Morvant v. Oil States Int'l, Inc., Civil Action No. 13–5845.

• Decision Date: 11 March 2014
• Docket Number: Civil Action No. 13–5845.
• Citation: 3 F.Supp.3d 561
• Court: U.S. District Court — Eastern District of Louisiana
• Parties: Loretta MORVANT et al. v. OIL STATES INTERNATIONAL, INC. et al.

3 F.Supp.3d 561

Loretta MORVANT et al.

v.OIL STATES INTERNATIONAL, INC. et al.

Civil Action No. 13–5845.

United States District Court,

E.D. Louisiana.

Signed March 11, 2014.

Francis I. Spagnoletti, Marc Evan Kutner, Spagnoletti & Co., Houston, TX, Walter K. Naquin, Jr., Attorney at Law, Thibodaux, LA, for Loretta Morvant et al.

David S. Bland, Allison Raquel Colon, Matthew C. Guy, Bland & Partners, PLLC, New Orleans, LA, for Oil States International, Inc. et al.

ORDER AND REASONS

LANCE M. AFRICK, District Judge.

Before the Court are two motions ¹ for summary judgment filed by defendants. Plaintiffs have filed oppositions ² to both motions, and defendants have filed reply memoranda.³ For the following reasons, the motions are GRANTED IN PART and DENIED IN PART.

BACKGROUND

On June 4, 2012, Timothy Morvant, Sr. (“Morvant”) was tragically killed in a workplace accident.⁴ Morvant was employed as a senior welder/fitter for 15 years by Oil States Skagit Smatco L.L.C. (“OSSS”) at its facility in Houma, Louisiana.⁵ OSSS is engaged in the design, manufacture, and refurbishment of winches and other products for the marine and offshore industries.⁶ At the time of the accident, Morvant was fabricating a “501 wall,” which is part of a large winch, when the wall fell and crushed him, causing his death.⁷

Plaintiffs, the surviving spouse and children of Morvant and Morvant's estate, filed the above-captioned lawsuit in the Southern District of Texas on March 27, 2013.⁸ Plaintiffs did not sue OSSS,⁹ which is presumably immune from tort liability under workers' compensation law. Plaintiffs instead brought claims against Oil States Industries, Inc. (“OSI”) and Oil States International, Inc. (“International”) ¹⁰ for their negligence in “failing to adequately manage, supervise, and direct their subsidiary in the performance of its operations and/or implement corporate safety policies.” ¹¹ The case was transferred to this Court on September 16, 2013.¹² A final pretrial conference is scheduled for March 12, 2014, and a jury trial is scheduled to begin on April 7, 2014. ¹³

Defendants filed the instant motions on February 3, 2014. The first motion requests partial summary judgment with respect to plaintiffs' punitive damages claims and the estate's wrongful death and survival claims.¹⁴ The second motion requests summary judgment with respect to all plaintiffs' claims on the basis that OSI and International did not owe a legal duty to Morvant. ¹⁵ Plaintiffs oppose both motions.¹⁶

STANDARD OF LAW

Summary judgment is proper when, after reviewing the pleadings, the discovery and disclosure materials on file, and any affidavits, the court determines there is no genuine issue of material fact. SeeFed.R.Civ.P. 56. “[A] party seeking summary judgment always bears the initial responsibility of informing the district court of the basis for its motion and identifying those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The party seeking summary judgment need not produce evidence negating the existence of material fact, but need only point out the absence of evidence supporting the other party's case. Id.; Fontenot v. Upjohn Co., 780 F.2d 1190, 1195 (5th Cir.1986).

Once the party seeking summary judgment carries its burden pursuant to Rule 56, the nonmoving party must come forward with specific facts showing that there is a genuine issue of material fact for trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). The showing of a genuine issue is not satisfied by creating “ ‘some metaphysical doubt as to the material facts,’ by ‘conclusory allegations,’ by ‘unsubstantiated assertions,’ or by only a ‘scintilla’ of evidence.” Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir.1994) (citations omitted). Instead, a genuine issue of material fact exists when the “evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The party responding to the motion for summary judgment may not rest upon the pleadings, but must identify specific facts that establish a genuine issue. Id. The nonmoving party's evidence, however, “is to be believed, and all justifiable inferences are to be drawn in [the nonmoving party's] favor.” Id. at 255, 106 S.Ct. 2505; see also Hunt v. Cromartie, 526 U.S. 541, 552, 119 S.Ct. 1545, 143 L.Ed.2d 731 (1999).

DISCUSSION

A. Duty

The threshold question in this case is whether OSI and International owed any duty to Morvant. A parent corporation generally does not incur any duty with respect to the employees of its subsidiaries by the mere fact of its ownership. Bujol v. Entergy Servs., Inc., 922 So.2d 1113, 1127–28 (La.2004); Little v. Delta Steel, Inc., 409 S.W.3d 704, 717 (Tex.App.2013). In both Texas and Louisiana, courts apply § 324A of the Restatement (Second) of Torts ¹⁷ in order to determine whether defendants like OSI and International owe a duty to the employees of their subsidiaries.¹⁸Bujol, 922 So.2d 1113; Little, 409 S.W.3d 704. Section 324A states:

One who undertakes, gratuitously or for consideration, to render services to another which he should recognize as necessary for the protection of a third person or his things, is subject to liability to the third person for physical harm resulting from his failure to exercise reasonable care to protect his undertaking, if

(a) his failure to exercise reasonable care increases the risk of such harm, or

(b) he has undertaken to perform a duty owed by the other to the third person, or

(c) the harm is suffered because of reliance of the other or the third person upon the undertaking.

Although the existence of a duty is a question of law for the Court, the factual predicates for the imposition of that duty are a question for the fact finder. See Johnson v. Abbe Eng'g Co., 749 F.2d 1131, 1133–34 (5th Cir.1984) (“Finding sufficient evidence to support a jury verdict imposing liability under § 324A, we AFFIRM.”); Bujol, 922 So.2d at 1138 (reversing a jury's verdict regarding § 324A duties); Torrington Co. v. Stutzman, 46 S.W.3d 829, 840 (Tex.2000) (“In other words, absent any determination that the factual predicates giving rise to a legal duty were satisfied, the defendants' failure to use reasonable care was of no legal consequence.”). A number of cases have examined a parent company's liability to its subsidiary's employees pursuant to § 324A.

In Muniz v. National Can Corp., 737 F.2d 145 (1st Cir.1984),¹⁹ the plaintiff brought an action against the parent company of his employer for exposure to toxic lead fumes. Id. at 147. “Although [the parent company] was not his employer, [the plaintiff] contend[ed] that it [was] liable for his work-related injuries, because it was ‘involved’ with safety measures[.]” Id. The district court found as a matter of law that the parent company did not have a duty to provide safe working conditions and did not assume that duty from the plaintiff's employer. Id. The U.S. Court of Appeals for the First Circuit affirmed the district court and stated, “Neither mere concern with nor minimal contact about safety matters creates a duty to ensure a safe working environment for the employees of a subsidiary corporation.” Id. at 148. The court found that the evidence did not show that the subsidiary relied on its parent corporation “by lessening or omitting its own safety measures.” Id. at 149. The court concluded that the district court's finding was not clearly erroneous because the parent corporation merely “provided general safety guidelines[ ] not specifically directed to the concentration of lead in the workplace” and “intended for these general guidelines to be implemented by local management.” Id.

In Bujol, two men were severely injured and one was killed when a flash fire occurred during valve maintenance at an air separation plant. 922 So.2d at 1120. The direct employer paid workers' compensation benefits, but the plaintiffs sued the parent corporation for, among other things, failure to supervise the facility, failure to prescribe proper procedures, and punitive damages. Id. at 1120–21. The plaintiffs alleged that this accident could have been prevented if the victims had used “barrier walls” as a shield from a possible fire. Id. at 1121–22. The evidence showed that the parent corporation issued a non-mandatory safety recommendation to some of its subsidiaries with respect to the use of such barrier walls. Id. at 1134.

The Louisiana Supreme Court in Bujol followed the analytical framework of § 324A of the Restatement and stated, “In determining whether a parent corporation affirmatively undertook the duty of safety owed by its subsidiary, courts have looked to the scope of the parent's involvement, the extent of the parent's authority, and the underlying intent of the parent....” Id. at 1131. Reversing the jury's findings,²⁰ the court found that “the evidence presented did not establish that [the parent corporation] affirmatively undertook to provide [the subsidiary]'s employees with a reasonably safe place to work under § 324A, with regard to the entire plant or with regard to providing barrier walls around oxygen valves.” Id. at 1133. The court also stated in the alternative that even if the threshold undertaking in the introductory clause of § 324A was satisfied, there was no evidence to support any of the required findings under subsections (a), (b), or (c). Id. at 1135–37.

In Little, the surviving spouse and children of a crane operator who was crushed to death by a large steel plate brought claims against his direct employer and its parent corporation. 409 S.W.3d at 706. The plaintiffs alleged that the parent corporation “had undertaken a responsibility to ensure safety for [the subsidiary]'s employees, and...