Federally pre-empted cases could head to state courts

St. Louis Daily Record & St. Louis Countian, Jul 7, 2008 by Donna Walter

A federal appeals decision last week pitted the ability of accident victims to find redress for injuries against the separation of power between Congress and the judiciary.

The 8th U.S. Circuit Court of Appeals said an amendment to the Federal Railroad Safety Act nullifies a judge's decision not to remand a lawsuit to state court -- even though Congress passed the amendment after the judge made his decision.

Wednesday's 2-1 decision, if it stands, means the plaintiffs who sued the Canadian Pacific Railway Co. over a 2002 derailment near Minot, N.D., will get to have their claims heard in Minnesota state court.

The decision could pave the way for other cases that would normally be pre-empted by federal law to go to trial in state courts.

The appeal drew the attention of the federal government and 13 states. In two separate amicus briefs, the government bodies argued in support of the constitutionality of the amendment. Missouri Attorney General Jay Nixon joined in the brief submitted by the North Dakota attorney general.

"We share the interest of North Dakota in preserving the ability of our citizens to sue under state law, that is, not to have their claims disappear because of pre-emption under federal law," Nixon spokesman John Fougere said.

But defense lawyer Timothy R. Thornton, of Minneapolis, said the court's decision has "huge implications" concerning the separation of powers doctrine.

The railroad is prepared to take the case up to the U.S. Supreme Court if that becomes necessary, Thornton said. The "strong dissent" written by Senior Circuit Judge C. Arlen Beam makes further review likely, he said.

The question comes down to whether Congress exceeded its authority when, after a federal judge dismissed the plaintiffs' claims, it enacted an amendment to the Federal Railroad Safety Act and then applied it retroactively to the date of the Minot derailment. The amendment states in part that "nothing in this section shall be construed to preempt an action under State law seeking damages for personal injury, death, or property damage."

The Minot derailment caused 220,000 gallons of anhydrous ammonia to be released into the air, injuring hundreds of people who were asleep in bed at the time. A large number of lawsuits came out of the accident. The case just decided by the 8th Circuit is a consolidation of 12 separate cases with 21 plaintiffs, including the named plaintiff Tom Lundeen.

"The first Lundeen decision was a very harsh result when you look at it in real terms," said Jerome Schlichter, a St. Louis personal injury lawyer who prosecutes railroad cases. "It seems almost unbelievable, but the plaintiffs would have had no remedy for something that was clearly not their fault and clearly profoundly damaging to a lot of people." Schlichter, of Schlichter Bogard & Denton, is not involved in the Lundeen case.

The 8th Circuit said Congress' action did not violate the separation of powers doctrine, and therefore the amendment is constitutional.

Lundeen I

The 8th Circuit reviewed this case for the first time two years ago. Then, the issue was whether a federal judge in Minnesota erred when he remanded the lawsuit to the state court after the plaintiffs stripped it of any federal law claims. The panel found for the railroad and said the Federal Railroad Safety Act pre-empts all of the plaintiffs' claims. After the U.S. Supreme Court refused to take the case, it went back down to the district judge, who dismissed the claims.

"The railroad has been claiming that they are immune from liability," said Sarah Andrews Herman, one of the Fargo, N.D., lawyers who represented the plaintiffs in this case. "With passage of the Federal Railroad Safety Act, they argued the common law actions as well as actions for violations of federal law were pre- empted, and these people have no remedy.

"We were so concerned about the injustice of that, and fortunately there were Congress members and senators who were also concerned about the injustice of that," Herman said.

In response to the 8th Circuit's decision in Lundeen I, Congress enacted an amendment to the act, which it titled "Clarification regarding State law causes of action."

Congress' actions violate the separation of powers doctrine, defense lawyer Thornton said, and if the decision stands, "you'll have Congress responding to political pressure telling courts what to do on a regular basis."

According to Thornton, Congress didn't amend the law. Instead, it "clarified the law in order to tell the courts what to do," he said. "That's not the province of the legislature; that's the province of the courts."

In Wednesday's decision, however, the 8th Circuit said the law passes constitutional muster because Congress had a rational reason for enacting the law.

"The purpose of the amendment is to give railroad accident victims the right to seek recovery in state courts when they allege railroads violate safety standards imposed by a railroad's own rules, certain state laws, or federal regulations. This easily qualifies as a rational legislative purpose for the amendment," Circuit Judge Kermit E. Bye for the majority.