Opinion ID: 381381
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Heading Rank: 2

Heading: Presto Change-o: A Paper Company As a Construction Company

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7 Under Louisiana Workmen's Compensation Law, a principal who employs an independent contractor to perform duties which are part of the principal's trade, business, or occupation is the statutory employer of the contractor and its employees, 4 and is thereby not liable in tort for injuries sustained by the statutory employees in performance of these duties. The injured employees' sole remedy is under Workmen's Compensation Law. See Blanchard v. Engine & Gas Compressor Services, Inc., 613 F.2d 65, 68-69 (5th Cir. 1980) (hereinafter cited as Blanchard II ). An often litigated issue is thus whether the work performed by a contractor comes within the ambit of the principal's trade, business, or occupation. See, e. g., Blanchard II, supra; Freeman v. Chevron Oil Co., 517 F.2d 201 (5th Cir. 1975); Cole v. Chevron Chemical Co.-Oronite Division, 477 F.2d 361 (5th Cir.), cert. denied, 414 U.S. 858, 94 S.Ct. 67, 38 L.Ed.2d 109 (1973); Lushute v. Diesi, 354 So.2d 179 (La.1977); Reeves v. Louisiana & Arkansas Railway, 282 So.2d 503 (La.1973); Doss v. American Ventures, Inc., 261 La. 920, 261 So.2d 615 (1972). Perhaps because of vague statutory language, the history of this law's judicial interpretation has been marked by chaos and confusion. 5 See Blanchard v. Engine & Gas Compressor Services, Inc., 575 F.2d 1140 (5th Cir. 1978) (hereinafter cited as Blanchard I ). 8 In 1978, this Court noted the confused state of Louisiana law in this area and certified the statutory interpretation question to the Louisiana Supreme Court. See Blanchard I, supra, 575 F.2d at 1143-46, certified, 590 F.2d 594 (5th Cir. 1979). However, the state court declined certification, apparently feeling that the law needed no clarification, and directed this Court to two Louisiana Supreme Court cases: Reeves v. Louisiana & Arkansas Railway, supra, and Lushute v. Diesi, supra. See Blanchard II, supra, 613 F.2d at 68. In our attempt to discern the meaning of the Louisiana statutory employer provision, we therefore pay close attention to the words of the Louisiana Supreme Court in Reeves and Lushute, together with the reading given them by this Court in Blanchard II. 9 Reeves involved a situation quite similar to the one at hand. In that case, the Humble Oil Company was found not to be a statutory employer with regard to construction of a new plant unit on the existing plant premises, since (t)he work being done at the time was not part of its regular business. 282 So.2d at 507. The Court noted that Humble Oil was first and foremost an oil company and concluded that it was not Humble's business practice to engage in new construction of this type and magnitude, and that the record did not support a conclusion that this type work was customarily done by Humble or other employers similarly situated. Id. at 508. 10 The question addressed in Lushute was whether air conditioner repair was part of a restaurant owner's trade, business, or occupation. The Court applied the so-called essential to the business test, and held that because a properly functioning air conditioner although desirable . . . is not necessary for the operation of a restaurant, the restaurant owner was not the statutory employer of the air conditioner repairman. 354 So.2d at 183. See Leger v. Amerada Hess Corp., 479 F.2d 1250 (5th Cir. 1973) (per curiam). 11 In light of these two Louisiana Supreme Court cases, this Court in Blanchard II defined the Louisiana statutory employer standard as whether the activity done by the injured employee or his actual immediate employer is part of the usual or customary practice of the principal or others in the same operational business. 613 F.2d at 71. The activity done must be defined broadly in terms of the general project on which the injured employees were working. See Freeman, supra, 517 F.2d at 201; Reeves, supra, 282 So.2d at 508. The question in the case at hand thus becomes whether new construction of this type and magnitude, see Reeves, supra, 282 So.2d at 507, is part of the usual or customary practice of the principal or others in the same operational business. See Blanchard II, supra, 613 F.2d at 71. 6 B. Defendants' Motion for Summary Judgment 12 Defendants as cross appellants argue that it was error for the trial court to have denied their motion for summary judgment based on the statutory employer defense. They suggest that Georgia Pacific is not only a wood products company, but is a construction company as well. In light of the standard for granting summary judgment, the evidence available to the trial court at the time the summary judgment motion was denied, and the applicable standard of Louisiana statutory employer law discussed above, we disagree and affirm the trial court's decision. 13 Summary judgment should be granted only if there is no genuine issue as to any material fact and . . . the moving party is entitled to a judgment as a matter of law. Fed.R.Civ.P. 56(c); see Keiser v. Coliseum Properties, Inc., 614 F.2d 406 (5th Cir. 1980). The burden of proof falls on the party seeking summary judgment, and any doubt as to the existence of a genuine issue of material fact must be resolved against the moving party. Id. at 410. In considering a motion for summary judgment, a court must examine the entire record before it, id., and draw every reasonable inference in favor of the party opposing the motion. AT&T v. Delta Communications Corp., 590 F.2d 100, 101-02 (5th Cir.), cert. denied, 444 U.S. 926, 100 S.Ct. 265, 62 L.Ed.2d 162 (1979). 14 Defendants as cross appellants argue that their heavy burden as summary judgment movants was sustained in this case. They note that plaintiff submitted no papers in opposition to defendants' affidavits in support of the summary judgment motion, and that therefore the facts in defendants' affidavits must be accepted as true. 7 Wang v. Lake Maxinhall Estates, Inc., 531 F.2d 832 (7th Cir. 1976); Fitzke v. Shappell, 468 F.2d 1072 (6th Cir. 1972). Assuming, arguendo, that defendants' analysis is correct, we nevertheless find that at the time the trial court denied summary judgment there was more than ample evidence in the record to create an issue of fact as to whether new construction of the type and magnitude undertaken here, see Reeves, supra, 282 So.2d at 507, was part of the usual or customary practice of Georgia Pacific. See Blanchard II, supra, 613 F.2d at 71. Hence the trial court was correct in denying summary judgment on the statutory employer issue. 15 The deposition testimony of workers participating in the Georgia Pacific expansion project characterized the work as major construction as opposed to maintenance-type work. Moreover, defendants' own memorandum in support of the summary judgment motion noted that Georgia Pacific did not have the manpower to undertake such a large scale project, and that it was therefore logistically impossible for Georgia Pacific to have completed the plant expansion by itself. In light of these statements, and examining the entire record as it existed at the time the summary judgment motion was denied, we find that defendants failed to sustain their burden of showing that no material issues of fact existed with regard to whether Georgia Pacific was the statutory employer of the plaintiff. It could not be said with certainty that the major construction project was part of the usual or customary practice of Georgia Pacific's trade, business, or occupation, 8 and thus summary judgment was inappropriate. 16 C. The Directed Verdict on the Statutory Employer Issue