E-Filed Document Jun :34: CT SCT Pages: 16 IN THE SUPREME COURT OF MISSISSIPPI CAUSE NO TS-00644
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1 E-Filed Document Jun :34: CT SCT Pages: TS IN THE SUPREME COURT OF MISSISSIPPI CAUSE NO TS ILLINOIS CENTRAL RAILROAD COMPANY DEFENDANT-APPELLANT V. BENNIE OAKES, DECEASED, BY AND THROUGH, CLARA HAGAN, HIS REPRESENTATIVE PLAINTIFF-APPELLEE PETITION FOR WRIT OF CERTIORARI GLENN F. BECKHAM, MBN: 2309 HARRIS F. POWERS, III, MBN: UPSHAW, WILLIAMS, BIGGERS, & BECKHAM, LLP POST OFFICE DRAWER 8230 GREENWOOD, MS (662) ATTORNEYS FOR APPELLANT
2 SUPREME COURT OF MISSISSIPPI ILLINOIS CENTRAL RAILROAD COMPANY DEFENDANT-APPELLANT V. CASE # 2015-TS BENNIE OAKES, DECEASED, BY AND THROUGH, CLARA HAGAN, HIS REPRESENTATIVE PLAINTIFF-APPELLEE CERTIFICATE OF INTERESTED PERSONS The undersigned counsel of record certifies that the following listed persons have an interest in the outcome of this case. These representations are made in order that the Justices of this Court may evaluate possible disqualification or recusal: 1. THE APPELLANT: Illinois Central Railroad Company S. Ashland Avenue Homewood, Illinois ATTORNEYS FOR APPELLANT: Glenn F. Beckham Harris F. Powers, III Upshaw, Williams, Biggers, & Beckham, LLP Post Office Drawer 8230 Greenwood, Mississippi AND Tommie G. Williams Marc A. Biggers F. Ewin Henson, III Robert S. Upshaw Clinton M. Guenther Richard C. Williams, Jr. Richard L. Kimmel W. Hugh Gillon, IV Patrick M. Tatum J.L. Wilson, IV Steven C. Cookston Peter L. Corson -i-
3 Tommie G. Williams, Jr. William L. Morton, III Loraleigh Phillips 3. THE APPELLEE: Clara Oakes Hagan, Representative and Daughter of Bennie Oakes, Deceased Post Office Box Murfreesboro, Tennessee 4. ATTORNEYS FOR APPELLEE: Timothy W. Porter Patrick Malouf Johnny Givens Porter & Malouf, P.A. 825 Ridgewood Road Post Office Box Jackson, Mississippi H. Dean Andrews, Jr. 903 Jackson Street Vicksburg, Mississippi s/glenn F. Beckham GLENN F. BECKHAM, MBN: 2309 HARRIS F. POWERS, III, MBN: Attorneys of Record for Appellant -ii-
4 TABLE OF CONTENTS Certificate of Interested Persons i-ii Table of Contents Table of Authorities iii iv I. Introduction II. Summary of Facts and Argument III. Procedural History IV. Argument A. Controlling Federal Common Law B. Improper Disregard of Controlling Federal Common Law C. Tortured Treatment of the Ayers Opinion D. Bankrupt Tortfeasors are not Collateral Sources E. Opinion Obliterates One Recovery Rule V. Conclusion Certificate of Service v Appendix A. Opinion of the Court of Appeals B. Motion for Rehearing C. Letter/Order Denying Motion for Rehearing -iii-
5 TABLE OF AUTHORITIES CASES: Benson v. CSX Transportation, 274 Fed. Appx. 273 (4 th Cir. 2008) Brown v. N. Jackson Nissan, Inc., 856 So.2d 692, 697 (Miss. Ct. App. 2003) Hager v. Norfolk & W. Ry., No , 2006 WL , No , 2006 WL (Ohio Ct. App. Dec. 14, 2006) Hess v. Norfolk Southern Railway Company, 835 N.E.2d 679 (2005) Illinois Central Gulf r. Co. v. Gibbs, 600 So.2d 944 (Miss. 1992) Krueger v. Soo Line R.R., No. 02-C-0611, 2005 WL (E.D. Wisc. Sept. 12, 2005) Mancini v. CSX Transportation, 201 WL (N.D.N.Y. 2010) Norfolk & Western Ry. Co. v. Ayers, 538 U.S. 135 (2003) , 4-7 Pillo v. Reading Company, 232 F.Supp. 761 (E.D. Pa. 1964) Schadel v. Iowa Interstate Railroad, Ltd., 381 F.3d 671 (7 th Cir. 2004) Seaford v. Norfolk S. Ry., 835 N.E.2d 717 (Ohio 2005) St. Louis - San Francisco Ry. v. Dyson, 207 Miss. 639, 43 So.2d 95, 98 (1949) Strasburg v. Union Pac. R.R., 839 N.W.2d 273 (Neb. 2013) iv-
6 I. INTRODUCTION The Majority Opinion (App. A) issued by the Court of Appeals in a split decision is in irreconcilable conflict with previous Opinions which acknowledged the duty of this Court to follow federal common law in FELA actions 1. The Opinion is in conflict with federal common law governing the issues and abrogates the basic, fundamental rule of law that allows only one recovery for the same injury. The Opinion violates existing federal common law governing Illinois Central s right to a set-off and grossly misconstrues the U.S. Supreme Court case 2 upon which it relies. The Opinion deems asbestos trusts as collateral sources when they are in fact bankrupt tortfeasors. While acknowledging the duty to follow federal common law, the Opinion does not (and cannot) cite even one federal FELA case which supports its Opinion. II. SUMMARY OF FACTS AND ARGUMENT This suit was brought under the Federal Employers Liability Act by Plaintiff Hagan seeking to recover damages for the lung cancer and death sustained by her father, Bennie Oakes, as a result of Oakes alleged exposure to asbestos while working for Illinois Central. Prior to the judgment obtained in this action, representatives of Oakes submitted claims to asbestos trusts seeking to recover for the same damages sought in the FELA action: Oakes lung cancer and death. As a result of these trust claims, Oakes collected at least $73, from the asbestos trusts. 1 Illinois Central Gulf R. Co. v. Gibbs, 600 So.2d 944 (Miss. 1992) holding that the Supreme Court is duty-bound to enforce the federal law as the Congress has provided it and as the federal courts have read it. Also see, St. Louis - San Francisco Ry. v. Dyson, 207 Miss. 639, 43 So.2d 95, 98 (1949). 2 Norfolk & Western Ry. Co. v. Ayers, 123 S.Ct. 1210, 155 L.Ed 2d 261, 538 U.S. 135 (2003). 1
7 Hagan ultimately obtained a verdict against Illinois Central, reduced by Oakes contributory negligence, in the net amount of $50, for Oakes lung cancer and death. The $50, net verdict, should have been set-off pursuant to federal common law, resulting in a negation of any recovery by Hagan in this case. III. PROCEDURAL HISTORY Clara Hagan, daughter and representative of her father, Bennie Oakes, filed the Complaint in the Circuit Court of Warren County in February of Oakes had been a long-time employee of Illinois Central. The Complaint sought damages due to Oakes lung cancer and death on April 12, 2004, which was allegedly caused by Oakes exposure to asbestos during his 40+ years of employment with Illinois Central. (R. 18; R.E. 19). Oakes did not work for any other railroad. The only evidence of any asbestos exposure occurred during Oakes employment with Illinois Central. A trial in 2011 concluded with a hung jury. Subsequently, and in response to a Motion to Compel, Hagan s counsel sent a letter (R. 600) producing over 70 pages of additional documents, including the claim forms submitted to THAN asbestos trust which resulted in a $65, payment (R ; R.E ). 3 A second trial resulted in a verdict for the Plaintiff Hagan in the amount of $50, Illinois Central was assessed with 20% fault and Hagan s decedent, Bennie Oakes, was assessed with 80% fault. 4 (T ; R ). 3 Most of these claim forms and other documents produced in 2012 are dated in This lawsuit was filed in February of Initial Interrogatories and Requests for Production pertaining to these documents were filed in mid The uncontradicted proof at trial established that in addition to being a heavy smoker for over 40 years, Oakes also had a separate severe illness prior to and at the time of his death: prostate cancer that had metastasized to the bone. 2
8 Shortly after the conclusion of this trial on February 15, 2013, Illinois Central filed its Motion for Entry of Judgment and Set-Off. (R ; R.E ). Only days after Defendant filed this Motion and prior to any response from Hagan, the Court entered an Order overruling it. (R. 711; R.E. 18). It is from this Order that Illinois Central pursued this appeal, which resulted in the Opinion of the Court of Appeals. Illinois Central filed a Motion for Rehearing (App. B) which was denied by the Court of Appeals (App. C). IV. ARGUMENT A. CONTROLLING FEDERAL COMMON LAW. Schadel v. Iowa Interstate Railroad, Ltd., 381 F.3d 671 (2004) is the controlling federal FELA case for the proposition that payments made to a plaintiff by other entities should be applied as a set-off against any jury verdict in favor of a plaintiff where a prior recovery has been obtained for the same damages pursued in the FELA action. In the Schadel case, the lower court had ruled in favor of a set-off based upon Illinois state law, but the U.S. Court of Appeals for the Seventh Circuit held that federal law applies rather than state law. Schadel at 676. The Schadel Court noted that under the FELA, the emphasis has always been on uniformity of result... Only a uniform federal rule would be consistent with nearly a century s worth of FELA decisions from the Supreme Court. Schadel at 677. The Schadel concluded that a pro tanto (dollar-for-dollar) approach used by the lower District Court was the correct rule for a FELA case. The Seventh Circuit therefore affirmed the District Court by finding that the jury s verdict should be reduced by $100, that Schadel had received in settlement from another party for the same damages. Schadel at 675, 678. Subsequently, the Ohio Supreme Court in Hess v. Norfolk Southern Railway Co., 3
9 835 N.E.2d 679 (Ohio 2005), followed the federal law expressed in Schadel where the Plaintiff received sums from asbestos trusts. (Hess at 682, FN 2 and at 689). 5 The Fourth Circuit has also followed Schadel s approach to set-off in FELA cases. Benson v. CSX Transportation, 274 Fed. Appx. 273 (4 th Cir. 2008). Benson had received $88, prior to trial of the FELA case. Following Schadel, the Fourth Circuit affirmed that an FELA Defendant is entitled to a pro tanto set-off of prior payments for the same damages pursuant to federal law. Benson at B. IMPROPER DISREGARD OF CONTROLLING FEDERAL LAW. Illinois Central cited eight cases 7 from other jurisdictions in which railroads were allowed a set-off against a jury verdict based on collections from other entities for the same damages. These cases express the federal common law which this Court has a duty to follow yet, the Opinion discards five of these eight cases, contending that they are irrelevant because the parties paying the sums set-off in those five cases were parties to the action. As noted by Justice Wilson s Dissenting Opinion, whether such entities were parties or non-parties makes no legal difference. The attempted non-party distinction cannot be explained or justified. The Majority Opinion makes no attempt to do so. 5 The Hess Court did not see it as a close question, noting that whether and how a settlement with a joint tortfeasor shall affect the non-settling railroad s liability concerns the measure of damages under the FELA, and therefore, is governed by federal law. Hess at Also see, Mancini v. CSX Transportation, 210 WL (N.D. N.Y. 2010), holding that the railroad company was entitled to a set-off for the amount of the settlements received by the injured party for the same injuries. Mancini at p Schadel v. Iowa Interstate R.R., 381 F.3d 671 (75h Cir. 2004); Benson v. CSX Transp. Inc., 274 F. App x 273 (4 th Cir. 2008); Mancini v. CSX Transp., No. 08-CV-933, 2010 WL (N.D.N.Y. July 27, 2010); Krueger v. Soo Line R.R., No. 02-C-0611, 2005 WL (E.D. Wisc. Sept. 12, 2005); Strasburg v. Union Pac. R.R., 839 N.W.2d 273 (Neb. 2013); Hess v. Norfolk S. Ry., 835 N.E.2d 679 (Ohio 2005); Seaford v. Norfolk S. Ry., 835 N.E.2d 717 (Ohio 2005); Hager v. Norfolk & W. Ry., No , 2006 WL (Ohio Ct. App. Dec. 14, 2006). 4
10 The Opinion also failed to appreciate that the Asbestos Trusts are not simply Asbestos Trusts, but rather Asbestos Bankruptcy Trusts. Such Trusts could not have been made parties in the Circuit Court of Warren County had Hagan or Illinois Central desired to do so. 8 Their liabilities in courts of law for the manufacture and sale of asbestoscontaining products had been discharged by bankruptcy in exchange for the establishment of trust funds which compensated Hagan and many others. There is no legal significance to the party or non-party status of the Asbestos Trusts. The Record establishes and Hagan has admitted that Oakes only had asbestos exposure during his employment with Illinois Central. (Brief of Appellee, p. 1). The claims filed with the Asbestos Trusts by or on behalf of Oakes asserted that his Illinois Central employment was the source of his lung disease and death. (See bankruptcy claims documents of THAN at R ; R.E ). These claims documents confirm that a claim was submitted to the THAN asbestos trust for Oakes lung cancer and death based on Oakes 40+ years of employment in the railroad industry. THAN paid $65, The Opinion s assertion (FN. 4, p.7) that such parties should or could be joined as parties in the FELA action (while seemingly unaware of their bankruptcy status) is in direct conflict with Ayers, supra, the U.S. Supreme Court Opinion which held that in an FELA action, a jury should not apportion negligence among joint tortfeasors. Ayers, 538 U.S The Opinion fails to comprehend the holding of Ayers, a case about the apportionment of fault, 8 In 2010 the Rand Institute published a report titled, Asbestos Bankruptcy Trusts which explains how asbestos personal-injury trusts are created, organized, governed, and operate. This study has in-depth information and explains that after formation, the trusts become the only source of compensation from the bankrupt defendants for asbestos-related injuries. Consistent with other bankruptcy law, the formation of an asbestos PI (personal injury) trust bars parties alleging asbestos-related injuries from suing the bankrupt defendants in the tort system. Asbestos Bankruptcy Trust, The Rand Institute, Dixon, McGovern, and Coombe (2010). URL: 5
11 and erroneously construes Ayers to prohibit a set-off for the recovery of money from other tortfeasors for the same damages. As noted by Justice Wilson s Dissenting Opinion, Ayers expressed no disapproval of the trial court s set-off for settlements with non-fela entities. (Dissenting Opinion, p. 10). In fact in Ayers, the very action of which the Opinion disapproves, a set-off, was actually approved in the trial court. Ayers, 538 U.S. at 144. C. TORTURED TREATMENT OF THE AYERS OPINION. The Opinion also misconstrues the meaning of the U.S. Supreme Court Ayers in other respects. Ayers stands for two primary propositions: (1) That a railroad employer cannot escape its responsibility by having fault apportioned to other joint tortfeasors; and (2) the railroad employer is to be an ultimate guarantor that a railroad employee is (as the Majority Opinion notes), to be compensated... for the work-related damages of the employee. What Ayers does not say is that a railroad should be denied credit when money is paid for the same damages by others. As noted by the Dissenting Opinion (p. 12, FN7), the Record in this case establishes, and Hagan has admitted, that the $73, collected from the Asbestos Bankruptcy Trusts were paid for events that occurred during Oakes Illinois Central employment. Those funds were paid to compensate for the same injuries and damages that were assessed against Illinois Central in the trial court: Oakes lung cancer and death. Again, ignoring the fact that these asbestos manufacturers were in bankruptcy, had Illinois Central been able to legally join them in the trial court action or in some other separate lawsuit, Ayers specifically holds that the railroad can spread these costs to other joint tortfeasors. 9 Ayers, 583 U.S. at Though no such action was required to establish the facts mandating a set-off in this case, if Illinois Central had filed some other action against these manufacturers and recovered 100% of the FELA damages assessed against it, such a result would be in accordance with Ayers, even though Illinois Central may have a net payout of zero. Ayers was not concerned about the identity 6
12 Ayers does not prohibit the set-off that should be enforced in this case. The prohibition of Ayers in rejecting Norfolk Southern s attempt to apportion negligence to other joint tortfeasors within the setting of Ayers FELA action against Norfolk Southern is diametrically opposed to the suggestion by the Majority Opinion (p. 7, FN 4) that Illinois Central should have made other tortfeasors parties to this action. 10 Such a suggestion, in view of Ayers rejection of the apportionment of liability to other parties within the context of an FELA case is a gross misinterpretation of Ayers. D. BANKRUPT TORTFEASORS ARE NOT COLLATERAL SOURCES. The Opinion contends that somehow Ayers implied (with no citation) that the collateral-source rule is applicable to Asbestos Trusts. There is no reference to the collateral source rule within the Majority Opinion of the Ayers decision. No federal common law is cited for the proposition that asbestos trusts are collateral sources. The Majority Opinion simply declares them to be so. Then, the Opinion cites the collateral source rule as somehow prohibiting the set-off requested by Illinois Central. This erroneous premise overlooks both fact and law. In both fact and law, asbestos trusts are not collateral sources. Rather, they are sums paid by asbestos manufacturers (now in bankruptcy and shielded from further litigation), who supplied asbestos products to the railroad and other industries and who are paying for the of the party that ultimately bares the cost, but Ayers did establish that the railroad employer stands as a reliable source for collection of the entirety of an injured railroad employee s work-related damages. 10 In this Footnote it is even suggested that having joined such parties (without explaining how this possibly could be done) the damages could have been allocated according to percentages of fault, an action clearly prohibited by Ayers. Also see Justice Wilson s dissent, FN. 7, p. 12 explaining why there was no need for the joinder of other parties. 7
13 same injuries and damages for which this Plaintiff sought recovery at the trial of his FELA action: Oakes lung cancer and death. As explained by the Judge Wilson in the Dissenting Opinion (p ), these asbestos trusts are not collateral sources but are joint tortfeasors who sold asbestos-containing products. While the Opinion contends that Illinois Central was wholly independent of the Asbestos Trusts, the Plaintiff also was wholly independent of the Asbestos Trusts, having no contract with them and having contributed nothing to their existence. Plaintiff s connection with these Trusts was filing the necessary claim forms and other papers to collect money for the same work-related damages sought and recovered in the FELA action against Illinois Central. The claims filed with the asbestos trusts were not collateral, and no FELA federal case has held that they are collateral sources. E. OPINION OBLITERATES ONE RECOVERY RULE. The Opinion affirmed the circuit court s denial of Illinois Central s claim of a set-off because the complaint was filed under the FELA and that Act seeks to fully compensate the plaintiff for tortuous conduct. (Opinion, p. 2). This summation glaringly omits the fact that the FELA only seeks to guarantee the collection by an FELA plaintiff of his total damages. The Warren Circuit Court jury determined that the damages due to the Plaintiff for Oakes lung cancer and death was $50, The Opinion avoids any mention of the elementary rule of law that a plaintiff should not receive more than full compensation for the same loss. As noted by Justice Wilson s Dissenting Opinion (p. 11),... a plaintiff is entitled to only one recovery of his damages (citing Brown v. N. Jackson Nissan, Inc., 856 So.2d 692, 697 (Miss. Ct. App. 2003). Illinois 11 The Court is reminded that Oakes had a 40+ year smoking history and prostate cancer that had metastasized to the bone. 8
14 Central respectfully suggests that this rule of law is universal. But most importantly, it is also the federal common law in FELA cases which this court is required to follow in this case. Pillo v. Reading Company, 232 F.Supp. 761 (E.D. Pa. 1964) confirms that the prohibition of a double recovery has been the law in FELA cases for over 50 years. In that FELA case, a railroad employee was injured by a vehicle in a crossing accident. Rather than filing an FELA action against his railroad employer, Pillo brought suit against the vehicle driver s employer in the state court and received a judgment for all of his damages. Pillo then brought another action under the FELA against the railroad employer. The U.S. District Court for the Eastern District of Pennsylvania dismissed Pillo s FELA claim, noting that elementary hornbook law held that a satisfied judgment against a joint tortfeasor bars suit against other joint tortfeasors for the same injury. Pillo at This Court must not ignore the prohibition against more than a full recovery of damages. Should the Opinion stand at the end of this appeal process, Oakes will recover more than 250% of what the Warren County jury determined as her full damages for Oakes lung cancer and death: ($50, plus approximately $74, previously collected from the Asbestos Trusts equals $124,000.00, plus interest on the $50, amount since the date of judgment). Requiring a set-off as requested by Illinois Central will uphold this basic rule of law. V. CONCLUSION As the discovery of the Asbestos Trust payments revealed, Hagan walked into the 12 The Pennsylvania District Court observed that if Pillo were allowed to proceed with his FELA claim, he had the potential of receiving double compensation for the same loss, which would be contrary to the bar against unjust enrichment and would potentially make the defendant railroad company pay for the same harm for which Pillo had already been fully compensated. 9
15 Warren County courtroom knowing that she already had pocketed at least $73, in payment for the same damages for which she sought recovery at the FELA trial. She has already received more than $23, in excess of her total FELA damages, thus fulfilling the primary goal that Ayers sought to insure: full recovery by negligently injured railroad workers. In creating the FELA scheme, Congress never envisioned a process that would provide compensation for more than double the damages accessed by an FELA jury. While the Opinion gives lip service to its duty to follow those FELA cases on substantive issues as interpreted by the federal courts, the ultimate result does no such thing. No federal case supports the Opinion. Illinois Central requests that this Court grant its Petition for Writ of Certiorari and implement the federal common law applicable to FELA actions and its overriding purpose of assuring that FELA plaintiffs collect all of their damages, but certainly not $73, more than was determined by the Warren County jury. RESPECTFULLY SUBMITTED, this the 5 th day of June, BY: s/glenn F. Beckham GLENN F. BECKHAM, MBN: 2309 HARRIS F. POWERS, III, MBN: Counsel for Appellant Illinois Central Railroad Company 10
16 OF COUNSEL: UPSHAW, WILLIAMS, BIGGERS, & BECKHAM, LLP 309 Fulton Street Post Office Drawer 8230 Greenwood, Mississippi Telephone: CERTIFICATE OF SERVICE I hereby certify that on June 5, 2017, I electronically filed the foregoing with the Clerk of the Court using the ECF system which sent notification of such filing to the following: Honorable Timothy W. Porter Honorable Patrick Malouf Honorable Johnny Givens Porter & Malouf, P.A. 825 Ridgewood Road Post Office Box Jackson, Mississippi Honorable H. Dean Andrews, Jr. 903 Jackson Street Vicksburg, Mississippi I hereby certify that I mailed a copy of the foregoing via U.S. Mail to: Honorable Isadore W. Patrick, Jr. Circuit Judge 1009 Cherry Street Post Office Box 351 Vicksburg, Mississippi s/glenn F. Beckham GLENN F. BECKHAM v.
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