Thomas v. Stone Container Corp., 95 Civ. 5726 (LAK).

• Decision Date: 25 April 1996
• Docket Number: No. 95 Civ. 5726 (LAK).,95 Civ. 5726 (LAK).
• Citation: 922 F. Supp. 950
• Parties: Daniel THOMAS, et ano., Plaintiffs, v. STONE CONTAINER CORPORATION, Defendant.
• Court: U.S. District Court — Southern District of New York

922 F. Supp. 950

Daniel THOMAS, et ano., Plaintiffs, v. STONE CONTAINER CORPORATION, Defendant.

No. 95 Civ. 5726 (LAK).

United States District Court, S.D. New York.

April 25, 1996.

COPYRIGHT MATERIAL OMITTED

Lawrence B. Saftler, New York City, for Plaintiffs.

Katherine L. Adams, D. Evan van Hook, Sidley & Austin, New York City, for Defendant.

MEMORANDUM OPINION

KAPLAN, District Judge.

Plaintiff Daniel Thomas seeks recovery for personal injuries allegedly sustained in an accident while he was employed as a temporary laborer for an independent contractor that was performing certain maintenance work at a Virginia paper mill owned by defendant Stone Container Corporation ("Stone"). Stone previously moved for summary judgment dismissing the complaint on the ground that Thomas was its statutory employee under the Virginia Workers' Compensation Act ("VWCA") and that Stone therefore could not be sued. The Court denied the motion on the ground that the statutory employment determination was within the primary jurisdiction of the Virginia Workers' Compensation Commission (the "Commission"), which was about to decide the issue in a proceeding commenced by Thomas. Thomas v. Stone Container Corp., No. 95 Civ. 5726 (LAK), 1996 WL 79325 (S.D.N.Y. Feb. 23, 1996). Days later, however, plaintiff settled the proceeding before the Commission in a manner that resulted in the dismissal of his workers' compensation claim against Stone, thus precluding a determination of the question in the administrative context. Stone therefore renews its motion for summary judgment dismissing the complaint.

The Facts

The accident that is the focus of this case occurred at Stone's Hopewell mill. Thomas was employed at the time by Labor Pro Temporary Services, which had supplied Thomas and other workers to Industrial NDT ("INDT"), which in turn had been engaged by Stone to conduct metallurgical surveying in preparation for certain non-destructive metallurgical testing. In view of the fact that the case turns, at this stage, on whether Stone is to be regarded as Thomas' statutory employer, a review of the evidence concerning the nature and extent of Stone's relevant operations is essential.

Stone's Factual Contentions

Stone has put forward a detailed account of its staffing and operations at the Hopewell mill, all of which is undisputed save in certain particulars discussed below.

Stone has maintenance and engineering ("M & E") departments at the Hopewell mill which employ 158 people — 36 percent of the mill's entire workforce. These departments include managers, skilled workers, and unskilled laborers, some of whom are trained in specific maintenance tasks required at the mill including metallurgical testing, welding, pipe fitting, and millwright work. They are responsible for ensuring the good working order of all aspects of the mill's equipment, and Stone has personnel on staff responsible for metallurgical testing among other functions. The majority of all maintenance work at the mill is undertaken directly by Stone employees, who spend about 230,000 hours per year on maintenance and repair work.

Stone maintains that it conducts non-destructive metallurgical testing about twelve times a year at the mill and that twelve of its employees are trained to conduct this work, which usually is done with the assistance of unskilled laborers. It contends also that it owns all of the equipment necessary to perform this work.

Stone conducts a maintenance outage at the mill each year during which extensive testing and repair operations are carried out. Because the mill is idled during the annual outage, thus stopping all production, there is a premium on doing the necessary work quickly, and Stone's entire M & E staff works around the clock. Nevertheless, while most of the work is performed by Stone employees, Stone also hires subcontractors to assist, specifying in advance the work to be done and then directing the subcontractors' activities and monitoring their work on a daily basis.

In March 1994, the mill had a regularly scheduled outage during which Stone determined that non-destructive metallurgical testing would be conducted on the recovery boiler, which generates power and steam for the mill. It hired INDT to perform this work, and INDT in turn contracted to supply technicians at a rate of $38 per hour and laborers to assist the technicians at a rate of $26 per hour. Thomas was among the laborers supplied by INDT.

INDT was not on its own during the outage. Two employees from Stone's Engineering and Technology Group came to Hopewell to assist in the work INDT was to conduct. They tested and/or approved each of the skilled INDT employees who was to conduct the actual testing. They did not, however, test the unskilled laborers. According to Stone, these two Stone employees monitored INDT's work.

Thomas was injured on March 19, 1994, during the outage, while performing unskilled labor relating to the testing of the recovery boiler.

Thomas' Affidavit

Thomas has submitted a brief affidavit in opposition to the motion.¹ The pertinent assertions are that (1) Thomas' "understanding is that STONE CONTAINER did not have the special equipment" used by INDT during the outage (Thomas Aff. ¶ 9; see also id. ¶ 15); (2) Thomas never was directed, managed, controlled or supervised by Stone employees while he was at the mill (id. ¶ 11); (3) Thomas "was told that `they (Stone Container) did not do this kind of work themselves' by employers sic of INDT and Stone Container" (id.); and (4) "while Stone Container may maintain a staff of employees in their maintenance and engineering department, Stone Container's ordinary course of business is not in maintenance, and certainly not metallurgical surveying," something Thomas allegedly was told by Stone employees (id. ¶ 15; see also id. ¶ 16). Thus, Thomas seeks to place in issue whether Stone personnel typically did the sort of work that it hired INDT to perform and whether it had the specialized equipment necessary to do so. The affidavit, however, does not set forth facts showing that Thomas is competent to testify to most of the assertions it contains.

Discussion

Section 65.2-307 of the VWCA, Va. Stat. § 65.2-307, provides that the rights granted to the employee under the Act "shall exclude all other rights and remedies of such employee ... at common law or otherwise" on account of a work-related injury. Accordingly, the Act divests both state and federal courts of subject matter jurisdiction over tort claims brought by employees against their employers. See Pendley v. United States, 856 F.2d 699, 702 (4th Cir.1988), cert. denied, 490 U.S. 1005, 109 S.Ct. 1640, 104 L.Ed.2d 155 (1989); Carmody v. F.W. Woolworth Co., 234 Va. 198, 361 S.E.2d 128 (1987).

Section 65.2-302 provides in relevant part:

"When any person (referred to in this section as `owner') undertakes to perform or execute any work which is part of his trade, business or occupation and contracts with any other person (referred to in this section as `subcontractor') for the execution or performance by or under such subcontractor of the whole or any part of the work undertaken by such owner, the owner shall be liable to pay to any worker employed in the work any compensation under this title which he would have been liable to pay if the worker had been immediately employed by him." Va.Stat. § 65.2-302.

Accordingly, a worker deemed to be a statutory employee is limited to his or her workers' compensation remedy against the statutory employer. Stone claims that it is entitled to summary judgment on the alternative grounds that Thomas was Stone's statutory employee and, in any case, that Thomas is estopped to contend otherwise by virtue of a position taken by him before the Commission.

Estoppel

During the course of the Virginia administrative proceeding, Labor Pro successfully requested that INDT and Stone be made parties defendant. Thomas' Virginia counsel then wrote that it was Thomas' "position ... that he is entitled to the same benefits from Stone Container that he is entitled to from the other defendants." She went on to say that "whether Stone Container was a statutory employer is a question of law for the Deputy Commissioner to decide." (Def. Mem. in Support of Motion to Renew Ex. E) Stone argues that Thomas, having taken the position that Stone was obliged to pay him benefits under the VWCA, is estopped to deny that Stone was his statutory employer.

The doctrine of judicial estoppel holds that a party that has taken one position in a proceeding in order to obtain some benefit may not thereafter take an inconsistent position in another proceeding. E.g., Roth v. McAllister Bros., Inc., 316 F.2d 143, 145 (2d Cir.1963). Nevertheless, at least as applied in this Circuit, the doctrine requires not only that the party have taken an inconsistent position, but that the party have succeeded in gaining some advantage by having done so. E.g., id.; Long Island Lighting Co. v. Transamerica Delaval, Inc., 646 F.Supp. 1442, 1447 n. 4 (S.D.N.Y.1986); Oneida Indian Nation of Wisconsin v. State of New York, 102 F.R.D. 450, 453-54 (N.D.N.Y.1984).

Here, Thomas took inconsistent positions in both seeking workers' compensation benefits from Stone before the Commission, an effort that necessarily rested on the theory that Stone was his statutory employer, and in denying before this Court that Stone occupied such a position.² But Thomas gained no benefit by doing so because he settled the Virginia matter with Labor Pro and dismissed as to Stone before the Commission ruled on the statutory employer point. In consequence, there is no inequity in permitting Thomas to proceed here. See 5 CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE: CIVIL § 1283, AT 542 (1990).

The Statutory Employer Issue

The question whether Thomas was a statutory employee of Stone turns on whether the work in which he assisted INDT "was a part of the trade,...