BNSF Railway Company v. L.B. Foster Company

Filing 57

MEMORANDUM AND ORDER - Defendant's "Motion to Extend Scheduling Deadlines until Defendant's Motion for Summary Judgment is Ruled Upon or in the Alternative Defendant's Motion for Leave to File a Third-Party Complaint", (filin g no. 46 ), is granted in part and denied in part as follows: 1) The defendant's motion to stay discovery pending a ruling on defendant's motion for summary judgment is denied.2) The defendant's motion for leave to file a Third Party Complaint is granted, and the defendant's Third Party Complaint, a copy of which is attached to its motion, shall be filed on or before July 9, 2012. Ordered by Magistrate Judge Cheryl R. Zwart. (JAB)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
BNSF RAILWAY COMPANY,
Plaintiff,

4:11CV3076

vs.
MEMORANDUM AND ORDER
L.B. FOSTER COMPANY,
Defendant.
The complaint filed by plaintiff BNSF Railway Company (“BNSF”) alleges that
on January 22, 2008, BNSF train number CCDMKCL003 departed from Edgemont,
South Dakota, and derailed while passing over a defective insulated joint near Ardmore,
South Dakota. BNSF alleges that the defective insulated joint was manufactured and sold
by the Defendant, L.B. Foster Company (“L.B. Foster”) and installed on BNSF track
located near Ardmore, South Dakota in June of 2003.

BNSF filed suit against L.B. Foster in May 19, 2011 to recover the damages
caused by the derailment. L. B. Foster has moved for summary judgment, claiming the
plaintiff’s claims are barred by the statute of limitations. L.B. Foster asserts South
Dakota law governs this case, and therefore the plaintiff’s claims are barred by South
Dakota’s three-year statute of limitations. BNSF claims Nebraska law applies, and
therefore this case was timely filed within Nebraska’s four-year limitations period.
Pending before me is L.B. Foster’s motion to stay discovery or, if discovery is not
stayed, to file a third party complaint against Herzog Services, Inc. L.B. Foster requests a
stay because the discovery will be both expensive and unnecessary if the defendant
prevails on summary judgment. BNSF objects to staying discovery, claiming L.B. Foster
has been uncooperative in scheduling depositions, particularly the deposition of its Rule
30(b)(6) representative, Sidney Shue.

BNSF has offered evidence showing it has

unsuccessfully attempted to schedule Shue’s deposition since February of 2012. Filing
No. 52-1. Counsel for BNSF states:
Attorneys representing the defendant have resisted and delayed BNSF's
attempts to schedule these depositions. They have represented that they will
aid counsel for BNSF in scheduling these depositions by agreement of the
parties and then have failed to do so with the result that these depositions
have not yet been taken, and BNSF has been unfairly surprised and
prejudiced by the pending Motion for Summary Judgment based on
testimony from the very person it has been seeking to depose for four
months. Affiant is still trying to schedule these depositions and upon
information and belief, Mr. Shue and the appropriate corporate designee
will be able to provide testimony regarding the manufacture, sale and
shipment of the insulated joint at issue in this case; ISO certification which
is relevant to BNSF's fraud and misrepresentation claims; the relationship
between the defendant and the purported manufacturer Midwest Rail
Company; the information and knowledge of key personnel at L.B. Foster
regarding representations made by defendant to BNSF, warranties, quality
management systems (also pertinent to BNSF's fraud and misrepresentation
claims); and the contacts between the defendant and Nebraska or South
Dakota.
Filing No. 52-1, at CM/ECF p. 2, ¶ 5.

The defendant did not file a brief in support of its motion to stay, (see NECivR
7.0.1(a)(1)(A)), and has offered nothing to refute BNSF’s factual assertions. L.B. Foster
did offer Shue’s affidavit in support of its motion for summary judgment. Filing No. 442.1 Shue testifies, by affidavit, regarding the transactions and contracts between BNSF
and L.B. Foster, ending with the statement “L.B. Foster is not aware of any contracts
between BNSF and L.B. Foster, pertaining to insulated rails, being entered into in
Nebraska or being governed by Nebraska law.” Filing No. 44-2, at CM/ECF p. 2.

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In an email dated May 24, 2012, defense counsel stated he “hope[d] to “speak to
Shue in the next couple of days.” Filing No. 52-3, at CM/ECF p. 3. Shue’s affidavit was
signed on May 31, 2012, (filing no. 44-2). L.B. Foster’s summary judgment motion was
filed only a week after BNSF’s last request for a Shue deposition date.
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BNSF has been unable to depose Shue, or test the assertions in his affidavit
through cross-examination. Specifically, BNSF has not had an opportunity to
examine L.B. Foster’s claim that a 1998 agreement which, by its terms, ended in
March 2001 controls the parties’ relationship and dealings regarding the 2003
purchase of an allegedly defective insulated joint. BNSF further explains, with
specificity, why the deposition of Shue is needed to adequately respond to the
defendant’s summary judgment motion.
Some of the facts . . . . (including L.B. Foster's connections with
Nebraska, South Dakota or other states; evidence concerning the
terms, scope and content of any applicable agreement between
BNSF and L.B. Foster; and rebuttal evidence concerning Mr. Shue's
off-hand comment in his Affidavit that the parties continued to act
upon the 1998 agreement) are directly pertinent to a determination
by the Court as to what law governs this case (which is of utmost
relevance in defending against the defendant's Motion for Summary
Judgment).
Filing No. 52-1, at CM/ECF p. 4.
Based on the undisputed facts of record, the defendant’s motion to stay
discovery will be denied. See Davis v. Witt, 81 F.3d 89, 91 (8th Cir. 1996)
(holding the district court abused its discretion by ruling on the opposing party’s
summary judgment while it was effectively staying and denying the nonmovant’s
access to potentially relevant discovery).

As an alternative, L.B. Foster seeks leave to file a third party complaint
against Herzog. BNSF has not opposed this portion of the defendant’s motion.
The proposed third party complaint alleges that prior to the derailment, Herzog
operated rail detection equipment over the track at issue, and if a defect existed,
Herzog should have located the defect and notified BNSF. L.B. Foster claims that
assuming the insulated joint was defective, Herzog’s failure to adequately inspect
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the track was a proximate cause of the derailment. Filing No. 46.

The proposed third party complaint is sufficiently related to the primary
action. L.B. Foster’s motion for leave to file a third party complaint will be
granted.

Accordingly,
IT IS ORDERED that defendant’s “Motion to Extend Scheduling
Deadlines until Defendant's Motion for Summary Judgment is Ruled Upon or in
the Alternative Defendant's Motion for Leave to File a Third-Party Complaint,
(filing no. 46), is granted in part and denied in part as follows:
1)

The defendant’s motion to stay discovery pending a ruling on
defendant’s motion for summary judgment is denied.

2)

The defendant’s motion for leave to file a Third Party Complaint is
granted, and the defendant’s Third Party Complaint, a copy of which
is attached to its motion, shall be filed on or before July 9, 2012.

Dated this 2nd day of July, 2012.
BY THE COURT:
s/ Cheryl R. Zwart
United States Magistrate Judge

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