Whalen v. CSX Transp., Inc.

DANIEL WHALEN, Plaintiff, v. CSX TRANSPORTATION, INC., et al., Defendants.

13 Civ. 3784 (LGS)(HBP)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

September 14, 2016

OPINION AND ORDER

PITMAN, United States Magistrate Judge:

I. Introduction

By notice of motion dated December 18, 2015 (Docket Item ("D.I.") 209), plaintiff moves to sever or dismiss the third-party claims of defendant CSX Transportation, Inc. ("CSX") against Office Environments Service, Inc. and Haworth Inc. As explained in more detail below, to the extent plaintiff claims that CSX's third-party claims should be severed because those claims are legally flawed, plaintiff's motion lacks any legal basis. To the extent plaintiff is asserting that the third-party claims should be severed as a matter of discretion, plaintiff's arguments also fail. To the extent plaintiff is seeking the dismissal of the third-party claims, he lacks standing to seek dismissal and, therefore, it is not necessary to address the merits of this aspect of the motion.¹ Accordingly, plaintiff's motion for severance is denied.

II. Facts

Plaintiff brings this action under the Federal Employers Liability Act, 45 U.S.C. §§ 51 et seq., alleging that on or about November 8, 2011, while employed by defendant CSX, he was injured while attempting to sit in a Zody Task Chair in the Carman's Office at CSX's Oak Point Yard, located in the Bronx, New York. According to plaintiff, "when he went to sit in the chair, it suddenly and without warning rapidly reclined all the way backwards, then just as suddenly the chair abruptly jerked back to its original upright position" (Plaintiff's Memorandum of Law in Support of Motion for Spoliation Sanctions, dated Dec. 18, 2015 (D.I. 206)("Plaintiff's Mem.") at 2).² As a result, plaintiff claims to have sustained injuries to his back. In addition to defending against plaintiff's claims, CSX has brought a third-party action against the chair's seller, Office Environments Service Inc., and its manufacturer, Haworth, Inc., seeking contribution and/or indemnity and alleging negligence, breach of warranty and related claims.

Plaintiff argues that CSX's third-party claims should be severed because (1) they are barred by the FELA and (2) trying the FELA and third-party claims to the same jury will result in juror confusion due to the different legal standards applicable to each set of claims.³III. Analysis

A. The FELA Does Not Bar Bar Third-Party Claims Against Parties that Are Not Employees of the Railroad

Plaintiff's principal argument -- that the FELA precludes a railroad from seeking indemnity or contribution from parties who are not employees of the railroad -- is contradicted by the very cases on which he relies.

Plaintiff's argument has its genesis in Section 55 of the FELA which provides:

Any contract, rule, regulation, or device whatsoever, the purpose or intent of which shall be to enable any common carrier to exempt itself from liability created by this Chapter, shall to that extent be void.

45 U.S.C. § 55. Plaintiff's theory appears to be that permitting a defendant railroad to seek contribution or indemnity is a device that enables the railroad to exempt itself from liability and, thus, a railroad's assertion of a third-party claim is prohibited.

The fundamental flaw in this argument is that it equates contribution and indemnity with an exemption from liability. However, "[i]ndemnification against liability is not the same as exemption from liability." Mead v. Nat'l R.R. Corp., 676 F. Supp. 92, 95 (D. Md. 1987). Contrary to plaintiff's argument,a claim for contribution or indemnity does not even accrue until the party asserting the claim has paid the underlying liability. SPV OSUS Ltd. v. UBS AG, 15 Civ. 619 (JSR), 2015 WL 4079079 at *3 (S.D.N.Y. July 1, 2015) (contribution); s.a.r.l. Orliac v. Winebow, Inc., 595 F. Supp. 470, 473 (S.D.N.Y. 1984) (Canella, D.J.) (indemnity). Because the predicate for a contribution or indemnity claim is a finding that the party seeking contribution or indemnity is liable, a claim for contribution or indemnity cannot, as a matter of logic, operate as an to create an exemption from liability.

One of the principal case on which plaintiff relies is Norfolk & Western Ry. Co. v. Ayers, 538 U.S. 135 (2003). It does not support plaintiff's theories. In that case, six former employees of the defendant railroad had contracted asbestosis and alleged that they had been exposed to asbestos while working for the railroad. Two of the plaintiffs also had significant exposure to asbestos while working for other employers. When the case was submitted to the jury, the trial court refused the railroad's "request to instruct the jury to apportion damages between [the railroad] and other employers alleged to have contributed to an asbestosis claimant's disease." 538 U.S. at 143.

Although Ayers clearly held that the FELA precludes a railroad from seeking apportionment in response to a claim by an employee, it endorsed the railroad's right to seek contributions from other tortfeasors who may have contributed to plaintiff's injury. For example, the Court stated its conclusion as follows: "[t]he FELA's express terms, reinforced by consistent judicial applications of the Act, allow a worker to recover his entire damages from a railroad whose negligence jointly caused an injury . . . , thus placing on the railroad the burden of seeking contribution from other tortfeasors." 538 U.S. at 141 (emphasis added).

Similarly, in further support of its conclusion, the Court stated:

The federal and state reporters contain numerous FELA decisions stating that railroad employers may be held jointly and severally liable for injuries caused in part by the negligence of third parties, and even more recognizing that FELA defendants may bring indemnification and contribution actions against third parties under otherwise applicable state or federal law. Those third-party suits would have been unnecessary had the FELA itself authorized apportionment.

538 U.S. at 162-63 (footnotes omitted).⁴ The Court's approving citation of these third-party actions is incomprehensible if the Court were concluding that the FELA precluded third-party claims against non-employees.

Finally, in responding to the railroad's argument that denying apportionment and requiring a railroad to seek contribution or indemnity through a third-party action would be wasteful, the Court noted that "FELA defendants may be able to implead third parties and thus secure resolution of their contribution action in the same forum as the underlying FELA actions." 538 U.S. at 165 n.23. Again, the Court's language makes no sense if the Court were concluding that the FELA categorically precluded a railroad from seeking contribution or indemnity in an FELA case.

In support of his argument, plaintiff cites a number of decisions in FELA cases in which a railroad's third-party claims for contribution or indemnity have been stricken. Virtually allof these cases, however, involve a railroad's claim for contribution or indemnity against a fellow employee of the injured plaintiff.⁵ This is an important distinction because the FELA eliminated the "fellow-servant rule."⁶ Norfolk & Western R.R. Co. v. Ayers, supra, 538 U.S. at 145; Sinkler v. Missouri Pac. R.R. Co., 356 U.S. 326, 329-30 (1958). Courts have, therefore, routinely dismissed third-party contribution and indemnity claims against a plaintiff's fellow employee because permitting such claims would effectively permit railroads to benefit from the fellow employee rule. As explained by the court in Waisonovitz v. Metro-N. Commuter R.R., supra, 462 F. Supp. 2d at 294-95:

Metro-North argues that FELA does not prohibit an employer from seeking contribution or indemnification from a co-employee. However, the cases cited by Metro-North . . . involve claims of contribution orindemnification against an outside third-party -- i.e., against a non-employee. Even the case Metro-North appears to rely on most, Gaulden v. Burlington Northern, Inc., 232 Kan. 205, 654 P.2d 383 (1982), involved the negligence of a third-party truck driver who was involved in a crossing accident. In that case, the Kansas Supreme Court noted that FELA did not provide for contribution; however, "[t]he purpose of FELA, to obligate an employer to pay damages when there is proof that the employer's negligence played any part in causing injury to an employee, is not defeated by permitting the employer to recoup its losses in part or in full from a third party, when the circumstances and state law permit." Id. at 389. All the other cases cited by Metro-North similarly allow contribution or indemnification claims against third-parties who are not employees of the railroad.

By contrast, since the purpose of FELA is "to persuade railroad employers to exercise caution in selecting and supervising its employees," Henson v. Baltimore & Ohio R.R. Co., 1985 U.S. Dist. LEXIS 21048, at *13 (W.D. Pa. 1985) (citing legislative history), "to permit an employer to seek indemnification . . . would violate the intent of Congress rather than foster it." Illinois Central Gulf R.R. Co. v. Haynes, 592 So.2d 536, 540 (Ala. 1991). Indeed, in construing 45 U.S.C. § 51, the Supreme Court has stated:

. . . .

. . . Thus while the common law had generally regarded the torts of fellow servants as separate and distinct from the torts of the employer, holding the latter responsible only for his own torts, it was the conception of this legislation that the railroad was a unitary enterprise, its economic resources obligated to bear the burden of all injuries befalling those engaged in the enterprise arising out of the fault of any other member engaged in the common endeavor. Hence a railroad worker may recover from his employer for an injury caused in whole or in part by a fellow worker, not because the employer is himself to blame, but because justice demands that one who gives hislabor to the furtherance of the enterprise

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