Dannels v. BNSF Ry. Co., DA 19-0343

Docket NºDA 19-0343
Citation483 P.3d 495, 403 Mont. 437, 2021 MT 71
Case DateMarch 23, 2021
CourtUnited States State Supreme Court of Montana

403 Mont. 437
483 P.3d 495
2021 MT 71

Robert DANNELS, Plaintiff and Appellee,
v.
BNSF RAILWAY COMPANY, Defendant and Appellant.

DA 19-0343

Supreme Court of Montana.

Argued and Submitted: June 10, 2020
Decided: March 23, 2021


For Appellant: Andrew S. Tulumello (argued), Gibson, Dunn & Crutcher LLP, Washington, District of Columbia Jeff Hedger, Michelle T. Friend, Hedger Friend, P.L.L.C., Billings, Montana

For Appellee: Deepak Gupta (argued), Lark Turner, Gupta Wessler PLLC, Washington, District of Columbia Dennis P. Conner, Keith D. Marr, Conner & Marr, PLLP, Great Falls, Montana

For Amicus Association of American Railroads: Anthony M. Nicastro, Knight Nicastro MacKay, LLC, Billings, Montana For Amicus Washington Legal Foundation: Mark D. Parker, Samantha A. Howard, Parker, Heitz & Cosgrove, PLLC, Billings, Montana

Justice James Jeremiah Shea delivered the Opinion of the Court.

403 Mont. 442

¶1 Defendant and Appellant BNSF Railway Company (BNSF) appeals the orders of the Eighth Judicial District Court, Cascade County, denying BNSF summary judgment and entering final judgment in favor of Plaintiff and Appellee Robert Dannels. We address the following issue:

Does the Federal Employers’ Liability Act preempt an injured railroad employee's State law bad faith claims?

¶2 We affirm.

PROCEDURAL AND FACTUAL BACKGROUND

¶3 Dannels was employed by BNSF as a Maintenance of Way laborer and equipment operator in northern Montana from approximately 1990 to 2010. On March 17, 2010, Dannels was assigned to operate a Bobcat skidsteer to remove snow piles from a parking lot in BNSF's Havre railroad yard. The front-end of the skidsteer collided with a steel wellhead concealed under a snow pile. As a result of the collision, Dannels suffered a disabling back and spine injury which required medical care.

¶4 On December 6, 2010, Dannels sued BNSF under the Federal Employers’ Liability Act (FELA) to recover damages for his work-related injury. Dannels alleged that throughout his employment, BNSF negligently assigned him physical work activities that caused "cumulative trauma" to his lower back and spine and made him susceptible to permanent disability.

483 P.3d 498

¶5 Before trial, BNSF moved in limine to preclude Dannels from referencing any "emotional distress not directly tied to [Dannels’] physical injury." The motion was granted and the District Court instructed the jury that it could only award damages "caused by the event in question," specifically "injuries ... sustained as a consequence of physical impact."

¶6 On February 13, 2013, a jury returned a verdict in Dannels’ favor in the amount of $1.7 million. The jury found BNSF to be 100% at fault and Dannels to be 0% at fault.

¶7 During the pendency of Dannels’ FELA claim, he never sought

403 Mont. 443

advance payment from BNSF of either his medical expenses or his lost wages, nor did he file a declaratory judgment action seeking a declaration of BNSF's obligations in that regard. After the verdict, but before the final judgment was entered, Dannels submitted a written request to BNSF, seeking payment of the portion of the jury verdict that represented his past lost wages. BNSF refused. After BNSF's motion for a new trial was denied, it paid the $1.7 million judgment.

¶8 On January 2, 2014, Dannels filed claims for bad faith and punitive damages against BNSF. He asserted BNSF violated Montana common law and statutory duties of good faith and fair dealing in handling his FELA claim by failing to advance his lost wages, failing to reasonably investigate and adjust his claim, and failing to offer him alternative or permanent employment. Dannels had originally named the individual claims adjustor and BNSF Insurance Company, Ltd. (BNSF IC) as defendants in his bad faith complaint. Dannels’ subsequently voluntarily dismissed the claims adjustor. On May 13, 2015, BNSF IC filed a motion to dismiss for lack of personal jurisdiction. BNSF IC acknowledged that it is a wholly owned subsidiary of the same parent company as BNSF, and that it maintains a program of self-insurance in conjunction with BNSF for coverage of FELA claims made by BNSF employees. BNSF IC asserted it has no contacts with the State of Montana because it is a licensed insurance company organized under the laws of Bermuda, a territory of the United Kingdom. The District Court granted BNSF IC's motion.

¶9 On May 1, 2017, BNSF moved for summary judgment, asserting that Dannels’ State law bad faith claims were preempted by the FELA. The District Court denied BNSF's motion.

¶10 On February 2, 2018, BNSF filed motions in limine seeking to preclude Dannels from offering evidence or testimony at trial regarding BNSF claims-handling practices or reporting, including evidence or testimony that BNSF had a duty to advance pay Dannels’ FELA claim or offer him alternative employment or permanent employment. BNSF argued in its motion that the FELA was the law governing Dannels’ underlying claim and does not require railroads to advance pay claimants or offer alternative employment or permanent employment as part of its settlement practices. BNSF further argued that "[e]vidence of other claims or claims handling practices or reporting in other cases is not relevant to the case at bar. [Dannels’] underlying claim and BNSF's claim handling practice is the only relevant issue."

¶11 Before the District Court could rule on BNSF's motions in limine, the parties filed a stipulation for entry of final judgment. BNSF

403 Mont. 444

stipulated that judgment be entered against it on Dannels’ bad faith claims in the amount of $7.4 million, inclusive of all fees, interest, and costs. BNSF reserved its right to appeal the District Court's denial of its summary judgment motion but stipulated that it would pay Dannels $2.25 million "regardless of the outcome of any appeal." BNSF stipulated that it would pay the $5.15 million balance upon its exhaustion of its appeal rights to this Court and the United States Supreme Court, if its appeals were unsuccessful. On May 14, 2019, the District Court accepted the parties’ stipulation and entered final judgment against BNSF.

STANDARDS OF REVIEW

¶12 We review a district court's summary judgment ruling de novo, applying the criteria set forth in M. R. Civ. P. 56.

483 P.3d 499

Sinclair v. Burlington Northern & Santa Fe Ry. , 2008 MT 424, ¶ 26, 347 Mont. 395, 200 P.3d 46. Summary judgment is appropriate if the moving party demonstrates from "the pleadings, the discovery and disclosure materials on file, and any affidavits" that there is no genuine issue of material fact and that the movant is entitled to judgment as a matter of law. Sinclair , ¶ 26 ; M. R. Civ. P. 56(c)(3). Where a district court determines there is no material factual dispute and the moving party is entitled to judgment as a matter of law, we review whether the district court correctly applied the law. Mont. Immigrant Justice Alliance v. Bullock , 2016 MT 104, ¶ 28, 383 Mont. 318, 371 P.3d 430 ; Sinclair , ¶ 26. A district court's determination regarding federal preemption is a question of law which we review for correctness. Mont. Immigrant Justice Alliance , ¶ 14.

DISCUSSION

¶13 Does the Federal Employers’ Liability Act preempt an injured employee's State law bad faith claims?

¶14 The Supremacy Clause of the United States Constitution provides:

This Constitution, and the Laws of the United States which shall be made in pursuance thereof; and all treaties made, or which shall be made, under the authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, anything in the Constitution or Laws of any State to the Contrary notwithstanding.

U.S. Const. art. VI, cl. 2. The Supremacy Clause "invalidates state laws that ‘interfere with, or are contrary to,’ federal law."

403 Mont. 445

Hillsborough Cty. v. Auto. Med. Laboratories, Inc. , 471 U.S. 707, 105 S. Ct. 2371, 85 L. Ed. 2d 714 (1985) (quoting Gibbons v. Ogden , 22 U.S. 1, 9 Wheat. 1, 211, 6 L.Ed. 23 (1824) (Marshall, C.J.). Congress is empowered by the Supremacy Clause to pass federal acts that supersede state law in three ways: (1) express preemption, (2) field preemption, or (3) conflict preemption, "the latter two being forms of implied preemption." Mont. Immigrant Justice Alliance , ¶ 28 (citing Valle Del Sol Inc. v. Whiting , 732 F.3d 1006, 1022-23 (9th Cir. 2013) ).

¶15 BNSF argues that Dannels’ state law bad faith claims are preempted by the FELA. The FELA is a federal act that serves as the "comprehensive" and "exclusive" scheme of recovery for physical injuries suffered on-the-job by a railroad employee, any part of whose duties further interstate commerce, as a result of the negligence of an employer. See 45 U.S.C. § 51 ("Every common carrier by railroad while engaging in commerce ... shall be liable in damages to any person...

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1 practice notes
  • Moe v. GEICO Indem. Co., CV 19-23-BU-BMM-KLD
    • United States
    • U.S. District Court — District of Montana
    • September 15, 2021
    ...obligations under the UTPA. This prerequisite is reflected once again in the Montana Supreme Court's recent decision in Dannels v. BNSF, 483 P.3d 495 (Mont. 2021), which addressed the issue of whether the Federal Employers' Liability Act (FELA) preempts an injured employee's state law bad f......
1 cases
  • Moe v. GEICO Indem. Co., CV 19-23-BU-BMM-KLD
    • United States
    • U.S. District Court — District of Montana
    • September 15, 2021
    ...obligations under the UTPA. This prerequisite is reflected once again in the Montana Supreme Court's recent decision in Dannels v. BNSF, 483 P.3d 495 (Mont. 2021), which addressed the issue of whether the Federal Employers' Liability Act (FELA) preempts an injured employee's state law bad f......

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