Salmon v. Exxon Corp.

• Decision Date: 30 April 1993
• Docket Number: No. 92-395-B.,92-395-B.
• Citation: 824 F. Supp. 81
• Parties: James L. SALMON, v. EXXON CORPORATION.
• Court: U.S. District Court — Middle District of Louisiana

824 F. Supp. 81

James L. SALMON, v. EXXON CORPORATION.

No. 92-395-B.

United States District Court, M.D. Louisiana.

April 30, 1993.

Michael A. Lombard, Lombard & Silbert, Metairie, LA, for plaintiff.

William Victor Courtney, Lourdes Estevez Martinez, Louise Van Meter White, Exxon Co., USA, New Orleans, LA, for defendant.

RULING ON DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

POLOZOLA, District Judge.

Exxon Corporation filed this motion for summary judgment contending that it is James L. Salmon's statutory employer, and thus it is immune from plaintiff's claim for work-related injuries. For reasons which follow, the Court finds that Exxon is plaintiff's statutory employer. Therefore, defendant's motion for summary judgment is hereby granted.

FACTS

Exxon Chemical Americas entered into a written contract with UMC of Louisiana, Inc., whereby UMC of Louisiana, Inc. would perform the mechanical portion of a turn-around¹ on the OXO unit located at Exxon Corporation's Baton Rouge Chemical Plant. Exxon Corporation is the owner and operator of the Baton Rouge chemical plant.

Exxon Chemical Americas is a division of Exxon Chemical Company, which is a division of Exxon Corporation.² J.E. Merit Constructors, Inc., plaintiff's employer at the time of his injuries, is a wholly-owned subsidiary of Jacob Engineering. At one time, UMC of Louisiana, Inc. was also a subsidiary of Jacob Engineering. When J.E. Merit was created, UMC of Louisiana, Inc. was dissolved and J.E. Merit took its place, performing the same type of work.³ The obligation of UMC of Louisiana, Inc. under the contract with Exxon Chemical Americas was assigned, with the consent of Exxon Chemical Americas, to J.E. Merit.

On April 20, 1992, plaintiff was assigned by J.E. Merit to hydro-test a segment of the piping system on the OXO unit at Exxon Corporation's Baton Rouge Chemical Plant. A hydro-test is a procedure used to detect the presence of leaks in the piping. Plaintiff alleges he sustained his injuries while performing the hydro-test.

Plaintiff originally filed his suit in state court against Exxon Corporation seeking damages for physical injuries he allegedly sustained in the accident while performing work for his employer, J.E. Merit Constructors, at Exxon Corporation's Baton Rouge Chemical Plant. Plaintiff alleges strict liability and negligence as his basis for recovery.

Defendant timely removed this suit to federal court pursuant to 28 U.S.C. § 1441. The Court has subject matter jurisdiction over this suit pursuant to 28 U.S.C. § 1332(a)(1).

After removing this suit, defendant filed a motion for summary judgment contending that since it is plaintiff's statutory employer under Louisiana Revised Statutes 23:1061, plaintiff is barred from suing defendant for tort liability under Louisiana Revised Statutes 23:1032. Specifically, defendant contends that it is plaintiff's statutory employer within the meaning of Louisiana Revised Statutes 23:1061, because defendant contracted with J.E. Merit, plaintiff's employer, for J.E. Merit to perform turnaround work on the OXO unit. Exxon argues that the turn-around work is part of defendant's trade, business, or occupation.

SUMMARY JUDGMENT

Summary judgment is proper when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law."⁴ If the moving party meets the initial burden of showing that there is no genuine issue of material fact, the burden shifts to the non-moving party to produce evidence of the existence of a genuine issue for trial.⁵ In opposing the granting of summary judgment, the non-moving party may not rest upon the mere allegations or denials of the moving party's pleadings, but by its own affidavits, depositions, answers to interrogatories, or admissions the non-moving party must set forth specific facts showing that there is a genuine issue for trial.⁶ When all the evidence presented by both parties could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial.⁷

Under the Louisiana Worker's Compensation Act, worker's compensation benefits are an employee's exclusive remedy against the employer for injury, compensable sickness or disease.⁸ An employee may not sue his employer or any "principal" in tort.⁹ "Principal" is defined as "any person who undertakes to execute any work which is a part of his trade, business, or occupation in which he was engaged at the time of the injury, or which he had contracted to perform and contracts with any person for the execution thereof."¹⁰ A person rendering service for another in any trade, business, or occupation covered by the worker's compensation laws is presumed to be an employee for purposes thereof.¹¹ However, this presumption may be rebutted by showing that the employee is an independent contractor.¹² Even if a worker is found to be an independent contractor, he may still be subject to the worker's compensation laws if he is also determined to be a statutory employee under Louisiana Revised Statutes 23:1032 or 23:1061.¹³

In 1989, the Louisiana Legislature amended Louisiana Revised Statutes 23:1061 to read:

A. When any person, in this Section referred to as the "principal", undertakes to execute any work, which is a part of his trade, business, or occupation or which he had contracted to perform, and contracts with any person, in this Section referred to as the "contractor", for the execution by or under the contractor of the whole or any part of the work undertaken by the principal, the principal shall be liable to pay to any employee employed in the execution of the work or to his dependent, any compensation under this Chapter which he would have been liable to pay if the employee had been immediately employed by him; .... The fact that work is specialized or nonspecialized, is extraordinary construction or simple maintenance, is work that is usually done by contract or by the principal's direct employee, or is routine or unpredictable, shall not prevent the work undertaken by the principal from being considered part of the principal's trade, business, or occupation, regardless of whether the principal has the equipment or manpower capable of performing the work....¹⁴

Louisiana Revised Statutes 23:1061 requires an employer to pay compensation to an employee under the following circumstances: (1) the execution of any work which is a part of the principal's trade, business, or occupation (one-contract situation), or (2) the execution of any work which the principal had contracted to perform, and contracts with another person for the execution thereof (two-contract situation).¹⁵ Since Exxon contracted with plaintiff's payroll employer to perform turnaround work at defendant's chemical plant, defendant relies on the "one-contract" theory in asserting it is plaintiff's statutory employer.¹⁶

Exxon contracted with J.E. Merit for the mechanical portion of the turnaround unit.¹⁷ Exxon, therefore, entered into a principal-contractor relationship with plaintiff's employer which satisfies the contract element of 23:1061. However, the defendant must also show that the work which is the subject of the contract is part of its trade, business, or occupation.

Prior to the 1989 amendment to 23:1061(A), Louisiana followed the three prong test set forth in Berry v. Holston Well Service, Inc.¹⁸ to resolve the question of whether work was part of a principal's trade, business, or occupation:

(1) Is the contract work specialized or non-specialized?

If the work is specialized, then the principal cannot be a statutory employer as a matter of law.

(2) If non-specialized, is the contract work comparable to the principal's trade, business, or occupation using the following inquiries?

(a) Is the work routine or customary?

(b) Does the principal have the equipment and personnel capacity to perform the work?

(c) What is the practice in the industry?

(3) Was the principal engaged in contract work at the time of the injury?¹⁹

The Berry decision established a very restrictive set of circumstances under which a principal could become a statutory employer. The 1989 amendment to 23:1061(A) broadened the reach of the statutory employer designation.²⁰ The amendment tracks the language in the first two prongs of the Berry test and then explicitly rejects the determinative nature of those queries.²¹

The 1989 amendment does not provide additional factors to guide courts in determining statutory employment relationships. The amendment, on the contrary, precludes the courts from considering only certain factors in determining whether an activity falls within a principal's trade, business, or occupation.²²

The amendment to 23:1061 became effective on January 1, 1990. Since the alleged injuries in this case occurred on April 20, 1992, the amended 23:1061 applies in defining the defendant's legal relationship with plaintiff.

Defendant contends that "turnaround" work is a part of its trade, business, or occupation. Prior to the 1989 amendment to 23:1061(A), this Court had previously found that turnaround work performed on a reactor at Exxon Corporation's chemical plant in Baton Rouge was within the trade, business, or occupation of Exxon Corporation.²³ The United States Fifth Circuit Court of Appeals affirmed this Court's decision.²⁴ Other courts have also frequently found that turnaround work is part of a refinery and chemical plant operator's trade, business, or occupation.²⁵

In Harris v. Murphy Oil, U.S.A., Inc.,²⁶ the United States Fifth Circuit recently affirmed that turnaround work is part of an oil refinery operator's trade, business, or occupation. In Harris, an employee of a subcontractor was injured while performing turnaround maintenance work on reactors at an oil refinery. The subcontractor's employee sued the operator of the oil...