Court of Appeals Affirms District Court’s Judgment in favor of Plaintiff Against Railroad Defendant

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Plaintiff Nancy Little (“Little”) filed suit against the Budd Company (“Budd”) alleging that decedent died from exposure to asbestos-containing insulation surrounding the pipes on Budd manufactured rail cars.  The parties went to trial and a verdict was returned in favor of the plaintiff. On appeal, Budd asserted that plaintiff’s tort claims were preempted  by the Locomotive Inspection Act (“LIA”) and  Safety Appliance Act (“SAA”). Budd’s theory on appeal was that the claims were preempted because all passenger rail cars are “appurtenances” to a complete locomotive.

While this matter was pending in district court, Budd filed a Fed. R. Civ. P. 12(c) motion for judgment on the pleadings. Budd argued that, taken together, LIA and SAA preempted all state-law claims, whether based on positive or common law, relating to train equipment. The district court denied the motion. After discovery, Budd sought summary judgment.  The court denied the motion for summary judgment.

The parties proceeded to trial. During trial, at the close of plaintiff’s case, Budd filed a Fed. R. Civ. P. 50(a) “Motion for Directed Verdict based on Federal Preemption.” The motion reasserted Budd’s claim that SAA preempts all forms of state regulation over rail car equipment intended for the protection and safety of railroad employees, not just the specific safety appliances listed in the Act. The issue of LIA preemption was not raised in Budd’s Rule 50(a) motion. The district court denied Budd’s motion for a directed verdict for the same reasons it previously articulated in denying Budd’s request for summary judgment. At trial, Budd proposed no jury instructions or factual submissions to the jury on either of its proffered preemption defenses.

After the jury rendered a verdict in Little’s favor, Budd sought judgment as a matter of law under Fed. R. Civ. P. 50(b). In addition to renewing the issue of SAA preemption set out in its Rule 50(a) motion, Budd also attempted to revitalize its LIA preemption defense. The district court denied that portion of Budd’s Rule 50(b) motion based on SAA preemption for the reasons it previously articulated in denying Budd’s motion for summary judgment. As to the issue of LIA preemption, the district court assumed, without deciding, that Budd did not waive the issue by failing to raise it in its Rule 50(a) motion. However, the court denied Budd’s Rule 50(a) motion.

On appeal, Budd argued the district court erred in determining Little’s state common law tort claims were not preempted by LIA or SAA. Budd further argued that Little’s state common law claims are preempted by LIA because passenger rail cars are locomotive appurtenances. However, the court noted that Budd never made this argument at any point before the district court. Instead, Budd argued asbestos-wrapped pipes that delivered steam from the locomotive to the rail car heating systems were locomotive appurtenances.  

Consequently, the court ruled that because Budd did not assert the LIA preemption before the district court and did not seek plain-error review, this assertion of error was waived. The court noted this is true whether the newly raised argument is “a bald-faced new issue or a new theory on appeal that falls under the same general category as an argument presented at trial. Furthermore, the Court found Budd’s assertion that Little’s s tort claims are preempted by the Safety Appliance Act (“SAA”) were contrary to the Supreme Court’s decision in Atlantic Coast Line Railroad Co. v. Georgia, 234 U.S. 280 (1914).

Therefore, the court affirmed the district court’s decision in favor of the plaintiff.

Read the case decision here.