United States: Seventh Circuit Sets Groundbreaking Precedent, Reverses FRSA Retaliation Judgment

Last Updated: December 21 2016
Article by Bruce J. Douglas

On October 31, 2016, a $1 million dollar judgment against BNSF Railway Co. evaporated when the U.S. Court of Appeals for the Seventh Circuit set groundbreaking precedent under the Federal Railroad Safety Act (FRSA) and vindicated BNSF. The jury had awarded Michael Koziara, the plaintiff in the case, a total of $425,724.64, which included $125,000 in punitive damages. In addition, the court had awarded approximately $565,000 in attorneys' fees, costs, and pre- and post-judgment interest. The Seventh Circuit reversed the judgment of the U.S. District Court in the Western District of Wisconsin with instructions to dismiss the case based on errors in jury instructions. Koziara v. BNSF Railway Co., No. 16-1577 (October 31, 2016). The Court of Appeals denied rehearing en banc on December 1, 2016.

Factual Background

Koziara worked as a track foreman for BNSF and was responsible for supervising large railroad track maintenance crews. BNSF disciplined Koziara for carelessness that led to an on-the-job injury: When he was directing a crew to remove a 1,200-pound crossing plank using a front-end loader, the plank popped up and struck Koziara in his shin, resulting in a fractured tibia. During a reenactment of the incident, which BNSF conducted per company policy in any case involving personal injury or property damage, a supervisor learned that Koziara had taken, without permission, used railroad ties (which are coated with creosote and must be disposed of in a particular way) and given them to a local farmer. BNSF fired Koziara for theft. Koziara's union appealed his suspension and discipline to a board of arbitration, which denied the grievances and upheld his discipline and discharge.

Koziara also filed a complaint with the Occupational Safety and Health Administration (OSHA) for FRSA violations. Under the FRSA, a plaintiff may bring either a whistleblower-type claim or allege, as did Koziara, that he or she was retaliated against for reporting an on-the-job injury. OSHA also found no violation of the law. Because OSHA did not decide the case within the 210-day period specified in the statute, Koziara was able to commence suit in court, and he chose the Western District of Wisconsin.

The District Court's Decision

The district court ruled on the parties' competing motions for summary judgment and denied BNSF's motion. However, the court granted, in part, Koziara's motion and held that he had established two elements of a prima facie case under the FRSA: namely that he made a report of an injury (engaged in protected activity) and that he had established that the report was a "contributing factor" in his discipline and discharge. This resulted in the plaintiff being relieved of the obligation to prove a causal connection between the filing of the injury report and his later discharge. Thus, BNSF was left to prove its statutory affirmative defense, by clear and convincing evidence, that it would have discharged Koziara regardless of the injury report.

At trial, BNSF argued repeatedly that the court's ruling was erroneous and, based on the evidence at trial, pressed for a jury instruction that would have required the jury to determine whether there was a causal link between Koziara's dismissal and the injury report in light of the fact that he was subsequently discovered taking company property without permission. The district court denied BNSF's motions and adhered to its ruling that the filing of the injury report started a "chain of events" that established a causal connection leading to the subsequent discipline.

The Seventh Circuit's Reversal

The court of appeals, however, sided with BNSF and held that the district court had given the jury flawed instructions that misled it to find for Koziara and to answer incorrectly the question of whether BNSF had proved its affirmative defense. In an opinion authored by Judge Richard Posner, the court of appeals distinguished between "causation and proximate causation." The Seventh Circuit rejected the district court's reasoning and stated:

The plaintiff had to show that his injury report was a "contributing factor" in his being fired. He never showed that, but the judge thought that, as a matter of law, he had, and narrowed the jury questions accordingly, resulting in the verdict in his favor that the railroad challenges. . . [H]e failed to distinguish between causation and proximate causation. The former term embraces causes that have no legal significance.

Koziara, the court said, was required to prove retaliation under the statute, and this he did not do.

Turning to the next step, the court of appeals considered the record on appeal and concluded that there was no reason to send the case back to the district court for a new trial. Observing that Koziara had rested his entire case on the "chain of events" theory and had not argued that BNSF's reasons for his discharge were pretextual, it found that BNSF had established its affirmative defense that it would have fired Koziara regardless of his injury report:

A plaintiff is master of his case. Koziara could have argued pretext, but chose instead to rest on the contention that he should be deemed to have won his suit just because the railroad never would have discovered the theft had he not filed an injury report (which led to the investigation, which led to the discovery of the theft). He chose his ground, and it is a legally bad one because the filing of the report was not a proximate cause of his being fired; having failed to make a backup pretext argument, he does not get a do‐over.

Key Takeaways

Railway employers should take note of Koziara especially given that, according to reports issued by OSHA, the third most common law under which whistleblower charges are brought is the FRSA. The primary error in this case was that the trial court presumed the element of causation for the FRSA retaliation claim. Thus, Koziara reinforces the requirement that a plaintiff must actually prove a case of retaliatory discharge under the FRSA and not rely on the mere fact that he or she made an injury report. The case also is an important reminder of the need to preserve any arguments for appeal very carefully during district court proceedings.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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