Court Opinion

ID: 4575858
Source: CourtListenerOpinion
Date Created: 2020-10-13 00:00:21.245855+00
Date Added: 2024-06-11T08:47:25.898610
License: Public Domain

Case: 19-30940     Document: 00515598131          Page: 1    Date Filed: 10/12/2020

              United States Court of Appeals
                   for the Fifth Circuit                             United States Court of Appeals
                                                                              Fifth Circuit

                                                                            FILED
                                                                      October 12, 2020
                                   No. 19-30940
                                                                       Lyle W. Cayce
                                                                            Clerk
   Brandon Morris,

                                                            Plaintiff—Appellant,

                                       versus

   Graphic Packaging International, L.L.C.,

                                                            Defendant—Appellee.

                  Appeal from the United States District Court
                     for the Western District of Louisiana
                            USDC No. 3:19-CV-266

   Before Higginbotham, Jones, and Higginson, Circuit Judges.
   Per Curiam:*
          While working for Graphic Packaging International (“GPI”),
   Brandon Morris was injured on the job site and later sued GPI in tort. GPI
   contends that, since Morris is a statutory employee, workers’ compensation
   provides Morris’s only remedy.       The district court granted summary

          *
            Pursuant to 5th Circuit Rule 47.5, the court has determined that this
   opinion should not be published and is not precedent except under the limited
   circumstances set forth in 5th Circuit Rule 47.5.4.
Case: 19-30940        Document: 00515598131           Page: 2    Date Filed: 10/12/2020

                                       No. 19-30940

   judgment for GPI and denied Morris’s Motion for Partial Summary
   Judgment. Morris appeals and we affirm.
            This court reviews the district court’s grant of summary judgment de
   novo, applying the same standards as the district court. DePree v. Saunders,
   588 F.3d 282, 286 (5th Cir. 2009). Summary judgment is appropriate if no
   genuine dispute of material fact exists, and the moving party is entitled to
   judgment as a matter of law. Fed. R. Civ. P. 56(a).
            In January 2018, GPI, a paper manufacturer, and Morris’s employer,
   ML Smith, Jr., L.L.C. (“ML Smith”) entered into a written contract
   (“Purchase Order”). The Purchase Order contained a document outlining
   terms and conditions. The terms and conditions form stated the requirement
   that ML Smith carry workers’ compensation insurance and that GPI would
   be the statutory employer of ML Smith’s employees. Id.
            A month later, Morris was assembling a new black liquor reclaim tank
   when he stepped in brown or black fluid on the ground. Morris sustained
   chemical burns on both his feet and has received benefits from Zurich
   American Insurance Company (“Zurich”), the insurer that issued ML
   Smith’s workers’ compensation policy.
            A little less than a year after his injuries, Morris filed suit against GPI
   in the Fourth Judicial District Court, Ouachita Parish, Louisiana. GPI
   removed the case to federal court under diversity jurisdiction. The district
   court granted summary judgment for GPI and denied Morris’s Motion for
   Partial Summary Judgment.           Morris timely appealed.        Zurich was an
   intervenor at the district court level, but has not appealed the ruling to this
   court.
            Under Louisiana law, workers’ compensation is the exclusive remedy
   in situations such as this one if the employee is a statutory employee. LA.

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Case: 19-30940      Document: 00515598131           Page: 3     Date Filed: 10/12/2020

                                     No. 19-30940

   STAT. ANN. § 23:1061 (2019). The terms of statutory employment are set
   out by Louisiana Revised Statutes § 23:1061(A)(3):
                  [A] statutory employer relationship shall not exist
          between the principal and the contractor's employees, whether
          they are direct employees or statutory employees, unless there
          is a written contract between the principal and a contractor
          which is the employee's immediate employer or his statutory
          employer, which recognizes the principal as a statutory
          employer. When the contract recognizes a statutory employer
          relationship, there shall be a rebuttable presumption of a
          statutory employer relationship between the principal and the
          contractor's employees, whether direct or statutory
          employees. This presumption may be overcome only by
          showing that the work is not an integral part of or essential to
          the ability of the principal to generate that individual principal's
          goods, products, or services.
   La. Stat. Ann. § 23:1061 (2019).
          In short, a worker is a statutory employee of the principal (here, GPI)
   if the employment relationship is formed with a written contract, and the
   employee is hired to perform services that are an integral part of the
   employer’s business.
          In this appeal, Morris contends that an unsigned writing – here, a
   Purchase Order with attached terms and conditions – cannot qualify as a
   written contract as required under Louisiana law for statutory employees.
   Morris also contends that the construction of a reclaim tank is not an integral
   part of GPI’s business, even though the use of the reclaim tank is an integral
   part of GPI’s business. We reject both claims.
          I. The Purchase Order satisfies the written contract requirement.
          “Except for intentional acts, workers’ compensation is the exclusive
   remedy for work-related injuries and illnesses.” Dugan v. Waste Mgmt., Inc.,

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                                         No. 19-30940

   45-407-CA (La. App. 2 Cir. 6/23/10); 41 So. 3d 1263, 1266 (citing La. Stat.
   Ann. § 23:1032). This statute applies if the worker is a statutory employee
   of a principal.1 La. Stat. Ann. § 23:1061. Under this statute, a statutory
   employment relationship exists when a principal hires a contractor, in
   conformance with § 23:1061, to perform services that are a part of the
   principal's business and a written contract exists between the principal and
   contractor that recognizes the principal as a statutory employer. La. Stat.
   Ann. § 23:1061.
           The Purchase Order is a “written contract” as required by Louisiana
   Revised Statutes 23:1061(A)(3) because it contains a clear written expression
   that GPI was Morris’s statutory employer. The Purchase Order states, in
   relevant part, “SECTION 13: STATUTORY EMPLOYMENT: If services
   are to be performed at [GPI's] facilities in the state of Louisiana, it is agreed
   that pursuant to the provisions of Louisiana Revised Statutes 23:1061(A)(3),
   that it is the intent and agreement of the parties hereto that the relationship
   of … [GPI] to the direct employees and the statutory employees of [ML
   Smith] (contractor) be that of a statutory employer.” This court has before
   recognized that this identical language was sufficient to recognize a statutory
   employment relationship. Nielsen v. Graphic Packaging Int'l, Inc., Civil
   Action No. 09-1757, 2011 WL 2462496 (W.D. La. June 17, 2011) aff'd, 469 F.
   App'x 305 (5th Cir. 2012). 2

           1
             A principal is defined as “any person who undertakes to execute any work which
   is a part of his trade, business, or occupation in which he was engaged at the time of the
   injury, or which he had contracted to perform and contracts with any person for the
   execution thereof.” La. Stat. Ann. § 23:1032.
           2
              Although Nielsen is an unpublished opinion and is not therefore binding on this
   court, it is useful evidence of this court’s treatment of this issue because of the factual
   similarity.

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                                     No. 19-30940

          While Morris contends that the contract is invalid because it was
   unsigned, the plain text of the Louisiana statute in question does not require
   a signed writing, it just requires a “written contract.” La. Stat. Ann.
   § 23:1061 (A)(3). Under Louisiana law, the offer and acceptance may be oral,
   and acceptance can be through performance, as it was here. La. Civ.
   Code Ann. art. 1927 (“Unless the law prescribes a certain formality for the
   intended contract, offer and acceptance may be made orally, in writing, or by
   action or inaction that under the circumstances is clearly indicative of
   consent.”). Further, the validity of the written contract was not at issue
   because, per the opening paragraph of the Purchase Order, performance
   constitutes acceptance. (“Acknowledgement, shipment or performance of
   any part of this Purchase Order will constitute acceptance by Seller of all
   Terms and Conditions hereof, including all documents incorporated herein
   by reference”).
          Therefore, while the Purchase Order was unsigned, it was a written
   contract that was accepted through performance and is a binding contract.
          II. Morris’s work in the construction of the reclaim tanks is an
   integral and essential part of GPI’s business.
          Once a principal has shown that a written contract has provided for a
   statutory employment relationship, there is a rebuttable presumption of
   statutory employment that can be overcome only by showing that the work is
   not an “integral part of or essential to the ability of the principal to generate
   that individual principal's goods, products, or services.” La. Stat. Ann.
   § 23:1061 (A)(3); see also Everitt v. Rubicon, Incorporated, 2004-1988 (La. App.
   1 Cir. 6/14/06); 938 So. 2d 1032 (“[T]he legislature has now shifted the
   burden of proof to the employee to rebut the presumption of a statutory
   employer relationship where a written contract recognizes such a
   relationship, and the statute specifies the burden the employee must meet in
   order to rebut the presumption.”). Morris contends that he can meet his

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                                     No. 19-30940

   burden to show that the work he was performing was not an integral part of
   or essential to the ability of GPI to generate its goods, products, and services.
   La. Stat. Ann. § 23:1061 (A)(3); Jackson v. St. Paul Ins. Co., 2004-0026,
   (La.App. 1 Cir. 12/17/04); 897 So. 2d 684, 688, writ denied, 2005-0156
   (La.3/24/05), 896 So.2d1042.
          According to an affidavit sworn by a GPI manufacturing manager,
   black liquor reclaim tanks, such as the one Morris was working on, are an
   “integral part of and essential to GPI’s ability to produce its paperboard
   products from both a continuous process perspective, as well as from an
   economic and environmental perspective.” Morris responds that, while the
   use of the tanks is an integral part of GPI’s business, the construction of those
   tanks is not an integral part of GPI’s business. Not so. Louisiana appellate
   courts have recognized that the statutory employer test is liberal and
   expansive, and for example held that the construction of a new fractionation
   plant was an essential part of a chemical company’s business. See Jackson v.
   St. Paul Ins. Co., 2004-0026, (La.App. 1 Cir. 12/17/04); 897 So. 2d 684, 688-
   89, writ denied, 2005-0156 (La.3/24/05), 896 So. 2d 1042 (“[T]he legislature
   has specifically rejected a restrictive analysis in favor of a more liberal
   interpretation of the words ‘integral’ and ‘essential.’”); Applegarth v.
   Transamerican Ref. Corp., 00-1547 (La. App. 5 Cir. 2/28/01), 781 So. 2d 804,
   807, writ denied, 2001-0834 (La. 5/11/01), 792 So. 2d 738 (After
   “[c]onsidering the history of the legislative responses to the restriction of
   statutory employee status by the courts, we conclude that [the legislature]
   intended the section to apply to new construction” in at least some
   circumstances, and therefore constructing “a retaining wall around the oil
   tanks and laying cement forms for the installation of pipe racks is essential to
   the ability of the refinery to generate its goods, products, or services.”)
          Since it is undisputed that the use of black liquor tanks is an integral
   and essential part of GPI’s business, and Louisiana courts have classified the

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                                   No. 19-30940

   new construction of an integral part of a company’s business as itself an
   integral part of the company’s business, we agree with the district court’s
   conclusion that the construction of black liquor reclaim tanks is an integral
   part of GPI’s business. See La. Stat. Ann. § 23:1061 (A)(3). Morris has
   not met his burden to rebut the written contract establishing a statutory
   employer relationship, and consequently, GPI was Morris’s statutory
   employer.
         III. Conclusion
         As Morris’s statutory employer, GPI is immune from Morris’s tort
   claims and his exclusive remedy is workers’ compensation. Accordingly, the
   judgment of the district court is AFFIRMED.

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