Case Information
*2 Before MELLOY, McMILLIAN, and COLLOTON, Circuit Judges.
___________
COLLOTON, Circuit Judge.
Michael and Terri Lynn Chapman and Daniel Howell brought actions in state court alleging various state common-law causes of action against LabOne, Inc. ("LabOne") and Union Pacific Railroad Company ("Union Pacific"). The defendants removed the actions to federal district courts in Iowa and Nebraska, respectively. The district court in Iowa dismissed the Chapman case on the ground that the common- law claims were preempted by the Federal Railroad Safety Act ("FRSA"), as amended by the Federal Omnibus Transportation Employee Testing Act of 1991 ("FOTETA"), and the Railway Labor Act ("RLA"). The district court in Nebraska ruled that removal of the Howell case was proper based on the doctrine of "complete preemption" under the FRSA and the FOTETA, and then dismissed the case on the ground that the FOTETA provided no private right of action. The Chapmans and Howell appeal these dismissals, and we reverse and remand for further proceedings.
I.
The facts of these two actions are similar. Both Daniel Howell and Michael Chapman are former employees of Union Pacific. Howell was a freight conductor, and Chapman was a switchman and freight conductor. Howell and Chapman each were required to undergo a random drug test by providing a urine sample to their employer on or about January 14, 1998, and August 26, 1999, respectively. The urine *3 samples were forwarded to LabOne for testing. LabOne tested the samples, and found that they were "not consistent with human urine." LabOne reported the results to Union Pacific, and Union Pacific subsequently terminated Howell and Chapman. Claiming that the test results were inaccurate, Howell and Chapman each filed an action in state court alleging various state common-law theories, including negligence, breach of contract, defamation, negligent misrepresentation, fraudulent misrepresentation, interference with business relations, intentional infliction of emotional distress, and invasion of privacy. The crux of each of these claims was that LabOne did not properly test the urine samples and reported inaccurate results to Union Pacific.
The procedural postures of the two cases are slightly different. Howell brought his action in Nebraska state court against both LabOne and Union Pacific. His complaint alleged that Union Pacific was vicariously liable for the actions of its agent, LabOne. The defendants removed the action to the United States District Court for the District of Nebraska based on an assertion of federal question jurisdiction. The district court denied Howell's motion to remand, concluding that under the doctrine of "complete preemption," Howell's state-law claims should be considered federal claims arising under federal law. The district court then granted motions to dismiss filed by LabOne and Union Pacific on the ground that the FOTETA does not provide for a private right of action. The court also granted Union Pacific's motion for summary judgment on the alternative ground that Howell's claims against Union Pacific were preempted by the RLA.
Michael Chapman and his wife filed an action in Iowa state court against LabOne only. LabOne removed the action to the United States District Court for the Southern District of Iowa based on diversity and federal question jurisdiction. The district court then granted LabOne's motion to dismiss. The court reasoned that the Chapmans' claims were predicated on the manner in which LabOne tested the urine specimen and reported the results to Union Pacific, and that the FRSA and its *4 corresponding regulations "'substantially subsumed the subject matter' of state tort law regarding the standards for drug testing railroad employees." Accordingly, the district court found that the Chapmans' state common-law claims were preempted.
On appeal, the Chapmans and Howell contend that the district courts erred in
holding that their state law claims were preempted by the FRSA, the FOTETA, and
their implementing regulations.
[1]
In addition, Howell asserts that because his claims
are not preempted by federal law, his case was improperly removed to federal court
and his motion to remand the case to state court should have been granted. Because
the two cases present closely related issues, we consolidated their appeals.
See
Fed.
R. App. P. 3(b)(2). We review
de novo
a district court's decision that state common-
law claims are preempted by federal law.
Thacker v. St. Louis Southwestern Ry. Co.,
II.
In 1985, the Secretary of Transportation, through the Federal Railroad Administration ("FRA"), adopted regulations to control the use of alcohol and drugs in the operation of our nation's railroads. Control of Alcohol and Drug Use in Railroad Operations, 50 Fed. Reg. 31,508 (Aug. 2, 1985) (to be codified at C.F.R. pts. 212, 217-219, 225). These initial regulations required toxicological testing of railroad employees under certain circumstances, such as after an accident or upon reasonable cause. Id. at 31,531. The regulations required an employee to sign a *5 consent form in connection with drug testing, but the FRA commented that "[o]bviously, this requirement does not require an employee to waive any claim for malpractice with respect to the drawing of blood or proper handling of the samples (matters for which the practical exposure is, in any event, negligible)." Id . at 31,532.
The FRA implemented the random drug testing program in 1988. Random
Drug Testing, 53 Fed. Reg. 47,102 (Nov. 21, 1988) (to be codified at 49 C.F.R. pts.
217, 219). The FRA's discussion of preemption in connection with its regulations
focused on state legislation. After observing that "some states have enacted laws
which limit or regulate drug testing by private employers," the FRA explained that
"issuance of this random drug testing rule will preempt any state legislation regarding
random drug testing for railroad employees, whether or not inconsistent with the final
rule."
The FRA amended its drug testing regulations in 1989, in part to remain consistent with the drug testing procedures issued by the Department of Transportation. Alcohol/Drug Regulations, 54 Fed. Reg. 53,238 (Dec. 27, 1989) (to be codified at C.F.R. pts. 217, 219, 225). At that time, the FRA added the following anti-waiver provision:
An employee required to participate in body fluid testing . . . shall . . . evidence consent to taking of samples . . . . The employee is not required to execute any document or clause waiving rights that the employee would otherwise have against the employer, and any such waiver is void. The employee may not be required to waive liability with respect to negligence on the part of any person participating in the collection, handling, or analysis of the specimen or to indemnify any person for the negligence of others.
Id.
at 53,261 (emphasis added);
see also
49 C.F.R. § 219.11(d) (1989). The FRA
believed that "as a practical matter, the employee will be fully protected from possible
*6
harm by virtue of the employer's responsibility for selection of the collection entity
and the provision of clear standards for acceptable collections," but also recognized
that "FRA cannot require that employees sign away their rights against third parties."
54 Fed. Reg. at 53,242. In addition, the FRA incorporated the Secretary of
Transportation's scientific and technical drug testing guidelines set forth in 49 C.F.R.
pt. 40, which by then included an identical anti-waiver provision at 49 C.F.R.
§ 40.25(f)(22)(ii) (1989).
The FRA anti-waiver provision is still in effect. 49 C.F.R. § 219.11(d) (2004). The Department of Transportation revised its general drug testing regulations in 2001, but continues to prohibit employers from requiring an employee to sign a "waiver of liability . . . with respect to any part of the drug or alcohol testing process." 49 C.F.R. § 40.27 (2004).
In 1991, Congress for the first time mandated drug testing in the railroad industry by passing the FOTETA, which amended the FRSA and required the Secretary of Transportation to promulgate regulations establishing programs for drug testing railroad employees. 49 U.S.C. § 20140(b); see also Omnibus Transportation Employee Testing Act of 1991, Pub. L. No. 102-143, § 4, 105 Stat. 917, 957-59 (1991). Congress specifically required the Secretary of Transportation to develop comprehensive regulations regarding controlled substance testing and laboratory procedures. 49 U.S.C. § 20140(c). The statute provided, however, that its mandate of drug testing did not prevent the Secretary of Transportation from continuing in effect, amending, or supplementing any of the drug testing regulations that were in effect prior to the FOTETA. 49 U.S.C. § 20140(f).
The preemptive effect of the FRA's regulations is governed by 49 U.S.C. § 20106, which provides that a state may "adopt or continue in force a law, regulation, or order related to railroad safety" until the Secretary of Transportation *7 "prescribes a regulation or issues an order covering the subject matter of the State requirement." [2] In its regulations regarding drug testing of railroad employees, the FRA provides that "issuance of these regulations preempts any State law, rule, regulation, order or standard covering the same subject matter," except for certain provisions directed at local hazards. 49 C.F.R. § 219.13(a) (2004).
III.
The doctrine of preemption arises from the Supremacy Clause of the
Constitution, which requires that state law must give way when it conflicts with or
frustrates federal law. U.S. Const. art. VI, cl. 2.;
CSX Transp., Inc. v. Easterwood
,
The doctrine of "complete preemption" establishes more than a defense to a
state-law claim. On occasion, the Supreme Court has concluded that "the pre-emptive
force of a statute is so 'extraordinary' that it 'converts an ordinary state common-law
complaint into one stating a federal claim for purposes of the well-pleaded complaint
rule."
Caterpillar, Inc. v. Williams
,
A.
We address first whether federal preemption is a defense to the state common-
law claims advanced in the complaint filed by the Chapmans. Because the FOTETA
contains an express preemption clause, we focus in the first instance on the plain
language of the statute, because it "necessarily contains the best evidence of
Congress' pre-emptive intent."
Easterwood
,
In
Easterwood
, the Supreme Court held that the preemption clause of the FRSA
(as then in effect) authorized the Secretary to preempt common-law claims. 507 U.S.
at 675. According to former 45 U.S.C. § 434, applicable regulations could preempt
any state "law, rule, regulation, order, or standard relating to railroad safety." The
Court held that "these broad phrases" encompassed common-law duties,
After
Easterwood
, Congress superseded § 434 in the 1994 amendments to the
FOTETA. The current preemption clause omits the terms "rule" and "standard," thus
narrowing the preemption clause to "a law, regulation, or order" relating to railroad
safety. Our court has said in
dicta
, however, that although § 20106 is "worded
slightly differently" than § 434, it is "identical in substance."
Cearley v. Gen. Am.
Trans. Corp.
,
One might question whether the text of § 20106 provides authority for the
Secretary to preempt state common law. While the terms "standard" and "rule" seem
naturally to encompass the common law, and thus support the Supreme Court's
conclusion in
Easterwood
, the revised text extends only to "a law, regulation, or
order."
[3]
In
Sprietsma v. Mercury Marine
,
Nonetheless, the Chapmans and Howell have not urged that the text of § 20106
alters the authority of the Secretary, recognized in
Easterwood
under former 45
U.S.C. § 434, to preempt state common law. Therefore, particularly in light of our
court's previous statement in
Cearley
, we will assume for purposes of this decision
that there is a "clear and manifest purpose of Congress" in the FRSA and the
FOTETA to authorize preemption of state common-law claims relating to drug
testing.
See Rice v. Santa Fe Elevator Corp.
,
B.
Assuming the Secretary has authority to preempt state common-law claims concerning drug testing, a common-law cause of action is preempted when the Secretary prescribes a regulation or issues an order "that covers the subject matter of as being synonymous with 'regulation[,]'" and "[t]he word 'standard' is omitted as being included in 'regulation.'" H.R. Rep. No. 103-180, at 80 (1994). By equating "standard" and "rule" with "regulation," and deleting the former terms, the report may suggest that the Committee did not believe the preemption clause was designed to extend beyond "regulations" and other positive enactments to the common law. The same report, however, also characterized the legislation as a "codification bill" that makes "no substantive changes in the law." Id. at 5. There is no indication whether the Senate or the President held this view.
the State requirement." 49 U.S.C. § 20106. Under this standard, "pre-emption will
lie only if the federal regulations substantially subsume the subject matter" of the
state common law.
Easterwood
,
LabOne points to federal drug testing regulations that set forth requirements for federally mandated drug testing, including preparation for testing, specimen collection procedures, laboratory analysis procedures, quality assurance and quality control, and requirements for reporting of test results. See 49 C.F.R. §§ 40.21- 40.39 (1999); 49 C.F.R. § 219.701. LabOne asserts that these regulations "substantially subsume" the subject matter of the state common-law claims brought by the Chapmans and Howell, or demonstrate an intent by the Secretary impliedly to preempt the field of drug testing regulation.
In considering whether the regulations preempt state common law, we bear in
mind that as with the original FRSA provision before it, the FOTETA preemption
provision is "employed within a provision that displays considerable solicitude for
state law in that its express pre-emption clause is both prefaced and succeeded by
express savings clauses."
Easterwood
,
We conclude that the Secretary's regulations do not preempt the common-law claims pleaded by the Chapmans. Important to our decision is a drug testing regulation promulgated by the Secretary that specifically contemplates the existence of common-law negligence actions arising from the drug testing process. In 1989, the Secretary directed that a federal employee required to participate in body fluid testing "may not be required to waive liability with respect to negligence on the part of any person participating in the collection, handling or analysis of the specimen or to indemnify any person for the negligence of others." 49 C.F.R. § 219.11(d) (1989) *12 (emphasis added). When Congress passed the FOTETA in 1991, this anti-waiver provision already was in effect, and Congress provided that the FOTETA did not prevent the Secretary of Transportation from "continuing in effect, amending, or further supplementing a regulation prescribed or order issued before October 28, 1991, governing the use of alcohol or a controlled substance in railroad operations." 49 U.S.C. § 20140(f); see also S. Rep. No. 102-54, at 24. Thereafter, the Secretary continued in effect this regulatory provision, which prohibits a service agent like LabOne from requiring an employee to waive "liability with respect to negligence." See 49 C.F.R. § 219.11(d); 49 C.F.R. § 40.25(f)(22)(ii) (1989). In 2001, the Secretary went further, amending the regulations to ensure that an employer, acting on behalf of a service agent, could not require such a waiver. 66 Fed. Reg. 41,944 (Aug. 19, 2001) (to be codified at 49 C.F.R. pt. 40); 49 C.F.R. §§ 40.27, 40.355(a) (2003).
We agree with the Ninth Circuit that "[n]egligence is a state common law tort,
and it would make no sense for the regulation to prohibit requiring the employee to
waive negligence claims if those claims were preempted and could not be made."
Ishikawa v. Delta Airlines, Inc.
,
At oral argument, LabOne contended that the FRA's comments to the final rule
when promulgated in 1989,
see
We are not persuaded that the principal authorities cited by LabOne,
Peters v.
Union Pacific Railroad Co.
,
In addition to their common-law negligence claims, the Chapmans also brought
common-law claims alleging breach of contract, defamation, negligent
misrepresentation, fraudulent misrepresentation, interference with business relations,
intentional infliction of emotional distress, invasion of privacy, and loss of spousal
consortium. As the FRA anti-waiver provision specifically addresses only
negligence, there remains the question whether other common-law claims are
*14
preempted by the federal regulations. One district court, noting the legislative history
of the FOTETA (which expressed concern about state
legislation
that might preclude
drug testing)
[4]
and the several regulatory provisions that contemplate potential
lawsuits by aggrieved employees, has held that analogous drug testing regulations of
the Federal Aviation Administration were only intended to preempt positive state
enactments.
Drake
,
At least with respect to the common-law claims asserted in these actions, all
of which arise from LabOne's alleged deficient performance in the drug testing
process, we conclude that there is no clear and manifest purpose of the Secretary to
preempt these related common-law claims. In addition to the considerations cited in
Drake
, we note that when the FRA first adopted its drug testing rule in 1988, it
expressed concern about positive state enactments. The agency's final commentary
observed that "some states have enacted laws which limit or regulate drug testing by
private employers," and explained that "issuance of this random drug testing rule
will
preempt any state legislation
regarding random drug testing for railroad employees,
whether or not inconsistent with the final rule."
In light of the presumption against preemption that we are bound to apply in this area, and the overall structure and history of the FRA's drug testing regulations, we conclude that the common-law claims alleged by the Chapmans are still available.
C.
With respect to Howell's case, it follows naturally from our previous discussion
that we also do not believe this is an area where the preemptive force of a federal
statute is so extraordinary that it not only provides a federal defense to a state
common-law claim, but also converts any state-law cause of action into a federal
claim from its inception. The doctrine of "complete preemption" has been applied
primarily in cases arising under § 301 of the Labor Management Relations Act of
1947 (LMRA),
see Avco Corp. v. Machinists
,
Moreover, we find the FRSA and the FOTETA to be distinguishable from other
statutory schemes in which courts have found complete preemption. Both the ERISA
and the LMRA include a specific jurisdictional provision stating that the district
courts of the United States shall have jurisdiction to grant relief based on the private
right of action created elsewhere in the statutes.
Metropolitan Life
,
Having explored the statutory and regulatory schemes involving drug testing of railroad employees, we are not persuaded that Congress intended to "completely preempt" state law causes of action in this area. Therefore, we conclude that Howell's action should not be removed to federal court based on the existence of federal question jurisdiction.
* * *
For the foregoing reasons, we reverse the judgments of the district courts and remand for further proceedings not inconsistent with this opinion.
______________________________
Notes
[1] Howell does not argue that the district court erred in granting Union Pacific's
summary judgment motion on the alternative ground that his claims were preempted
by the RLA. Accordingly, the district court's judgment dismissing Union Pacific is
final. Fed. R. App. P. 28(a);
Jasperson v. Purolator Courier Corp.
,
[2] The current version of the statute, as amended in 2002, reads as follows: § 20106. National uniformity of regulation Laws, regulations, and orders related to railroad safety and laws, regulations, and orders related to railroad security shall be nationally uniform to the extent practicable. A State may adopt or continue in force a law, regulation, or order related to railroad safety or security until the Secretary of Transportation (with respect to railroad safety matters), or the Secretary of Homeland Security (with respect to railroad security matters), prescribes a regulation or issues an order covering the subject matter of the State requirement. A State may adopt or continue in force an additional or more stringent law, regulation, or order related to railroad safety or security when the law, regulation, or order – (1) is necessary to eliminate or reduce an essentially local safety or security hazard; (2) is not incompatible with a law, regulation, or order of the United States Government; and (3) does not unreasonably burden interstate commerce.
[3] A report of the House Judiciary Committee concerning the 1994 amendments to the FOTETA explains the changes in text by stating that "the word 'rule' is omitted
[4] The report of the Senate Committee on Commerce, Science, and Transportation observed that "[s]everal States have enacted legislation , or are considering doing so, to prohibit or restrict drug and alcohol testing of certain classes of individuals." S. Rep. No. 102-54, at 23 (1991) (emphasis added). The Senate Committee expressed concern that "these restrictions may impinge upon the ability of the Secretary to ensure effective implementation" of mandatory drug testing of railroad employees, and the Committee therefore "reaffirm[ed] the provisions of current law which would serve to preempt such State or local government restrictions." Id . at 28.