Eimers v. Lindsay Corp.

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STEPHEN EIMERS, Plaintiff, v. LINDSAY CORPORATION, et al., Defendants.

No. 1:19-cv-44

United States District Court, E.D. Tennessee, Chattanooga

May 27, 2022

CHRISTOPHER H. STEGER, MAGISTRATE JUDGE.

ORDER

TRAVIS R. MCDONOUGH, UNITED STATES DISTRICT JUDGE.

Before the Court is Plaintiff Stephen Eimers's motion for reconsideration of the Court's grant of summary judgment regarding punitive damages (Doc. 287). After initial briefing on this motion, the Court ordered the parties to file supplemental briefs to address whether Eimers waived his argument regarding punitive damages by failing to raise it in summary-judgment briefing, whether the crash-testing standards at issue were actually required in any federal or state regulation, and whether new evidence would support a finding that Lindsay did not comply with those crash-testing standards. (Doc. 321, at 13.) For the following reasons, the Court will GRANT Eimers's motion for reconsideration (Doc. 287) and REVERSE its previous ruling dismissing Eimers's punitive-damages claim (Doc. 269, at 57-58).

I. STANDARD OF LAW

Federal Rule of Civil Procedure 54(b) provides, in pertinent part:

[A]ny order or other decision, however designated, that adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties does not end the action as to any of the claims or parties and may be revised at any time before the entry of a judgment adjudicating all the claims and all the parties' rights and liabilities.

“Traditionally, courts will find justification for reconsidering interlocutory orders when there is (1) an intervening change of controlling law; (2) new evidence available; or (3) a need to correct a clear error or prevent manifest injustice.” Rodriguez v. Tenn. Laborers Health & Welfare Fund, 89 Fed.Appx. 949, 959 (6th Cir. 2004) (citation omitted); cf. Shah v. NXP Semiconductors USA, Inc., 507 Fed.Appx. 483, 495 (6th Cir. 2012) (noting that motions for reconsideration cannot be used to raise new legal arguments that could have been raised before).

II. BACKGROUND^[1]

At summary judgment, the Court based its decision to dismiss the punitive-damages claim on Tennessee Code Annotated § 29-39-104(e), which bars punitive damages when a defendant demonstrates it was in “substantial compliance with applicable federal and state regulations setting forth specific standards applicable to the activity in question.” The Court held that this statute applied to bar punitive damages in this case because “Plaintiff acknowledges, as he must, that the X-LITE did pass its crash tests and was approved by the [Federal Highway Administration], even if it was only ‘technically passing a bare minimum crash test (with disturbing interpretations and submissions of those test results).'” (Doc. 269, at 58 (quoting Doc. 257, at 16-17).)

Eimers now argues that the crash-testing criteria the Federal Highway Administration (“FHWA”) required that the X-LITE meet before issuing an “approval letter” for the product was not a federal regulation, and that the Tennessee Department of Transportation's (“TDOT”) requirement that a product receive the FHWA approval letter before it would be included on its Qualified Products List (“QPL”) was not a state regulation. (Doc. 288, at 5-8; Doc. 223-3, at 92 (“The purpose of the Qualified Products List is to make available to Construction and Maintenance personnel a list of products which perform satisfactorily. Inclusion on the QPL must not be considered as prior approval, and in no way precludes Departmental testing and approval requirements. Products on the QPL are products which have been evaluated and found that they could be acceptable for use, provided all testing and/or certification requirements have been met and provided the products are used in accordance with the manufacturer's recommendations.”); Doc. 341-1.) Based on these arguments, the Court ordered Eimers to submit a supplemental brief regarding why he did not waive this argument by failing to raise it in response to Lindsay's motion for summary judgment. (Doc. 321, at 13.) Lindsay, in its initial response to Eimers's motion for reconsideration, asserted that the crash-testing criteria were “mandatory safety standard[s]” required by both the FHWA and the TDOT but cited no regulations from these agencies that required crash testing. (Doc. 290, at 6-9.) Therefore, the Court also ordered Lindsay to file a supplemental brief identifying which regulation, promulgated through notice-and-comment procedures at the federal level, or equivalent procedures at the state level, set forth applicable crash-testing standards. (Doc. 321, at 13.) The parties have now filed their supplemental briefs, and Eimers's motion for reconsideration is ripe for the Court's review. (Docs. 326-27.)

III. ANALYSIS

Tennessee Code Annotated § 29-39-104(e) (hereinafter, “§ 104(e)”) provides:

Punitive damages shall not be awarded in any civil action when a defendant demonstrates by a preponderance of the evidence that it was in substantial compliance with applicable federal and state regulations setting forth specific standards applicable to the activity in question and intended to protect a class of persons or entities that includes the plaintiff, if those regulations were in effect at the time the activity occurred.

The Court dismissed Eimers's punitive-damages claim because Eimers acknowledged that the X-LITE passed its crash tests and was approved by the FHWA. (Doc. 269, at 57-58.) Implicit in this conclusion was that the crash-testing standards required for approval by the FHWA were regulatory standards within the meaning of § 104(e). But the Court did not explicitly consider whether the crash-testing standards, which were developed by the National Cooperative Highway Research Program 350 Report (“NCHRP 350”), were, in fact, regulatory standards, because Eimers did not raise this argument. Instead, he only argued that Lindsay did not substantially comply with the crash-testing standards.^[2] However, Eimers's motion for reconsideration and the parties' supplemental briefs clarified that the assumption that the FHWA regulations required compliance with the standards of crashworthiness under the NCHRP 350 was a clear error of law.

A. No Federal Regulation Imposed the Specific Standards of NCHRP 350

Section 104(e) does not bar punitive damages in this case. Federal regulations imposed no specific crash-testing standards; NCHRP 350 was merely guidance or policy.

FHWA's reliance on the NCHRP 350 arose out of the Intermodal Surface Transportation Efficiency Act of 1991 (“ISTEA”). In this statute, Congress required the FHWA to promulgate a regulation establishing standards to ensure the crashworthiness of guardrail end terminals to be installed on the national highway system:

(a) Initiation of rulemaking proceeding.--Not later than 30 days after the date of the enactment of this Act [Dec. 18, 1991], the Secretary shall initiate a rulemaking proceeding to revise the guidelines and establish standards for installation of roadside barriers and other safety appurtenances, including longitudinal barriers, end terminals, and crash cushions. Such rulemaking shall reflect state-of-the-art designs, testing, and evaluation criteria contained in the National Cooperative Highway Research Program Report 230, relating to approval standards which provide an enhanced level of crashworthy performance to accommodate vans, mini-vans, pickup trucks, and 4-wheel drive vehicles.

(b) Final rule.--Not later than 1 year after the date of the enactment of this Act [Dec. 18, 1991], the Secretary shall complete the rulemaking proceeding initiated under subsection (a), and issue a final rule regarding the implementation of revised guidelines and standards for acceptable roadside barriers and other safety appurtenances, including longitudinal barriers, end terminals, and crash cushions. Such revised guidelines and standards shall accommodate vans, mini-vans, pickup trucks, and 4-wheel drive vehicles and shall be applicable to the refurbishment and replacement of existing roadside barriers and safety appurtenances as well as to the installation of new roadside barriers and safety appurtenances.

Intermodal Surface Transportation Efficiency Act of 1991, Pub. L. No. 102-240, § 1073, 105 Stat. 1914 (1991) (emphasis added). The FHWA undertook a formal rulemaking process, as prescribed in the ISTEA, which resulted in a final rule in 1993. The rule provided, in part:

(a) Plans and specifications for proposed Federal-aid highway projects shall provide for a facility that will-

(1) Adequately meet the existing and probable future traffic needs and conditions in a manner conducive to safety, durability, and economy of maintenance; and

(2) Be designed and constructed in accordance with standards best suited to accomplish the foregoing objectives and to conform to the particular needs of each locality.

23 C.F.R. § 625.2(a) (1994 version). This rule has remained largely unchanged. 23 C.F.R. § 625.2(a) (current) (“Plans and specifications for proposed National Highway System (NHS) projects shall provide for a facility that will-(1) Adequately serve the existing and planned future traffic of the highway in a manner that is conducive to safety, durability, and economy of maintenance; and (2) Be designed and constructed in accordance with criteria best suited to accomplish the objectives described in paragraph (a)(1) of this section and to conform to the particular needs of each locality.”).

At the time the rule was first promulgated, it also contained a section entitled “Guides and references, ” and referenced “citations to publications which are primarily informational or guidance in character and serve to assist the public in knowing those...