Monessen Southwestern Railway Company v. Morgan, 86-1743

• Decision Date: 06 June 1988
• Docket Number: No. 86-1743,86-1743
• Citation: 108 S.Ct. 1837,100 L.Ed.2d 349,486 U.S. 330
• Parties: MONESSEN SOUTHWESTERN RAILWAY COMPANY, Appellant v. Gerald L. MORGAN
• Court: U.S. Supreme Court

486 U.S. 330

108 S.Ct. 1837

100 L.Ed.2d 349

MONESSEN SOUTHWESTERN RAILWAY COMPANY, Appellant

v Gerald L. MORGAN.

No. 86-1743.

Argued Feb. 22, 1988.

Decided June 6, 1988.

Syllabus

Appellee suffered a permanent back injury while working as a brakeman and conductor for appellant railroad. After returning to work in a less physically demanding position, appellee brought an action under the Federal Employers' Liability Act (FELA) in a Pennsylvania state court, alleging that his injury was attributable to appellant's negligence and that his future earning power had been impaired as a result of his injury. The trial judge refused to instruct the jury that any damages award for loss of future earnings should be reduced to present value, but instead informed the jury that the law (apparently referring to Pennsylvania case law) "now provides that there need not be such a reduction." After the jury found for appellee and awarded damages, the trial judge assessed an additional amount as prejudgment interest pursuant to Pennsylvania Rule of Civil Procedure 238, which requires state courts in personal injury actions to add to compensatory damages 10% per year, as "damages for delay," from the date the complaint was filed or from the date one year after the cause of action accrued, whichever was later, to the date of the verdict. The Pennsylvania Superior Court affirmed. The Pennsylvania Supreme Court also affirmed, characterizing Rule 238 as a mere "rule of procedure," and holding that it was not inconsistent with FELA. It also held that whether the trial judge properly refused to instruct the jury to discount future damages to present value and instead applied the "total offset" method, under which future inflation is presumed equal to future interest rates, was a question of federal law, and that the judge's use of the total offset rule was not inconsistent with St. Louis Southwestern R. Co. v. Dickerson, 470 U.S. 409, 105 S.Ct. 1347, 84 L.Ed.2d 303.

Held:

1. State courts may not award prejudgment interest pursuant to local practice in FELA actions. Pp. 334-339.

(a) The proper measure of damages under FELA—including the question whether prejudgment interest may be awarded to a prevailing plaintiff—is inseparably connected with the right of action, and therefore is an issue of substance that must be settled according to federal law rather than state law. The Pennsylvania courts cannot avoid the application of federal law by characterizing Rule 238 as nothing more than a procedural device to encourage settlements and relieve court congestion. Pp. 335-336.

(b) Federal law does not authorize awards of prejudgment interest in FELA actions. Although neither FELA nor the general federal interest statute, 28 U.S.C. § 1961, mentions prejudgment interest, when Congress enacted FELA in 1908 the common law did not allow prejudgment interest in suits for personal injury or wrongful death, and that was the rule in the federal courts. In enacting FELA, Congress expressly dispensed with other common-law doctrines of that era, and there is no indication that Congress intended to abrogate the doctrine barring prejudgment interest sub silentio. Moreover, the lower federal courts and the state courts have held with virtual unanimity that prejudgment interest is not available under FELA. Congress' failure to disturb such a longstanding, consistent judicial interpretation of a statute indicates that Congress at least acquiesces in, and apparently affirms, that interpretation. Pp. 336-339.

2. The trial court did not act consistently with federal law in instructing the jury not to discount appellee's future lost earnings to present value. St. Louis Southwestern R. Co. v. Dickerson, supra. The jury has the task of making the present value determination in FELA cases, but it is permissible for the judge to recommend to the jury on or more methods of calculating present value so long as the judge does not in effect pre-empt the jury's function. In the present case, however, the trial judge instructed the jury that a zero discount rate was to be applied as a matter of law to appellee's future damages. The instruction improperly took from the jury the essentially factual question of the appropriate rate at which to discount appellee's FELA award to present value. Pp. 339-342.

513 Pa. 86, 518 A.2d 1171 (1986), reversed and remanded.

WHITE, J., delivered the opinion of the Court, in which BRENNAN, STEVENS, SCALIA, and KENNEDY, JJ., joined, in Parts I, II-A, and III of which MARSHALL and BLACKMUN, JJ., joined, and in Parts I and II of which REHNQUIST, C.J., and O'CONNOR, J., joined. BLACKMUN, J., filed an opinion concurring in part and dissenting in part, in which MARSHALL, J., joined, post, p. ---- O'CONNOR, J., filed an opinion concurring in part and dissenting in part, in which REHNQUIST, C.J., joined, post, p. ----

Paul A. Manion, Pittsburgh, Pa., for appellant.

Thomas Hollander, Pittsburgh, Pa., for appellee.

Justice WHITE delivered the opinion of the Court.

This case concerns the application of state-law rules affecting the measure of damages in an action brought in state court under the Federal Employers' Liability Act (FELA), 35 Stat. 65, as amended, 45 U.S.C. § 51 et seq.

I

Appellee was employed by appellant as a railroad brakeman and conductor. In August 1977, appellee fell while alighting from a railroad car and suffered a permanent injury to his back. He returned to work in February 1979 in the less physically demanding position of radio and supply clerk.

Appellee brought an FELA action in the Court of Common Pleas of Allegheny County, Pennsylvania, alleging that his fall was attributable to appellant's negligence. He claimed that his future earning power had been impaired as a result of his injury because he could not obtain certain incentive and shift differential payments in his new position.

The trial judge refused to instruct the jury that any damages award for loss of future earnings would have to be reduced to present value. Instead, she informed the jury that "[t]he law now provides that there need not be such a reduction." App. 61. The judge apparently was referring to the Pennsylvania Supreme Court's decision in Kaczkowski v. Bolubasz, 491 Pa. 561, 583, 421 A.2d 1027, 1038-1039 (1980), which had instructed state courts to cease discounting future lost earnings to present value because "as a matter of law . . . future inflation shall be presumed equal to future interest rates with these factors offsetting."

The jury found in favor of appellee and awarded damages of $125,000. The trial judge assessed an additional $26,712.50 as prejudgment interest pursuant to Rule 238 of the Pennsyl- vania Rules of Civil Procedure. Rule 238 requires state courts in personal injury actions to "add to the amount of compensatory damages . . ., damages for delay at ten (10) percent per annum, not compounded," from "the date the plaintiff filed the initial complaint in the action or from a date one year after the accrual of the cause of action, whichever is later," to the date of the verdict.¹ The judge rejected appellant's contention that Rule 238 could not be applied to FELA actions.

A three-judge panel of the Pennsylvania Superior Court affirmed. 339 Pa.Super. 465, 489 A.2d 254 (1985).

The Pennsylvania Supreme Court granted appellant's petition for allowance of appeal and subsequently affirmed by a narrow margin. 513 Pa. 86, 518 A.2d 1171 (1986).

The court characterized Rule 238 as a mere "rule of procedure" designed to encourage meaningful settlement negotiations and thereby alleviate congestion in the trial courts. Id., at 98-99, 518 A.2d, at 1177. The court concluded that, as neither the "worthy goal" nor the specific provisions of Rule 238 contravened the purposes and provisions of the FELA, the Pennsylvania courts could apply Rule 238 to award prejudgment interest in FELA cases as well as in cases involving only state law. Ibid.

The court recognized that whether the trial judge had properly refused to instruct the jury to discount future damages to present value, and instead applied the so-called "total offset" method, was a question of federal law. See St. Louis Southwestern R. Co. v. Dickerson, 470 U.S. 409, 411, 105 S.Ct. 1347, 1348, 84 L.Ed.2d 303 (1985) (per curiam ). The court noted our discussion of a Federal District Court's use of Pennsylvania's total offset rule in Jones & Laughlin Steel Corp. v. Pfeifer, 462 U.S. 523, 103 S.Ct. 2541, 76 L.Ed.2d 768 (1983), a case brought under the Longshoremen's and Harbor Workers' Compensation Act (LHWCA), 33 U.S.C. § 904. We held in Pfeifer that "whatever rate the District Court may choose to discount the estimated stream of future earnings, it must make a deliberate choice, rather than assuming that it is bound by a rule of state law." 462 U.S., at 552-553, 103 S.Ct., at 2558. Here, the trial judge's use of the total offset rule was held to have been permissible under Pfeifer because the reviewing court had itself "deliberately selected" that rule in Kaczkowski v. Bolubasz "after a thorough consideration of various present worth theories and rules." 513 Pa., at 92-93, 518 A.2d, at 1174. Nor did the court find any inconsistency between the trial judge's use of the total offset rule and our holding in Dickerson that "an utter failure to instruct the jury that present value is the proper measure of [an FELA] damages award is error." 470 U.S., at 412, 105 S.Ct., at 1348-1349. Here, reasoned the court, "the trial judge did instruct the jury on present value by charging on the total offset method." 513 Pa., at 94-95, 518 A.2d, at 1175.²

We noted probable jurisdiction, 484 U.S. 813, 108 S.Ct. 63, 98 L.Ed.2d 27 (1987), and now reverse.

II

We first consider whether state courts may award prejudgment interest pursuant to local practice in actions brought under the FELA.

A

State courts are required to apply federal substantive law in adjudicating FELA claims. Dickerson, supra, at...