Amicus Curiae Brief — BNSF Railway Company, et al., Petitioners v. Montana Eighth Judicial District Court, Cascade County, et al.

No. 18-1246

IN THE

Supreme Court of the United States

BNSF RAILWAY CO., NANCY AHERN,

and JOHN DOES 1– 10,

Petitioners,

v.

MONTANA EIGHTH JUDICIAL DISTRICT COURT,

CASCADE COUNTY; THE HONORABLE KATHERINE

BIDEGARAY, Presiding Judge; and ROBERT DANNELS,

Respondents.

On Petition for a Writ of Certiorari to

the Supreme Court of the State of Montana

MOTION FOR LEAVE TO FILE BRIEF AND

BRIEF OF WASHINGTON LEGAL FOUNDATION

AS AMICUS CURIAE IN SUPPORT OF PETITIONERS

Richard A. Samp

(Counsel of Record)

Cory L. Andrews

Washington Legal Foundation

2009 Mass. Ave., NW

Washington, DC 20036

(202) 588-0302

rsamp@wlf.org

Date: April 25, 2019

MOTION OF WASHINGTON LEGAL FOUNDATION

FOR LEAVE TO FILE BRIEF AS

AMICUS CURIAE IN SUPPORT OF PETITIONERS

Pursuant to Rule 37.2 of the Rules of this Court,

the Washington Legal Foundation (WLF) respectfully

moves for leave to file the attached brief as amicus

curiae in support of Petitioners.

Counsel for

Petitioners has consented to the filing of this brief.

Counsel for Respondents did not respond to a request

for consent. Accordingly, this motion for leave to file is

necessary.

WLF is a nonprofit public-interest law and policy

center based in Washington, D.C., with supporters

nationwide, including in Montana. WLF promotes and

defends free enterprise, individual rights, a limited and

accountable government, and the rule of law.

WLF frequently files briefs in both state and

federal courts on issues arising under the Federal

Employers’ Liability Act (FELA), 45 U.S.C. §§ 51-60.

See, e.g., BNSF Railway Co. v. Tyrrell, 137 S. Ct. 1549

(2017); CSX Transportation, Inc. v. Hensley, 556 U.S.

838 (2009). WLF filed a brief in support of the petition

for a writ of supervisory control filed by BNSF with the

Montana Supreme Court on December 11, 2018. WLF

has also appeared frequently as amicus curiae in cases

involving federal preemption issues, to point out the

economic inefficiencies often created when multiple

layers of government seek simultaneously to regulate

the same business activity. See, e.g., Kurns v. Railroad

Friction Products Corp., 565 U.S. 625 (2012).

FELA is a unique federal negligence statute

under which railroad employees may seek

compensation from their employing railroads for workrelated injuries. The compensation scheme differs

sharply from that available to most other types of

employees, who generally must seek compensation for

work-related injuries in no-fault administrative

proceedings established by state law. In general, the

compensation available to railroad employees under

FELA is more generous than that available to

employees whose claims are governed by state workercompensation statutes.

WLF is concerned that Montana state courts are

interfering with the efficient, uniform compensation

system established by FELA by overlaying a separate

state-law regime on top of the one established by

Congress. WLF seeks to file this brief to urge the

Court to grant the petition and rein in unwarranted

state-law claims of this sort.

For the foregoing reasons, WLF requests leave to

file the attached brief.

Respectfully submitted,

Richard A. Samp

Washington Legal Foundation

2009 Massachusetts Ave., NW

Washington, DC 20036

202-588-0302

Dated: April 25, 2019

i

QUESTION PRESENTED

Whether the Federal Employers Liability Act

(FELA), 45 U.S.C. § 51, preempts bad-faith claims

under Montana law that seek to impose state-law

liability based on the litigation conduct of a self-insured

employer sued under FELA.

iii

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES . . . . . . . . . . . . . . . . . . . v

INTEREST OF AMICUS CURIAE . . . . . . . . . . . . . 1

STATEMENT OF THE CASE . . . . . . . . . . . . . . . . . 2

SUMMARY OF ARGUMENT . . . . . . . . . . . . . . . . . . 6

REASONS FOR GRANTING THE PETITION . . . . 9

I.

II.

REVIEW IS WARRANTED BECAUSE THE

DECISION BELOW DIRECTLY CONFLICTS

WITH THIS COURT’S UNDERSTANDING OF

FELA’S PREEMPTIVE SCOPE . . . . . . . . . . . . . . 9

A.

The Court Has Determined that

Congress, When It Adopted FELA,

Intended to Establish an Exclusive

Federal Regime for Railroad

Injuries . . . . . . . . . . . . . . . . . . . . . . . . 11

B.

The Decision Below Conflicts with

This Court’s Decisions Recognizing

Congressional Intent to Create

Uniform Liability Standards . . . . . . . 16

UNLESS REVIEW IS GRANTED NOW,

PETITIONERS MAY BE DEPRIVED OF ANY

OPPORTUNITY TO RAISE THEIR

PREEMPTION CLAIM . . . . . . . . . . . . . . . . . . . . 19

iv

Pages

III.

THE QUESTION PRESENTED IS VERY

IMPORTANT TO THE ENTIRE RAILROAD

INDUSTRY . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

v

TABLE OF AUTHORITIES

Cases:

Page(s)

Arizona v. United States,

567 U.S. 387 (2012) . . . . . . . . . . . . . . . . . . . . . . . 17

Bandini Petroleum Co. v. Superior Court,

284 U.S. 8, 14 (1931) . . . . . . . . . . . . . . . . . . . . . . 19

BNSF Railway Co. v. Tyrrell,

137 S. Ct. 1549 (2017) . . . . . . . . . . . . . . . . . . . 1, 18

Consolidated Rail Corp. v. Gottshall,

512 U.S. 532 (1994) . . . . . . . . . . . . . . . . . 10, 15, 16

Counts v. Burlington Northern R.R. Co.,

896 F.2d 424 (9th Cir. 1990) . . . . . . . . . . . . . . . . 17

Cox Broadcasting Corp. v. Cohn,

420 U.S. 469 (1975) . . . . . . . . . . . . 9, 19. 20, 22, 23

Dice v. Akron, Canton & Youngstown R.R. Co.,

342 U.S. 359 (1952) . . . . . . . . . . . . . . . . . 13, 14, 17

CSX Transp., Inc. v. McBride,

564 U.S. 685 (2011) . . . . . . . . . . . . . . . . . . . . . . . . 1

Erie R.R. Co. v. Winfield,

244 U.S. 170 (1917) . . . . . . . . . . . . . . . 7, 12, 14, 17

Giard v. Burlington Northern Santa Fe Ry.,

2014 WL 37687 (D. Mont. 2014) . . . . . . . . . . . . . 15

Kurns v. Railroad Friction Products Corp.,

565 U.S. 625 (2012) . . . . . . . . . . . . . . . . . . . . . 1, 13

Metro-North Commuter R.R. Co. v. Buckley,

521 U.S. 424 (1997) . . . . . . . . . . . . . . . . . . . . . . . 16

Napier v. Atlantic Coast Line R.R. Co.,

272 U.S. 605 (1926) . . . . . . . . . . . . . . . . . . . . . . . 13

New York Central & Hudson River R.R. Co. v.

Tonsellito, 244 U.S. 360 (1917) . . . . . . . . . 7, 12, 14

New York Central R.R. Co. v. Winfield,

244 U.S. 147 (1917) . . . . . . . . . . . . 7, 11, 12, 14, 17

vi

Page(s)

Radio Station WOW, Inc. v. Johnson,

326 U.S. 120 (1945) . . . . . . . . . . . . . . . . . . . . . . . 19

Reidelbach v. Burlington N. & Santa Fe Ry. Co.,

312 Mont. 49 (2002) . . . . . . . . . . . . . . . . . . . passim

Stiffarm v. Burlington Northern R.R. Co.,

81 F.3d 170, 1996 WL 146687 (9th Cir.),

cert. denied, 519 U.S. 823 (1996) . . . . . . . . . . . . . 14

Story v. City of Bozman,

242 Mont. 436 (1990) . . . . . . . . . . . . . . . . . . . . . . . 6

Toscano v. Burlington Northern R.R. Co.,

678 F. Supp. 1477 (D. Mont. 1987) . . . . . . . . . . . 18

Wildman v. Burlington Northern R.R. Co.,

825 F.2d 1392 (9th Cir. 1987) . . . . . . . . . . . . 14, 15

Statutes:

Federal Employers’ Liability Act (FELA),

45 U.S.C. §§ 51-60 . . . . . . . . . . . . . . . . . . . . passim

Locomotive Inspection Act, 49 U.S.C. § 20701 . . . 13

28 U.S.C. § 1257(a) . . . . . . . . . . . . . . . . . . . . . . . 8, 19

Montana Unfair Trade Practices Act (UTPA) . . . 2, 4

MCA § 33-18-201 . . . . . . . . . . . . . . . . . . . . 2, 6

MCA § 33-18-202(8) . . . . . . . . . . . . . . . . . . . . 6

Miscellaneous:

House Report No. 1386,

60th Cong., 1st Sess. (1917) . . . . . . . . . . . . . . . . . 12

INTEREST OF AMICUS CURIAE

The Washington Legal Foundation (WLF) is a

public-interest law firm and policy center with

supporters in all 50 States, including Montana.1 WLF

promotes and defends free enterprise, individual

rights, a limited and accountable government, and the

rule of law.

WLF often files briefs in both state and federal

courts on issues arising under the Federal Employers’

Liability Act (FELA), 45 U.S.C. §§ 51-60. See, e.g.,

BNSF Railway Co. v. Tyrrell, 137 S. Ct. 1549 (2017);

CSX Transportation, Inc. v. Hensley, 556 U.S. 838

(2009). WLF filed a brief in support of the petition for

a writ of supervisory control filed by BNSF with the

Montana Supreme Court on December 11, 2018. WLF

has also appeared frequently as amicus curiae in cases

involving federal preemption issues, to point out the

economic inefficiencies often created when multiple

layers of government seek simultaneously to regulate

the same business activity. See, e.g., Kurns v. Railroad

Friction Products Corp., 565 U.S. 625 (2012).

FELA is a unique federal negligence statute that

allows railroad employees to seek compensation from

their employer railroads for work-related injuries. The

compensation scheme differs sharply from that

available to most other types of employees, who

generally must seek compensation for work-related

1

Pursuant to Supreme Court Rule 37.6, WLF state that

no counsel for a party authored this brief in whole or in part; and

that no person or entity, other than WLF and its counsel, made a

monetary contribution intended to fund the preparation and

submission of this brief. More than 10 days before filing this brief,

WLF notified counsel for Respondent Dannels of its intent to file.

2

injuries in no-fault administrative proceedings

established by state law. In general, the compensation

available to railroad employees under FELA is more

generous that available to employees whose claims are

governed by state worker-compensation statutes.

WLF is concerned that Montana state courts are

interfering with the efficient, uniform compensation

system established by FELA by overlaying a separate

state-law regime on top of the one established by

Congress.

STATEMENT OF THE CASE

Respondent Robert Dannels suffered an injury

in March 2010 while working for Petitioner BNSF

Railway Co. Several months later, he sued BNSF in

Montana state court under FELA, alleging that BNSF’s

negligent conduct contributed to his injury. BNSF

defended against that claim. The case came to trial in

2013, and a jury awarded Dannels $1.7 million. That

judgment has been fully satisfied.

Dannels filed this second state-court lawsuit in

2014, alleging that BNSF and Petitioner Nancy Ahern

violated Montana’s Unfair Trade Practices Act (UTPA),

MCA § 33-18-201, and Montana common law by

breaching a duty of good faith in handling and

defending against Dannels’s FELA claim. He alleges

that Petitioners’ FELA-related misconduct caused him

to suffer emotional distress, for which he is entitled to

compensatory damages. Dannels also seeks an award

of punitive damages based on his allegation that BNSF

acted with malice and fraud for the purpose of avoiding

fair and equitable settlement of FELA claims.

3

Throughout the district court proceedings, BNSF

and Ahern have asserted (without success) that

Dannels’s claims are preempted by federal law. On

January 9, 2018, the district court denied Petitioners’

supplemental motion for summary judgment. Pet.

App. 58a-72a. It held that the Montana Supreme

Court’s decision in Reidelbach v. Burlington N. &

Santa Fe Ry. Co., 312 Mont. 49 (2002), “disposes the

Defendants’ preemption arguments in Dannels’ favor.”

Id. at 63a.

The parties repeatedly clashed over discovery

issues. In an order dated November 16, 2018 (the

“Sanctions Order,” Pet. App. 12a-52a), the district

court concluded that BNSF inadequately responded to

discovery requests, and it rejected BNSF’s efforts to

invoke attorney-client privilege, work product

privilege, and trade secret confidentiality. As a

sanction, it entered a default judgment against BNSF

on liability and causation and stated, “This case shall

proceed to trial solely on the measure of damages,”

including punitive damages. Id. at 51a.

As “an additional sanction” it ordered BNSF to

produce documents that had not previously been

demanded. Among the additional documents were

“monthly status reports” prepared by BNSF attorneys

on all its pending FELA claims nationwide from 2010

to date. Id. at 52a. BNSF contends that the reports

“include the privileged or protected observations and

impressions of BNSF’s counsel regarding FELA cases,

both litigated to judgment and settled,” and that their

disclosure “threatens BNSF’s nationwide operations.”

BNSF Application for Stay (No. 18A1006, filed April 2,

2009) at 22-23.

4

Petitioners responded on December 11, 2018, by

filing a petition for a writ of supervisory control with

the Montana Supreme Court, the second time they had

done so in these proceedings. Among the issues raised

by both petitions: the court should overrule its

Reidelbach decision and hold that FELA preempts

state-law claims based on a railroad’s alleged bad faith

in handling and defending against FELA claim.

The Montana Supreme Court issued an order

denying the second petition on March 12, 2019. Pet.

App. 1a-11a. It acknowledged Petitioner’s challenge to

Reidelbach’s holding on FELA preemption but stated

that “this is an issue for which the normal appeal

process is adequate.” Id. at 9a. Judge McKinnon

dissented, stating that the court should order

additional briefing on whether to overrule Reidelbach.

Id. at 10a-11a. She expressed concern that “the Court

is affirming an order for sanctions requiring BNSF to

produce documents that are otherwise undiscoverable,

but for the case’s status as a UTPA action; and the

documents ordered to be disclosed are potentially

protected pursuant to the attorney work-product and

attorney client privileges.” Id. at 11a (emphasis in

original).

The Certiorari Petition seeks review of the

March 12 Montana Supreme Court final judgment

denying the petition for supervisory control. But the

district court is not awaiting this Court’s disposition of

the Petition. At a March 14 status conference, the

district court ordered BNSF to produce the privileged

and confidential documents identified in the Sanctions

5

Order no later than March 22.2 When BNSF delayed

complying with the Sanctions Order while it pursued

appellate relief, Dannels filed a motion for sanctions in

the district court on March 28. On March 30, the

district court granted Dannels’s request for a hearing

and issued an order to BNSF’s outside counsel and its

General Counsel to show cause why they should not be

held in contempt of court for failing to produce

documents required by the Sanctions

Order—confidential documents that (as Justice

McKinnon pointed out, Pet. App. 11a) would be

undiscoverable if (as Petitioners contend and as

numerous courts have held) FELA preempts state-law

claims alleging bad-faith handling of FELA claims. See

BNSF Application for Stay (No. 18A1006, April 2,

2019), Attachment E.

Given the magnitude of the potential contempt

citation—Dannels has asked that BNSF be fined

$25,000 per day from March 22 until the date that it

produces all contested documents—awaiting

completion of the post-trial appeals process to seek this

Court’s review of the preemption issue is not a realistic

option for BNSF. The district court has already

sanctioned BNSF by entering a default judgment on

liability and causation. In the absence of immediate

review by this Court, contempt fines could easily

amount to tens of millions of dollars (in addition to

2

Petitioners responded to that directive by moving on

March 18 in the Montana Supreme Court for a stay pending

disposition of its Certiorari Petition. That motion was denied on

April 2. Justice Kagan on April 3 denied Petitioners’ application

for stay and emergency administrative stay of judgment and

proceedings.

6

potential punitive damages) before BNSF would be

positioned to file another certiorari petition from a

potentially adverse judgment on the merits from the

Montana Supreme Court.

SUMMARY OF ARGUMENT

As the Montana Supreme Court readily

concedes, it has “used the bad faith tort in a manner

uniformly rejected by all other jurisdictions.” Story v.

City of Bozman, 242 Mont. 436, 447 (1990). In

particular, it is the only State that recognizes a cause

of action against an employer alleged to have acted in

bad faith in handling a FELA claim filed by one of its

employees.

If the employer’s FELA liability is

reasonably clear, Montana law imposes on the

employer a duty to advance wages and medical

expenses while the suit is pending and to enter into a

fair and equitable settlement. The implication is clear:

a Montana employer defends a FELA suit at its peril.3

Montana courts have repeatedly rejected

arguments that the state-law cause of action against

railroads for handling FELA claims in bad faith is

3

Montana justifies imposing these fiduciary duties on

FELA employers by likening them to insurance companies. A

railroad could, of course, purchase insurance to cover the costs of

FELA claims filed by injured employees. But many larger

railroads (including BNSF) have concluded that insurance is

unnecessary because they can predict overall FELA claims rates

reasonably accurately. Montana law classifies such railroads as

“self-insured” and imposes on them the same claims-settlement

obligations that it imposes on insurance companies in their dealing

with both their insureds and the third-party beneficiaries of

insurance contracts. Mont. Code Ann. §§ 33-18-201, 33-18-202(8).

7

preempted by FELA. The Montana Supreme Court

rejected that preemption argument in its 2002

Reidelbach decision and has consistently affirmed that

decision in the ensuing two decades. BNSF repeatedly

raised the preemption argument in lower-court

proceedings. Concluding that it was “bound to follow

Reidelbach,” the district court rejected BNSF’s

assertion that FELA preempted Dannels’s bad-faith

claims and denied its motion for summary judgment.

Pet. App. 63. The Montana Supreme Court rejected

two separate petitions for a writ of supervisory control

file by BNSF, each time explicitly citing Reidelbach in

support of its decision not to dismiss on preemption

grounds. Id. at 9a, 56a.

Review is warranted because the Montana

Supreme Court’s decision sharply conflicts with FELA

decisions from both this Court and other federal and

state courts. This Court has repeatedly held that

FELA comprehensively “occupies the field” of railroademployee injury claims. It has explained that FELA

provides the exclusive remedy for injured railroad

employees engaged in interstate commerce. See, e.g.,

New York Central R.R. Co. v. Winfield, 244 U.S. 147,

150 (1917); Erie R.R. Co. v. Winfield, 244 U.S. 170, 172

(1917); New York Central & Hudson River R.R. Co. v.

Tonsellito, 244 U.S. 360, 361 (1917). Indeed, the

conflict between those decisions and the Montana

Supreme Court decision is so stark that the Court may

wish to consider summary reversal.

Reidelbach sought to distinguish this Court’s

preemption precedents by arguing that any emotional

distress damages suffered by a railroad employee

during the FELA claims process are analytically

8

distinct from the on-the-job injury giving rise to the

FELA claim because they are incurred at a later time.

312 Mont. at 507. But that argument ignores the close

relationship between the “two” injuries; the alleged

emotional distress damages would not have arisen but

for the filing of a FELA claim in response to the on-thejob injury. Indeed, under Reidelbach’s later-in-time

rationale, FELA would not cover continuing medical

expenses for treatment of the on-the-job injury when

the treatment is not received until some years after the

employee’s disability retirement.

Review is also warranted because this may be

BNSF’s only opportunity to obtain Supreme Court

review of its preemption claim. The denial of its

petition for a writ of supervisory control is a final

judgment and thus is subject to review under 28 U.S.C.

§ 1257(a). That final judgment explicitly rejected

BNSF’s claim that the complaint should be dismissed

based on federal preemption. If the Court grants

review and reverses the judgment below, the litigation

would come to an end.

On the other hand, if the Court denies review,

BNSF will likely face a substantial default judgment in

the district court. Because that judgment will be based

on a refusal to produce attorney-client privilege and

work-product privilege documents whose

confidentiality BNSF deems critical, the subsequent

appeal to the Montana Supreme Court will likely focus

on the propriety of the district court’s production

orders. Given the unorthodox nature of those orders,

there is a good chance that the Montana Supreme

Court will reverse without ever reaching BNSF’s

federal preemption claim. This Court has deemed

9

certiorari petitions arising under these circumstances

to be particularly fit for review. Cox Broadcasting

Corp. v. Cohn, 420 U.S. 469, 482-83 (1975).

Finally, review is warranted because Montana’s

bad-faith cause of action—which in essence permits

“double dipping” by FELA claimants—is of particular

importance not only to BNSF but to the other railroads

that operate in Montana. It effectively deprives them

of their ability to defend against insubstantial FELA

claims because they fear that an aggressive defense

will be cited in subsequent litigation as evidence of bad

faith.

This Montana-only cause of action also

undermines one of Congress’s major purposes in

adopting FELA: to establish uniform liability

standards governing compensation claims submitted by

injured railroad workers. If Dannels’s state-law cause

of action is not preempted, the compensation claims

submitted by a railroad employee will receive

significantly different treatment depending on whether

his train was traveling through Montana or Idaho at

the time he incurred his injury.

REASONS FOR GRANTING THE PETITION

I.

REVIEW IS WARRANTED BECAUSE THE

DECISION BELOW DIRECTLY CONFLICTS WITH

THIS COURT’S UNDERSTANDING OF FELA’S

PREEMPTIVE SCOPE

The petition raises issues of exceptional

importance. Congress adopted FELA in 1908 to

provide railroad employees a right to recover for workrelated injuries that were the result, in whole or in

part, of their railroad-employer’s negligence. Congress

10

acted in response to concerns that adequate

compensation was unavailable under state law, and

that “the physical dangers of railroading ... resulted in

the death or maiming of thousands of workers every

year.” Consolidated Rail Corp. v. Gottshall, 512 U.S.

532, 542 (1994). The Court has decreed that FELA be

liberally and uniformly construed to ensure that

injured employees in all 50 States receive adequate

compensation.

Now more than a century old, FELA has

achieved its intended purposes. Indeed, Respondent

Dannels benefitted greatly from the statute; he has

never suggested that the $1.7 million FELA judgment

awarded to him by Montana’s courts did not

adequately compensate him for his work-related

injuries.

But while FELA includes a comprehensive

compensation scheme, Congress imposed some finite

limits on the extent of railroad liability. For example,

the federal appeals courts have uniformly held that

FELA does not authorizes punitive-damage awards,

and this Court has determined that it limits awards for

emotional distress damages (no matter how genuine

they may be) and medical monitoring costs.

The comprehensive nature of the federal scheme

demonstrates that Congress has “occupied the field”

and thereby left no room for states to impose their own

regulation of railroad-injury claims. Indeed, this Court

has repeatedly so held. Review is warranted because

the decision below, as well as a long line of Montana

decisions on which the decision relies, directly conflict

with this Court’s FELA preemption decisions.

11

A.

The Court Has Determined that

Congress, When It Adopted FELA,

Intended to Establish an Exclusive

Federal Regime for Railroad Injuries

The Montana Supreme Court does not dispute

that FELA preempts recovery of additional damages

under state law for on-the-job injuries suffered by

railroad employees. Rather, it holds that injuries (such

as emotional distress) caused by a railroad’s bad-faith

handling of a FELA claim are not part of the field over

which Congress sought to establish exclusive federal

control when it adopted FELA. Reidelbach, 312 Mont.

506-07. That holding directly conflicts with this

Court’s FELA case law.

Very soon after FELA’s adoption, a series of

Court decisions established that FELA does, indeed,

“occupy the field” and thereby preempts state-law

claims based on injuries arising from a railroad’s

conduct. Those decisions are still good law and

continue to be followed by courts across the country.

New York Central R.R. Co. v. Winfield, 244 U.S.

147 (1917) [“Winfield”], involved a railroad worker who

sustained an eye injury while employed in interstate

commerce. The employee sought compensation not

under FELA, but under New York State’s workers’

compensation law. The Court held that the state-law

claim was preempted by FELA. Citing congressional

reports accompanying FELA’s adoption, the Court

stated:

[T]he reports ... disclose, without any

uncertainty, that FELA was intended to

12

be very comprehensive, to withdraw all

injuries to railroad employees in

interstate commerce from the operation of

varying state laws, and to apply to them

a national law having a uniform

operation throughout all the states. ...

Thus, in the House Report it is said: “It

[the bill] is intended in its scope to cover

all commerce to which the regulative

power of Congress extends. ... by this bill

it is hoped to fix a uniform rule of liability

throughout the Union with reference to

the liability of common carriers to their

employees. ... A Federal statute of this

character will supplant the numerous

state statutes on the subject so far as

they relate to interstate commerce.”

244 U.S. at 150 (quoting House Report No. 1386, 60th

Cong., 1st Sess.).

The Court held similarly that FELA preempted

a compensation claim filed under New Jersey law,

explaining that “Congress intended [FELA] to be as

comprehensive of those instances in which it excludes

liability as those in which liability is imposed.” Erie

R.R. Co. v. Winfield, 244 U.S. 170, 172 (1917) [“Erie”].

The Court held in New York Central & Hudson River

R.R. Co. v. Tonsellito, 244 U.S. 360 (1917), that FELA

preempts state-law claims filed by relatives of the

injured railroad worker. Holding that a father could

not recover for medical expenses he incurred on behalf

of his minor son and for the loss of his son’s services,

the Court explained that FELA “is comprehensive and

also exclusive in respect of a railroad’s liability for

13

injuries suffered by its employees while engaging in

interstate commerce.” 244 U.S. at 361.4

The Court held in Dice v. Akron, Canton &

Youngstown R.R. Co., 342 U.S. 359 (1952), that FELA

field preemption barred States from expanding or

contracting the defenses otherwise available to

railroads under federal law in a FELA case. It held

that States are not:

permitted to have the final say as to what

defenses could or could not be properly

interposed to suits under the act.

Moreover, only if federal law controls can

the federal Act be given that uniform

application throughout the country

essential to effectuate its purposes.

Dice, 342 U.S. at 361. Reidelbach and the decision

below cannot be squared with Dice. Montana’s badfaith cause of action restricts railroads’ right to defend

4

The Court has also held that another railroad safety law,

adopted contemporaneously with FELA, preempts (under a field

preemption theory) state law covering the same subject matter.

The Boiler Inspection Act (adopted in 1911) and its successor, the

Locomotive Inspection Act (adopted in 1915), prohibit use of a

locomotive unless it meets federal safety standards and has been

certified as such by federal inspectors. 49 U.S.C. § 20701. In

Napier v. Atlantic Coast Line R.R. Co., 272 U.S. 605 (1926), the

Court held that the LIA preempts the field and thus bars state

governments from adopting additional locomotive safety

regulations. In 2012, the Court held in Kurns that LIA fieldpreemption also preempts state-law design-defect and failure-towarn claims against locomotive manufacturers by railroad

workers. 565 U.S. at 637-38.

14

FELA actions vigorously (by, for example, requiring the

employer in many instances to advance lost wages and

medical expenses while the issue of FELA liability is

still being contested). Dice held that such state-law

rules are field preempted; Reidelbach held that they

are not.

Reidelbach stated that field preemption is

inapplicable because injuries caused by a railroad’s

bad-faith handling of a FELA claim are not part of any

preempted field—they are distinct from the on-the-job

injuries that gave rise to the initial FELA claim and

often occur after the claimant’s railroad employment

has ceased. 312 Mont. at 506-07. But that rationale

cannot be reconciled with Winfield, Erie, Tonsellito,

and Dice, which held that Congress intended FELA “to

be very comprehensive” and “to withdraw all injuries

to railroad employees in interstate commerce from the

operation of varying state laws.” Winfield, 244 U.S. at

150. Indeed, Reidelbach suggests that the preempted

field is very small indeed. Its logic seems to exclude,

for example, any medical bills incurred by a former

employee in the years following his disability

retirement, even when the bills are for treatment of the

lingering effects of his on-the-job injury.

Winfield, Erie, Tonsellito, and Dice continue to

be cited on a regular basis by other courts for the

proposition that FELA provides the exclusive remedy

for injured railroad workers engaged in interstate

commerce. Those courts include the Ninth Circuit and

the U.S. District Court for the District of Montana.

See, e.g., Wildman v. Burlington Northern R.R. Co., 825

F.2d 1392, 1395 (9th Cir. 1987); Stiffarm v. Burlington

Northern R.R. Co., 81 F.3d 170, 1996 WL 146687 at *2

15

(9th Cir.), cert. denied, 519 U.S. 823 (1996); Giard v.

Burlington Northern Santa Fe Ry. Co., 2014 WL 37687

at *8 (D. Mont., Jan. 6, 2014). The conflicts between

those decisions and Reidelbach mean that injured

Montana railroad workers will be subject to conflicting

preemption rules depending on whether their bad-faith

claims are heard in federal court or state court.5

The Ninth Circuit has concluded that field

preemption applies even if the damages sought by the

railroad employee under state law are not available

under FELA. See, e.g., Wildman, 825 F.2d at 1395

(employee’s state-law claims for punitive damages are

preempted even though punitive damages are

unavailable in a FELA action); Stiffarm, 1996 WL

146687, at *2 (employee’s state-law claims for

intentional infliction of emotional distress are

preempted even though such damages might not be

available in a FELA action).6 In direct conflict with the

5

For obvious reasons, plaintiffs’ lawyers prefer to have

their bad-faith claims heard in state court. To prevent removal of

those claims to federal court under diversity jurisdiction, lawyers

always include a Montana citizen as an additional defendant. A

desire to prevent removal fully explains Dannels decision to name

Nancy Ahern as a defendant alongside BNSF. Dannels recently

told the district court that he has no interest in pursuing damages

claims against Ahern.

6

This Court has interpreted FELA as limiting railroad

workers’ rights to recover for emotional distress suffered on the

job. An employee who has suffered emotional injuries but no

physical injuries is not entitled to recover for those injuries unless

they were sustained at a time when the railroad’s conduct placed

him in immediate risk of physical harm. Gottshall, 512 U.S. at

554-555. The Court explained that a rule authorizing broader

recovery of emotional distress damages could “lead to

16

Ninth Circuit, Reidelbach held that claims for

emotional distress caused by a railroad’s bad-faith

defense of a FELA proceeding (and associated claims

for punitive damages) are not preempted, in large

measure because such damages are not recoverable in

a FELA lawsuit. 312 Mont. at 515 (stating that “given

the humanitarian purpose of the FELA, we find it

inconceivable ... that Congress intended the FELA to

cover only certain railroad worker injuries while

absolutely precluding any remedy for others”).

B.

The Decision Below Conflicts with

This Court’s Decisions Recognizing

Congressional Intent to Create

Uniform Liability Standards

The Montana Supreme Court’s rejection of

conflict preemption also merits review. This Court has

repeatedly stated that one of Congress’s major

objectives in adopting FELA was to create uniform

liability standards governing compensation claims

submitted by injured railroad workers. Under wellaccepted conflict-preemption principles, state law is

preempted to the extent that it interferes with the

unpredictable and nearly infinite liability for defendants.” Id. at

552. The Court’s limitation on recovery as a matter of federal law

was “based upon the recognized possibility of genuine claims from

the essentially infinite number of persons, in an infinite variety of

situations, who might suffer real emotional harm as a result of

negligent conduct.” Id. (emphasis in original). Nor may an

asymptomatic worker who has been exposed to carcinogens such

as asbestos recover for his very real emotional distress damages,

nor may he recover the costs of medical monitoring designed to

detect cancer. Metro-North Commuter R.R. Co. v. Buckley, 521

U.S. 424 (1997).

17

maintenance of uniform liability standards. See, e.g.,

Arizona v. United States, 567 U.S. 387, 399 (2012)

(conflict preemption applies whenever “the challenged

state law stands as an obstacle to the accomplishment

and execution of the full purposes and objectives of

Congress”). Montana’s unique bad-faith cause of action

eliminates that uniformity and thereby runs afoul of

this Court’s FELA preemption case law.

In sharp contrast with that case law, Reidelbach

expressly rejected the defendant’s contention that

conflict-preemption principles barred recognition of

Montana’s cause of action against railroads alleged to

have acted in bad faith in handling a FELA claim. 312

Mont. at 507-16. Review is warranted to resolve that

additional conflict.

Congress’s uniform-liability-standards objective

has been recognized repeatedly by both this Court and

other federal and state courts. See, e.g., Erie, 244 U.S.

at 172 (FELA “establishes a rule or regulation which is

intended to operate uniformly in all the states”);

Winfield, 244 U.S. at 150 (“A federal statute of this

character ... will create uniformity throughout the

Union, and the legal status of such employer’s liability

for personal injuries, instead of being subject to

numerous rules, will be fixed by one rule in all the

states.”); Dice, 342 U.S. at 361 (“[O]nly if federal law

controls [defenses available to a FELA defendant] can

the federal Act be given that uniform application

throughout the country essential to effectuate its

purposes.”); Counts v. Burlington Northern R.R. Co,

896 F.2d 424, 425 (9th Cir. 1990) (“[U]niform

application [of FELA] throughout the country [is]

essential to effectuate its purposes.”); Toscano v.

18

Burlington Northern R.R. Co, 678 F. Supp. 1477, 1479

(D. Mont. 1987) (“The desire for uniformity which

prompted Congress to enact the FELA precludes

Toscano from imposing liability upon the Burlington

Northern for actions relating to an FELA claim, when

the liability is predicated upon a duty having a genesis

in state law.”).

Such

non-uniformity

is

particularly

unwarranted when one considers that railroad

employees often work in more than one State. An

engineer might, for example, drive a locomotive from

Minnesota to Washington State, passing through three

other States in the process. If the engineer is injured

during the course of his trip, due-process limitations on

personal jurisdiction mean that a lawsuit seeking

compensation for damages arising out of that injury

will likely need to be filed in the State in which the

injury occurred. See Tyrrell, 137 S. Ct. at 1559-60. If

the Montana Supreme Court’s anti-preemption holding

is correct, then the engineer’s compensation claims will

be on far stronger footing if his injury occurs while the

train is traveling through Montana than when the

train later reaches Idaho. Basing liability standards on

the happenstance of where a fast-moving train happens

to be located at the precise moment of injury (even

assuming that a “precise moment” can be determined)

stands as a significant obstacle to accomplishment of

Congress’s goal of creating a uniform liability standard

throughout the Nation governing FELA compensation

claims.

19

II.

U NLESS R EVIEW I S G RANTED N OW ,

PETITIONERS MAY BE DEPRIVED OF ANY

OPPORTUNITY TO RAISE THEIR PREEMPTION

CLAIM

The Montana Supreme Court’s denial of the

December 2018 petition for a writ of supervisory

control is a final judgment and thus subject to review

by this Court under 28 U.S.C. § 1257(a). Bandini

Petroleum Co. v. Superior Court, 284 U.S. 8, 14 (1931).

The issue pressed here—Petitioners’ contention that

federal preemption principles require dismissal of

Respondent Dannels’s state-law bad-faith claim—was

squarely rejected by the Montana Supreme Court. And

while it is theoretically possible that Petitioners could

again bring the issue before this Court following posttrial appeals even if the Petition is denied, all relevant

considerations support granting review now.

Cox Broadcasting Corp. v. Cohn, 420 U.S. 469,

477 (1975), outlined four scenarios under which the

Court deems it appropriate to grant certiorari petitions

in cases “in which the highest court of a State has

finally determined the federal issue present in a

particular case, but in which there are further

proceedings in the lower state courts to come.” Cox

explained that in “most, if not all, of the cases in these

[four] categories ... immediate rather than delayed

review would be the best way to avoid ‘the mischief of

economic waste and of delayed justice.’” Id. at 477-78

(quoting Radio Station WOW, Inc. v. Johnson, 326 U.S.

120, 124 (1945)).

Most pertinent here is the fourth of the four

scenarios described by Cox:

20

[T]here are those situations where the

federal issue has been finally decided in

the state courts with further proceedings

pending in which the party seeking

review here might prevail on the merits

on nonfederal grounds, thus rendering

unnecessary review of the federal issue by

this Court, and where reversal of the

state court on the federal issue would be

preclusive of any further litigation on the

relevant cause of action rather than

merely controlling the nature and

character of, or determining the

admissibility of evidence in, the state

proceedings still to come.

In these

circumstances, if a refusal immediately to

review the state court decision might

seriously erode federal policy, the Court

has entertained and decided the federal

issue, which itself has been finally

determined by the state courts for

purposes of the state litigation.

Cox, 420 U.S. at 482-83.

The fourth Cox scenario fits this case precisely.

First, reversal of the Montana Supreme Court on the

federal preemption issue will be “preclusive of any

further litigation” on Dannels’s state-law bad-faith

claim. Petitioners assert that the cause of action is

entirely preempted.

Moreover, if review is denied, Petitioners face

serious obstacles to bringing the federal issue back to

this Court after completion of post-trial appeals. The

21

district court has already entered a default judgment

against BNSF on the issues of liability and causation,

and the threat of a default judgment on compensatory

and punitive damages looms unless BNSF accedes to

the trial judge’s demands that it produce documents

that, BNSF asserts, contain highly confidential

attorney-client privilege and work-product privilege

information. Thus, any post-judgment appeal to the

Montana Supreme Court is likely to focus primarily on

the propriety (under state law) of the trial court’s

sanctions orders. And in light of the highly unorthodox

nature of those orders—among other things, the trial

judge ordered production of documents that Dannels

never demanded and did so without providing BNSF

an opportunity to argue why production was

inappropriate—there is a significant possibility that

the Montana Supreme Court could overturn a proplaintiff judgment without ever addressing the federal

preemption issue.7

An even more serious obstacle facing BNSF, its

General Counsel, and its outside attorneys is the

threat of huge contempt-of-court-sanctions. Dannels

filed a motion asking that BNSF be fined $25,000 per

day until it produces all contested documents, and on

March 30 the district granted granted Dannels’s

request for a hearing and issued an order to BNSF’s

outside counsel and its General Counsel to show cause

why they should not be held in contempt of court for

7

There is also a very significant possibility that BNSF

would prevail at any trial on liability and damages issues. Indeed,

it is not immediately apparent how Dannels was injured by

BSNF’s response to his FELA claim, given that BNSF fully

satisfied his $1.7 million FELA judgment.

22

failing to produce those documents. If this Court

denies the Petition, BNSF may conclude that the

prospect of ever-mounting contempt fines, possibly

exceeding $10 million, makes settlement of this

litigation its only realistic alternative. A settlement

would, of course, prevent the federal preemption issue

from returning to the Court.

For all the reasons outlined above, failure to

review the issue now “might seriously erode public

policy.” Cox, 420 U.S. at 469. Congress enacted FELA

in large measure to ensure adoption of a railroad-injury

liability standard that applies uniformly throughout

the Nation. The Montana courts are undercutting that

congressional policy by limiting the defenses available

to railroads when contesting FELA claims filed by their

employees.

The theoretical possibility that the Montana

Supreme Court might decide on its own to overrule its

Reidelbach decision is not grounds to deny BNSF’s

petition.

The Montana Supreme Court decided

Reidelbach nearly 20 years ago and has stood by the

decision ever since. As a result, Montana FELA

claimants routinely file a second lawsuit accusing their

employers of bad faith in handling their FELA claims.

In connection with this lawsuit, BNSF has twice asked

the Montana Supreme Court to overrule Reidelbach

and has been rebuffed on both occasions. There is no

reason to think that the third time will be the charm.

If the Montana Supreme Court were seriously thinking

about overruling its longstanding precedent (and it has

given no indication that it is), it has had more than

sufficient opportunity to do so before now.

23

Finally, granting the Petition will “avoid the

mischief of economic waste and of delayed justice.”

Cox, 420 U.S. at 478. Dannels’s bad-faith lawsuit has

been pending in Montana’s courts for five years; it has

proven to be extremely expensive and time-consuming

for all concerned. Delaying review will not allow for

further “percolation” of the issue; all of the relevant

courts (the Montana Supreme Court, the Ninth Circuit,

and the U.S. District Court for the District of Montana)

have already weighed in on whether state-law badfaith claims are preempted by federal law. The

preemption issue is unlikely to arise elsewhere because

no other State has emulated Montana law. Granting

the Petition will resolve a long-standing conflict and

may well bring this lawsuit to an end.

III.

T HE Q UESTION P RESENTED I S V ERY

IMPORTANT TO THE E NTIRE R AILROAD

INDUSTRY

Review is also warranted because Montana’s

bad-faith cause of action is of particular importance not

only to BNSF but to the entire railroad

industry—particularly to railroads that operate in

Montana.8 Montana’s cause of action in essence

permits “double dipping” by FELA claimants. They can

sue their employers for work-related injuries and then

sue again alleging bad faith if the employers do not

concede the validity of their claims.

Particularly

8

problematic

is

Montana’s

Among the other large railroads that operate in Montana

is Union Pacific Corp.

24

requirement that FELA employers advance the

plaintiff’s wages and medical expenses during the

pendency of suit once the employer’s FELA liability

becomes “reasonably clear.” That vague standard can

and does create havoc for employers. An employer may

think that liability is not “reasonably clear,” but it can

have no assurance that a state-court jury will agree.

The result is that employers’ ability to defend

against FELA claims in Montana is significantly

impaired.

The absence of statutory limits on

compensation and FELA’s extremely relaxed causation

standard mean that, in general, the compensation

available to railroad employees under FELA is more

generous than the compensation available to employees

whose claims are governed by state workercompensation statutes. But FELA is not a no-fault

statute; it authorizes railroads to avoid liability by

demonstrating that the employee’s injury was not a

result of its negligence. Yet railroads in Montana are

routinely sued for bad-faith conduct when they argue,

when defending a FELA claim, that they did not act

negligently.

As the Petition explains (at 29-31), the

understandable fear of bad-faith lawsuits forces

railroads to settle even insubstantial FELA claims.

And as this lawsuit demonstrates, claims that a

railroad repeatedly handles FELA lawsuits in bad faith

(and thus should be liable for punitive damages) can

results in discovery orders that threaten to expose vast

quantities of confidential documents—including

documents that bear no relation to operations in

Montana. Review is warranted to determine whether

Congress has authorized state-law litigation practices

25

that so seriously undermine employers’ statutorily

authorized FELA defenses.

CONCLUSION

The Court should grant the Petition.

Respectfully submitted,

Richard A. Samp

(Counsel of Record)

Cory L. Andrews

Washington Legal

Foundation

2009 Mass. Ave., NW

Washington, DC 20036

(202) 588-0302

rsamp@wlf.org

Dated: April 25, 2019