Fifth Circuit Rejects Vicarious Liability Claim From Personnel Basket Injury

The U.S. Fifth Circuit Court of Appeals issued an opinion today addressing the vicarious liability of a principal contractor for its independent contractors.  The Plaintiff was employed as a crane mechanic by Gulf Crane Services and was working on an offshore platform owned and operated by Dynamic Offshore Resources, LLC.  He was injured in a personnel basket transfer from a boat to the platform.  He sued Dynamic, alleging it was vicariously liable for the negligence of its subcontractors, including the crane operator.  No Dynamic personnel were present on the platform.

 

The District Court dismissed the case on summary judgment and the Plaintiff appealed to the Fifth Circuit.  The Court noted that under Louisiana law, a principal is not liable for the activities of
an independent contractor committed in the course of performing its duties under the contract, with two exceptions: 1) the principal is liable for ultrahazardous activities contracted out to an independent contractor, and 2) the principal is liable if it has operational control over the acts of the independent contractor or authorizes unsafe practices.

 

The Court determined that a personnel basket transfer is not an ultrahazardous activity, regardless of the high wind that allegedly caused the basket to suddenly fall eight feet.  The law does not consider the specific conditions of an activity to determine whether it qualifies as ultrahazardous.  Furthermore, the Court found the Plaintiff could point to no evidence that Dynamic authorized an unsafe practice.  Instead, Plaintiff testified that he specifically requested the personnel basket transfer in high winds despite his “stop work authority”.  Dynamic in no way authorized an unsafe working condition.  Therefore the Plaintiff was unable to establish that his injury fell into either exception to the vicarious liability rule and Dynamic could not be held liable for the activities of its independent contractors.  The Fifth Circuit affirmed summary judgment in Dynamic’s favor.

 

Davis v. Dynamic Offshore Resources, LLC

Seaman’s Widow’s Claim for Punitive Damages Denied

Recently, the United States District Court for the Eastern District of Louisiana further shored up the clearly delineated avenues for recovery available to plaintiffs involved in Jones Act and personal injury suits arising under general maritime law.  In Wade v. Clemco Industries Inc., et al, No. 16502 (E.D. La. Feb. 2, 2017), the court affirmed the Fifth Circuit’s decision in Scarborough v. Clemco Industries, Inc., and denied the widow of a Jones Act seaman the recovery of punitive damages from non-employer third-parties.

 

Court documents show that the decedent, Garland Wade, worked as a sandblaster and paint sprayer on vessels owned by Coating Specialists, Inc., and performed work on permanent fixed platforms owned and/or operated by Chevron USA both in Louisiana and Federal waters.  Several years after leaving his employment as a sandblaster, the decedent died of connective tissue disease. In the case at bar, it was alleged that the decedent was not provided with a protective hood, not given instructions for the proper use of the hood he may have been given, and that he was not provided with a safe work place.

 

Plaintiff, Rose Wade, initially filed suit on grounds that her husband’s death was caused by products manufactured, marketed, designed, sold, and/or distributed by the defendants, and which contained asbestos which she alleged directly caused or aggravated her husband’s illness and death.  As a result of the defendant’s respective actions and/or inactions, Plaintiff sought $5,000,000.00 in damages for the wrongful death of her husband.

 

Defendant quickly filed motions for partial summary judgment seeking the dismissal of Plaintiff’s claims for non-pecuniary losses, under the well-established rule that Jones Act seamen and their survivors are not entitled to recover non-pecuniary damages from a non-employer third parties. (Scarborough v. Clemco Industries, Inc., 391 F.3d 660, 668 (5th Cir. 2004).)  In conjunction with their efforts, Defendants noted that the Plaintiff in the instant matter had already filed a state court suit in which the decedent had been adjudged to have been a Jones Act seaman, and therefore there could be little question that Scarborough would apply to the claims at issue before the Eastern District.  Defendants also argued that the Supreme Court’s holding in Townsend, which had previously resulted in an award of punitive damages for Employer’s arbitrary withholding of maintenance and cure, did not apply, because the Wade matter did not involve the issues of maintenance and cure.

 

In response, Plaintiff averred that her claims against the non-employer third-parties did not arise under the Jones Act or general maritime law; however, the Court disagreed with this assertion.  In so doing, the Honorable Judge Eldon Fallon found this case to be analogous to McBride v. Estis Well Serv., L.L.C., 768 F.3d 382 (5th Cir. 2014), cert. denied, 135 S. Ct. 2310 (2015), and noted that in that matter, as in the instant case, Plaintiff elected to bring her claim under general maritime law, and thus the parties were to be bound by the limitations on damages previously established under that body of law.  In granting the defendants’ motions in Wade, the court further solidified the foundation laid by McBride and its progeny, in wrongful death cases brought under general maritime law, which continue to limit a survivor’s recovery from employers and non-employers to pecuniary losses in cases where the Jones Act is implicated.

Ninth Circuit Finds DBA Claimant Failed to Establish Employee-Employer Relationship

The Ninth Circuit recently addressed the employer-employee relationship required in a claim under the Defense Base Act.  Claimant worked as a contractor truck driver with the U.S. military in Iraq.  In 2005, he was injured by an improvised explosive device (IED) and filed a claim under the DBA.  Claimant named his employer as Theodor Wille Intertrade, GmbH (TWI), a Swiss corporation that did business in Iraq as Servco Solutions, LLC (Servco).  TWI/Servco controverted the claim and denied Claimant was its employee.

 

The claim was submitted to the Administrative Law Judge on briefs.  Judge Paul Johnson reviewed multiple deposition transcripts (including two from the Claimant) and affidavits and denied the claim on the grounds that Claimant had failed to establish that there was an employer-employee relationship.  Claimant appealed to the Benefits Review Board, which affirmed Judge Johnson’s decision.  Claimant then appealed to the U.S. Ninth Circuit Court of Appeals.

 

The Claimant testified that he was working for TWI/Servco or one of its subsidiaries and that he took instruction from a TWI/Servco employee, Eddie Nagel.  He also submitted a signed declaration from a friend who confirmed these allegations, as well as a letter of recommendation from Mr. Nagel on TWI/Servco letterhead.  Judge Jonnson discounted Claimant’s testimony based on multiple inconsistencies at his two depositions, gave no weight to the signed declaration, and credited Mr. Nagel’s explanation that he wrote the letter out of sympathy, but did not supervise the Claimant.  The Ninth Circuit affirmed the ALJ’s findings because the credibility determinations were not in conflict with the record and held that substantial evidence supported the ALJ’s finding that Claimant was not an employee of TWI/Servco.

 

Mikha v. Director, OWCP

District Court Refuses to Pierce ExxonMobil Corporate Veil in Denying Jones Act Liability

Plaintiff was the widow of Decedent, a German citizen who worked aboard several foreign vessels from December 1973 to December 1978. During this time period, Plaintiff alleged that her husband was exposed to asbestos in the course of his employment as a chief engineer and merchant seaman. Decedent’s employer during that time period was MOSAT, a Liberian corporation. Plaintiff filed a Jones Act claim on behalf of herself and her deceased spouse against twenty-two corporate defendants. One such corporation, ExxonMobil, filed a Motion for Summary Judgment on the grounds that ExxonMobil was neither Decedent’s employer, nor was it the owner of the subject vessels during the relevant time period. Plaintiff alleged that ExxonMobil’s subsidiaries, Mobil Oil and MOSAT, were essentially the same business entity for liability purposes under the Jones Act.

 

The District Court judge looked to several factors to determine whether a parent company so dominates a subsidiary as to warrant disregarding corporate separateness between the two entities. These factors included: (1) disregard of corporate formalities; (2) inadequate capitalization; (3) intermingling of funds; (4) overlap in ownership, officers, directors, and personnel; (5) common office space, address and telephone numbers of corporate entities; (6) the degree of discretion shown by the allegedly dominated corporation; (7) whether the dealings between the entities are at arm’s length; (8) whether the corporations are treated as independent profit centers; (9) payment or guarantee of the corporation’s debts by the dominating entity; (10) intermingling of property between the entities.

 

In granting ExxonMobil’s Motion for Summary Judgment, the District Court held that Plaintiff was only able to establish, at most, two alter ego factors: some interlocking officers and some common office space. The court placed greater weight on the evidence presented by ExxonMobil that the subsidiary company MOSAT had independent responsibility for the company’s international marine transportation. The court also found it significant the fleets were flown under the flags of various different countries.

 

Unterberg v. ExxonMobil Oil Corporation