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Locomotive Seat Manufacturer May Be Liable to Railroad That Settled With Injured Engineer
April/May 2019A federal district court held that the designer and manufacturer of seats installed in a General Electric (GE) locomotive may be liable to BNSF Railway Co., which settled with an engineer who was injured when the backrest of his locomotive seat collapsed suddenly due to an allegedly defective reclining mechanism.
Here, BNSF sued Seats, Inc., alleging products liability, breach of contract, and other claims. The railroad, which sought to recover the amount of its settlement with an engineer who was injured when the backrest of his locomotive seat suddenly gave way, argued that it was a third-party beneficiary of the contract between the defendant, a seat manufacturer, and GE, a locomotive manufacturer. The defendant moved to dismiss.
Denying the motion, the court rejected the defense argument that the economic loss doctrine precluded the plaintiff’s claim. Where a defective product causes harm that is unaccompanied by personal injury or property damage, the court said, contract law provides the exclusive remedy. Here, however, the plaintiff is claiming that the defendant designed a defective locomotive seat that injured a BNSF employee and is not merely seeking damages for the cost of the defective seat.
Citing case law, the court also found that under Nebraska law, a party is entitled to enforce a contract as a third-party beneficiary when it appears that the rights and interests of that party were contemplated during the making of the contract. The plaintiff asserts that, among other things, the defendant expected its seat to reach BNSF and, therefore, the railroad’s rights and interests were sufficiently contemplated so as to make the railroad a third-party beneficiary of the contract between the defendant and GE to install seats on BNSF locomotives. Thus, the court denied the defendant’s motion to dismiss the plaintiff’s breach of contract claim.
Citation: BNSF Ry. Co. v. Seats, Inc., 2019 WL 266421 (D. Neb. Jan. 18, 2019).
Plaintiff counsel: Andrew D. Weeks and Nichole S. Bogen, both of Lincoln, Neb.
