Opinion ID: 2741731
Heading Depth: 1
Heading Rank: 4

Heading: the ell

Text: The ELL “imposes a heightened statutory stan- dard of care on a person or entity who either is in charge of, or responsible for, any work involving risk or danger.” Woodbury v. CH2M Hill, Inc., 335 Or 154, 159, 61 P3d 918 18 The Restatement sets out the following principles: “[T]he fact that A is the President of P Corporation does not in itself subject A to liability for E [an employee’s] violation of the Fair Housing Act. In contrast, if A directs or participates in an action that violates the Act, A is subject to liability. However, an agent whose assigned function within an organization includes the supervision of others may be subject to liability when a failure by the agent properly to supervise breaches a duty that the agent owes to a third party.” Restatement at § 7.01 comment d. 19 In this case, the difference between the standard stated in Pelton and the standard stated in The Restatement (Third) may not make any difference because we have assumed that, in undertaking to oversee Sun Studs’ implementation of the safety plan, there was sufficient evidence of participation to test Swanson’s actions for negligence. The difference, however, might matter in a subsequent case. Cite as 356 Or 254 (2014) 273 (2003).20 In this case, the “work involving risk or danger” was driving forklifts through the areas of the mill in which Sun Studs’ employees customarily walked. The question on which plaintiff’s ELL claim turns is whether Swanson was a person “having charge of, or responsibility for” that work. See ORS 654.305 (stating that standard).21 On that issue, this court has held that, in addition to a worker’s direct employer, liability under the ELL “can be imposed on a person or entity who (1) is engaged with the plaintiff’s direct employer in a ‘common enterprise’; (2) retains the right to control the manner or method in which the risk-producing activity was performed; or (3) actually controls the manner or method in which the risk producing activity is performed.” Woodbury, 335 Or at 160 (summarizing Wilson v. P.G.E. Company, 252 Or 385, 391-92, 448 P2d 562 (1968)). Swanson was not plaintiff’s “direct employer,” and the Court of Appeals held that a reasonable juror could not infer that Swanson was plaintiff’s “indirect employer” for the purposes of the ELL; that is, the Court of Appeals held that a reasonable juror could not infer that Swanson was engaged in a common enterprise with Sun Studs, that Swanson actually controlled the risk-producing activity, or that Swanson retained the right to control that activity. Cortez, 248 Or App at 446-48. On review, we agree with the Court of Appeals that Swanson was not liable under the ELL on a common-enterprise or actual-control theory of responsibility. See Sacher v. Bohemia, Inc., 302 Or 477, 486-87, 731 P2d 434 (1987) (defining when a third party will 20 The ELL provides: “Generally, all owners, contractors or subcontractors and other persons having charge of, or responsibility for, any work involving a risk or danger to the employees or the public shall use every device, care and precaution that is practicable to use for the protection and safety of life and limb, limited only by the necessity for preserving the efficiency of the structure, machine or other apparatus or device, and without regard to the additional cost of suitable material or safety appliance [sic] and devices.” ORS 654.305. 21 Swanson does not argue that, if it were a person “having charge of, or responsibility for,” the risk-producing activity, no reasonable juror could find from the evidence on summary judgment that it failed to satisfy the standard that the ELL requires. 274 Cortez v. Nacco Material Handling Group be liable under a common-enterprise theory);22 Woodbury, 335 Or at 162 (explaining that a reasonable juror could find actual control where the owner oversaw the construction of a high platform from which the plaintiff fell and instructed the plaintiff’s employer how to build the platform). We disagree, however, that a reasonable juror could not infer that Swanson retained the right to control the method or manner in which the risk-producing activity was performed. To establish that Swanson “retained the right to control” a risk-producing activity, plaintiff must either “identify some source of legal authority for that perceived right” or evidence from which a retained right could be inferred. See Boothby v. D.R. Johnson Lumber Co., 341 Or 35, 41, 137 P3d 699 (2006). In this case, Swanson was the sole membermanager of Sun Studs. As such, the governing statutes gave Swanson the right to manage Sun Studs’ business. See ORS 63.130(1)(a) (explaining that, in member-managed LLCs, each member has equal rights in the management and conduct of the LLC’s business). Although Swanson chose to delegate responsibility for day-to-day decisions to Suns Studs’ mill manager and HR director, Swanson retained the right, under ORS 63.130, to manage all aspects of Sun Studs’ operation, including the way that forklifts operated in the mill and the safety conditions in their area of operation. Beyond that, there was evidence from which a rea- sonable juror could infer that, even though Swanson had chosen to delegate primary authority to Sun Studs to operate the mill and regulate the way that forklifts were used, Swanson retained the right to do so itself. See Boothby, 341 Or at 41 (noting that a retained right to control can be based on either a source of legal authority, such as a contract, or evidence of a retained right). In this case, Swanson’s executive vice president acknowledged that Swanson “could have made all of th[e safety] changes” when it first acquired Sun Studs that Sun Studs later made in response to plaintiff’s 22 Typically, a common enterprise theory applies to a work site in which two companies are working together on a project. The court has recognized that, when an employee of one company works with another company that has “charge of, or responsibility for, any work involving a risk or danger” and the employee is injured as a result, the employee can bring an ELL claim against the other company under a common enterprise theory. See Thomas v. Foglio, 225 Or 540, 358 P2d 1066 (1961). Cite as 356 Or 254 (2014) 275 accident. Similarly, the executive vice-president agreed “that if the Swanson group people wanted to change either the design or the equipment used in the yard at Sun Studs, they could do that.” A reasonable juror could infer from that evidence that, as the LLC statutes state, Swanson retained the right to manage the day-to-day operations of Sun Studs, including the operation of the forklifts and attendant safety procedures. Put differently, a reasonable juror could infer that Swanson “retain[ed] the right to control the manner or method in which the risk-producing activity was performed.” See Woodbury, 335 Or at 160. Because Swanson argues that this court’s decision in Wilson leads to a different conclusion, we discuss that case briefly. In Wilson, an owner contracted with an independent contractor to build an electric transmission line. 252 Or at 389. Under the contract, the independent contractor was responsible for the method or manner in which the risk-producing activity was performed. Id. at 393. The owner, however, retained the contractual right to “ ‘increase th[e] safety, efficiency, and adequacy’ of the independent contractor’s ” methods “ ‘[i]f at any time the Contractor’s methods    appear to the [owner] to be unsafe.’ ” Id. at 394 (quoting the contract) (emphasis deleted). The contractual right that the owner retained in Wilson, as the court characterized it, was limited to requiring greater safety procedures than those that the contractor had put in place, and the question in Wilson was whether the owner’s retention of that right was sufficient to make it liable under the ELL. The court held that it was not, for three related reasons. First, the court explained that, in order for an owner’s retained right to give rise to liability under the ELL, the right had to “bear some relation to the creation of a risk of danger to work[ers] resulting from dangerous working conditions.” Id. at 396 (emphasis added). Under the terms of the parties’ contract, however, the independent contractor was responsible for the manner or methods in which the risk-producing activity was performed. Id. at 396. Second, although the owner retained the right to require greater safety procedures, the court explained that the retention of that right “created no risk of danger to [the] plaintiff.” Id. The court reasoned that the retention of that 276 Cortez v. Nacco Material Handling Group right would create a risk of danger to the plaintiff only if it caused the independent contractor to be less diligent regarding safety, a possibility that the court discounted because “the duty to maintain safety remained the primary duty of the contractor.” Id. Finally, the court reasoned that imposing liability on owners for retaining a contractual right to require greater safety measures would serve as a disincentive to including such clauses in future contracts and thus would be contrary to the purposes underlying the ELL. Id. at 396-97. Wilson arose in the context of an ELL claim against an owner by an employee of an independent contractor. This court explained that, under the terms of the contract, the independent contractor was responsible for the method and manner in which the risk-producing activity was performed and that the owner retained only the limited right to require greater safety measures than the ones that the contractor had put in place. In that circumstance, the right that the owner retained did not bear on the creation of any additional risk to which the employee was exposed. Whatever the merits of that decision,23 this case arises in a different context. Sun Studs was not an independent contractor over which Swanson retained only a limited right of control. Rather, Swanson was the sole member-manager of Sun Studs, and the jury reasonably could find that, as such, Swanson retained the right to control all aspects of Sun Studs’ operation. Put differently, a jury reasonably could find from the evidence on summary judgment that Swanson “retain[ed] the right to control the manner or method in which the risk-producing activity was performed.” See Woodbury, 335 Or at 160. Were we to hold otherwise, we would effectively eviscerate a category of responsibility under the ELL that we have long recognized. See, e.g., Boothby, 341 Or at 41; Woodbury, 335 Or at 160; Wilson, 252 Or at 392. The trial court correctly held that the evidence in support of plaintiff’s ELL claim was sufficient to avoid summary judgment. 23 Plaintiff does not argue that Wilson was wrongly decided, and we assume that the court’s decision was correct in light of the particular contractual relationship in that case. Cite as 356 Or 254 (2014) 277 We recognize that some tension may exist between our resolution of plaintiff’s negligence and ELL claims. Any tension results, however, from the differences between the common-law tort standards stated in Pelton and Lewis and the broader statutory standards that the legislature adopted in the ELL. Our negligence cases have held that, in the absence of knowledge or participation, corporate officers and directors are not liable for their employees’ negligence. That is so even though corporate officers, having delegated responsibility to others to carry out tasks, retain the right to control how those tasks are carried out. Our ELL cases, however, have held that persons who retain the right to control how others carry out risk-producing activities are liable under the ELL. Our resolution of plaintiff’s claims reflects those differing standards. Because we conclude that Swanson is not entitled to summary judgment on the merits of plaintiff’s ELL claim, we turn to Swanson’s remaining argument that ORS 656.018 (2011) shielded it from liability for violating the ELL.