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Kansas Court of Appeals Finds Railroad is Entitled to a Damages Setoff for Compensation an Employee Received for Their Injury from Sources Separate from FELA Litigation
In Kemper v. BNSF Railway Company, BNSF appealed from the trial court’s denial of its motion for a setoff of damages paid to the estate of the plaintiff David Kemper, a former employee who was diagnosed with mesothelioma. Kemper sued BNSF under FELA alleging that BNSF negligently exposed him to asbestos. BNSF argued at trial that if it was liable for Kemper’s injury it was nonetheless entitled to an offset for any compensation that Kemper separately received for his mesothelioma from other sources.
Kemper died before trial but at the time of his death he had received nearly $610,000 in compensation from various asbestos bankruptcy trusts and another $40,000 in VA benefits for a service-related disability related to his diagnosis. In May of 2023 a jury found that BNSF’s negligence contributed to Kemper’s diagnosis and death and awarded $1,000,000 to Kemper’s estate and $500,000 to his wife, who had been substituted in as plaintiff.
On appeal, the Court of Appeals of Kansas considered whether 1) FELA permits setoffs for payments that a plaintiff received from non-FELA sources as compensation for the same harm occasioned by the railroad’s negligence, and 2) whether and to what extent the Kempers were compensated for asbestos exposure.
The Court found no express prohibition on such setoffs. The legislative history of 45 U.S.C. § 55 reveals that Congress intended to prohibit railroads from contracting around FELA liability, not from seeking a setoff for non-railroad compensation to injured employees. There was no implicit bar, either, as courts routinely permit all manner of equitable relief in FELA cases. Absent any prohibition, the Court then turned to federal common law circa 1908 to determine whether such setoffs were permitted, and determined that at the time FELA was enacted, BNSF would have been entitled to reduce its responsibility for Kemper’s damages by the amount of compensation the Estate received from other joint tortfeasors, and held that such offsets were permitted as a matter of federal common law.
This left open the factual question of whether the compensation Kemper received was for “the same harm” caused by BNSF’s negligence. Notwithstanding that “[a]ppellate courts are not factfinders,” Kemper’s estate had stipulated in its post-trial motion that David Kemper had received $608,586.27 “as a result of his mesothelioma” and thirteen disability checks from the VA totaling $40,903.46 “as a result of [Kemper’s] Navy exposures[,]” resolving the factual dispute. The Court therefore remanded with an instruction to offset the award by that amount.
Key Takeaway: It is important to thoroughly investigate and pursue discovery on collateral sources of a FELA plaintiff’s recovery for their injury to preserve the ability to obtain a damages setoff post-trial.