Court Opinion

ID: 4352079
Source: CourtListenerOpinion
Date Created: 2018-12-19 18:01:15.223665+00
Date Added: 2024-06-11T14:12:29.377970
License: Public Domain

FOR PUBLICATION

    UNITED STATES COURT OF APPEALS
         FOR THE NINTH CIRCUIT

 SIRA CRUZ,                                         No. 17-55441
                      Plaintiff-Appellant,
                                                      D.C. No.
                      v.                           3:14-cv-02956-
                                                     LAB-DHB
 NATIONAL STEEL AND SHIPBUILDING
 COMPANY; PETERSON INDUSTRIAL
 SCAFFOLDING, INC.,                                   OPINION
              Defendants-Appellees,

                     and

 UNITED STATES OF AMERICA,
                       Defendant.

         Appeal from the United States District Court
           for the Southern District of California
          Larry A. Burns, District Judge, Presiding

                   Submitted August 29, 2018*
                      Pasadena, California

                    Filed December 19, 2018

    *
      The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
2            CRUZ V. NAT’L STEEL & SHIPBUILDING

        Before: Kim McLane Wardlaw, Jay S. Bybee,
             and Sandra S. Ikuta, Circuit Judges.

                      Opinion by Judge Bybee

                            SUMMARY**

                              Admiralty

    The panel affirmed the district court’s summary judgment
in favor of the defendant in an admiralty action brought by an
injured maritime worker.

    The plaintiff was injured while working as a tank tester
aboard a Navy ship that was docked for repairs. She
collected workers’ compensation under the Longshore and
Harbor Workers’ Compensation Act from her primary
employer, a staffing agency, and she brought a negligence
action against the general contractor that had functioned as
her borrowing employer.

    The panel held that the defendant general contractor was
immune from suit pursuant to the “one recovery” policy at the
heart of workers’ compensation law. Joining other circuits,
the panel held that the “borrowed employee” doctrine applies
to “employees” under the Longshore Act. The worker was
the defendant’s borrowed employee because her work was
subject to its direction and control at all times. She therefore
was barred from bringing tort claims against the defendant.

    **
       This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
           CRUZ V. NAT’L STEEL & SHIPBUILDING                 3

                         COUNSEL

Preston Easley, Law Offices of Preston Easley, San Pedro,
California; Dawn Schock, SK Appellate Group LLP, San
Pedro, California; for Plaintiff-Appellant.

Bradley H. Pace, Philip Barilovits, and Pamela L. Schultz,
Hinshaw & Culbertson LLP, San Francisco, California, for
Defendant-Appellee.

                          OPINION

BYBEE, Circuit Judge:

    In this case we are asked to determine whether a maritime
worker who has collected statutory workers’ compensation
for her injuries may further recover against a so-called
“borrowing employer.” Sira Cruz suffered injuries to her ribs
and lungs while working as a tank tester aboard a Navy ship
that was docked for repairs. She collected workers’
compensation from her primary employer, a staffing agency.
Then, she brought a negligence action against general
contractor National Steel and Shipbuilding Company
(“Nassco”) seeking recovery for the same injuries. Nassco,
which had functioned as Cruz’s borrowing employer for
several years at the time of the accident, asserted that it was
immune from suit pursuant to the “one recovery” policy at the
heart of workers’ compensation law. The district court
granted Nassco’s motion for summary judgment on these
grounds. Cruz appeals from that judgment, and we affirm.
In this, we join the Third, Fourth, Fifth, and Eleventh Circuits
in holding that the borrowed employee doctrine applies to
4         CRUZ V. NAT’L STEEL & SHIPBUILDING

“employees” under the Longshore and Harbor Workers’
Compensation Act (“LHWCA”), 33 U.S.C. §§ 901–50.

                             I

    Except where noted, Cruz and Nassco have stipulated to
the following facts.

    Nassco is a shipbuilding company that contracts with the
U.S. government to build and repair Navy vessels. To carry
out this work, Nassco also contracts with labor brokers,
including Tradesmen International, Inc. (“Tradesmen”), for
temporary personnel. The contract between Nassco and
Tradesmen granted Nassco significant control over the
temporary employees Tradesmen assigned to Nassco. Nassco
could terminate the temporary employees at any time,
Tradesmen was required to provide Nassco notice if a
temporary employee resigned, and temporary employees
needed to seek approval for vacation time from Nassco.
Tradesmen employees assigned to Nassco received a badge
bearing both companies’ names enabling them to access
Nassco job sites. These employees attended daily meetings
led by Nassco employees who discussed task assignments.
Tradesmen provided some general safety training to
employees, but Nassco trained these employees on how to
perform shipbuilding and ship repair roles, including “fire
watch” and “tank tester.” Tradesmen invoiced Nassco for its
employees’ services at a rate agreed upon between the
companies, and Tradesmen then paid its employees a
separately agreed-upon hourly rate. The contract also
required Tradesmen to obtain workers’ compensation
coverage for each employee pursuant to the Longshore and
Harbor Workers’ Compensation Act (“LHWCA”).
          CRUZ V. NAT’L STEEL & SHIPBUILDING                5

     Sira Cruz, a Tradesmen employee assigned to Nassco,
was injured while conducting repair work on the USS Makin
Island—a Nassco work site—on February 20, 2013. Prior to
working for Tradesmen, Cruz had worked at another
temporary staffing agency and did some work at Nassco on
behalf of that agency. Cruz began her work for Tradesmen in
October 2010. In the two years immediately preceding her
injury Tradesmen assigned Cruz to work exclusively for
Nassco, with the exception of one week where it assigned her
to work for another Tradesmen client. In support of its
motion for summary judgment, Nassco submitted an August
16, 2016 screenshot of Cruz’s Facebook profile, where she
listed her employer as “Nasco” [sic] from March 2008 to the
present.

    Cruz started her work for Tradesmen at Nassco as a fire
watch. She later asked a Nassco employee to move her to the
position of tank tester. After many conversations with
Nassco employees about this move, Nassco informed Cruz
she would become a tank tester. Cruz learned how to test
tanks on the job with instructions from another Nassco
employee. She has stipulated that she would not have
otherwise known how to do the work because Tradesmen did
not provide her with tank-testing training. Cruz attended
meetings led by Nassco employees each morning, and some
of her work clothing had Nassco’s name on it. However,
Cruz alleges that even when Nassco gave her work
assignments, she controlled the details of her work and
Nassco employees did not supervise or direct her.

   At the time of her injury on February 20, 2013, Cruz had
worked as a tank tester for at least six months on
approximately eight different ships that Nassco was repairing.
On that day, Nassco employees instructed her to work in a
6          CRUZ V. NAT’L STEEL & SHIPBUILDING

tank on the USS Makin Island. Cruz fell through an access
hole in the tank while descending a ladder and suffered rib
fractures and a collapsed lung.

     Cruz collected LHWCA benefits from Tradesmen, which
had obtained LHWCA insurance coverage for her in
accordance with its contract with Nassco. She then filed a
complaint in admiralty in the Central District of California
alleging, among other charges, that Nassco’s negligence
caused her injuries. Nassco moved for summary judgment.
It argued that it was immune from suit in tort under the
LHWCA’s single-recovery provisions. The district court
granted summary judgment, holding that “as a matter of law[]
. . . Cruz was Nassco’s borrowed employee and is barred
from suing her employer under [the LHWCA].” Cruz now
appeals this judgment.

                                II

    The district court had original jurisdiction over this suit in
admiralty, 28 U.S.C. § 1333, and we have appellate
jurisdiction to review the district court’s final decision on the
merits, 28 U.S.C. § 1291. We review the district court’s grant
of summary judgment de novo. Bravo v. City of Santa Maria,
665 F.3d 1076, 1083 (9th Cir. 2011). Viewing the evidence
in the light most favorable to the nonmoving party, we
consider whether there are any genuine issues of material fact
and whether the district court correctly applied the relevant
substantive law. Frudden v. Pilling, 877 F.3d 821, 828 (9th
Cir. 2017).
          CRUZ V. NAT’L STEEL & SHIPBUILDING             7

                            A

    The district court correctly found no genuine issue of
material fact and ruled as a matter of law that Nassco was
immune from Cruz’s tort claims under the LHWCA,
33 U.S.C. §§ 901–50. Enacted in 1927, the LHWCA
establishes a mandatory framework for compensation of
maritime employees injured on the navigable waters of the
United States. A 1972 revision to the statute expanded its
coverage to injuries suffered in “any . . . adjoining area
customarily used by an employer in loading, unloading, [or]
repairing . . . a vessel.” LHWCA Amendments of 1972, Pub.
L. No. 92-576, § 2(c), 86 Stat. 1251, 1251 (codified as
amended at 33 U.S.C. § 903(a)). When a covered employee
is injured, the employer is liable regardless of fault.
33 U.S.C. § 904(b). A general contractor is liable to the
employee of a subcontractor only where the subcontractor
fails to procure workers’ compensation insurance or
otherwise fails to pay compensation. See id. § 905(a).

    An injured employee may file a claim for workers’
compensation benefits with the Office of Workers’
Compensation Programs, which has sole authority to
investigate the claim and hold a hearing, and must either
reject the claim or make an award. Id. § 919; 20 C.F.R.
§ 1.2(e). The LHWCA fixes the amount of compensation
based on the nature and extent of the injury and the
employee’s weekly pay rate. See 33 U.S.C. §§ 906, 908–10.

    When the LHWCA applies, its remedy is “exclusive and
in place of all other liability of [the] employer to the
employee.” Id. § 905(a); see Figueroa v. Campbell Indus.,
45 F.3d 311, 314–15 (9th Cir. 1995) (applying the LHWCA’s
one-recovery rule). The Supreme Court described the
8          CRUZ V. NAT’L STEEL & SHIPBUILDING

LHWCA’s compensation scheme as a quid pro quo: “In
return for the guarantee of compensation, the employees
surrender common-law remedies against their employers for
work-related injuries.” Wash. Metro. Area Transit Auth. v.
Johnson, 467 U.S. 925, 931 (1984) (superseded on other
grounds by statute, LHWCA Amendments of 1984, Pub. L.
No. 98-426, 98 Stat. 1639). An employer is thus immune
from any suit seeking further recovery for the same injury.
See id.

   Tradesmen, which paid Cruz’s LHWCA claim, was
Cruz’s contractual employer at the time of her injury.
However, the district court held that Nassco was legally
Cruz’s employer at this time under the borrowed employee
doctrine and thus was entitled to assert the defense of
LHWCA immunity.

                               B

     We have long recognized the borrowed employee—
traditionally, “borrowed servant” or “loaned servant”—
doctrine. Parker v. Joe Lujan Enters., Inc., 848 F.2d 118, 120
(9th Cir. 1988); United States v. Bissett-Berman Corp., 481
F.2d 764, 772 (9th Cir. 1973); McCollum v. Smith, 339 F.2d
348, 351–52 (9th Cir. 1964). “When one person puts his
[employee] at the disposal and under the control of another
for the performance of a particular service . . . [the employee]
is to be dealt with as [that] of the latter and not of the
former.” Denton v. Yazoo & Miss. Valley R.R. Co., 284 U.S.
305, 308 (1932). The relationship between a borrowing
employer and borrowed employee carries “all the legal
consequences” of a conventional employer-employee
relationship. See id. (quoting Standard Oil Co. v. Anderson,
212 U.S. 215, 220 (1909)). “[A]uthoritative direction and
          CRUZ V. NAT’L STEEL & SHIPBUILDING                 9

control” are the “critical factors” by which we resolve a
borrowed employee inquiry. Parker, 848 F.2d at 120 (citing
McCollum, 339 F.2d at 351); see United States v. N.A.
Degerstrom, Inc., 408 F.2d 1130, 1133 (9th Cir. 1969) (“The
critical factual inquiry in determining whether the loaned-
servant doctrine should be applied is the location of the power
to control the servant. . . . [R]esponsibility is regarded as a
correlative of power.” (quoting McCollum, 339 F.2d at 351));
see also Wolsiffer v. Atlantis Submarines, Inc., 848 F. Supp.
1489, 1495 (D. Haw. 1994) (applying McCollum and also
considering “whether there was a written agreement by the
employers regarding the loan of the employee, who paid the
employee’s wages and benefits, whether the employee
assented to the transfer, and the length of time of the
employment”).

    Here, the record establishes that Nassco was Cruz’s
borrowing employer because her work was subject to its
direction and control at all relevant times. Cruz had been
“loaned” from Tradesmen to Nassco for two nearly
uninterrupted years prior to her injury, and she had worked
for Nassco prior to that while she was affiliated with a
different temporary staffing agency. Cruz attended daily
morning meetings at which Nassco employees gave her tasks
to perform. On site, she wore an ID badge identifying her as
a Nassco employee. Cruz became a tank tester, the job she
performed on the day of her injury and for the six months
prior, only because she asked a Nassco employee to promote
her to the position and because another Nassco employee
trained her. Conversely, Tradesmen provided her with no
training or direction on how to perform this job. Nassco had
the authority to terminate Cruz’s temporary employment at
any time, and Cruz had to seek Nassco’s approval for
vacation time. On the day before her injury, Nassco
10        CRUZ V. NAT’L STEEL & SHIPBUILDING

employees instructed Cruz to work in the tank where she was
injured.

    Cruz presents no compelling argument that she was not
subject to Nassco’s direction and control. Although she
remained on the payroll of Tradesmen, payroll status is not
dispositive in borrowed employee inquiries. See N.A.
Degerstrom, 408 F.2d at 1132–33 (affirming a district court’s
holding that a loader operator was the borrowed employee of
the government despite being on the payroll of the plaintiff
company). Her signed declaration that she subjectively
considered herself a Tradesmen employee is insufficient to
put the matter in controversy: the borrowed employee
inquiry is objective; and this declaration made for litigation
purposes contradicts Cruz’s personal Facebook profile, where
she listed “Nasco” [sic] as her employer from March 2008
until at least August 2016. Finally, Cruz’s assertion that she
“sometimes worked in the Tradesmen office” is immaterial to
our conclusion that Nassco functioned as her borrowing
employer while she was performing repairs on the USS Makin
Island.

                              C

    We next review the district court’s conclusion that
Nassco, as a borrowing employer, was entitled to the same
immunity as a conventional employer under the LHWCA.
Until now, we have never directly addressed this question.
See Burnette v. Sierra Nev. Corp., No. 2:14-cv-2761, 2015
WL 5475262 at *6 (D. Ariz. Sept. 18, 2015) (commenting on
the lack of Ninth Circuit precedent). We now expressly hold
that a borrowed employee is an “employee” and a borrowing
employer is an “employer” for purposes of the LHWCA, and
accordingly, a borrowed employee who has been fully
          CRUZ V. NAT’L STEEL & SHIPBUILDING               11

compensated under the LHWCA by any party has no further
remedy for the same injury against her borrowing employer.

     Sound construction of the LHWCA compels this
conclusion. Congress enacted the statute’s current definition
of the term “employee” in 1984. LHWCA Amendments of
1984, Pub. L. No. 98-426, § 2, 98 Stat. 1639, 1639 (codified
as amended at 33 U.S.C. § 902(3)). An “employee,” for
purposes of the statute, is “any person engaged in maritime
employment . . . including a ship repairman,” but excluding
eight enumerated categories of individuals. 33 U.S.C.
§ 902(3). Those Congress excluded from employee status
include, among others, secretarial and marina personnel,
certain types of laborers on small vessels, and “individuals
who (i) are employed by suppliers, transporters, or vendors,
(ii) are temporarily doing business on the premises of an
employer . . . and (iii) are not engaged in work normally
performed by employees of that employer . . . .” Id.
§ 902(3)(A)–(H).

    Borrowed employees are not among the eight categories
of laborers Congress chose to categorically exclude from
coverage in § 902(3). Moreover, § 902(3)(D)’s exclusion of
individuals (i) employed by suppliers, transporters, or
vendors, (ii) temporarily doing business on the premises of an
employer, and (iii) not engaged in work normally performed
by employees of the employer further supports our
conclusion. Section 902(3)(D) excludes only a narrow subset
of borrowed employees: those who perform work for the
borrowing employer distinct from the type of work that
12          CRUZ V. NAT’L STEEL & SHIPBUILDING

employer’s conventional employees perform.1 This precise
language reflects a policy decision by Congress to exclude
some borrowed employees—but not all. See also id. § 905(a)
(describing the conditions under which a subcontractor’s
employees will be deemed employees of the contractor).

    We may assume that Congress understood in 1984 that
the Supreme Court had long recognized the borrowed
employee doctrine and that the statute’s definitions thus
reflect this understanding. Denton, 284 U.S. at 308; see
Merck & Co. v. Reynolds, 559 U.S. 633, 648 (2010) (“We
normally assume that, when Congress enacts statutes, it is
aware of relevant judicial precedent.”); Miranda B. v.
Kitzhaber, 328 F.3d 1181, 1189 (9th Cir. 2003) (“Congress is
presumed to know the law and to have incorporated judicial
interpretations when adopting a preexisting remedial scheme
. . . .”). Thus, applying the well-recognized canon of
expressio unius est exclusio alterius, we conclude that the
LHWCA reaches borrowed employees who otherwise fall
within Congress’s definition of “employee.” See Andrus v.
Glover Constr. Co., 446 U.S. 608, 616–17 (1980) (“Where
Congress explicitly enumerates certain exceptions to a
general prohibition, additional exceptions are not to be
implied, in the absence of evidence of a contrary legislative
intent.”).

    Our conclusion places us in agreement with the other
circuits to address this question. See Langfitt v. Fed. Marine
Terminals, Inc., 647 F.3d 1116, 1124 (11th Cir. 2011); White
v. Bethlehem Steel Corp., 222 F.3d 146, 149 (4th Cir. 2000);

     1
      Cruz, who performed the same type of work on the USS Makin
Island as Nassco employees, does not argue that she qualifies for this
exclusion.
            CRUZ V. NAT’L STEEL & SHIPBUILDING                        13

Peter v. Hess Oil Virgin Islands Corp., 903 F.2d 935, 940 (3d
Cir. 1990); Gaudet v. Exxon Corp., 562 F.2d 351, 355 (5th
Cir. 1977). It is also consistent with the broader body of
workers’ compensation law. Borrowing employers are
generally immune from borrowed employees’ tort suits under
various other workers’ compensation schemes. See 1 Modern
Workers Compensation § 103:30 (compiling state and federal
statutes and cases to conclude that “[e]xcept when the loaned
servant doctrine has been abrogated for this purpose, the
loaned employee cannot maintain a tort action against the
borrowing employer, even if the borrowing employer does
not provide workers’ compensation benefits to the loaned
employee.” (citations omitted)).

                                   III

    Cruz’s remaining arguments are without merit. She
alleges that Nassco waived its right to assert that she was its
borrowed employee through its contract with Tradesmen,
citing two vague provisions of the contract which do not
address the borrowed employee doctrine. Under California
law,2 “waiver is the intentional relinquishment of a known
right after knowledge of the facts.” Waller v. Truck Ins.
Exch., Inc., 900 P.2d 619, 636 (Cal. 1995) (emphasis added)

    2
       We interpret the agreement between Nassco and Tradesmen
according to California contract law. As a general contract principle, the
law of the situs state applies. See Thompson v. Enomoto, 915 F.2d 1383,
1388 (9th Cir. 1990). State law may apply in an admiralty case so long as
it merely supplements federal maritime law and does not deprive a party
of substantive admiralty rights. Pope & Talbot v. Hawn, 346 U.S. 406,
409–10 (1953). Waiver does not disrupt any admiralty right, and we have
previously considered claims of contractual waiver while sitting in
admiralty. Dant & Russell, Inc. v. Dillingham Tug & Barge Corp.,
895 F.2d 507, 511 (9th Cir. 1989).
14         CRUZ V. NAT’L STEEL & SHIPBUILDING

(internal quotation marks and citation omitted). Cruz bears
the burden to “prove [waiver] by clear and convincing
evidence that does not leave the matter to speculation,” and
we resolve doubtful cases against the party asserting waiver.
Id. She has not met this burden. Nothing in the contract
suggests Nassco intentionally waived its right to assert the
borrowed employee doctrine, and even so, a contract cannot
alter the truth of an employment relationship by placing
parties in different positions from those they actually held.
See Kowalski v. Shell Oil Co., 588 P.2d 811, 816 (Cal. 1979)
(en banc) (citing Martin v. Phillips Petroleum Co., 117 Cal.
Rptr. 269, 271 (Ct. App. 1974)).

     Cruz also argues that the district court improperly allowed
Nassco to join another defendant’s motion for summary
judgment. This argument is irrelevant because Nassco filed
its own motion for summary judgment—in which it asserted
the defense of immunity under the LHWCA—and we may
affirm the district court’s grant of summary judgment on any
ground supported by the record. Campidoglio LLC v. Wells
Fargo & Co., 870 F.3d 963, 973 (9th Cir. 2017).

                              IV

    The LHWCA provides maritime employees one
guaranteed recovery for covered injuries. Cruz received her
recovery, and the district court was correct to preclude her
from pursuing a second. For these reasons, the judgment of
the district court is AFFIRMED.