Luna v. U.S.

• Decision Date: 17 July 2006
• Docket Number: No. 04-4143.,04-4143.
• Citation: 454 F.3d 631
• Parties: Patricia A. LUNA, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

454 F.3d 631

Patricia A. LUNA, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee.

No. 04-4143.

United States Court of Appeals, Seventh Circuit.

Argued September 20, 2005.

Decided July 17, 2006.

David J. Kupets (argued), Kupets & Decaro, Chicago, IL, for Plaintiff-Appellant.

Thomas P. Walsh, Ann. L. Wallace (argued), Office of the United States Attorney, Chicago, IL, for Defendant-Appellee.

Before EASTERBROOK, MANION, and SYKES, Circuit Judges.

SYKES, Circuit Judge.

Patricia Luna injured herself at the Great Lakes Naval Base, where she worked as an instructor under a contract between the Navy and a private contractor. She sued the United States under the Federal Tort Claims Act ("FTCA"), which provides a remedy for personal injuries caused by negligent acts of governmental employees acting within the scope of their employment. See 28 U.S.C. § 1346(b)(1). Under the FTCA the federal government is liable to the same extent that a private individual would be under the law of the state where the negligent act occurred — in this case, Illinois. See 28 U.S.C. § 2674. The Illinois Workers' Compensation Act ("IWCA") provides the exclusive recovery against employers and "borrowing employers" for workers injured in the course of their employment. The Navy is not Luna's employer; the question in this case is whether the Navy is a "borrowing employer" for purposes of the IWCA. We hold that it is, and on this basis affirm the judgment in favor of the United States.

I. Background

Patricia Luna was addressing a large group of Navy recruits at the seamanship school at the Great Lakes Naval Base in northeastern Illinois when she fell and injured her knee. The auditorium-like room where she was injured was designed to simulate the deck of a ship docked at a pier. Part of the floor was painted gray to resemble the deck of a ship; the rest was painted blue to simulate the water surrounding the ship. At the edge of the ship's "deck" was a three-foot drop-off to the "water" below. About 200 recruits were seated on the floor of this training area to hear Luna's presentation. Luna positioned herself near the drop-off at the edge of the "deck" and began instructing the recruits. A few minutes into her remarks she stepped backward and fell off the unprotected edge of the "deck" onto the blue-painted concrete floor below. She sustained a torn meniscus in her knee and recovered $20,706.40 in workers' compensation benefits under the IWCA. She then sued the United States under the FTCA, alleging that the Navy was negligent because it did not put up a barrier to prevent her fall off the simulated ship's "deck."

Luna was not employed by the Navy; she worked for a company called Resource Consultants, Inc. ("RCI"), which is in the business of supplying employees to governmental agencies. Luna was assigned to the Great Lakes Naval Base as part of a team of employees RCI provided to the Navy under a five-year contract. The contract provided that the Navy would pay RCI a fixed rate for the employees to perform certain work at the base, and RCI was responsible for paying the employees' wages and providing workers' compensation coverage.

The United States sought summary judgment, arguing that it was a "borrowing employer" under the IWCA and was entitled to immunity from suit by operation of the IWCA's exclusivity provisions. The government cited Belluomini v. United States, 64 F.3d 299 (7th Cir.1995), a decision of this court that identified two tests derived from Illinois Supreme Court case law for determining whether an employer is a borrowing employer under the IWCA. The first test, based on the language of the IWCA defining a "loaning employer," looks to the relationship between the employers. If the employer supplying the employee meets the statutory definition of a loaning employer, then the employer on the other end of the relationship — the one receiving the services of the employee — is deemed a borrowing employer. Id. at 302. The second test, which the parties here have dubbed the "control test," focuses on the "extent of control which the alleged borrowing employer has over the employee and inquires as to whether a contract existed between the employee and the borrowing employer." Id. The United States maintained that RCI met the statutory definition of a loaning employer, and the Navy was thus a borrowing employer under the first of the tests identified in Belluomini.

The district court rejected the government's argument. The court concluded that Belluomini had incorrectly assumed "that if an entity qualified as a `loaning employer' under [the IWCA,] then the entity to which it `loaned' an employee automatically became a `borrowing employer.'" The judge thought Belluomini's articulation of this "statutory test" was flawed based on two subsequent opinions from the Illinois court of appeals. Concluding that issues of fact remained as to whether the "control test" was satisfied, the district court denied the government's motion for summary judgment.

The case proceeded to a bench trial, and the court issued a written decision holding that the government failed to satisfy the control test for a borrowing employer under the IWCA. The court nevertheless entered judgment for the United States, concluding that the Navy was not negligent and Luna's injury was the result of her own carelessness. Luna appeals, arguing that the district court erred in finding her solely responsible for her injury and also challenging certain evidentiary rulings. We need not reach these arguments, however. The United States defends its judgment on appeal by reiterating its claim that the Navy was a borrowing employer for purposes of the IWCA, and we agree.

II. Discussion

The FTCA is a limited waiver of the United States' sovereign immunity. Warrum v. United States, 427 F.3d 1048, 1049-50 (7th Cir.2005). It exposes the United States to liability for personal injuries as a result of its negligence to the same extent that a private person would be liable under the law of the place where the negligence occurred. See 28 U.S.C. § 1346(b)(1). In Illinois, where the Navy's alleged negligence occurred, the IWCA is the exclusive remedy for workers injured on the job; covered employers cannot be sued for accidental workplace injuries. Under workers' compensation statutes, employers are relieved of the risk of large damages verdicts in tort lawsuits arising from accidental workplace injuries, and employees receive the benefit of no-fault recovery. See Meerbrey v. Marshall Field & Co., 139 Ill.2d 455, 151 Ill.Dec. 560, 564 N.E.2d 1222, 1225 (1990).

The IWCA applies to employers who "borrow" workers from another employer:

Where an employer operating under and subject to the provisions of this Act loans an employee to another such employer and such loaned employee sustains a compensable accidental injury in the employment of such borrowing employer and where such borrowing employer does not provide or pay the benefits or payments due such injured employee, such loaning employer is liable to provide or pay all benefits or payments due such employee under this Act and as to such employee the liability of such loaning and borrowing employers is joint and several, provided that such loaning employer is in the absence of agreement to the contrary entitled to receive from such borrowing employer full reimbursement for all sums paid or incurred pursuant to this paragraph together with reasonable attorneys' fees and expenses in any hearings before the Illinois Workers' Compensation Commission or in any action to secure such reimbursement.

820 ILL. COMP. STAT. 305/1(a)4; Belluomini, 64 F.3d at 302. A loaning employer is thus jointly and severally liable for workers' compensation benefits with the borrowing employer. Absent a contrary agreement between the employers, the loaning employer is entitled to reimbursement from the borrowing employer for workers' compensation payments made to a worker injured while on the job. Loaning and borrowing employers share immunity from tort liability under the IWCA. Belluomini, 64 F.3d at 302; O'Loughlin v. ServiceMaster Co. Ltd. P'ship, 216 Ill. App.3d 27, 159 Ill.Dec. 527, 576 N.E.2d 196, 201 (1991); Saldana v. Wirtz Cartage Co., 74 Ill.2d 379, 24 Ill.Dec. 523, 385 N.E.2d 664, 668 (1978):

The IWCA does not define "borrowing employer." It does, however, define "loaning employer":

An Employer whose business or enterprise or a substantial part thereof consists of hiring, procuring or furnishing employees to or for other employers operating under and subject to the provisions of this Act for the performance of the work of such other employers and who pays such employees their salary or wages notwithstanding that they are doing the work of such other employers shall be deemed a loaning employer within the meaning and provisions of this Section.

820 ILL. COMP. STAT. 305/1(a)4. Based on an Illinois Supreme Court case, Chicago's Finest Workers Co. v. Industrial Commission, 61 Ill.2d 340, 335 N.E.2d 434, 436 (1975), this court in Belluomini extrapolated from this definition the elements of a statutory test for a borrowed employment relationship. Belluomini, 64 F.3d at 302. It is this aspect of Belluomini that the district court questioned. It should not have done so.

We note as a preliminary matter that the parties agree that an employer may be a borrowing employer under the IWCA if it has "control" of a loaned employee — a test measured by a variety of factors¹ we need not consider here because the United States now concedes it cannot satisfy this so-called "control test" on the facts of this case. The question for us is whether Illinois law recognizes a statutory test under the IWCA for borrowing employers and whether the Navy satisfies that test.

The Navy characterizes this as a question of subject-matter jurisdiction. It is not. The district court had subject-matter jurisdiction because Luna brought her claim under...