Morgan v. Baker Hughes Inc.
| Decision Date | 03 April 2018 |
| Docket Number | No. 17-8002,17-8002 |
| Parties | KATHERINE K. MORGAN, as wrongful death representative of the deceased person, David P. Morgan, Plaintiff - Appellant, v. BAKER HUGHES INCORPORATED, a Delaware corporation, Defendant - Appellee. |
| Court | United States Courts of Appeals. United States Court of Appeals (10th Circuit) |
(D. Wyo.)
ORDER AND JUDGMENT*Before LUCERO, O'BRIEN, and PHILLIPS, Circuit Judges.
Katherine Morgan, as wrongful death representative of her deceased husband David Morgan, appeals the district court's grant of judgment as matter of law ("JMOL") in favor of Baker Hughes Incorporated, issued after trial but before the case was submitted to the jury. Because material disputes in the evidence remain for resolution by the jury, we conclude that JMOL was inappropriate. Exercising jurisdiction under 28 U.S.C. § 1291, we reverse the grant of JMOL, while affirming evidentiary rulings made during the course of trial.
On August 16, 2012, David Morgan ("Morgan") was fatally crushed by a heavy chemical tote that fell from a forklift at his place of employment. At that time, he worked as a Project Coordinator in the Casper, Wyoming warehouse of Baker Petrolite Incorporated ("Baker Petrolite"). Baker Petrolite is a subsidiary of Baker Hughes Incorporated ("Baker Hughes"), a "matrix organization" that owns more than one hundred legal entities in eighty countries. Prior to the accident, Morgan had worked with forklifts at the Casper warehouse for eighteen years, and had received regular training on forklift operation for nine years. Morgan's widow brought suit against Baker Hughes, claiming the company negligently controlled safety operations at the Casper warehouse, which caused Morgan's accident.
In 2010, Baker Hughes acquired BJ Services Company, then-owner of the Casper warehouse. Baker Hughes initially left the safety management systems of BJ Services in effect, having determined that the safety procedures were in accord with applicable Occupational Safety and Health Administration ("OSHA") regulations. In early 2011, however, Baker Hughes began to integrate the forklift safety systems of BJ Services, Baker Petrolite, and another company—Baker Hughes Oilfield Operation—into a single common system.
Prior to entry of JMOL, Richard Bui, Vice President of Health and Safety for Baker Hughes, testified at trial that a "consistent" application of procedures within Baker Hughes was important because of the numerous people moving between organizations. Bui testified that Baker Petrolite controlled the forklift safety programat the Casper warehouse, and that he was not directed by any Baker Hughes employees on how to carry out his Baker Petrolite-related responsibilities. He asserted that it was Morgan who was responsible for implementing safety measures at the Casper warehouse, and that Morgan's immediate contact for safety-related issues was a Baker Petrolite employee.
Other witnesses testified that Baker Hughes promulgated a comprehensive procedural manual on forklift safety that became effective approximately seven months before Morgan's death. Although it was available to employees of Baker Hughes subsidiaries electronically, the manual was not specifically given to Morgan. The manual's contents established requirements for operation of forklifts by "Baker Hughes employees and contract employees at Baker Hughes facilities and at client sites." Managers at Baker Hughes subsidiaries were obligated to ensure requirements in the manual were implemented and verify that "employees and contract employees" were trained to established standards in the manual. One of the documents included in the manual was titled "Forklift Safe Work Practices User Guide." All Baker Hughes entities were required to address the User Guide in their training programs. Bui testified that the manual was designed to provide high-level, generalized procedures that each facility would be free to modify. Each individual facility was ultimately responsible for applying the guidelines in the manual.
The section of the manual most directly implicated in Morgan's death was titled "Parking." It instructed forklift operators to "fully lower" the load when parking a forklift. Additionally, the section specified that when the operator is morethan fifteen feet away from the forklift, the forklift "should be turned off and the key removed."
Several years before the accident, one of Morgan's co-workers noticed that when forklifts were running, totes "crept" down the forks as a result of vibration. To steady the tote, Morgan and his coworker developed a practice of roping totes to the forklift to prevent them from moving. Bui, accompanied by a subordinate, visited the Casper warehouse in June of 2012 and discussed forklift safety with Morgan. Noticing a rope tied to a forklift, Bui suggested that the tote might be better secured with a nylon cargo strap. At the time of this visit, Bui worked under the president of Baker Petrolite and also reported to the "head guy of HSE [Health, Safety, and Environment] at Baker Hughes Incorporated."
On the day of the accident, Morgan was working alone in the Casper warehouse. Having suspended a 4,500-pound chemical tote about eighteen inches off the ground on a forklift, he proceeded to take a sample from a valve underneath the tote. The tote tipped forward on top of Morgan and crushed him to death. After one of Morgan's coworkers discovered his body, an individual named David Munzenmaier called OSHA's after-hours phone line to report the fatality. Munzenmaier identified himself as "with Baker Hughes" and his title as "HSES [Health, Safety, Environment, and Security] Director of industrial service portfolio." A fatality narrative prepared by OSHA described "Baker Hughes and Baker Petrolite Corporation personnel" as present during the OSHA examination of the accident site. OSHA additionally described the accident scene as having been preserved by "BakerHughes and Baker Petrolite Corporation officials." After Morgan's death, Baker Hughes issued a safety alert to all of its subsidiaries. The alert briefly described the circumstances surrounding the accident. It also included immediate recommendations for improving forklift operations, one of which was review of the manual and local documents governing its implementation.
After the plaintiff rested her case, the district court considered and granted a motion by Baker Hughes motion for JMOL under Fed. R. Civ. P. 50.
We review a district court's grant of JMOL de novo. Strickland v. United Parcel Serv., Inc., 555 F.3d 1224, 1228 (10th Cir. 2009). In this diversity action, Wyoming law controls substantive issues, Mid-Continent Cas. Co. v. True Oil Co., 767 F.3d 1000, 1003 (10th Cir. 2014), but federal law controls the procedural issue of whether plaintiff presented sufficient evidence to withstand a motion for JMOL. Sharon Steel Corp. v. Lakeshore, Inc., 753 F.2d 851, 853 (10th Cir. 1985). We must "draw all reasonable inferences in support of the nonmoving party." Haynes Trane Serv. Agency Inc. v. Am. Standard, Inc., 573 F.3d 947, 955 (10th Cir. 2009). JMOL is "only appropriate if the evidence points but one way and is susceptible to no reasonable inferences which may support the opposing party's position." Strickland, 555 F.3d at 1228 (quotation omitted). When engaging in this review, we "refrain from weighing the evidence, passing on the credibility of witnesses, or substituting our judgment for that of the jury." Bannister v. State Farm Mut. Auto. Ins. Co., 692 F.3d 1117, 1126 (10th Cir. 2012).
Wyoming has explicitly rejected "any doctrine of respondeat superior resulting in liability on the part of a parent corporation for acts of its subsidiary." Loredo v. Solvay Am. Inc., 212 P.3d 614, 620 (Wyo. 2009). Instead, "a parent company can only be held liable for the acts of its subsidiary where it assumed some independent legal duty by retaining or exercising control over some aspect of the operation of a subsidiary corporation which was involved in the incident resulting in the plaintiff's injuries." Medina v. Four Winds Int'l Corp., 111 F. Supp. 2d 1164, 1166-67 (D. Wyo. 2000) (quotation and brackets omitted). Merely advising a subsidiary on safety matters—for example, by drafting company safety policies or investigating accidents at the subsidiary—does not necessarily amount to the assumption of an independent legal duty. See Fiscus v. Atl. Richfield, 773 P.2d 158, 162-63 (Wyo. 1989); Cline v. State of Wyo., Dep't of Family Servs., 927 P.2d 261, 264 (Wyo. 1996).1
In order for a parent to escape liability under this standard, the subsidiary must be "entirely free to do the work its own way." Loredo, 212 P.3d at 622. To be held liable, a parent must have "retain[ed] or exercis[ed] control over some aspect of the operation of a subsidiary corporation which was involved in the incident resulting in the plaintiff's injuries." Fiscus, 773 P.2d 158 at 160. We must consider whether the evidence presented at trial, viewed in the light most favorable to plaintiff, is reasonably susceptible to the inference that Baker Hughes controlled operations atthe Casper warehouse "to such a degree that it directed how" forklift safety "should or should not be done." Loredo, 212 P.3d at 624.
We conclude that plaintiff presented sufficient evidence to satisfy this standard, and presented an evidentiary conflict that would have best been resolved by the jury. For example, Bui testified that at the time of the accident, he was paid by Baker Petrolite and also reported directly to its president. But he also testified that he reported to the head of Health, Safety, Environment, and Security at Baker Hughes. Bui explained that these dual reporting chains required him to submit "strategic directions" received from Baker Hughes to Baker Petrolite's president and discuss "strategies that were appropriate for Baker Petrolite." Although these reporting chains standing alone might not suffice to impose liability on a parent...
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