STATE EX REL. BURLINGTON NORTHERN v. Dist. Ct.

No. 13295 I N THE SUPREME COURT OF THE STATE OF M N A A OTN 1976 STATE O M N A A e x re1 F OTN BURLINGTON NORTHERN I N C . , Rela t o r , THE DISTRICT COURT O THE EIGHTH F JUDICIAL DISTRICT OF THE STATE OF MONTANA, I N AND FOR THE C U T OF O NY CASCADE, THE HON. N T ALLEN, JUDGE A PRESIDING, ORIGINAL PROCEEDING : Counsel o f Record: F o r Re l a t o r : Gough, Booth, Shanahan and Johnson, Helena, Montana C o r d e l l Johnson a r g u e d , Helena, Montana F o r Respondents: Hoyt and Bottomly, G r e a t F a l l s , Montana John Hoyt a r g u e d , G r e a t F a l l s , Montana Submitted: March 1 7 , 1976 Decided : fiPR 1 4 1376 F i l e d : .&PR l4 m'f? M r . J u s t i c e John Conway H a r r i s o n d e l i v e r e d t h e Opinion o f t h e Court. T h i s i s an o r i g i n a l proceeding. Relator Burlington N o r t h e r n , I n c . , p e t i t i o n e d t h i s Court f o r a w r i t o f s u p e r v i s o r y control o r other appropriate order. Ex p a r t e p r e s e n t a t i o n on March 4 , 1976, was f o l l o w e d by an o r d e r o f t h i s Court f o r a n a d v e r s a r y h e a r i n g on March 1 7 , 1976. B r i e f s were s u b m i t t e d , t h e m a t t e r argued and t a k e n under advisement by t h e C o u r t . This matter involves a Federal ~ m p l o y e r s 'L i a b i l i t y Act (FELA) c a s e which was b e f o r e t h i s Court p r e v i o u s l y (McGee v. B u r l i n g t o n N o r t h e r n , I n c . , Mont . , 540 P.2d 298, 32 St.Rep. 847). I n t h a t case r e l a t o r appealed a j u r y v e r d i c t i n t h e amount o f $525,000 a g a i n s t r e l a t o r t o t h i s Court. Following t h e j u r y v e r d i c t and judgment, r e l a t o r r a i l r o a d company f a i l e d t o p o s t a s u p e r s e d e a s bond w i t h i n t h e p e r i o d provided by t h e r u l e s o f a p p e l l a t e c i v i l p r o c e d u r e and McGee l e v i e d on a p p r o x i m a t e l y $170,000 o f t h e r e l a t o r ' s a s s e t s b e f o r e such bond was p o s t e d . T h i s C o u r t , on a p p e a l , v a c a t e d and set a s i d e t h e judgment and o r d e r e d a new t r i a l on t h e i s s u e o f damages. Following d e n i a l o f a r e h e a r i n g on September 1 3 , 1975, r e l a t o r f i l e d a motion on September 1 8 , 1975, f o r a n o r d e r r e q u i r i n g a n a c c o u n t i n g o f funds l e v i e d on by McGee a f t e r t h e j u r y v e r d i c t and judgment and asked f o r an o r d e r f o r r e s t i t u t i o n o f such f u n d s and f o r c o s t s on appeal. Following t h e d e c i s i o n o f t h i s C o u r t , McGee f i l e d a p e t i t i o n f o r a w r i t o f c e r t i o r a r i i n t h e United S t a t e s Supreme C o u r t . The t r i a l c o u r t o r d e r e d t h a t McGee would n o t have t o f i l e b r i e f s on t h e a c c o u n t i n g and r e s t i t u t i o n o r c o s t q u e s t i o n s u n t i l 30 days a f t e r a r u l i n g by t h e United S t a t e s Supreme Court on t h e w r i t o f c e r t i o r a r i i n t h a t Court. On January 1 9 , 1976, t h e Supreme Court of t h e United S t a t e s denied t h e p e t i t i o n f o r a w r i t o f c e r t i o r a r i . The t r i a l j u d g e , Judge A l l e n , on J a n u a r y 27, 1976, s e t t h e c a s e f o r t r i a l on A p r i l 27, 1976. McGee t h e n f i l e d an amended c o m p l a i n t a l l e g i n g t h e v i o l a t i o n o f t h e F e d e r a l S a f e t y Appliance A c t , which had been i n t h e o r i g i n a l c o m p l a i n t b u t which t h e o r i g i n a l t r i a l judge had deemed i t n o t n e c e s s a r y t o r u l e upon, and i n a d d i t i o n a l l e g e d w i ' l f u l and wanton c o n d u c t by r e l a t o r r a i l r o a d company a s a b a s i s f o r p u n i t i v e damages. R e l a t o r r a i l r o a d company f i l e d c o n s o l i d a t e d motions d i r e c t e d a t t h e amended c o m p l a i n t and renewed i t s p r e v i o u s motion f o r an a c c o u n t i n g and an o r d e r r e q u i r i n g r e s t i t u t i o n o f t h e f u n d s McGee e x e c u t e d on f o l l o w i n g t h e judgment a t t h e end o f t h e f i r s t trial. The t r i a l judge d e n i e d r e l a t o r ' s c o n s o l i d a t e d motions and r e l a t o r i n s t i t u t e d t h i s p r o c e e d i n g under Rule 7 and Rule 1 7 , Rules o f A p p e l l a t e C i v i l P r o c e d u r e , a s k i n g t h i s Court t o e x e r c i s e supervisory c o n t r o l over the d i s t r i c t court i n the case. This Court i s r e q u e s t e d t o e x e r c i s e c o n t r o l o v e r t h r e e m a t t e r s : (1) Whether r e l a t o r i s e n t i t l e d t o r e s t i t u t i o n o f f u n d s t a k e n b y McGee on e x e c u t i o n s , where t h e d i s t r i c t c o u r t judgment upon which t h e e x e c u t i o n s were b a s e d was s e t a s i d e and v a c a t e d on appeal. (2) Whether p u n i t i v e damages c a n b e c o n s i d e r e d f o r any purpose i n an FELA c a s e . (3) Whether t h o s e p o r t i o n s o f 1 4 c ~ e e ' s amended c o m p l a i n t which do n o t comply w i t h t h e p r o v i s i o n s o f Rule 8 , M.R.Civ.P., s h o u l d be o r d e r e d s t r i c k e n . W w i l l f i r s t c o n s i d e r i s s u e s (1) and ( 3 ) . e These i s s u e s a r e premature a t t h i s s t a g e of t h e proceedings. I s s u e ( I ) , t h e r e s t i t u t i o n of funds, W e noe t h a t a t t h e time of t h e f i r s t t r i a l McGee r e c e i v e d a v e r d i c t i n t h e amount o f $525,000 f o r s e r i o u s i n j u r i e s received. While t h a t judgment was r e v e r s e d , t h e m a t t e r was r e t u r n e d f o r r e t r i a l on t h e q u e s t i o n o f damages. Because of r e l a t o r ' s f a i l u r e t o p o s t a supersedeas bond, c e r t a i n a s s e t s were l e v i e d upon and t h i s Court f i n d s no e r r o r on t h e p a r t of t h e t r i a l c o u r t i n n o t g r a n t i n g r e l a t o r ' s motion f o r an accounting a t t h i s s t a g e of t h e c a s e . R e l a t o r c i t e s and argues Anderson v. Border, 87 Mont. 4 , 285 P. 174, a s c o n t r o l l i n g on t h e r e s t i - t u t i o n of monies l e v i e d upon by McGee. W do n o t f i n d Anderson e c o n t r o l l i n g f o r i n t h a t c a s e t h e r e was a f i n a l judgment from which no f u r t h e r appeal was taken. Here, t h e c a s e i s about t o be r e t r i e d . For t h i s Court t o now c a l l f o r an accounting and r e s t i t u t i o n would n o t only i n t e r f e r e w i t h t h e t r i a l c o u r t ' s handling of t h e c a s e , b u t would cause a d d i t i o n a l d e l a y i n a c a s e t h a t has been s e t f o r r e t r i a l on A p r i l 27, 1976. I s s u e (3) i s d i r e c t e d a t t h e amended complaint. We w i l l n o t i n t e r f e r e a t t h i s p r e t r i a l s t a g e of t h e proceedings w i t h t h e t r i a l c o u r t ' s d e c i s i o n t o allow t h e amended complaint t o s t a n d . While we a g r e e t h a t one of t h e purposes of t h e Montana Rules o f C i v i l Procedure i s t o provide simple, c o n c i s e and d i r e c t p l e a d i n g s , we do n o t f i n d an abuse of d i s c r e t i o n by t h e t r i a l judge i n n o t g r a n t i n g r e l a t o r ' s motion t o s t r i k e M c ~ e e ' samended complaint. As p r e v i o u s l y n o t e d , t h e amended complaint r e i n s t a t e d a count covering v i o l a t i o n o f t h e F e d e r a l S a f e t y Appliance Act (45 U.S.C. $ 1 e t seq.). F e d e r a l c a s e s c o n s t r u e t h i s Act a s an amendment t o and a p a r t of FELA (45 U.S.C.551 e t s e q . ) and t h e two a c t s should be r e a d and a p p l i e d t o g e t h e r . W f i n d t h a t p u n i t i v e damages a r e e n o t proper f o r a v i o l a t i o n of t h i s Act. Urie v. Thompson, 337 U.S. 163, 69 S.Ct. 1018, 93 L ed 1282, 1 ALR2d 252; Chicago & 1 N.W.Ry.Co. v. Chicago, R . I . & P.R.Co., 179 F.Supp. 33, a f f ' d 280 F.2d 110, c e r t . d e n . 364 U.S. 931; International-G.N.Ry.Co. v. United S t a t e s , 268 F.2d 409; H o l f e s t e r v. Long I s l a n d R a i l r o a d Co., 360 F.2d 369; Underwood v. Missouri-Kansas-Texas R a i l r o a d Co., 191 Kan. 338, 381 P.2d 510; A t l a n t i c Coast Line R.Co. v . Moore, 135 F l a . 485, 186 So. 210. The remaining i s s u e , i s s u e ( 2 ) , t h a t of a l l o w i n g McGee t o plead p u n i t i v e damages i n h i s amended complaint, was e r r o r on t h e p a r t of t h e t r i a l c o u r t . The F e d e r a l ~ m ~ l o ~ eL is 'b i l i t y r a Act i s a s i t s name i m p l i e s , a f e d e r a l a c t , and when a p p l i c a b l e i s t h e e x c l u s i v e remedy a g a i n s t t h e r a i l r o a d s f o r i n j u r i e s t o t h e i r employees. Metropolitan Coal Company v. Johnson, 265 F.2d 173, Any s u i t s f o r i n j u r i e s under t h e Act and r i g h t s t o r e c o v e r must be p r e d i c a t e d on negligence. Herdman v. Penn.R.Co., 228 F.2d 902, 352 U.S. 518, 77 S.Ct. 455, 1 L ed 2d 508. While t h e FELA provides t h a t s u i t s may be f i l e d i n e i t h e r f e d e r a l o r s t a t e c o u r t s , t h e r e can be no q u e s t i o n t h a t t h e r i g h t s c r e a t e d by t h e Act a r e governed by t h e d e c i s i o n s of t h e federal courts. Bowman v. I l l i n o i s C e n t r a l Railroad Co., 1 I11.2d 1 186, 142 N.E.2d 104, c e r t . d e n . 355 U.S. 837, 78 S.Ct.63, 2 L ed 2d 49. With t h e enactment of FELA, Congress took over t h e f i e l d of employers' l i a b i l i t y t o employees i n i n t e r s t a t e t r a n s p o r t a t i o n by r a i l , and a l l s t a t e laws upon t h e s u b j e c t were superseded. The r i g h t s and o b l i g a t i o n s of an employee and t h e employer depend on t h e FEU a s construed by t h e f e d e r a l c o u r t s . This Court recognized t h i s p r i n c i p l e i n Resner v. N.P.Ry.Co., 161 Mont. 177, 505 P.2d 86. See a l s o Davee v. Southern P a c i f i c Company, 25 Cal.Rptr. 445, 375 P.2d 293; D w v. C a r n e g i e - I l l i n o i s S t e e l Corporation, 165 F. o 2d 777. T h e r e f o r e , f o r guidance on whether p u n i t i v e damages a r e an element of damages t o be considered i n FELA c a s e s , we look t o the federal jurisdiction. W n o t e h e r e , t h a t though FELA has been e i n e x i s t e n c e n e a r l y 70 y e a r s , t h e q u e s t i o n of p u n i t i v e damages has never been considered and passed on by t h e United S t a t e s Supreme Court. The h i g h e s t c o u r t t o c o n s i d e r t h e q u e s t i o n was t h e S i x t h C i r c u i t i n 1971, when i t overturned a r u l i n g of a f e d e r a l D i s t r i c t Court, and r u l e d t h a t p u n i t i v e damages a r e n o t t o b e c o n s i d e r e d . I n Kozar v. Chesapeake and Ohio Railway Company, 449 F.2d 1238, 1240, 1242, t h e Court s a i d : II Punitive Damages I1 Since we hold that punitive damages are not recoverable under the Federal ~mployers'Liability Act, no purpose would be served by setting forth the facts upon which the appellee relies to support the $70,000 award. II There are two basic reasons advanced in the IOmnibus Opinion' of the District Court for sub- mitting to the jury, under the usual instructions, the issue of punitive damages. First, it is argued that the legislative history of the Act indicates that it was not its purpose to limit or take away any 1 remedy' available at common law and at common law punitive damages were available. Second, per- mitting the recovery of punitive damages advances the objective of the Act to ' [place] such stringent liability upon the railroads for injuries to their employees as to compel the highest safeguarding of the lives and limbs of men in this dangerous employment. I We conclude that neither reason is a sound basis for accepting an interpretation of the Act that would permit the unprecedented recovery of punitive damages. "Admittedly, the legislative history of the Act shows that its provisions were not to limit or take away any t remedy1 available at common law to an injured employee. But it is a mistake to characterize the right to recover punitive damages at common law a 1 common law remedy'. There is an important distinction between a I remedy1 which Eouvier's Law Dictionary de- fines as 1 the means employed to enforce a right or redress an injury1, and 'damages1 which are defined asl[t]he indemnity recoverable by a person who has sustained an injury + : 9: and the term includes not only compensatory, but also exemplary or punitive or vindictive ;v +i ;k damages. I Damages are simply a measure of injury, and to say that at common law there was I punitive damages as a right of action' or there was available 1 the common law remedy action of punitive damages' or a I punitive damages remedy' is a misuse of the legal terminology. Thus, when the legislative history of the Act is examined and shows that Congress never intended the Act as a restriction on the remedies available to an injured employee, if is not referring to a damages theory. Moreover, the eases cited by the District Court as examples of early common law cases permitting recovery of punitive damages are distinguishable from the case of a railroad employee or an employee's administrator suing his employer for injuries or death suffered on the job. Most of the cases relied upon by the District Court are cases of intentional torts. he District Court, in its I Omnibus Opinion', correctly set forth the humanitarian and beneficient reasons for the adoption of the Federal ~mployers' Liability Act by Congress. However, no matter how persuasive this policy argument may be, it cannot stand as the law in light of the clear, unambiguous state- ments in the line of Supreme Court authorities holding that damages recoverable under the Act are compensatory only. 11 I n Gulf, Colorado and Santa Fe Railway Company v. McGinnis, 228 U.S. 173, 175-176, 33 S.Ct. 426,427, 57 L.Ed. 785 (1913), i t i s s t a t e d : "'1n a s e r i e s of c a s e s l a t e l y decided by t h i s c o u r t , t h e a c t i n t h i s a s p e c t has been construed a s intended only t o compensate t h e s u r v i v i n g r e l a t i v e s of such a deceased employe f o r t h e a c t u a l pecuniary l o s s r e s u l t i n g t o t h e p a r t i c u l a r person o r persons f o r whose b e n e f i t an a c t i o n i s given. The recovery must t h e r e f o r e be l i m i t e d t o compensating t h o s e r e l a t i v e s f o r whose b e n e f i t t h e a d m i n i s t r a t o r s u e s a s a r e shown t o have s u s t a i n e d some pecuniary l o s s . Michigan C e n t r a l Railroad v. Vreeland, 227 U,S.59, [33 S.Ct. 192, 57 L.Ed. 4171; American Railroad [Co. of Porto Rico] v. Didricksen, 227 U.S. 145, 33 S.Ct. 224, 57 L.Ed. 4561. I n t h e l a s t c i t e d c a s e , speaking of t h e ~ m p l o y e r s ' L i a b i l i t y Act, we s a i d (p.149, [33 S.Ct. p. 2251): "The cause of a c t i o n which was c r e a t e d i n b e h a l f of t h e i n j u r e d employ& d i d n o t s u r v i v e h i s d e a t h , nor pass t o h i s r e p r e s e n t a t i v e s . But t h e a c t , i n c a s e of t h e d e a t h of such an employ& from h i s i n j u r y , c r e a t e s a new and d i s t i n c t r i g h t of a c t i o n f o r t h e b e n e f i t of t h e dependent r e l a t i v e s named i n t h e s t a t u t e . The damages r e c o v e r a b l e a r e l i m i t e d t o such l o s s a s r e - s u l t s t o them because they have been deprived of a r e a s o n a b l e e x p e c t a t i o n of pecuniary b e n e f i t s by t h e wrongful d e a t h of t h e i n j u r e d employe. The damage i s limited s t r i c t l y t o the f i n a n c i a l l o s s thus sustained." 11 1 The s t a t u t o r y a c t i o n of an a d m i n i s t r a t o r i s n o t f o r t h e e q u a l b e n e f i t of each of t h e s u r v i v i n g r e l a t i v e s f o r whose b e n e f i t t h e s u i t i s brought. Though t h e judgment may b e f o r a g r o s s amount, t h e i n t e r e s t of each b e n e f i c i a r y must be measured by h i s o r h e r i n d i v i d u a l pecuniary l o s s . That apportionment i s f o r t h e j u r y t o r e t u r n . This w i l l , of c o u r s e , exclude any recovery i n b e h a l f of such a s show no pecuniary l o s s . 1 ii ' >k 9: I I I n Michigan C e n t r a l Railroad Company v. Vreeland, 227 U.S. 59, 68-69, 33 S.Ct. 192,195, 57 L.Ed. 417 (1913), i n commenting upon t h e type of a c t i o n c r e a t e d by t h e F e d e r a l Employers1 L i a b i l i t y Act and t h e damages r e c o v e r a b l e , t h e following unequivocal s t a t e m e n t s a r e made: "'1t i s a l i a b i l i t y f o r t h e l o s s and damage s u s t a i n e d by r e l a t i v e s dependent upon t h e decedent. It i s t h e r e f o r e a l i a b i l i t y f o r t h e pecuniary damage r e s u l t i n g t o them, and f o r t h a t o n l y . * ii *"I ' McGee c i t e s and argues a number o f c a s e s decided b e f o r e Kozar: P e t i t i o n of Den Norske Amerikalinje, 276 F.Supp. 163; Gunnip v. Warner Co., 43 F.R.D. 365, 10 A R Fed 528; P h i l l i p v. L United S t a t e s Lines Co., 240 F.Supp. 992; Urie v. Thompson, 337 U.S. 163, 69 S.Ct. 1018, 93 L ed 1282. Particular reliance i s placed i n t h e c a s e of United S t a t e s S t e e l Corporation v. Fuhrman, 407 F.2d 1143, 10 A R Fed 500, c e r t . d e n . L 398 U.S. 958, 90 S.Ct. These same zrguments were made w i t h no a v a i l t o t h e S i x t h C i r c u i t i n Kozar, where t h e Court h e l d : "We do n o t b e l i e v e t h a t United S t a t e s S t e e l C o r p o r a t i o n v. Fuhrman, 407 F.2d 1143 ( 6 t h C i r . 1969). which r e v e r s e d t h e D i s t r i c t Court i n P e t i t i o n o f Den Norske A m e r i k a l i n j e A/S, 276 F.Supp. 163 (N. D. Ohio, 1 9 6 7 ) , r e q u i r e s a d i f f e r e n t r e s u l t from t h e c o n c l u s i o n t h a t p u n i t i v e damages a r e n o t r e c o v e r - a b l e under FELA. Den Norske d i d h o l d t h a t p u n i t i v e damages w e r e r e c o v e r a b l e from a t o r t f e a s o r i n a n a d m i r a l t y proceeding and v o l u n t e e r e d t h e s t a t e m e n t t h a t S e c t i o n 59 o f FELA p e r m i t t e d a deceased r a i l - r o a d e r t o s u e f o r p u n i t i v e damages. However, t h e M i s s i s s i p p i c a s e o f Ennis v. Yazoo & M.V. Ry., 118 Miss. 509, 79 So. 73 (1918), c i t e d by t h e D i s t r i c t Court a s a l l o w i n g p u n i t i v e damages was a s t a t e wrongful d e a t h a c t i o n c o n t r o l l e d by s t a t e law, and a c t u a l l y by way o f n e g a t i v e i n f e r e n c e t h e o p i n i o n o f t h e M i s s i s s i p p i c o u r t r e c o g n i z e s t h a t compensatory damages a r e t h e I measure o f damages *** recoverable under t h e F e d e r a l ~ m p l o y e r s ' L i a b i l i t y Act. 1 Also, t h e s t a t e m e n t i n t h e o p i n i o n o f t h e D i s t r i c t Court t h a t S e c t i o n 59 o f t h e Act added by t h e Amendment o f 1910 p e r m i t s r e c o v e r y of p u n i t i v e damages i s r e f u t e d i n S t . Louis I . M . & S.R. Company v. C r a f t , 237 U.S. 648,658, 35 S . C t . 704, 706, 59 L.Ed. 1160 (1915). 11 I On t h e c o n t r a r y , i t [ § 591 means t h a t t h e r i g h t e x i s t i n g i n t h e i n j u r e d person a t h i s death--a r i g h t c o v e r i n g h i s l o s s and s u f f e r i n g w h i l e he l i v e d , b u t t a k i n g no account o f h i s premature d e a t h o r o f what he would have e a r n e d o r accomplished i n t h e n a t u r a l span of l i f e - - s h a l l survive t o h i s personal representative t o t h e end t h a t i t may b e e n f o r c e d and t h e proceeds p a i d t o t h e r e l a t i v e s i n d i c a t e d , And when t h i s p r o v i - s i o n a r d § I a r e r e a d t o g e t h e r t h e c o n c l u s i o n i s un- avoidable t h a t the personal representative i s t o re- c o v e r on b e h a l f o f t h e d e s i g n a t e d b e n e f i c i a r i e s , n o t o n l y such damages a s w i l l compensate them f o r t h e i r own p e c u n i a r y l o s s , b u t a l s o such damages a s w i l l b e r e a s o n - a b l y compensatory f o r t h e l o s s and s u f f e r i n g o f t h e i n - j u r e d person w h i l e he l i v e d . ' (Emphasis added). I I Den Norske was r e v e r s e d by t h i s Court i n Fuhrman on t h e grounds t h a t t h e f i n d i n g s of f a c t upon which t h e D i s t r i c t Court r e l i e d t o make t h e award o f p u n i t i v e damages were c l e a r l y e r r o n e o u s , and any i n f e r e n c e t h a t may b e e x t r a c t e d from t h e r e a d i n g o f Fuhrman t h a t puni- t i v e damages may b e r e c o v e r a b l e i n a n a d m i r a l t y proceeding cannot be regarded a s c o n t r o l l i n g i n t h i s case." For t h e f o r e g o i n g r e a s o n s w e h o l d t h a t p u n i t i v e damages cannot b e c o n s i d e r e d i n a n FELA c a s e . This opinion s h a l l c o n s t i t u t e a w r i t o f supervisory c o n t r o l f o r t h e guidance of t h e t r i a l c o u r t . We Concur: A '& * f q1 4 * + - . / J i ti, Justices. ' h o n . Jack Shanstrom, DistrJct Judge, i 1 sitting for Chief Justice Harrison. t4r.J u s t i c e 3ene 3. DaLy s p e c i a i l y c o n c u r r i n g i n p a r t and dissenting i n part: I concur w i t h t h e m a j o r i t y e x c e p t a s t o t h e r a t i o n a l e jubi'iiitted t o s u p p o r t i t s h o l d i n g on i s s u e (2), p u n i t i v e damages. Ne may b e bound by t h e d e c i s i o n s of t h e h i g h e s t f e d e r a l c o u r t , huwever, I do n o t f i n d t h e r a t i o n a l e i n Kozar p a r t i c u l a r l y uersuasive .