Court Opinion

ID: 9489815
Source: CourtListenerOpinion
Date Created: 2023-08-05 13:24:58.327948+00
Date Added: 2024-06-11T17:53:44.004476
License: Public Domain

McMILLIAN, Circuit Judge,
dissenting.
I respectfully dissent. For the reasons discussed below, I would hold that the FELA prohibits railroads from asserting claims against employees for negligently causing property damage. I agree with the majority opinion that the FELA must be interpreted in the appropriate historical context. However, in my view, the appropriate historical context does not support the railroads’ property damage counterclaims. In addition, I would hold that the railroads’ property damage counterclaims are “devices” within the méaning of both 45 U.S.C. § 55 and 45 U.S.C. § 60. These conclusions are based upon the persuasive analysis set forth in a law review article, William P. Murphy, Sidetracking the FELA: The Railroads’ Property Damage Claims, 69 Minn. L.Rev. 349 (1985) (hereinafter cited as Sidetracking).
Railroads’ property damage counterclaims are not expressly addressed by the FELA. However, Mr. Murphy persuasively demonstrates that, when viewed in the appropriate historical context, Congress by its silence did not intend to allow such claims.
Early case law indicates that the common law only tentatively embraced an employer’s right to proceed against an employee for negligently caused property damage. Such actions certainly did not have the prominence of common law defenses such as contributory negligence, assumption of the risk, or fellow servant negligence. Usually, the employer was *1254limited to the defensive benefit of setting off some amount against the employee’s recovery in a suit for wages....
Cases suggesting that an employer could recover affirmatively from an employee for negligently caused property damage typically introduce statutes or rules that go beyond the common law in protecting the interests of employers....
The employer’s property damage claim, therefore, was contextually limited in pre-FELA common law. Even assuming that Congress was aware of these cases, it could not anticipate that such claims, •raised exclusively in employees’ suits for wages and often influenced by state statutes, would expand into a defensive action in employees’ suits for .injury and death. As a purely procedural matter, Congress had little reason to expect in 1906 [when the FELA was first enacted] and 1908 [when the FELA was reenacted] that set-offs sounding in assumpsit could be raised against injured workers suing in trespass on the case. Moreover, the prevalence of the contributory negligence bar in pre-FELA common law also explains Congress’s failure to enact an express prohibition of employers’ property damage counterclaims in FELA suits. If the FELA plaintiff proved that any employer negligence contributed to the employee’s injury or death, common law presumably would bar the employer’s property damage claim C..
... Historical analysis proves that employer claims raised under pre-FELA common law differed significantly from those presently asserted by railroads.
Id. at 367-71 (footnotes omitted). Thus, in 1908 employers’ property damage claims were contractual in nature, defensive, and limited to setoffs.
The Federal Rules of Civil Procedure cannot supply the answer to the question. Fed.R.Civ.P. 13(a) requires a defendant to plead all claims the defendant may have against the opposing party arising out of the same transaction or occurrence. The majority in Cavanaugh v. Western Maryland Ry., 729 F.2d 289, 291 (4th Cir.) (Cavanaugh), cert. denied, 469 U.S. 872, 105 S.Ct. 222, 83 L.Ed.2d 151 (1984), concluded that it would be unfair to bar the railroads from filing compulsory counterclaims for property damage.
Barring the counterclaim, however, would be “unfair” only if the FELA, in conjunction with the supremacy clause of the constitution, otherwise permitted the railroad’s claim. Since the Federal Rules of Civil Procedure “shall not abridge, enlarge or modify any substantive right,” 28 U.S.C. § 2072 (1982), Rule 13(a) obviously does not create any right of action in the railroad for property damage negligently caused by a railroad worker. Instead, the inquiry must be whether a state law cause of action such as that asserted in Cava-naugh exists at all and, if so, whether it nevertheless has been superseded by virtue of the supremacy of the FELA over any state law that conflicts or -interferes with its terms of policies.
Sidetracking, 69 Minn. L.Rev. at 365 n. 72; see also id. at 383 n. 147 (suggesting that Rule 13(a) could fall within the prohibition against “rules” contained in the “no contract-no device” prohibition in 45 U.S.C. § 55).
Mr. Murphy also demonstrates how railroads’ property damage claims would frustrate the remedial purpose of the FELA by examining the effect of such claims on the FELA comparative negligence section, 45 U.S.C. § 53.
[The comparative negligence provision] was added in 1908, replacing the prior qualified contributory negligence bar.... Imposing liability on the railroad in proportion to its own negligence and that of other workers was intended to encourage railroad safety. In this balance, reducing the FELA award in proportion to the injured worker’s negligence was a “sufficient” burden for the employee to bear.
To illustrate the disruption to this balance that occurs when an FELA defendant railroad counterclaims for property , damage, consider the situation in which an injured worker and the railroad are both fifty percent negligent and the jury assesses damages for the employee’s injury at $500,000. In the absence of a property *1255damage counterclaim, the injured worker would recover half of $500,000, or $250,000, from the railroad. A radically different result occurs, however, if the railroad asserts and proves .that the same negligence resulted in $500,000 in property damage. Even if the applicable state comparative negligence law reduces the railroad’s recovery in proportion to its own negligence, the property damage claim offsets the FELA recovery.
Assuming the same damage figures, in a case in which a plaintiff is fifty percent negligent and proves that a co-worker also is fifty percent negligent, the plaintiff’s recovery on the FELA claim once again would be $250,000. If the state law under which a property damage counterclaim arises recognizes joint and several liability, however, the railroad may be legally entitled to obtain full recovery of its $500,000 property loss from the FELA plaintiff. This occurs if state law prohibits imputing the negligence of an employee to the employer when the employer raises its own claim. The employer’s judgment against the FELA plaintiff, of course, would probably be satisfied only to the extent of the plaintiffs recovery against the railroad; that recovery is exactly what made the FELA plaintiff vulnerable to an enforceable judgment. Because the negligent coworker has achieved no recovery, any rights of contribution possessed by the FELA plaintiff against the co-worker would be of little value....
Sidetracking, 69 Minn. L.Rev. at 373-75 (footnotes omitted).
Railroads’ property damage counterclaims are also incompatible with the safety acts provision in the comparative negligence section. That provision provides, that “no such employee who may be injured or killed shall be held to have been guilty of contributory negligence in any case where the violation by such common carrier of any statute enacted for the safety of employees contributed to the injury or death of such employee.” 45 U.S.C. § 53.
This prohibition against considering the worker's negligence, of course, would not apply to a purely state law property damage claim. Such a claim consequently could offset the FELA recovery of a con-tributorily negligent worker even if the railroad violated a safety statute. This result directly conflicts with Congress’s firm intention to prevent railroads from escaping FELA liability when the violation of a safety statute contributed to the worker’s injury or death and squarely defeats the railroads’ statutory incentive to comply with safety acts.
Sidetracking, 69 Minn. L.Rev. at 375.
In addition, railroads’ property damage claims could interfere with the employee’s choice of forum. This is because railroads are not limited to raising property damage claims as counterclaims.
[Rjailroads could file property damage claims in separate state law actions. Indeed, the three-year FELA statute of limitations [45 U.S.C. § 56] may induce railroads facing shorter limitations periods for their state claims to initiate first strikes. [T]he disposition of such state law claims could bar later FELA suits under the principles of res judicata and collateral estop-pel to the extent that the state courts themselves would apply those doctrines in a subsequent action brought in state court.
More practically, a. railroad’s first filing could force the prospective FELA plaintiff to raise the FELA as a counterclaim to the railroad’s state law action to prevent the preclusion of the FELA claim. Such defense actions could occur whether the railroad filed in state court or in federal court. Regardless of the railroad’s filing situs, Congress’s intention to permit FELA plaintiffs to choose the legal forum would be soundly defeated. On the one hand, if the employer files first in federal court, the congressional aim, embodied in the FELA’s removal prohibition [28 U.S.C. § 1445(a) ], to permit FELA claimants to litigate in state courts if they so desire is thwarted. On the other hand, if a nondi-verse employer files first in state court, no generally accepted principle permits the FELA eounterelaimant to remove the action to federal court.
Id. at 375-76 (footnotes omitted).
Mr. Murphy next demonstrates that the term “device” in 45 U.S.C. § 55 (and 45 *1256U.S.C. § 60) covers, and bars, railroads’ property damage counterclaims in FELA actions.
In reaction to the railroads’ growing practice of obtaining contractual exoneration from liability to employees injured or killed in railroad accidents, Congress expressly admonished in the 1906 FELA that “no contract of employment, insurance, relief benefit, or indemnity for injury or death ... shall constitute any bar or defense to any [FELA] action.” This provision guarded railroad workers against a multitude of threats to FELA recoveries. By preventing contract-related bars or defenses from having any judicial effect on the FELA’s liability design, Congress protected its interest in compensating employees and their families for injury and death and in encouraging railroad safety improvements. The breadth of matters condemned in this “no contract” section evidences Congress’s intent to prohibit all known and potential liability-avoidance techniques permitted under common law.
By its very terms, this 1906 prohibition superseded any common law right of employers to assert property damage counterclaims in employees’ personal injury actions. [E]mployers asserted pre-FELA property damage claims exclusively as set-offs, recoupments, or counterclaims in employees’ suits for wages. Court decisions examining the common law basis of these claims agreed on one essential point: the employer’s claim derived from the employment contract. At this stage of common law development, Congress could anticipate, at most, that courts also would characterize any similar claims asserted in employees’ personal injury suits as contract defenses, and it provided for such contingencies by banning all contract bars and defenses in FELA suits.
In the 1908 FELA reenactment, Congress extended the “no contract” prohibition to include “[a]ny contract, rule, regulation, or device whatsoever, the purpose or intent of which shall be to enable any common carrier to exempt itself from any [FELA] liability.” [45 U.S.C. § 55] Although this section no longer contained the 1906 provision’s “bar or defense” language, Congress could not have intended to reinstate contractual bars and defenses to FELA liability. On the contrary, Congress sought to expand the prohibitions beyond those expressed in 1906. The 1906 prohibition of contract-related defenses thus was reasserted in the 1908 “no contract-no device” provision, albeit in slightly different language.
The majority in Cavanaugh, in holding that the “contract ... or device” language did not prohibit a railroad’s property damage counterclaim,-failed to recognize that the closest ancestor of the modern property damage counterclaim in pre-FELA common law was rooted in contract. Rather, the court held that “device” referred only to the attempts of railroads to “exempt” or excuse themselves from liability and that “a counterclaim by the railroad for its own damages is plainly not an ‘exemption] ... from any liability’ and is thus not a ‘device’ within the contemplation of Congress.” [729 F.2d at 292] Under this algebraic analysis, however, neither are most contracts, rules, and regulations “exemptions” even though they preclude employee compensation and eliminate the liability incentive for safety improvements.
An even more basic flaw in the Cava-naugh court’s reasoning is the assumption that Congress intended to prohibit only those “devices” within its immediate contemplation. By adding the “[a]ny ... device whatsoever” clause, Congress attempted to bar all future creative defenses that common law might otherwise permit to defeat railroads’ FELA liability. To accomplish this purpose, Congress adopted the broadest and most open-ended language possible....
The FELA’s 1939 amendments reinforce the necessity of interpreting the “no contract-no device” prohibition to apply to the railroads’ property damage counterclaims. The amendments resulted from congressional frustration with courts’ applying the assumption of risk defense when railroads had issued a general notice of unsafe conditions. In reaction to these “aggressions of courts,” Congress abolished the- common law assumption of risk defense in FELA *1257actions. [45 U.S.C. § 54] The House Judiciary Committee report, however, maintained that the amendment was unnecessary because the defense already was barred by the “no contract-no device” provision: “[S]uch a scheme of charging notice is a device to escape liability.... [T]he prohibition of devices, regulations, and so forth, to defeat liability covers a subject matter outside of relief associations, against which the provisions ... were mainly directed.”
The 1939 [House] Judiciary Committee report thus confirms that Congress intended the 1908 “no contract-no device” provision to prohibit FELA defenses not yet envisioned.
Sidetracking, 69 Minn. L.Rev. at 380-82 (emphasis added to statutory quotation; footnotes omitted).
Mr. Murphy further supports his analysis of the inelusiveness of the term “device” in 45 U.S.C. § 55 by noting that the section’s “sole exception ... allows a railroad to set off its contributions to insurance designed to compensate workers for injury or death.” Sidetracking, 69 Minn.. L.Rev. at 383 (footnote omitted).
First, the setoff exception is purposeless if, as the court in Cavanaugh maintained, the prohibition itself applies only to technical exemptions from liability and not to set-offs. Second, Congress’s exclusion of one specific setoff from the “no contraet-no device” prohibition implies that Congress did not intend to except other forms of setoff, including the common law equivalent of counterclaim, from the prohibition’s scope.
The court in Cavanaugh maintained that the “no contract-no device” prohibition applies only to contracts and devices that permit railroads to “exempt” themselves from FELA liability. By this view, a railroad’s counterclaim falls outside the prohibition because it does not prevent finding the railroad hable on the FELA claim; it affects only the amount of damages the FELA plaintiff can recover from the railroad. Neither does a railroad’s claim for setoff seek to exempt the railroad from FELA liability, however, since it also merely permits the railroad to reduce the plaintiffs recovery. Thus, under the Ca-vanaugh analysis, Congress had no need to exclude railroad setoffs for contributions to insurance and other compensatory benefits from the “no contract-no device” prohibition. All setoff claims were already excluded. Congress nonetheless did adopt the narrow setoff exception to the 1906 “no contract” prohibition and the 1908 “no contract-no device” prohibition because it apparently believed that a specific exclusion for a limited setoff was necessary to avoid the operation of the prohibition. The set-off exception thus implies a result opposite to that reached under the Cavanaugh analysis: all setoffs are prohibited under the “no contraet-no device” provision unless otherwise excepted.
Id. at 383 (footnotes omitted).
Finally, Mr. Murphy also demonstrates that railroads’ property damage claims are fundamentally incompatible with another section of the FELA, 45 U.S.C. § 60, because “such claims may inhibit co-workers [of the FELA plaintiff] from volunteering information necessary to establish an FELA suit.” Sidetracking, 69 Minn. L.Rev. at 386.
The FELA, even though conceived as remedial legislation, is still grounded on the plaintiffs ability to prove at least some negligence by the railroad or co-workers. Some very practical consequences flow from this requirement. A worker not mortally injured may be able to testify regarding railroad or co-worker negligence. When the employee has not personal knowledge or died as a result of the accident, however, the FELA plaintiff must investigate the accident independently to obtain much of the necessary proof. The FELA plaintiff is rarely as equipped to conduct an immediate inquiry as is the railroad. Consequently, the evidence may become stale and the accident difficult or impossible to reconstruct. In these circumstances, information from co-workers is essential for the plaintiff to prevail in the FELA action. If the railroad, in keeping its own investigatory files confidential, creates the impression that it might retaliate against co-workers who admit their *1258own negligence or testify as to railroad negligence, the likelihood of a full and effective investigation by the FELA plaintiff diminishes significantly.
Although the 1906 and 1908 versions of the FELA contained no provisions ensuring plaintiffs , free access to co-worker information, by 1939 Congress had recognized that the threatening practices of railroads could suppress the free flow of information from co-workers to parties interested in seeking FELA remedies. Although the resulting FELA amendment did not compel employees to provide information or eliminate railroads’ privilege with respect to their investigatory files, the amendment is remarkable for its attempt to anticipate and prohibit all railroad maneuvers designed to inhibit free access to information:
Any contract, rule, regulation, or device whatsoever, the purpose, intent, or effect of which shall be to prevent employees of any common carrier from furnishing voluntarily information to a person in interest as to the facts incident to the injury or death of any employee, shall be void, and whoever, by threat, intimidation, order, rule, contract, regulation, or device whatsoever, shall atr tempt to prevent any person from furnishing voluntarily such information to a person in interest, or whoever discharges or otherwise disciplines or attempts to discipline any employee for furnishing voluntarily such information to a person in interest, [shall be punished by fine or imprisonment].
This “free access” guarantee thus should bar railroad property damage claims against co-workers when such claims are deemed to be “devices” having the effect of preventing employees from volunteering information to parties interested in pursuing and maintaining FÉLA suits.
. For any arguably negligent worker, the risk of supplying information is the risk of complete financial disaster. When a worker furnishes evidence of personal negligence to anyone interested in pursuing an FELA action, the worker may be furnishing evidence on which the railroad could base a property damage claim. Even worker-witnesses who believe themselves free of negligence would risk suffering retaliatory charges of negligence and railroad property damage suits. The “common law” property damage claim, however doubtful its. heredity, would prevent the very flow of co-worker information supposedly protected by the “free access” guarantee.
Id. at 386-89 (emphasis added to statutory quotation; footnotes omitted); cf. Stack v. Chicago, Milwaukee, St. Paul & Pacific R.R., 94 Wash.2d 155, 158-60, 615 P.2d 457, 459-60 (1980) (banc) (railroad impleaded surviving crew members; court barred impleader as chilling FELA “free access” guarantee; Murphy argues offending “device” was not impleader of third party defendants into FELA suit but property damage cause of action itself).
In sum, I am persuaded by Mr. Murphy’s analysis that in 1908 the common law did not allow railroads’ property damage counterclaims and that, even assuming the common law did so, such claims, whether filed as counterclaims or brought as separate actions, are preempted by the FELA’s statutory language and are fundamentally incompatible with its remedial purpose.