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O'Melveny Secures Important US Supreme Court Victory in Kurns et al. v. Railroad Friction Corp et al.

March 01, 2012

FOR IMMEDIATE RELEASE

 

 

Contact:                                                           

 

Piper Hall                                           Julie Fei                                                            

O’Melveny & Myers LLP                 O'Melveny & Myers LLP

202.220.5022 (office)                        213.430.7792 (office)                                                    

202.870.1800 (cell)                            213.440.7792 (cell)

phall@omm.com                              jfei@omm.com

 

WASHINGTON, DC -- March 1, 2012 -- O’Melveny & Myers LLP prevailed in the US Supreme Court in a federal preemption case with potentially significant consequences for preemption of asbestos-related tort claims, as well as tort claims in other contexts.  In Kurns v. Railroad Friction Products Corp., the Court affirmed a lower court ruling for O’Melveny’s client Viad Corp., agreeing with O’Melveny that design-defect and failure-to-warn claims challenging the use of asbestos in locomotives manufactured more than 50 years ago could not proceed because a federal statute called the Locomotive Inspection Act (LIA) gave the Federal Railroad Administration (“FRA”)the exclusive authority to regulate the design, material, and construction of locomotives.  The decision also reaffirms the doctrine of “field preemption,” which was attacked by the plaintiff and several amicus groups, ensuring that this important principle of federal-law supremacy continues to preclude localized, disparate regulation of areas Congress intended to leave exclusively in the federal regulatory domain. 

 

The case concerned claims brought by the wife and estate of George Corson, a former railroad employee who worked in the railroad’s locomotive repair and maintenance facilities, and whose duties included installing brake shoes on locomotives and stripping insulation from locomotive boilers.  Corson was diagnosed with malignant mesothelioma, which he alleged was caused by exposure to asbestos contained in the locomotive equipment he repaired.  He and his wife (and, after he passed away, his estate) brought suit against several railroads and locomotive equipment manufacturers, including Railroad Friction Products Corp. (RFPC), a brake shoe manufacturer, and O’Melveny client Viad Corp., the alleged successor-in-interest to a locomotive manufacturer, alleging design-defect and failure-to-warn claims based on the use of asbestos in the boilers and brake shoes. 

                                                                                 

The plaintiffs’ claims put into issue the continuing vitality of a 1926 Supreme Court case called Napier v. Atlantic Coast Line R. Co., 272 U.S. 605 (1926), which held that the LIA’s broad delegation of authority to the FRA’s predecessor agency to regulate locomotive equipment safety prohibited states from enforcing their own laws regulating the design, construction, and materials out of which locomotives are made.  The district court and Third Circuit agreed with the defendants’ arguments that the plaintiffs’ design-defect and failure-to-warn claims were preempted under Napier.

 

The plaintiffs petitioned the Supreme Court for certiorari, and Viad retained O’Melveny to handle the case before the Supreme Court.  Viad took the unusual step of acquiescing in certiorari because the Third Circuit’s decision clearly conflicted with Pennsylvania state appellate decisions allowing similar claims to proceed despite Napier, ensuring that Viad would be facing state-law claims based on the use of asbestos in locomotives even if cert. were denied. 

 

The Supreme Court granted certiorari and, in a decision that divided 9–0 on one issue and 6–3 on another, affirmed the Third Circuit’s decision across the board.  The opinion by Justice Thomas (joined by the Chief Justice and Justices Scalia, Kennedy, Thomas, and Kagan) closely tracked O’Melveny’s brief, holding that both the design-defect and the failure-to-warn claims were preempted by the LIA because they sought to regulate locomotive design.  Significantly, the majority rejected the submission of the Solicitor General, representing the Department of Transportation, that the failure-to-warn claims, at least, were outside the scope of LIA preemption under Napier.  It is nearly unprecedented for the Court to reject the views of a federal agency concerning the preemptive scope of the statute it administers.  The decision is also significant in its treatment of failure-to-warn claims as substantively identical to design-defect claims for purposes of the preemption analysis:  “A failure-to-warn claim alleges that the product itself is unlawfully dangerous unless accompanied by sufficient warnings or instructions.”  This aspect of the ruling should help defendants argue that the plaintiffs cannot avoid preemption-of-design claims–regardless of context–simply by creatively pleading failure to warn. 

 

O’Melveny partner and Chair of the Supreme Court and Appellate Practice Jonathan Hacker argued the case before the Supreme Court.  Counsel Anton Metlitsky and associate Joanna Nairn authored the certiorari-stage and merits briefs with him.