Source: https://supreme.justia.com/cases/federal/us/356/525/
Timestamp: 2019-04-22 18:15:50+00:00

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Justia › US Law › US Case Law › US Supreme Court › Volume 356 › Byrd v. Blue Ridge Rural Elec. Coop., Inc.
In diversity cases where the Erie doctrine applies, federal courts must balance their respect for the substance of state laws with the need to preserve the essential characteristics and functions of the federal courts. The Seventh Amendment jury function is one of those essential functions.
Byrd, a resident of North Carolina, was employed by a subcontractor of Blue Ridge Electric, a South Carolina company. When he was hurt during his work on power lines, Byrd sued Blue Ridge for negligence in a federal court, based on diversity jurisdiction. Blue Ridge defended against his claim based on a South Carolina law that would restrict workers in Byrd's position to workers' compensation benefits. This was because South Carolina provided that employees of sub-contractors should be considered employees of contractors for which the sub-contractor provided work. Collateral negligence actions could not be sustained in these situations under South Carolina law.
Although the trial court did not allow this issue to be considered, the U.S. Supreme Court ruled that it should have been considered and remanded the case for a new trial. South Carolina law further provided that the immunity defense needed to be determined by a judge rather than a jury. Byrd contended that his Seventh Amendment right to a jury trial should trump that provision of the state law.
The South Carolina law at issue is essentially a procedural rule because it determines how immunity should be enforced, rather than affecting the substantive rights and obligations created by the state. If there are no significant countervailing considerations, the federal court should follow this type of rule. In this case, however, the constitutional requirements of the Seventh Amendment protect the right to a jury trial as an essential factor in the federal court process.
The difference between trying a case before a judge or a jury makes less of an impact on the outcome of the decision than the statute of limitations. If a federal policy suggests that the state rule should not be followed, the federal court should not follow the state rule based only the difference between the judge and the jury. This decision thus replaces the outcome-determinative test used to distinguish substantive from procedural law in Erie cases with a subtler balance of interests test.
Basing jurisdiction on diversity of citizenship, petitioner sued in the Federal District Court to recover for injuries allegedly caused by respondent's negligence. Respondent asserted as an affirmative defense that petitioner was respondent's employee for purposes of the State Workmen's Compensation Act, and that the Act provided petitioner's exclusive remedy. After hearing respondent's evidence on this issue, the trial judge struck the defense without hearing petitioner's evidence. The Court of Appeals, holding that, under state law, respondent had established its defense, reversed and directed that judgment be entered for respondent.
Held: judgment reversed and cause remanded. Pp. 356 U. S. 526-540.
1. The Court of Appeals erred in directing judgment for respondent without allowing petitioner an opportunity to present evidence on the issue of respondent's affirmative defense. Pp. 356 U. S. 528-533.
2. Notwithstanding state decisions holding that this statutory defense must be decided by the judge alone, petitioner is entitled in a federal court to have the factual issues raised by the defense presented to the jury. Pp. 356 U. S. 533-540.
(a) The state rule requiring judge determination of this defense is not so bound up with state-created rights and obligations as to require its application in federal courts under Erie R. Co. v. Tompkins, 304 U. S. 64. Pp. 356 U. S. 535-536.
(b) Although jury determination of the issue may substantially affect the outcome of the case, the policy of Guaranty Trust Co. v. York, 326 U. S. 99, does not invariably prevail over an affirmative federal policy favoring jury determination of disputed factual questions. Pp. 356 U. S. 536-539.
(c) There is here no such strong possibility that the outcome of the suit would be affected by jury determination of the defense as to require federal practice to yield in the interest of uniformity. Pp. 356 U. S. 539-540.
238 F.2d 346 reversed, and cause remanded.
This case was brought in the District Court for the Western District of South Carolina. Jurisdiction was based on diversity of citizenship. 28 U.S.C. § 1332. The petitioner, a resident of North Carolina, sued respondent, a South Carolina corporation, for damages for injuries allegedly caused by the respondent's negligence. He had judgment on a jury verdict. The Court of Appeals for the Fourth Circuit reversed and directed the entry of judgment for the respondent. 238 F.2d 346. We granted certiorari, 352 U.S. 999, and subsequently ordered reargument, 355 U.S. 950.
The respondent is in the business of selling electric power to subscribers in rural sections of South Carolina. The petitioner was employed as a lineman in the construction crew of a construction contractor. The contractor, R. H. Bouligny, Inc., held a contract with the respondent in the amount of $334,300 for the building of some 24 miles of new power lines, the reconversion to higher capacities of about 88 miles of existing lines, and the construction of 2 new substations and a breaker station.
The petitioner was injured while connecting power lines to one of the new substations.
concerning this defense are before us: (1) whether the Court of Appeals erred in directing judgment for respondent without a remand to give petitioner an opportunity to introduce further evidence; and (2) whether petitioner, state practice notwithstanding, is entitled to a jury determination of the factual issues raised by this defense.
"And the opinion in the Marchbanks case [Marchbanks v. Duke Power Co., 190 S.C. 336, 2 S.E.2d 825, said to be the 'leading case' under the statute] reminds us that, while the language of the statute is plain and unambiguous, there are so many different factual situations which may arise that no easily applied formula can be laid down for the determination of all cases. In other words,"
"it is often a matter of extreme difficulty to decide whether the work in a given case falls within the designation of the statute. It is in each case largely a question of degree and of fact."
a jury issue, became irrelevant because of the interpretation given § 72-111 by the trial judge. In striking respondent's affirmative defense at the close of all the evidence, [Footnote 3] he ruled that the respondent was the statutory employer of the petitioner only if the construction work done by respondent's crews was done for somebody else, and was not the statutory employer if, as the proofs showed, the crews built facilities only for the respondent's own use.
"My idea of engaging in the business is to do something for somebody else. What they [the respondent] are doing -- and everything they do about repairing lines and building substations, they do it for themselves."
On this view of the meaning of the statute, the evidence, even accepting the manager's testimony on direct examination as true, lacked proof of an essential element of the affirmative defense, and there was thus nothing for the petitioner to meet with proof of his own.
Appeals, cf. Ragan v. Merchants Transfer & Warehouse Co., 337 U. S. 530, 337 U. S. 534, and do so readily here, since neither party now disputes the interpretation.
However, instead of ordering a new trial at which the petitioner might offer his own proof pertinent to a determination according to the correct interpretation, the Court of Appeals made its own determination on the record and directed a judgment for the respondent. The court noted that the Rural Electric Cooperative Act of South Carolina [Footnote 4] authorized the respondent to construct, acquire, maintain, and operate electric generating plants, buildings, and equipment, and any and all kinds of property which might be necessary or convenient to accomplish the purposes for which the corporation was organized, and pointed out that the work contracted to the petitioner's employer was of the class which respondent was empowered by its charter to perform.
"The testimony with respect to the construction of the substations of Blue Ridge, stated most favorably to the [petitioner], discloses that, originally, Blue Ridge built three substations with its own facilities, but that all of the substations where were built after the war, including the six it was operating at the time of the accident, were constructed for it by independent contractors, and that, at the time of the accident, it had no one in its direct employ capable of handling the technical detail of substation construction."
and supervision of the work, concluding from these findings that "the main actor in the whole enterprise was the Cooperative itself." Ibid.
Finally, the court held that its findings entitled the respondent to the direction of a judgment in its favor.
". . . [T]here can be no doubt that Blue Ridge was not only in the business of supplying electricity to rural communities, but also in the business of constructing the lines and substations necessary for the distribution of the product. . . ."
". . . [T]he direction to enter judgment for the defendant, instead of a direction to grant a new trial, denies plaintiff his right to introduce evidence in contradiction to that of the defendant on the issue of defendant's affirmative defense, a right which he would have exercised if the District Judge had ruled adversely to him on his motion to dismiss, and thus deprives him of his constitutional right to a jury trial on a factual issue."
statute by the Court of Appeals, it presented a fact question, which, in the circumstances of this case to be discussed infra, is properly to be decided by a jury. This is clear not only because of the issue of the credibility of the manager's vital testimony, but also because, even should the jury resolve that issue as did the Court of Appeals, the jury on the entire record -- consistent with the view of the South Carolina cases that this question is in each case largely one of degree and of fact -- might reasonably reach an opposite conclusion from the Court of Appeals as to the ultimate fact whether the respondent was a statutory employer.
"the defendant, without waiving his right to offer evidence in the event the motion is not granted, may move for a dismissal on the ground that upon the facts and the law the plaintiff has shown no right to relief."
"We haven't discussed it, but we are making that motion. I frankly don't know at this point of any reply that is necessary. I don't know of any evidence in this case --"
"I am inclined to think so far it is a question of law, but I will hear from Mr. Walker [respondent's counsel] on that. I don't know of any issue of fact to submit to the jury. It seems to me, under the testimony here, there has been -- I don't know of any conflict in the testimony, so far as that's concerned, so far."
The judge turned to respondent's counsel and there followed a long colloquy with him, [Footnote 5] at the conclusion of which the judge dismissed the defense upon the ground that, under his interpretation of the statute, the defense was not sustained without evidence that the respondent's business involved the doing of work for others of the kind done by the petitioner's employer for the respondent. Upon this record, it plainly cannot be said that the petitioner submitted the issue upon the evidence in the case and conceded that he had no evidence of his own to offer. The petitioner was fully justified, in that circumstance, in not coming forward with proof of his own at that stage of the proceedings, for he had nothing to meet under the District Court's view of the statute. He thus cannot be penalized by the denial of his day in court to try the issue under the correct interpretation of the statute. Cf. Fountain v. Filson, 336 U. S. 681; Weade v. Dichmann, Wright & Pugh, Inc., 337 U. S. 801; Globe Liquor Co. v. Sam Roman, 332 U. S. 571; Cone v. West Virginia Pulp & Paper Co., 330 U. S. 212.
"Thus, the trial court should have in this case resolved the conflicts in the evidence and determined the fact of whether [the independent contractor] was performing a part of the 'trade, business or occupation' of the department store appellant and, therefore, whether [the employee's] remedy is exclusively under the Workmen's Compensation Law."
230 S.C. at 543, 96 S.E.2d at 572.
First. It was decided in Erie R. Co. v. Tompkins that the federal courts in diversity cases must respect the definition of state-created rights and obligations by the state courts. We must, therefore, first examine the rule in Adams v. Davison-Paxon Co. to determine whether it is bound up with these rights and obligations in such a way that its application in the federal court is required. Cities Service Oil Co. v. Dunlap, 308 U. S. 208.
Commission. A State may, of course, distribute the functions of its judicial machinery as it sees fit. The decisions relied upon, however, furnish no reason for selecting the judge, rather than the jury, to decide this single affirmative defense in the negligence action. They simply reflect a policy, cf. Crowell v. Benson, 285 U. S. 22, that administrative determination of "jurisdictional facts" should not be final but subject to judicial review. The conclusion is inescapable that the Adams holding is grounded in the practical consideration that the question had theretofore come before the South Carolina courts from the Industrial Commission, and the courts had become accustomed to deciding the factual issue of immunity without the aid of juries. We find nothing to suggest that this rule was announced as an integral part of the special relationship created by the statute. Thus, the requirement appears to be merely a form and mode of enforcing the immunity, Guaranty Trust Co. v. York, 326 U. S. 99, 326 U. S. 108, and not a rule intended to be bound up with the definition of the rights and obligations of the parties. The situation is therefore not analogous to that in Dice v. Akron, C. & Y. R. Co., 342 U. S. 359, where this Court held that the right to trial by jury is so substantial a part of the cause of action created by the Federal Employers' Liability Act that the Ohio courts could not apply, in an action under that statute, the Ohio rule that the question of fraudulent release was for determination by a judge, rather than by a jury.
court failed to apply a particular local rule. [Footnote 9] E.g., Guaranty Trust Co. v. York, supra; Bernhardt v. Polygraphic Co., 350 U. S. 198. Concededly, the nature of the tribunal which tries issues may be important in the enforcement of the parcel of rights making up a cause of action or defense, and bear significantly upon achievement of uniform enforcement of the right. It may well be that, in the instant personal injury case, the outcome would be substantially affected by whether the issue of immunity is decided by a judge or a jury. Therefore, were "outcome" the only consideration, a strong case might appear for saying that the federal court should follow the state practice.
rights and obligations, see, e.g., Guaranty Trust Co. v. York, supra, cannot in every case exact compliance with a state rule [Footnote 12] -- not bound up with rights and obligations -- which disrupts the federal system of allocating functions between judge and jury. Herron v. Southern Pacific Co., 283 U. S. 91. Thus, the inquiry here is whether the federal policy favoring jury decisions of disputed fact questions should yield to the state rule in the interest of furthering the objective that the litigation should not come out one way in the federal court and another way in the state court.
"is not in any sense a local matter, and state statutes which would interfere with the appropriate performance of that function are not binding upon the federal court under either the Conformity Act or the 'Rules of Decision' Act."
Third. We have discussed the problem upon the assumption that the outcome of the litigation may be substantially affected by whether the issue of immunity is decided by a judge or a jury. But clearly there is not present here the certainty that a different result would follow, cf. Guaranty Trust Co. v. York, supra, or even the strong possibility that this would be the case, cf. Bernhardt v.
The Court of Appeals did not consider other grounds of appeal raised by the respondent, because the ground taken disposed of the case. We accordingly remand the case to the Court of Appeals for the decision of the other questions, with instructions that, if not made unnecessary by the decision of such questions, the Court of Appeals shall remand the case to the District Court for a new trial of such issues as the Court of Appeals may direct.
"§ 72-111. Liability of owner to workmen of subcontractor."
"When any person, in this section and § 72-113 and 72-114 referred to as 'owner', undertakes to perform or execute any work which is a part of his trade, business or occupation and contracts with any other person (in this section and § 72-113 to 72-116 referred to 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 workman employed in the work any compensation under this Title which he would have been liable to pay if the workman had been immediately employed by him."
"§ 72-121. Employee's rights under Title exclude all others against employer."
"The rights and remedies granted by this Title to an employee when he and his employer have accepted the provisions of this Title, respectively, to pay and accept compensation on account of personal injury or death by accident, shall exclude all other rights and remedies of such employee, is personal representative, parents, dependents or next of kin as against his employer at common law or otherwise, on account of such injury, loss of service or death."
"§ 72-123. Only one remedy available."
"Either the acceptance of an award under this Title or the procurement and collection of a judgment in an action at law shall be a bar to proceeding further with the alternate remedy."
In earlier proceedings, the case was dismissed on the ground that the respondent, a nonprofit corporation, was immune from tort liability under South Carolina law. 118 F.Supp. 868. The Court of Appeals reversed and remanded the case for trial, 215 F.2d 542.
The trial judge, in spite of his action striking the defense, permitted the respondent to include the affirmative defense as a ground of its motions for a directed verdict and judgment non obstante veredicto.
S.C.Code, § 1952, § 12-1025.
The only remarks thereafter made by the petitioner's counsel reiterated his statement that he pressed his motion to dismiss the affirmative defense.
The decision came down several months after the Court of Appeals decided this case.
See Cities Service Oil Co. v. Dunlap, 308 U. S. 208; West v. American Tel. & Tel. Co., 311 U. S. 223; Klaxon Co. v. Stentor Electric Mfg. Co., 313 U. S. 487; Guaranty Trust Co. v. York, 326 U. S. 99; Angel v. Bullington, 330 U. S. 183; Ragan v. Merchants Transfer Co., 337 U. S. 530; Woods v. Interstate Realty Co., 337 U. S. 535; Cohen v. Beneficial Loan Corp., 337 U. S. 541; Bernhardt v. Polygraphic Co., 350 U. S. 198; Sampson v. Channell, 110 F.2d 754.
Knight v. Shepherd, 191 S.C. 452, 4 S.E.2d 906; Tedars v. Savannah River Veneer Co., 202 S.C. 363, 25 S.E.2d 235; McDowell v. Stilley Plywood Co., 210 S.C. 173, 41 S.E.2d 872; Miles v. West Virginia Pulp & Paper Co., 212 S.C. 424, 48 S.E.2d 26; Watson v. Wannamaker & Wells, Inc., 212 S.C. 506, 48 S.E.2d 447; Gordon v. Hollywood-Beaufort Package Corp., 213 S.C. 438, 49 S.E.2d 718; Holland v. Georgia Hardwood Lumber Co., 214 S.C. 195, 51 S.E.2d 744; Younginer v. J. A. Jones Construction Co., 215 S.C. 135, 54 S.E.2d 545; Horton v. Baruch, 217 S.C. 48, 59 S.E.2d 545.
Cf. Morgan, Choice of Law Governing Proof, 58 Harv.L.Rev. 153; 3 Beale, Conflict of Laws, § 594.1; Restatement of the Law, Conflict of Laws, pp. 699-701.
Our conclusion makes unnecessary the consideration of -- and we intimate no view upon -- the constitutional question whether the right of jury trial protected in federal courts by the Seventh Amendment embraces the factual issue of statutory immunity when asserted, as here, as an affirmative defense in a common law negligence action.
The Courts of Appeals have expressed varying views about the effect of Erie R. Co. v. Tompkins on judge-jury problems in diversity cases. Federal practice was followed in Gorham v. Mutual Benefit Health & Accident Assn., 114 F.2d 97 (1940); Diederich v. American News Co., 128 F.2d 144 (1942); McSweeney v. Prudential Ins. Co., 128 F.2d 660 (1942); Ettelson v. Metropolitan Life Ins. Co., 137 F.2d 62 (1943); Order of United Commercial Travelers of America v. Duncan, 221 F.2d 703 (1955). State practice was followed in Cooper v. Brown, 126 F.2d 874 (1942); Gutierrez v. Public Service Interstate Transportation Co., 168 F.2d 678 (1948); Prudential Ins. Co. of America v. Glasgow, 208 F.2d 908 (1953); Pierce Consulting Engineering Co. v. City of Burlington, 221 F.2d 607 (1955); Rowe v. Pennsylvania Greyhound Lines, 231 F.2d 922 (1956).
This Court held in Sibbach v. Wilson & Co., 312 U. S. 1, that Federal Rules of Civil Procedure 35 should prevail over a contrary state rule.
"The defense of contributory negligence or of assumption of risk shall, in all cases whatsoever, be a question of fact, and shall at all times, be left to the jury."
Diederich v. American News Co., 128 F.2d 144, decided after Erie R. Co. v. Tompkins, held that an almost identical provision of the Oklahoma Constitution was not binding on a federal judge in a diversity case.
Stoner v. New York Life Ins. Co., 311 U. S. 464, is not contrary. It was there held that the federal court should follow the state rule defining the evidence sufficient to raise a jury question whether the state-created right was established. But the state rule did not have the effect of nullifying the function of the federal judge to control a jury submission, as did the Arizona constitutional provision which was denied effect in Herron. The South Carolina rule here involved affects the jury function as the Arizona provision affected the function of the judge: the rule entirely displaces the jury without regard to the sufficiency of the evidence to support a jury finding of immunity.
MR. JUSTICE WHITTAKER concurring in part and dissenting in part.
"shall exclude all other rights and remedies of such employee . . . against his employer at common law or otherwise, on account of such injury"
(§ 72-121), and vests exclusive jurisdiction in the South Carolina Industrial Commission over all claims falling within the purview of the Act (§ 72-66), subject to review by appeal to the State's courts upon "errors of law." § 72-356.
"undertakes to perform or execute any work which is a part of his trade, business or occupation and contracts with any other person [called '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 workman employed in the work any compensation under this Title which he would have been liable to pay if the workman had been immediately employed by him."
(Emphasis supplied.) Employees of such subcontractors are commonly called "statutory employees" of the "owner."
which arose out of and in the course of that employment. Subsequent to his injury, he sought and received the full benefits provided by the South Carolina Workmen's Compensation Law.
Diversity existing, petitioner then brought this common law suit in a Federal District Court in South Carolina against the "owner," the respondent here, for damages for his bodily injury, which, he alleged, had resulted from the "owner's" negligence. The respondent "owner" answered, setting up, among other defenses, the affirmative claim that petitioner's injury arose by accident out of and in the course of his employment, as a lineman, by the subcontractor while executing the contracted work "which [was] a part of [the owner's] trade, business or occupation." It urged, in consequence, that petitioner was its "statutory employee," and that, therefore, his exclusive remedy was under the South Carolina Workmen's Compensation Law, and that exclusive jurisdiction of the subject matter of his claim was vested in the State's Industrial Commission and, hence, the federal court lacked jurisdiction over the subject matter of this common law suit.
petitioner was injured, it did not have in its direct employ any person capable of constructing a substation; [Footnote 2/3] (3) that it regularly employed a crew of 16 men -- 8 linemen and 8 groundmen -- two-thirds of whose time was spent in constructing new transmission lines and extensions, and that such was "a part of [its] trade, business [and] occupation." This evidence stood undisputed when respondent rested its case.
the district judge heard arguments upon and overruled respondent's motion for a directed verdict, [Footnote 2/4] and submitted the case to the jury which returned a verdict for petitioner.
"was not only in the business of supplying electricity to rural communities, but [was] also in the business of constructing the lines and substations necessary for the distribution of the product,"
(238 F.2d 351), and that the contracted work was of like nature and, hence, was "a part of [respondent's] trade, business or occupation" within the meaning of § 72-111, and therefore petitioner was respondent's statutory employee, and hence the court was without jurisdiction over the subject matter of the claim. Upon this basis, it reversed the judgment of the District Court with directions to enter judgment for respondent. 238 F.2d 346.
issue of respondent's prima facie established jurisdictional defense, and, therefore, cannot stand.
But the Court's opinion proceeds to discuss and determine the question whether, upon remand to the District Court, if such becomes necessary, the jurisdictional issue is to be determined by the judge or by the jury -- a question which, to my mind, is premature, not now properly before us, and is one we need not and should not now reach for or decide. The Court, although premising its conclusion "upon the assumption that the outcome of the litigation may be substantially affected by whether the issue of immunity [Footnote 2/5] is decided by a judge or a jury," holds that the issue is to be determined by a jury -- not by the judge. I cannot agree to this conclusion, for the following reasons.
49 S.E.2d 718; Holland v. Georgia Hardwood Lbr. Co., 214 S.C. 195, 51 S.E.2d 744; Younginer v. J. A. Jones Const. Co., 215 S.C. 135, 54 S.E.2d 545; Horton v. Baruch, 217 S.C. 48, 59 S.E.2d 545."
"Thus, the trial court should have in this case resolved the conflicts in the evidence and determined the fact of whether Emporium [the concessionaire] was performing a part of the 'trade, business or occupation' of the department store appellant, and therefore whether respondent's remedy is exclusively under the Workmen's Compensation Law."
It thus seems to be settled under the South Carolina Workmen's Compensation Law, and the decisions of the highest court of that State construing it, that the question whether exclusive jurisdiction in cases like this is vested in its Industrial Commission or in its courts of general jurisdiction is one for decision by the court, not by a jury. The Federal District Court, in this diversity case, is bound to follow the substantive South Carolina law that would be applied if the trial were to be held in a South Carolina court, in which State the Federal District Court sits. Erie R. Co. v. Tompkins, 304 U. S. 64. A Federal District Court sitting in South Carolina may not legally reach a substantially different result than would have been reached upon a trial of the same case "in a State court a block away." Guaranty Trust Co. v. York, 326 U. S. 99.
would be substantially affected by whether the issue of immunity is decided by a judge or a jury."
"upon the assumption that the outcome of the litigation may be substantially affected by whether the issue of immunity is decided by a judge or a jury."
Upon that premise, the Court's conclusion, to my mind, is contrary to our cases.
"Here (as in Guaranty Trust Co. v. York, supra) we are dealing with a right to recover derived not from the United States, but from one of the States. When, because the plaintiff happens to be a nonresident, such a right is enforceable in a federal as well as in a State court, the forms and mode of enforcing the right may at times, naturally enough, vary because the two judicial systems are not identic. But since a federal court adjudicating a state-created right solely because of the diversity of citizenship of the parties is, for that purpose, in effect only another court of the State, it cannot afford recovery if the right to recover is made unavailable by the State, nor can it substantially affect the enforcement of the right as given by the State."
The words "substantive" and "procedural" are mere conceptual labels, and in no sense talismanic. To call a legal question by one or the other of those terms does not resolve the question otherwise than as a purely authoritarian performance. When a question, though denominated "procedural," is nevertheless so "substantive" as materially to affect the result of a trial, federal courts, in enforcing state-created rights, are not free to disregard it on the ground that it is "procedural," for such would be to allow, upon mere nomenclature, a different result in a state court from that allowable in a federal court though both are, in effect, courts of the State and "sitting side by side." Klaxon Co. v. Stentor Electric Mfg. Co., 313 U. S. 487, 313 U. S. 496.
by rules of procedure which it has acquired from the Federal Government and which therefore are not identical with those of the state courts. Yet, in spite of that difference in procedure, the federal court enforcing a state-created right in a diversity case is, as we said in Guaranty Trust Co. v. York, 326 U. S. 99, 326 U. S. 108, in substance 'only another court of the State.' The federal court therefore may not 'substantially affect the enforcement of the right as given by the State.' Id., 326 U. S. 109."
"Where local law qualifies or abridges [the right], the federal court must follow suit. Otherwise, there is a different measure of the cause of action in one court than in the other, and the principle of Erie R. Co. v. Tompkins is transgressed."
Ragan v. Merchants Transfer & Warehouse Co., 337 U. S. 530, 337 U. S. 533.
courts must follow the law of the State. . . ."
"that in the instant personal-injury case the outcome would be substantially affected by whether the issue of immunity is decided by a judge or a jury,"
it follows that, in this diversity case, the jurisdictional issue must be determined by the judge -- not by the jury. Insofar as the Court holds that the question of jurisdiction should be determined by the jury, I think the Court departs from its past decisions. I therefore respectfully dissent from part II of the opinion of the Court.
The terms "employee" and "employer" are conventionally defined in §§ 72-11 and 72-12.
S.C.Code 1952, c. 4, §§ 72-151 to 72-165.
As I see it, the evidence referred to in "(1)" is only collaterally material, and that referred to in "(2)" is wholly immaterial, to the issue of whether petitioner was respondent's statutory employee at the time of the injury, because that question, under the South Carolina Workmen's Compensation Law, does not depend upon what particular trade, business or occupation the "owner" lawfully might pursue, or lawfully might have pursued in the past. Rather, it depends upon what work he is engaged in at the time of the injury -- i.e., whether the contracted work "is a part of (the owner's) trade, business or occupation." The statute thus speaks in the present tense, and hence the relevant inquiry here is limited to whether the work being done by petitioner for the "owner" at the time of the injury was a part of the trade, business, or occupation of the "owner" at that time.
The Court's opinion and MR. JUSTICE FRANKFURTER's dissent comment upon the fact that the district judge stated to respondent's counsel that he would "allow" him to include in his motion for a directed verdict the affirmative jurisdictional defense which had just been stricken. To my mind, this is wholly without significance, for the district judge was without power to control what points and arguments respondent's counsel might urge in support of his motion for a directed verdict.
Here, as at other places in its opinion, the Court treats with the South Carolina Workmen's Compensation Law as an "immunity" of the employer from liability. To me, the question is not one of immunity. Rather, it is which of two tribunals -- the Industrial Commission of the court of general jurisdiction -- has jurisdiction, to the exclusion of the other, over the subject matter of the action, and hence the power to award relief upon it.
new substations and an outside line through which, by a mistake on the part of another of Bouligny's employees, current was running. Petitioner filed a claim against Bouligny pursuant to the South Carolina Workmen's Compensation Law, S.C.Code 1952, § 72-1 et seq., under which both Bouligny and respondent operated, and recovered the full benefits under the Law. He then brought this suit.
court granted petitioner's motion to strike the defense on the ground that an activity could not be a part of a firm's "trade, business or occupation" unless it was being performed "for somebody else." The court also denied respondent's motion for a directed verdict and submitted the case to the jury, which returned a verdict for petitioner in the amount of $126,786.80.
"there can be no doubt that Blue Ridge was not only in the business of supplying electricity to rural communities, but also in the business of constructing the lines and substations necessary for the distribution of the product,"
238 F.2d 346, 351. The Court of Appeals, having concluded that respondent's defense should have been sustained, directed the District Court to enter judgment for the respondent. The District Court had decided the question of whether or not respondent was a statutory employer without submitting it to the jury. It is not altogether clear whether it did so because it thought it essentially a nonjury issue, as it is in the South Carolina courts under Adams v. Davison-Paxon Co., 230 S.C. 532, 96 S.E.2d 566, or because there was no controverted question of fact to submit to the jury.
"[T]he basic purpose of the Compensation Act is the inclusion of employers and employees, and not their exclusion; and we add that doubts of jurisdiction must be resolved in favor of inclusion, rather than exclusion."
"The Court: In the event I overrule your motion, do you contemplate putting up any testimony in reply? You have that right, of course. On this point, I mean."
"Mr. Hammer [petitioner's counsel]: We haven't discussed it, but we are making that motion. I frankly don't know at this point of any reply that is necessary. I don't know of any evidence in this case --"
may wish to move for a directed verdict on that ground, since it is a question of law. But that is his prerogative after all the evidence is in. Of course, he can't move for a directed verdict as long as you have a right to reply."
"Mr. Hammer: We are moving at this time in the nature of a voluntary dismissal."
"The Court: You move to dismiss that defense?"
"Mr. Hammer: Yes, sir at this stage of the game."
it appear that petitioner had any such "game" in mind. He gave not the slightest indication of an intention to introduce any additional evidence, no matter how the court might decide the issue. It seems equally clear that, had the trial court decided the issue -- on any construction -- in favor of the respondent, the petitioner was prepared to rely solely upon his right of appeal.
We are not to read the record as though we are making an independent examination of the trial proceedings. We are sitting in judgment on the Court of Appeals' review of the record. That court, including Chief Judge Parker and Judge Soper, two of the most experienced and esteemed circuit judges in the federal judiciary, interpreted the record as it did in light of its knowledge of local practice and of the ways of local lawyers. In ordering judgment entered for respondent, it necessarily concluded, as a result of its critical examination of the record, that petitioner's counsel chose to have the issue decided on the basis of the record as it then stood. The determination of the Court of Appeals can properly be reversed only if it is found that it was baseless. Even granting that the record is susceptible of two interpretations, it is to disregard the relationship of this Court to the Courts of Appeals, especially as to their function in appeals in diversity cases, to substitute our view for theirs.
evidence -- no,t at any rate, if such inconsistency as existed was resolved in favor of petitioner. According to the governing view of South Carolina law, as given us by the Court of Appeals, that evidence would clearly have required the District Court to grant a directed verdict to the respondent. Accordingly, I would affirm the judgment.
"When any person, in this section and §§ 72-113 and 72-114 referred to as 'owner', undertakes to perform or execute any work which is a part of his trade, business or occupation and contracts with any other person (in this section and §§ 72-113 to 72-116 referred to 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 workman employed in the work any compensation under this Title which he would have been liable to pay if the workman had been immediately employed by him."
"The rights and remedies granted by this Title to an employee when he and his employer have accepted the provisions of this Title, respectively, to pay and accept compensation on account of personal injury or death by accident, shall exclude all other rights and remedies of such employee, his personal representative, parents, dependents or next of kin as against his employer at common law or otherwise, on account of such injury, loss of service or death."
It may be noted that not even petitioner's counsel supports the trial court's theory regarding the South Carolina Workmen's Compensation Law.
For example, whether or not the defendant had ever itself performed the work contracted out has not been thought to be a conclusive criterion. In fact, in Boseman v. Pacific Mills, 193 S.C. 479, 8 S.E.2d 878, the court rejected the defendant's contention that, because it had never performed the work in question, it could not be held an employer. See also Hopkins v. Darlington Veneer Co., 208 S.C. 307, 38 S.E.2d 4; Kennerly v. Ocmulgee Lumber Co., 206 S.C. 481, 34 S.E.2d 792. Nor is the question whether or not the accomplishment of the work involved requires specialized skill determinative. See Marchbanks v. Duke Power Co., 190 S.C. 336, 2 S.E.2d 825.
I join in MR. JUSTICE FRANKFURTER's dissenting opinion, but desire to add two further reasons why I believe the judgment of the Court of Appeals should be affirmed. As I read that court's opinion, it held that, under South Carolina law, the construction of facilities needed to transmit electric power was necessarily a part of the business of furnishing power, whether such construction was performed by the respondent itself or let out to others, and that, in either case, respondent would be liable to petitioner for compensation as his statutory employer. Since there is no dispute that respondent, at the time of the accident, was engaged in the business of furnishing power, and that petitioner was injured while engaged in construction in furtherance of that business, I do not perceive how any further evidence which might be adduced by petitioner could change the result reached by the Court of Appeals. In any event, in the circumstances disclosed by the record before us, we should, at the very least, require petitioner to make some showing here of the character of the further evidence he expects to introduce before we disturb the judgment below.
Blue Ridge Rural Electric Cooperative, Inc.

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