UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF NEW YORK
July 16, 1998
RAY W. KLINE and DOROTHY M. KLINE, his spouse, Plaintiffs,
E.I. DuPONT DE NEMOURS & CO., INC., et al., Defendants.
The opinion of the court was delivered by: ARCARA
DECISION AND ORDER
This case was referred to Magistrate Judge Leslie G. Foschio pursuant to 28 U.S.C. § 636(b)(1) on June 24, 1997. On August 18, 1997, third-party defendant The Goodyear Tire & Rubber Company filed a motion for judgment on the pleadings or for summary judgment. On March 17, 1998, Magistrate Judge Foschio filed a Report and Recommendation, recommending that third party defendant Goodyear's motion for judgment on the pleadings or, alternatively, for summary judgment, should be granted.
Defendants filed objections to the Report and Recommendation on April 29, 1998. Oral argument on the objections was held on June 19, 1998.
Pursuant to 28 U.S.C. § 636(b)(1), this Court must make a de novo determination of those portions of the Report and Recommendation to which objections have been made. Upon a de novo review of the Report and Recommendation, and after reviewing the submissions and hearing argument from the parties, the Court adopts the proposed findings of the Report and Recommendation. Moreover, the Court writes separately to address cases decided after this motion was submitted for the Magistrate Judge's consideration.
A. Recent Developments
On May 12, 1998, the Court of Appeals of New York decided Majewski v. Broadalbin-Perth Central School District, 91 N.Y.2d 577, 696 N.E.2d 978, 673 N.Y.S.2d 966, 1998 WL 248915. In Majewski, the plaintiff was injured and filed suit, and the third-party defendant was impleaded, prior to the effective date of the Omnibus Workers' Compensation Reform Act of 1996 ("the Act"). The Court of Appeals determined that the Act did not apply to actions, such as Majewski's, that were pending on the effective date of the Act.
In reaching this holding, the Court of Appeals examined the text of the Act and found that language stating that the Act was to "take effect immediately" did not indicate that the Act was to apply to actions filed prior to the Act's effective date. The Court of Appeals also examined the legislative history of the Act and determined that the various statements made by legislators and Governor Pataki were inconclusive with respect to the question of retroactivity. Finally, the Court of Appeals analyzed the Act's purpose and found that it was best served by a prospective application of the Act.
The Court of Appeals held that the Act would not apply in that case as it was filed prior to the Act's effective date. Significantly for the present case, the Court of Appeals summarized its holding at the end of the decision as follows:
We conclude that, irrespective of the date of the accident, a prospective application of the subject legislation to actions by employees for on-the-job injuries against third parties filed after the effective date of the relevant provisions is eminently consistent with the overall and specific legislative goals behind passage of the Act.
Id. at 590, 1998 WL 248915 at *6 (emphasis added). The Court of Appeals included the phrase "irrespective of the date of the accident" despite the fact that in its lengthy analysis of the statute's retroactivity, it had not discussed the significance of the date of the accident giving rise to the action. The Court of Appeals' decision instead seems to place primary importance on the date of the filing of the action.
The Second Department decided Zurheide v. S-C Associates, 669 N.Y.S.2d 852 (N.Y. App. Div. 1998), on March 2, 1998, also subsequent to the submission of this motion to the Magistrate Judge, but prior to the Majewski decision. In that case the court, in a two-paragraph decision, stated that the Act is to be applied prospectively and thus was inapplicable "where the underlying injury occurred before the effective date of the amendment." Although Zurheide was decided shortly before the Court of Appeals' decision in Majewski, the Majewski court did not mention Zurheide in its decision.
B. The Parties' Arguments
In objecting to the Report and Recommendation, defendants claim that the Act's amendments do not apply where, as here, the injury occurred prior to the Act's effective date, but the action is filed after the effective date. Defendants point to the Second Department's Zurheide decision in support of this argument. Defendants also claim that this Court is not bound to follow the language in the Majewski decision finding the Act applicable "irrespective of the date of the accident" where the action is filed after the Act's effective date. Characterizing this language as dicta, defendants claim that this statement does not represent the state of the law in New York, and that the Court should look to the Zurheide decision for guidance. Moreover, defendants argue, by not expressly overruling the Zurheide decision, the Court of Appeals in Majewski implicitly approved of that holding. Defendants also rely on Majewski's analysis of the prospective application of the Act as support for their position.
The third-party defendants, of course, rely on the Majewski decision's statement that the Act's amendments are effective when the action is filed after its effective date "irrespective of the date of the accident." The third-party defendants argue that this language is not dicta, and that even if it is dicta, it is a pronouncement of the highest court of the state and is binding on this Court in its interpretation of state law.
As Magistrate Judge Foschio correctly noted, in a diversity case, this Court must follow state substantive law. "Where the substantive law of the forum state is uncertain or ambiguous, the job of the federal courts is carefully to predict how the highest court of the forum state would resolve the uncertainty or ambiguity." Travelers Ins. Co. v. 633 Third Assoc., 14 F.3d 114, 119 (2d Cir. 1994). To predict how the New York Court of Appeals would rule, a federal court must give "the fullest weight to the pronouncements of the New York Court of Appeals." Id. Where the highest court of a state has not resolved an issue, the Second Circuit has held that a federal court "must apply what they find to be the state law after giving 'proper regard' to relevant rulings of other courts of the State." Id.
Here, the Court of Appeals in Majewski determined that the Act does not apply to actions filed prior to the Act's effective date. The Court of Appeals did not, however, directly decide the issue in the present case: whether the Act applies to actions filed after the effective date where the injury giving rise to the action occurred before the effective date. The Court of Appeals' language at the end of its decision, stating that the Act applies to actions filed after the effective date, "irrespective of the date of the accident," would resolve this issue in favor of the third-party defendants should the Court follow it. Defendants urge against this result, characterizing the language as "dicta."
The Second Circuit has not squarely addressed how a federal court should treat the dicta of the highest court of a state in predicting state law. In one case, the Second Circuit found that a statement of law in dicta in a Court of Appeals decision was binding on the federal courts since "the lower courts of that state have taken it as authoritative, and so must we." Newburgh Land & Dock Co. v. Texas Co., 227 F.2d 732 (2d Cir. 1955). However, that is not the case here, as it does not appear that any lower court in New York has yet accepted the dicta in issue as authoritative.
Other circuits have more recently discussed the role of dicta in predicting state law and have indicated that federal courts may look to dicta as a reliable means of forecasting the course of state law. The Sixth Circuit has stated that the decisions of a state's intermediate appellate courts "serve as a datum for ascertaining state law which is not to be disregarded by a federal court unless it is convinced by other persuasive data that the highest court of the state would decide otherwise. . .Other persuasive data include the state's supreme court dicta, restatements of law, law review commentaries, and the majority rule among other states." Kurczi v. Eli Lilly and Co., 113 F.3d 1426, 1429 (6th Cir. 1997). Under this framework, it would seem that the dicta of the state's highest court may trump the decisions of lower appellate courts. The Third Circuit has also addressed the significance to be accorded to dicta in predicting state law, stating that "we have recognized, along with respected commentators, that considered dicta by the state's highest court may provide a federal court with reliable indicia of how the state tribunal might rule on a particular question, and be considered conclusive particularly if it is a carefully considered statement by the state court." Scotts African Union Methodist Protestant Church v. Conference of African Union First Colored Methodist Protestant Church, 98 F.3d 78, 92 (3d Cir. 1996) (internal quotations and citations omitted).
The Court has located one case in which a federal court determined that it would follow a lower appellate court decision that contradicted dicta from the state's highest court. See Travelers Indemnity Co. of Illinois v. DiBartolo, 131 F.3d 343 (3d Cir. 1997). However, that case is readily distinguishable from the present one. In the Travelers case, the lower state court, whose precedent the Third Circuit chose to follow, had decided the case after the Pennsylvania Supreme Court's decision containing the contradictory dicta. Here, in contrast, the Second Department decided the Zurheide case before the Court of Appeals decided Majewski, depriving the Court in this case of the benefit of seeing how the lower state court would interpret the dicta of the state's highest court. Moreover, the Third Circuit in Travelers emphasized that the lower state court decision it followed contained "compelling reasoning," id. at 348. In this case, defendants' argument that the Court should follow a two-paragraph decision by a lower state court rather than the Court of Appeals' dicta is not persuasive.
The Court concludes that in the present case, the statement by the New York Court of Appeals that the Act's amendments are to apply to all actions filed after the Act's effective date, "irrespective of the date of the accident," is a very strong indicator of how the Court of Appeals would rule on the issue in this case. Even if this statement is dicta, it is a statement by the highest court of New York state. As discussed above, the dicta of the highest state court may be considered by a federal court in predicting state law. In the absence of any persuasive evidence that the Court of Appeals would decide this issue differently, this Court is bound to follow the statement of the Court of Appeals in Majewski. Thus, the Court finds that the Act applies to this action, and defendants' objections must be denied.
Accordingly, for the reasons set forth in Magistrate Judge Foschio's Report and Recommendation, and the reasons discussed above, third-party defendant Goodyear's motion for judgment on the pleadings or, alternatively, for summary judgment is granted. This case is hereby referred back to Magistrate Judge Foschio for further proceedings.
IT IS SO ORDERED.
HONORABLE RICHARD J. ARCARA
UNITED STATES DISTRICT JUDGE
Dated: July 16, 1998