O&G Indus., Inc. v. Nal R.R. Passenger Corp., No. 06-4719 (2d Cir. 2008)
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06-4719-cv O&G Indus., Inc. v. Nat l R.R. Passenger Corp. UNITED STATES COURT OF APPEALS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 HARTFORD FIRE INSURANCE CO. AND DAVID E. ROBERTS, ADMINISTRATOR FOR THE ESTATE OF GREGORY J. ROBERTS, 33 34 35 36 37 38 39 40 41 42 43 44 45 Appeal from a judgment of the United States District Court for the District of Connecticut (Dorsey, J.) entered in a third-party action for indemnity, following an accident in which a train owned and operated by defendant-third-party-plaintiff appellee Amtrak caused the death of one employee of third-party-defendant appellant O&G Industries, Inc. and injured another. In the first instance, the district court (1) granted summary judgment to Amtrak on the ground that the indemnity agreement between Amtrak and O&G was not invalid under Connecticut General Statute § 52-572k(a), because the latter is preempted by 49 U.S.C. § 28103(b), which allows rail passenger carriers to enter into indemnification agreements concerning claims brought against them; and (2) held that O&G was required, as a matter of law, to indemnify Amtrak for the liabilities and costs FOR THE SECOND CIRCUIT August Term, 2007 (Argued: October 23, 2007 Decided: August 8, 2008) Docket No. 06-4719-cv - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - O&G INDUSTRIES, INC., Third-Party-Defendant Appellant, Plaintiffs, PETER QUINTILIANI AND LAUREL QUINTILIANI, Consolidated Plaintiffs, v. NATIONAL RAILROAD PASSENGER CORPORATION, Defendant-Third-Party-Plaintiff Appellee, - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - B e f o r e: FEINBERG, WINTER, and STRAUB, Circuit Judges. 1 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 Amtrak incurred in the tort actions arising out of the accident, despite a jury verdict that O&G was relieved of this obligation because Amtrak s failure to adequately protect O&G workers amounted to a material breach of the contract between them. We now affirm the rulings of the district court. We also find that any error the district court committed by precluding appellant from cross-examining an employee of the appellee in the first phase of the trial (concerning the tort actions against Amtrak) and subsequently restricting appellant s direct examination of the same employee in the second phase of the trial (concerning the indemnity claim against O&G) was harmless. Finally, we dismiss for want of appellate jurisdiction O&G s challenges to the award of attorneys fees and costs. Dismissal does not affect our jurisdiction to review the merits of the other issues on appeal. Affirmed in part and dismissed in part. KIMBERLY A. KNOX (Michael S. Taylor and Brendon P. Levesque, on the brief), Horton Shields & Knox, P.C., Hartford, Connecticut, and Jeffrey A. Blueweiss (on the brief), Bai, Pollock, Blueweiss & Mulcahey, Shelton, Connecticut, for Third-PartyDefendant Appellant. WILLIAM G. BALLAINE (Dawn Pinkston, of counsel, on the brief), Landman Corsi Ballaine & Ford, P.C., New York, New York, for Defendant-Third-Party-Plaintiff Appellee. FEINBERG, Circuit Judge: This case is procedurally complicated. The present appeal 77 arises out of a third-party complaint brought by National Railroad 78 Passenger Corporation (hereafter Amtrak or appellee ) against O&G 79 Industries, 80 States District Court for the District of Connecticut (Dorsey, J.). 81 In its complaint, Amtrak sought indemnification from O&G for any 82 liabilities and costs, including attorneys fees, that Amtrak would Inc. (hereafter O&G 2 or appellant ) in the United 83 incur in two consolidated tort actions against it for wrongful death 84 and personal injury damages resulting from a train accident. 1 85 The proceedings in the district court included two rulings that 86 O&G now appeals to this Court. First, before trial of the third- 87 party indemnity action began, the district judge granted partial 88 summary judgment to Amtrak on the basis of an explicit indemnity 89 provision in a right-of-access contract between Amtrak and O&G. The 90 court upheld the validity of the indemnity provision, ruling that 49 91 U.S.C. § 28103(b) (hereafter § 28103(b) ) -- which allows rail 92 passenger carriers to enter into liability-shifting agreements -- 93 preempted 94 referred to hereafter as the Connecticut statute ). That statute 95 prohibits, on public policy grounds, indemnity agreements entered 96 into in connection with construction contracts, if they purport to 97 shield the indemnitee from liability for its own negligence. O&G 98 invoked the Connecticut statute to defeat Amtrak s indemnity claim. 99 See Roberts v. Nat l R.R. Passenger Corp. v. O&G Indus., Nos. 3:04- 100 cv-1318, 3:04-cv-1622 & 3:04-cv-2195, 2006 WL 648212 (D. Conn. Mar. 101 9, 2006). 1 Connecticut General Statute § 52-572k(a) (frequently The two actions were Roberts v. Nat'l R.R. Passenger Corp., No. 3:04-cv-1318 (D. Conn. filed Aug. 9, 2004), and Quintiliani v. Nat'l R.R. Passenger Corp., No. 3:04-cv-2195 (D. Conn. filed Dec. 29, 2004). A third action was brought against Amtrak by the Hartford Fire Insurance Company, as subrogee of O&G, for damage to O&G property caused by the train accident. See Hartford Fire Ins. Co. v. Nat l R.R. Passenger Corp., No. 3:04-cv-1622 (D. Conn. filed Sept. 28, 2004). This action was settled and is not part of the present appeal. 3 Second, 102 the judge granted Amtrak's post-trial motion for 103 judgment as a matter of law, setting aside a jury verdict that O&G 104 was 105 Amtrak s material breach of the contract with O&G. Judge Dorsey held 106 that Amtrak s contractual default did not affect the validity of the 107 indemnity agreement, which explicitly covered accidents attributable 108 to Amtrak s negligence. See Roberts v. Nat l R.R. Passenger Corp. v. 109 O&G Indus., Nos. 3:04-cv-1318, 3:04-cv-1622 & 3:04-cv-2195, 2006 WL 110 2621733 (D. Conn. Sept. 12, 2006). relieved of its obligation to indemnify Amtrak because of 111 O&G argues on appeal that the district court erred in (1) 112 granting partial summary judgment to Amtrak; (2) entering judgment 113 for Amtrak as a matter of law; (3) curtailing O&G s cross- and 114 direct examination of an Amtrak employee during the trial; and (4) 115 awarding 116 evidence as to their amount and reasonableness. Amtrak attorneys fees and defense costs without any On the first and second of these issues, we affirm the district 117 118 court. On 119 cross-examination rights by the district court, even if erroneous, 120 were 121 issue, we conclude that we lack appellate jurisdiction over the 122 district court s non-final award of attorneys fees and costs. not the third, substantially we find prejudicial 123 124 I. BACKGROUND 4 the to limitations appellant. On of the O&G s fourth 125 The accident that led to this litigation occurred in June 2004, 126 while Gregory Roberts and Peter Quintiliani, carpenters employed by 127 O&G, 128 bridge suspended over Amtrak's tracks in East Haven, Connecticut. An 129 Amtrak diesel locomotive entered their worksite without warning and 130 collided with the man-lift in which they were stationed. Amtrak s 131 on-site 132 because they were unaware of the train s scheduled passage through 133 O&G s 134 Amtrak s 135 employees, having already de-energized the tracks at the East Haven 136 worksite so that no electric-powered train could pass, erroneously 137 believed that the tracks had been placed out of service. Thus, they 138 had not made a specific request to foul the tracks, i.e., render 139 them completely inoperable until O&G s crew had completed its work. 140 At the time of the accident, therefore, none of O&G s or Amtrak s 141 employees on duty at the site expected any train movement through 142 the work zone. 2 The collision killed Roberts instantly; Quintiliani 143 was injured while jumping out of the lift. were installing safety work 2 personnel area, chief wood due to planks were poor dispatcher in on unable the to underside prevent coordination Boston. with of the the Furthermore, a highway accident, office of Amtrak s A more detailed description of the train accident can be found in the district court s March 2006 ruling on the parties motions for summary judgment. See Roberts v. Nat l R.R. Passenger Corp. v. O&G Indus., Nos. 3:04-cv-1318, 3:04-cv-1622 & 3:04-cv-2195, 2006 WL 648212 (D. Conn. Mar. 9, 2006), 2006 WL 648212, at *1-3. We think it unnecessary to recount here all the factual circumstances surrounding the accident, because the crux of the dispute before us is Amtrak s indemnity claim against O&G -- not responsibility for the accident, which Amtrak admitted at trial. 5 David 144 Roberts (hereafter Roberts ), the brother of the 145 deceased O&G employee and administrator of his estate, filed in 146 August 147 compensatory and 148 consolidated with 149 answering the two actions, Amtrak filed its third-party complaint 150 against O&G. 2004 a wrongful death punitive action damages. Quintiliani s against The suit personal Amtrak, by injury seeking Roberts action. was After The indemnity claim was based on a clause in the Temporary 151 152 Permit to Enter 153 concluded between O&G and Amtrak in October 2003. Under the Permit, 154 Amtrak allowed O&G access to Amtrak s property in East Haven, in 155 order to perform construction work in relation to O&G s contract 156 with the Connecticut State Department of Transportation regarding 157 the re-building of a stretch of Interstate 95 between New Haven and 158 Branford, Connecticut; 159 undertook to 160 accidents, delay or interference with [Amtrak's] trains or property 161 and abide by Amtrak's safety regulations. Pursuant to the Permit, 162 Amtrak would provide, at its discretion and at O&G s expense, flag 163 service and/or other protection necessary to maintain the safety 164 and 165 exclusive control. However, the provision of protective services 166 would not relieve [O&G] from [its] complete responsibility for the continuity Upon use of Property all (hereafter consideration necessary railroad care traffic, 6 was Permit ), $1. and over O&G, on a its part, to avoid precaution which contract Amtrak retained 167 adequacy and safety of [its] operations. 168 A key feature of the Permit is the following provision: The Permittee [O&G] shall defend, indemnify and hold harmless Railroad [Amtrak], its officers, directors, employees, agents, servants, successors, assigns and subsidiaries, irrespective of their negligence or fault, from and against any and all losses and liabilities, . . . claims, causes of action, suits, costs and expenses incidental thereto (including cost of defense and attorney's fees), which any or all of them may hereafter incur, be responsible for, or pay as a result of injury, [or] death, . . . to any person . . . arising out of or . . . resulting from activities of or work performed by [O&G], its officers, employees, agents, servants, contractors, subcontractors, or any other person acting for or by permission of [O&G]. The foregoing obligation shall not extend to situations where the negligence or fault of Amtrak, its officers, directors, [or] employees . . . is the sole causal negligence or fault, except that it shall so extend to injury [or] death . . . to employees of [O&G], its agents, servants, contractors, subcontractors, or any other person acting for or by permission of [O&G]. The foregoing obligation shall not be limited by the existence of any insurance policy or by any limitation on the amount or type of damages, compensation, or benefits payable by or for [O&G] or any contractor or subcontractor, and shall survive the termination of this permit for any reason. 169 170 171 172 173 174 175 176 177 178 179 180 181 182 183 184 185 186 187 188 189 190 191 192 193 (Emphasis added.) In the district court, O&G argued that the above 194 provision 195 572k(a), which declares void as against public policy agreements to 196 indemnify a party against its own negligence, if such agreements 197 were 198 contracts. made was invalid in under connection Connecticut with or General collateral Statute to § 52- construction 199 Before trial began on Amtrak s indemnity claim, Amtrak sought 200 summary judgment and orders directing O&G to defend Amtrak in the 201 two tort actions and reimburse Amtrak s reasonable attorneys' fees 202 in defending against those claims. 7 In March 2006, Judge Dorsey 203 granted Amtrak partial summary judgment, concluding that § 28103(b), 204 which allows Amtrak to enter into indemnification agreements as to 205 claims against it, preempted the Connecticut statute and allowed 206 Amtrak to pursue its indemnity claim at trial. 207 The jury trial of the consolidated actions by plaintiffs 208 Roberts and Quintiliani against Amtrak began in March 2006. The 209 first phase ( Phase I ) was limited to the issue of damages to be 210 awarded 211 recklessness). In April 2006, the jury awarded plaintiffs $1.425 212 million 213 damages claims, finding that Amtrak's conduct was not willful or 214 reckless. 3 At the end of the second phase of the trial ( Phase II ) 215 concerning 216 found that O&G was excused from its obligation to indemnify Amtrak, 217 because 218 protection amounted to a material breach of the Permit, rendering it 219 void in its entirety. 220 to plaintiffs. each in After compensatory Amtrak s Amtrak's this Amtrak damages, third-party failure second to conceded complaint provide verdict, but O&G s Amtrak negligence rejected against crew moved (but the O&G, punitive the adequate for not jury on-site judgment as a 221 matter of law, under Federal Rule of Civil Procedure 50(b), arguing 222 that there were no triable issues of fact as to the applicability of 223 the indemnity clause in the Permit and, hence, O&G was required to 3 The Roberts estate appealed from the judgment of the district court entered against Amtrak after the verdict. That appeal was heard by this panel the same day as the appeal now before us. In November 2007, we summarily affirmed the judgment of the district court. See Roberts v. Nat l R.R. Passenger Corp., No. 06-3036-cv, 2007 WL 3230736 (2d Cir. Nov. 1, 2007) (summary order). 8 224 indemnify Amtrak for litigation costs and damages awarded in the 225 underlying actions by Quintiliani and Roberts. In the alternative, 226 Amtrak sought a new trial, under Rule 59(a), on whether a material 227 contractual default nullified the entire Permit. 228 In 229 motion, 230 accrues, under the Permit, where Amtrak is found liable for injury 231 to 232 negligence or fault. See Roberts, 2006 WL 2621733, at *5-6. Allowing 233 O&G 234 negligence, the court reasoned, would render the indemnification 235 provision meaningless. Id. at *6. or September 2006, concluding that death to of evade an its O&G the judge Amtrak s employee indemnity granted right solely to Amtrak's indemnity caused obligations Rule by because 50(b) explicitly Amtrak s of own Amtrak s In December 2006, the court entered judgment in favor of Amtrak 236 237 in its indemnity 238 action against O&G. This timely appeal by O&G followed. 239 240 II. DISCUSSION 241 The parties to this appeal raise several issues. First, we must 242 decide whether the Connecticut statute, which nullifies indemnity 243 agreements insulating a contracting party from its own negligence, 4 4 Connecticut General Statute § 52-572k states: (a) Any covenant, promise, agreement or understanding entered into in connection with or collateral to a contract or agreement relative to the construction, alteration, repair or maintenance of any building, structure or appurtenances thereto including moving, demolition and excavating connected therewith, that purports to indemnify or hold harmless the 9 244 applies, on its face, to the Permit; if it does, we must next 245 examine 246 indemnification 247 Second, in considering the district court's grant of Amtrak's motion 248 for judgment as a matter of law, we must assess whether Amtrak s 249 conceded failure to effectively protect O&G s crew constituted a 250 material breach of the Permit, discharging O&G from its indemnity 251 obligation. 252 preclude O&G from cross-examining an Amtrak employee during Phase I 253 of the trial, and the judge s subsequent decision to restrict O&G's 254 direct examination of the same employee during Phase II. Finally, we 255 consider whether we have jurisdiction over the district court's non- 256 quantified award to Amtrak of reasonable costs and attorneys' fees 257 incurred in the defense of the Roberts and Quintiliani actions. whether § 28103(b), agreements, 5 Third, we review which permits preempts the the district Amtrak to enter Connecticut court's into statute. decision to 258 259 A. Preemption 260 Our review of a grant of summary judgment under Rule 56 is 261 plenary. [S]ummary judgment is appropriate where there exists no promisee against liability for damage arising out of bodily injury to persons or damage to property caused by or resulting from the negligence of such promisee, such promisee's agents or employees, is against public policy and void, provided this section shall not affect the validity of any insurance contract, workers' compensation agreement or other agreement issued by a licensed insurer. 5 49 U.S.C. § 28103(b) provides: A provider of rail passenger transportation may enter into contracts that allocate financial responsibility for claims. 10 262 genuine issue of material fact and, based on the undisputed facts, 263 the 264 D'Amico v. City of New York, 132 F.3d 145, 149 (2d Cir. 1998). We 265 view the facts in the light most favorable to the nonmoving party 266 and resolve all factual ambiguities in its favor. Cioffi v. Averill 267 Park Cent. Sch. Dist. Bd. of Educ., 444 F.3d 158, 162 (2d Cir. 268 2006). moving party is entitled to judgment as a matter of law. 269 270 1) Applicability of the Connecticut Statute 271 In its appeal, O&G relies heavily on the Connecticut statute. 272 In response, Amtrak claims for the first time that the Connecticut 273 statute 274 indemnity 275 Amtrak 276 district court, however, Amtrak did not contest the applicability of 277 the Connecticut statute, although it had ample opportunity to do so. 278 Under the circumstances, Amtrak has waived that argument and cannot 279 raise it on appeal. See Greene v. United States, 13 F.3d 577, 586 280 (2d 281 (1976)). 6 Therefore, we proceed with the preemption question on the does 6 apply agreements argues Cir. not that 1994) to only the (citing the if Permit inserted Permit was Singleton not v. because in it allegedly construction such Wulff, a contracts. contract. 428 U.S. bars In 106, the 120 Our refusal to consider Amtrak s waived argument on the applicability of the Connecticut statute is of little importance to the final disposition of the case. As set forth below, we agree with the district court s finding that the Connecticut statute is preempted by federal law and thus does not invalidate the indemnity clause in the Permit. 11 282 assumption 283 that the Connecticut statute applies, unless it is preempted. 284 285 2) 286 Section 28103 of Title 49 of the United States Code was enacted 287 as 288 (hereafter the Reform Act ). Subsection (b) of § 28103 provides 289 that [a] provider of rail passenger transportation may enter into 290 contracts that allocate financial responsibility for claims. Amtrak 291 argues that this subsection was intended to allow it to enter into 292 enforceable indemnity agreements not voidable under state law. In 293 Amtrak s 294 Connecticut statute. 295 part Preemption by § 28103(b) of O&G the view, Amtrak § counters (1) Reform and 28103(b) is that 28103(b) with applies to indemnity 298 railroads. Because Gregory Roberts and Quintiliani were not Amtrak 299 passengers, and the indemnity agreement was between Amtrak and O&G, 300 a construction company rather than a freight railroad company, O&G 301 maintains that § 28103(b) is not applicable and does not supersede 302 the Connecticut statute. In support of its arguments, O&G points to 303 subsection 304 damages to be awarded in relation to passenger claims for personal which 12 governs the passengers the concluded between passenger rail carriers like Amtrak and freight 28103, by only preempts 1997 297 § brought and of agreements of claims odds Act 296 (a) regarding § at Accountability issue of and (2) punitive 305 injury, wrongful death or property damage, 7 and to the legislative 306 history of § 28103(b). 307 Federal preemption of state law is a doctrine grounded in the 308 Supremacy Clause of the Constitution. See U.S. Const. Art. VI, cl. 2 309 ("[T]he Laws of the United States . . . made in Pursuance [of the 310 Constitution] shall be the supreme Law of the Land . . . any Thing 311 in 312 notwithstanding."). 313 congressional intent, which is the ultimate touchstone of pre- 314 emption analysis. See Cipollone v. Liggett Group, Inc., 505 U.S. 315 504, 516 (1992) (quoting Malone v. White Motor Corp., 435 U.S. 497, 316 504 (1978)). Intent to preempt state law may be found (1) where 317 Congress 318 Congress's the 7 Constitution expressly scheme or The of doctrine states of Laws its any requires intent federal State us to to first the Contrary to ascertain preempt; regulation is (2) sufficiently That subsection provides: (a) Limitations. --(1) Notwithstanding any other statutory or common law or public policy, or the nature of the conduct giving rise to damages or liability, in a claim for personal injury to a passenger, death of a passenger, or damage to property of a passenger arising from or in connection with the provision of rail passenger transportation, . . . punitive damages, to the extent permitted by applicable State law, may be awarded in connection with any such claim only if the plaintiff establishes by clear and convincing evidence that the harm that is the subject of the action was the result of conduct carried out by the defendant with a conscious, flagrant indifference to the rights or safety of others. If, in any case wherein death was caused, the law of the place where the act or omission complained of occurred provides, or has been construed to provide, for damages only punitive in nature, this paragraph shall not apply. (2) The aggregate allowable awards to all rail passengers, against all defendants, for all claims, including claims for punitive damages, arising from a single accident or incident, shall not exceed $200,000,000. 13 where 319 comprehensive to give rise to a reasonable inference that it leaves 320 no room for the state to act; and (3) where state law actually 321 conflicts with federal law. Marsh v. Rosenbloom, 499 F.3d 165, 177 322 (2d Cir. 2007) (citing Cal. Fed. Sav. & Loan Ass n v. Guerra, 479 323 U.S. 272, 280 (1987)). 324 As the district court correctly concluded, § 28103(b) does not 325 expressly preempt state law, nor is it so pervasive as to make 326 reasonable the inference that Congress left no room for the states 327 to supplement it. Roberts, 2006 WL 648212, at *10. Preemption can 328 thus be found here only if the Connecticut statute conflicts with § 329 28103(b), i.e., if compliance with both statutes is impossible, or 330 if 331 accomplishment and execution of the full purposes and objective of 332 Congress. United States v. Locke, 529 U.S. 89, 109 (2000) (quoting 333 California v. ARC Am. Corp., 490 U.S. 93, 100-101 (1989)). 334 the O&G Connecticut first statute contends that stands no as an irreconcilable obstacle conflict to the exists 335 between the federal and the Connecticut statutes, because Congress 336 intended § 28103(b) to apply only to passenger claims. The argument 337 is unavailing. The subsection contains no such limitation on its 338 face and indeed makes plain that Amtrak may enter into contracts 339 allocating financial responsibility (i.e., indemnity agreements) for 340 any claims brought against it. 341 Furthermore, if Congress intended § 28103(b) to apply only to 342 passenger claims, it would have included such qualifying language in 14 343 the definition of the term claims. Congress did not do so. The 344 definition in subsection (e) of § 28103 is sufficiently broad to 345 encompass any claims asserted against Amtrak -- not only those by 346 passengers. 8 Subsection (e) defines the persons or entities against 347 whom 348 claimants. Because the language is unambiguous on this point, we 349 cannot supply that which is omitted by the legislature. Spielman 350 v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 332 F.3d 116, 127 351 (2d Cir. 2003). a claim The 352 may title be of pursued, § 28103 but - does not limit Limitations on the rail class of passenger 353 transportation liability - is of little aid to O&G s proposition 354 that the statute covers only passenger claims. [A] title . . . 355 cannot limit the plain meaning of unambiguous text. Collazos v. 356 United 357 original) (internal quotation marks omitted). States, 368 F.3d 190, 196 (2d Cir. 2004)(omission in 358 We conclude that § 28103(b), read in the context of the whole 359 section, see Food & Drug Admin. v. Brown & Williamson Tobacco Corp., 360 529 361 indemnification agreements for any claim filed against it, including U.S. 8 120, 133 (2000), authorizes Amtrak s entry 49 U.S.C. § 28103(e) states: Definition.-- For purposes of this section -(1) the term "claim" means a claim made-(A) against Amtrak, any high-speed railroad authority or operator, any commuter authority or operator, any rail carrier, or any State; or (B) against an officer, employee, affiliate engaged in railroad operations, or agent, of Amtrak, any high-speed railroad authority or operator, any commuter authority or operator, any rail carrier, or any State. 15 into 362 tort claims by contractor employees. This permissive mandate can 363 hardly 364 statute. 365 be reconciled with the prohibition of the Connecticut O&G also argues that the scope of § 28103(b) only extends to 366 indemnity 367 companies that own most of the rail lines on which Amtrak operates 368 and are reluctant to shoulder liabilities stemming from the use of 369 their tracks by passenger trains. This claim is equally unpersuasive 370 because of the unambiguous text of § 28103(b) for the reasons set 371 forth above, and we rest our conclusion that § 28103(b) preempts the 372 Connecticut statute on that ground. 373 agreements Nonetheless, by the between O&G s Amtrak argument freight congressional 376 provider 377 railroads, the protection afforded by § 28103(b) will most likely 378 apply to indemnity agreements with freight railroads. As a result, 379 many of the congressional sponsors of the Reform Act frequently 380 referred in their discussions to the liability allocation agreements 381 between Amtrak and host freight railroads. That said, we find no 382 evidence of congressional intent that § 28103(b) apply only in that 383 particular set of circumstances. Rather, the goal of the Reform Act 384 was to shield all of Amtrak's indemnity arrangements from legal 385 attacks on their validity. See Symposium: The State of the Law in 16 28103(b), systems owned counsels as different result is meritless. Because Amtrak is a passenger rail track § intent, 375 on of railroad evidenced operating history the 374 mostly legislative that and by a freight 386 the Railroad Indus., 26 Transp. L.J. 319, 336-37 (1999) ( Congress . 387 . . encouraged all providers of rail passenger transportation to 388 enter 389 claims. Resolving an issue that had plagued freight railroads that 390 host Amtrak trains, Congress also affirmed the enforceability of 391 contracts that include indemnification obligations. ). into contracts that legislative allocate history 393 Congressional 394 financial 395 arrangements designed to reduce its liability exposure. The Reform 396 Act was meant, among other things, to ensure the enforceability of 397 indemnity 398 Senate Committee Report is categorical in that regard: problems and agreements legislative intention Amtrak 28103(b) to concludes is for The reveal § responsibility 392 debates of financial concern support with illuminating. about Amtrak s any other Amtrak s contractual party. The [T]his bill clarifies that indemnification agreements related to the provision of rail passenger service entered into by Amtrak and other parties would be enforceable. The Committee has been requested by Amtrak to include this provision in order to aid Amtrak in achieving operating self-sufficiency. . . . As long as there is the possibility that state laws governing indemnification contracts may make these contracts unenforceable, Amtrak and a freight railroad may find themselves litigating with each other. Amtrak believes that such litigation inevitably would not only adversely impact business relationships between Amtrak and the host freight railroads, but it would also lead to significantly higher outlays in settlements and judgments to plaintiffs. 399 400 401 402 403 404 405 406 407 408 409 410 411 412 413 414 S. 415 unmistakably intended [t]he language in section 28103(b) . . . to 416 confirm Rep. No. that 105-85, such at 5 (1997) contractual (emphasis agreements 17 added). [i.e. Congress indemnification 417 agreements] are consistent with Federal law and public policy. 143 418 Cong. Rec. S11937-03 (statement of Sen. Lott). O&G s interpretation 419 of the statute s legislative history would be inconsistent with the 420 stated objective of § 28103(b) to solidify the enforceability of 421 Amtrak s liability-shifting arrangements. When the Reform Act was passed, Amtrak was in the middle of a 422 423 financial crisis, with growing and 424 severely limiting its ability to 425 jeopardizing 426 Accountability Act of 1997, §2(2), Pub. L. No. 105-134, December 2, 427 1997, 111 Stat. 2570, at *2571; see also 143 Cong. Rec. S11929-03 428 (statement of Sen. McCain) ( Amtrak is on the verge of bankruptcy. 429 Fundamental reforms are needed immediately if there is to be any 430 possibility of addressing Amtrak's financial crisis and turning it 431 into 432 Congress s distress over Amtrak s financial burdens: in 49 U.S.C. § 433 28103(a), Congress limited the award of punitive damages, in actions 434 arising from . . . the provision of rail passenger transportation, 435 to 436 flagrant indifference to the rights or safety of others. 49 U.S.C. 437 § 28103(a)(1). In a similar vein, Congress placed a $200 million cap 438 on Amtrak s aggregate liability from any single accident. Id. § 439 28103(a)(2). a cases its viable where long-term operation. ). the defendant substantial cover was 18 Reform proven obligations operating viability. The debt Amtrak Act to costs Reform clearly have a and and reflects conscious, Against this legislative background, contentions that Congress 440 441 intended to 442 Congress s attempt to rescue Amtrak are simply not persuasive. We 443 believe 444 indemnity provision in the Permit. Applying the Connecticut statute 445 would violate the plain language and spirit of § 28103(b), which 446 therefore preempts the Connecticut statute. that allow we state must law enforce or public and policy recognize to the interfere validity with of the 447 448 B. Material Breach of the Permit 449 At the conclusion of Phase II of the trial, the jury found 450 that, under the indemnity provision in the Permit, O&G was required 451 to reimburse Amtrak for costs incurred and damages awarded in the 452 Roberts and Quintiliani actions, but that Amtrak s material breach 453 of the Permit relieved O&G of all its contractual duties, including 454 the 455 overturned the jury verdict, ruling that as a matter of law O&G s 456 contractual obligation to indemnify Amtrak was valid regardless of 457 Amtrak s negligence. See Roberts, 2006 WL 2621733, at *5-7. O&G now 458 challenges this ruling, arguing that the jury properly found that 459 Amtrak's violation of its duty to protect O&G's workers from passing 460 trains 461 indemnity 462 court's grant of a post-verdict judgment to Amtrak as a matter of 463 law, considering the evidence in the light most favorable to O&G, obligation resulted to indemnify in obligation Amtrak. termination thereunder. of We 19 However, the entire review de the district Permit novo and the judge O&G s district 464 the nonmoving party. Zellner v. Summerlin, 494 F.3d 344, 371 (2d 465 Cir. 2007). 466 [A] material breach is a failure to do something that is so 467 fundamental to 468 obligation defeats the essential purpose of the contract or makes it 469 impossible for the other party to perform under the contract. 23 470 Williston on Contracts § 63:3 (4th ed. 2007) (footnotes and internal 471 quotation 472 material failure of performance by one contracting party discharges 473 the other party from any further performance under the contract, 474 which is rendered unenforceable in toto. See Bernstein v. Nemeyer, 475 570 A.2d 164, 168 (Conn. 1990). marks a contract omitted). that Under the failure to Connecticut perform law, an that uncured, 476 It is uncontroverted that O&G complied with its obligations 477 under the Permit to perform its work on Amtrak s property so as to 478 observe 479 [Amtrak s] 480 adequate 481 Permit s purpose and amounted to a material breach. The district 482 court rejected this claim because of the unambiguous language of the 483 indemnity agreement, which the court held squarely applicable to the 484 undisputed facts of the case. See Roberts, 2006 WL 2621733, at *6 485 ( The argument lacks merit, however, because the factual situation 486 on which O&G relies for being excused from its obligation is exactly 487 the factual situation which gives rise to that obligation. ). Amtrak's safety operations. protection to regulations By contrast, O&G s and Amtrak s workers, 20 not O&G interfere failure claims, to with provide negated the We agree with the district judge s holding. Not only is the 488 489 indemnity 490 obligation to operate its trains safely through the worksite, but it 491 explicitly provides Amtrak with a right to indemnity even where the 492 negligence or fault of Amtrak [or] its . . . employees is the sole 493 cause 494 employees of O&G. 9 O&G cannot circumvent its indemnity obligation by 495 invoking Amtrak s 496 clearly determined 497 duties. As Judge Dorsey emphasized, if O&G is allowed to evade its 498 obligation 499 ultimate responsibility for any unsafe train operation, as provided 500 in the Permit, would be nullified. Id. at *6. Since the indemnity 501 provision expressly contemplates the factual situation that arose 502 here (i.e., Amtrak s negligence was the sole cause of injury and 503 death to O&G s employees), Amtrak s failure to safely operate its 504 trains through O&G s work zone could not have thwarted the Permit s 505 essential purpose. of clause not injury, to hold qualified death, disease, negligence, would Amtrak by not which or or on occupational the exonerate harmless, conditioned parties O&G from Amtrak s Amtrak's disease envisaged its to and contractual protection against 506 A reading of the Permit as a whole suggests, in fact, that at 507 the core of the agreement was the parties preoccupation with the 508 safety and continuity of railroad traffic, rather than the safety 509 of O&G s personnel. The emphatic references to O&G s undertaking to 510 take all measures necessary to avoid undue interference with train 9 The indemnity provision is quoted in full in section I of the opinion, see supra at p.__. Its applicability in this case has not been called into question by the parties. 21 511 operations and its complete responsibility for the adequacy and 512 safety of its activities suggest that the Permit was drafted with a 513 principal 514 furnish protection was aimed at ensuring the safety and continuity 515 of railroad traffic and would come into play only if, in the opinion 516 of 517 condition that O&G would bear all the costs. It is a fair inference 518 that the essential purpose of the Permit was not to guarantee the 519 safety of O&G s employees, but rather to authorize O&G s temporary 520 access 521 presence on its property would neither disrupt train operations nor 522 damage Amtrak s trains and facilities. Amtrak s negligent failure to 523 provide adequate protection to O&G s workers did not vitiate this 524 purpose. focus Amtrak s to on Amtrak s officers, Amtrak s interests. conditions property while Even Amtrak s warrant it, reassuring and Amtrak promise under that to the O&G s 525 O&G does not claim that every negligent act by Amtrak would 526 constitute a material breach of the Permit. According to O&G, there 527 could 528 representatives 529 indemnity provision without necessarily amounting to a breach of a 530 fundamental contractual term. For example, O&G claims, an Amtrak 531 employee could accidentally strike someone with a tool or a piece of 532 equipment, or could dig a hole into which an individual might fall. 533 See Br. of Appellant at 36. be situations that, involving negligent nevertheless, would 22 acts be by covered Amtrak by the 534 The breadth of the indemnity provision refutes the distinction 535 O&G seeks to introduce. The provision does carve out of its reach 536 some situations where Amtrak s negligence is the sole cause of the 537 indemnifiable 538 explicitly 539 occupational disease to employees of [O&G] exclusively caused by 540 Amtrak's 541 O&G s employees were a centerpiece of the Permit, and default of 542 this 543 entirety, the parties could have made this clear by, for example, 544 including a termination clause in the Permit. Absent any stipulation 545 or indication to that effect, we cannot unmake the bargain the 546 parties struck, whether provident or improvident. Tallmadge Bros., 547 Inc. v. Iroquois Gas Transmission Sys., L.P., 746 A.2d 1277, 1292 548 (Conn. 2000) (internal quotation marks omitted). Where the language 549 of the contract is clear and unambiguous, the contract is to be 550 given effect according to its terms. Pesino v. Atl. Bank of New 551 York, 552 omitted). 553 material breach of the Permit would be incompatible with its plain 554 language. loss, extends but to negligence obligation 709 were 540, Under the obligation instances or A.2d O&G s fault. intended 545 of If (Conn. injury, Amtrak s to to circumstances of death, obligation invalidate 1998) indemnify the this disease, to Permit (internal Amtrak protect in quotation case, a or its marks finding of 555 Simply stated, . . . the evidence [here] is such that, without 556 . . . considering the weight of the evidence, there can be but one 557 conclusion as to the verdict that 23 reasonable men could have 558 reached. Simblest 559 Accordingly, we affirm the district court's grant of judgment to 560 Amtrak as a matter of law and hold that, regardless of Amtrak s 561 negligence in causing the accident, O&G bears the valid obligation 562 to 563 Roberts. indemnify v. Amtrak Maynard, for the 427 damages F.2d 1, awarded 4 to (2d Cir. 1970). Quintiliani and 564 565 C. Cross-Examination of Amtrak's Employee by O&G The district court permitted O&G to participate in Phase I of 566 567 the trial, 568 defendant Amtrak. The judge s rationale was that evidence presented 569 in relation to plaintiffs claims against Amtrak might well bear on 570 Amtrak s indemnity claim against O&G. Nevertheless, the judge did 571 not 572 Division 573 cross-examining Fournier was to elicit testimony tending to prove 574 that O&G was not at fault for the accident, which was entirely 575 attributable to Amtrak's reckless conduct. O&G argues that a showing 576 of Amtrak s recklessness would enable O&G to avoid its indemnity 577 obligations on public policy grounds. Judge Dorsey s reasoning for 578 denying 579 pertaining to O&G's role in the accident would be addressed in Phase 580 II. O&G was told that it would have ample opportunity to present its 581 recklessness defense at that time. However, when O&G attempted to permit in which O&G's counsel Superintendent O&G s plaintiffs request to Fred to Roberts cross-examine Fournier. cross-examine 24 and Quintiliani Amtrak's O&G s stated Fournier was New sued England reason that for issues 582 question Fournier in Phase II of the trial about whether Amtrak 583 followed proper internal procedures to avert safety risks to O&G s 584 on-site employees, the court sustained Amtrak s objection to this 585 line 586 resolved the issue of Amtrak s fault in Phase I of the trial. of O&G 587 questioning. now claims The judge that by noted that precluding the its jury had already cross-examination of 588 Fournier in Phase I and limiting its questioning of the same witness 589 in Phase II of the trial, the district judge prevented O&G from 590 fully litigating the question of Amtrak's recklessness -- on which 591 one of O&G s defense was premised -- and thus deprived it of its 592 cross-examination rights. The error, according to O&G, warrants a 593 new trial. As a preliminary matter, we reject Amtrak's contention that 594 595 this claim has not 596 repeatedly objected to the court's limitations on its examination of 597 Fournier, 598 recklessness by Amtrak in Phase I, that issue would be barred from 599 jury consideration in Phase II. articulating been the preserved concern for that, appellate if the review. jury found O&G no 600 We turn to the merits of O&G s claim. Whether an evidentiary 601 error implicates a substantial right depends on the likelihood that 602 the error affected the outcome of the case. See Tesser v. Bd. of 603 Educ., 370 F.3d 314, 319 (2d Cir. 2004) (per curiam) (quoting Malek 604 v. Fed. Ins. Co., 994 F.2d 49, 55 (2d Cir. 1993)); see also Fed. R. 605 Civ. P. 61 ( Unless justice requires otherwise, no error . . . by 25 606 the court . . . is ground for granting a new trial, . . . or 607 otherwise disturbing a judgment or order. At every stage of the 608 proceeding, the court must disregard all errors and defects that do 609 not affect any party s substantial rights. ) 610 We believe that the court s alleged error did not have a 611 substantial impact on the outcome of the case. O&G's interests were 612 adequately protected by Roberts and Quintiliani, the plaintiffs in 613 Phase I. These parties were seeking punitive damages from Amtrak and 614 thus had an equal, if not greater, incentive than O&G to show that 615 Amtrak's conduct was reckless. The question of Amtrak s recklessness 616 was adequately litigated by Roberts and Quintiliani and there is no 617 indication that the jury would have found recklessness, had O&G been 618 allowed 619 cross-examination 620 prejudice to O&G, because it is [not] likely that in some material 621 respect the factfinder's judgment was swayed by the error. Tesser, 622 370 F.3d at 319 (internal quotation marks omitted). See also United 623 States v. Thomas, 274 F.3d 655, 668 (2d Cir. 2001) (en banc) ( An 624 error affects a defendant's substantial rights if it is prejudicial 625 and it affected the outcome of the district court proceedings ) 626 (internal quotation marks omitted). 627 to cross-examine Furthermore, rights, even Fournier. even if supposing The limitation erroneous, the did district not judge of O&G s cause had any not 628 restricted O&G s examination of Fournier in Phase I, and that O&G 629 had convinced the jury that Amtrak s conduct was reckless, it is 26 630 doubtful that the outcome of the case would have been more favorable 631 to O&G. The indemnity provision in the Permit unequivocally requires 632 O&G to reimburse Amtrak for all the losses Amtrak may sustain as a 633 result of death or injury to O&G s employees, even when Amtrak s own 634 negligence 635 unmistakable 636 nullify its obligation to indemnify Amtrak, even if the jury had 637 entered 638 grounds. a or fault wording punitive is of the damages cause of clause the sole would thus award against the incident. not Amtrak on allow O&G The to recklessness 639 O&G argues to us that, had it been allowed to fully participate 640 in Phase I of the trial, and had the jury found Amtrak s conduct 641 reckless, O&G would have been relieved of its duty to hold Amtrak 642 harmless, by raising a public policy defense against enforcement of 643 the indemnity agreement. We disagree. We have already held in this 644 opinion 645 embodying the public policy of Connecticut against indemnification 646 for liabilities due solely to the negligence of the indemnitee 10 is 647 preempted by § 28103(b). Subsection § 28103(b) also superseded the 648 opinion that would have been most helpful to O&G in its public 649 policy 650 Nat l R.R. Passenger Corp. v. Consol. Rail Corp. ( ConRail ), 698 F. 651 Supp. 951 (D.D.C. 1988) (invalidating an agreement to indemnify for 652 losses caused by the indemnitee s gross negligence, as contrary to 653 District of Columbia public policy), vacated on other grounds, 892 (see defense 10 Part II.A, against supra) that indemnification See supra note 3. 27 the for Connecticut reckless statute conduct. See 654 F.2d 1066 655 granting summary judgment to Amtrak, it was precisely the doubts 656 cast 657 agreements by railroad parties that prompted Congress to enact § 658 28103(b). 659 unqualified 660 specific 661 between 662 against Amtrak. See S. Rep. No. 105-85, at 5 (1997). A finding of 663 recklessness in Phase I, therefore, would have resulted in a higher 664 jury verdict against Amtrak in the underlying actions against it in 665 Phase I of the trial. This would most probably have permitted Amtrak 666 to obtain greater recovery from O&G under the Permit; public policy 667 considerations would not have precluded enforcement of the express 668 direction of the indemnity provision. by (D.C. the Cir. ConRail See intent of and As Judge decision Roberts, language Amtrak 1990). in 2006 § WL to the parties with of noted *11. The no doubt as indemnity respect to in indemnity at leaves sanction correctly validity 648212, 28103(b) Congress other over Dorsey broad, to the arrangements any claims 669 In view of the above, we hold that, assuming arguendo that the 670 district judge erred in preventing O&G from cross-examining Fournier 671 in Phase I and from fully pursuing its recklessness defense in Phase 672 II, the error was not prejudicial to O&G in the context of the trial 673 as a whole and does not justify a new trial. 674 675 D. 676 677 Attorneys' Fees In granting Amtrak's Rule 50(b) motion for judgment as a matter of law, the district judge held that, under the indemnity 28 678 agreement, Amtrak was entitled to reimbursement of its attorneys 679 fees, as well as the costs it incurred in Phase I of the trial, in 680 defense 681 judge, 682 litigation costs for which O&G was required to indemnify Amtrak. O&G 683 now argues that the district court abused its discretion in awarding 684 attorneys fees and costs where there was no evidence as to the 685 amount or reasonableness of these expenses. Amtrak responds that the 686 amount of fees due would be ascertained by the district judge only 687 after liability for such fees was determined. of the actions however, did not brought set by the Roberts amount and of Quintiliani. attorneys fees The and 688 Pursuant to 28 U.S.C. § 1291, we review only final decisions of 689 the district court that leave[] nothing for the court to do but 690 execute the judgment. Catlin v. United States, 324 U.S. 229, 233 691 (1945). A non-quantified award of attorneys fees and costs is not 692 appealable until the amount of the fees has been set by the district 693 court. We have held that where attorneys fees are a contractually 694 stipulated element of damages, a judgment is not final until the 695 fees 696 Trustees, 776 F.2d 1563, 1564 (2d Cir. 1985) (per curiam); see also 697 Honeywell Int'l, Inc. v. Purolator Prods. Co., 468 F.3d 162, 164 (2d 698 Cir. 2006). This circuit, moreover, has rejected the doctrine of 699 pendent appellate jurisdiction as a basis to review an undetermined 700 award of attorneys fees, even when the question of liability for 701 the have fees been had determined. been F.H. consolidated Krear with 29 & Co. other v. Nineteen decisions that Named were 702 final. Krumme v. WestPoint Stevens Inc., 143 F.3d 71, 87 (2d Cir. 703 1998) 704 1993)). We therefore dismiss for lack of appellate jurisdiction the 705 portion of O&G s appeal challenging the district court s grant of 706 attorneys fees and costs incurred in Phase I of the trial. 707 (citing This Cooper defect v. does Salomon not Bros., impair the 1 F.3d finality 82, of 85 the (2d Cir. district 708 court s ruling on Amtrak s motion for judgment as a matter of law, 709 nor does it divest us of jurisdiction to review the merits of the 710 other issues on appeal. In reaching this conclusion, we apply the 711 bright-line rule enunciated by the Supreme Court in Budinich v. 712 Becton Dickinson & Co., 486 U.S. 196 (1988), that a decision on the 713 merits is a final decision for purposes of [28 U.S.C.] § 1291 714 whether 715 attorney's fees. Id. at 202-03. 11 or not there remains for adjudication a request for 716 717 III. CONCLUSION 11 Some of our pre-Budinich precedent might be read to support the proposition that the non-finality of an award of attorneys fees sought as an element of contractual damages renders non-appealable the entire judgment in which such award is incorporated. See, e.g., Union Tank Car Co. v. Isbrandtsen, 416 F.2d 96 (2d Cir. 1969) (per curiam). However, we heed the Supreme Court s admonition in Budinich that no interest pertinent to § 1291 is served by according different treatment to attorney's fees deemed part of the merits recovery, and abide by the now uniform rule that an unresolved issue of attorney s fees . . . does not prevent judgment on the merits from being final. Budinich, 486 U.S. at 202. Application of this sensible rule also promotes the interests of judicial economy, especially in this case where resolution of the question remaining to be decided . . . will not alter . . . or revise the court s final rulings on the merits of the other issues on appeal. Id. at 199. Treating the district court s grant of Amtrak s Rule 50(b) motion as non-final and remanding the entire case to the district court would only cause further delays in the disposition of this long-pending case. 30 718 We have considered all of appellant O&G s arguments and find 719 them to be without merit. For the reasons discussed above, we affirm 720 the district court on all issues except for the ruling on attorneys' 721 fees, over which we lack appellate jurisdiction. AFFIRMED IN PART 722 AND DISMISSED IN PART. 31
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