Union Pacific R.R. v. Motive Equipment

714 N.W.2d 232

2006 WI App 58

UNION PACIFIC RAILROAD COMPANY, Plaintiff-Appellant, v. MOTIVE EQUIPMENT, INC., Defendant-Third-Party Plaintiff-Respondent, Electro-Motive Division/General Motors Corporation and Diesel Division of General Motors of Canada, Defendants-Respondents, v. West Bend Mutual Insurance Company and Marlin Toy Products, Inc., Third-Party Defendants-Respondents.

No. 2004AP2630.

Court of Appeals of Wisconsin.

Oral Argument January 18, 2006.

Opinion Filed March 14, 2006.

On behalf of the plaintiff-appellant, the cause was submitted on the briefs of Brian D. Baird and Patrick D. McNally of Borgelt, Powell, Peterson & Frauen, S.C., Milwaukee. There was oral argument by Joseph P. Mascovich.

On behalf of the defendants-respondents, the cause was submitted on the brief of Michael J. Gonring and Keith A. Bruett of Quarles & Brady, LLP, Milwaukee, and Timothy S. Coon of Eckert Seamans Cherin & Mellott, LLC, Pittsburgh, Pennsylvania. There was oral argument by Thomas J. Sweeney, Jr.

On behalf of the defendant-third-party plaintiff-respondent, the cause was submitted on the brief of Christopher P. Riordan and Maureen Hegarty Kanter of von Briesen & Roper, S.C., Milwaukee. There was oral argument by Christopher P. Riordan.

On behalf of the third-party defendants-respondents, the cause was submitted on the brief of Terry J. Booth of Piper & Schmidt, Milwaukee. There was oral argument by Terry J. Booth.

Before WEDEMEYER, P.J., CURLEY and KESSLER, JJ.

¶ 1 WEDEMEYER, P.J

Union Pacific Railroad Company appeals from orders entered dismissing its contribution/indemnification action against Motive Equipment, Inc. (MEI) and Electro-Motive Division/General Motors Corporation and Diesel Division of General Motors of Canada (GM). Union Pacific contends the trial court erred in granting summary judgment in favor of GM and MEI on the basis that the economic loss doctrine applied and the action was preempted by federal law, i.e., the Federal Employers Liability Act, (FELA) 45 U.S.C. §§ 51-60 and the Locomotive Inspection Act, (LIA) 49 U.S.C. §§ 20701-703. Because we conclude that Union Pacific's claim is preempted by federal law, we affirm.

BACKGROUND

¶ 2 On January 1, 1999, Douglas Butolph, a Union Pacific locomotive engineer was operating unit number 8172, a diesel locomotive manufactured by GM, on a westbound coal train. Butolph noticed a strange odor and smoke in the cab, which started to burn his throat. He attempted to open all the windows to clear the odor, but that only made the odor worse. The cause of the smoke and odor was a fire in the refrigerator in the locomotive cab.

¶ 3 Butolph called the dispatcher and received permission to take the next available siding. He stopped the train there and exited the vehicle. He was exposed to the odor for about fifteen minutes before he was able to get off the locomotive. As a result, Butolph suffered severe rhino sinusitis and vocal cord dysfunction. Butolph filed suit against Union Pacific in Colorado. He alleged that Union Pacific failed to provide a reasonably safe place to work, and thus was negligent under the FELA, and the LIA. Following discovery and mediation, Union Pacific settled Butolph's claim for $350,000.

¶ 4 Union Pacific then filed this action against GM, from whom it bought the locomotive, and MEI, who manufactured the refrigerator, for contribution and indemnity.¹ It alleged that it paid more than its fair share of the parties' joint liability. Union Pacific alleged that GM had improperly installed the refrigerator and was liable for negligence, strict products liability, breach of warranties and breach of the indemnification provisions of the sale contract for the locomotive. MEI was the manufacturer of the refrigerator that malfunctioned and started the fire. Union Pacific alleged that MEI was liable for negligence, strict products liability, and breach of warranties.

¶ 5 GM and MEI filed motions seeking summary judgment. GM asserted that the LIA preempted any tort claims against it and its warranty disclaimers eliminated any non-tort claims. GM also asserted there was no proof of causation. MEI asserted similar arguments and contended that the claim was barred by the economic loss doctrine.

¶ 6 The trial court granted GM's and MEI's motions for summary judgment, holding that Union Pacific's claims were preempted by federal law, that its damages were "purely economic" and that its theories of negligence, strict liability and breach of warranty were barred by the economic loss doctrine. Union Pacific now appeals.

DISCUSSION

¶ 7 This case arises from a grant of summary judgment. Our standard of review in such circumstances is well known. We review summary judgments independently, employing the same methodology as the trial court. See Green Spring Farms v. Kersten, 136 Wis.2d 304, 315, 401 N.W.2d 816 (1987). We do value any analysis that the trial court has placed in the record. We will affirm the trial court's decision granting summary judgment if the record demonstrates that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. WIS. STAT. § 802.08(2) (2003-04).

¶ 8 The dispositive issue in this case is whether Union Pacific's claim is preempted by federal law. We conclude that it is, and therefore affirm the trial court for the reasons that follow.

¶ 9 In 1926, the United States Supreme Court held that the LIA (sometimes referred to as the Boiler Inspection Act) "extends to the design, the construction and the material of every part of the locomotive and tender and of all appurtenances." Napier v. Atlantic Coast Line R.R. Co., 272 U.S. 605, 611, 47 S.Ct. 207, 71 L.Ed. 432 (1926). Congress intended federal law to occupy the entire field of locomotive safety and equipment, "particularly as it relates to injuries suffered by railroad workers in the course of their employment." Law v. General Motors Corp., 114 F.3d 908, 910 (9th Cir. 1997). In Law, the Ninth Circuit articulated the reason preemption was necessary:

This broad preemptive sweep is necessary to maintain uniformity of railroad operating standards across state lines. Locomotives are designed to travel long distances, with most railroad routes wending through interstate commerce. The virtue of uniform national regulation "is self-evident: locomotive companies need only concern themselves with one set of equipment regulations and need not be prepared to remove or add equipment as they travel from state to state."

Id. (citations omitted). Although cases are repeatedly brought challenging the status of federal preemption in this area, the majority of courts across the nation hold firm to the Napier principle that federal law preempts all state claims, leaving no area within which states may act. See, e.g., Darby v. A-Best Prods. Co., 102 Ohio St.3d 410, 811 N.E.2d 1117 (2004); In re W. Virginia Asbestos Litig., 215 W.Va. 39, 592 S.E.2d 818 (2003); General Motors Corp. v. Kilgore, 853 So.2d 171 (Ala.2002); Forrester v. American Dieselelectric, Inc., 255 F.3d 1205 (9th Cir.2001); Furlough v. Union Pacific R.R. Co., 766 So.2d 751 (La.App.2000); Seaman v. A.P. Green Indus., Inc., 184 Misc.2d 603, 707 N.Y.S.2d 299 (Sup.Ct.2000); Scheiding v. General Motors Corp., 22 Cal.4th 471, 93 Cal. Rptr.2d 342, 993 P.2d 996 (2000); Norfolk S. Ry. Co. v. Denson, 774 So.2d 549 (Ala. 2000); Oglesby v. Delaware & Hudson Ry. Co., 180 F.3d 458 (2d Cir.1999); Carter v. Consolidated Rail Corp., 126 Ohio App.3d 177, 709 N.E.2d 1235 (1998); Springston v. Consolidated Rail Corp., 130 F.3d 241 (6th Cir.1997); Key v. Norfolk S. Ry. Co., 228 Ga.App. 305, 491 S.E.2d 511 (1997); In re Train Collision at Gary, Indiana, 670 N.E.2d 902 (Ind.App.1996); Southern Pac. Transp. Co. v. Public Util. Comm'n, 9 F.3d 807 (9th Cir.1993); Burlington N. R.R. v. City of Connell, 811 F.Supp. 1459 (E.D.Wash.1993); Burlington N. R.R. Co. v. State of Montana, 805 F.Supp. 1522 (D.Mont.1992); Smith v. Norfolk & W. Ry. Co., 776 F.Supp. 1335 (N.D.Ind.1991); Missouri Pac. R.R. v. Railroad Comm'n of Texas, 850 F.2d 264 (5th Cir.1988); King v. Southern Pac. Transp. Co., 855 F.2d 1485 (10th Cir.1988); Green v. River Terminal Ry. Co., 585 F.Supp. 1019 (N.D.Ohio 1984), aff'd, 763 F.2d 805 (6th Cir.1985); Marshall v. Burlington N., Inc., 720 F.2d 1149 (9th Cir.1983); Consolidated Rail Corp. v. Pennsylvania Pub. Util. Comm'n, 536 F.Supp. 653 (E.D.Pa.), aff'd, mem., 696 F.2d 981 (3d Cir.1982), aff'd, 461 U.S. 912, 103 S.Ct. 1888, 77 L.Ed.2d 280 (1983); New York, C. & St. L.R.R. Co. v. Van Dorp, 36 Ohio App. 530, 173 N.E. 445 (1930); Pennsylvania R.R. Co. v. Pelsor, 90 Ind.App. 111, 168 N.E. 249 (1929).

¶ 10 Union Pacific argues that the holdings in these cases do not apply to the facts and circumstances of this case. It contends that because the instant case involves allegations that third parties' actions contributed to Butolph's injuries Engvall v. Soo Line Railroad Co., 632 N.W.2d 560 (Minn.2001) applies, and as a result, GM and MEI should share in the financial responsibility for the damages Butolph sustained. We cannot agree.

¶ 11 Union Pacific's contribution claims are premised on Butolph's underlying claim. Thus, Union Pacific can recover from GM and MEI, only if Butolph could have recovered from GM and MEI himself. See Kafka v. Pope, 194 Wis.2d 234, 242-43, 533 N.W.2d 491 (1995). If Butolph's claim is preempted as to GM and MEI, then Union Pacific's claim must be preempted as well.

¶ 12 Federal law preempts any state action that would affect "the design, the construction, and the material" of locomotives. Napier, 272 U.S. at 611, 47 S.Ct. 207. Butolph's claim involved the negligent design of a refrigerator installed on the locomotive. There is simply no way to conclude that Butolph's claim is something different from that which is federally preempted. If Butolph attempted to file a state claim against GM or MEI, we have no doubt that his attempt would have failed. His...