Andrews v. Norfolk Southern Railroad Corp.
2017 IL App (1st) 153007
| Ill. App. Ct. | 2017Background
- Wesley Andrews, a Norfolk Southern conductor, was injured in 2006 and received about $75,000 in presuit advance indemnity payments from Norfolk Southern; each advance receipt stated the advance would be credited against any settlement or judgment.
- Andrews sued under FELA in April 2009; after a jury, his damages were reduced for contributory fault, producing a net judgment of $37,500.
- Norfolk Southern sought a posttrial setoff under FELA §55 to apply the $37,500 judgment against the $75,000 of advances and petitioned to have the judgment satisfied.
- Andrews’ attorneys claimed a 25% contingency-fee lien (and ~$58,000 in fees/expenses) and argued Illinois statutory procedure (735 ILCS 5/12-178(5)) requires attorneys be paid from the judgment before setoff.
- The trial court granted Norfolk Southern’s petition and declared the $37,500 judgment satisfied by setoff; Andrews appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Illinois law (735 ILCS 5/12-178(5)) gives attorneys priority to be paid from the judgment before a railroad may set off presuit advances under FELA §55 | 12-178(5) is a state procedural rule that requires the attorney’s fees/disbursements be paid from the first judgment, so counsel should be paid before Norfolk Southern gets setoff | FELA §55 creates a federal substantive right to set off employer-paid indemnity advances against any judgment for the injury; federal law governs allocation of damages and preempts conflicting state rules | Court held FELA §55 governs; Norfolk Southern entitled to setoff and judgment was fully satisfied by the setoff |
| Whether section 12-178(5) applies to the present situation (single judgment and presuit advances) | 12-178(5) should apply to prevent setoff against amounts due to attorney fees/disbursements | The statute contemplates competing judgments/liens between parties; it does not govern a railroad’s statutory setoff of its own advances against a single FELA judgment | Court held 12-178(5) does not apply here because the companion setoff provisions presuppose multiple judgments and the facts do not fit that scheme |
| Whether federal collateral-source or Railroad Retirement Board rules require paying attorneys first | Pointed to 20 C.F.R. §341.5 and Railroad Retirement Board practice to argue attorneys should be reimbursed before reimbursement to the Board; hence priority for fees is consistent with federal regulation | Railroad noted advances here were voluntary indemnity payments under §55 (not collateral-source fringe benefits) and the Railroad Retirement Board waived reimbursement here | Court treated Railroad Retirement Board matter as collateral and not controlling; advances here were indemnity payments properly subject to §55 setoff |
| Whether the permissive language (“may”) in §55 means setoff is non-priority and cannot cut off an attorney’s lien | The use of “may” shows Congress left priority questions to state law; thus Illinois law can give attorneys priority | The permissive grant lets railroads choose whether to seek setoff, but once sought the right to setoff affects substantive damages and is governed by federal law and preempts conflicting state rules | Court held the permissive wording does not negate §55’s substantive federal effect; state priority rules cannot override it |
Key Cases Cited
- Norfolk & Western Ry. Co. v. Liepelt, 444 U.S. 490 (federal control over measure of damages in FELA actions) (supporting that damages allocation is substantive federal law)
- Monessen Southwestern Ry. Co. v. Morgan, 486 U.S. 330 (substantive nature of rules affecting FELA damages and attorney-fee recovery under FELA) (Congressional silence preserves the American Rule)
- Philadelphia, Baltimore, & Washington R.R. Co. v. Schubert, 224 U.S. 603 (railroad could not condition benefits on waiver of FELA claims; railroads still may get setoff)
- Clark v. Burlington Northern, Inc., 726 F.2d 448 (8th Cir.) (distinguishing voluntary indemnity advances under §55 from collateral-source fringe benefits; allowing setoff to avoid double recovery)
- Dice v. Akron, Canton & Youngstown R. Co., 342 U.S. 359 (FELA procedural/substantive rules; preserving uniform federal substantive rights in state tribunals)