West v. Kerr-McGee Corp.

• Decision Date: 18 July 1985
• Docket Number: No. 84-3458,KERR-M,84-3458
• Citation: 765 F.2d 526
• Parties: , 54 USLW 2091 Hartland Dean WEST, Plaintiff-Appellant, v.cGEE CORPORATION, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 526

765 F.2d 526

1986 A.M.C. 150, 54 USLW 2091

Hartland Dean WEST, Plaintiff-Appellant, v. KERR-McGEE CORPORATION, et al., Defendants-Appellees.

No. 84-3458.

United States Court of Appeals Fifth Circuit.

July 18, 1985.

Carl J. Hebert, A. Gill Dyer, New Orleans, La., for plaintiff-appellant.

Christopher Tompkins, Ethel H. Cohen, New Orleans, La., for Kerr-McGee & Home Ind.

Timothy F. Burr, New Orleans, La., for Cabot Corp.

Robert B. Nolan, New Orleans, La., for Case Pomroy & Felmont.

Appeal from the United States District Court for the Eastern District of Louisiana.

Before GEE, TATE, and HIGGINBOTHAM, Circuit Judges.

PATRICK E. HIGGINBOTHAM, Circuit Judge:

Hartland Dean West, injured in an explosion on an offshore oil platform, sued Kerr-McGee Corporation, the platform operator and majority owner, along with three companies that held minority interests in the platform. The district court filed a thoughtful opinion granting Kerr-McGee's motion for summary judgment on the ground that West was Kerr-McGee's borrowed employee, and that Kerr-McGee thus enjoyed tort immunity under the Longshoremen's and Harbor Workers' Compensation Act, 33 U.S.C. Sec. 905(a). 558 F.Supp. 669 (E.D.La.1983). Later, finding that Kerr-McGee and its co-platform owners were joint venturers, and that West was the borrowed employee of the joint venture, the court granted the remaining defendants' summary judgment motions. 586 F.Supp. 493 (E.D.La.1984). We conclude that the 1984 amendments to the LHWCA did not abolish the borrowed-employee doctrine, but also hold that the evidence before the district court raised issues of material fact with respect to West's status as a borrowed employee. We must therefore reverse and remand for trial.

I

In August of 1980, West applied to work for Kerr-McGee. Kerr-McGee wanted to hire West, but because it had filled its employment quota, it arranged an interview for West with one of its labor contractors, Berry Brothers. Berry hired West and sent him to work on offshore platform 229-A, operated solely by Kerr-McGee and owned by Kerr-McGee, Cabot Corporation, Felmont Oil Corporation, and Case-Pomeroy Oil Corporation.

For five months, West worked on the night shift as a "pumper" on the platform, monitoring various gauges and recording data. West's tools, other than a hard hat and shoes which he supplied himself, were provided by Kerr-McGee. West was periodically given instructions from Kerr-McGee supervisors, but he was usually not under direct supervision while on duty. Kerr-McGee employees had the power to grant West leave time, to discipline him, and to dismiss him from the platform. Kerr-McGee was not authorized to fire West from his position with Berry Brothers, though. West, as an employee on the Berry Brothers payroll, had a lower priority than Kerr-McGee employees in selecting sleeping quarters and obtaining transportation to and from the mainland.

The Master Service Contract between Berry Brothers and Kerr-McGee contained the following language:

Contractor [Berry Brothers] is an independent contractor, free of control and supervision by Kerr-McGee as to the means or manner of performing all work or services hereunder.... Neither Contractor nor any person used or employed by Contractor shall be deemed for any purpose to be the employee, agent, servant, or representative of Kerr-McGee in performance of any work or services ... under this Agreement.

In January of 1981, West was injured in a gas explosion allegedly caused when a Kerr-McGee employee lit a cigarette. West sued Kerr-McGee, alleging negligence, strict product liability under La.Civ.Code art. 2317, and "ruin," or strict premises liability, under La.Civ.Code art. 2322. Later, West amended his complaint to name Cabot, Felmont, and Case-Pomeroy, the platform co-owners, as defendants. The district court, as previously mentioned, granted all defendants' motions for summary judgment.

II

We first address an issue not briefed by the parties: whether the 1984 amendments to the LHWCA, Pub.L. No. 98-426, 98 Stat. 1639, 1641 (1984), eliminated the concept of a borrowed employee in LHWCA jurisprudence. Our review of the amendment's legislative history and the context of its passage persuades us that Congress did not intend such a result.

Borrowed-servant disputes, as in this case, arise when a defendant who is not a plaintiff's formal employer argues that the plaintiff is in fact acting as the defendant's employee. In a second line of cases, where employees of subcontractors have sued general contractors in tort, the general contractors have also asserted immunity under 33 U.S.C. Sec. 905(a) (1976) ¹--not because the plaintiff was a "borrowed" or de facto employee of the general contractor, but because of the general contractor's obligation under the pre-1984 LHWCA to guarantee the payment of compensation to subcontractors' employees. See 33 U.S.C. 904(a) (1976). ² General contractors argued that the quid pro quo for their assumption of this duty should be the extension of immunity to them as well as to the direct employer, the subcontractor.

Most courts, including this one, rejected this position, holding that general contractors' statutory duty under the LHWCA was "secondary [and] guaranty-like," and that immunity attached only in the event that a subcontractor failed to secure compensation and the general contractor was forced to pay it. Probst v. Southern Stevedoring Co., 379 F.2d 763, 767 (5th Cir.1967); Johnson v. Bechtel Associates Professional Corp., 717 F.2d 574, 582 (D.C.Cir.1983). In June of 1984, however, the Supreme Court reversed the cited D.C. Circuit decision, and adopted the general contractors' argument that they enjoyed LHWCA immunity from subcontractors' employees' tort suits "unless the [general] contractor has neglected to secure workers' compensation coverage after the subcontractor failed to do so." Washington Metropolitan Area Transit Authority v. Johnson, --- U.S. ----, 104 S.Ct. 2827, 2835, 81 L.Ed.2d 768 (1984). Under WMATA, immunity for general contractors became the rule rather than the exception.

Three months later, Congress approved a bill amending the LHWCA. Section 904(a) was rewritten to read, in pertinent part:

In the case of an employer who is a subcontractor, only if such subcontractor fails to secure the payment of compensation shall the contractor be liable for and be required to secure the payment of compensation. A subcontractor shall not be deemed to have failed to secure the payment of compensation if the contractor has provided insurance for such compensation for the benefit of the subcontractor.

The following sentence was added to the end of Sec. 905(a):

For purposes of this subsection, a contractor shall be deemed the employer of a subcontractor's employees only if the subcontractor fails to secure the payment of compensation as required by section 904 of this title.

As we have previously noted, these amendments overturn WMATA, and are applicable to pending cases. Louviere v. Marathon Oil Co., 755 F.2d 428, 429-30 (5th Cir.1985); Martin v. Ingalls Shipbuilding, 746 F.2d 231 (5th Cir.1984).

The bare language of the amendment to Sec. 905(a) could also be interpreted as foreclosing any designation of any contractor as the employer of its subcontractors' employees--even if a borrowed-employee relationship existed--unless the subcontractor failed to secure compensation payments. If Congress meant for Sec. 905(a) to be so read, the cases delineating indices of a borrowed employee would be obsolete. In actions such as this one, where the subcontractor paid LHWCA benefits, the general contractor would have no immunity as a matter of law. Another possible reading, though, is that the "shall be deemed" language of the 905(a) amendment refers only to "deeming" a contractor the employer of a subcontractor's employee when the contractor is not the employee's true employer as well. Under this view, if the contractor is the employee's "employer" under the borrowed servant doctrine, the contractor is liable for Sec. 904(a) compensation, and has Sec. 905(a) immunity, whether or not its behavior as a general contractor and insurance guarantor would cause it to be "deemed" an employer under the amended scheme.

When, as here, a statute contains "latent ambiguities" despite its superficial clarity, we turn to the statute's legislative history for guidance. James v. United States, 760 F.2d 590, 593-94 (5th Cir.1985) (en banc). The legislative history of the 1984 amendments unambiguously demonstrates that Congress's sole purpose in amending Sec. 904(a) and Sec. 905(a) was to overrule WMATA, and not to amend the borrowed-servant doctrine or otherwise modify LHWCA law. The report of the Conference Committee that added the Sec. 904(a) and Sec. 905(a) amendments states that WMATA "changed key components of what had widely been regarded as the proper rules governing contractor and subcontractor liability under the [LHWCA]," and recites that the amendments "disapprov[e]" WMATA. After describing the amendments, the report concludes:

WMATA, the conferees believe, does not comport with the legislative intent of the Act nor its interpretation from 1927 through 1983. The case should not have any precedential effect.

H.R.Conf.Rep. No. 98-1027, 98th Cong., 2d Sess. 24, reprinted in 1984 U.S.Code Cong. & Admin.News 2734, 2771, 2774.

The narrow Congressional focus on reversing WMATA is underscored by the Conference Committee's beginning and ending sentences. Congress characterized WMATA as an unwanted deviation from 56 years of precedent. That precedent includes the borrowed-employee doctrine, Ruiz v. Shell Oil Co., 413 F.2d 310 (5th Cir.1969), as well as the general-contractor rule rejected by WMATA, Probst v. Southern Stevedoring Co., 379 F.2d 763 (5th Cir.1967). Indeed, this court has explicitly recognized that Probst, whose rule is codified in the 1984 amendments, does not foreclose the possibility that a...