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Kelley v. Southern Pacific Co. (full text) :: 419 U.S. 318 (1974) :: Justia US Supreme Court Center Log In
› Kelley v. Southern Pacific Co.
Kelley v. Southern Pacific Co. 419 U.S. 318 (1974)
U.S. Supreme CourtKelley v. Southern Pacific Co., 419 U.S. 318 (1974)Kelley v. Southern Pacific Co.No. 73-1270Argued October 22, 1974Decided December 23, 1974419 U.S. 318CERTIORARI TO THE UNITED STATES COURT OF APPEALS
1. The "while employed" language of the FELA requires not only that the FELA plaintiff be an agent of the rail carrier but the carrier's servant, and here the District Court erred in holding that petitioner (who according to the court's findings was neither a borrowed servant of respondent nor a dual servant of respondent and PMT) came within the coverage of the FELA, since those findings also did not establish a master-servant relationship between respondent and PMT that would be necessary to render petitioner a subservant of the railroad. Nor was the District Court's conclusion that respondent was "responsible" for the unloading operation tantamount to a finding that the railroad controlled or had the right to control the physical conduct of PMT employees like petitioner in the unloading operation. Pp. 419 U. S. 322-326. Page 419 U. S. 319
Petitioner Eugene Kelley was seriously injured when he fell from the top of a tri-level railroad car where he had been working. He sought recovery for his injuries from the respondent railroad under the Federal Employers' Liability Act (FELA), 35 Stat. 65, as amended, 45 U.S.C. §§ 51-60. Under the FELA, a covered railroad is liable for negligently causing the injury or death of any person "while he is employed" by the railroad. Although petitioner acknowledged that he was technically in the employ of a trucking company, rather than the railroad, he contended that his work was sufficiently under the control of the railroad to bring him within the Page 419 U. S. 320 coverage of the FELA. The District Court agreed, but the Court of Appeals for the Ninth Circuit reversed, 486 F.2d 1084 (1973), creating an apparent conflict with a previous decision of the Fourth Circuit, Smith v. Norfolk Western R. Co., 407 F.2d 501, cert. denied, 395 U.S. 979 (1969). [Footnote 1] We granted certiorari to resolve the conflict. 416 U.S. 935 (1974). We vacate the judgment and remand the case for further proceedings in the District Court.
At the time of his accident, petitioner had worked for the Pacific Motor Trucking Co. (PMT), a wholly owned subsidiary of the Southern Pacific Co., for about eight years. [Footnote 2] PMT was engaged in various trucking enterprises, primarily in conjunction with the railroad operations of its parent company. Among PMT's functions was transporting new automobiles from respondent's San Francisco railyard to automobile dealers in the San Francisco area. As part of its contractual arrangement with Page 419 U. S. 321 the railroad, PMT would unload automobiles from Southern Pacific's "tri-level" auto-carrying flatcars when they arrived in the yard. It was petitioner's job to unhook the automobiles from their places on the railroad cars and to drive them into the yard for further transfer to PMT auto trailers. PMT maintained the unloading operation in the yard on a permanent basis. Although there were Southern Pacific employees in the area who would occasionally consult with PMT employees about the unloading process, PMT supervisors controlled and directed the day-to-day operations.
In his complaint, petitioner alleged that he was employed by the respondent railroad within the meaning of the FELA. After a six-day hearing, the District Court, sitting as trier of fact, [Footnote 4] ruled in petitioner's favor on the employment question. The job of unloading Page 419 U. S. 322 automobiles was the railroad's responsibility, the court found, "pursuant to its contractual responsibilities to the shippers and its tariff responsibilities." In addition, the court found that the railroad supplied the necessary ramps and owned the area in which the PMT employees worked. The responsibility for supervision and control of the unloading operations was respondent's, the court concluded, even though "the exercise thereof was executed by employees of Pacific Motor Trucking Company." In sum, the court found that PMT was serving generally as the railroad's agent; PMT employees were agents of the railroad for the purposes of the unloading operation, and because the work being performed by petitioner was "in fulfillment of a nondelegable duty of defendant Southern Pacific Company," the relationship between petitioner and the railroad was sufficient to bring him within the coverage of the FELA. After this resolution of the employment issue, the railroad stipulated to its negligence, the parties agreed to set damages at $200,000, and the trial court entered judgment for petitioner in that amount.
Petitioner insists that the District Court in effect made a factual finding of employment, and that the Court of Appeals erred in upsetting that finding. Of course, even Page 419 U. S. 323 if the District Court made such a finding of employment after applying the proper principles of law, that would not be the end of the matter. Under Fed.Rule Civ.Proc. 52(a), an appellate court must set aside the trial court's findings if it concludes that they are "clearly erroneous." See United States v. United States Gypsum Co., 333 U. S. 364, 333 U. S. 394-395 (1948). We need not reach the question whether any of the District Court's findings in this case were clearly erroneous, however, since we agree with the Court of Appeals that the trial court applied an erroneous legal standard in holding that the plaintiff was within the reach of the FELA. United States v. Singer Mfg. Co., 374 U. S. 174, 374 U. S. 194 n. 9 (1963).
In an early FELA case, this Court noted that the words "employee" and "employed" in the statute were used in their natural sense, and were "intended to describe the conventional relation of employer and employe." Robinson, supra, at 237 U. S. 94. In Baker, supra, the Court reaffirmed that for the purposes of the FELA the question of employment, or master-servant status, was to be determined by reference to common law principles. The Page 419 U. S. 324 Court in Baker referred to sections of the Restatement (Second) of Agency dealing with the borrowed servant doctrine and the general master-servant relationship as a guideline for analysis and proper jury instructions. [Footnote 5] Section 220(1) of the Restatement defines a servant as
Under common law principles, there are basically three methods by which a plaintiff can establish his "employment" with a rail carrier for FELA purposes even while he is nominally employed by another. First, the employee could be serving as the borrowed servant of the railroad at the time of his injury. See Restatement (Second) of Agency § 227; Linstead v. Chesapeake & Ohio R. Co., 276 U. S. 28 (1928). Second, he could be deemed to be acting for two masters simultaneously. See Restatement § 226; Williams v. Pennsylvania R. Co., 313 F.2d 203, 209 (CA2 1963). Finally, he could be a subservant of a company that was, in turn, a servant of the railroad. See Restatement § 5(2); Schroeder v. Pennsylvania R. Co., 397 F.2d 452 (CA7 1968). Page 419 U. S. 325
The District Court found that PMT employees exercised supervision and control over the unloading operations, although the railroad bore the "responsibility" for those functions. On these facts, the District Court was plainly correct in concluding that PMT was an agent of the railroad. But a finding of agency is not tantamount to a finding of a master-servant relationship. See Restatement (Second) of Agency § 2. The finding that the railroad was "responsible" for the unloading operations is significantly weaker than would be a finding that it controlled or had the right to control the physical conduct of the PMT employees in the course of their unloading operations. The railroad would satisfy the District Court's "responsibility" test whenever it agreed to perform a service Page 419 U. S. 326 and subsequently engaged another company to perform that service for it on its premises. The "control or right to control" test, by contrast, would be met only if it were shown that the role of the second company was that of a conventional common law servant. [Footnote 7] Accordingly, we agree with the Court of Appeals that the District Court's test for FELA coverage was too broad.
As we noted in 419 U. S. the District Court's findings concerning the contractual relationship between PMT and the railroad fall far short of compelling the conclusion that Kelley was employed by Southern Pacific. The court's other factual determinations add no more force to the claim. The findings that Kelley's crew worked most of the time on the railroad's premises and that railroad employees were responsible for checking safety conditions Page 419 U. S. 327 on the tri-level cars reflect the fact that the activities of the two companies were closely related and necessarily had to be coordinated. Railroad employees tending the cars and PMT employees unloading them naturally had substantial contact with one another. In addition, Southern Pacific supervisory personnel were occasionally in the area where PMT conducted its unloading operations, and from time to time would advise or consult with PMT employees and supervisors. But the trial court did not find that Southern Pacific employees played a significant supervisory role in the unloading operation or, more particularly, that petitioner was being supervised by Southern Pacific employees at the time of his injury. [Footnote 8] Nor did the court find that Southern Pacific employees had any general right to control the activities of petitioner and the other PMT workers. [Footnote 9]
The two companies were sufficiently distinct in organization and responsibility that there was no apparent overlap in the supervisory ranks. Indeed, the labor contract Page 419 U. S. 328 between the Teamsters and PMT expressly provided that the PMT employees would be subject only to the control of PMT supervisors. In light of the analysis in this Court's previous cases, the District Court's findings clearly fail to establish that petitioner was "employed" by the railroad.
In the following year, the Court was again faced with the question whether a particular worker was an employee of the railroad that had caused his death, or whether he Page 419 U. S. 329 was an independent contractor. Chicago, R I. & P. R. Co. v. Bond, 240 U. S. 449 (1916). The decedent had been engaged by the railroad to procure coal and wood and to perform various other services at its loading center in Enid, Okla. Although the railroad directed the decedent's activities to some extent, the Court observed that those directions were simply reformulations of the flexible obligations assumed by the decedent under his contract, not "a detailed control of the actions of [decedent] or those of his employees." Id. at 240 U. S. 455-456. The arrangement by which decedent had been engaged to provide services for the railroad, the Court concluded, was
Id. at 212 U. S. 222. Cf. Page 419 U. S. 330 Denton v. Yazoo & Mississippi Valley R. Co., 284 U. S. 305 (1932).
In this case, as in Anderson, the evidence of contacts between Southern Pacific employees and PMT employees may indicate not direction or control, but rather the passing of information and the accommodation that is obviously required in a large and necessarily coordinated operation. See Del Vecchio v. Pennsylvania R. Co., 233 F.2d 2, 5 (CA3 1956). The informal contacts between the two groups must assume a supervisory character before the PMT employees can be deemed pro hac vice employees of the railroad. [Footnote 10] Page 419 U. S. 331
We part company with the Court of Appeals on the propriety of a remand. The court rendered judgment for respondent apparently because it determined that the District Court had found that there was no employment relationship, or because it had decided on its own that any such finding would have been clearly erroneous. Yet, while the District Court's failure to adopt petitioner's Page 419 U. S. 332 proposed findings of fact relating to employment is of some significance in determining what that court deemed to be the requirements of the "while employed" clause, see n 6, supra, it is not enough to constitute a reviewable finding that there was no master-servant relationship between petitioner and the railroad. Similarly, while the Court of Appeals may have meant to suggest that, in its view, the record could not support a finding of employment, that suggestion is not developed in its opinion, and we think the best course at this point is to require the trier of fact to reexamine the record in light of the proper legal standard. Accordingly, we vacate the judgment of the Court of Appeals and remand the case to that Court with instructions to remand the case to the District Court for further findings in accordance with this opinion.
The correct standard is not a novel one. The law of master and servant has been with us for a long time, and its adequate exposition elsewhere, e.g., Restatement (Second) of Agency §§ 5(2), 220, 226, and 227, renders much of the Court's extended discussion unnecessary. But my chief problem with the Court's opinion is its insistence upon dissecting the particularized evidence in this case. Whether or not the Southern Pacific Co. controlled or had the right to control Kelley's work is for the original factfinder to determine. Page 419 U. S. 333
The first Employers' Liability Act was enacted in 1906, 34 Stat. 232, and this Court responded by holding the Act unconstitutional. Employers' Liability Cases, 207 U. S. 463 (1908). Congress tried again in 1908, and produced the Act which is now in effect. 35 Stat. 65, 45 U.S.C. § 51 et seq. This time, the Court upheld the statute, Second Employers' Liability Cases, 223 U. S. 1 (1912), but judicial hostility did not end. The defense of assumption of risk was, for the most part, held to be still available to the employer. Seaboard Air Line R. Co. v. Horton, 233 U. S. 492 (1914). The Act sought expressly to control the use of a contributory negligence defense, but the Court circumvented this to a considerable degree by developing the doctrine of "primary duty." See Great Northern R. Co. v. Wiles, 240 U. S. 444 (1916). Page 419 U. S. 334 Finally, in 1939, the Congress decided that further legislation was needed. 53 Stat. 1404. The result was a more liberal view of the Act which did not provide the employer with so many defenses. See Tiller v. Atlantic Coast Line R. Co., 318 U. S. 54 (1943).
In Baker v. Texas & Pacific R. Co., 359 U. S. 227 (1959), the petitioner's decedent had been hired as a workman by W. H. Nichols & Co., a firm which had entered into a contract with the respondent railroad. The decedent was working along the main line of the railroad performing various operations designed to strengthen and stabilize the roadbed. He was killed when he was struck by a train. The trial judge refused to submit the issue of employment to the jury, and held that, as a matter of Page 419 U. S. 335 law, the decedent was not in an employment relationship with the railroad at the time of his death. This Court reversed on the ground that whether the decedent was an employee within the meaning of the Act was properly a question for the jury. Noting that the terms "employee" and "employed" are not used in any "special sense," the Court reasoned that the issue of employment
Many Courts of Appeals have been confronted with problems similar to those in Baker and Ward, and they too have taken a nontechnical approach based on the various aspects of the particular case presented. For example, in Missouri K-T R. Co. v. Hearson, 422 F.2d 1037 (CA10 1970), the injured worker was a car cleaner. The railroad had stopped doing its own car cleaning and had hired a firm to do the job, and the injured worker was nominally the employee of this hired firm. But, upon examining all the factors, the Court of Appeals affirmed Page 419 U. S. 336 the District Court ruling that reasonable men could not differ in the conclusion that the victim was in an employment relationship with the railroad for FELA purposes. In Schroeder v. Pennsylvania R. Co., 397 F.2d 452 (CA7 1968), the deceased worker was nominally an employee of a trucking company which was under contract to perform certain pickup and delivery services for the railroad. Considering all the facts, the Court of Appeals held that the trial judge had properly submitted to the jury the question of whether the deceased had been employed by the railroad for FELA purposes. Many more cases of a similar nature exist. See, e.g., Byrne v. Pennsylvania R. Co., 262 F.2d 906 (CA3 1958); Cimorelli v. New York Central R. Co., 148 F.2d 575 (CA6 1945). But see, e.g., Fawcett v. Missouri Pacific R. Co., 242 F.Supp. 675 (WD La.1963), aff'd, 347 F.2d 233 (CA5 1965).
Id. at 502. The District Court in this case relied on the language of the Court of Appeals in Smith v. Norfolk & Western R. Co., supra. The Court today holds that this language misstates the law. Page 419 U. S. 337
The District Court made numerous findings of fact which support its conclusion that the FELA is applicable here, and these findings have not been held to be "clearly erroneous" under Fed.Rule Civ.Proc. 52(a). Petitioner had been working in the job of unloading automobiles from respondent's railroad cars for eight years. Restatement (Second) of Agency § 220(2)(f), 227, Page 419 U. S. 338 comment c. The work performed was that of respondent, to be performed in the general course of respondent's business pursuant to its contractual responsibilities. Id. § 220(2)(h). The work was of an unskilled variety. Id., § 220(2)(d), 227, comment c. Petitioner was paid by the hour. Id., § 220(2)(g). The record was unclear as to who supplied the necessary hammers and wrenches, but respondent clearly supplied the necessary ramps and working area, and it was responsible for safety. Id., § 220(2)(e). Respondent had the immediate responsibility for supervision and control of the work, though this task was carried out by others who, like petitioner, were servants of Pacific Motor Trucking Co. Id., § 220(2)(a). [Footnote 2/3]
There are basically two reasons for the Court of Appeals' reversal of the District Court's holding in petitioner's Page 419 U. S. 339 favor. First, the District Court found that petitioner was an employee of the trucking company. But this does not mean that petitioner was not also an employee of the railroad for the purposes of the FELA. In Byrne v. Pennsylvania R. Co., 262 F.2d at 910, the victim was an employee of Westinghouse who was working on a railroad locomotive at the time of his death. The Court of Appeals noted in that case that
The second reason the Court of Appeals used for reversing the District Court was that the District Court had rejected a finding that petitioner was an employee of the railroad. The trial judge was relying on the "agency" language of Smith v. Norfolk & Western R. Co., supra, and he therefore apparently had his labels confused. He was using the concept of employment in a narrow and restricted way, yet was expanding it to accommodate decisions such as Baker by including both employment and agency relationships within the scope of the FELA. If the District Judge did not find an employment relationship in this narrow sense, that fact is unimportant, for he did find a relationship sufficient to satisfy the correct test. While he used language of agency he gave that language the substantive content Page 419 U. S. 340 of Baker and of the source relied upon by Baker -- Restatement (Second) of Agency § 220. He made findings of fact easily sufficient to support the existence of an employment relationship under the correct substantive test, and he, in fact, found that the requisite relationship existed. The fact that he used the word "agency", rather than the word "employment," to describe this relationship is thus of no more than technical, abstract concern. This is not the sort of concern that should motivate us in the FELA context.
In a strictly doctrinal sense, this case may not have a great impact on the coverage of the FELA, but I fear Page 419 U. S. 341 that the precedent set today bodes ill for the future. It distorts the accepted meaning of the Act and reflects a judicial hostility to the FELA of the kind that existed prior to the 1939 amendments.
This Court, however, held that the Act does not use the terms "employee" and "employed" in any special Page 419 U. S. 342 sense, and that the familiar general legal problems as to whose employee or servant a worker is at a given time present themselves as matters of federal law under the Act. Each case, the Court said, must be decided on its peculiar facts and "ordinarily no one feature of the relationship is determinative.'" The Court concluded that it was "perfectly plain" that the question "contains factual elements such as to make it one for the jury under appropriate instructions as to the various relevant factors under law." Id. at 228. It pointed out that the petitioners introduced evidence tending to prove that the work "was part of the maintenance task of the railroad"; that the road "furnished the material to be pumped into the roadbed"; and that a supervisor, admittedly in the employ of the railroad, in the daily course of the work, exercised directive control over the details of the job. Ibid. The railroad introduced evidence tending to controvert this. The Court then held that an issue for determination by the jury was presented.
So it is here. Kelley was injured at the railroad's loading and unloading ramp in San Francisco. He and others were unchaining new automobiles for unloading when he fell from the third level of the railroad car. He was hired, paid by, and could be discharged by the railroad's wholly owned subsidiary. All the officers and directors of that subsidiary were officers or directors of the railroad. The subsidiary was the only company then having a contract with the railroad to unload cars at that ramp. Kelley had been employed at this particular job and at this site for eight years and was paid on an hourly basis. The unloading was the railroad's responsibility pursuant to its contractual obligation to its shipper. The railroad supplied the necessary working area. The work performed by Kelley was unskilled. Railroad employees had the responsibility daily to check the safety of the cars and to make necessary repairs. There was evidence Page 419 U. S. 343 that the railroad exercised a degree of control over the unloading operation, and that PMT employees performing this work frequently felt they had to heed the railroad supervisor's command. *
While the Court disclaims any modification of the standards for allowing questions of fact in FELA cases to go to the jury, its decision here suggests otherwise. The Court implies that supervision must be "day-to-day" in order to constitute "supervision" for purposes of creating "employee" status under the FELA. Ante at 419 U. S. 331. Does this mean that orders must be issued with a certain frequency (e.g., every day, or most days) or merely in a certain manner (e.g., the "daily" normal "course of the work," Baker, 359 U.S. at 359 U. S. 228-229)? The Page 419 U. S. 344 Court does not say. I suspect that trial judges will be inclined to resolve most doubts against plaintiffs if their findings are to be so vulnerable to challenge.