Earl Warren: Number 57, James Earl Byrd, Petitioner, v. Blue Ridge Electric Cooperative. Mr. Hammer, you may proceed.
Henry Hammer: If it please Your Honor, Mr. Chief Justice, and members of the Court. I appear on behalf of the petitioner, James Earl Byrd, in this case which is here for pre-argument on a writ of certiorari granted by this Court to review the decision of the United States Court of Appeals for the Fourth Circuit, which reversed a District Court judgment entered in favor of petitioner, Byrd, upon a jury verdict and remanded it with direction to enter judgment for the respondent, Blue Ridge Company, on the ground of its affirmative defense which had been dismissed by the trial judge for a want of substantial evidence. In reversing, the court below pleaded as having probative value the testimony of the managing agent of respondent company insofar of its affirmative defense and held that it was legally sufficient to establish such defense notwithstanding the fact that such testimony had been changed, corrected, recanted, and repudiated by the managing agent on the witness stand prior to the completion of his examination. And in remanding, the court below went even further and held that since this testimony had not been controverted by revised testimony on the part of the petitioner, it was not only legally sufficient but this as a matter of law conclusively established respondent's affirmative defense and warranted a directed verdict in his favor. Notwithstanding the fact that the affirmative defense has been dismissed by the trial judge prior to petitioner's case in reply so that there was no opportunity or occasion to dispute what controvert the facts on this affirmative defense. The questions, if the Court please, does presented are first, whether a federal appellate court may reverse the ruling of a district judge dismissing for want of substantial evidence in affirmative defense where the evidence produce in support thereof is legally insufficient to sustain the owner's of proof imposed upon a defendant according to the standards applied both by this Court and by the applicable state court in testing, the legal sufficiency of one's evidence. And secondly, assuming for the sake of argument that the decision of the trial judge was erroneous, thus a federal appellate court in reversing have the power also to direct entry of judgment for a defendant on the issue of its affirmative defense where the evidence produced in support thereof is subject to conflicting inferences and conclusions or under circumstances where because of the ruling of the district judge declared erroneous, a plaintiff does not have the opportunity nor the occasion to dispute or controvert the facts on the issue of the affirmative defense. The pertinent facts in this case briefly are these. The petitioner, Byrd, a non-resident of South Carolina brought this action in the District Court of the United States for the Western District of South Carolina against the respondent, Blue Ridge Rural Electric Cooperative, Inc., a South Carolina corporation engaged in the business of supplying electricity to recover damages for its negligence and causing, and permitting electric power to run into an uncompleted concrete and steel structure, a substation in the process of construction upon which the petitioner, Byrd, was working resulting in the tragic loss of both forearms of the petitioner, who a that time in February of 1953 was a young man, 24 years of age, married, the father of two children, and had an earning capacity of approximately $5,000.00 per year. At the time of the petitioner's injuries, he was working as an employee of Bouligny Construction Company, an independent contracting construction firm of Charlotte, North Carolina which under a written contract with the respondent, Blue Ridge, was engaged in constructing a large project in South Carolina including the construction of the substations involved herein at a cause to respondent of approximately $334,000. Under the terms of this contract, the substation, which was under the control and the custody of the independent building contractor during the process of construction was in the charge and the control, not of the Blue Ridge but the independent contractor was not to be turned over to the respondent, Blue Ridge, until completion. And then only, upon payment by it of at least 90% of the contract price at which time it was then to be used by the respondent, Blue Ridge, in the promotion of its operational activity of supplying electricity. Although this case had been pending for some time, it was not until several weeks prior to the trial of this case that the respondent, Blue Ridge, with the permission of the district judge lamented its answer to enclose the affirmative defense that the work of the independent contractor, Bouligny, in erecting the substations involved herein to be delivered through the respondent upon completion was part of the respondent's trade business and occupation and therefore, the petitioner's action herein was barred under the expressed provisions of Section 72-111 of the South Carolina Workmen's Compensation Act set out in the briefs. At the trial of this case, in order to bring this case or rather in accordance with the decisions of the South Carolina Supreme Court that where work is customarily performed by the direct employees of an owner, such work is deemed to be part of the trade business or occupation of the owner so as to render Section 72-111 of the Act applicable, the respondent Blue Ridge sought to establish its affirmative defense solely by evidence that his direct employees, ordinary and appropriately performed the work of constructing substations in the promotion of its usual business of supplying electricity.
William J. Brennan, Jr.: Mr. Hammer, would you tell me supposed Blue Ridge, when it was organized, acquired no facilities of any kind, substations, wire lines were or anything else, all I had is this cash. And they contracted out the building of this whole system and then in there. In other words, they have no employees of their own. The whole building in the system was done by contractor's employees. In that, as I understand it, your South Carolina statute expressly empowers one of the rural electrical cooperative's or something.
Henry Hammer: That's correct, sir.
William J. Brennan, Jr.: -- to do their own construction.
Henry Hammer: Empowers them to their own construction?
William J. Brennan, Jr.: Yes. But suppose they didn't in fact, that's what I'm trying to get to. They didn't, in fact, do any -- had no employees and they just contracted out the building of a whole new system. In that circumstance, is there any South Carolina case that suggests that the employees of the subcontractor could -- or rather the contractor could employ -- to recover its injuries from the cooperative?
Henry Hammer: There's no case in South Carolina that I could find and I don't think counsel or my adversary can find any case which permits a recovery under such circumstances.
William J. Brennan, Jr.: Well, is that to say then the only time --
Henry Hammer: Of Workmen's -- excuse me. Of Workmen's Compensation --
William J. Brennan, Jr.: That's what I'm talking at a Workmen's Compensation Act. Well, now you're suggesting that the South Carolina cases have to be read as requiring at least that the -- what is this, this the Rule of cooperative?
Henry Hammer: Rule of cooperative.
William J. Brennan, Jr.: Yes. As requiring at least that -- at some time its own employees must do this kind of work before the employees of a contractor doing the same work are entitled to compensation of the South Carolina law?
Henry Hammer: The South Carolina cases indicate very clearly that where it's an operational activity as distinguished from construction of a facility in preparation for the operational activity. Then in such cases, it may be held that the Workmen's Compensation Act would be applicable because in that event, the owner would be attempting to evade his liability under the Workmen's Compensation Act by doing through direct employee and by doing through independent contractor's work which direct employees would ordinarily perform.
William J. Brennan, Jr.: Why as -- why as in fact this case?
Henry Hammer: In this case, direct employees do not ordinarily perform the work of constructing a facility to be used in the promotion of its usual business. They perform maintenance work. They perform operational activities.
William J. Brennan, Jr.: Well now, supposed some farm in this area in South Carolina wanted to have electric service, it required perhaps the placement of a pole or two and the stringing of the poles with -- with wire and that was done by the employees of the cooperative. Would that be maintenance or construction?
Henry Hammer: That would be, in my opinion a combination. We must remember that it requires a vast amount of facilities to perform this work. If they didn't have to invest any capital, make a capital outlays to purchase facilities to do work of the nature, Your Honor described, under those circumstances perhaps that might be work which is part of his trade business to occupation. But in this case we have a very distinguishing feature. Here, we have a construction project at the cost of $334,000. We have a project which requires equipment and facilities which require a good deal of investment in capital which this respondent did not seek to lay out in order to engage in that kind of business. It was never engaged -- it is never engaged in such type of activity.
Felix Frankfurter: Under your law, in the South Carolina Law, must the construction and maintenance work by the cooperative in order to hold the contractor's employees in order to enable the contractor's employees to sue the principles, the cooperative statutory employer, must construction work be done in the very thing in which the (Inaudible)? Is that your -- is that your -- because I got your answer to Justice Brennan, you said they didn't use this $300,000, a sizeable project, that's part of the country and they didn't have anything to do with it, except what they did have to do with it. Now assume they didn't have a stitch to do with the physical construction work of that particular transaction. Does that take them out of coming within the requirement of your law as statutory employers of the contractor's employees?
Henry Hammer: Yes, it does not make them statutory employers. If they --
Felix Frankfurter: Although -- although they may have done such work six months ago, is that it?
Henry Hammer: Oh, no. No. If they had done such work, within a reasonable -- reasonably short period of time.
Felix Frankfurter: That they -- that they just had not engaged in either systematically or episodically of that kind of work is necessary --
Henry Hammer: That's --
Felix Frankfurter: -- not that in this particular transaction, they have no share in it?
Henry Hammer: That's correct, sir.
Felix Frankfurter: All right.
Henry Hammer: That's -- that's correct, sir.
Hugo L. Black: (Inaudible) is a part of the employer's business. You emphasized that the -- and besides I understand that if the employer, as a work (Inaudible) that does as a part of the employer's business, this type of work, then all will do that type of work, even the ones of an independent contractor are likewise statutory employees of the employer. You don't deny that?
Henry Hammer: No sir.
Felix Frankfurter: But you are asking us to say that the Court of Appeals are totally wrong in concluding that on the fact that this case, the cooperative was the statutory employer within the Workmen's Compensation.
Henry Hammer: Yes sir.
Felix Frankfurter: You are doing that?
Henry Hammer: Very emphatically.
Felix Frankfurter: You're saying that there's a -- it comes -- Judge Soper and his colleagues were holding an error --
Henry Hammer: Yes sir.
Felix Frankfurter: -- in their construction of South Carolina Law, is that right?
Henry Hammer: I think they found some facts which are not warranted by the evidence, sir and relied -- (Voice Overlap)
William J. Brennan, Jr.: Well, apart from the fact -- I think Mr. Justice Frankfurter's question is address to whether or not the Court of Appeals correctly stated the South Carolina Law.
Henry Hammer: No sir. I don't think --
Felix Frankfurter: Right.
Henry Hammer: -- the Court of Appeals did.
William J. Brennan, Jr.: Do you think it did not?
Henry Hammer: That's right.
William J. Brennan, Jr.: Now, are you going to point out to us where in the Court of Appeals erroneously stated the South Carolina law?
Henry Hammer: Yes sir. I will point it out at this point.
William J. Brennan, Jr.: Can you do it with reference to the opinion?
Henry Hammer: The Court of Appeals stated that merely because -- I'm sorry -- merely because of the fact that the cooperative was interested in the work. That made it part of the employer's trade business or occupation.
William J. Brennan, Jr.: Let's see, interested, what do you mean by interested?
Henry Hammer: That's all the Court said, they were interested in the work, interested in the work being performed.
Felix Frankfurter: Well, what is it? To get right on what of the Court of Appeals says, the lower court, the District Court said, “Work must be done for another to be an employer,” is that right?
Henry Hammer: The Court of Appeals did --
Felix Frankfurter: No, no. Is that what the District Court did?
Henry Hammer: The District Court makes some expression along those lines.
Felix Frankfurter: What do you mean by along those lines? That was the ground of the judges, what is it?
Henry Hammer: Yes, sir.
Felix Frankfurter: All right. Now the District -- the Court of Appeals says that's the wrong criteria, is that right?
Henry Hammer: Court of Appeals, if Your Honor please, didn't say that was the wrong criteria. The Court of Appeals simply took its own criteria and said that merely because a person, an employer, is interested in the work and merely because he engaged an independent contractor to perform the work that was part of the owner's trade business or occupation.
Felix Frankfurter: But surely, the business is complete and typically there's an opposition between the view that hold that if the District Court that in order to be a statutory employer, the work must be done for somebody else and the views of the Court of Appeals that that isn't so that an employer may become a statutory employer of a contracted employee if the work in question is the work getting done for his own purpose.
Henry Hammer: That's correct.
Felix Frankfurter: Well, those are (Inaudible), aren't they?
Henry Hammer: That's correct.
Felix Frankfurter: But does that have clash between the District Court and the Court of Appeals?
Henry Hammer: Yes, it has clash, but we do not rely upon the District Court's ground or District Court -- the District Court reasons for the dismissal of the affirmative defense.
Felix Frankfurter: I understand that. They're trying to say what if it is, if the Court of Appeals held to be the scope of the South Carolina Workmen's Compensation Act in order to include this cooperative as having -- as seeing the statutory employer of the contracted employees.
Henry Hammer: The Court of Appeals, if Your Honor please, Mr. Justice Frankfurter, stated that the mere fact that an independent contractor is employed to perform this work makes him the statutory employer. That's the dissent of the Court of Appeals --
Felix Frankfurter: Well, I don't care about the dissent. But would you be good enough to turn to the opinion of the Court of Appeals on which you rely as Justice Brennan asked you, that if you have an interest, as of course an employer of a -- of a sub-contractor or contractor to have an interest on what the contractor does for him so that the word “interest” is -- is the word that has to be cross-examined.
Henry Hammer: The Court of Appeals at page 72 -- at page 62, the transcript of records states, line four, “In other words, the statute recognize the practice of letting out to others the actual performance of one's business and subjects the owner to liability for compensation to injured workers. The manifest purpose is to afford the benefits of compensation to the men who are exposed to the risks of its business and to place the burden of paying compensation upon the organizer of the enterprise. In consequence, both the owner and the contractors whom he engages to do his work are subjected to the requirements of the Act and the workers received double compensation.”
Felix Frankfurter: That's all addressed to the criterion of the District Court on which you do not rely, namely, that the work must be done for others.
Henry Hammer: My position, if the Court please, that the case was tried on the theory by the respondent in support of its affirmative defense that the work which was performed by the independent contractor in the instant case was work which is customarily performed by the direct employees of the owner.
Felix Frankfurter: That the -- that the person who sue the Blue Ridge Rural Electric Cooperative has done work of this nature and therefore, it became the statutory employer of Byrd.
Henry Hammer: That's their contention.
Felix Frankfurter: That's their contention?
Henry Hammer: Yes, sir.
Felix Frankfurter: And does Judge (Inaudible) -- I beg you pardon, rule that out instead the work must be done. You're not a statutory employer unless you did that kind of work for others. And the Court of Appeals rejected that and gave the philosophy of these laws, namely, to give an employee as this were a two-named paper, re-insurance by making not only his employer subject to liability but also making the contracting employer subject to liability if he ever did this kind of work and gave the reasons for it for the protection of the employees. To give him double protection as against contractors who would very often fly-by-night, not responsive, et cetera.
Henry Hammer: But the South Carolina Supreme Court, Mr. Justice Frankfurter, in the case of Adams versus Davison-Paxon case, said the purpose of the statute is not to give him double protection but to give him protection where he is not -- not otherwise protected by law, such as in the instant case where the petitioner --
William J. Brennan, Jr.: Well, I may say Mr. Hammer, you made that argument last time you were here and practically, reading Adams-Paxon, I don't believe the language of the Court's support you. Now, what I'm getting at, trying to get, and I think Mr. Justice Frankfurter too, is in these circumstances when -- does any situations exist in which there is not workmen's compensation protection for the employees of the contract. Does that situation exist in circumstances in which the owner does no work of a kind that the contractors employed to do and never has done any under the South Carolina cases?
Henry Hammer: I do not think it exist and it was this exception, where the work is -- work of a maintenance major requires to be performed periodically and recurrently in promotion of the usual business of the owner without which the business cannot continue, then under such circumstances, I submit that Workmen's Compensation Act would be applicable but this is not the case here. Here, --
William J. Brennan, Jr.: But in this case, I gather your argument is that this contractor, $334,000 contract was a contract in effect to do new construction.
Henry Hammer: Correct.
William J. Brennan, Jr.: -- I gather there was something about the replacement of existing lines that there were thousands of miles of new lines and new substations which had not yet been turned over to the cooperative, is that right?
Henry Hammer: That's correct, sir.
William J. Brennan, Jr.: Now, that you say is new construction.
Henry Hammer: Right.
William J. Brennan, Jr.: And that that's something which this company had never previously done.
Henry Hammer: Correct.
William J. Brennan, Jr.: Is that right?
Henry Hammer: Correct, sir.
William J. Brennan, Jr.: And that, never having previously done it even though under the statutes which created it, it was authorized directly to do it. Never having previously done it, then compensation remedy is not available to these employees and there must -- for that reason maintain the (Inaudible) action you brought in negligence against the cooperative, is that it?
Henry Hammer: That's in substance our position.
William J. Brennan, Jr.: In substance to your position.
Henry Hammer: In essence.
William J. Brennan, Jr.: But there is -- there is evidence, is there not, on whether you say it's sufficient or whether it is to be believed there was evidence in this record that in fact, the very kind of work which these employees were doing, as employees for this contractor, was also done and indeed being done at the same time and perhaps in other areas by the maintenance and construction crew of the cooperative?
Henry Hammer: Only a part of their work.
William J. Brennan, Jr.: No, whether you agree or not. The fact is that there is such evidence in the record.
Henry Hammer: There is evidence in the record that some of the work that was performed by the Bouligny Construction Company was performed by the direct employees of the owner.
William J. Brennan, Jr.: But now your suggestion is, that that creates at least a question of facts for resolution by (Voice Overlap) --
Henry Hammer: No, sir. Our opposition is that they -- that does not satisfy the requirements of proof in order to make the Workmen's Compensation Act applicable because the employees must have performed the whole of the Workmen's.
William J. Brennan, Jr.: Now, if you're wrong in that, you say at least that it was a fact question.
Henry Hammer: At least.
William J. Brennan, Jr.: Whether or not this made the cooperative a statutory employer.
Henry Hammer: Yes, sir.
William J. Brennan, Jr.: Is that right?
Henry Hammer: Yes sir, at the least.
Hugo L. Black: (Inaudible) was just word in part, Mr. Hammer, of the statute which is part of the employer's business.
Henry Hammer: It refers to the employer's business. The whole of the work must be part of the employer's business. The whole of the work of the independent contractor must be part of the employer's business. Otherwise, we would have a situation where the mere fact that an independent contractor drives the nail end into the wall and such work is sometimes performed by the employees, direct employees of the owner it would make the whole of the work part of the trade business occupation of the owner.
William J. Brennan, Jr.: Well, the emphasis -- I just -- it shows the emphasis in this connection and it is upon the fact that at the time this accident occurred this contract work had not yet been turned over and accepted by cooperative, is that it?
Henry Hammer: That's correct.
William J. Brennan, Jr.: And that it could not become part of anything that was done by the employees of the cooperative would not be identical with the work being done by the employees of this contractor.
Henry Hammer: That's correct.
William J. Brennan, Jr.: -- until such time as the completed work have been turned over and accepted by the cooperative -- (Voice Overlap)
Henry Hammer: But in addition, the work of constructing substations which is the laying of concrete and seal structure is work which was never performed --
William J. Brennan, Jr.: Well, of course the -- I think the records had some evidence even though you don't accept it, which indicates that there were some of these substations. I'm not saying what the fact is, I don't know, but there is evidence as I recall it. Although you say, it was withdrawn and denied and everything else by the general manager. Nevertheless, there is evidence that on at least three occasions, they had done some of the building and some substation.
Henry Hammer: There was evidence on his testimony but we --
William J. Brennan, Jr.: I know, you say he took it all back --
Henry Hammer: On question.
William J. Brennan, Jr.: -- but that's where the -- that's where the trier of fact, who ever the trier of fact is, isn't it, to determine?
Henry Hammer: No, sir. Under that situation, we submit that if this Court is going to permit the application of a standard, which would permit litigant having the burden of proof, to come in to the federal court, and give false testimony --
William J. Brennan, Jr.: Yes, but if we disagree with you about this, if we disagree with you then you still say this is a fact question?
Henry Hammer: Yes, sir.
William J. Brennan, Jr.: But why did you turn then that we want to decide the fact question?
Henry Hammer: So far as that is concerned, if the Court please, we submit that although the case of Erie Railroad versus Tompkins holds that the federal courts are bound by the substantive law of the state in which it says that such rule is not applicable to a procedural matter and we submit that the mode or manner of determining the facts in a federal court is clearly a procedural matter which is governed solely by the federal practice and procedures under the provisions of Article III and the Seventh Amendment of the United States Constitution. And we submit that at the least, in the event the Court below -- or rather we submit at the least that we were entitled to put up controverting testimonies even though the evidence pointed all one way in favor of the respondent, cooperative. May I reserve the remainder of my time for rebuttal.
Earl Warren: Yes you may. Mr. Walker.
Wesley M. Walker: Mr. Chief Justice and members of this Honorable Court. The respondent here is the Rural Electric Cooperative Incorporated under a special statute in the State of South Carolina whereby Rural Electric Cooperative are created and permitted to operate. This particular respondent was engaged upon a tremendous expansion growth. It had been doing so for several years. It was then the throes of this tremendous expansion program at the time of the accident in question to the petitioner. The respondent had procured this loan from the federal REA and it's been in order to expedite its work contracted for the portion that is this $334,000 loan or disbursement. That work was contracted to the Bouligny Construction Company. The contract provided for the construction of 24.19 miles of new lines, 87.69 miles of conversion and two additional of pertinent substations. The petition here was the direct employee of the Bouligny Construction Company. We say he was the statutory employee of Blue Ridge Electric Cooperative. At the time of the accident in question, this petitioner climb up a substation that was under construction and which was not energized, and his purpose was to measure what they call a jump wire from a converted line that was running through the substation and which line had been converted under this particular contract from a two -- from a one phase to a two-phase lot.
William J. Brennan, Jr.: Tell me Mr. Walker, I gather this is leading to a suggestion that you in support of your affirmative defense prevail of it if the evidence shows that what he was doing at the time is a kind of work ordinarily done by the construction and maintenance crews of the cooperative?
Wesley M. Walker: We certainly think that we must prevail upon showing that --
William J. Brennan, Jr.: Well now, can you prevail under the statute as it has been interpreted by the South Carolina Supreme Court except as there is evidence which supports a fact finding of who makes it, that accept this as evidence supporting a fact finding by somebody whether judge or jury. That if the cooperative did do the kind of work, a; that the petitioner was engaged in doing when he was injured or at least, b; that was contracted to be done by the contractor.
Wesley M. Walker: The work -- if I follow up that last part there. The work that was being done, we say was a part of the type of work that we did (Voice Overlap)--
William J. Brennan, Jr.: Yes. You say part of the type of work that you did. What I'm trying to get at is, does that mean that the South Carolina cases require proof that the work contracted to be done was a kind of work in fact done by, at some time without regard of when, at some time work in fact done by the cooperative?
Wesley M. Walker: The South Carolina cases do not place that it is a burden upon us, that is the owner. The South Carolina cases hold that where the work being done is reasonably or directly related to the business of the owner, then the employee of the contractor would be the statutory employee of the owner.
William J. Brennan, Jr.: Well now, is that to say using the illustration I put with Mr. Hammer that all you have was money in the bank and the corporation? You didn't have any system at all and you contracted out the building of a system to this contractor and you had a charter which authorized you to construct it yourself, but you never did the thing about it. You contracted out the whole building operation to a contractor. Do the South Carolina cases say in that circumstance that the employees of the contractor would be statutory employees of the cooperative?
Wesley M. Walker: We think the South Carolina cases do say that because, I think, that your illustration would be work that was reasonably related to the trade or business of the owner.
William J. Brennan, Jr.: Well, there's no question. The statute says that this is a business and that they may construct facilities in the doing of the business.
Wesley M. Walker: Yes, sir.
William J. Brennan, Jr.: Well now, will you tell me this Mr. Walker. Isn't it as if the former case, is that the one that talks about (Voice Overlap) --
Wesley M. Walker: (Inaudible) Yes, sir.
William J. Brennan, Jr.: Well now, I note for formal case, it's something like this that the language of the statute is plain and unambiguous, yet there are so many different factual situations which arise. There's no easily applied formula can be laid down for the determination of all cases. In other words, it is often the matter with extreme difficulty to decide whether the work in a given case falls within the designation of the statute. There's an each case largely a question of degree and the fact? But what fact question is to be resolved? If you're right, that the mere fact that they held a charter, authorizing to do this work of itself would require the cooperative to pay workmen's compensation under your statute to the employees of the contractor. Where's the fact question?
Wesley M. Walker: We think that the only fact question here is one that might be termed a jurisdictional fact question with respect to the jurisdiction of the, what we turn the Industrial Commission, or that is the applicability of the South Carolina Workmen's Compensation law.
William J. Brennan, Jr.: Well, why -- why did you put in all these evidences to the work of your maintenance and construction crews? Why didn't you just rest on the provision of the South Carolina statute which organized your company and authorized you to do this construction work and just stop? If you're right, then the South Carolina cases support you?
Wesley M. Walker: Yes sir.
William J. Brennan, Jr.: But why did you do it then?
Wesley M. Walker: Because in the trial of the case, I think, that the burden is upon counsel to prove it to the greatest possible degree and in trial I would not deem it --
William J. Brennan, Jr.: You mean -- you must mean by that, but you have some doubt when you're right?
Wesley M. Walker: No, sir. I think that in the trial that the burden is upon counsel to do the best job possible and to prove it beyond any question or beyond any doubt.
William J. Brennan, Jr.: Well now, tell me. Did the Court of Appeals read the South Carolina cases the way you now say that should be read?
Wesley M. Walker: I think that they did in its opinion, yes.
William J. Brennan, Jr.: Well, why did they go into all of this discussion of the facts as to the work that you did?
Wesley M. Walker: I'm afraid I couldn't tell you why the Court of Appeals might have gone into its opinion as extensively as it did, but I say, Mr. Justice Brennan, that I think the opinion of the Court of Appeals very clearly shows that the record was very carefully gone over and that the matter was extensively and studiously written?
William J. Brennan, Jr.: Well now, can you find anything in the Court of Appeals opinion would suggest the view of the South Carolina statute that you just given us, namely, that the mere fact that you are authorized to do this business of itself, of itself, to establish that you are this statutory employer of the -- of this petitioner. Does anything in the opinion would suggest that?
Wesley M. Walker: The -- the opinion of the Court of Appeals does mention the fact that we were authorized to do this work by (Voice Overlap) --
William J. Brennan, Jr.: Yes. But does the face of decision that's all upon that to say that's enough without going to look further?
Wesley M. Walker: The Court of opinions does not base its decision upon that point alone it merely referred to it.
William J. Brennan, Jr.: Well then, don't you suppose we have to read the Court of Appeals opinion as in fact saying that you're a statutory employer only because all the evidence that you offered to show that in fact your maintenance and construction crews did this kind of work is what is that makes your client a statutory employer. Isn't that the fair reading of the Court of Appeals decision?
Wesley M. Walker: I think that it can be and so interpreted. Yes, I think that it maybe --
William J. Brennan, Jr.: Well now, if it is, that's the Court of Appeals' view of South Carolina laws.
Wesley M. Walker: I think that the Court of Appeals express that opinion and it also, I think, express other reasons as to why the petitioner here with our statutory employer.
William J. Brennan, Jr.: Now, what are the reasons? I'm trying to find out what the basis of the opinion is. As I read it, the basis is in all of the evidence that the Court reviews of the kind of work that you've done and over the periods that you've done, so your maintenance and construction crews, isn't it?
Wesley M. Walker: I didn't hear you sir.
William J. Brennan, Jr.: Is that the basis of the opinion?
Wesley M. Walker: The Court of Appeals on pages -- beginning on pages 59 at the bottom and the last paragraph on page 59, page 60 and page 61 and into page 62 deals very extensively with the type of work that was being done under this particular time track the type of work that the cooperative engaged in and that was normally done by its employees.
William J. Brennan, Jr.: Of setting one along the side the other, therefore said that this petitioner was a statutory employee?
Wesley M. Walker: Yes, sir.
Hugo L. Black: Can I ask you a question to see if I'm sure of what you said? (Inaudible) South Carolina has (Inaudible) but if it decides not to do it again, it concludes to how well known independent contractor, a large company, to dig up the ground and to get it all ready (Inaudible) What I understand from you is that under South Carolina law, the employees of that independent contractor would be considered as your employees in reference of your compensation.
Wesley M. Walker: Yes, sir. I -- I say that as long as the work that was being done was reasonably related or directed to and connected with the work of the telephone company and I submit that you file a Marchbanks v. Duke Power and the Boseman versus Pacific Mills both hold clearly and exactly what your question was Mr. Justice Black.
Hugo L. Black: A rather unusual provision (Inaudible) situation.
Wesley M. Walker: We think it is not unusual and that we think that most jurisdictions go and make that far.
Hugo L. Black: I think that maybe --
Wesley M. Walker: Yes. We submit that the authorities from other jurisdictions go substantially that (Inaudible) and some approximately to that degree.
Hugo L. Black: That's Duke Power Company and what is the other? It's cited in your brief.
Wesley M. Walker: Yes. The Boseman versus Pacific Mills and that particular case the employee was held to be the statutory employee of the Mills and what he was doing was painting a water tank that had never been painted by the Mills and the water tank was used by the Mills only for fire prevention purposes and had nothing to do with this ordinary manufacturing operations. And the tank was of such height that it was concluded that the type of person who might have done that job would have to be a specialist. That is someone who might be a specialist or equipped to climb to substantial heights. Nevertheless, the South Carolina Supreme Court tells us that the employee of the paint contractor that is the employee doing the painting of that water tank was the statutory employee of Pacific Mills.
Hugo L. Black: What's the name of the Duke's case? That doesn't to be in that --
Wesley M. Walker: That's Marchbanks v. Duke Power Company.
Hugo L. Black: Marchbanks?
Wesley M. Walker: Yes.You will find it under Marchbanks. It is cited several times and we say, sir that that is the landmark decision in South Carolina. That is the established decision and I believe that is the first decision on this subject in South Carolina.
William J. Brennan, Jr.: May I ask you another question, Mr. Walker. Suppose we interpret the Court of Appeals' opinion, the cause of its emphasis on the evidence showing that you in fact did the same kind of work as stating that the South Carolina law is that mere authorization to do it is not enough. It must appear that in fact the owner has done the same kind of work before the owner becomes a statutory employer, on the canvass that we would reach that conclusion. As I understand it the trial judge here said that the -- he read the statute is requiring you to prove that you did this kind of work for somebody else not for yourself is that right?
Wesley M. Walker: In his ruling whereby he denied our motion for a directed verdict he so states.
William J. Brennan, Jr.: Now you have no evidence that you -- that you never done this kind of work for anybody else?
Wesley M. Walker: We did not.
William J. Brennan, Jr.: And in that circumstance, if the trial judge has been right in his interpretation, I gather that the petitioner would have had an offer no evidence at all on the question, wouldn't it?
Wesley M. Walker: If the trial judge had been right, I agree the (Inaudible) no evidence.
William J. Brennan, Jr.: Now the -- so the -- and the petitioner came forward with no evidence?
Wesley M. Walker: He did not.
William J. Brennan, Jr.: Now, when you get to the Court of Appeals, the Court of Appeals said that, “No, the trial judge is wrong.” The test is not whether the owner has done work for somebody else, the test is whether -- I'm assuming my component. The owner has done the same kind of work itself and that's the proper (Inaudible), is that right?
Wesley M. Walker: Yes.
William J. Brennan, Jr.: Now, if that's so, why wasn't the petitioner, if that's the way Court of Appeals' opinion of the South Carolina Laws be read? Why was not the petitioner then for the first time confronted with the necessity of offering evidence?
Wesley M. Walker: They asked to that lies at first in the motion made by petitioner, immediately preceding trial and that the petitioner moved to eliminate the question of Workmen's Compensation form the consideration of the jury and move to not --
William J. Brennan, Jr.: I'm thinking of the jury, I'm not thinking of who decides this question. My question goes to the emphasis in your brief as I read it on the fact that the petitioner had come forward with no evidence on this issue although walk with an opportunity I think you phrased it by the judge to come forward to them. And my question is, was there ever an occasion for the petitioner to come forward with evidence?Until after the Court of Appeals had given the interpretation of the statute. Namely, that the statute means, that if you have ever done work of this kind yourselves, then you are the statutory employer of the employee of the independent contractor. Wasn't that the first occasion when the necessity would often prove?
Wesley M. Walker: No sir, we think -- Mr. Justice Brennan, at the conclusion of the petitioner's case, that is the plaintiff's keys in the trial court. The motion was made for an involuntary dismissal, that is (Inaudible) And at that time, that motion was predicated upon the same ground that the testimony of the petitioner, that is the testimony of the plaintiff itself shows that the work being done was a fraud of the trade and business of the defendant, the respondent. And that the Workmen's Compensation defense constituted a complete barr to his actions and the trial judge --
William J. Brennan, Jr.: You mean that the plaintiff had proved your affirmative defense for you?
Wesley M. Walker: That -- that position was taken, it was the motion was maid and the District Judge on pages -- previous on page 22 of the record said this, it is on page 22 at the top and “This motion -- I repeat so -- was made the conclusion of the plaintiff's case with the emphasis that his testimony had proved our defense to be a complete ball.” And the Court said this “What I am going to do? This is a very technical point. What I mean is I can't come to any conclusion about it one way or another. What I am going to do as to your last round, I am going to take that on the advisement and think about it and see if I can't work it out.” You're argument has helped me some, but here's what I've got to decide that the elements, what I have got to decide is whether or not the claimant was injured while engaged on an operation which the other is directly into and became a part of the business of the person.And that means Blue Ridge Company, doesn't it? We asked again, the Court said “For whom the work was being done?” Now, the Court, said at the bottom of the page “I am going to take the whole thing under (Inaudible), it is a mighty close question -- mighty pretty quest and then he did reserve decision and thus, I say that from that time, certainly, the petitioner here in the Court below has been fronted with this issue and at the --
William J. Brennan, Jr.: I don't understand that, when finally, you have to reserve -- they finally decided against you and said “No, you can't win without showing that you've done this work for somebody else.” And you admit yourself but you have made no showing that you've ever done this work for somebody else.”
Wesley M. Walker: We did not --
William J. Brennan, Jr.: That's the ground on which he denied your motion with.
Wesley M. Walker: That's the ground upon which he denied the motion --
William J. Brennan, Jr.: But what he denied on that ground, why the petitioner have to work for anything else?
Wesley M. Walker: Because we could not make that motion until after the petitioner had said, he had nothing in reply. In other words, the Court inquired of the petitioner and said “Do you have anything in reply?” He said that he did not and then the Court entertained that motion for a directed verdict. And this -- I was going to say --
Charles E. Whittaker: (Inaudible)
Wesley M. Walker: I was going to say something -- that this reservation that he made was not ruled upon, until he denied our motion for a directed verdict.
Charles E. Whittaker: With that clearing on referring -- looking at page 22 of the records?
Wesley M. Walker: Yes sir.
Charles E. Whittaker: I think (Inaudible)
Wesley M. Walker: Yes sir.
Charles E. Whittaker: (Inaudible) anything in reply? And there actually was, we have a motion Your Honor. As of this is motion to strike your (Inaudible) All right now then, which says (Inaudible) was then said, I overruled your motion. Do you contemplate putting up any testimony and require -- (Inaudible) on this point -- he haven't discussed it. You are making that motion, I frankly don't know at this point of any applied that is (Inaudible) I don't know if there is evidence in the case. Of course, I'm going to think so far as I would be here to be walking on that. Now then, what I'd like to know, do you contend that the plaintiff had a right to put on evidence at that point and as (Inaudible) defense but at rest before the Court you got a motion?
Wesley M. Walker: The plaintiff certainly had the right to put on evidence in response to the affirmative defense. There is no question as to that sir.
Charles E. Whittaker: (Inaudible) has the plaintiff rest before the Court rule this motion? (Inaudible)
Wesley M. Walker: As the plaintiff rested his case before --
Charles E. Whittaker: The Court ruled the motion despite your affirmative defense.
Wesley M. Walker: I think not sir.
Charles E. Whittaker: You think that the --
Wesley M. Walker: Because sir, Mr. Justice Whittaker, the records will show the following -- the ruling upon the petitioner's motion to strike the defense that the court had, if they had anything in reply. The Court asked again if the records shows this, but the Court again asked if they had anything in reply and then the Court entertained our motion for a directed verdict allowing us to include that affirmative defense is a part of our motion.
Charles E. Whittaker: That proves me incomplete, I'll have to be more plain about this in my mind. Now, if at (Inaudible) of the defendant's state, the plaintiff has a right to offer evidence in rebuttal or after to the affirmative defense do they not?
Wesley M. Walker: Yes sir.
Charles E. Whittaker: If instead of doing so, he says, “I am satisfied with the record, we rest. Here is our motion Your Honor, is to strike it out.” Now, he then put all his eggs in one basket and he's right or wrong, and of the Court strikes out the affirmative defense, the Court of Appeals holds it was wrong, there's no need to have an opportunity and the possibility of putting any more evidence but if before the defendant, the plaintiff had rested this case, he filed this motion to strike out your defense and the Court did not rule out motion until after he had -- the plaintiff had rest in, will that be the end of it? Otherwise he wouldn't be, do you understand me?
Wesley M. Walker: I think I understand you Mr. Justice Whittaker and I submit that the answer to it lies in that the petitioner hear the plaintiff in the Court below. This put his eggs into one basket, the petitioner here had occasion, he had opportunity, ample time and it was afforded him not once but twice by the Court to offer anything in reply that he would.
Charles E. Whittaker: But did he ever say that all words that he construed to mean before the Court -- it is motion just like their defense?
Wesley M. Walker: No sir.
William J. Brennan, Jr.: No, as a matter Mr. Walker, I wonder if you can really sustain that position, as Mr. Justice Whittaker pointed out. After you rested on your affirmative defense and looking at page 48. The motion to strike was made, it was a colluquy in page 50, the Court says that it can't see how you can prevail on your affirmative defense because the business of this people is selling electricity. Then on the contract is to build a substation. And then you argue some more with them and finally says, “I can't follow you, I'll have to grant the motion” then he turns the counsel for the plaintiff and after he has granted the motion he says, “Anything in reply?” And he says, “Nothing Your Honor.” So the plaintiff never did rest his case on the affirmative defense. He never had any occasion to rest because the Court decided it against you on the ground that you can have any evidence in the record that you did this kind of work for others.
Wesley M. Walker: I didn't follow you then, when you said that the plaintiff didn't rely upon that, I didn't bother you --
William J. Brennan, Jr.: No, I say the Court -- the Court just threw you out. On the ground that you had no evidence that you ever did on the contracting working substation. With that said on that ground, you have no affirmative defense. And it finally returns to the petitioner's counsel and say, “Do you want anything more?” And actually, he said, “No” and so (Inaudible)
Felix Frankfurter: (Inaudible) the Court already ruled?
Wesley M. Walker: When?
Felix Frankfurter: At the District Court on (Inaudible)
Wesley M. Walker: He did. Now look at page --
Felix Frankfurter: (Inaudible)
Wesley M. Walker: The district --
Felix Frankfurter: (Inaudible)
Wesley M. Walker: The District Court did ask the plaintiff, the petitioner -- before he ruled if he had anything in reply.
William J. Brennan, Jr.: Well now, look at page 52 of the record and let's see if you're supported on that. It's captioned, ruling of the Court. He is talking to you, he said, “I can't follow you on that, anything else you have to say, gentlemen? I will have to grant the motion. I allow an exception, and then he turns to (Inaudible) says anything in reply” after he ruled the motion didn't he?
Wesley M. Walker: Mr. Justice Brennan, I have to refer you to page 48 of the records sir. And on page 48, where you will see the defendant rest and then the Court said there anything in reply, and then when proceed and said, “We have a motion Your Honor.” And then after the motion was made, then the Court again at the bottom of page 48, said, “In the event I will rule your motion, do you contemplate putting up any testimony in reply?
Charles E. Whittaker: What sign indicates -- would that indicate the plaintiff had rested or that he was waiting to see what the reports did, reserving his rights (Inaudible)?
Wesley M. Walker: I think Mr. Justice Whittaker, that yeah, well we had a legal question, a jurisdictional question that was before the Court and that had been prefaced by the petitioner or the plaintiff's own motion prior to the beginning of trial that was strictly a question of law, that is a question of substantive law of South Carolina to be decided by the Court and bound by the South Carolina authorities we say, Mr. Justice Whittaker that the issue was there, the petitioner was confronted with it and that if he chose not to put any evidence in reply, then he waive whatever right he may have had.
Charles E. Whittaker: Well, does that make a difference (Inaudible) before or after the Court have ruled. Not return it round down, just take it from the (Inaudible) of the plaintiff's case, the defendant elects to rest, after the plaintiff has rested without putting on any other evidence, then moved for judgment and before the last judgment for defendant. Now, if on the field, that's the first legal error of the trial court, it's got to come back to the new trial, doesn't it?
Wesley M. Walker: Yes.
Charles E. Whittaker: Whereas, if the defendant had said, “Your Honor, you're not ready to say whether or not you rest, the plaintiff has rested but here is our motion for a direct verdict.” The Court then rules on that motion for a directed verdict (Inaudible) the defendant of course puts on no evidence, put on appeal, that order of the Court is reversed, doesn't the case have to come back to a new trial?
Wesley M. Walker: I submit Mr. Justice Whittaker that the situation is n that analysis. First, I say that in the trial of the lawsuit that the plaintiff would have the burden in proving his case-in-chief. That is whenever he has upon the trial, he has a burden of proof in order to establish his case certainly with respect to an affirmative defense, the defendant has the burden with respect to an affirmative defense. But if, in this particular case, the plaintiff that is the petitioner had put his testimony in the evidence. He had made a motion prior to beginning of trial or after beginning of trial whereby, it was ruled upon by the Court and in effect, stipulated as to what circumstances and the issue here would be, he had been confronted with it from the very outset and we say that when he got to the end, that is the end of the road of the situation in these circumstance cannot be compared or it is not analogous to a circumstance, where a defendant makes a motion for an involuntary dismissal at the (Inaudible) of the plaintiff's case. We say sir, that the situation or the circumstances are not analogous in any way. Mr. Chief Justice, may I held my associate make the valid file argument. Thank you.
Ray R. Williams: Mr. Chief Justice, may it please the Court. One thing in addition to what has been said in connection with the motion I wish to point out to the Court that two motions were made. The Court made it clear throughout that he was reserving this thing so the directed verdict could be obtained. On the part of the defense, as well as this motion strike and the Court wanted all the testimony and suggested to the petitioner that if they had any testimony, a motion will likely be made for the direction of verdict. Neither phase of all that the defendant answered and they answer is revealing. They -- obviously had no testimony, now the interesting thing is, that the ground upon which the petitioner made his motion to strike. And the ground on which the Court decided or do in turn different things. The petitioner didn't move that because the respondent didn't do contract work for other people. No decision in South Carolina has ever held that. That was not argued in the case but for some reason, the Court did put the holding on that basis. But that was not the ground of the motion that's told. Now, I do want to revert to something that the Court's been inquiring about here, and that has to do with this matter of the work that constitutes a part of the business, whether or not it's necessary for the owner. And that's the simplest way to put it. The owner that operates the business, whether or not it's necessary to show that a (Inaudible) of the same work is done by the employees of that owner as are than under the contract. Now the Law of South of Carolina makes an owner of the business lawful, not only for his own employees but for those of a contractor. If what the employees of the contractor, if they engage in work which constitutes a part of the business undertaken by the owner. And the Court imposing on that has said that “When the work done, bares some reasonably direct relationship to the business of the owner”. Then it constitutes a part of it. And in that connection the Court has said an advocacy that the basic purpose of the South Carolina's statute is to include, not to exclude the employers and the employees. That if there is any doubt, the doubt must be a resolved in favor of the inclusion right of the exclusion so that the after that end, the statute must be liberally construed. In order to bring in the greatest possible number of the employees who would otherwise be left out of this coverage in protection. Now that's the attitude of the legislature, that's the intent Court has said. Now, there are seven decisions in South Carolina sighted in the respondent's brief, which going to this matter of what constitutes the business. And every decision is in support of the opinion in the Court below. Every single one, the counsel can't forward out -- counsel for petition not one case. That is contrary to the position of the respondent. Now, to go forward with the point, about bearing some direct relation, go back to the Boseman case that my associate referred to. A mill that manufactures cloth, it had this high water tank, a 125 to 130 feet tall. No employee there have ever done that sort of work, couldn't do it. It required a steeplejack or steeplejacks. The mill used it simply for prior protection. Well, it furnished the materials just as in and on the tank, just as responded here, on the ground, on which this substation in the wire that ran into it or was trying to be brought into it, owned that. The -- we furnished the material, the respondent furnished the material for the substation in this tank case. The owner furnished the materials, the contractor furnished the labor, furnishes the two. Now, in that situation the Pacific Mills argued with Grand Falls. That now, we don't have -- we are in the manufacturing business, we manufacture clothes, we don't paint tanks. That a different type of bill.
William J. Brennan, Jr.: But they did do maintenance work did they?
Ray R. Williams: (Inaudible)
William J. Brennan, Jr.: They did do maintenance work, generally as to recall.
Ray R. Williams: I don't know, but it's certain that they never painted the tank.
William J. Brennan, Jr.: Didn't the opinion say so?
Ray R. Williams: Sir?
William J. Brennan, Jr.: Didn't the opinion say --
Ray R. Williams: No sir. And they never painted the tank. Now I'm talking about the Boseman case. I think you are thinking about the Marchbanks versus Duke Power.
William J. Brennan, Jr.: I thought the Boseman case was a case in which this particular part of the ordinary maintenance activity is that manufacturers. Because it was a type of tank hard to reach which contracted out to a contractor who had a special kind of equipment which made it possible to paint on that high tanks of that kind. Am I wrong about that?
Ray R. Williams: Well, at least this. The -- it's possible that that opinion said that they had some time painted auxiliary tank. I'm not that sure about that, but I know one thing, the opinion says beyond any doubt that there are only employees had never done this type of work. That they couldn't and that it always been done by contractors but it was necessary. Now, the Mill argued that it was useful but necessary, because it manufactures clothes without this tanks, without this prior protection. They could manufacture, clothes. The only trouble came was when a fire would occur. And they need a protection but they said it's -- Now, going to another keys and they have two along this line, the Kennerly versus Ocmulgee Lumber Company in a South Carolina case. There, the company -- it was its custom to operate a sawmill in this Kennerly versus Ocmulgee. But the log, it owned the track of lands about 4,000 acres and it was it was its custom, to have the logging, the trees cut, the logs hold bound in upon independent contract. Now in that situation, the employee did not to do the work, that is of the lumber company. The employees of the contractor did. So that in our case. In a (Inaudible) case, you have a double proposition, it's twice as strong as any other case, I submit that if the company, if the respondents have never done construction work. That it would cause due to -- fraud of it because the matter of delivering energy is so related to construction that the two can't be simply separated. One is absolutely dependant on the other. So that if the employees have never done this kind of work. Now, as I read the opinion below, the Court said taking the opinion most favorably to the petitioner. Assuming that the respondent didn't have an employee who could do this kind of work but nevertheless, it was necessary for that ongoing of their business. Now, reverting to that log operation chief, it suggested here that the work log is complete and that that made some difference. Well, when the logs were being hold, the employee of the contractor was yield not at the plant but before he got to the plant. The log never got to the plant. And so it couldn't have been involved in the process of manufacturing. It couldn't have been part of the lumber mills' operations and yet the Court held that if for some reason, the direct relationship to the business undertaken by the lumber company, it could manufacture logs without -- in the lumber that getting the logs there somewhere. So and for a reason, it's a direct relationship. Now, in every case -- in every case you find this in South Carolina. That the employee was injured or killed during the process of the work, well they work certainly wasn't complete and couldn't have been cooperated into the final operation, until it was complete, that's true with the law. Now, the --
Speaker: (Inaudible)
Ray R. Williams: And the statute itself in that -- if any owner contracts the whole or any part of its business, that it shall be liable under Workmen's Compensation, that's the wording of the statute itself. Now, and there is -- as far as I know.
Speaker: (Inaudible)
Ray R. Williams: I'd say that --
Speaker: (Inaudible)
Ray R. Williams: Well, what has to be considered is the overall operation. What purpose it's created for? Now, this cooperative is to deliver electric energy. Now, anything that is necessary or incident to the delivery of electricity is part of its business. Now, if this cooperative was organized to deliver electric energy and had it all done, it would be in that business under the statute. Now the --
Speaker: Are they going to be under that?
Ray R. Williams: No. The other company --
Speaker: If the current company did it all?
Ray R. Williams: It would necessarily be under the act if it had the required number of the employees, it would be under the act but it might not have the number of the employee.
Speaker: So what is it?
Ray R. Williams: If it did, both would be under the act.
Speaker: (Inaudible)
Ray R. Williams: The owner would be on writ and the subcontractor.
Speaker: (Inaudible)
Ray R. Williams: That where -- a code for under?
Speaker: (Inaudible)
Ray R. Williams: Well, yes. This seven cases in South Carolina, the deal with this question --
Speaker: I've talked about this whole (Inaudible) that had all that --
Ray R. Williams: Well --
Speaker: What cases --
Ray R. Williams: There isn't a case where any companies that I know of in South Carolina did the whole operation by contract. Unless, take for example the Ocmulgee Lumber company case that I just sited there and the other case of Hopkins versus the Veneer Company. Now, those two cases, you have an operation which the company had never carried on -- didn't carry on. That is the operation of cutting the timber and of hauling it to the plant, the logging operation. And the Court said, although in those two cases, the company had never carried that operation on with its only employees, nevertheless, it constituted the part of the general operation of the owner. And so it did come under the provisions of the act.
Speaker: (Inaudible)
Ray R. Williams: Sir? (Inaudible) It -- the question was whether or not the owner, that is the principle was (Inaudible) The owner and the Court held that it was on and the Court has said it times and time again on our decision that if they come under for one purpose, they are under for all purpose. And that if the owner must come under for liability, it must come under the act for the immunities. So that the Court has held that in all of the South Carolina. Now --
Earl Warren: The Court will recess now.