Spitzmueller v. Burlington Northern R. Co.

• Citation: 740 F. Supp. 671
• Decision Date: 29 June 1990
• Docket Number: Civ. No. 4-88-1039.
• Parties: John R. SPITZMUELLER v. BURLINGTON NORTHERN RAILROAD CO.
• Court: U.S. District Court — District of Minnesota

740 F. Supp. 671

John R. SPITZMUELLER v. BURLINGTON NORTHERN RAILROAD CO.

Civ. No. 4-88-1039.

United States District Court, D. Minnesota, Fourth Division.

June 29, 1990.

COPYRIGHT MATERIAL OMITTED

Phyllis Karasov, John M. Harens, and James A. Bobzien, Moore, Costello & Hart, St. Paul, Minn., for plaintiff.

Thomas J. Knapp and Lawrence M. Stroik, Ft. Worth, Tex., and Thomas W. Spence, St. Paul, Minn., for defendant.

ORDER

ROSENBAUM, District Judge.

Defendant moves to dismiss this cause, pursuant to Rule 12(b), Federal Rules of Civil Procedure (Fed.R.Civ.P.) or, in the alternative, for summary judgment pursuant to Rule 56, Fed.R.Civ.P. The Court has considered affidavits and documents outside the pleadings and, therefore, treats defendant's motion as one for summary judgment pursuant to Rule 56. Having considered these items and the arguments of counsel, the Court grants defendant's motion for summary judgment.

Facts

In 1967, several railroads merged to become the Burlington Northern Railroad Company. The merger was approved by the Interstate Commerce Commission (ICC). The ICC, however, imposed specific labor protection benefits (the Northern Lines protective conditions, 331 ICC 228 (1967), aff'd, 296 F.Supp. 853 (D.D.C.1968), aff'd sub nom., United States v. ICC, 396 U.S. 491, 90 S.Ct. 708, 24 L.Ed.2d 700 (1970)) which inured to all employees of the railroads. Among these conditions was a guarantee that certain benefits, calculated at a particular rate, were to be paid to employees affected by any reduction in force at the railroads. 49 U.S.C. § 11347.

Plaintiff was employed by defendant from October, 1953, to October, 1986, when his position was abolished. From 1965 on, plaintiff held non-union, exempt positions. When his position was abolished, plaintiff was given three options: (1) to exercise seniority and obtain a new position pursuant to a collective bargaining agreement with defendant; (2) remain an exempt employee without job duties and with a reduced compensation equivalent to plaintiff's benefit guarantees under the Northern Lines protective conditions; or (3) enter into a settlement and release with defendant. It is plaintiff's claim that officers of defendant advised him the third option would be most beneficial, that he relied heavily on those representations, and that he has been injured thereby.

Initially, following the abolishment of his position, plaintiff apparently began receiving benefits as computed pursuant to the Northern Lines merger (option two of defendant's proposals). Defendant also sent a proposed settlement and release form to plaintiff for his consideration (pursuant to option three of defendant's proposals).

Plaintiff admits that he hired an attorney to assist him in considering the prospective agreement and release. He contends, however, that he hired the attorney solely "for the express purpose of confirming the written terms of the agreement BN had proposed to me ... such as clarifying with BN questions regarding the receipt of benefits, deductions to be taken for Railroad Retirement, and the timing and amount of the severance payment." Plaintiff's affidavit, ¶ 24. In his affidavit plaintiff states he "did not retain the attorney to negotiate on my behalf or advise me regarding any aspect of the other options presented to me by BN." Id.

Plaintiff agreed to sign the settlement and release agreement. He did so after further negotiations concerning the terms of the agreement. Pursuant to the agreement, plaintiff was paid $78,350.22 plus reimbursements originally taken as deductions pursuant to the Rail Passenger Service Act, 45 U.S.C. § 565. Plaintiff also negotiated the payment of his attorney's fees. By its terms the final settlement released defendant from all claims relating to plaintiffs' employment and retirement.

In August, 1985, another exempt employee of defendant — Mr. George W. Landis — brought suit in the United States District Court for the Western District of Washington challenging defendant's interpretation of the protective conditions. Mr. Landis alleged defendant's interpretation breached the 1967 merger agreement. The district court referred the issue to the ICC.

In December, 1986, the ICC concluded defendant misinterpreted the protective conditions and applied an incorrect formula for determining guaranteed benefits. The ICC's decision is generally referred to as Landis I.¹ Roughly one and a half years later, in April, 1988, the ICC promulgated the correct measure for determining the guarantees. This latter decision is known as Landis II.²

Following Landis I, defendant sent a copy of the ICC's decision to all exempt employees, including plaintiff. Plaintiff received the decision in February, 1987, prior to the date he cashed his release consideration check. Plaintiff acknowledges cashing his Railroad Retirement Act reimbursement following this first notice.

Defendant also sent a notice of the Landis II decision to all exempt employees. Defendant alleges plaintiff continued to accept the benefits of the settlement and release agreement after the Landis II decision was handed down and distributed.

Plaintiff brings this action seeking to rescind the release he signed in December, 1986. He claims he would not have entered into the settlement had he known of the Landis litigation. He alleges in Counts I and II that defendant has breached the ICC's Northern Lines merger regulations and protective conditions and 49 U.S.C. § 11347. Plaintiff further alleges in Count III that defendant has breached the Employee Retirement Income Security Act, 29 U.S.C. § 1001, et seq. In particular, plaintiff contends defendant has breached sections 1140 and 1141 of Title 29. In Count IV, plaintiff contends the release is invalid because defendant misled him by failing to apprise him of the Landis litigation — which had not yet been decided by the ICC — during the negotiation of the release. In Counts V and VI, plaintiff alternatively alleges the release is invalid because it was made under a unilateral mistake or a mutual mistake. As in Count IV, plaintiff alleges the release is unenforceable since defendant knew of the pendency of the Landis case and he did not.

Defendant responds by arguing the release is valid and plaintiff's claims are, therefore, barred. In particular, defendant notes the release is supported by consideration and was signed by plaintiff with full knowledge of its ramifications. In the alternative, defendant suggests plaintiff's claims in Counts I and II should be referred to the ICC for determination prior to consideration of Counts III through VI.³

Analysis

I. Summary Judgment Standard

Summary judgment is appropriate if there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Rule 56(c), Federal Rules of Civil Procedure (Fed.R. Civ.P.). Summary judgment may be granted against a party who fails to make a showing sufficient to establish the existence of an element essential to its case and on which that party will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 2552-53 91 L.Ed.2d 265 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986). The opposing party must produce concrete facts demonstrating the issue for trial. Buford v. Tremayne, 747 F.2d 445, 447 (8th Cir.1984).

II. Choice of Law

The settlement and release signed by plaintiff includes a choice of law clause providing that Texas law govern any dispute over the release terms. Plaintiff suggests the choice of law clause is unenforceable and Minnesota law governs this dispute. Defendant disagrees, but notes in its reply brief that Minnesota and Texas law generate the same outcome. Absent serious objection from defendant, the Court need not resolve any conflict of laws question which may otherwise be presented. For purposes of this motion, the Court accepts plaintiff's argument and applies Minnesota law.

III. ICC Priority

Defendant suggests referring Counts I and II to the ICC. Since those counts allege violations of the Northern Lines merger agreement, the ICC appears to be the proper administrative body to consider plaintiff's allegations under the doctrine of primary jurisdiction. See Morgan v. St. Joseph Terminal Railroad Co., 815 F.2d 1232, 1235 (8th Cir), cert. denied, 484 U.S. 846, 108 S.Ct. 141, 98 L.Ed.2d 98 (1987).

The ICC is clearly the entity to determine, in the first instance, whether a Northern Lines violation has occurred, particularly when a complaint raises issues such as compliance with pre-merger protective agreements, ICC merger approval orders, and the statutory mandate for fair and equitable arrangements to protect the interests of employees affected by a merger. Anderson v. United Transportation Union, 557 F.2d 165, 169 (8th Cir.1977). In particular, "the doctrine should be exercised if the issues in the proceeding `turn on a determination of the reasonableness of a challenged practice,' or raise a `question of the validity of a ... practice.'" Maislin v. Primary Steel, Inc., 879 F.2d 400, 403 (8th Cir.1989) (quoting Nader v. Allegheny Airlines, Inc., 426 U.S. 290, 304-06, 96 S.Ct. 1978, 1987-88, 48 L.Ed.2d 643 (1976)). Even though a private cause of action may exist for the enforcement of the ICC order, the doctrine provides that the ICC retains initial jurisdiction. Engelhardt v. Consolidated Rail Corp., 594 F.Supp. 1157, 1164 (N.D.N.Y.1984), aff'd, 756 F.2d 1368, 1369 (2d Cir.1985).

Were plaintiff's claims before the Court absent the issue created by his release, this Court would feel bound to address these matters to the ICC. Plaintiff's first two counts turn on the merger agreement and the ICC's interpretation in a fashion which is facially similar to Mr. Landis. Yet, the claims also relate to the release agreement signed by the plaintiff. Before the Court may pass the issue to the ICC for consideration of...