence. The District Court held that the pass was not free as L & N was obligated to pay Amtrak a statutory cost reimbursement for providing the passenger service to Thompson, and that, since the release of liability provision is good only against gratuitous passengers, it did not bar Thompson's recovery. 22 The Supreme Court has held that free passes issued by interstate carriers and the conditions attached thereto are governed by federal law, not state law. See Francis v. Southern Pacific Co., 333 U.S. 445, 449-50, 68 S.Ct. 611, 613, 92 L.Ed. 798 (1948); Kansas City Southern R. Co. v. Van Zant, 260 U.S. 459, 468, 43 S.Ct. 176, 177, 67 L.Ed. 348 (1923); Charleston & Western Carolina R. Co. v. Thompson, 234 U.S. 576, 578, 34 S.Ct. 964, 965, 58 L.Ed. 1476 (1914). 1 23 Early Supreme Court decisions held that a provision in a gratuitously issued pass which released the railroad from liability due to its negligence was valid. See Boering v. Chesapeake Beach R. Co., 193 U.S. 442, 24 S.Ct. 515, 48 L.Ed. 742 (1904); Northern Pacific R. Co. v. Adams, 192 U.S. 440, 453-54, 24 S.Ct. 408, 411, 48 L.Ed. 513 (1904). Later Supreme Court decisions held that Congress intended to preempt the issue of free passes in interstate commerce by passage of the Hepburn Act, 49 U.S.C. § 1(7), which prohibited the issuance of free passes to all save certain enumerated classes of people including employees, and that the early decisions upholding limitation of liability provisions in free passes were part of the Hepburn Act. See Francis, supra; Thompson, supra. Thus, if an employee is traveling on a free pass, the Court will give effect to any release of liability provision contained therein. However, if there is consideration for the pass, the release of liability provision is not valid. See Norfolk Southern R. Co. v. Chatman, 244 U.S. 276, 37 S.Ct. 499, 61 L.Ed. 1131 (1917) (the Hepburn Act does not modify previous cases which held that a person traveling on a pass to care for livestock which the carrier was transporting for hire was a passenger for hire and any limitation of liability on his pass was not valid). 24 Thompson presents two arguments that the pass was not free but supported by good consideration: 1) the pass was issued pursuant to a collective bargaining agreement and was part of his compensation for his work, and 2) L & N had to pay Amtrak for the passes issued by Amtrak to L & N employees. 25
26 The Rail Passenger Service Act, 45 U.S.C. § 501, et seq., was amended in 1972 to provide that Amtrak shall provide to any railroad employee eligible to receive free or reduced-rate transportation under the terms of any policy or agreement existing at the time Amtrak took over intercity rail service free or reduced-rate service on Amtrak trains, with the condition that Amtrak be allowed to use a single system-wide schedule of terms. 45 U.S.C. § 565(f). The legislative history indicates Congress was merely restoring rights the employees formerly had, not creating new rights. See Senate Rep.No. 92-756, 92nd Cong., 2d Session, 1972 U.S.Code Cong. & Admin.News, pp. 2393, 2396, 2400; Conference Report No. 92-834, 92nd Cong., 2d Session, 1972 U.S.Code Cong. & Admin.News, pp. 2436, 2441. This statute gave employees those rights they had previous to the creation of Amtrak if the employees had no entitlement to a free pass before, the statute would not give them any such right. Thus, free passes, if issued at all, are not issued by virtue of this statute; they must be issued by virtue of a contract of employment or of a policy of the employer. The statute requires only that Amtrak recognize those pre-existing contracts or policies. 27 The collective bargaining agreement between L & N and its employees provides in Rule 44: Employees and those dependent upon them for support will be given the same consideration in issuing free transportation as is granted other employees in the service. This provision only guarantees equal treatment, not that employees shall receive passes. Plaintiff Thompson responds by arguing that L & N had a custom of giving these passes and that this custom was an inducement to work which constitutes the consideration. 28 In this Circuit, there is an apparent conflict regarding employment as consideration for free passes. In Martin v. Greyhound Corp., 227 F.2d 501 (6th Cir. 1955), cert. denied, 350 U.S. 1013, 76 S.Ct. 657, 100 L.Ed. 873 (1956), this Court held that an employee of a bus company who was injured while on a personal journey pursuant to a free pass was not barred from recovery by virtue of the limitation of liability provision contained in the free pass. As the employer was required to give these passes by the collective bargaining agreement, the pass was supported by consideration and was not gratuitous. Martin, unlike Charleston & Western Carolina R. Co. v. Thompson, supra, did not involve a mere possibility of getting an occasional free pass, but involved a definite commitment to grant free passes. However, the Court in Martin did not discuss Francis, the most recent Supreme Court case on the subject of free passes in interstate transport, and did not quote the collective bargaining agreement. 29 More recently, this Court in Uhlik v. Penn Central R. Co., 459 F.2d 460 (6th Cir. 1972), held that plaintiffs who were riding the New York Central Railway pursuant to free passes issued by the railroad were barred from recovery by provisions in the passes releasing the railroad from liability and disclaiming any consideration for the passes. The husband had been laid off from his employment. Without mentioning Martin, the Court said there was no proof of consideration. 30 Although Martin involved a bus while Uhlik involved a train, the cases are not distinguishable on that basis since the National Motor Carrier Act, 49 U.S.C. § 317(b), makes the provisions of the Hepburn Act applicable to common carriers by motor vehicles. Thus, decisions of the Supreme Court interpreting free passes on railroads under the Hepburn Act would seem to be equally applicable to busses. See Atlantic Greyhound Lines v. Skinner, 172 Va. 428, 2 S.E.2d 441 (1939). 31 Martin can only be distinguished on the basis that in Martin the collective bargaining agreement required the issuance of free passes, whereas in Uhlik there was no showing that any employment contract required the issuance of free passes. Whether a requirement in a collective bargaining agreement that free passes be issued would be sufficient consideration given the rationale of the Supreme Court cases concerning free passes need not be decided here since there is no such express requirement in the present case. 32 In Francis, supra, in which the Court, per Justice Douglas, held that the free pass was a gratuity even though it had been issued to an employee, 333 U.S. at 449, 68 S.Ct. at 613, the dissent, per Justice Black, would not have given effect to the limitation of liability condition of the pass. 2 After reviewing legislative history, the dissent concluded that Congress recognized that passes issued to employees were part of the consideration for their employment. Some unions, the dissent suggested, had bargaining agreements on passes. 333 U.S. at 467 & n.7, 68 S.Ct. at 621. However, the Court was not presented with the consideration argument upon which the dissent in part relies the petitioner did not argue that the employee's pass was supported by valid consideration. The petitioner conceded the limitation of liability provision in the pass would have been a defense to the employee's suit for negligence against the railroad had the employee lived. See Petitioner's Brief in Support of the Petition for Writ for Certiorari, at 47. 33 The consideration argument was, however, presented to the Supreme Court in Thompson, supra. Plaintiff argued and the Georgia Court of Appeals agreed that the free pass used by the plaintiff was not a gratuity. The consideration for the pass was plaintiff's husband's employment. See Brief for Defendant in Error on Merits of Appeal, at 3-5; Defendant in Error's Motion to Dismiss and Brief in Support of the Motion, at 2-3, 4-5; id., at 10-11 (opinion of the Georgia Court of Appeals). The Supreme Court, per Justice Holmes, rejected plaintiff's argument. After stating that the railroad was under no obligation to issue the free passes, the Court held that even if 34 the possibility of getting an occasional free pass entered into the motives of the employee in working for the road, the law did not contemplate his work as a conventional inducement for the pass, but, on the contrary, contemplated the pass as being what it called itself, free. 35 234 U.S. at 578, 34 S.Ct. at 965. 36 Thus, if there is only the possibility of a free pass, Thompson forecloses the issue: the pass is a gratuity and any conditions attached limiting liability of the carrier for its negligence will be enforced. That this possibility of a free pass is mentioned in a collective bargaining agreement does not change the nature of the obligation the carrier remains free not to give passes to anyone. While this Court recognizes that L & N may have a consistent custom of giving passes to all its employees and this custom may be an important motivating factor in the employees' decisions to work for the carrier, this Court is nevertheless bound by the decisions of the Supreme Court. In the present case, the record does not show L & N was required to give these passes to its employees, but only if it gave passes to any of its employees, it must give passes on the same basis to the railroad employees. This mere possibility of a free pass is not sufficient consideration to make plaintiff Thompson a passenger for hire rather than a gratuitous passenger. 3 37
38 The Railway Passenger Service Act provides that Amtrak shall be reimbursed by the railways for such costs as may be incurred in providing free or reduced-rate passes to the employees of the railways. If the parties cannot agree on the amount of payment, the matter would be referred to the Interstate Commerce Commission. See 45 U.S.C. § 565(f). Defendants report that the Commission awarded Amtrak a reimbursement cost of $.0087 per mile which was approximately $2.00 for plaintiff Thompson's round trip between Nashville, Tennessee and Decatur, Alabama (about 220 miles). 39 The legislative history indicates that Congress did not intend the reimbursement cost to be based on actual fares. It was anticipated that the reimbursement would be minimal since the passes would be issued on space available. See Senate Report, No. 92-756, 92nd Cong., 2d Session, 1972 U.S.Code Cong. & Admin.News, pp. 2393, 2400. 40 The payment from L & N to Amtrak is similar to a service fee it reimburses Amtrak for expenses in carrying an additional passenger on a train with empty seats, such as issuing the ticket, but Amtrak derives no profit therefrom. Other courts have held that the payment of small fees does not constitute consideration that would make the free pass other than a gratuity. See Sims v. Northwest Airlines, Inc., 269 F.Supp. 272, 273 (S.D.Fla.1967) ($45 service charge for plane tickets for plaintiff and family); Richards v. Atchison, Topeka & Santa Fe R. Co., 226 F.Supp. 812, 814 (S.D.Iowa 1964) ($4.40 for seat reservations on train); Luerssen v. Seaboard Air Line R., 203 F.Supp. 707, 708 (E.D.N.Y.1962) (payment for Pullman accommodation); Braughton v. United Air Lines, Inc., 189 F.Supp. 137, 140-42 (W.D.Mo.1960) (payment of $6.00 service charge for train tickets); Holeman v. Louisville & Nashville R. Co., 319 S.W.2d 47, 48 (Ky.1958), cert. denied, 359 U.S. 1012, 79 S.Ct. 1148, 3 L.Ed.2d 1036 (1959) (purchase of Pullman accommodations). This Court agrees that the payment of such small fees cannot be said to put the passenger traveling on a free pass in the same position vis-a-vis Amtrak as a passenger who paid for his ticket. 41 Since under established law neither plaintiff Thompson's employment nor the payment of the small fee to Amtrak by L & N constitute consideration for the free pass, Thompson was traveling gratuitously and the limitation of liability provision of that pass is valid, and Thompson is barred from all recovery. 42 While it seems harsh that Thompson is barred from recovery while the other plaintiffs are not, this Court can only point to the Supreme Court rationale in Adams, supra: 43 The railway company was not, as to Adams, a carrier for hire. It waived its right as a common carrier to exact compensation. It offered him the privilege of riding in its coaches without charge if he would assume the risks of negligence. He was not in the power of the company and obliged to accept its terms. They stood on an equal footing. If he had desired to hold it to its common law obligations to him as a passenger, he could have paid his fare and compelled the company to receive and carry him. He freely and voluntarily chose to accept the privilege offered; and, having accepted that privilege, cannot repudiate the conditions. It was not a benevolent association, but doing a railroad business for profit; and free passengers are not so many as to induce negligence on its part. So far as the element of contract controls, it was a contract which neither party was bound to enter into, and yet one which each was at liberty to make, and no public policy was violated thereby. 44 Northern Pacific R. Co. v. Adams, 193 U.S. 440, 453, 24 S.Ct. 408, 411, 48 L.Ed. 513 (1904), quoted with approval in Francis v. Southern Pacific Co., 333 U.S. 445, 448 n.2, 68 S.Ct. 611, 612, 92 L.Ed. 798 (1948).