Boyd v. BNSF Ry. Co., A14–0277.

• Decision Date: 27 January 2016
• Docket Number: No. A14–0277.,A14–0277.
• Citation: 874 N.W.2d 234
• Parties: Terry BOYD, Respondent, v. BNSF RAILWAY COMPANY, Appellant.
• Court: Minnesota Supreme Court

874 N.W.2d 234

Terry BOYD, Respondent,

v.BNSF RAILWAY COMPANY, Appellant.

No. A14–0277.

Supreme Court of Minnesota.

Jan. 27, 2016.

Christopher J. Moreland, Bremseth Law Firm, P.C., Minnetonka, MN, for respondent.

Timothy R. Thornton, Jonathan P. Schmidt, Leah Ceee O. Boomsma, Briggs and Morgan, P.A., Minneapolis, MN; and Timothy K. Masterson, R. John Wells, Sweeney & Masterson, P.A., Saint Paul, MN, for appellant.

OPINION

WRIGHT, Justice.

This appeal arises from Terry Boyd's lawsuit against his former employer, BNSF Railway Company (BNSF), under the Federal Employers' Liability Act (FELA), 45 U.S.C. §§ 51 –60 (2012), for injuries incurred on the job. Following a jury verdict and award against BNSF, the Hennepin County District Court ordered appellant BNSF to pay "double costs" to respondent Terry Boyd pursuant to Minn. R. Civ. P. 68.03(b)(2). Rule 68.03(b)(2) permits a plaintiff to recover additional costs and disbursements incurred after an offer is rejected by a defendant and the relief awarded is less favorable to the defendant than the rejected offer. BNSF appealed, and the court of appeals affirmed the double-costs award. We granted BNSF's petition for review to consider whether FELA preempts the application of Rule 68.03(b)(2) in a state court FELA action. We conclude that because double costs are substantive, rather than procedural, and are not authorized by federal law, FELA preempts the application of Rule 68.03(b)(2) in this state court action. We, therefore, reverse the decision of the court of appeals and remand to the district court for entry of an amended judgment consistent with this opinion.

I.

FELA was enacted in 1908 to create national uniformity in personal injury actions brought by railroad employees against their employers, Norfolk & W. Ry. v. Liepelt, 444 U.S. 490, 493 n. 5, 100 S.Ct. 755, 62 L.Ed.2d 689 (1980) (citing H.R.Rep. No. 1386, 60th Cong., 1st Sess., at 3 (1908)); N.Y. Cent. R.R. v. Winfield, 244 U.S. 147, 149–50, 37 S.Ct. 546, 61 L.Ed. 1045 (1917), and to ensure that railroad workers can recover for their employers' negligence, see Wilkerson v. McCarthy, 336 U.S. 53, 68 & n. 1, 69 S.Ct. 413, 93 L.Ed. 497 (1949) (Douglas, J., concurring) (citing H.R.Rep. No. 1386, at 2). State and federal courts share concurrent jurisdiction over FELA actions. 45 U.S.C. § 56.

After being injured in the course of his employment, Boyd filed a complaint against BNSF in Hennepin County District Court, alleging violations of FELA and other federal laws. Boyd later made a $275,000 settlement offer. BNSF rejected the offer, and the matter proceeded to trial. A jury awarded Boyd $610,954.61 in damages on his FELA claim, which the district court later reduced to $411,954.98. Boyd then sought costs and disbursements pursuant to Minn. R. Civ. P. 54.04(b) and requested "double costs" pursuant to Minn. R. Civ. P. 68.03(b)(2), which provides for an additional payment equal to the costs and disbursements incurred after the date of a rejected settlement offer. See Minn. R. Civ. P. 68.03(b)(2) ("[T]he defendant-offeree must pay, in addition to the costs and disbursements to which the plaintiff-offeror is entitled under Rule 54.04, an amount equal to the plaintiff-offeror's costs and disbursements incurred after service of the offer."). BNSF objected to the request for double costs under Rule 68.03(b)(2), arguing that double costs are a form of damages preempted by FELA. Following a hearing, the district court administrator taxed BNSF $152,537.16 in costs and disbursements, including $62,584.48 in double costs.

BNSF sought review by the district court, arguing that an award of double costs under Rule 68.03(b)(2) is preempted by FELA. See Minn. R. Civ. P. 54.04(e) (providing that a party may appeal to the district court an order awarding costs and disbursements). The district court disagreed. Citing Monessen Southwestern Railway v. Morgan, 486 U.S. 330, 108 S.Ct. 1837, 100 L.Ed.2d 349 (1988), which holds that FELA preempts state substantive law—but not state procedural law—in a state court FELA action, the district court compared double costs to the state prejudgment interest rule at issue in Monessen. Unlike prejudgment interest, the district court concluded, Rule 68.03(b)(2) double costs are not a form of damages and, therefore, the rule is procedural.

A divided panel of the court of appeals affirmed the district court's order taxing double costs. Boyd v. BNSF Ry., 858 N.W.2d 797 (Minn.App.2014). Relying on a different analysis than the district court, the court of appeals majority expressly declined to apply the substantive-procedural test of FELA precedent. Id. at 803 ("[P]reemption does not hinge upon whether rule 68.03 is characterized as ‘substantive’ or ‘procedural.’ "). Rather, the court of appeals relied on a field preemption test derived from Felder v. Casey, 487 U.S. 131, 108 S.Ct. 2302, 101 L.Ed.2d 123 (1988). Concluding that Rule 68.03(b)(2)"does not burden the federal right created by FELA, or affect the ‘ultimate disposition’ of FELA claims" under the test articulated in Felder, the court of appeals held that Rule 68.03(b)(2)"can be applied to FELA claims adjudicated in state court." 858 N.W.2d at 810.¹ We granted BNSF's petition for review.

II.

Whether FELA preempts Minn. R. Civ. P. 68.03(b)(2) presents a question of law, which we review de novo. Kinworthy v. Soo Line R.R., 860 N.W.2d 355, 356 (Minn.2015) (citing Monessen, 486 U.S. at 335, 108 S.Ct. 1837 ).

As a threshold matter, we must decide whether the court of appeals employed the proper preemption test when determining that Rule 68.03(b)(2)'s double-costs provision applies to Boyd's FELA claim. There are three ways that a federal statute can preempt state law—express preemption, conflict preemption, or implied field preemption. Arizona v. United States, ––– U.S. ––––, 132 S.Ct. 2492, 2500–01, 183 L.Ed.2d 351 (2012) ; Martin ex rel. Hoff v. City of Rochester, 642 N.W.2d 1, 10–11 (Minn.2002). Field preemption is implied when congressional legislation has so fully occupied the field of an area of law that there is no room for state regulation. Arizona, ––– U.S. at ––––, 132 S.Ct. at 2501 ; Martin, 642 N.W.2d at 11. More than 100 years ago, the United States Supreme Court held that FELA occupies the field of railroad employees' personal injury claims against their employers in interstate commerce. See Mich. Cent. R.R. v. Vreeland, 227 U.S. 59, 66, 33 S.Ct. 192, 57 L.Ed. 417 (1913) ("By this act Congress has undertaken to cover the subject of the liability of railroad companies to their employees injured while engaged in interstate commerce. This exertion of [the commerce] power which is granted in express terms must supersede all legislation over the same subject by the states."); see also Winfield, 244 U.S. at 151, 37 S.Ct. 546 ("That [FELA] is comprehensive and also exclusive is distinctly recognized in repeated decisions of this court."). However, because state courts have concurrent jurisdiction over FELA claims, FELA preempts state substantive law—but not state procedural law—in state court FELA actions. See Mondou v. N.Y., New Haven & Hartford R.R., 223 U.S. 1, 56–57, 32 S.Ct. 169, 56 L.Ed. 327 (1912) (holding that litigants may enforce FELA in state courts as a matter of right but also observing that state courts are free to apply their own "modes of procedure" to FELA cases); see also Brown v. W. Ry. of Ala., 338 U.S. 294, 296, 70 S.Ct. 105, 94 L.Ed. 100 (1949) ("[W]hile state courts are without power to detract from ‘substantive rights' granted by Congress in FELA cases, they are free to follow their own rules of ‘practice’ and ‘procedure.’ "); Cent. Vt. Ry. v. White, 238 U.S. 507, 511–12, 35 S.Ct. 865, 59 L.Ed. 1433 (1915) ("As long as the question involves a mere matter of procedure ... the state court can ... follow [its] own practice...."); Kinworthy, 860 N.W.2d at 357 ("When a plaintiff chooses to bring a FELA claim in state court ... federal law governs all substantive matters, but procedural matters are subject to state procedural rules.").

The United States Supreme Court refined the substantive-procedural test into a two-step analysis in Monessen.² The first step in the Monessen analysis is to determine whether the state law is substantive or procedural. See 486 U.S. at 335, 108 S.Ct. 1837. If the state law is substantive, the second step of the Monessen analysis is to determine whether federal law authorizes application of the state law in a FELA case. See id. at 336–39, 108 S.Ct. 1837.

When presented with BNSF's preemption arguments, the court of appeals expressly declined to rely on the substantive-procedural test of FELA precedent. Boyd, 858 N.W.2d at 803 ("Contrary to the arguments of the parties, preemption does not hinge upon whether rule 68.03 is characterized as ‘substantive’ or ‘procedural.’ Simply looking at rule 68.03 in a vacuum and choosing whether its operation looks more like ‘substance’ or ‘procedure’ would do nothing to aid our preemption analysis."). Rather, the court of appeals commenced its preemption analysis by considering each federal preemption doctrine in turn. Id. at 802–03. After finding no express or implied preemption, the court of appeals turned to a field preemption analysis, relying on Felder v. Casey, 487 U.S. 131, 108 S.Ct. 2302, 101 L.Ed.2d 123 (1988), a case decided under 42 U.S.C. § 1983 (2012). Boyd, 858 N.W.2d at 804.³

The court of appeals erred by applying the Felder preemption analysis. Because the United States Supreme Court has consistently held that FELA preempts state substantive law, but not state procedural law, the Felder preemption analysis does not apply. See, e.g., Brown, 338 U.S. at 296, 70 S.Ct. 105 ; New Orleans & Ne. R.R. v. Harris, 247 U.S. 367, 372, 38 S.Ct. 535, 62 L.Ed. 1167 (1918) (stating that in a FELA case, "the question of burden of proof is a matter of substance and not subject to control by laws of the several states").⁴ The Monessen substantive-procedural analysis, not the...