628 F.2d 862 (5th Cir. 1980), 78-2165, Murphy v. Georgia Pac. Corp.

Docket Nº:78-2165.
Citation:628 F.2d 862
Party Name:Ralph E. MURPHY, Plaintiff-Appellant Cross-Appellee, v. GEORGIA-PACIFIC CORPORATION et al., Defendants-Appellees Cross-Appellants.
Case Date:October 23, 1980
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit

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628 F.2d 862 (5th Cir. 1980)

Ralph E. MURPHY, Plaintiff-Appellant Cross-Appellee,


GEORGIA-PACIFIC CORPORATION et al., Defendants-Appellees


No. 78-2165.

United States Court of Appeals, Fifth Circuit

October 23, 1980

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J. Robert Ates, New Orleans, La., for plaintiff-appellant cross-appellee.

Vincent P. Fornias and Paul H. Spaht, Baton Rouge, La., for defendants-appellees cross-appellants.

Appeals from the United States District Court for the Middle District of Louisiana.

Before GOLDBERG, GARZA and REAVLEY, Circuit Judges.

GOLDBERG, Circuit Judge:

We journey today into the mysterious realm of Merlin, as we are faced with a valiant attempt at legal sleight of hand. Attorneys for defendants have used all the magic dust and abracadabras they could muster in order to change a paper manufacturing company into a construction company. Not satisfied with this first attempt at prestidigitation, for their next trick defendants tried to make the Erie Doctrine vanish into thin air. We find these attempts to

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pull a construction company out of a hat and to vaporize Erie to be quite clever. However, because we realize that the sleight of hand is ultimately mere illusion, we are not persuaded by the hocus pocus.

I. Nothing Up My Sleeve: Setting the Magic Show Stage

Plaintiff Ralph E. Murphy ("Murphy") was employed by Lafayette Steel Erectors, Inc. ("Lafayette") as a construction worker. In August 1975, Lafayette was under contract to perform new construction work at the Port Hudson, Louisiana paper manufacturing plant of defendant Georgia Pacific Corporation ("Georgia Pacific") as part of a major expansion project undertaken by Georgia Pacific. While working on this project, Murphy was injured when he tried to escape from a spray of "cooking liquor," 1 a chemical substance which was leaking from then operating paper pulp processing equipment located next to the new construction. Murphy subsequently brought suit in federal district court 2 against Georgia Pacific and its liability insurer, Hartford Accident and Indemnity Company. The jury returned a verdict of $60,000 for plaintiff, and both parties appeal from the judgment entered pursuant to the jury's award.

As appellant, plaintiff argues that the trial judge erred in refusing to allow the jury to consider the decreasing purchasing power of the dollar as part of its assessment of damages. In addition, plaintiff-appellant claims that certain comments made by the judge in the jury's presence were unduly prejudicial. As cross appellants, defendants argue that their summary judgment motion, based on the claim that Georgia Pacific was the "statutory employer" of Murphy pursuant to Louisiana law and thereby not liable for his injuries in tort, 3 should have been granted by the trial court. In addition, defendants-cross appellants contest the trial court's subsequent finding that as a matter of law Georgia Pacific was not Murphy's statutory employer. Finally, defendants-cross appellants claim that there was insufficient evidence at trial to support the jury's finding of negligence. Because we agree with plaintiff both in his capacity as appellant and in his capacity as cross appellee, we affirm as to liability but reverse as to damages and remand for a new trial solely on that issue.

II. Presto Change-o: A Paper Company As a Construction Company

  1. The Louisiana Statutory Employer Standard

    Under Louisiana Workmen's Compensation Law, a principal who employs an independent contractor to perform duties which are part of the principal's "trade, business, or occupation" is the statutory employer of the contractor and its employees, 4 and is thereby not liable in tort for injuries sustained by the statutory employees in performance of these duties. The injured employees' sole remedy is under Workmen's Compensation Law. See

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    Blanchard v. Engine & Gas Compressor Services, Inc., 613 F.2d 65, 68-69 (5th Cir. 1980) (hereinafter cited as Blanchard II ). An often litigated issue is thus whether the work performed by a contractor comes within the ambit of the principal's "trade, business, or occupation." See, e. g., Blanchard II, supra; Freeman v. Chevron Oil Co., 517 F.2d 201 (5th Cir. 1975); Cole v. Chevron Chemical Co.-Oronite Division, 477 F.2d 361 (5th Cir.), cert. denied, 414 U.S. 858, 94 S.Ct. 67, 38 L.Ed.2d 109 (1973); Lushute v. Diesi, 354 So.2d 179 (La.1977); Reeves v. Louisiana & Arkansas Railway, 282 So.2d 503 (La.1973); Doss v. American Ventures, Inc., 261 La. 920, 261 So.2d 615 (1972). Perhaps because of vague statutory language, the history of this law's judicial interpretation has been marked by chaos and confusion. 5 See Blanchard v. Engine & Gas Compressor Services, Inc., 575 F.2d 1140 (5th Cir. 1978) (hereinafter cited as Blanchard I ).

    In 1978, this Court noted the confused state of Louisiana law in this area and certified the statutory interpretation question to the Louisiana Supreme Court. See Blanchard I, supra, 575 F.2d at 1143-46, certified, 590 F.2d 594 (5th Cir. 1979). However, the state court declined certification, apparently feeling that the law needed no clarification, and directed this Court to two Louisiana Supreme Court cases: Reeves v. Louisiana & Arkansas Railway, supra, and Lushute v. Diesi, supra. See Blanchard II, supra, 613 F.2d at 68. In our attempt to discern the meaning of the Louisiana statutory employer provision, we therefore pay close attention to the words of the Louisiana Supreme Court in Reeves and Lushute, together with the reading given them by this Court in Blanchard II.

    Reeves involved a situation quite similar to the one at hand. In that case, the Humble Oil Company was found not to be a statutory employer with regard to construction of a new plant unit on the existing plant premises, since "(t)he work being done at the time was not part of its regular business." 282 So.2d at 507. The Court noted that Humble Oil was first and foremost an oil company and concluded that "it was not Humble's business practice to engage in new construction of this type and magnitude," and that the record did not "support a conclusion that this type work was customarily done by Humble or other employers similarly situated." Id. at 508.

    The question addressed in Lushute was whether air conditioner repair was part of a restaurant owner's "trade, business, or occupation." The Court applied the so-called "essential to the business test," and held that because a properly functioning air conditioner "although desirable . . . is not necessary for the operation of a restaurant," the restaurant owner was not the statutory employer of the air conditioner repairman. 354 So.2d at 183. See Leger v. Amerada Hess Corp., 479 F.2d 1250 (5th Cir. 1973) (per curiam).

    In light of these two Louisiana Supreme Court cases, this Court in Blanchard II defined the Louisiana statutory employer standard as "whether the activity done by the injured employee or his actual immediate employer is part of the usual or customary practice of the principal or others in the same operational business." 613 F.2d at 71. "The activity done" must be defined broadly in terms of the general project on which the injured employees were working. See Freeman, supra, 517 F.2d at 201; Reeves, supra, 282 So.2d at 508. The question in the case at hand thus becomes whether "new construction of this type and magnitude," see Reeves, supra, 282 So.2d at 507, "is part of the usual or customary practice of the principal or others in the same operational business." See Blanchard II, supra, 613 F.2d at 71. 6

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  2. Defendants' Motion for Summary Judgment

    Defendants as cross appellants argue that it was error for the trial court to have denied their motion for summary judgment based on the statutory employer defense. They suggest that Georgia Pacific is not only a wood products company, but is a construction company as well. In light of the standard for granting summary judgment, the evidence available to the trial court at the time the summary judgment motion was denied, and the applicable standard of Louisiana statutory employer law discussed above, we disagree and affirm the trial court's decision.

    Summary judgment should be granted only if "there is no genuine issue as to any material fact and . . . the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c); see Keiser v. Coliseum Properties, Inc., 614 F.2d 406 (5th Cir. 1980). "The burden of proof falls on the party seeking summary judgment, and any doubt as to the existence of a genuine issue of material fact must be resolved against the moving party." Id. at 410. In considering a motion for summary judgment, a court must examine the entire record before it, id., and draw every reasonable inference in favor of the party opposing the...

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