Court Opinion

ID: 2770374
Source: CourtListenerOpinion
Date Created: 2015-01-15 20:00:58.678467+00
Date Added: 2024-06-11T10:33:56.110955
License: Public Domain

PUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                             No. 14-1180

JAMES THOMAS DEMETRES,

                Plaintiff - Appellant,

           v.

EAST WEST CONSTRUCTION, INC.,

                Defendant - Appellee.

Appeal from the United States District Court for the Eastern
District of Virginia, at Norfolk.    Rebecca Beach Smith, Chief
District Judge. (2:13-cv-00155-RBS-DEM)

Argued:   October 30, 2014                Decided:   January 15, 2015

Before NIEMEYER and GREGORY, Circuit Judges, and DAVIS, Senior
Circuit Judge.

Affirmed by published opinion. Judge Gregory wrote the opinion,
in which Judge Niemeyer and Senior Judge Davis joined.

ARGUED: Earl Stanley Murphy, MOODY LAW FIRM, Portsmouth,
Virginia, for Appellant.   Danielle D. Giroux, HARMAN, CLAYTOR,
CORRIGAN & WELLMAN, Richmond, Virginia, for Appellee. ON BRIEF:
Stanley P. Wellman, HARMAN, CLAYTOR, CORRIGAN & WELLMAN,
Richmond, Virginia, for Appellee.
GREGORY, Circuit Judge:

     James       Thomas      Demetres       (“Demetres”)          appeals         the    district

court’s dismissal of his personal injury suit against East West

Construction,      Inc.       (“East    West”)        for    lack       of    subject       matter

jurisdiction       pursuant       to        Federal     Rule       of        Civil      Procedure

12(b)(1).    For the reasons stated herein, we affirm the judgment

of the district court.

                                                I.

     Demetres is a resident and citizen of North Carolina.                                      His

direct   employer,          Ashland    Construction            Co.      (“Ashland”),           is   a

North    Carolina           corporation.              East       West        is    a     Virginia

corporation.        In March of 2011, Ashland hired East West as a

subcontractor          to    prepare        a    site       in    Virginia             Beach    for

construction of a CVS Pharmacy, and designated Demetres as the

superintendent.

     At the jobsite on March 28, 2011, a bulldozer, which was

operated    by    an    employee       of    East     West,      backed       over      Demetres,

resulting    in     significant         injuries         and      nearly          killing      him.

Demetres    subsequently         received           workers’      compensation           benefits

under North Carolina law through his employment with Ashland.

     On March 27, 2013, Demetres filed a personal injury suit

against East West in the Eastern District of Virginia, alleging

negligence and seeking $100,000,000 in damages.

                                                2
     East West filed a motion to dismiss for lack of subject

matter jurisdiction, pursuant to Federal Rule of Civil Procedure

12(b)(1).        It    argued    that    the    exclusivity       provision     of    the

Virginia     Workers’      Compensation         Act   (“VWCA”),     Va.   Code       Ann.

§ 65.2-307,      barred        Demetres’s       personal    injury    suit.          The

district court, relying largely on our decision in Garcia v.

Pittsylvania County Service Authority, 845 F.2d 465 (4th Cir.

1988),   granted        East    West’s    motion      and   dismissed     the    suit.

Demetres timely appealed.

                                          II.

     We review a district court’s dismissal for lack of subject

matter jurisdiction under Rule 12(b)(1) de novo. 1                    Evans v. B.F.

Perkins Co., 166 F.3d 642, 647 (4th Cir. 1999).                       The burden of

establishing          subject    matter        jurisdiction       rests   with        the

plaintiff.       Id.     A 12(b)(1) motion should be granted if, after

engaging    in   any     necessary      fact-finding,       the   court   determines

     1
        There was some discussion at oral argument and in the
district court about whether East West’s motion should be
characterized as a Rule 12(b)(6), rather than a Rule 12(b)(1),
motion.    Because the outcome would be the same regardless, we
have no need to decide that issue and proceed as if East West’s
motion properly invoked Rule 12(b)(1).

                                            3
that the movant is entitled to judgment as a matter of law.                  See

Arbaugh v. Y&H Corp., 546 U.S. 500, 514 (2006). 2

     Demetres makes two main arguments on appeal.                     First, he

argues that the Full Faith and Credit Clause requires Virginia

to defer to the law of North Carolina, the state that paid him

benefits, in determining whether his suit is barred.                  Second, he

argues that Supreme Court of Virginia precedent allows Virginia

to apply the law of the state that paid benefits, even if the

injury occurred in Virginia.

                                       A.

     Demetres argues that East West would be amenable to suit in

North Carolina and, because he accepted workers’ compensation

benefits in North Carolina through Ashland, the district court

should have applied North Carolina law to determine whether his

suit against East West should be barred.                   The district court

rejected   this     argument   and,    applying   Virginia     law,    concluded

that the suit was barred.

     Because this is a diversity action, the district court,

sitting in Virginia, was required to apply Virginia law.                     See

Klaxon   Co.   v.   Stentor    Elec.   Mfg.   Co.,   313    U.S.   487,   496-97

     2
       “[I]n some instances, if subject-matter jurisdiction turns
on contested facts, the trial judge may be authorized to review
the evidence and resolve the dispute on her own.               If
satisfaction of an essential element of a claim for relief is at
issue, however, the jury is the proper trier of contested
facts.” Arbaugh, 546 U.S. at 514 (internal citations omitted).

                                        4
(1941); see also Res. Bankshares Corp. v. St. Paul Mercury Ins.

Co., 407 F.3d 631, 635 (4th Cir. 2005).                 Virginia subscribes to

the lex loci delicti principle for determining the applicable

substantive law in tort suits.                Jones v. R.S. Jones & Assocs.,

Inc.,     431    S.E.2d   33,    34   (Va.     1993).      According    to   that

principle, the law of the place in which the injury occurred

governs    the    substantive     cause   of    action.     Id.    Because    the

injury that is the basis of this suit occurred in Virginia, the

substantive law of Virginia governs.

     An injured employee who is covered by the VWCA is barred

from suing his employer in tort for injuries “arising out of and

in the course of the injured employee’s employment.”                   See, e.g.,

Simms v. Ruby Tuesday, Inc., 704 S.E.2d 359, 362 (Va. 2011).

Section 65.2-307 of the Virginia Code provides:

     The rights and remedies herein granted to an employee
     when his employer and he have accepted the provisions
     of   this  title   respectively  to   pay  and   accept
     compensation on account of injury or death by accident
     shall exclude all other rights and remedies of such
     employee,   his   personal   representative,   parents,
     dependents or next of kin, at common law or otherwise,
     on account of such injury, loss of service or death.

Va. Code Ann. § 65.2-307(A) (emphasis added).                 Section 65.2-302

defines    a     “statutory     employer.”       That   section   provides,    in

relevant part:

     When any person (referred to in this section as
     “contractor”) contracts to perform or execute any work
     for another person which work or undertaking is not a
     part of the trade, business or occupation of such

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       other person and contracts with any other person
       (referred to in this section as “subcontractor”) for
       the   execution  or   performance by  or   under  the
       subcontractor of the whole or any part of the work
       undertaken by such contractor, then the contractor
       shall be liable to pay to any worker employed in the
       work any compensation under this title which he would
       have been liable to pay if that worker had been
       immediately employed by him.

Va. Code Ann. § 65.2-302(B) (emphasis added).

       The Supreme Court of Virginia has interpreted the VWCA as

barring suits where, as here, injured employees of a general

contractor attempt to sue a subcontractor who was engaged in the

general   contractor’s          “trade,   business    or     occupation.”        See,

e.g., David White Crane Serv. v. Howell, 714 S.E.2d 572, 575

(Va.   2011)        (“Because   the   purpose   of   the   [VWCA]     is    to   bring

within its operation all persons who are engaged in the trade,

business or occupation of the contractor who engages to perform

the    work,    all     such    persons   are   entitled     to   the      protection

afforded by Code § 65.2-307.”); Pfeifer v. Krauss Constr. Co.,

546 S.E.2d 717, 719 (Va. 2001) (“If a particular subcontractor

and an injured employee’s common law or statutory employer are

both working on the same project and are also engaged in the

owner’s        or     general     contractor’s       work,     that        particular

subcontractor, as a statutory co-employee of the injured worker,

is also entitled to the common law immunity provided by the

exclusivity provision.”).             Notwithstanding whatever our own view

of the statutory text may be, when interpreting state law, we

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are obligated to defer to the state’s highest court.                             See, e.g.,

Assicurazioni Generali, S.p.A. v. Neil, 160 F.3d 997, 1002 (4th

Cir. 1998) (“It is axiomatic that in determining state law a

federal court must look first and foremost to the law of the

state’s       highest     court,    giving     appropriate         effect     to    all    its

implications.”).           Here, East West, a construction subcontractor

preparing a worksite for Ashland, was clearly engaged in the

same “trade, business or occupation” as Ashland.                            East West is

therefore       a    statutory      co-employee        of    Demetres      under     Supreme

Court    of    Virginia       precedent.           Thus,    if   the   VWCA      applies    to

Demetres’s claim, his suit is barred.

        Demetres, however, argues that the VWCA does not apply to

his    claim,       because    he   obtained        benefits      in     North     Carolina.

Under the workers’ compensation laws of North Carolina, Demetres

argues that East West would not be immune from suit.                             He further

argues that Virginia should give full faith and credit to his

right of action against East West under North Carolina law.

        In Garcia v. Pittsylvania County Service Authority, a panel

of    this    Court     held   that    the     VWCA    barred      the    claims     of    two

employees       of    a    North      Carolina        subcontractor        for     injuries

sustained      while      working     on   a   project      for   a    Virginia      general

contractor in Virginia.              845 F.2d at 468.             Relying primarily on

the Supreme Court’s decision in Carroll v. Lanza, 349 U.S. 408

(1955), the panel concluded that “the law of Virginia controls

                                               7
for [an] accident which occurred in Virginia and was occasioned

by the negligence of an independent contractor with the [general

contractor]         who   was     doing    work        in    Virginia     and   required       by

Virginia law to have workers’ compensation insurance.”                                  Garcia,

845 F.2d at 467.

       The Supreme Court in Carroll held that states with more

permissive workers’ compensation laws are not required to give

full faith and credit to states whose laws are more restrictive.

349    U.S.    at    413-14.         There,    an       injured      employee     brought       a

personal       injury      suit      against       a    third      party    tortfeasor        in

Arkansas,       after     collecting       workers’          compensation       benefits       in

Missouri.       Id. at 409-10.            At the time, Missouri barred suits by

injured employees against third parties, but Arkansas did not.

Id.      The Supreme Court held that the Full Faith and Credit

Clause    did    not      require     Arkansas         to    defer   to    Missouri’s      more

restrictive laws and bar the suit.                          Id. at 413-14.            The Court

reasoned that Arkansas, as the state where the injury occurred,

had “a legitimate interest in opening her courts to suits of

this nature, even though in this case Carroll’s injury may have

cast no burden on her or on her institutions.”                            Id. at 413.         The

Court expressly limited its holding to cases where a state seeks

to    permit    a    cause      of   action    that         is   barred    by   the    laws    of

another state.            See id. (stating that Carroll is not a case

“where the State of the forum seeks to exclude from its courts

                                               8
actions arising under a foreign statute” and that the situation

in Carroll is “a much weaker [case] for application of the Full

Faith and Credit Clause”).

      Notwithstanding the Supreme Court’s limiting language, the

Garcia   panel      concluded    that    Carroll      applied   to   all   workers’

compensation       cases     “involving        differing    state     compensation

statutes.”        Garcia, 845 F.2d at 466.            Thus, in Garcia, Virginia

was   not    required       to   relax    its     more     restrictive     workers’

compensation bar to hear a suit permitted under the laws of

North Carolina.       Id. at 467.

      The district court concluded that Garcia clearly foreclosed

Demetres’s claim.         Demetres v. E.W. Constr. Co., 995 F. Supp. 2d

539, 544 (E.D. Va. 2014) (relying on Garcia to conclude that

Demetres’s    “tort       suit   is   barred    [in    Virginia]”).        Like    the

district court, we conclude that, under Garcia, Demetres’s claim

is barred by the VWCA.

      Demetres, however, argues that Garcia was wrongly decided,

that this Court erred in relying on Carroll, and that it should

have applied the Full Faith and Credit balancing test applied in

Hughes v. Fetter, 341 U.S. 609 (1951).                   In Hughes, the Supreme

Court held that Wisconsin could not bar a wrongful death claim

arising out of Illinois law solely because the death occurred

outside of Wisconsin.             Id. at 612.          The Court balanced the

policies     of    both    Wisconsin     and    Illinois     and,    finding      that

                                          9
Wisconsin “has no real feeling of antagonism against wrongful

death    suits   in   general,”   concluded      that    the    Full    Faith    and

Credit    Clause    required   Wisconsin    to    open    its    courts     to    the

plaintiff’s wrongful death claim.          Id.

     Demetres argues that the balancing test the Supreme Court

applied    in      Hughes   should   have     been       applied       in   Garcia.

Regardless of our opinion on the validity of the Garcia panel’s

analysis, however, we are bound to follow its decision.                          See,

e.g., McMellon v. United States, 387 F.3d 329, 332 (4th Cir.

2004) (en banc) (stating the “basic principle that one panel

cannot overrule a decision issued by another panel”).                        Thus,

even if we were to agree with Demetres that the analysis in

Garcia was faulty, we are powerless as a panel to overrule it. 3

     3
       Demetres also argues that the 1932 Supreme Court of
Virginia case Solomon v. Call, 166 S.E. 467 (Va. 1932),
expressly allows his claim to be heard in Virginia.       Solomon
held that an out-of-state employee, who was injured in Virginia
but collected workers’ compensation benefits in his home state,
may sue the third party tortfeasor responsible for his injuries
in Virginia.   Id. at 469.    The Supreme Court of Virginia has
never expressly overruled Solomon.     In Garcia, however, this
Court held that Solomon, to the extent that it would allow a
suit such as Demetres’s to proceed, was no longer the “present
law of Virginia on the subject.” Garcia, 845 F.2d at 467.

     Since Garcia abrogated Solomon and barred a suit that
Demetres’s counsel admitted at oral argument was factually
indistinguishable from the instant case, we have no need to
address Solomon here. Today we are bound to follow Garcia, and
under Garcia, Demetres’s suit is barred.

                                     10
    Only the full court, sitting en banc, can overrule a panel

decision.    However, for the time being, we must follow the panel

decision    in   Garcia   and   hold   that,   because   Demetres’s   injury

occurred in Virginia, and East West is a statutory co-employee

under Virginia law, his personal injury action is barred by the

VWCA.

                                                                  AFFIRMED

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