Byrd v. Blue Ridge Rural Electric Cooperative

Decision Date19 May 1958
Docket NumberNo. 57,57
Citation2 L.Ed.2d 953,78 S.Ct. 893,356 U.S. 525
CourtU.S. Supreme Court

See 357 U.S. 933, 78 S.Ct. 1366.

Mr. Henry Hammer, Columbia, S.C., for petitioner.

Messrs. Wesley M. Walker and Ray R. Williams, Greenville, S.C., for respondent.

Mr. Justice BRENNAN delivered the opinion of the Court.

This case was brought in the District Court for the Western District of South Carolina. Jurisdiction was based on diversity of citizenship. 28 U.S.C. § 1332, 28 U.S.C.A. § 1332. The petitioner, a resident of North Carolina, sued respondent, a South Carolina corporation, for damages for injuries allegedly caused by the respondent's negligence. He had judgment on a jury verdict. The Court of Appeals for the Fourth Circuit reversed and directed the entry of judgment for the respondent. 238 F.2d 346. We granted certiorari, 352 U.S. 999, 77 S.Ct. 557, 1 L.Ed.2d 544, and subsequently ordered reargument, 355 U.S. 950, 78 S.Ct. 530, 2 L.Ed.2d 527.

The respondent is in the business of selling electric power to subscribers in rural sections of South Carolina. The petitioner was employed as a lineman in the construction crew of a construction contractor. The contractor, R. H. Bouligny, Inc., held a contract with the respondent in the amount of $334,300 for the building of some 24 miles of new power lines, the reconversion to higher capacities of about 88 miles of existing lines, and the construction of 2 new substations and a breaker sta- tion. The petitioner was injured while connecting power lines to one of the new substations.

One of respondent's affirmative defenses was that under the South Carolina Workmen's Compensation Act,1 the petitioner—because the work contracted to be done by his employer was work of the kind also done by the respondent's own construction and maintenance crews—had the status of a statutory employee of the respondent and was therefore barred from suing the respondent at law because obliged to accept statutory compensation benefits as the exclusive remedy for his injuries.2 Two ques- tions concerning this defense are before us: (1) whether the Court of Appeals erred in directing judgment for respondent without a remand to give petitioner an opportunity to introduce further evidence; and (2) whether petitioner, state practice notwithstanding, is entitled to a jury determination of the factual issues raised by this defense.


The Supreme Court of South Carolina has held that there is no particular formula by which to determine whether an owner is a statutory employer under § 72—111. In Smith v. Fulmer, 198 S.C. 91, 97, 15 S.E.2d 681, 683, the State Supreme Court said:

'And the opinion in the Marchbanks case (Marchbanks v. Duke Power Co., 190 S.C. 336, 2 S.E.2d 825, said to be the 'leading case' under the statute) reminds us that while the language of the statute is plain and unambiguous, there are so many different factual situations which may arise that no easily applied formula can be laid down for the determination of all cases. In other words, 'it is often a matter of extreme difficulty to decide whether the work in a given case falls within the designation of the statute. It is in each case largely a question of degree and of fact."

The respondent's manager testified on direct examination that three of its substations were built by the respondent's own construction and maintenance crews. When pressed on cross-examination, however, his answers left his testimony in such doubt as to lead the trial judge to say, 'I understood he changed his testimony, that they had not built three.' But the credibility of the manager's testimony, and the general question whether the evidence in support of the affirmative defense presented a jury issue, became irrelevant because of the interpretation given § 72—111 by the trial judge. In striking respondent's affirmative defense at the close of all the evidence3 he ruled that the respondent was the statutory employer of the petitioner only if the construction work done by respondent's crews was done for somebody else, and was not the statutory employer if, as the proofs showed, the crews built facilities only for the respondent's own use. 'My idea of engaging in the business is to do something for somebody else. What they (the respondent) are doing—and everything they do about repairing lines and building substations, they do it for themselves.' On this view of the meaning of the statute, the evidence, even accepting the manager's testimony on direct examination as true, lacked proof of an essential element of the affirmative defense, and there was thus nothing for the petitioner to meet with proof of his own.

The Court of Appeals disagreed with the District Court's construction of § 72—111. Relying on the decisions of the Supreme Court of South Carolina, among others, in Marchbanks v. Duke Power Co., 190 S.C. 336, 2 S.E.2d 825, and Boseman v. Pacific Mills, 193 S.C. 479, 8 S.E.2d 878, the Court of Appeals held that the statute granted respondent immunity from the action if the proofs established that the respondent's own crews had constructed lines and substations which, like the work contracted to the petitioner's employer, were necessary for the distribution of the electric power which the respondent was in the business of selling. We ordinarily accept the interpretation of local law by the Court of Appeals, cf. Ragan v. Merchants Transfer & Warehouse Co., 337 U.S. 530, 534, 69 S.Ct. 1233, 1235, 93 L.Ed. 1520, and do so readily here since neither party now disputes the interpretation.

However, instead of ordering a new trial at which the petitioner might offer his own proof pertinent to a determination according to the correct interpretation, the Court of Appeals made its own determination on the record and directed a judgment for the respondent. The court noted that the Rural Electric Cooperative Act of South Carolina4 authorized the respondent to construct, acquire, maintain, and operate electric generating plants, buildings, and equipment, and any and all kinds of property which might be necessary or convenient to accomplish the purposes for which the corporation was organized, and pointed out that the work contracted to the petitioner's employer was of the class which respondent was empowered by its charter to perform.

The court resolved the uncertainties in the manager's testimony in a manner largely favorable to the respondent: 'The testimony with respect to the construction of the substations of Blue Ridge, stated most favorably to the (petitioner), discloses that originally Blue Ridge built three substations with its own facilities, but that all of the substations where were built after the war, including the six it was operating at the time of the accident, were constructed for it by independent contractors, and that at the time of the accident it had no one in its direct employ capable of handling the technical detail of substation construction.' 238 F.2d 346, 350.

The court found that the respondent financed the work contracted to the petitioner's employer with a loan from the United States, purchased the materials used in the work, and entered into an engineering service contract with an independent engineering company for the design and supervision of the work, concluding from these findings that 'the main actor in the whole enterprise was the Cooperative itself.' Ibid.

Finally, the court held that its findings entitled the respondent to the direction of a judgment in its favor. '* * * (T)here can be no doubt that Blue Ridge was not only in the business of supplying electricity to rural communities, but also in the business of constructing the lines and substations necessary for the distribution of the product * * *.' Id., at page 351.

While the matter is not adverted to in the court's opinion, implicit in the direction of verdict is the holding that the petitioner, although having no occasion to do so under the District Court's erroneous construction of the statute, was not entitled to an opportunity to meet the respondent's case under the correct interpretation. That holding is also implied in the court's denial, without opinion, of petitioner's motion for a rehearing sought on the ground that '* * * '(T)he direction to enter judgment for the defendant instead of a direction to grant a new trial denies plaintiff his right to introduce evidence in contradiction to that of the defendant on the issue of defendant's affirmative defense, a right which he would have exercised if the District Judge had ruled adversely to him on his motion to dismiss, and thus deprives him of his constitutional right to a jury trial on a factual issue.'

We believe that the Court of Appeals erred. We do not agree with the petitioner's argument in this Court that the respondent's evidence was insufficient to withstand the motion to strike the defense and that he is entitled to our judgment reinstating the judgment of the District Court. But the petitioner is entitled to have the question determined in the trial court. This would be necessary even if petitioner offered no proof of his own. Although the respondent's evidence was sufficient to withstand the motion under the meaning given the statute by the Court of Appeals, it presented a fact question, which, in the circumstances of this case to be discussed infra, is properly to be decided by a jury. This is clear not only because of the issue of the credibility of the manager's vital testimony, but also because, even should the jury resolve that issue as did the Court of Appeals, the jury on the entire record—consistent with the view of the South Carolina cases that this question is in each case largely one of degree and of fact—might reasonably reach an opposite conclusion from the Court of Appeals as to the ultimate fact whether the respondent was a statutory employer.

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