Cole v. Norfolk S. Ry. Co.

• Decision Date: 31 August 2017
• Docket Number: Record No. 161163.
• Citation: 803 S.E.2d 346
• Parties: Alan Barry COLE, as Executor of the Estate of Aaron Jethro Cole v. NORFOLK SOUTHERN RAILWAY COMPANY
• Court: Virginia Supreme Court

294 Va. 92

803 S.E.2d 346

Alan Barry COLE, as Executor of the Estate of Aaron Jethro Cole

v.NORFOLK SOUTHERN RAILWAY COMPANY

Record No. 161163.

Supreme Court of Virginia.

August 31, 2017

John E. Guerry, III (Charles R. Allen, Jr., Roanoke; Russell N. Brahm, III, Norfolk; Motley Rice, on briefs), for appellant.

Frank K. Friedman (James W. Jennings ; David A. Damico; Woods Rogers, Roanoke; Burns, White, on brief), for appellee.

Amicus Curiae: Association of American Railroads (John D. Eure ; Johnson, Ayers & Matthews, Roanoke, on brief), in support of appellee.

PRESENT: Lemons, C.J., Mims, McClanahan, Powell, Kelsey, McCullough, JJ., and Lacy, S.J.

OPINION BY JUSTICE WILLIAM C. MIMS

In this appeal, we consider whether a release of liability is void under the Federal Employers' Liability Act ("FELA"), 45 U.S.C. § 51 et seq.

I. Background and Procedural History

For more than 35 years, Aaron J. Cole worked as a machinist for Norfolk Southern Railway Company ("NSRC"). During this time, he was regularly exposed to toxic substances and dust, including asbestos. In 1996, he filed a complaint in the circuit court alleging that he contracted "occupational pneumoconiosis

, including but not limited to asbestosis" as a result of NSRC's negligence. His complaint also alleged that he suffered

from extreme nervousness, mental anxiety and fear of contracting mesothelioma

, lung cancer and/or other cancers and/or other conditions caused by exposure to harmful and toxic dust and/or conditions including, but not limited to, cor pulmonale. In addition, [Cole], because of his occupational pneumoconiosis, now has an increased risk of contracting mesothelioma, lung cancer, and/or other cancers and/or other conditions.

On May 15, 2000, the parties entered into a settlement agreement whereby Cole, who was 78 years old and represented by counsel, signed a release of liability in exchange for $20,000. In pertinent part, the release states that Cole

does hereby RELEASE AND FOREVER DISCHARGE [NSRC] ... from all liability for all claims or actions for pulmonary-respiratory occupational diseases and/or other known injuries, physical, mental or financial, suffered or incurred by [Cole], including, but not limited to: (a) medical, hospital and funeral expenses, (b) pain and suffering, (c) loss of income, (d) increased risk of cancer

, (e) fear of cancer, (f) any and all forms of cancer, including mesothelioma [,] (g) and all costs, expenses and damages whatsoever, including all claims, debts, demands, actions, or causes of action of any kind, in law or equity, which [Cole] has or may have at common law or by statute or by virtue of any action under [FELA] ..., in whole or in part, arising out of:

Exposure to toxic substances, including asbestos, silica, sand, coal dust, work place dust and all other toxic dusts, fibers, fumes, vapors, or mists used by NSRC during [Cole's] employment by NSRC.

On February 16, 2009, Cole was diagnosed with lung cancer

; he died on November 14, 2010. Alan B. Cole, as the executor of Cole's estate, filed a complaint in the circuit court alleging under FELA that Cole's death was the direct and proximate result of NSRC's negligence. In a plea in bar, NSRC argued that the complaint should be dismissed because the claim was released as part of the settlement of Cole's 1996 asbestosis

action. Cole responded that the release was void under § 5 of FELA, which states that

[a]ny contract, rule, regulation, or device whatsoever, the purpose or intent of which shall be to enable any common carrier to exempt itself from any liability created by this act ... shall to that extent be void.

45 U.S.C. § 55.

Upon consideration of an evidentiary stipulation submitted by the parties, the circuit court granted NSRC's plea in bar. It acknowledged that a federal circuit split has resulted in two tests for evaluating the validity of releases under § 5 of FELA, but concluded that the release was valid under either test. We granted Cole this appeal.

II. Analysis

"The jurisdiction of the courts of the United States under [FELA] shall be concurrent with that of the courts of the several States." 45 U.S.C. § 56. However, "[s]tate courts are required to apply federal substantive law in adjudicating FELA claims." Monessen Southwestern Ry. Co. v. Morgan , 486 U.S. 330, 335, 108 S.Ct. 1837, 100 L.Ed.2d 349 (1988) ; Dice v. Akron, Canton & Youngston R.R. Co. , 342 U.S. 359, 361, 72 S.Ct. 312, 96 L.Ed. 398 (1952) ("[U]niform application throughout the country [is] essential to effectuate [FELA's] purposes."). Thus, the "validity of releases under [FELA] raises a federal question to be determined by federal law rather than state law." Id. While we are bound by the decisions of the United States Supreme Court construing FELA, Chesapeake & Ohio Ry. Co. v. Martin , 283 U.S. 209, 220–21, 51 S.Ct. 453, 75 L.Ed. 983 (1931), there is no similar obligation with respect to decisions of the lower federal courts. Toghill v. Commonwealth , 289 Va. 220, 227, 768 S.E.2d 674, 677 (2015) (citing Lockhart v. Fretwell , 506 U.S. 364, 376, 113 S.Ct. 838, 122 L.Ed.2d 180 (1993) (Thomas, J., concurring) ("[N]either federal supremacy nor any other principle of federal law requires that a state court's interpretation of federal law give way to a (lower) federal court's interpretation.")).

A. Validity of Releases Under § 5 of FELA

FELA renders common carrier railroads liable in damages to any person suffering injury while employed by the carrier if the injury resulted in whole or in part from the carrier's negligence. 45 U.S.C. § 51. When FELA was enacted in 1908, "[t]he injury rate among railroad employees ... was horrific—the average life expectancy of a switchman was seven years, and a brakeman's chance of dying from natural causes was less than one in five." Thomas E. Baker, Why Congress Should Repeal the Federal Employers' Liability Act of 1908, 29 Harv. J. on Legis. 79, 81–82 (1992). FELA therefore was designed to "shift[ ] part of the ‘human overhead’ of doing business from employees to their employers." Conrail v. Gottshall , 512 U.S. 532, 542, 114 S.Ct. 2396, 129 L.Ed.2d 427 (1994) (quoting Tiller v. Atlantic Coast Line R.R. Co. , 318 U.S. 54, 58, 63 S.Ct. 444, 87 L.Ed. 610 (1943) ). To that end, "Congress did away with several common-law tort defenses that had effectively barred recovery by injured workers." Id. As cataloged in Gottshall , FELA "abolished the fellow servant rule, rejected the doctrine of contributory negligence in favor of ... comparative negligence," and, in a 1939 amendment, "abolished the assumption of risk defense." Id. at 542–43, 114 S.Ct. 2396.

At issue in the present case, Congress also "prohibited employers from exempting themselves from FELA through contract." Id . at 543, 114 S.Ct. 2396. As noted, § 5 of FELA provides that

[a]ny contract, rule, regulation, or device whatsoever, the purpose or intent of which shall be to enable any common carrier to exempt itself from any liability created by this act, shall to that extent be void.

45 U.S.C. § 55. This section was primarily aimed at two specific practices. First, many railroads required employees to sign "a contract of employment which by its terms released the company from liability for damages arising out of the negligence of other employees." H.R. Rep. No. 1386, 60th Cong., 1st Sess. 6 (1908). Second, it was common for railroads to utilize relief agreements, whereby the railroad would provide benefits to injured workers conditioned on a waiver of any claims against the railroad. Philadelphia, Balt. & Wash. R.R. v. Schubert , 224 U.S. 603, 612, 32 S.Ct. 589, 56 L.Ed. 911 (1912) ("The practice of maintaining relief departments, which had been extensively adopted, and of including in the contract of membership provision for release from liability [by] employe[e]s who accepted benefits, was well known to Congress" when it enacted § 5 of FELA.).

"Shortly after FELA's adoption, the [United States] Supreme Court began to establish the boundaries of § 5." Wicker v. Conrail , 142 F.3d 690, 696 (3d Cir. 1997). In Schubert , for example, an employee contributed a portion of his salary to a relief fund established by his railroad employer until he was injured. 224 U.S. at 606, 32 S.Ct. 589. After accepting benefits from the relief fund, he filed a FELA claim against the railroad for damages related to his injury. Id. at 607–08, 32 S.Ct. 589. The railroad argued that his claim was barred because his acceptance of benefits from the relief fund was conditioned upon the release of all claims against the railroad. Id . at 606–08, 32 S.Ct. 589. The Supreme Court held that the release directly violated § 5 of FELA because its purpose was to provide the railroad with immunity from liability. Id. at 611–12, 32 S.Ct. 589.

The Supreme Court revisited the issue in Duncan v. Thompson , 315 U.S. 1, 62 S.Ct. 422, 86 L.Ed. 575 (1942). There, an injured employee signed a contract whereby he accepted $600 to cover living expenses upon the condition that he return the money before bringing any claim against the employer. Id. at 3, 62 S.Ct. 422. He nevertheless filed a FELA claim without refunding the $600, and the employer raised the contract as a defense. Id. The Supreme Court held that the contract was void under § 5 of FELA because, in light of the employee's dire financial circumstances, the contract's "purpose or intent" was "to exempt [the railroad] from any liability" under FELA. Id. at 7, 62 S.Ct. 422.

However, § 5 of FELA is not without limitations. In Callen v. Pennsylvania Railroad Company , 332 U.S. 625, 626, 68 S.Ct. 296, 92 L.Ed. 242 (1948), an employee brought a FELA action after injury to his back in the course of his employment. After his injuries, but prior to filing suit, the employee executed a general release freeing the railroad from liability in exchange for $250. Id. at 626–27, 68 S.Ct. 296. While the primary issue on appeal was the accuracy of certain jury instructions, the Court also dismissed an argument raised by...