Source: https://supreme.justia.com/cases/federal/us/342/359/
Timestamp: 2019-04-25 17:51:19+00:00

Document:
Justia › US Law › US Case Law › US Supreme Court › Volume 342 › Dice v. Akron, Canton & Youngstown R. Co.
State courts have the power to adjudicate federal claims, but they should not use state laws to determine the scope of federal rights.
When an engine owned by the Akron, Canton & Youngstown Railroad Co. jumped the track, it struck and injured a railroad fireman named Dice. He brought a negligence claim in Ohio state court under the Federal Employers' Liability Act. The railroad produced a document in which Dice purportedly released it from all liability beyond the amount of $925 that he had already received. Dice responded by asserting that the railroad had fraudulently told him that the document was a receipt for that amount and that he had not read it before signing it.
After the jury found for Dice, the judge granted the railroad's motion for judgment notwithstanding the verdict because it ruled that Dice could not avoid the obligations created by signing the release. Ohio state law imposed a duty on him to read the document before signing it. However, federal law would have held that the railroad's fraud precluded the enforcement of the release, and the state appellate court reversed on this basis. The state supreme court reversed again.
The effect of federal laws would be undermined if the rights that they provided could be forestalled by defenses that would arise only under state law. Judges in state courts do have the authority to resolve issues of fraud that arise in negligence actions, but the federal system provides the right to a jury trial as an essential function in its process.
When a situation is controlled by federal law, it must be applied in a consistent way so that the purpose of the U.S. Congress is effectuated.
1. In an action in a state court under the Federal Employers' Liability Act, the question of the validity of a release granted to the carrier by the injured employee is a federal question, and is to be determined by federal, rather than state, law. Pp. 342 U. S. 361-362.
2. A release of rights under the Federal Employers' Liability Act is void when the employee is induced to sign it by deliberately false and material statements of the carrier's authorized representatives, made to deceive the employee as to the contents of the release. P. 342 U. S. 362.
3. In an action brought under the Federal Employers' Liability Act in an Ohio state court, which provides jury trials for cases arising under the Act, it was error for the judge to take from the jury the determination of the factual questions as to whether a release had been fraudulently obtained. Pp. 342 U. S. 362-364.
155 Ohio St. 185, 98 N.E.2d 301, reversed.
In a state court action under the Federal Employers' Liability Act, the State Supreme Court sustained a judgment for the defendant notwithstanding a verdict of the jury in favor of the plaintiff. 155 Ohio St. 185, 98 N.E.2d 301. This Court granted certiorari. 342 U.S. 811. Reversed and remanded, p. 342 U. S. 364.
Petitioner, a railroad fireman, was seriously injured when an engine in which he was riding jumped the track. Alleging that his injuries were due to respondent's negligence, he brought this action for damages under the Federal Employers' Liability Act, 35 Stat. 65, 45 U.S.C. § 51 et seq., in an Ohio court of common pleas. Respondent's defenses were (1) a denial of negligence and (2) a written document signed by petitioner purporting to release respondent in full for $924.63. Petitioner admitted that he had signed several receipts for payments made him in connection with his injuries, but denied that he had made a full and complete settlement of all his claims. He alleged that the purported release was void because he had signed it relying on respondent's deliberately false statement that the document was nothing more than a mere receipt for back wages.
to support its finding of fraud. The Ohio Supreme Court, one judge dissenting, reversed the Court of Appeals' judgment and sustained the trial court's action, holding that: (1) Ohio, not federal, law governed; (2) under that law, petitioner, a man of ordinary intelligence who could read, was bound by the release even though he had been induced to sign it by the deliberately false statement that it was only a receipt for back wages, and (3) under controlling Ohio law, factual issues as to fraud in the execution of this release were properly decided by the judge, rather than by the jury. 155 Ohio St. 185, 98 N.E.2d 301. We granted certiorari because the decision of the Supreme Court of Ohio appeared to deviate from previous decisions of this Court that federal law governs cases arising under the Federal Employers' Liability Act. 342 U.S. 811.
devices designed to liquidate or defeat injured employees' claims play an important part in the federal Act's administration. Compare Duncan v. Thompson, 315 U. S. 1. Their validity is but one of the many interrelated questions that must constantly be determined in these cases according to a uniform federal law.
Second. In effect, the Supreme Court of Ohio held that an employee trusts his employer at his peril, and that the negligence of an innocent worker is sufficient to enable his employer to benefit by its deliberate fraud. Application of so harsh a rule to defeat a railroad employee's claim is wholly incongruous with the general policy of the Act to give railroad employees a right to recover just compensation for injuries negligently inflicted by their employers. And this Ohio rule is out of harmony with modern judicial and legislative practice to relieve injured persons from the effect of releases fraudulently obtained. See cases collected in note, 164 A.L.R. 402-415. See also Union Pacific R. Co. v. Harris, 158 U. S. 326; Callen v. Pennsylvania R. Co., 332 U. S. 625; Chesapeake & O. R. Co. v. Howard, 14 App.D.C. 262, aff'd, 178 U. S. 178 U.S. 153; Graham v. Atchison, T. & S.F. R. Co., 176 F.2d 819. We hold that the correct federal rule is that announced by the Court of Appeals of Summit County, Ohio, and the dissenting judge in the Ohio Supreme Court -- a release of rights under the Act is void when the employee is induced to sign it by the deliberately false and material statements of the railroad's authorized representatives made to deceive the employee as to the contents of the release. The trial court's charge to the jury correctly stated this rule of law.
in the factum." The factual issue of fraud is thus split into fragments, some to be determined by the judge, others by the jury.
It is contended that, since a state may consistently with the Federal Constitutional provide for trial of cases under the Act by a non-unanimous verdict, Minneapolis & St. Louis R. Co. v. Bombolis, 241 U. S. 211, Ohio may lawfully eliminate trial by jury as to one phase of fraud while allowing jury trial as to all other issues raised. The Bombolis case might be more in point had Ohio abolished trial by jury in all negligence cases, including those arising under the federal Act. But Ohio has not done this. It has provided jury trials for cases arising under the federal Act, but seeks to single out one phase of the question of fraudulent releases for determination by a judge, rather than by a jury. Compare Testa v. Katt, 330 U. S. 386.
"The right to trial by jury is 'a basic and fundamental feature of our system of federal jurisprudence,' and that it is 'part and parcel of the remedy afforded railroad workers under the Employers' Liability Act.'"
Bailey v. Central Vermont R. Co., 319 U. S. 350, 319 U. S. 354. We also recognized in that case that to deprive railroad workers of the benefit of a jury trial where there is evidence to support negligence "is to take away a goodly portion of the relief which Congress has afforded them." It follows that the right to trial by jury is too substantial a part of the rights accorded by the Act to permit it to be classified as a mere "local rule of procedure" for denial in the manner that Ohio has here used. Brown v. Western R. Co., 338 U. S. 294.
The trial judge and the Ohio Supreme Court erred in holding that petitioner's rights were to be determined by Ohio law, and in taking away petitioner's verdict when the issues of fraud had been submitted to the jury on conflicting evidence and determined in petitioner's favor.
The judgment of the Court of Appeals of Summit County, Ohio, was correct, and should not have been reversed by the Supreme Court of Ohio. The cause is reversed and remanded to the Supreme Court of Ohio for further action not inconsistent with this opinion.
* The trial judge had charged the jury that petitioner's claim of fraud must be sustained "by clear and convincing evidence," but, since the verdict was for petitioner, he does not here challenge this charge as imposing too heavy a burden under controlling federal law.
"Where it is claimed that a release was induced by fraud (other than fraud in the factum) or by mistake, it is . . . necessary, before seeking to enforce a cause of action which such release purports to bar, that equitable relief from the release be secured."
155 Ohio St. 185, 186, 98 N.E.2d 301, 304. Thus, in all cases in Ohio, the judge is the trier of fact on this issue of fraud, rather than the jury. It is contended that the Federal Employers' Liability Act requires that Ohio courts send the fraud issue to a jury in the cases founded on that Act. To require Ohio to try a particular issue before a different factfinder in negligence actions brought under the Employers' Liability Act from the factfinder on the identical issue in every other negligence case disregards the settled distribution of judicial power between Federal and State courts where Congress authorizes concurrent enforcement of federally created rights.
courts jurisdiction over common law actions for negligence may deny access to its courts for a negligence action founded on the Federal Employers' Liability Act. Nor may a State discriminate disadvantageously against actions for negligence under the Federal Act as compared with local causes of action in negligence. McKnett v. St. Louis & S.F. R. Co., 292 U. S. 230, 292 U. S. 234; Missouri ex rel. Southern R. Co. v. Mayfield, 340 U. S. 1, 340 U. S. 4. Conversely, however, simply because there is concurrent jurisdiction in Federal and State courts over actions under the Employers' Liability Act, a State is under no duty to treat actions arising under that Act differently from the way it adjudicates local actions for negligence, so far as the mechanics of litigation, the forms in which law is administered, are concerned. This surely covers the distribution of functions as between judge and jury in the determination of the issues in a negligence case.
of the jury required by that Amendment where applicable. (a) That the first ten Amendments, including, of course, the 7th, are not concerned with state action, and deal only with Federal action. We select from a multitude of cases those which we deem to be leading: Barron v. Baltimore, 7 Pet. 243; Fox v. Ohio, 5 How. 410, 46 U. S. 434; Twitchell v. Commonwealth, 7 Wall. 321; Brown v. New Jersey, 175 U. S. 172, 175 U. S. 174; Twining v. New Jersey, 211 U. S. 78, 211 U. S. 93. And, as a necessary corollary, (b) that the 7th Amendment applies only to proceedings in courts of the United States, and does not in any manner whatever govern or regulate trials by jury in state courts, or the standards which must be applied concerning the same. Livingston v. Moore, 7 Pet. 469, 32 U. S. 552; The Justices v. Murray, 9 Wall. 274; Edwards v. Elliott, 21 Wall. 532; Walker v. Sauvinet, 92 U. S. 90; Pearson v. Yewdall, 95 U. S. 294."
241 U.S. at 241 U. S. 217.
"And it was, of course, presumably an appreciation of the principles so thoroughly settled which caused Congress, in the enactment of the employers' liability act, to clearly contemplate the existence of a concurrent power and duty of both Federal and state courts to administer the rights conferred by the statute in accordance with the modes of procedure prevailing in such courts."
241 U.S. at 241 U. S. 218.
United States, and therefore that its terms have no relation whatever to the enforcement of rights in other forums merely because the right enforced is one conferred by the law of the United States."
241 U.S. at 241 U. S. 219-220.
not discriminate against Employers' Liability suits, nor does it make any inroad upon substance.
collisions on the waters of the law. We have put the questions squarely because they seem to be precisely what will be roused in the minds of lawyers properly pressing their clients' interests and in the minds of trial and appellate judges called upon to apply this Court's opinion. It is one thing not to borrow trouble from the morrow. It is another thing to create trouble for the morrow.
"One who attacks a settlement must bear the burden of showing that the contract he has made is tainted with invalidity, either by fraud practiced upon him or by a mutual mistake under with both parties acted."
Employers' Liability Act, 35 Stat. 65, 66, 45 U.S.C. § 55.
"the Federal law controls as to the validity of a release pleaded and proved in bar of the action, and the burden of showing that the alleged fraud vitiates the contract or compromise or release rests upon the party attacking the release."
And he made an extended analysis of the relevant circumstances of the release, concluding, however, that there was no "clear, unequivocal and convincing evidence" of fraud. Since these elusive words fail to assure us that the trial judge followed the Federal test, and did not require some larger quantum of proof, we would return the case for further proceedings on the sole question of fraud in the release.
Chafee, Simpson, and Maloney, Cases on Equity (1951 ed.) 12.

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