Pallen v. United Parcel Service General Services
| Decision Date | 17 March 1998 |
| Docket Number | No. CIV. 95-713-FR.,CIV. 95-713-FR. |
| Citation | 997 F.Supp. 1367 |
| Parties | Jay PALLEN, Plaintiff, v. UNITED PARCEL SERVICE GENERAL SERVICES CO., a Delaware corporation; Inforite Corp., a New York corporation; Toppan Moore Co., a Japanese corporation; and II Morrow, Inc., an Oregon corporation, Defendants. |
| Court | U.S. District Court — District of Oregon |
Arthur C. Johnson, Johnson, Clifton, Larson & Corson, Eugene, OR, William Rutzick, Corrie J. Yackulic, Schroeter, Goldmark & Bender, David N. Mark, Seattle, WA, for Plaintiff.
Christopher W. Angius, Joy Ellis, Perkins Coie, Portland, OR, G.H. Gromel, Jr., Cassandra C. Collins, Hunton & Williams, Richmond, VA, Anne E. Kershaw, Hunton & Williams, New York, NY, for Defendants United Parcel Service General Services Co. and II Morrow, Inc.
Richard A. Lee, Molly Jo Mullen, Bodyfelt, Mount, Stroup & Chamberlain, Portland, OR, for Defendant Inforite Corp.
James D. Hibbard, John T. Kaempf, Bullivant, Houser, Bailey, Pendergrass & Hoffman, Portland, OR, for Defendant Toppan Moore Co.
The plaintiffs, package car drivers employed by United Parcel Service, allege that they have suffered repetitive stress injuries from using hand-held computers known as delivery information acquisition devices (DIADs) in the performance of their jobs. Before the court is the motion of defendant Inforite Corp. for summary judgment (# 151); the motion of defendant Toppan Moore Co., Ltd. for summary judgment (# 152); the motions of defendants United Parcel Service General Services Co. and II Morrow, Inc. for summary judgment (# 155); and the motion of defendant Inforite Corp. to join defendants United Parcel Service General Services Co. and II Morrow, Inc.'s motion for summary judgment (# 187).
The package delivery business that is commonly called "UPS" is a family of corporations. UPS America, Inc. (UPS America) is the parent corporation of numerous wholly-owned subsidiaries, including defendant United Parcel Service General Services Co. (UPSGSC), defendant II Morrow, Inc., United Parcel Service, Inc., an Ohio corporation (UPS, Inc.), and United Parcel Service, Inc., a New York corporation (UPS New York). The plaintiffs are package car drivers employed by UPS, Inc., the entity which is responsible for the ground delivery of packages in the central and western parts of the United States. UPS New York employs package car drivers who service other parts of the country. UPSGSC and UPS, Inc. share the same corporate chairman, secretary, assistant secretary, treasurer, assistant treasurer, and directors, and they share fifteen of the same vice presidents. UPS America files a consolidated federal income tax return for itself and its subsidiaries located in the United States, including II Morrow, Inc., UPS, Inc., and UPSGSC.
Effective January 1, 1958, UPSGSC entered into a contract with UPS America, whereby UPSGSC agreed to provide administrative and management services for numerous operating companies, including UPS, Inc. (the Service Agreement). One of the services specified in the Service Agreement for UPSGSC to perform was "[t]o assist each of said operating companies in accident prevention and safety work." UPSGSC also agreed to supervise "the purchase of insurance of every kind and character." The Service Agreement provides that "[y]our company [UPSGSC] will be required to perform the services described above as items (1) to (5) [including the two noted above by the court]." The Service Agreement was modified in 1970 to provide that "the fee shall be equal to five (5%) per cent of your [UPSGSC's] actual disbursements for labor, materials and expenses required or incurred by you [UPSGSC] in the performance of said agreement." UPSGSC also purchases material and equipment, including trucks, uniforms, and hand held equipment, on behalf of the operating companies, including UPS, Inc. These purchases are transferred to the operating companies at cost through an intercompany clearing account.
As stated above, the Service Agreement requires UPSGSC to purchase insurance of every kind and character for the operating companies, including UPS, Inc. James Felty of UPSGSC testified as follows:
Q. And how about workers' compensation coverage, who's the carrier for that?
A. Liberty Mutual Insurance Company.
Q. And who pays for the premium on that?
A. General Services Company.
Q. And do the operating companies have workers' compensation coverage?
A. Yes, they do.
Q. And who's the carrier for that?
A. Liberty Mutual Insurance Company.
Q. Who pays the premium on that?
A. General Services Company.
....
Q. [by a different attorney] Does General Services Company have its own workers' compensation policy?
A. General Services is covered I believe under a blanket policy that covers all the companies. I can't speak to that specifically, though.
Q. So you don't know whether or not General Services workers' comp policy for its own employees is different or the same as the policy that the operating companies have for its own [sic] employees?
A. I have no intimate knowledge of independent individual insurance policies. That's not what I do.
Deposition of James Felty at 112-13. The plaintiffs obtained a declaration from Donna Knepper, an employee of the State of Wisconsin. She states that no entity called United Parcel Service General Services Company is identified as an "employer" or is listed as having workers' compensation insurance coverage in the State of Wisconsin. Knepper included several pages of printouts of the information that the State of Wisconsin has concerning entities related to UPS. Most pages of the printouts list UPS of America as the insured; UPS, Inc. is mentioned in only one place.
UPSGSC and UPS, Inc. keep separate books. The general tariff1 is issued by UPS, Inc. and UPS New York. The National Master United Parcel Service Agreement is a collective bargaining agreement between the International Brotherhood of Teamsters and UPS, Inc. and UPS New York.
The service territory is divided into regions. UPSGSC employs people working at the regional level. Regions are divided into districts. Operating companies, including UPS, Inc., employ people working at the district level. District managers report to regional managers. At the district level, supervisors of UPS, Inc. hire the package car drivers, train them, evaluate them, and manage their daily concerns, such as the assignment of their routes and any grievances that they have.
In 1984, Clay Lafferty, the head of research and development for defendant UPSGSC, sent a Request for Proposal to several companies asking for proposals "to design, build, and test five prototypes of a hand-held delivery information acquisition device" (DIAD). Affidavit of Richard A. Lee, Exhibit A at 6. In February of 1986, UPSGSC contracted with defendant Inforite Corp. (Inforite) to design, build and test the prototype DIADs.
Inforite did not have a technical design engineering group; therefore, the engineering work necessary for the DIADs was to be performed by employees of the parent company of Inforite, defendant Toppan Moore Co. (Toppan Moore). Inforite is located in the United States; Toppan Moore is located in Japan. Lafferty frequently met with engineers from Toppan Moore in Japan. Inforite sent representatives to some, but not all, of these meetings.
Toppan Moore built 50 prototype DIADs and sent them to UPSGSC in late 1987 and early 1988. UPSGSC's engineers tested the prototypes, rewrote the software, and began field testing the prototypes in the State of New York. Changes were made to the DIADs after the field tests. In November of 1988, UPSGSC ordered the manufacture of an additional 250 prototype DIADs; they were delivered in April of 1989, and field testing continued.
UPSGSC and Inforite entered into a contract effective September 28, 1989 whereby Inforite agreed to manufacture and supply DIADs to UPSGSC. Section 15.5 of that agreement states that nothing contained in the agreement creates a joint venture or a partnership between the companies.
Robert Esslinger, an employee of UPSGSC, states that Inforite did not design or engineer the DIADs, "not one stroke." Affidavit of Richard A. Lee, Exhibit C at 5. Roy Lancraft from the research and development department of UPSGSC also states that Inforite did not do any design work on the DIADs. Kiroku Kato of Inforite states that, at the relevant time, Inforite did not have any design engineers on its staff. Kato was at some of the meetings where employees of UPSGSC and of Toppan Moore discussed the design of the DIADs. Lafferty states that he and people at Inforite and Toppan Moore came to a "joint conclusion" that the DIADs should be shaped like a clipboard because the decision came out of a meeting where they were all getting together and going over the requirements. Declaration of Corrie J. Yackulic, Exhibit 5 at 134-35.
Kato of Inforite prepared the 1984 proposal in response to the request of UPSGSC and also prepared the 1986 addendum to the proposal. At least some of the decisions reflected in the proposal and its addendum, such as eliminating the shoulder strap from the design, were dictated to Kato by UPSGSC. Kato also testified that the substance of the proposal was "almost entirely" prepared by the Toppan Moore engineering group. Affidavit of Richard Lee, Exhibit I at 3. UPSGSC insisted that all of the communications between Toppan Moore and UPSGSC be routed through Inforite. Inforite took steps to reinforce the importance of this request with employees of Toppan Moore when Toppan Moore employees began to contact UPSGSC directly.
UPSGSC wrote the final product specifications in August of 1989 and contracted with Inforite to sell the DIADs to UPSGSC, which were manufactured according to the final product specifications written in August of 1989. This...
To continue reading
Request your trial