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Product Liability Law Blog Legal updates, news, and commentary from the attorneys of Baker Sterchi Cowden & Rice LLC

Federal Preemption Doesn't Bar Railroad's Suit Against Locomotive Seat Manufacturer

August 24, 2018 | John Lord

In BNSF Railway Co. v. Seats, Inc., a Burlington Northern Santa Fe locomotive engineer was injured when the backrest of his locomotive seat broke.  The engineer sued BNSF under the Federal Employers Liability Act alleging the seat did not comply with standards articulated in the Locomotive Inspection Act (“LIA”) The LIA requires all locomotives and their components to be “in proper condition and safe to operate without unnecessary danger of personal injury”. 

BNSF settled the engineer’s lawsuit.  Thereafter, BNSF sued Seats, Inc. to recover its settlement costs.  Seats designed, manufactured and marketed the locomotive seat that injured the engineer.  BNSF sought relief under products liability and breach of contract theories.  The district court decided BNSF’s claims were preempted by the LIA, and granted Seats’ motion to dismiss BNSF’s claims.

On appeal, the Eighth Circuit noted that the LIA does not confer a private right of action on injured railroad workers.  Rather, the LIA establishes standards of care that are enforced by a private right of action for railroad employees under the FELA.  These standards of care, in the interest of national uniformity, are intended to occupy the field of locomotive design, materials and construction.  Thus, quoting the U.S. Supreme Court decision in Kurns v. Railroad Friction Products Corp., 565 U.S. 625 (2012), the Eighth Circuit stated that “state common law duties and standards of care directed to the subject of locomotive equipment are pre-empted by the LIA”. 

The Court framed the primary issue in the case as whether the LIA preempts state claims based on federal standards of care.   Seats argued that state claims based on federal standards compromise national uniformity.   The Court disagreed, and held that “…the enforcement under state law of a federal standard of care does not undermine national uniformity because it does not impose conflicting regulations that a railroad must heed during interstate travel.”  

In determining that the District Court erred in ruling that the LIA preempts BNSF’s products liability claim, the Court added that if it were to hold that state law claims asserting LIA violations are preempted, the nation’s railroads would be left without a remedy, no matter how glaring the liability of an equipment supplier. 

BNSF’s breach of contract claim was based on Seats’ contract with the locomotive manufacturer, General Electric.   Seats and GE executed a contract that required Seats to manufacture locomotive seats “in compliance with the LIA” for installation in the locomotive.  BNSF alleged Seats breached this contract by providing a defective seat.  

Seats successfully argued to the District Court that BNSF’s breach of contract claim was a repackaged version of its products liability claim that was also preempted by the LIA.  Again, the Eighth Circuit disagreed.   The Court’s reasoning on the breach of contract claim was two-pronged.

First, the Court noted that “[j]ust as there is room for state tort remedies, there is room for state contract remedies associated with the federal standards embodied in the LIA”.  Second, the Court found that the breach of contract claim did not require compliance with a state duty or standard of care.  Instead, the claim was based on a duty that was voluntarily assumed and not imposed by state law.   Therefore, these “self-imposed undertakings” are not preempted by federal law.                            

Commentary: The Seats decision provides great clarity to the commercial relationships between railroads and vendors whose products are covered by federal standards of care.  The case is certainly not the first among such entities, and the Eighth Circuit has provided a definitive guide for current and future litigation.

No Class: SCOTUS Holds That Tolling Properties of Class Actions Only Apply to Individual Cases, Not Future Class Actions

July 31, 2018 | David Eisenberg and Allen James

The recent United States Supreme Court decision China Agritech, Inc. v. Resh, 201 L. Ed. 2d 123 (2018), sensibly resolved some existing confusion about the tolling effect that a putative class action creates for the members of a proposed class. In its 1974 decision in American Pipe & Constr. Co. v. Utah, the Court held that a timely filed class action effectively tolls any applicable statute of limitations for persons who are a part of the proposed class.  The Court elaborated on this rule in 1983 in Crown, Cork & Seal Co. v. Parker, stating that the tolling rule applies to putative class members who, if class certification is denied, “prefer to bring an individual suit rather than intervene.”  This sparked a slew of actions by plaintiff’s attorneys who argued that the tolling rule applied to both individual claims as well as successive class actions after an original class’ certification was denied.  Defense attorneys, understandably, felt differently, and argued against the application of equitable estoppel by some courts, to permit the filing of “stacked” class actions.

The Court’s unanimous ruling in China Agritech, Inc. v. Resh sets the record straight and makes clear that the rule in American Pipe “tolls the statute of limitations during the pendency of a putative class action, allowing unnamed class members to join the action individual or file individual claims if the class fails.  But American Pipe does not permit the maintenance of a follow-on class action past expiration of the statute of limitations.” 

While widely anticipated, the ruling was no less vital to class action defendants.  Under the arguments advanced by plaintiff’s attorneys, new class actions could conceivably be stacked end-to-end in perpetuity once an original class action had been timely filed.  The Court recognized this perpetual domino effect, and Justice Ginsburg, writing for the Court, viewed this as a fundamental matter of judicial efficiency.  American Pipe properly applies to permit tolling of individual claims, “because economy of litigation favors delaying those claims until after a class-certification denial.  If certification is granted, the claims will proceed as a class and there would be no need for the assertion of any claim individually.”  Early assertion of competing class representative claims is beneficial because it allows “the district court [to] select the best plaintiff with knowledge of the full array of potential class representatives and class counsel.”  The Court’s holding effectively ensures class-action defendants that if class certification is denied in the first place, successive nearly-identical class suits will not follow, assuming the time period contemplated by the statute of limitations has passed.

The ruling comes as a relief to would-be class action defendants concerned that an already time consuming and dreadfully expensive area of litigation could multiply exponentially.  Moreover, the stacking of successive class actions could have effectively allowed plaintiffs to “test the waters” in an original class suit, knowing there would be a fall back option, in a later-filed case.  Class action defendants can now rest a little easier knowing that if class certification is defeated, future liability will be limited to individual claims if the statute of limitations period has expired.  

North Carolina Court Finds Employer's Negligence to Be Superseding, Sole Proximate Cause of Asbestos Plaintiff's Injuries

February 7, 2018 | Robert Chandler

Plaintiff appealed a jury verdict in the District Court for the Western District of North Carolina in favor of an asbestos product vendor. Plaintiff claimed that the verdict form, which included a series of questions as to each defendant, caused the jury to render a legally inconsistent verdict and requested partial entry of judgment in his favor or a new trial.  The 4th Circuit U.S. Court of Appeals affirmed the judgment.

Facts

Plaintiff Erik Ross Phillips alleged that he contracted mesothelioma from exposure to asbestos-containing brake linings used in a machine at the facilities of his employer, Champion International Paper Company.  The brake linings were manufactured by Reddaway Manufacturing Company and sold to International Paper by Pneumo Abex, LLC.  Plaintiff filed suit against Abex on a negligent failure to warn theory.

At trial Abex argued that even if it was negligent, the intervening negligence of Plaintiff’s employer was the sole proximate cause of Plaintiff’s injury.  Under North Carolina law, where both defendant and a third party are negligent, but the third party’s negligence is the sole proximate cause of the plaintiff’s injury, plaintiff cannot recover from the defendant.

The jury was submitted questions on the verdict form asking them first to determine, for each defendant, whether plaintiff’s injury was proximately caused by any negligence of the defendant.  If the answer was “Yes,” the jury was next asked whether any negligence on the part of a third party served to be a superseding or intervening cause of the injury suffered by defendant.

The jury found initially that Abex’s negligence was the sole proximate cause of plaintiff’s injury, but next found that the negligence of a third party was a superseding or intervening cause of the injury suffered by plaintiff.  Based upon these answers, the Court entered judgment on behalf of Abex, taking the jury’s answers to the verdict form questions to mean that the jury believed that the negligence of a third party was an intervening cause of plaintiff’s injuries which became the sole proximate cause.  Plaintiff then appealed.

The Verdict Form Did Not Present an Inconsistent Verdict Under North Carolina Law

 On appeal Phillips argued that the jury’s answer to the verdict form questions rendered a legally inconsistent verdict.  Because the jury found both that Abex’s negligence was the proximate cause of plaintiff’s injury in answer to the verdict form first question, and that a third party’s negligence was the cause in the answer to the second, the verdict was inconsistent since both could not legally be the proximate cause of plaintiff’s injuries.  The Court disagreed.

The Appellate Court pointed to North Carolina law, indicating that to insulate the negligence of a party, the intervening negligence of a third party must break the sequence or causal connection between the negligence of the first party and the plaintiff’s injury so as to exclude the negligence of the first party as a proximate cause of the injury.  “It must be an independent force which entirely supersedes the original action and renders its effect in the chain of causation remote.”  The Court noted that, under the state law, although there may be more than one proximate cause, a new and entirely independent source of negligence, breaking the sequence of events between the first source of negligence and the injury, will insulate the first source of negligence from liability.

The District Court treated the intervening negligence of plaintiff’s employer as an affirmative defense – the burden of proof for proving third party negligence belonged to Abex – and ruled that, even if the jury found negligence on the part of Abex, the intervening negligence of plaintiff’s employer would act to relieve Abex of liability.  The Court found that the jury was properly instructed on these issues, and, subsequently, the jury’s findings were in accordance with North Carolina law.  The second finding by the jury, that the intervening negligence of plaintiff’s employer was the cause of plaintiff’s injury, was a new proximate cause which extinguished the proximate cause finding by the jury against Abex.  Accordingly, Phillips’ appeal was denied.

Conclusion

When making determinations regarding whether proximate cause exists, parties will want to consider whether a superseding or intervening cause for a claimant’s injury is a defense to claims.  Even where a defendant’s conduct may be a source of negligence, the negligence may not be the proximate cause of the claimed injury.

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About Product Liability Law Blog

The BSCR Product Liability Blog examines significant developments, trends, and topics in product liability law of interest to individuals and product manufacturers, distributors and sellers. Learn more about the editor, David E. Eisenberg,  and our Product Liability practice.

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