Giving Credit Where Credit Is Due: Applying the Proper Set-Off Rules in FELA and Jones Act Cases After AmClyde, Ayers, and Schadel

• Author: Michael Mims
• Position: Associate at Bradley, Murchison, Kelly & Shea LLC in New Orleans, Louisiana. J.D./D.C.L., Louisiana State University
• Pages: 729-755

Giving Credit Where Credit Is Due: Applying the

Proper Set-Off Rules in FELA and Jones Act Cases

After AmClyde, Ayers, and Schadel

Michael Mims*

TABLE OF CONTENTS

I. Introduction ..........................................................................730

II. The General Rule: The “Proportionate Share” Method

of Set-Off 733

A. McDermott v. AmClyde: The Supreme Court

Embraces the “Proportionate Share” Method

of Set-Off .......................................................................734

B. AmClyde’s Legacy: the “Proportionate Share”

Method Emerges as the General Rule of Set-off in

Federal Joint and Several Liability Cases ......................737

III. The Exception: FELA and Jones Act Cases Begin to

Adopt the Alternative “Pro Tanto” Method of Set-Off .......738

A. FELA (and the Jones Act): A Brief Primer ...................738

B. Norfolk v. Ayers: The Supreme Court Reaffirms

Joint and Several Liability for FELA Cases ..................740

C. Schadel v. Iowa Interstate Railroad: An Exception

to the “Proportionate Share” Method Emerges for

FELA and Jones Act Cases ............................................742

IV. Making Sense of the Exception for FELA and Jones Act

Cases: A Critique of Schadel ...............................................745

A. “Apportionment of Liability”: One Phrase, Multiple

Meanings ........................................................................745

B. Schadel: Misreading Ayers and Misunderstanding

Apportionment ...............................................................747

Copyright 2012, by MICHAE L MIMS.

* Associate at Bradley, Murchison, Kelly & Shea LLC in New Orleans,

Louisiana. J.D./D.C.L., Louisiana State University. The author thanks Frank L.

Maraist, Thomas C. Galligan, Jr., David S. Kelly, and Michael A. McGlone for

their helpful comments. All views and any errors herein are solely attributable to

the author.

730 LOUISIANA LAW REVIEW [Vol. 72

C. Settlement is Different: The Bar on Contribution ..........749

D. The Remedial Purpose of the FELA Does Not

Justify a Departure from AmClyde .................................752

V. Conclusion: Courts Should Reaffirm AmClyde as the

Proper Rule in FELA and Jones Act Cases .........................755

I. INTRODUCTION

Courts have recently begun grappling with a new issue in cases

brought under the Federal Employers’ Liability Act (FELA) and

the Jones Act: what sort of credit, if any, should a jointly and

severally liable FELA or Jones Act defendant receive for

settlements that the plaintiff has made with negligent third

parties?1 Although this is a relatively new issue in FELA cases,

courts have long considered this issue in other areas of federal

law.2 In the seminal 1994 case of McDermott, Inc. v. AmClyde, the

United States Supreme Court held that a plaintiff’s recoverable

damages from a jointly and severally liable maritime defendant

should be reduced by the proportionate share of damages

attributable to a settling defendant.3 Under this method, the

nonsettling defendant receives a “settlement credit” (also known as

a “set-off”) in proportion to the settling defendant’s share of the

injury, regardless of how much money the plaintiff actually

recovered from the settling defendant.4 The AmClyde Court

1. See Schadel v. Iowa Interstate R.R., Ltd., 381 F.3d 671 (7th Cir. 2004)

(FELA); Benson v. CSX Transp., Inc., 274 Fed. App’x 273 (4th Cir. 2008)

(FELA); Lewin v. Am. Exp. Lines, Inc., 224 F.R.D. 389 (N.D. Ohio 2004)

(Jones Act); Krueger v. Soo Line R.R., No. 02-C-0611, 2005 WL 2234610 (E.D.

Wis. Sept. 12, 2005) (FELA); Mancini v. CSX Transp., Inc., No. 08-CV-933,

2010 WL 2985964 (N.D. N.Y. July 27, 2010) (FELA); Torrejon v. Mobil Oil

Co., 876 So.2d 877 (La. Ct. App. 4th 2004) (Jones Act); Palmer v. Union Pacific

R. Co., 311 S.W. 3d 843 (Mo. Ct. App. 2010) (FELA); Hess v. Norfolk

Southern Ry. Co., 835 N.E. 2d 679 (Ohio 2005) (FELA).

2. See, e.g., McDermott, Inc. v. AmClyde, 511 U.S. 202 (1994) (adopting

a proportionate share approach); Leger v. Drilling Well Control, Inc., 592 F.2d

1246 (5th Cir. 1979) (adopting a proportionate share approach); Self v. Great

Lakes Dredge & Dock Co., 832 F.2d 1540 (11th Cir. 1987) (adopting a pro

tanto approach); see also Gus A. Schill, Jr., Recent Developments Regarding

Maritime Contribution and Indemnity, 51 LA. L. REV. 975, 987 (1991)

(discussing the history of the set-off debate before AmClyde); W. Robins Brice,

Solidarity and Contribution in Maritime Claims, 55 LA. L. REV. 799 (1995)

(discussing the issue in light of AmClyde).

3. AmClyde, 511 U.S. at 217.

4. Id. at 210.