BNSF Ry. Co. v. Seats Inc.

• Decision Date: 05 May 2015
• Docket Number: No. 1 CA–CV 14–0002.,1 CA–CV 14–0002.
• Citation: 712 Ariz. Adv. Rep. 9,237 Ariz. 259,349 P.3d 1096
• Parties: BNSF RAILWAY COMPANY, a Delaware corporation authorized to do business in Arizona, Cross–Claimant/Appellant, v. SEATS INCORPORATED, a Wisconsin corporation, Cross–Defendant/Appellee.
• Court: Arizona Court of Appeals

237 Ariz. 259

349 P.3d 1096

712 Ariz. Adv. Rep. 9

BNSF RAILWAY COMPANY, a Delaware corporation authorized to do business in Arizona, Cross–Claimant/Appellant

v.SEATS INCORPORATED, a Wisconsin corporation, Cross–Defendant/Appellee.

No. 1 CA–CV 14–0002.

Court of Appeals of Arizona, Division 1.

May 5, 2015.

Thorpe Shwer, PC By William L. Thorpe, Bradley D. Shwer, Kristin Paiva, Phoenix, Counsel for Appellant.

Bowman and Brooke, LLP By Curtis J. Busby, Amanda E. Heitz, Phoenix, Counsel for Appellee.

Vorys Sater Seymour and Pease, LLP By J. Scott Jamieson, Columbus, OH, Co–Counsel for Appellee.

Presiding Judge KENT E. CATTANI delivered the opinion of the Court, in which Judge LAWRENCE F. WINTHROP and Judge PETER B. SWANN joined.

OPINION

CATTANI, Judge:

¶ 1 This appeal addresses whether the Locomotive Inspection Act (“LIA”), 49 U.S.C. § 20701 et seq., preempts a state-law claim by a railway company alleging that a seat manufacturer failed to comply with the federal standard of care for manufacturing and installing locomotive seats. We conclude that although LIA establishes uniform federal safety regulations and preempts claims premised on a state-specific standard of care, it does not preempt claims based on the federal standard. Accordingly, we vacate the order of dismissal in this case and remand for further proceedings consistent with this decision.

FACTS AND PROCEDURAL BACKGROUND

¶ 2 Jeffery McKinney, a train conductor employed by BNSF Railway Company (“BNSF”), filed a complaint under the Federal Employers' Liability Act (“FELA”) alleging, among other claims, that he sustained injuries due to an unsafe seat on a BNSF locomotive. McKinney's claims against BNSF are based on a LIA violation. McKinney amended the complaint to join Seats Inc. (“Seats”), the manufacturer of the allegedly defective seat, as a defendant, asserting claims for products liability and negligence per se. BNSF subsequently filed cross-claims against Seats for indemnification and contribution, if McKinney were to recover from BNSF.

¶ 3 Seats moved to dismiss McKinney's complaint and BNSF's cross-claims under Arizona Rule of Civil Procedure 12(b)(6) on the basis that the claims were preempted by federal law. After briefing and argument, the superior court granted Seats' motion, holding that LIA preempts the claims at issue.

¶ 4 The superior court certified the judgment for Seats as final under Arizona Rule of Civil Procedure 54(b), and BNSF timely appealed. We have jurisdiction under Article 6, Section 9, of the Arizona Constitution and Arizona Revised Statutes (“A.R.S.”) §§ 12–120.21(A)(1) and –2101(A)(1).¹

DISCUSSION

¶ 5 BNSF contends that the superior court erred by dismissing its indemnification and contribution claims, arguing that these state-law claims are not preempted by LIA because they are premised on a federal standard of care rather than a state-specific standard. We agree.

I. Standard of Review.

¶ 6 Dismissal is appropriate under Rule 12(b)(6) only if “as a matter of law [the] plaintiff[ ] would not be entitled to relief under any interpretation of the facts susceptible of proof.” Fid. Sec. Life Ins. Co. v. State Dep't of Ins., 191 Ariz. 222, 224, ¶ 4, 954 P.2d 580, 582 (1998). We review dismissal under Rule 12(b)(6) de novo. Coleman v. City of Mesa, 230 Ariz. 352, 356, ¶ 8, 284 P.3d 863, 867 (2012).

II. Preemption of BNSF's Indemnification and Contribution Claims.

¶ 7 Whether BNSF may assert claims for indemnification and contribution against Seats turns on whether LIA preempts all state-law claims or only those based on state- specific (rather than the federally promulgated) standards of care.

A. Statutory and Regulatory Background.

¶ 8 LIA provides that “a locomotive ... and its parts and appurtenances” must be “in proper condition and safe to operate without unnecessary danger of personal injury.” 49 U.S.C. § 20701(1). Under LIA, the Federal Railroad Administration has promulgated regulations on the governing standards of care, including a requirement that locomotive seats “be securely mounted and braced.” 49 C.F.R. § 229.119(a). LIA's safety standard applies both to railroad carriers and to manufacturers providing locomotive components. See Kurns v. R.R. Friction Prods. Corp., –––U.S. ––––, 132 S.Ct. 1261, 1268–69, ––– L.Ed.2d –––– (2012).

¶ 9 LIA does not provide a private right of action to employees injured by defective locomotive equipment. Urie v. Thompson, 337 U.S. 163, 188, 69 S.Ct. 1018, 93 L.Ed. 1282 (1949). Instead, an injured employee may bring a FELA claim against the railroad alleging a LIA violation, proof of which establishes the railroad's negligence as a matter of law. See 45 U.S.C. §§ 51, 56 (establishing right of action for employee to recover damages caused by railroad's negligence); Urie, 337 U.S. at 189, 69 S.Ct. 1018 (stating that LIA violation constitutes negligence per se for purposes of employee's FELA claim against railroad). Accordingly, LIA, in conjunction with FELA, “impos [es] on interstate railroads an absolute and continuing duty to provide safe equipment” and has the “purpose and effect of facilitating employee recover [y].” Urie, 337 U.S. at 188–89, 69 S.Ct. 1018 (citations and internal quotation marks omitted).

B. Preemptive Effect of LIA.

¶ 10 Under the Supremacy Clause of the United States Constitution, federal law “shall be the supreme Law of the Land ... any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.”U.S. Const. art. VI, cl. 2. Although the Supremacy Clause grants Congress authority to preempt state law, federal enactments are presumed not to override the states' traditional police powers unless Congress clearly manifests an intent to do so. Cipollone v. Liggett Grp., Inc., 505 U.S. 504, 516, 112 S.Ct. 2608, 120 L.Ed.2d 407 (1992). Even where a statute does not expressly provide for preemption, “a federal statute implicitly overrides state law either when the scope of a statute indicates that Congress intended federal law to occupy a field exclusively or when state law is in actual conflict with federal law.” Freightliner Corp. v. Myrick, 514 U.S. 280, 287, 115 S.Ct. 1483, 131 L.Ed.2d 385 (1995). The preemptive effect of LIA falls into the former category, known as “field preemption.” See Kurns, 132 S.Ct. at 1266 ; see also Del. & Hudson Ry. Co. v. Knoedler Mfrs., Inc. (“Knoedler ”), 781 F.3d 656, 661 (3d Cir.2015).

¶ 11 Two United States Supreme Court cases have addressed field preemption under LIA. In Napier v. Atlantic Coast Line Railroad Co., the Court considered challenges to a Georgia statute requiring that locomotive fireboxes be equipped with an automatic door, and to a Wisconsin statute requiring locomotives to have cab curtains. 272 U.S. 605, 607, 47 S.Ct. 207, 71 L.Ed. 432 (1926). The Court found that LIA was “intended to occupy the field” pertaining to “the design, the construction, and the material of every part of the locomotive and tender and of all appurtenances.” Id. at 611, 613, 47 S.Ct. 207. Under LIA, only the federal agency tasked with implementing LIA could “set[ ] the standard” for a locomotive's proper operating condition, and any “requirements by the states are precluded, however commendable or however different their purpose.” Id. at 612–13, 47 S.Ct. 207.

¶ 12 In Kurns, the Court rejected as preempted state common-law design defect and failure-to-warn claims against the manufacturer of locomotive equipment containing asbestos. 132 S.Ct. at 1264, 1269–70. Although the claims in Kurns were based on state common-law duties rather than on state legislation, the Court concluded that “state commonlaw duties and standards of care directed to the subject of locomotive equipment are pre-empted by LIA.” Id. at 1269–70.

¶ 13 In the instant case, the superior court concluded that, under Kurns and Napier, LIA preempted BNSF's state-law cross-claims for indemnification and contribution premised on an allegedly defective piece of locomotive equipment. But here, unlike in Kurns and Napier, the claims at issue do not rely on a state-specific standard of care, but rather on standards prescribed under LIA itself. Thus, the concerns underlying preemption (primarily the need for national uniformity) are not implicated. See Knoedler, 781 F.3d at 666 (“Preemption allows railroad carriers to abide by a single set of national equipment regulations, instead of having to meet different standards and, potentially, to change equipment when a train crosses state lines.”).

¶ 14 We find persuasive the analysis in Knoedler, in which the Third Circuit concluded that LIA did not preempt a railway company's state-law contribution and indemnification claims—similar to those at issue here—against a locomotive seat manufacturer because the claims were premised on LIA's standards of care. The Third Circuit rejected the argument that Kurns and Napier mandate preemption of all state claims regarding the design and manufacture of locomotive equipment:

[T]hose decisions did not speak so broadly. They were explicit in holding, and only holding, that a state may not impose its own duties and standards of care on the manufacture and maintenance of locomotive equipment. See Kurns, 132 S.Ct. at 1269 (“We therefore conclude that state common-law duties and standards of care directed to the subject of locomotive equipment are pre-empted by LIA.”); Napier, 272 U.S. at 613, 47 S.Ct. 207 (“[R]equirements by the states [regarding locomotive equipment] are precluded, however commendable or however different their purpose.”). The question left unanswered by Napier and Kurns is whether LIA preempts a state claim that is premised on a violation of the duties and standards of care stemming from LIA itself; in other words, whether a state claim based on a federal standard of care is preempted. We conclude that it is not.

781 F.3d at 662.

¶ 15 The Third Circuit noted that “[w]hile there is no Supreme Court authority exactly on point, there are plenty of strong hints that such an avenue to relief is not...