Windom v. Norfolk Southern Railway Company

Filing 100

ORDER GRANTING IN PART and DENYING IN PART 89 Motion to Satisfy Judgment on Jury Verdict. Ordered by Judge Marc Thomas Treadwell on 12/7/2012. (tlh)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
MACON DIVISION
PAUL WINDOM,
Plaintiff,
v.
NORFOLK SOUTHERN RAILWAY
COMPANY,
Defendant.

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CIVIL ACTION NO. 5:10-CV-407 (MTT)

ORDER
Before the Court is the Defendant’s Motion to Satisfy Judgment on the Jury
Verdict. (Doc. 89). The Plaintiff brought suit against the Defendant pursuant to the
Federal Employers’ Liability Act (FELA), 45 U.S.C. § 51, et seq. After a jury trial, the
Plaintiff was ultimately awarded $20,000.1 The Defendant contends that the Plaintiff’s
Judgment should be reduced by: (1) the amount the Defendant will have to reimburse
the Railroad Retirement Board (RRB), (2) Tier I and Tier II2 deductions and Medicare
contributions on the award for “past wage loss,” and (3) payments made to the Plaintiff
pursuant to his Supplemental Sickness Benefits Plan (the Plan). (Doc. 89-5). The
Defendant requests the Court rule the Judgment satisfied, because the amount by

1
The jury awarded $200,000, $100,000 for “Net lost wages and benefits to the date of trial,” and
$100,000 for “Net lost wages and benefits in the future reduced to present value.” (Doc. 84 at
3). However, this amount was reduced by the Plaintiff’s contributory negligence, resulting in a
net award of $20,000.
2

The Railroad Retirement Act resembles both a private pension program and a social welfare
plan by providing two tiers of benefits. Hisquierdo v. Hisquierdo, 439 U.S. 572, 573 (1979). The
upper tier is tied to earnings and career service, while the lower tier corresponds to those an
employee would expect to receive under the Social Security Act. Id.

which the Defendant contends the Judgment should be reduced—$27,046.33—
exceeds the actual Judgment. (Doc. 89 at 9). The Plaintiff agrees the Judgment
should be offset by the amount the Defendant must pay the RRB, $6,233.23. (Doc. 91
at 1). For the following reasons, the Motion is GRANTED in part and DENIED in part.
A. The Railroad Retirement Board Reimbursement
Both Parties agree the RRB is entitled to reimbursement by the Defendant in the
amount of $6,233.23. (Doc. 89 at 7; Doc. 91 at 1). Accordingly, with regard to the RRB
benefit amount, the Motion is GRANTED, and the Defendant is ORDERED to pay
$6,233.23 of the Judgment to the RRB.
B. Tier I, Tier II, and Medicare Contributions
The Defendant contends that “any jury award for past lost wages is subject to
withholding for Tier I and Tier II benefits.”3 (Doc. 89 at 2). Essentially, the Defendant
argues it will have to pay to the RRB the Plaintiff’s contributions for Tier I and Tier II
benefits when it satisfies the jury’s $10,000 past lost wages award. 4 (Doc. 91 at 2).
The Defendant calculates it will have to pay $810 to the RRB. (Doc. 89 at 2).

3
The Defendant also seeks a set off of $145 for “Medicare contribution” it says it will have to
make when it pays the Judgment. However, the Defendant cites no authority suggesting that an
employer must pay an employee’s Medicare contributions when it pays a judgment for net lost
wages. See e.g. 26 U.S.C. § 104(a)(2).

4
How to handle Tier I and Tier II contributions has caused the Parties some angst and has led
to some confusion. The angst is demonstrated by the battles fought by the Parties over the
Plaintiff’s economist’s methodology for treating Tier I and Tier II contributions in the context of
net lost wages. The confusion is illustrated by the Defendant’s Request to Charge Number 25
which would have instructed the jury that “Tier I and Tier II taxes must be subtracted from the
actual wage loss,” without distinguishing between the employer and employee contributions to
these “taxes.” (Doc. 74-7 at 41).
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The Plaintiff cites CSX Transportation, Inc. v. Levant, 200 Ga. App. 856, 410
S.E.2d 299 (1991), rev’d on other grounds by CSX Transportation, Inc. v. Levant, 262
Ga. 313, 417 S.E.2d 320 (1992), which considered a similar issue:
The trial court also refused to admit any evidence relating to the
amount of railroad retirement taxes withheld from plaintiff's income.
CSX contends that it should have been allowed to show plaintiff's net
income as reduced by his railroad retirement taxes. It is clear that
CSX sought to mitigate damages by having the jury consider
plaintiff's payment of railroad retirement taxes. “‘The Railroad
Retirement Act is substantially a Social Security Act for employees of
common carriers.... The benefits received under such a system of
social legislation are not directly attributable to the contributions of
the employer so they cannot be considered in mitigation of the
damages caused by the employer.’” Eichel v. N.Y. Central R. Co.,
375 U.S. 253, 254, (1963) citing New York, N.H. & C.R. Co. v. Leary,
204 F.2d 461 (1st Cir.1953). The taxes paid by plaintiff into the
railroad retirement fund are to fund his future retirement and are paid
directly to him upon his retirement. Since the railroad retirement
taxes would ultimately be paid directly to plaintiff upon his retirement,
we find no error with the trial court's exclusion of this evidence or
with the trial court's refusal to instruct the jury that plaintiff's net
income means gross income minus all taxes including railroad
retirement taxes.
Levant, 200 Ga. App. at 859-60, 410 S.E.2d 299, 303 (emphasis added).
The Defendant contends Levant is inapposite because the court was considering
the issue in the context of admissibility at trial rather than in a post-judgment situation.
(Doc 93 at 2). Levant is not directly on point, but not for the reason suggested by the
Defendant. Properly read, Levant recognizes that a FELA plaintiff may recover, as a
part of his net lost wages, the contributions he would have made for Tier I and Tier II
benefits because they are payments by him for his retirement benefits. This makes
sense; putting aside the issue of whether the employer’s contributions for Tier I and Tier
II benefits should reduce the Plaintiff’s award, clearly the Plaintiff’s own contributions, or

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contributions he would have made had he actually earned the wages, should not reduce
his recovery. However, Levant sets up the situation raised by the Defendant here.
Assuming the employee in Levant recovered his net lost wages, without reduction for
contributions he would have made for Tier I and Tier II benefits for those wages, the
Railroad, when it paid that judgment, might be faced with the situation that the
Defendant here claims it now faces. When the Railroad paid Levant his award, it, under
the Defendant’s theory, would have to pay to the RRB both its contributions for Tier I
and Tier II benefits for the amount of that lost wages award plus Levant’s contributions.
If the Defendant had paid, or even if it could show with some certainty that it
would have to pay, the Plaintiff’s contributions for Tier I and Tier II benefits, it might
have a plausible argument for set off. The problem for the Defendant is that it has not
demonstrated that it has been held liable for any such contributions or even that it will
be held liable for such contributions.5 The authorities it cites do not establish its liability
and certainly do not establish the amount of its liability. The most apparent flaw in the
Defendant’s argument is that the Defendant terminated6 the Plaintiff shortly after his

5
As the Plaintiff notes, the authority the Defendant cites does not stand for the exact theory the
Defendant is alleging in this case. For example, Hance v. Norfolk Southern Railroad Co., 571
F.3d 511 (6th Cir. 2009), is factually distinguishable because it involved a Uniform Services
Employment and Reemployment Rights Act of 1994 claim, rather than a FELA claim. Further,
as a result of the lawsuit Hance was reinstated to his position with the railroad, and the railroad
taxes at issue were specifically an “award of substitute retirement benefits” on “back pay
award.” Id. at 523. The court reasoned that Hance would receive retirement credit for the years
of service covered by the back pay award, putting him in the position he would have been in had
he not been discharged. Id. at 523. Thus, the district’s award of “substitute retirement benefits”
would be clear double recovery because of Hance’s reinstatement.

6
The Court’s use of the word terminated is not intended to express its opinion on why the
Plaintiff is no longer employed by the Defendant. The Court recognizes that the Defendant
describes the Plaintiff’s termination as a result of the Plaintiff forfeiting his seniority. The
characterization of why or how the Plaintiff was no longer employed by the Defendant after
December 2 2010, is not relevant for this action.  
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injury, and thus all or most of the lost wages award would be for the period after the
Plaintiff had been terminated.7 The Defendant appears to acknowledge that the RRB
will not hold it responsible for any Tier I and Tier II withholdings after the Plaintiff’s
termination. (Doc. 89 at 6 n. 9). In short, the Defendant has not proved that it has
suffered or will suffer any liability for contributions for which the Plaintiff should have
been liable. If and when the Defendant incurs such liability, it can then consider its
options.8 See Burlington N. RR. Co. v. Strong, 907 F.2d 707 (7th Cir. 1990) (discussing
the previous trial court’s decision to require the defendant to obtain a judgment or lien
before allowing it to set off supplemental sickness benefits from a FELA judgment).
Accordingly, the Court DENIES the Defendant’s Motion with regard to Tier I, Tier
II, and Medicare contributions.
C. The Benefits Paid Pursuant to the Plaintiff’s Supplemental Sickness
Benefits Plan
The Defendant contends the Plaintiff received $19,868.00 in benefits pursuant to
a Supplemental Sickness Benefits Plan (the Plan), and that this entire amount should
be “withheld from payment made in satisfaction of the Judgment.” (Doc. 89 at 8). The
Plan was issued pursuant to “collective bargaining agreements between railroads
represented by the National Carriers’ Conference Committee and employees
represented by labor organizations.” (Doc. 89-5 at 3). The Plaintiff contends that FELA

7
Had this particular issue been brought to the Court’s attention at trial, perhaps the verdict form
could have been broken down further, i.e. to account for net lost wages attributed to the Plaintiff
from August 12-December 2, 2010, and those net lost wages attributed to December 2, 2010the date of trial.   
8

The Court notes the Defendant does cite an IRS Federal Regulation to support its argument
that whether the Defendant has to pay the “railroad retirement taxes does not turn on when the
award is paid.” (Doc. 93 at 3-4). Even if applicable, this does not address whether the
Defendant will have to pay the “taxes” on the lost wages amount attributed to the time period
before the trial, but while the Plaintiff was no longer an employed by the Defendant. 
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bars any attempts by the Defendant to contract away its liability. (Doc. 91); see also 45
U.S.C. § 55. Further, the Plaintiff argues that this Plan does not fall into an exception
contemplated by § 55 because “there is nothing to indicate that the Supplemental
Sickness Benefits were funded by contributions from Defendant itself, either directly or
indirectly.” (Doc. 91 at 3).
First, the Court notes that there does not appear to be Eleventh Circuit precedent
addressing whether the Defendant is entitled to set off the full amount of benefits the
Plaintiff received pursuant to the Supplemental Sickness Benefits Plan. Courts in other
circuits analyze this issue in various ways. All courts recognize that 45 U.S.C. § 55
generally renders void any contract by which a common carrier exempts itself from
liability in an action brought pursuant to FELA. However, courts recognize a narrow
exception: If a common carrier has contributed or paid to any insurance or relief benefit
that may have been paid to the injured employee, the common carrier can set off the
amount. 45 U.S.C. § 55. Therefore, the issue here is whether the Plan falls into this
narrow exception.
In some cases, courts have found that benefits funded by employer payments
were nonetheless to be treated as collateral source payments, and thus not subject to
set off. See Hall v. Minnesota Transfer Ry. Co., 322 F. Supp. 92, 96 (D. Minn. 1971);
Southern Pac. Tranp. Co. v. Allen, 525 S.W.2d 300 (Tex. Civ. App. 1975). Other courts
have concluded that set off is appropriate when the benefit plan is funded by the
employer and when the supplemental sickness benefit plan or collective bargaining
agreement contains language clearly providing benefit payments were not to duplicate
amounts received for lost wages from the employer. Folkestad v. Burlington, N. Inc.,

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813 F.2d 1377 (9th Cir. 1987); Burlington N. RR. Co. v. Strong, 907 F.2d 707 (7th Cir.
1990). Alternatively, the Fifth Circuit, though not analyzing a FELA judgment, has
reasoned that the mere fact an employer has contributed to a fund from which an
employee receives benefits does not necessarily mean the fund is not a collateral
source. Haughton v. Blackships, Inc., 462 F.2d 788, 790 (5th Cir. 1972). Specifically,
Haughton held:
The policy considerations for the collateral source rule are apparent.
On the one hand, an employer-tortfeasor who voluntarily undertakes
to indemnify itself against liability by payment into a fund for that
purpose, should not be penalized by permitting the plaintiff a double
recovery of his benefits under the fund as well as his full measure of
damages. On the other hand, where the employer-tortfeasor makes
payment directly or indirectly into a fund established for an
independent reason, or where such payment by the employer should
be considered in the nature of a fringe benefit or deferred
compensation, the employer should not be entitled to benefit by
setting off such income in mitigation of his responsibility as a
tortfeasor.

Id. at 791. Moreover, some courts have held that when the employee contributes to the
payment of the supplemental sickness benefit plan premium, i.e., through monthly
payroll deduction, then the benefits paid to the employee under that plan cannot be
offset against a judgment, even when the employer “overwhelmingly funded” the plan.
Kansas City Southern Railway Co. v. Nussbeck, 135 S.W.3d 874 (Tex. App. 2004).
Though the Defendant has attached a copy of the Supplemental Sickness
Benefit Plan9, the Collective Bargaining Agreement is not in the record. Nor has the
Defendant alleged, much less proved, any amount it contributed to the self-funded Plan.

9
As the Plaintiff points out, there has been no foundation laid for the admission of this
document. However, the Plan does contain language supporting the Defendant’s general
argument.
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Further, even if the Court were to assume the Defendant did contribute, the Defendant
does not allege in what manner the contributions were made, i.e., through payroll
deductions or from a specific corporate fund. The Defendant simply has not put forth
enough evidence for the Court to determine whether the benefits paid pursuant to the
Plan meet the exception to 45 U.S.C. § 55.
Moreover, this too is an issue that should have been addressed before trial, or
perhaps in a subsequent action. For example, in Strong, after the trial and judgment,
the defendant moved the trial court “for a determination that the amount of the judgment
ought to be reduced by … the amount paid to [the plaintiff] in [Supplemental Sickness
benefits].” Strong, 907 F.2d at 709 (discussing the previous trial court decision). The
trial court had held “‘in the absence of a lien or judgment in its favor [the defendant] is
not entitled to withhold the sum of … any Supplemental Sickness Benefit paid to [the
plaintiff].” Id. (internal citation omitted). The trial court suggested that the plaintiff may
not succeed in keeping the money if the defendant sued on the contract; however, a
post-judgment motion was not the appropriate mechanism for the defendant to obtain
an offset. Id. Pursuant to the trial court’s order, the defendant then sued on the
contract to recover the benefit payments, and the Seventh Circuit ultimately held that
the defendant was entitled to set off the full amount of the benefits paid to the plaintiff
under the supplemental sickness benefits plan. While the Court is not necessarily
suggesting that filing another action is appropriate, the point is that these issues have to
be addressed at the appropriate time and in the appropriate way.
Thus, even if the Defendant had put forth enough evidence for this Court to
determine whether the Defendant is entitled to set off the full amount of benefits the
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Plaintiff received pursuant to the Supplemental Sickness Benefits Plan, a post-judgment
motion is not the proper avenue for the Defendant to obtain the set off. The Motion is
DENIED with respect to the benefits paid pursuant to the Supplemental Sickness
Benefits Plan.10
Accordingly, the Motion is GRANTED only with regard to the RRB
Reimbursement in the amount of $6,233.33. The Defendant is ORDERED to pay that
amount to the RRB and the Plaintiff’s Judgment is reduced by the amount. The
remainder of the Motion is DENIED.
SO ORDERED, this 7th day of December, 2012.
S/ Marc T. Treadwell
MARC T. TREADWELL, JUDGE
UNITED STATES DISTRICT COURT

10
The Plaintiff also argues that even if the Defendant were entitled to set off the Judgment by
this amount, set off would be reduced by Georgia’s complete compensation rule and the
common-fund doctrine. Because the Court denies the Defendant’s Motion, the Court declines
to determine the merits of these arguments.
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