U.S. District Court for the District of Nebraska

The plaintiff brings claims under the Federal Employers’ Liability Act (FELA) and the Federal Locomotive Inspection Act. The plaintiff, who was employed as a brakeman and conductor by defendant Union Pacific Railroad Company, alleges that while employed by Union Pacific from 1963 to 2000, he was negligently exposed to various toxic tort substances and carcinogens that caused or contributed to his development of colorectal cancer.

Defendant Union Pacific filed a motion for summary judgment, contending that the plaintiff’s action is barred by a settlement and release that the plaintiff executed in 2011 on an asbestosis claim. The plaintiff admits that he settled his asbestosis claim against Union Pacific in 2011 for $5,000 with the assistance of an attorney. The 2011 release recites that the plaintiff filed a claim for injuries resulting from occupational exposure and the basis of the claim resolved by the release was exposure to asbestos. At the time of the execution of the 2011 release, the plaintiff had been diagnosed with asbestosis. The plaintiff acknowledged the payment of $5,000 as a “complete compromise and settlement of all claims, demands, actions, injuries, damages, costs and compensation of any kind arising out of the subject matter of this release, whether known or unknown, whether or not ascertainable at this time.” The release further provided that the plaintiff “brought a claim against Union Pacific seeking damages as a result of alleged illness and diseases and any cancers or death resulting” from the plaintiff’s “Occupational Exposures,” and that the release “expressly includes any claims for cancer which presently exists as well as any cancer which does not presently exist but which may develop in the future.” In the release, the plaintiff acknowledged that the “possible future effects of existing injuries [were] specifically bargained for.” The plaintiff conceded that asbestosis may lead to lung cancer and mesothelioma.

The validity of a release under the FELA is determined in accordance with federal law. Butler v. Union Pac. R.R. Co., No. 8:19CV166, 2020 U.S. Dist. LEXIS 222127, at *8 (D. Neb. Oct. 22, 2020) (internal citations omitted). The court went on to cite 45 U.S.C. § 55 for the proposition that “any contract where the purpose is to “exempt” an employer from “any liability” under FELA is void.” Id. However, “[w]here controversies exist as to whether there is liability, and if so for how much,” a release of liability is not a device to exempt from liability but is a means of compromising a claimed liability, and is not precluded by § 5 of the FELA, 45 U.S.C. § 55. Id., citing Callen v. Penn. Ry. Co., 332 U.S. 625, 630, (1948). Thus, “a release of FELA claims can have the same effect as any other release, in that it may constitute a settlement or compromise, rather than an attempt to escape liability.” Id., citing Babbitt v. Norfolk & W. Ry. Co., 104 F.3d 89, 92 (6th Cir. 1997). The plaintiff bears the burden of establishing that a release is void under this section of the FELA. Id., citing Callen, 332 U.S. 630.

The court acknowledged that there is a split in authority as to the validity of a release of future claims under the FELA. Compare Babbitt, 104 F.3d at 93 (holding that a release is not valid if it exempts the railroad from liability for future, undiagnosed injuries) with Wicker v. Consol. Rail Corp., 142 F.3d 690, 701 (3rd Cir. 1998) (holding that a release of liability for future, undiagnosed injuries may be valid as long it is executed for valid consideration as part of a settlement and the scope of the release is limited to those risks that are known to the parties at the time the release is signed). Under the Babbitt standard, “a release must reflect a bargained-for settlement of a known claim for a specific injury, as contrasted with an attempt to extinguish potential future claims the employee might have arising from injuries known or unknown by him.” Id., citing Babbitt, 104 F.3d at 93. In Wicker, the Third Circuit takes a different approach, rejecting the “known injury” standard in favor of a “known risks” standard, under which the parties can compromise a future claim as part of a settlement as long as “the scope of the release is limited to those risks which are known to the parties at the time the release is signed.” Id., citing Wicker, 142 F.3d at 701.

In making the ‘known risk’ inquiry, a court must evaluate the intent of the parties at the time of the settlement agreement. Id., citing Wicker, 142 F.3d at 700. However, it is not enough for a release to simply list all the possible risks of a person’s exposure; rather, a valid release must address a specific claim instance of disputed liability. Id. While the 2011 release acknowledged the possibility of the development of future illnesses, the court found that this was essentially boilerplate language. At the time the plaintiff executed the 2011 release, his known injury—that which the release bargained for—was asbestosis related to asbestos exposure. The plaintiff’s colorectal cancer was not known at the time of the 2011 agreement, nor was it sufficiently related to his bargained-for claim to be considered released pursuant to 45 U.S.C. Section 55. Neither party contends that the plaintiff’s colorectal cancer was caused by exposure to asbestos. As such, the court found that the plaintiff only intended to release Union Pacific from claims related to the plaintiff’s asbestos exposure. Further, the court found that the settlement amount of $5,000 does not evidence an intent of the plaintiff to release all claims related to known and unknown risks related to his exposure to a plethora of toxins, but only those related to asbestos.

The court held that the 2011 release “does not pass muster under 45 U.S.C. Section 55, and is therefore ineffective under the FELA to preclude the plaintiff’s claim.” Therefore, the court denied the defendant’s motion for summary judgment.