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Alby v. Bnsf Railway Co.

Supreme Court of Minnesota

October 30, 2019

James Alby, Appellant,
v.
BNSF Railway Company, Respondent.

          Court of Appeals Office of Appellate Courts

          Mark R. Bradford, Amie E. Penny Sayler, Lauren F. Schoeberl, Bassford Remele, P.A., Minneapolis, Minnesota; and Paula M. Jossart, Jossart Law Office, LLC, Burnsville, Minnesota, for appellant.

          Sam Hanson, Timothy R. Thornton, Leah Ceee O. Boomsma, Briggs & Morgan, P.A., Minneapolis, Minnesota; and Patrick Sweeney, Sweeney Law Firm, P.A., White Bear Lake, Minnesota, for respondent.

          Lawrence M. Mann, Alper & Mann, P.C., Bethesda, Maryland; and Cortney S. LeNeave, Thomas W. Fuller, Hunegs, LeNeave, & Kvas, P.A., Wayzata, Minnesota, for amicus curiae Academy of Rail Labor Attorneys.

          Jennifer K. Eggers, Emily A. Atkinson, Arthur, Chapman, Kettering, Smetak & Pikala, P.A., Minneapolis, Minnesota, for amicus curiae Association of American Railroads.

         SYLLABUS

         Postjudgment interest in an action brought under the Federal Employers' Liability Act in Minnesota courts is calculated in accordance with Minn. Stat. § 549.09, subd. 1(c) (2018).

         Reversed and remanded.

          OPINION

          THISSEN, JUSTICE.

         Appellant James Alby sued his employer, respondent BNSF Railway Company (BNSF), under the Federal Employers' Liability Act (FELA), 45 U.S.C. §§ 51-60 (2012). Alby claimed that he suffered cumulative trauma to his back resulting from his 20 years of employment as a conductor and engineer with the railroad.

         The jury decided in Alby's favor and the district court awarded him damages. The district court also awarded postjudgment interest and applied the federal postjudgment interest rate of 0.58 percent per year, see 28 U.S.C. § 1961 (2012), rather than the state rate of 10 percent per year, see Minn. Stat. § 549.09, subd. 1(c)(2) (2018). The court of appeals affirmed the district court's use of the federal postjudgment interest rate. Alby v. BNSF Ry. Co., 918 N.W.2d 562, 569 (Minn.App. 2018).

         The decision to use the federal interest rate is significant. Postjudgment interest on the judgment awarded to Alby using the federal interest rate is approximately $18, 500. Had the district court used the state interest rate, postjudgment interest would be approximately $320, 000.

         We are asked to decide whether the federal postjudgment interest rate or the state postjudgment interest rate applies. Because we conclude that the state postjudgment interest rate applies, we reverse the decision of the court of appeals and remand to the district court for further proceedings.

         ANALYSIS

         There are no factual disputes in this appeal. The question of whether the state or federal postjudgment interest rate applies is a question of law, which we review de novo. Kinworthy v. Soo Line R.R. Co., 860 N.W.2d 355, 356 (Minn. 2015). We also review de novo the interpretation of statutes and rules of procedure. In re Welfare of Child of R.S., 805 N.W.2d 44, 48-49 (Minn. 2011).

         We start by reviewing the competing postjudgment interest statutes. The federal postjudgment interest statute provides:

Interest shall be allowed on any money judgment in a civil case recovered in a district court. Execution therefor may be levied by the marshal, in any case where, by the law of the State in which such court is held, execution may be levied for interest on judgments recovered in the courts of the State. Such interest shall be calculated from the date of the entry of the judgment, at a rate equal to the weekly average 1-year constant maturity Treasury yield, as published by the Board of Governors of the Federal Reserve System, for the calendar week preceding[] the date of the judgment. . . .

28 U.S.C. § 1961(a). The parties agree that the relevant applicable rate under the federal formula is 0.58 percent per year. The federal statute further provides that it "shall not be construed to affect the interest on any judgment of any court not specified in this section." 28 U.S.C. § 1961(c)(4).

         Minnesota statutes distinguish between prejudgment interest and postjudgment interest. Section 549.09, subdivision 1, sets forth the rules for the accrual of interest "until judgment is finally entered." Minn. Stat. 549.09, subd. 1(a) (2018). Subdivision 2 creates a judgment creditor remedy and provides that "[d]uring each calendar year, interest shall accrue on the unpaid balance of the judgment or award from the time that it is entered or made until it is paid, at the annual rate provided in subdivision 1." Id., subd. 2 (2018). Subdivision 1(c)(2) states that "[f]or a judgment or award over $50, 000 . . . the interest rate shall be ten percent per year until paid." Id., subd. 1(c)(2) (2018).

         FELA was enacted by Congress to ensure that an injured railroad worker could recover when the railroad's negligence caused the worker's injuries. See 45 U.S.C. § 51; Atchison, Topeka & Santa Fe Ry. Co. v. Buell, 480 U.S. 557, 561 (1987). The statute is designed to bring national uniformity to the circumstances under which railroad workers would be compensated for on-the-job injuries. N.Y. Cent. R.R. Co. v. Winfield, 244 U.S. 147, 150 (1917). The statute also provides for concurrent jurisdiction in state and federal courts. 45 U.S.C. § 56. Imposing concurrent jurisdiction on the states "in no sense . . . depended upon the conception that for the purposes of enforcing [FELA] right[s] the state court was to be treated as a Federal court deriving its authority not from the State creating it, but from the United States." Minneapolis & St. Louis R.R. Co. v. Bombolis, 241 U.S. 211, 222 (1916) (holding that a state court could apply the Minnesota rule that a civil case could be decided by agreement of five of six jurors even though federal law required a unanimous verdict). Accordingly, when a FELA case is brought in state court, federal law governs the parties' substantive rights, but state court practices and procedures apply. Boyd v. BNSF Ry. Co., 874 N.W.2d 234, 237 (Minn. 2016); see Brown v. W. Ry. of Ala., 338 U.S. 294, 296 (1949); Mondou v. N.Y., New Haven & Hartford R.R. Co., 223 U.S. 1, 56- 57 (1912).

         The dispute in this case is whether postjudgment interest affects substantive FELA rights (in which case the federal postjudgment interest rate applies) or is procedural (in which case the state postjudgment interest rate applies). We apply a two-part test to make that determination. First, we assess "whether the state law is substantive or procedural" in nature. Boyd, 874 N.W.2d at 238. If it is procedural, the state law applies. If the state law is substantive, we move to the second question and "determine whether federal law authorizes application of the state law in a FELA case." Id.

         We turn first to the question of whether postjudgment interest is substantive or procedural in nature for FELA purposes. We begin by observing that the distinction between substantive law and procedural law is not always clear cut. In the FELA context, what are generally considered rules of procedure and practice may be deemed substantive when the procedural rule "dig[s] into 'substantive rights'" so much that those procedural rules unduly impact or interfere with the substantive rights accorded by FELA. See, e.g., Brown, 338 U.S. at 296; see also Cent. Vt. Ry. Co. v. White, 238 U.S. 507, 511 (1915) (stating that "matters of substance and procedure must not be confounded because they happen to have the same name"). When that line is crossed, federal substantive law applies. Here, the proper measure of FELA damages is the only substantive right identified by BNSF that is potentially impacted by application of the state's postjudgment interest rate. Accordingly, we must address whether postjudgment interest affects the proper measure of FELA damages so much that it unduly impacts or interferes with that substantive FELA right.

         We conclude that postjudgment interest is procedural. For more than a century, the Supreme Court of the United States has recognized that a state court may apply its own postjudgment procedures in FELA cases. In Louisville & Nashville Railroad Company v. Stewart, the Supreme Court approved the use of Kentucky's postjudgment supersedeas procedure that required any party who sought to appeal a judgment to pay an additional 10 percent on the damages awarded at trial if the trial judgment was affirmed.[1] 241 U.S. 261, 263 (1916). The Stewart Court allowed the state to impose the 10-percent postjudgment penalty on FELA awards even though it meant that a railroad sued in Kentucky state court would ultimately pay 10 percent more than if sued in federal court.

         This result makes sense because entry of judgment defines and settles the scope of substantive FELA liability and fixes the total and proper amount of FELA damages. Once judgment is entered, the injured employee's right of recovery under federal substantive law has been fulfilled and "[a]ll that remains is to collect the amount of the award from ...


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