Chapman v. Lab One

• Decision Date: 30 November 2004
• Docket Number: No. 03-2269.,No. 03-2105.,03-2105.,03-2269.
• Citation: 390 F.3d 620
• Parties: Michael CHAPMAN; Terri Lynn Chapman, Appellants, v. LAB ONE, a Missouri Corporation; Lab One, Inc., a Delaware Corporation, Appellees. Daniel Howell, Appellant, v. Lab One, Inc., a Missouri Corporation; Lab One, Inc., a Delaware Corporation; Union Pacific Railroad Company, a Delaware Corporation, Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 620

390 F.3d 620

Michael CHAPMAN; Terri Lynn Chapman, Appellants, v. LAB ONE, a Missouri Corporation; Lab One, Inc., a Delaware Corporation, Appellees.

Daniel Howell, Appellant, v. Lab One, Inc., a Missouri Corporation; Lab One, Inc., a Delaware Corporation; Union Pacific Railroad Company, a Delaware Corporation, Appellees.

No. 03-2105.

No. 03-2269.

United States Court of Appeals, Eighth Circuit.

Submitted: February 13, 2004.

Filed: November 30, 2004.

Rehearing and Rehearing En Banc Denied January 28, 2005.

Richard J. Dinsmore, argued, Omaha, NE, for appellant.

Delores Faye Caldwell, argued, Houston, TX (Thomas J. Mortati, Albany, NY, on the brief), for Lab One, Inc.

Clifford A. Godnier, St. Louis, MO, for Union Pacific R. Co.

Before MELLOY, McMILLIAN, and COLLOTON, Circuit Judges.

COLLOTON, Circuit Judge.

Michael and Terri Lynn Chapman and Daniel Howell brought actions in state court alleging various state common-law causes of action against LabOne, Inc. ("LabOne") and Union Pacific Railroad Company ("Union Pacific"). The defendants removed the actions to federal district courts in Iowa and Nebraska, respectively. The district court in Iowa dismissed the Chapman case on the ground that the common-law claims were preempted by the Federal Railroad Safety Act ("FRSA"), as amended by the Federal Omnibus Transportation Employee Testing Act of 1991 ("FOTETA"), and the Railway Labor Act ("RLA"). The district court in Nebraska ruled that removal of the Howell case was proper based on the doctrine of "complete preemption" under the FRSA and the FOTETA, and then dismissed the case on the ground that the FOTETA provided no private right of action. The Chapmans and Howell appeal these dismissals, and we reverse and remand for further proceedings.

I.

The facts of these two actions are similar. Both Daniel Howell and Michael Chapman are former employees of Union Pacific. Howell was a freight conductor, and Chapman was a switchman and freight conductor. Howell and Chapman each were required to undergo a random drug test by providing a urine sample to their employer on or about January 14, 1998, and August 26, 1999, respectively. The urine samples were forwarded to LabOne for testing. LabOne tested the samples, and found that they were "not consistent with human urine." LabOne reported the results to Union Pacific, and Union Pacific subsequently terminated Howell and Chapman. Claiming that the test results were inaccurate, Howell and Chapman each filed an action in state court alleging various state common-law theories, including negligence, breach of contract, defamation, negligent misrepresentation, fraudulent misrepresentation, interference with business relations, intentional infliction of emotional distress, and invasion of privacy. The crux of each of these claims was that LabOne did not properly test the urine samples and reported inaccurate results to Union Pacific.

The procedural postures of the two cases are slightly different. Howell brought his action in Nebraska state court against both LabOne and Union Pacific. His complaint alleged that Union Pacific was vicariously liable for the actions of its agent, LabOne. The defendants removed the action to the United States District Court for the District of Nebraska based on an assertion of federal question jurisdiction. The district court denied Howell's motion to remand, concluding that under the doctrine of "complete preemption," Howell's state-law claims should be considered federal claims arising under federal law. The district court then granted motions to dismiss filed by LabOne and Union Pacific on the ground that the FOTETA does not provide for a private right of action. The court also granted Union Pacific's motion for summary judgment on the alternative ground that Howell's claims against Union Pacific were preempted by the RLA.

Michael Chapman and his wife filed an action in Iowa state court against LabOne only. LabOne removed the action to the United States District Court for the Southern District of Iowa based on diversity and federal question jurisdiction. The district court then granted LabOne's motion to dismiss. The court reasoned that the Chapmans' claims were predicated on the manner in which LabOne tested the urine specimen and reported the results to Union Pacific, and that the FRSA and its corresponding regulations "`substantially subsumed the subject matter' of state tort law regarding the standards for drug testing railroad employees." Accordingly, the district court found that the Chapmans' state common-law claims were preempted.

On appeal, the Chapmans and Howell contend that the district courts erred in holding that their state law claims were preempted by the FRSA, the FOTETA, and their implementing regulations.¹ In addition, Howell asserts that because his claims are not preempted by federal law, his case was improperly removed to federal court and his motion to remand the case to state court should have been granted. Because the two cases present closely related issues, we consolidated their appeals. See Fed. R.App. P. 3(b)(2). We review de novo a district court's decision that state common-law claims are preempted by federal law. Thacker v. St. Louis Southwestern Ry. Co., 257 F.3d 922, 923 (8th Cir.2001).

II.

In 1985, the Secretary of Transportation, through the Federal Railroad Administration ("FRA"), adopted regulations to control the use of alcohol and drugs in the operation of our nation's railroads. Control of Alcohol and Drug Use in Railroad Operations, 50 Fed.Reg. 31,508 (Aug. 2, 1985) (to be codified at C.F.R. pts. 212, 217-219, 225). These initial regulations required toxicological testing of railroad employees under certain circumstances, such as after an accident or upon reasonable cause. Id. at 31,531. The regulations required an employee to sign a consent form in connection with drug testing, but the FRA commented that "[o]bviously, this requirement does not require an employee to waive any claim for malpractice with respect to the drawing of blood or proper handling of the samples (matters for which the practical exposure is, in any event, negligible)." Id. at 31,532.

The FRA implemented the random drug testing program in 1988. Random Drug Testing, 53 Fed.Reg. 47,102 (Nov. 21, 1988) (to be codified at 49 C.F.R. pts. 217, 219). The FRA's discussion of preemption in connection with its regulations focused on state legislation. After observing that "some states have enacted laws which limit or regulate drug testing by private employers," the FRA explained that "issuance of this random drug testing rule will preempt any state legislation regarding random drug testing for railroad employees, whether or not inconsistent with the final rule." 53 Fed.Reg. at 47,122.

The FRA amended its drug testing regulations in 1989, in part to remain consistent with the drug testing procedures issued by the Department of Transportation. Alcohol/Drug Regulations, 54 Fed.Reg. 53,238 (Dec. 27, 1989) (to be codified at C.F.R. pts. 217, 219, 225). At that time, the FRA added the following anti-waiver provision:

An employee required to participate in body fluid testing... shall ... evidence consent to taking of samples.... The employee is not required to execute any document or clause waiving rights that the employee would otherwise have against the employer, and any such waiver is void. The employee may not be required to waive liability with respect to negligence on the part of any person participating in the collection, handling, or analysis of the specimen or to indemnify any person for the negligence of others.

Id. at 53,261 (emphasis added); see also 49 C.F.R. § 219.11(d) (1989). The FRA believed that "as a practical matter, the employee will be fully protected from possible harm by virtue of the employer's responsibility for selection of the collection entity and the provision of clear standards for acceptable collections," but also recognized that "FRA cannot require that employees sign away their rights against third parties." 54 Fed.Reg. at 53,242. In addition, the FRA incorporated the Secretary of Transportation's scientific and technical drug testing guidelines set forth in 49 C.F.R. pt. 40, which by then included an identical anti-waiver provision at 49 C.F.R. § 40.25(f)(22)(ii) (1989). 54 Fed.Reg. at 53,273; see also 49 C.F.R. § 219.701(c) (1989).

The FRA anti-waiver provision is still in effect. 49 C.F.R. § 219.11(d) (2004). The Department of Transportation revised its general drug testing regulations in 2001 but continues to prohibit employers from requiring an employee to sign a "waiver of liability ... with respect to any part of the drug or alcohol testing process." 49 C.F.R. § 40.27 (2004).

In 1991, Congress for the first time mandated drug testing in the railroad industry by passing the FOTETA, which amended the FRSA and required the Secretary of Transportation to promulgate regulations establishing programs for drug testing railroad employees. 49 U.S.C. § 20140(b); see also Omnibus Transportation Employee Testing Act of 1991, Pub.L. No. 102-143, § 4, 105 Stat. 917, 957-59 (1991). Congress specifically required the Secretary of Transportation to develop comprehensive regulations regarding controlled substance testing and laboratory procedures. 49 U.S.C. § 20140(c). The statute provided, however, that its mandate of drug testing did not prevent the Secretary of Transportation from continuing in effect, amending, or supplementing any of the drug testing regulations that were in effect prior to the FOTETA. 49 U.S.C. § 20140(f).

The preemptive effect of the FRA's regulations is governed by 49 U.S.C. § 20106, which provides that a state may "adopt or continue in force a law, regulation, or order related to railroad safety" until the Secretary of Transportation "prescribes a regulation or issues an order covering the subject matter of the State requirement."² In its regulations regarding drug testing of...