All the Livelong Day
Ellen Fitzsimmons works to modernize CSX
Published in Corporate Counsel Edition - May 2010 magazine
on April 12, 2010
Updated on April 20, 2010
When President Jimmy Carter signed the Staggers Rail Act of 1980, it opened up the floodgates for mergers and increased competition between railroads, which, since the Industrial Revolution, had been regulated. But companies with centuries-long practices aren’t easy to change—something Ellen Fitzsimmons realized when she joined railroad giant CSX a decade later.
Within a month of her arriving at its Richmond, Va., offices as senior counsel, there was an accident involving an Amtrak train in southern Georgia. Since the companies share some operations, she was surprised when CSX didn’t respond the way she expected. “Executives justify things by saying ‘We’ve been doing it this way for a long time,’” she says. “In this society, that probably means you need to consider making a change.”
Now, as CSX’s general counsel and senior vice president of law and public affairs, Fitzsimmons has more influence. She is in charge of nine departments, including internal audit, environmental and compliance, and oversees 475 employees, including vice presidents, corporate auditors and police officers. She travels regularly to Capitol Hill to meet with transportation officials and discuss industry news.
CSX has a substantial tort docket, inevitable when you’re the largest railroad company in the East and run trains in 23 states covering 21,000 miles of tracks. The company, which since moved its headquarters to Jacksonville, Fl., deals with everything from the dangers of carrying highly toxic materials to kids challenging locomotives to a race across the tracks.
A large part of Fitzsimmons’ job is public relations. When there were signal complications in Florida and New York in 2000, she helped lead an internal audit that resulted in a complete correction of the problem. When Hurricane Katrina hit, directly affecting 350 area employees, CSX management ordered that $1,000 be placed in each of their bank accounts, no questions asked.
Fitzsimmons may have acquired her natural sense of diplomacy as a child of Washington, D.C., with an extended family immersed in the workings of Capitol Hill. “If there’s an agency in Washington, I’ve had a relative there,” she says.
She attended college at nearby Virginia Tech, and after graduation, married and moved to Akron, Ohio. At a time when the city’s unemployment rate was near 20 percent, Fitzsimmons worked three jobs, including one as a paralegal and another as a legal secretary. Her father, then a senior attorney with the Securities and Exchange Commission, suggested law school. She took his advice and attended Georgetown University Law Center, graduating in 1986.
Her father also told her that she wouldn’t have to stand up in front of a courtroom if she went into corporate law, which she did. After four years at Hunton & Williams, she joined CSX in 1991. Upon taking the post, she helped the company divest itself of its non-railroad holdings, including container shipping, barge and pipeline companies, and increase its railroad holdings, which she did as one of the principal lawyers for the acquisition of Conrail.
September 11th brought a host of new challenges. CSX instituted alternate routings, immediately designating a special “security corridor” around Washington, D.C., with special cameras and monitors providing round-the-clock surveillance. Her team also helped launch the Network Operation Workstation, which enables security professionals to immediately see the location of railcars containing highly hazardous materials. In areas like New York and New Jersey, CSX also participates in several “fusion centers” that coordinate this information with local and regional law enforcement.
Fitzsimmons is proud of TELLCSX, a program she helped design that allows the public to call a central dashboard with concerns and complaints, ranging from trash on the right-of-way to blocked crossings to obscured signage. “If I see that we have a number of calls about grade crossings in an area, we’ll put a team on it to find out what’s wrong,” she says. Senior executives, including herself, periodically sit with phone operators to hear directly how the public perceives them.
Fitzsimmons points to these programs as examples of how, when you get a corporate culture going in the right direction, it takes on its own momentum.
But past mistakes still haunt CSX. In 2007, The New York Times bestseller Free Lunch was published, including the story of a 1991 Amtrak train derailment that caused eight deaths in South Carolina. One woman, whose husband was killed in the accident, refused CSX’s settlement offer and went to trial, winning $50 million in punitive damages. The book portrayed a company that had cut its safety budget in half two decades earlier to save money—essentially $2.4 billion in maintenance and upkeep.
Fitzsimmons wasn’t involved in the trial, but describes the incident as “a sickening loss.” She says that the company has drastically changed its ways. “Very early on we would figure out what went wrong and start to fix it. We’d have changed the process long before the trial, and dealt with the litigation later.”
Today, employees will not discuss fault at the scene. “There are four things they’re supposed to do,” she says. “Support emergency responders; protect the environment; diminish fear, injury and anger on the ground; and communicate with the public and its representatives early and often.”
Fitzsimmons sits on the board of the American Tort Reform Association, which lobbies against “frivolous” lawsuits, and is in favor of caps on punitive damage awards. She cites a West Virginia attorney who has filed “tens of thousands” of asbestos-related lawsuits against CSX over the years, and cases “with strong evidence that plaintiff’s attorneys convinced their clients to withhold medical treatment so that their injuries will play better with juries.” She recalls a New Orleans derailment case with no serious injuries in which the jury decided CSX was 15 percent at fault but ordered the company to pay $2.5 billion out of a $3.37 billion judgment.
CSX ultimately appealed and settled the case for $220 million, with insurance paying for most of the award.
Agreeing in principle that companies need to pay for, and learn from their mistakes—and noting that she “loves and respects juries”—she adds, “There’s plenty of money short of $2.5 billon that will teach CSX or any company to correct its actions.”
With Fitzsimmons now at the legal helm, she works to ensure that such judgments remain in the past.