Lund v. San Joaquin Valley RR

• Citation: 1 Cal.Rptr.3d 412,71 P.3d 770,31 Cal.4th 1
• Decision Date: 03 July 2003
• Docket Number: No. S099479.,S099479.
• Court: California Supreme Court
• Parties: Ronald G. LUND, Plaintiff and Respondent, v. SAN JOAQUIN VALLEY RAILROAD, Defendant and Appellant.

1 Cal.Rptr.3d 412

31 Cal.4th 1

71 P.3d 770

Ronald G. LUND, Plaintiff and Respondent, v. SAN JOAQUIN VALLEY RAILROAD, Defendant and Appellant.

No. S099479.

Supreme Court of California.

July 3, 2003.

As Modified on Denial of Rehearing September 24, 2003.

Dowling, Aaron & Keeler, William T. McLaughlin II, Timothy R. Sullivan, Fresno; Lane Powell Spears Lubersky and Michael B. King for Defendant and Appellant.

Crosby, Heafey, Roach & May and Joseph P. Mascovich for Association of American Railroads as Amicus Curiae on behalf of Defendant and Appellant.

Crosby, Heafey, Roach & May, Joseph P. Mascovich; Brasher Law Firm and William A. Brasher for The Burlington Northern and Santa Fe Railway Company and Union Pacific Railroad Company as Amici Curiae on behalf of Defendant and Appellant.

Miller & Reivitis, Kimberly A. Miller, Michael E. Reivitis; and Charlotte E. Costan, Burbank, for Plaintiff and Respondent.

KENNARD, J.

Under the Federal Employers Liability Act (FELA), a railroad employee injured by the employer's negligence may sue the employer for negligence. The action may be filed in either a state or a federal court. (45 U.S.C. § 56.) This case raises two questions pertaining to actions brought in California courts.

First, should the trial court tell the jury that the injured employee is not entitled to benefits under California's workers' compensation law? The answer is no, unless a case presents unusual circumstances where the probative value of this information outweighs its prejudicial effect.

Second, if the employer rejects the employee's pretrial settlement offer and the employee at trial obtains a judgment more favorable than the offer, may the trial court award the employee prejudgment interest under California law? The answer is no, because federal law prohibits such an award.

I. FACTS

Plaintiff Ronald G. Lund worked as a trackman for defendant San Joaquin Valley Railroad. In the spring of 1997, he and other employees were replacing worn railroad ties. After replacing those ties with new ones, the workers used a "hydrospiker," a machine that drives spikes through the ties and into prepunched holes in tie plates under the rails. The hydrospiker did not drive all the spikes in correctly. Plaintiffs supervisor then told him to use a "spike maul," a sledgehammer with an elongated head, to drive in spikes that the hydrospiker had only partially driven in. While swinging the spike maul, plaintiff tore two tendons in his shoulder. The injury permanently damaged his shoulder, rendering him unable to perform his job.

Plaintiff sued defendant for negligence under the FELA. He alleged that the spikes could not be driven in with the spike maul because they were too big for the holes in the tie plates, and that defendant should have given him a pneumatic spike driver, or air gun, to accomplish the task. Before trial, plaintiff made a settlement offer, which defendant rejected.

At plaintiffs request, the trial court told prospective jurors: "State Workers' Compensation is not available to the plaintiff in this case." At the close of evidence, the trial court reiterated that comment: "As I instructed you at the beginning of the case ... the employee does not have the right to Workers' Compensation benefits ... even though ... the alleged accident did occur here in the state of California." The jury found defendant negligent, and awarded plaintiff damages of $538,570. Relying on California law, the court awarded plaintiff an additional $22,280.57 in prejudgment interest under Civil Code section 3291.

The Court of Appeal affirmed the judgment. We granted defendant's petition for review.

II. The FELA (45 U.S.C. § 51 et seq.)

In California, injured employees are generally entitled to workers' compensation benefits, irrespective of whether the employer was at fault. (Lab.Code, § 3200 et seq.) But those benefits are not available to railroad employees who suffer on-the-job injuries; their right of recovery is governed by the FELA, which permits recovery only if the employer acted negligently. (45 U.S.C. § 51.)

The FELA, enacted by Congress in 1908, is "founded on common-law concepts of negligence and injury" (Urie v. Thompson (1949) 337 U.S. 163, 182, 69 S.Ct. 1018, 93 L.Ed. 1282) to "provide a federal remedy for railroad workers who suffer personal injuries as a result of the negligence of their employer or their fellow employees" (Atchison T. & S.F.R. Co. v. Buell (1987) 480 U.S. 557, 561, 107 S.Ct. 1410, 94 L.Ed.2d 563). Through the FELA, Congress intended to create "`uniformity throughout the Union' with respect to railroads' financial responsibility for injuries to their employees" (Norfolk & Western R. Co. v. Liepelt (1980) 444 U.S. 490, 493, fn. 5, 100 S.Ct. 755, 62 L.Ed.2d 689) and to "eliminate a number of traditional defenses to tort liability and to facilitate recovery in meritorious cases" (Atchison, T. & S.F.R. Co., supra, at p. 561, 107 S.Ct. 1410). Courts construe the FELA liberally to fulfill the act's remedial purposes. (Consolidated Rail Corporation v. Gottshall (1994) 512 U.S. 532, 543, 114 S.Ct. 2396, 129 L.Ed.2d 427; Atchison T. & S.F.R. Co., supra, at p. 562, 107 S.Ct. 1410.)

As noted at the outset, a FELA action can be brought in either federal or state court. When, as here, a FELA action is brought in state court, state law governs procedural questions while federal law governs substantive issues. (St. Louis Southwestern R. Co. v. Dickerson (1985) 470 U.S. 409, 411, 105 S.Ct. 1347, 84 L.Ed.2d 303.) State procedure does not apply, however, if it results in the denial of a federal right granted by Congress. (Arnold v. Panhandle & S.F.R. Co. (1957) 353 U.S. 360, 361, 77 S.Ct. 840, 1 L.Ed.2d 889; Brown v. Western R. of Alabama (1949) 338 U.S. 294, 296, 70 S.Ct. 105, 94 L.Ed. 100; see also Wright, Law of Federal Courts (4th ed. 1983) State Enforcement of Federal Law, § 45, p. 272 [expressing the view that the applicability of state procedure in federal claim cases "has become so shrunken as to fall within the maxim de minimis"].)

III. TRIAL COURT'S INSURUCTION ON PLAINTIFF'S INELIGIBILITY FOR STATE WORKERS' COMPENSATION BENEFITS

Defendant faults the trial court for telling the jury, at plaintiffs request, that as an injured railroad worker plaintiff was ineligible for workers' compensation benefits ordinarily available to injured employees under California law.

Because defendant had not objected at trial to the challenged instruction, the Court of Appeal precluded defendant from raising the issue on appeal. A party may, however, challenge on appeal an erroneous instruction without objecting at trial. (Agarwal v. Johnson (1979) 25 Cal.3d 932, 949, 160 Cal.Rptr. 141, 603 P.2d 58; Griesel v. Dart Industries, Inc. (1979) 23 Cal.3d 578, 583, fn. 4, 153 Cal. Rptr. 213, 591 P.2d 503; Code Civ. Proc., § 647.) To support its conclusion that defendant did not preserve the issue, the Court of Appeal relied on the rule that when a trial court gives a jury instruction that is legally correct but is "`too general, lacks clarity, or is incomplete'" (Conservatorship of Gregory (2000) 80 Cal.App.4th 514, 520, 95 Cal.Rptr.2d 336, quoting 7 Witkin, Cal. Procedure (4th ed. 1997) Trial, § 272, pp. 318-319), a party may challenge the instruction on appeal only if it had asked the trial court to give a clarifying instruction. But here defendant does not contend that the instruction was too general, lacked clarity, or was incomplete. Rather, defendant argues that the instruction conveyed irrelevant prejudicial information to the jury—that plaintiff was ineligible for workers' compensation. No objection was necessary to preserve this claim. We therefore address its merits.

Ordinarily, the first step in analyzing that issue would be to determine whether the instruction pertained to a state procedure, or instead was a substantive matter, and thus, as noted earlier, governed by federal law. Here, however, we need not undertake such an evaluation. Under both federal and California law the jury in a FELA action should, as a general rule, not be told whether the injured railroad worker action can also seek recovery from any other source, such as workers' compensation. Because federal and California law on this subject are identical, we need not decide which one controls.¹ Below, we discuss the pertinent features of both laws.

A. Federal Law

If an injured plaintiff gets some compensation for the injury from a collateral source such as insurance, that payment is, under the collateral source doctrine, not deducted from the damages that the plaintiff can collect from the tortfeasor. (See 1 Dobbs, Law of Remedies (2d ed.1993) § 3.8(1), pp. 372-373.) The collateral source rule is "generally accepted in the United States" (Helfend v. Southern Cal. Rapid Transit Dist. (1970) 2 Cal.3d 1, 6, 84 Cal.Rptr. 173, 465 P.2d 61; see also Rest.2d Torts, §§ 920, 920A), and the federal courts apply the rule in FELA actions (Eichel v. New York Central R. Co. (1963) 375 U.S. 253, 254, 84 S.Ct. 316, 11 L.Ed.2d 307 (Eichel)).

The question whether to tell the jury about collateral compensation is analytically distinct from the collateral source rule itself. But because the two issues are so closely linked, courts often draw no distinction between the two. A recent federal appellate decision observed: "The case law sometimes confuses these interrelated principles, moving effortlessly from the substantive to the evidentiary strands of the collateral source doctrine, and back, with little differentiation." (Fitzgerald v. Expressway Sewerage Const, Inc. (1st Cir. 1999) 177 F.3d 71, 73.)

The United States Supreme Court held in Eichel, supra, 375 U.S. 253, 84 S.Ct. 316, 11 L.Ed.2d 307, that in a FELA case brought in federal court the jury should not be told that the plaintiff has received benefits from a collateral source. In Eichel, the defendant sought to show that the plaintiff had received disability pension benefits under the ...