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Shields v. Consolidated Rail Corp.

filed: January 29, 1987.

SHIELDS, ARNETT L.
v.
CONSOLIDATED RAIL CORPORATION V. BETHLEHEM STEEL CORPORATION, APPELLANT



Appeal from the United States District Court for the Eastern District of Pennsylvania, D.C. Civil No. 85-0063.

Author: Aldisert

Before: ALDISERT, Chief Judge, WEIS, Circuit Judge, and FISHER, Judge.*fn*

Opinion OF THE COURT

ALDISERT, Chief Judge.

This case requires us to determine whether the district court properly applied Pennsylvania choice of law precepts in a contribution claim by a defendant against a third-party defendant arising out of an action under the Federal Employers' Liability Act, 45 U.S.C. ยง 51, against Consolidated Rail Corporation ("Conrail"). Because we hold that Indiana law, and not Pennsylvania law, governs the claim for contribution, we will reverse the district court's denial of third-party Bethlehem Steel Corporation's motion for judgment notwithstanding the verdict and remand these proceedings to the district court with a direction that it enter judgment in favor of Bethlehem as a matter of law.

I.

This appeal evolves from a railroading accident that occurred at Bethlehem Steel Corporation's Burns Harbor, Indiana steel plant. At the time of the accident, Conrail provided twenty-four hour in-plant railroad switching services for the plant, and in essence, ran the short-line railroad within the steel mill. The Burns Harbor plant is the only Bethlehem steel mill in the United States where Conrail performed this in-plant switching service.

In the early morning hours of December 11, 1983, Arnett Shields, a Conrail employee, was working with a three-man crew responsible for switching railroad cars from track 513 to track 511 on the plant premises. Shields was assigned the task of throwing the switch at track 511. The switch was located in an earthen depression or hole that was surrounded by a mound of dirt. Freezing rain had fallen throughout the night and conditions were icy at the mill. When Shields stepped on the mound surrounding the switch, he slipped on ice, fell directly into the switch, and was seriously injured.

Shields brought suit under FELA against Conrail alleging negligence and seeking damages for injuries sustained. Conrail impleaded Bethlehem as a third-party defendant under Rule 14, F.R.Civ.P., seeking indemnification or contribution. This claim falls within the ancillary jurisdiction of the federal courts. Schwab v. Erie Lackawanna Railroad Co., 438 F.2d 62, 67 (3d Cir. 1971). The district court bifurcated the case and tried the liability issue before a jury. After all the evidence was received, Bethlehem moved for a directed verdict, arguing that Indiana law governed Conrail's third-party complaint and that, as a matter of Indiana law, Conrail could not assert a claim for indemnity or contribution against Bethlehem. The district court applied Indiana law to the liability issue, but ruled that Pennsylvania law governed the third-party claim and submitted the case to the jury.

The jury returned its verdict by answers to special interrogatories and found Conrail liable to Shields. On the third-party complaint, the jury refused to hold Bethlehem liable for indemnity, but ordered it to pay Conrail twenty-five percent contribution.

II.

As a threshold matter, we have decided to address sua sponte our appellate jurisdiction. On March 3, 1986, Bethlehem filed a motion for judgment n.o.v. under Rule 50(b), F.R.Civ.P., or, in the alternative, for a new trial under Rule 59(b). In its motion, Bethlehem argued that the district court incorrectly applied Pennsylvania law to Conrail's contribution claim. On April 23, 1986, the district court filed a memorandum opinion that discussed the choice of law issue and concluded that Pennsylvania law controlled the contribution claim. The opinion, however, dismissed Bethlehem's motion for lack of prosecution because Bethlehem supposedly failed to order a transcript of the trial. Shields v. Consolidated Rail Corp., No. 85-0063, slip op. at 4-5 (E.D. Pa. Apr. 23, 1986), reprinted in app. at 12A-16A. The district court entered an appropriate order the same day.

Bethlehem promptly moved for reconsideration of this order and, on May 23, 1986, filed notice of appeal with this court (no. 86-1333). On June 16, the district court amended its April 23 memorandum opinion and order, deleted all references to Bethlehem's failure to order the transcript, and vacated its order dismissing the post-trial motions. App. at 18A-19A. In its stead, the court entered a new order denying Bethlehem's motions. On June 19, Bethlehem filed a notice of appeal from this new order (no. 86-1388).

Bethlehem's pending motion for reconsideration in the district court did not render its May 23 appeal premature under Rule 4(a)(4), F.R.App.P. In Turner v. Evers, 7 ...


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