Wolfe v. BNSF Railway Company

Filing 73

FINDINGS AND RECOMMENDATIONS: IT IS RECOMMENDED that 47 First MOTION for Summary Judgment Regarding Plaintiff's Claims filed by BNSF Railway Company be GRANTED. Judge Magistrate Carolyn S Ostby termed case no longer referred. Objections to F&R due by 9/15/2011. Signed by Magistrate Carolyn S Ostby on 8/29/2011. (JDH, ) Modified on 8/29/2011 to correct document type (JDH, ).

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
BILLINGS DIVISION
SCOTT R. WOLFE,

CV 09-166-BLG-RFC-CSO

Plaintiff,
FINDINGS AND
RECOMMENDATION OF
UNITED STATES
MAGISTRATE JUDGE

vs.
BNSF RAILWAY COMPANY, a
Delaware Corporation,
Defendant.

Plaintiff Scott R. Wolfe (“Wolfe”) brings this action against BNSF
Railway Company (“BNSF”) alleging he was illegally dismissed from
employment due to BNSF’s negligence and mismanagement. See Court
Doc. 69 at 11 (Amended Complaint). Currently pending is BNSF’s
motion for summary judgment. Court Doc. 47. Wolfe has withdrawn
his motion for partial summary judgment. Court Docs. 44, 65.
The parties have agreed that the filing of the amended complaint
does not require re-briefing the pending motion for summary judgment.
Accordingly, the Court considers below BNSF’s motion as it applies to
the single claim in the Amended Complaint.
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I.

BACKGROUND
Wolfe’s employment with BNSF began in 1981. Court Doc. 15

(Court’s Scheduling Order) at 3. Wolfe is a member of the Brotherhood
of Maintenance of Way Employees union (“Union”). His employment is
governed by a Collective Bargaining Agreement (“CBA”) which
incorporates additional terms contained in a Memorandum of
Understanding (“MOU”) between BNSF and the Union. See Court
Docs. 49-7 (relevant portion of CBA) & 49-9 at 71-81 (MOU).
On December 18, 2008, while working as a relief track inspector,
Wolfe’s vehicle collided with a train. He does not claim to have suffered
any personal injuries. Court Doc. 15 at 3; Court Doc. 49 at 2, ¶ 1; Court
Doc. 4 at ¶¶ 16-17; Court Doc. 56-13 (Depo. Scott Wolfe) at 19 (162:20 166:12).
Pursuant to Rule 40 of the CBA, BNSF conducted two formal
investigations into possible rule violations by Wolfe. Court Docs. 49-8
& 49-9 (records of formal investigations). One investigation concerned
Wolfe’s alleged failure to have Main Track Authority at the time of the
accident. Court Doc. 49-9 at 67. The second investigation concerned

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Wolfe’s allegedly intentional misuse of company property by failing to
activate the Hy-rail Limits Compliance System (“HLCS”) on his vehicle.
Court Doc. 49-8 at 67.
Wolfe and his Union representative objected to both investigative
proceedings. In the first investigation, he and his Union representative
argued that the incident should not be subject to a formal investigation
under Rule 40 of the CBA, but instead should be handled under the
MOU’s “Alternative Handling Program.” See Court Doc. 49-9 at 5:5-25.
Based on Rule 40, Wolfe’s Union representative also objected that the
investigation was unfair and “most importantly [violated] the
contractual rights of Mr. Wolfe.” Id. at 13. In the second investigation,
Wolfe’s Union representative again objected to the proceedings under
Rule 40 of the CBA. Court Doc. 49-8 at 6-9. He also objected that the
second investigation subjected Wolfe to double-jeopardy. Court Doc. 498 at 9:4-21. He continued to object regarding the absence of witnesses
at the investigation and concluded that the proceeding was not fair and
impartial as required by Rule 40 of the CBA. Court Doc. 49-9 at 9-11.
Despite these objections, BNSF gave Wolfe a 30-day level-S

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suspension for his failure to use the HLCS, and dismissed him for his
failure to have main track authority. See Court Doc. 49 at 6, ¶ 12;
Court Doc. 56-13 at 11 (130:14-22). Wolfe has appealed his dismissal as
provided by the CBA and is awaiting arbitration. Court Docs. 49-7 at 34, 56-12 at 4 (10: 19 - 12:3).
II.

LEGAL STANDARD
“The court shall grant summary judgment if the movant shows

that there is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). “[A]
party seeking summary judgment always bears the initial
responsibility of informing the court of the basis for its motion, and
identifying those portions of ‘the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if
any,’ which it believes demonstrate the absence of a genuine issue of
material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
Material facts are those which may affect the outcome of the case.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute as
to a material fact is genuine if there is sufficient evidence for a

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reasonable fact-finder to return a verdict for the nonmoving party. Id.
“A moving party without the ultimate burden of persuasion at
trial – usually, but not always, a defendant – has both the initial
burden of production and the ultimate burden of persuasion on a
motion for summary judgment.” Nissan Fire & Marine Ins. Co. v. Fritz
Companies, Inc., 210 F.3d 1099, 1102 (9th Cir. 2000). To carry its
burden of production, the moving party must either produce evidence
negating an essential element of the nonmoving party’s claim or
defense or show that the nonmoving party does not have enough
evidence of an essential element to carry its ultimate burden of
persuasion at trial. Id.
If the moving party meets its initial responsibility, the burden
shifts to the opposing party to establish a genuine issue as to any
material fact. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475
U.S. 574, 586 (1986). The opposing party may not rely solely upon the
denials of its pleadings, but is required to tender evidence of specific
facts in the form of affidavits or admissible discovery material. Fed. R.
Civ. P. 56(c); Matsushita, 475 U.S. at 586, n.11.

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When the material facts are undisputed and resolution of a
motion for summary judgment turns on a question of law, the court
may determine which party’s position is correct as a matter of law. If
there are no genuine issues of fact pertaining to a claim, the movant’s
burden is not an evidentiary one – because the material facts are not in
dispute– but rather the court is left with the obligation to resolve the
legal dispute between the parties as a matter of law. Gulf Ins. Co. v.
First Bank, 2009 WL 1953444 at *2 (E.D. Cal. 2009) (citing Asuncion v.
Dist. Dir. Of U.S. Immigration & Naturalization Serv., 427 F.2d 523,
524 (9th Cir. 1970)).
III. PARTIES’ ARGUMENTS
BNSF contends that Wolfe’s claim for negligent mismanagement
pursuant to § 39-2-703, MCA, is preempted by the Railway Labor Act
(“RLA”), 45 U.S.C. § 151 et seq. BNSF argues that consideration of
Wolfe’s § 39-2-703, MCA, claim, as applied to the allegations presented
here, requires interpretation and application of the CBA, and thus is
preempted. Court Doc. 48 at 9-15.
BNSF also argues that punitive damages are improper here.

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Court Doc. 48 at 17. BNSF argues that, because summary judgment
should be granted with respect to Wolfe’s substantive claims, there is
no basis for the imposition of punitive damages. Court Doc. 48 at 17.
BNSF also contends that even if Wolfe’s claim were to survive there is
no basis for punitive damages because Wolfe can establish neither
actual malice nor actual fraud as required under Montana law. Court
Doc. 48 at 18-21.
In response, Wolfe contends that his negligent mismanagement
claim is not preempted because Montana law provides an independent
cause of action for mismanagement. Court Doc. 52 at 3. Wolfe
contends that his negligent mismanagement claim does not require
interpretation of the CBA and is not preempted by the RLA. Court Doc.
52 at 3-14. Wolfe argues that substantial evidence of negligence,
mismanagement, and “omission and commission” exists. Court Doc. 52
at 14. Accordingly, he asserts that his claim under § 39-2-709, MCA,
which is fact intensive, should not be subject to summary judgment.
Court Doc. 52 at 14-18.
Wolfe also argues that “summary judgment is inappropriate with

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respect to claims of punitive damages, malice, false representations and
willful wrongs by the railroad.” Court Doc. 52 at 18. Wolfe contends he
is entitled to present evidence of “indifference, conscious or intentional
disregard” of his rights and the high probability of injury to him. Court
Doc. 52 at 19. Additionally, Wolfe argues that false evidence as to the
value of the property damage is sufficient to establish actual fraud.
Court Doc. 52 at 19. Accordingly, Wolfe contends summary judgment is
inappropriate. Court Doc. 52 at 19-20.
IV.

DISCUSSION
1.

Railway Labor Act Preemption

Congress’ purpose in passing the RLA was “to promote stability in
labor-management relations by providing a comprehensive framework
for resolving labor disputes.” Hawaiian Airlines v. Norris, 512 U.S.
246, 252 (1994). To this end, the RLA created a “mandatory arbitral
mechanism for ‘prompt and orderly settlement’ of two classes of
disputes [ – ]” major and minor. Id. (quoting 45 U.S.C. § 151a).
“Major” disputes relate to the formation of collective bargaining
agreements, or efforts to obtain them, while “minor” disputes are those

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involving “interpretation or application of existing labor agreements.”
Id. at 256 (citing Consol. Rail Corp. (Conrail) v. Ry. Labor Executives’
Ass’n, 491 U.S. 299, 305 (1989)). Major disputes seek to create
contractual rights, minor dispute to enforce them. Id. at 253.
This case does not involve a major dispute. Here, the Court must
determine whether Wolfe’s negligent mismanagement claim is a minor
dispute under the RLA and thus preempted. The state statute creating
a cause of action for “mismanagement,” M.C.A. § 39-2-703, is
interpreted under state law but the issue of preemption is a question of
federal law. See Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 214
(1985). The mandatory arbitration mechanism for minor disputes
under the RLA creates the preemption, which requires arbitration of
claims that purport to be based on state common law or statutory
grounds, but in substance are “minor disputes” under the RLA.
Andrews v. Louisville & Nashville R.R. Co., 406 U.S. 320, 323-24
(1972).
The RLA does not completely preempt wrongful discharge or
other state law claims. In Hawaiian Airlines, supra, the United States

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Supreme Court took a narrow view of RLA preemption, holding that “a
state law cause of action is not preempted by the RLA if it involves
rights that exist independent of the collective bargaining agreement.”
512 U.S. at 260. These state rights can include protections against
wrongful termination. Id. at 250, 266. “Pre-emption of employment
standards within the traditional police power of the State should not be
lightly inferred.” Id. at 252.
When “the meaning of contract terms is not the subject of dispute,
the bare fact that a collective-bargaining agreement will be consulted in
the course of state-law litigation plainly does not require the claim to
be extinguished.” Id. at 261, n.8 (quoting Livadas v. Bradshaw, 512
U.S. 107, 124 (1994)). In Hawaiian Airlines, the Court explained:
[E]ven if dispute resolution pursuant to a collective bargaining
agreement, on the one hand, and state law, on the other, would
require addressing precisely the same set of facts, as long as the
state-law claim can be resolved without interpreting the
agreement itself, the claim is “independent” of the agreement ....
Id. at 262 (quoting and adopting standard of Lingle v. Norge Div. of
Magic Chef, Inc., 486 U.S. 399, 408-10 (1988)).
The Court also made clear, however, that “where the resolution of

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a state-law claim depends on an interpretation of the CBA, the claim is
pre-empted.” Id. at 261. It is the substance and not the
characterization of the claim that determines whether it is preempted.
The Supreme Court has articulated two general instances when
preemption may occur: (1) when the “claims [are] founded directly on
rights created by collective bargaining agreements;” and (2) “where the
right is created by state law ... [but the application of state law]
requires the interpretation of a collective bargaining agreement.”
Hayden v. Reickerd, 957 F.2d 1506, 1509 (9th Cir. 1992) (quoting Lingle,
486 U.S. at 411-12) (quoted in Ware v. Burlington Northern Santa Fe
Ry., 2006 WL 2741897 at *3 (E.D. Cal. Dec. 18, 2006)).
Under these guidelines, the Court concludes that Wolfe’s claim for
negligent mismanagement asserts a right created by and based on state
law but requires interpretation of the CBA – making it a minor dispute
under the RLA. Wolfe alleges that BNSF “negligently or willfully
mismanaged its investigation relating to responsibility for the
described collision, and negligently and/or willfully mismanaged the
consequent termination of Plaintiff.” Court Doc. 69 at ¶ 26B. Wolfe

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takes issue with the investigation leading to his dismissal, including
charges of “mismanage[ment of] railroad operations resulting in the
train/truck collision,” “faulty evidence, negligent investigation,
extreme exaggerations, ... false testimony,” “altered evidence, and other
wrongdoing to dismiss an employee otherwise undeserving of such
treatment....” Id. at ¶¶ 26A, 26C, 26D. He seeks lost wages and
benefits, general damages, and punitive damages – all stemming from
termination of his employment.
Thus, the bases for Wolfe’s claim stem from investigations
conducted pursuant to the CBA and the proceedings that resulted in
Wolfe’s termination. As discussed in detail below, to rule on Wolfe’s
claims the Court necessarily would have to interpret and apply the
CBA.
First, Wolfe previously alleged that BNSF artificially inflated the
damage amount to disqualify him from Alternative Handling (“a nonpunitive response to rule violations that includes training and other
non-disciplinary measures”) and to allow his termination under the
CBA. Court Doc. 50-2 at 73. Wolfe has now withdrawn this claim,

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giving notice as follows: “Plaintiff, at trial, will not introduce evidence
as to the value of the truck nor will plaintiff claim exaggeration of the
truck value as a fact in establishing the case for mismanagement.”
Court Doc. 65 at 1-2. Although Wolfe apparently no longer intends to
argue that he was entitled to Alternative Handling under the MOU, the
Court notes that, if the parties cannot agree, the MOU provides the
mechanism for determining whether an employee is eligible for
Alternative Handling. Court Doc. 49-9 at 80.
Second, Wolfe argues that BNSF’s mismanagement included
BNSF’s failure to consider the negligence of the dispatcher and failure
to produce the complete dispatch tape at the disciplinary hearing. Once
it was determined that Wolfe was ineligible for Alternative Handling,
his discipline was governed by Rule 40 of the CBA. See Court Doc. 50-2
at 93. This rule governs “Investigations and Appeals” and provides:
“An employe[e] in service sixty (60) days or more will not be disciplined
or dismissed until after a fair and impartial investigation has been
held.” Court Doc. 50-2 at 93 (Rule 40A.). Rule 40 then defines the
scope and nature of the investigative process. It describes when the

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investigation must take place, where it must take place, the notice that
must be given to the employee and to the appropriate local union
representative, information regarding representation, information
regarding the presence of witnesses, and information regarding the
investigation transcript. Court Doc. 49-7 at 2 (Rule 40.A - G). It
requires that the employee and his representative be furnished a copy
of the transcript of investigation, including all statements, reports, and
information made a matter of record. A purpose of the investigation is
to determine whether the employee has been “unjustly disciplined or
dismissed.” Id.
Wolfe’s Amended Complaint itself makes clear that his claims
cannot be decided without applying and interpreting the CBA. He
complains that he should not have been dismissed because he was
given faulty equipment and because the dispatcher erred. Court Doc.
69 at 3-7. But he acknowledged that his dismissal occurred because
BNSF “charged Plaintiff with a rule violation” and “[i]n order to do so,
BNSF has to hold a hearing under the labor agreement and present
evidence.” Id. at 7, ¶¶ 13, 14. He complains that BNSF “did not allow

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the dispatcher to appear at the hearing,” “did not produce or reveal all
the records they had,” and “did not produce or allow the train crew to
testify,” created an “incomplete and flawed investigation record,”
“brought only the altered, edited tape to Plaintiff’s investigation
hearing,” all of which constitutes “negligence and mismanagement in
the conduct of BNSF’s investigation [and] its handling of the
termination....” Id. at ¶¶ 15, 16, 22, 23, 24. These claims could not be
resolved in this action without applying and interpreting the CBA.
The state law invoked by Wolfe, M.C.A. § 39-2-701(1) provides:
A person or corporation operating a railway or railroad in this
state is liable for all damages sustained by any employee of the
person or corporation in consequence of the neglect of any other
employee of the person or corporation or by the mismanagement
of any other employee and in consequence of the willful wrongs,
whether of commission or omission, of any other employee of the
person or corporation when the neglect, mismanagement, or
wrongs are in any manner connected with the use and operation
of a railway or railroad on or about which the employee is
employed. A contract that restricts the liability is not legal or
binding.
The Montana Supreme Court has held that a claim for violation of the
covenant of good faith and fair dealing is preempted because it is
necessarily based on the contract between the parties. Winslow v.

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Montana Rail Link, Inc., 16 P.3d 992, 997 (Mont. 2000). But in
Winslow, the court also found that a mismanagement claim was not
preempted, explaining:
[T]he fact that Winslow is an employee covered by a collective
bargaining agreement does not necessarily mean that his claim
for mismanagement is one requiring an interpretation or
construction of that agreement and is therefore preempted by the
RLA.
....
We determine that the District Court, in concluding that
Winslow's claim “requires interpretation of the CBA” and is
therefore preempted by the RLA, read too much into the
allegations of the complaint. The complaint makes no reference to
the CBA or to the rights and remedies accorded Winslow under
that agreement. Rather, the complaint alleges that MRL was
guilty of “mismanagement or neglect” under § 39-2-703, MCA.
The source of the right to be free from mismanagement is state
statutory law, § 39-2-703, MCA, and is independent of any
negotiated labor agreement. Under the teachings of Norris, the
claim is not subject to federal preemption.
Id. at 295-96. Here, however, Wolfe’s Amended Complaint, as
excerpted above, makes clear that he does mention the “labor
agreement” and he is challenging the handling of the process conducted
pursuant to the CBA. Therefore, unlike Winslow, it is clear that the
claim for mismanagement is one that will require interpretation or
construction of the CBA.

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Claims are preempted if “based on a matrix of facts which are
inextricably intertwined with the grievance machinery of the collective
bargaining agreement and of the R.L.A.” McCann v. Alaska Airlines,
Inc., 758 F.Supp. 559, 562 (N.D. Cal. 1991) (citing Magnuson v.
Burlington Northern, Inc., 576 F.2d 1367, 1369-70 (9th Cir. 1978)).
Claims are preempted when they relate to “abuses of the investigatory
process and errors in the hearing procedures.” Magnuson v. Burlington
Northern, Inc., 576 F.2d 1367, 1369-70 (9th Cir. 1978) (cited in Veta v.
American Airlines, Inc., 107 F.3d 878 at * 2 (9th Cir. 1997)
(unpublished)).
Although the Ninth Circuit called Magnuson into question in
Miller v. AT&T Network Systems, 850 F.2d 543, 549 (9th Cir. 1988), it
remains instructive here because it is consistent with the standard
announced in Allis-Chalmers Corp. v. Lueck, 471 U.S. 202 (1994) (cited
in Hawaiian Airlines, 512 U.S. at 260). It is also consistent with other
post-Hawaiian Airlines cases that have considered claims that require
interpreting terms of a CBA. See Gore v. Transworld Airlines, 210 F.3d
944, 950-51 (8th Cir. 2000) (state law negligence claim held preempted

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because duty depended upon the terms of the agreement between the
parties); Monroe v. Missouri Pac. RR Co., 115 F.3d 514, 518 (7th Cir.
1997) (holding wrongful discharge claim preempted in part because
claimant “questions the propriety of his disciplinary hearing as well as
the sufficiency of the evidence proffered at that hearing [thus]
necessitating the court’s interpretation” of the CBA).
In Allis-Chalmers, the Court held that § 301 of the Labor
Management Relations Act, 29 U.S.C. § 185, preempted a state tort law
action for alleged bad faith in handling a claim because the tort claim
“is firmly rooted in the expectations of the parties that must be
evaluated by federal contract law.” 471 U.S. at 217. The Court also
noted:
The parties' agreement as to the manner in which a benefit claim
would be handled will necessarily be relevant to any allegation
that the claim was handled in a dilatory manner. Similarly, the
question whether Allis-Chalmers required Lueck to be examined
by an inordinate number of physicians evidently depends in part
upon the parties' understanding concerning the medical evidence
required to support a benefit claim. These questions of contract
interpretation, therefore, underlie any finding of tort liability,
regardless of the fact that the state court may choose to define the
tort as “independent” of any contract question. Congress has
mandated that federal law govern the meaning given contract
terms. Since the state tort purports to give life to these terms in a
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different environment, it is pre-empted.
Allis-Chalmers Corp., 471 U.S. at 218-219. Because Wolfe’s claim is
tied to alleged abuses of the CBA’s investigatory process and errors in
the hearing procedures, the Court concludes that they are preempted
and should be dismissed.
2.

Punitive Damages

In light of the Court’s conclusions regarding Wolfe’s substantive
claims, there is no basis for awarding punitive damages. Thus, Wolfe’s
request that punitive damages be awarded against BNSF should be
denied.
V.

CONCLUSION
Based on the foregoing, IT IS RECOMMENDED that BNSF’s

motion for summary judgment (Court Doc. 47) be GRANTED.
NOW, THEREFORE, IT IS ORDERED that the Clerk shall
serve a copy of the Findings and Recommendation of United States
Magistrate Judge upon the parties. The parties are advised that
pursuant to 28 U.S.C. § 636, any objections to the findings and
recommendation must be filed with the Clerk of Court and copies

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served on opposing counsel within fourteen (14) days after service
hereof, or objection is waived.
DATED this 29th day of August, 2011.

/s/ Carolyn S. Ostby
United States Magistrate Judge

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