Court Opinion

ID: 8923595
Source: CourtListenerOpinion
Date Created: 2022-11-27 06:28:01.91249+00
Date Added: 2024-06-11T17:09:20.756277
License: Public Domain

OPINION OF THE COURT
ALDISERT, Chief Judge.
In this case of first impression, we must decide whether plaintiffs have presented a claim for which relief could be granted in seeking to have a federal district court reopen Federal Employers’ Liability Act cases originally brought, and thereafter settled, in the Pennsylvania state courts. Prior to payment of the agreed upon settlement amount, the defendant railroad deducted from that amount premium payments it had made on behalf of each plaintiff under supplemental insurance programs. Plaintiffs, believing such deductions improper, instituted the present action to recover same. The district court denied relief and plaintiffs appealed. We affirm.
I.
The named plaintiffs allegedly suffered personal injuries in the course of their employment with defendant, Consolidated Rail Corporation, and brought damage suits in state court under the provisions of the Federal Employers’ Liability Act (FELA), 45 U.S.C. §§ 51-60. Section 51 of FELA provides, in relevant part, that “[ejvery common carrier by railroad while engaged in commerce ... shall be liable in damages to any person suffering injury ... resulting in whole or in part from the negligence of ... such carrier ____” In order to limit the defenses available to defendant railroads, § 55 states that
[a]ny contract, rule, regulation, or device ..., the purpose or intent of which shall be to ... exempt [the railroad] from any liability created by this chapter, shall ... be void; Provided, That ... such com*931mon carrier may set off therein any sum it has contributed or paid to any insurance ... that may have been paid to the injured employee____
Thus, by their express terms, § 51 allows suit and § 55 prevents the raising of potential defenses.
Each of the state court cases initiated by plaintiffs was ultimately discontinued upon proof that a settlement agreement had been reached. The railroad then deducted from the settlement amounts the disability payments paid to plaintiffs under the supplemental insurance benefit program. Plaintiffs, alleging that these deductions violated § 55 of FELA, filed the present class action in the district court below. The complaint asked for a judgment in the amount of the deductions and an order enjoining the railroad from continuing this practice in future settlements. Defendant, arguing that the action was brought under § 55, moved under Rule 12(b)(6), F.R. Civ.P., to dismiss the complaint on the grounds that the section “neither establishes nor implies a private cause of action [and] in any event the settlements ... were not unlawful.” Because a favorable decision on defendant’s motion would eliminate the need for the substantial expenditures associated with class certification, the parties agreed that the court should decide the dismissal motion first.
The district court agreed with the railroad and concluded that § 55 does not create a private cause of action, citing Bay v. Western Pacific R.R., 595 F.2d 514 (9th Cir.1979), and Fullerton v. Monongahela Connecting R.R., 242 F.Supp. 622 (W.D.Pa. 1965). The court was persuaded by the Bay rationale that § 55 was intended only to allow a FELA plaintiff to avoid a railroad defense based on a contract discharging the carrier from liability. In the words of the Bay court, the statute provided a “shield” for the employee but not a “sword” that could be used to bring a separate suit against the railroad. Accordingly, the complaint was dismissed.
On appeal, plaintiffs contend that their case is based on § 51, not § 55. Appellee responds that the personal injury claims actionable under § 51 were extinguished by the settlements. Appellants’ present contentions, appellee argues, are based on intentional acts of the railroad in connection with the settlements, not negligent conduct causing bodily injury that is the sole basis of liability under § 51. 'We must inquire, therefore, whether any relief is now available to appellants under § 51.
II.
Preliminarily, we note that even though FELA provides for concurrent state and federal court jurisdiction, 45 U.S.'C. § 56, it is firmly established that the substantive aspects of such litigation are governed by federal law. See, e.g., Lukon v. Pennsylvania R.R., 131 F.2d 327, 329 (3d Cir.1942); see also Dice v. Akron, Canton & Youngstown R.R., 342 U.S. 359, 72 S.Ct. 312, 96 L.Ed. 398 (1952). Also, in interpreting the Act, it is important to bear in mind that it was enacted in “response to the special needs of railroad workers,” Sinkler v. Missouri Pacific R.R., 356 U.S. 326, 329, 78 S.Ct. 758, 761, 2 L.Ed.2d 799 (1958), and should be construed liberally for the protection of railroad employees, Sowards v. Chesapeake and Ohio Ry., 580 F.2d 713, 714 (4th Cir.1978); Lukon, 131 F.2d at 329. Further, we note that the Act is a statutory mechanism designed to give injured railroad employees a federal right to sue “in commerce” railroad employers for what would otherwise be a common law action for negligently inflicted tortious damages. Finally, although the Act is a federal counterpart to state worker’s compensation laws, it allows for more generous remedies to injured workers.
One element of a prima facie case brought under § 51, therefore, is the averment of negligence, and, to reverse the grant of a 12(b)(6) motion, appellants must show that there is some set of facts that they could prove at trial to support such an averment. If we were to view the present suit as representing a new claim based on appellee’s unilateral reduction of the agreed upon settlement figure, we would *932have serious doubts whether appellants would be able to make out the requisite levels of proof. First, the injury complained of is economic, not tortious; second, the behavior of the railroad in effecting the deduction of insurance benefits was deliberate, not negligent; and third, the basis for claiming that the railroad’s actions were illegal is the violation of a federal statutory provision and is not grounded in the common law. Characterized as such, we would have difficulty asserting that, regardless of the additional facts appellants might be able to prove at trial, the injury for which they seek to recover is tortious, arising from Conrad’s negligence.
But appellants, perhaps anticipating these difficulties, try to characterize their action as one arising from the alleged tort that formed the basis of their original state court suits. They assert that the “claims [presented herein] are not new claims arising under a new cause of action ...,” but rather relate back to the original injuries. Brief for Appellant at 10. Further, they contend that they are not seeking some new or additional recovery, but only the “restoration of damages that they were lawfully entitled to under [their original] § 51” FELA claims. • Id. at 13.
Viewed as such, what appellants are seeking is federal review of a settlement agreement that terminated previously instituted FELA suits. Because the interpretation of such an agreement, even if performed in state court, would be a question of federal law, federal question jurisdiction is available to allow them entry into our courts. Imm v. Union R.R., 289 F.2d 858 (3d Cir.1961). But that does not end our inquiry. As noted above, the settlement that appellants challenge was the direct result of, and formed the basis for discontinuing, several state court FELA suits, and the claims presented in the appeal before us are not new claims but stem from the injuries that formed the basis of those same state court actions. Thus, to be able to review the legality of the settlement and to afford appellants, and the class they represent, the relief demanded, we are essentially being asked to take over where the discontinued state actions left off.
It is well settled that a federal court has the inherent power to enforce and to consider challenges to settlements entered into in cases originally filed therein. Pearson v. Ecological Science Corp., 522 F.2d 171 (5th Cir.1975), cert. denied, 425 U.S. 912, 96 S.Ct. 1508, 47 L.Ed.2d 762 (1976). Typically, the court does this without inquiring into, or requiring, an independent basis of subject matter jurisdiction for the enforcement/challenge suit. See Aro Corp. v. Allied Witan Co., 531 F.2d 1368 (6th Cir.), cert. denied, 429 U.S. 862, 97 S.Ct. 165, 50 L.Ed.2d 140 (1976). But see Fairfax Countywide Citizens Ass’n v. County of Fairfax, 571 F.2d 1299 (4th Cir. 1978) (when settlement is not contained in district court’s order dismissing original action subsequent enforcement suit filed in same court requires an independent jurisdictional basis).
But, that is not the question presented to us today. The issue before us is whether the federal courts have, or should exercise, authority to reopen, by collateral means, private law suits brought and settled in the state court system, where the grounds asserted for relief are not a denial of constitutional rights, but rather an assertion that in completing the agreement that terminated the state court actions brought under federal law, a certain federal statute was not respected. To state the issue is to answer it. Having elected to proceed in the first instance in a state court, it is to that court that these appellants must return for any relief to which they may be entitled. As stated in Lee v. Hunt, 483 F.Supp. 826, 832 (W.D.La. 1979) , affd, 631 F.2d 1171 (5th Cir.1980), where venue was challenged by a party contesting the validity of a court approved settlement, “judicial economy and the policy favoring settlement as an end to litigation require that settlement agreements be *933enforced in the same court in which the [original] litigation was pending.” 1
III.
Accordingly, the 'judgment of the district court will be affirmed.

. Appellants can find no assistance in Duncan v. Thompson, 315 U.S. 1, 62 S.Ct. 422, 86 L.Ed. 575 (1942), or Hogue v. Southern R.R., 390 U.S. 516, 88 S.Ct. 1150, 20 L.Ed.2d 73 (1968). These cases stand for the proposition that if the plaintiff enters into a release prior to filing the FELA suit he need not tender back to the defendant the consideration received in order to sue. . Neither case deals with a release or settlement arrived at under a state court FELA proceeding followed by a subsequent suit filed in federal court.