Minnesota allows for interest to accrue on judgments in four different ways. One way is what is called “prejudgment” interest. Under Minnesota Statute Section 549.09, subdivision 1(a), one can collect interest for the period between a jury verdict and or the court’s order for judgment and the physical entry of judgment. There are exceptions to this rule, as the Minnesota Supreme Court recently held.
No Prejudgment Interest on FELA Awards
On March 4, 2015, the Minnesota Supreme Court held that recoverability of prejudgment interest in an action brought in state court under the Federal Employers’ Liability Act (“FELA”) 45 U.S.C. section 51 (2012), is governed by federal substantive law. The Court further held pursuant to existing federal law, a successful plaintiff in a FELA action brought in state court is not entitled to post-verdict, prejudgment interest under Minnesota Statute section 549.06, subdivision 1(a) (2014).
This case arose out of Dennis Kinworthy’s (“Kinworthy”) successful action against his former employer, Soo Line Railroad (“Soo Line”). He brought the action because he was injured during his employment as a conductor with Soo Line. He sought damages under FELA and the Locomotive Inspection Act (“LIA”), 49 U.S.C. §§ 20701-20703 (2012).
Kinworthy was eventually awarded $340,000 by a jury against Soo Lines due to violations of LIA. Kinworthy sought to amend the award to add $7,854.30 in prejudgment interest pursuant to Minnesota Statute section 549.09, subdivision 1(a). Soo Line opposed the amendment. The district court denied the motion and the court of appeals affirmed. The lower courts found that there is federal binding precedent that FELA does not permit prejudgment interest. An appeal to the Minnesota Supreme Court followed.
As background information, FELA is federal law that protects railroad employees and their families when the railroad employee is hurt or killed on the job. FELA allows recovery of past and future wage loss, medical expenses, pain and suffering and other financial or economic losses. Specifically, FELA states, “[a railroad] shall be liable in damages to any [employee] suffering injury…from negligence” attributable to the railroad itself or a railroad employee. 45 U.S.C § 51. The LIA sets forth federal standards for safety regarding locomotives and locomotive components.
The statute Kinworthy was trying to add interest under is Minnesota Statute section 549.09, subdivision 1(a), which states, “[w]hen a judgment or award is for the recovery of money, including a judgment for recovery of taxes, interest from the time of the verdict, award, or report until judgment is finally entered shall be computed by the court administrator or arbitrator…and added to the judgment or award.”
Kinworthy argued that even though the case was based on federal law, it was commenced in Minnesota and therefore subject to Minnesota’s procedural rules—thus categorizing Minnesota Statute section 549.09 as “procedural.” Soo Line cited Monessen Sw. Ry. V. Morgain, 486 U.S. 330 (1988), which stands for the proposition that prejudgment interest is not available in FELA actions.
The Court found in favor of Soo Line. The Court’s reasoning was that although federal cases are subject to the procedural rules of the state in which that federal case is brought, there are some exceptions to that rule. Namely, that the United States Supreme Court has reclassified some procedural rules as “substantive” in order to promote uniformity in federal law.
The Court relied heavily on the case of Monessen and stated that even though the issue in Monessen was pre-verdict interest, as opposed to post-verdict prejudgment interest, the opinion in that case “broadly concluded that ‘prejudgment interest’ of any kind is not recoverable in a state court FELA action.” 486 U.S. 330 at 336 (emphasis added).
Based on the reasoning in Monessen, the Court ultimately concluded that prejudgment interest under Minnesota Statute section 549.09, subdivision 1(a)-(b), whether it is pre-verdict or post-verdict, is not recoverable in a FELA state court action.
As a result of this case, it is important to know that prejudgment or post-judgment interest is not always guaranteed even when bringing an action in state court.