Smith v. Gould, Inc.

• Decision Date: 19 November 1990
• Docket Number: No. 90-1126SI,90-1126SI
• Citation: Smith v. Gould, Inc., 918 F.2d 1361 (8th Cir. 1990)
• Parties: 119 Lab.Cas. P 56,717 Melvin SMITH and Mona Smith, Appellants, v. GOULD, INC., Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1361

918 F.2d 1361

119 Lab.Cas. P 56,717

Melvin SMITH and Mona Smith, Appellants, v.GOULD, INC., Appellees.

No. 90-1126SI.

United States Court of Appeals Eighth Circuit.

Submitted Sept. 14, 1990.

Decided Nov. 19, 1990.

Lyle Rodenburg, Council Bluffs, Iowa, for appellants.

Robert F. Rossiter, Jr., Mary K. Frank, Omaha, Neb., for appellees.

Before BOWMAN and MAGILL, Circuit Judges, and FLOYD R. GIBSON, Senior Circuit Judge.

MAGILL, Circuit Judge.

Melvin and Mona Smith appeal from an order of the district court¹ granting Gould, Inc.'s motion for summary judgment in an action seeking damages for breach of contract and personal injuries arising out of Mr. Smith's employment at Gould.Mrs. Smith also sought damages for loss of consortium and support.On appeal, the Smiths argue first that the Nebraska Workers' Compensation Act, which the district court held barred their intentional tort claim against Gould, violates the due process clause of the fourteenth amendment.Next, the Smiths attack the district court's determination that Mr. Smith's discharge was not wrongful, arguing that his discharge was retaliatory and therefore violated public policy because Gould's purpose in firing him was to avoid having to pay workers' compensation benefits.Finally, the Smiths argue that the district court incorrectly determined that the exclusivity provision of the Nebraska Workers' Compensation Act bars their claim under the Nebraska Factory Act.We affirm.

I.

In 1970, Melvin Smith began working for Gould, Inc., a manufacturer of batteries, at its smelter in Omaha, Nebraska.He was hired as a maintenance worker and was covered by the union contract, which provided that employees could be fired only for cause.About eighteen months later, Mr. Smith was promoted to a supervisory position and therefore ceased to be covered by the union contract.He testified, however, that he understood at the time of the promotion that his new position was to be permanent and that he would have job security--that is, that he could be fired only for reasonable cause.In 1973, Mr. Smith accepted another promotion and was transferred to a Gould facility in Denver, Colorado, where he was in charge of buying scrap batteries and shipping them to Omaha.He was laid off from that position in March 1975, when Gould shut down its Denver battery-buying operation for economic reasons.When he asked about returning to his old job in Omaha, Gould informed him that it had a policy against transferring salaried employees back to hourly positions.Mr. Smith subsequently found employment elsewhere.

During his employment with Gould, Mr. Smith developed diabetes and began to suffer from anemia and other symptoms of lead poisoning.While working at the Omaha plant, he was treated for lead poisoning by Gould medical staff, who administered pills and intravenous drugs to remove the lead from his body by chelation.Mr. Smith contends that these drugs were not effective and that, in fact, they harmed him by causing lead to accumulate in his kidneys.After leaving Gould, Mr. Smith began to suffer from high blood pressure and heart disease.Although he has a family history predisposing him to these conditions, he believes they were hastened and aggravated by his exposure to lead at Gould.He also claims that the lead poisoning itself caused other medical problems from which he has suffered or is suffering.These include gastrointestinal ailments (nausea, vomiting, diarrhea, constipation, colic); muscle and joint pain; neurologic damage leading to sensory and motor dysfunction, headaches, personality changes, tremors, insomnia and bad dreams; psychological problems; kidney dysfunction and nephritis; damage to the adrenal and pituitary glands; lung dysfunction; hearing loss; and lead encephalopathy.²He is now totally disabled as a result of a heart attack in 1986 and is receiving social security benefits.

On November 17, 1987, the Smiths filed this action against Gould in Iowa state court.At Gould's request, the action was removed to the United States District Court for the Southern District of Iowa.In their amended complaint, filed September 8, 1988, the Smiths sought relief on grounds of wrongful discharge; fraud, deceit, and intentional misrepresentation; and breach of contract.Specifically, in the wrongful discharge claim, they alleged that Gould had breached Smith's contract of employment, which required reasonable cause for discharge, and that Gould's asserted economic reasons for the discharge were pretextual, its real reason being its knowledge that Mr. Smith suffered from progressive lead poisoning.In their fraud claim, the Smiths alleged that Gould had lied to Mr. Smith about the safety of its workplace, about the consequences of lead exposure, and about his medical condition, and that as a result Mr. Smith, not realizing that he was suffering from lead poisoning, had not sought proper medical treatment.In their final claim for breach of contract, the Smiths alleged that Gould had undertaken through its medical staff to give Mr. Smith medical advice and treatment for lead poisoning and had breached that obligation by failing to inform Mr. Smith of his condition or treat it.Mrs. Smith also alleged loss of consortium and financial support as a result of Mr. Smith's injuries.Gould moved for summary judgment on the ground that Mr. Smith was an at-will employee and that his sole remedy for personal injuries resulting from his employment was under the Nebraska Workers' Compensation Act.The district court granted the motion on November 20, 1989, holding that (1) Mr. Smith's discharge was not wrongful, since he had failed to show any contractual or other restrictions on Gould's right to terminate him; and (2) the Smiths' other claims were barred because Mr. Smith's injuries were work-related and thus exclusively governed by the Workers' Compensation Act.The Smiths filed a motion for reconsideration; it was denied on December 20, 1989.The Smiths then appealed to this court.

II.

Summary judgment is properly granted when the trial court determines that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.Fed.R.Civ.P. 56(c).In making these determinations, the court must view the facts in the light most favorable to the nonmoving party, Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 106 S.Ct. 1348, 1356-57, 89 L.Ed.2d 538(1986), and must give that party the benefit of all reasonable inferences from the facts, Kegel v. Runnels, 793 F.2d 924, 926(8th Cir.1986).We apply this same standard on appellate review.McCuen v. Polk County, Iowa, 893 F.2d 172, 173(8th Cir.1990).

The parties agree that Nebraska law governs this action.³

A.Due Process

On appeal, the Smiths argue first that the Nebraska Workers' Compensation Act (WCA) is unconstitutional because it makes workers' compensation benefits the exclusive remedy for injuries resulting from accident or occupational disease, and thus deprives the Smiths of a remedy for injuries sustained as a result of Gould's intentional conduct.They contend that the constitutional guarantee of substantive due process does not permit Nebraska to deprive them of their common-law right of action for Gould's intentional tort without providing an adequate substitute.Gould's failure to inform Mr. Smith of his illness and to provide proper medical treatment, they argue, is a new, separate injury.The WCA does not provide a reasonably just substitute remedy for this second injury comporting with due process; indeed, it provides no remedy at all.The worker gets no compensation at the time of the injury, since he is unaware of it due to the employer's concealment.He will be able to claim benefits only when the employer's cover-up is discovered, if ever.Where the employer has intentionally aggravated the employee's injury and has withheld compensation for it, the Smiths argue that a remedy separate from the WCA is constitutionally required.

The Smiths did not raise this issue in their complaint, nor was it argued before the district court.As a general rule, a federal appellate court does not consider an issue not passed upon below.Singleton v. Wulff, 428 U.S. 106, 120, 96 S.Ct. 2868, 2877, 49 L.Ed.2d 826(1976).Having failed to raise the issue of the WCA's constitutionality below, the Smiths may not raise it here.Cato v. Collins, 539 F.2d 656, 662(8th Cir.1976).Even disregarding this procedural defect, however, we find no merit in their argument.The constitutionality of workers' compensation acts was settled early this century in a series of Supreme Court decisions on the subject.SeeJeffrey Mfg. Co. v. Blagg, 235 U.S. 571, 35 S.Ct. 167, 59 L.Ed. 364(1915);New York Cent. R.R. v. White, 243 U.S. 188, 37 S.Ct. 247, 61 L.Ed. 667(1917);Mountain Timber Co. v. Washington, 243 U.S. 219, 37 S.Ct. 260, 61 L.Ed. 685(1917);Arizona Employers' Liability Cases, 250 U.S. 400, 39 S.Ct. 553, 63 L.Ed. 1058(1919);Middleton v. Texas Power & Light Co., 249 U.S. 152, 39 S.Ct. 227, 63 L.Ed. 527(1919).Although many of the early workers' compensation statutes contained exceptions for intentional acts of the employer, as do some today, the constitutionality of those statutes was never held to depend on the existence of such an exception, as the Smiths incorrectly argue in their brief.The Supreme Court in these early decisions did suggest some due process limits on workers' compensation statutes: in New York Cent. R.R., for example, the Court considered whether the statute was arbitrary and unreasonable from the standpoint of natural justice, 243 U.S. at 202, 37 S.Ct. at 252, implied that the workers' compensation remedy must be a reasonably just substitute for the common law rights of action taken away, id. at 201, 37 S.Ct. at 252, and hinted that the scale of compensation under a workers' compensation act might be subject to...