## Facts

- Robert M. Cavanaugh worked as a railroad engineer for Western Maryland Railway Company or Baltimore & Ohio Railroad Company (B&O).
- On February 12, 1980, the B&O train Cavanaugh was operating collided head-on with another B&O train on B&O-owned and -controlled track near Orleans Road in Morgan County, West Virginia.
- Cavanaugh filed a Federal Employers’ Liability Act (FELA) action on November 19, 1981, seeking $1,500,000 for personal injuries.
- The railroads asserted a state-law counterclaim for $1,700,000 in property damage from the same collision, alleging Cavanaugh’s negligence caused or contributed to the accident.
- The district court dismissed the counterclaim, concluding it would violate FELA §§ 5 and 10 (45 U.S.C. §§ 55, 60) and the public policy reflected in the Act.
- The district court entered final judgment on the counterclaim under Fed. R. Civ. P. 54(b), and the railroads appealed.

## Issues

1. Whether FELA §§ 5 and 10 bar a railroad employer from asserting a counterclaim for property damage against an employee who sued under FELA for personal injuries arising from the same accident.
2. Whether a property-damage counterclaim constitutes an unlawful “device” to exempt the railroad from FELA liability under § 5.
3. Whether allowing such counterclaims contravenes § 10’s policy against carrier efforts to suppress accident information or testimony.

## Decision

- The Fourth Circuit reversed the dismissal and reinstated the railroads’ property-damage counterclaim.
- FELA contains no express prohibition against employer counterclaims for property damage arising from the same incident.
- A counterclaim seeking the employer’s own damages is not a “device” to exempt the carrier from FELA liability within the meaning of § 5.
- Section 10 targets retaliation or coercion aimed at preventing the furnishing of accident information; it does not impliedly bar counterclaims.
- Because the property-damage claim arose from the same collision, it functioned as a compulsory counterclaim and could be litigated in the same action.

## Legal Principles

- Common law permits an employer to sue an employee for property damage caused by the employee’s ordinary negligence within the scope of employment, absent statutory abrogation.
- FELA § 5 invalidates mechanisms intended to exempt a carrier from FELA liability; an employer’s counterclaim for independent damages is not such a mechanism.
- FELA § 10 prohibits carrier conduct aimed at preventing or deterring the voluntary furnishing of accident information; the existence of a counterclaim, without more, is not prohibited.
- When reciprocal claims arise from the same transaction or occurrence, federal procedure favors resolving them together; FELA does not implicitly eliminate the employer’s ability to assert a related property-damage counterclaim.

## Conclusion

The court held that FELA does not preclude a railroad from pursuing a state-law counterclaim for property damage against an employee plaintiff based on the same accident, because such a counterclaim neither exempts the railroad from FELA liability under § 5 nor violates § 10’s protections regarding accident information.


Cavanaugh v. W. Md. Ry. Co., 729 F.2d 289 (4th Cir. 1984)