And Gatx Third Aircraft, LLC v. Cooper Marine & Timberlands Corp. (In re Cooper Marine & Timberlands Corp.)

IN THE MATTER OF COOPER MARINE & TIMBERLANDS CORPORATION,

as Owner Pro Hac Vice and Operator; and GATX THIRD AIRCRAFT, LLC,

as Owner of the BARGE CMT 123, Official No. 1067600

ROBERT L. COLEMAN, Special Administratorfor the Estate of Nicolas Perez Hernandez, andhis Surviving Heirs and Dependents PLAINTIFF v. COOPER MARINE & TIMBERLANDS CORPORATION, et al. DEFENDANTSKASSANDRA NIEVES, Individually andas Personal Representative of the Estate of Juan Nievesand his Surviving Heirs and Dependents PLAINTIFF v. COOPER MARINE & TIMBERLANDS CORPORATION, et al. DEFENDANTS

No. 3:15CV00170 JLH (LEAD)

NO. 3:15CV00225 JLH

NO. 3:15CV00350 JLH

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF ARKANSAS JONESBORO DIVISION

June 8, 2017

OPINION AND ORDER

These two wrongful death cases have been consolidated for discovery because the decedents—Juan Nieves and Nicolas Perez Hernandez—were killed in the same accident while unloading steel coils from a barge as workers for Kinder Morgan Bulk Terminals, Inc. In addition to three Kinder Morgan entities, the decedents' estates have sued the manufacturer of the steel coils, the company that loaded the steel coils onto the barge, and the company whose tug took custody of the barges and delivered them to a Kinder Morgan Marine Services fleet terminal in Arkansas. The defendants other than the Kinder Morgan entities have asserted third-party claims against two staffing agencies that supplied Nieves and Hernandez to Kinder Morgan. The staffing agencies have moved for summary judgment. For reasons that will be explained, the motions for summary judgment filed by the staffing agencies are granted.

I. SUMMARY JUDGMENT STANDARD

A court should grant summary judgment if the evidence demonstrates that there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). The moving party bears the initial burden of demonstrating the absence of a genuine dispute for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 2553, 91 L. Ed. 2d 265 (1986). If the moving party meets that burden, the nonmoving party must come forward with specific facts that establish a genuine dispute of material fact. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S. Ct. 1348, 1356, 89 L. Ed. 2d 538 (1986); Torgerson v. City of Rochester, 643 F.3d 1031, 1042 (8th Cir. 2011) (en banc). A genuine dispute of material fact exists only if the evidence is sufficient to allow a reasonable jury to return a verdict in favor of the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 2510, 91 L. Ed. 2d 202 (1986). The Court must view the evidence in the light most favorable to the nonmoving party and must give that party the benefit of all reasonable inferences that can be drawn from the record. Pedersen v. Bio-Med. Applications of Minn., 775 F.3d 1049, 1053 (8th Cir. 2015). If the nonmoving party fails to present evidence sufficient to establish an essential element of a claim on which that party bears the burden of proof, then the moving party is entitled to judgment as a matter of law. Id.

II. UNDISPUTED FACTS

On June 15, 2010, Kinder Morgan¹ contacted Temps Plus, Inc., and requested that it supply a worker as a cutting torch operator. Juan Nieves was then sent by Temps Plus to fulfill that request. Nieves had applied for employment with Temps Plus on December 7, 2009, and had stated in his application that he had experience in welding. Similarly, on May 21, 2012, Kinder Morgan² contacted Dawson Employment Service, Inc., and requested that it provide a cutting torch operator. Both Nieves and Hernandez remained on the payrolls of the staffing agencies while continuing to work for Kinder Morgan until the incident that caused their deaths on April 8, 2014.

Kinder Morgan Energy Partners, L.P., acting for itself and its affiliates and subsidiaries, contracted with the staffing agencies using a form contract that it prepared and sent to the agencies. The contracts provided that the staffing agencies would provide temporary personnel to Kinder Morgan with compensation to the staffing agencies based on a schedule of values pertaining to the work to be completed or accomplished. Kinder Morgan's agreement with Temps Plus provided for Kinder Morgan to pay Temps Plus at markup rate of 38% for industrial positions and 44% for longshore and harbor positions. Dawson charged Kinder Morgan a markup of 40% for industrial workers and 45% for longshore and harbor workers. Both staffing agencies charged a higher rate for longshore and harbor workers because of the increased cost in longshore and harbor workers' compensation coverage. It was the duty of the hiring manager, who was the contact person at Kinder Morgan for the staffing agencies, to provide the staffing agencies with specific laborclassifications pertaining to the work to be completed or accomplished. Those classifications could be revised by mutual agreement between Kinder Morgan and the staffing agencies.

From June of 2010 until Nieves died on April 8, 2014, Temps Plus charged Kinder Morgan at the 38% markup rate. Temps Plus was never informed by Kinder Morgan that Nieves was working on a barge or in any other capacity that required coverage under the Longshore and Harbor Workers' Compensation Act. Some timesheets submitted by Kinder Morgan referenced a "coil dock" location, but, nevertheless, Kinder Morgan never informed Temps Plus that Nieves was working in a job assignment that required Longshore and Harbor Workers' Compensation Act coverage. Dawson, in contrast, has a record showing that effective December 23, 2013, Hernandez's classification was changed, and he was moved to a position that required coverage under the Longshore and Harbor Workers' Compensation Act. Dawson did not, however, know exactly what Hernandez was doing—it did not know that he was unloading barges.

The contracts between Kinder Morgan and the staffing agencies provided that no worker placed by the staffing agencies with Kinder Morgan would be deemed an employee of Kinder Morgan. The staffing agencies paid those workers based on timesheets submitted by Kinder Morgan. The staffing agencies provided workers' compensation insurance and, if applicable, insurance coverage pursuant to the Longshore and Harbor Workers' Compensation Act, as well as other forms of liability insurance. The contracts also provided for the staffing agencies to provide the workers some training with respect to safety policies and procedures. Work was to be performed by the employees as instructed by Kinder Morgan's hiring manager. The employees were not permitted to deviate from the work assignment without authorization from the hiring manager.

The steel coils that were being unloaded on April 8, 2014, weighed more than thirty tons each. Severstal Columbus, LLC, now known as Steel Dynamics Columbus, LLC, manufactured them. Logistic Services, Inc., loaded them on two barges in Columbus, Mississippi. Cooper Marine & Timberlands Corporation took custody of the barges and tugged them upriver to the Kinder Morgan terminal. Kinder Morgan Bulk Terminals received the coils pursuant to a contract with its customer, IPSCO Tubulars, Inc. The first barge was unloaded without incident. At some point while the second barge was being unloaded, one or more of the coils rolled to a side, which caused the barge to list and then to sink.

The plaintiffs allege that Steel Dynamics, Logistic Services, and Cooper Marine were negligent and that their negligence caused the accident in which Nieves and Hernandez were killed. These three defendants have filed third-party complaints against Dawson and Temps Plus pursuant to Federal Rules of Civil Procedure 9(h) and 14(c). The third-party complaints allege that the staffing agencies had a duty to train Hernandez and Nieves properly and to ensure that they were fully qualified to do the work that they were doing at the time of the incident but that they failed to fulfill that duty. The third-party complaints seek indemnity or contribution from Dawson and Temps Plus for any damages Steel Dynamics, Logistic Services, or Cooper Marine may be required to pay to the plaintiffs.

Dawson and Temps Plus have filed substantially similar motions for summary judgment. They first argue that they are immune from liability as employers of Nieves and Hernandez under the Longshore and Harbor Workers' Compensation Act. In the alternative, they argue that they had no common-law duty to train Nieves and Hernandez.

III. LONGSHORE AND HARBOR WORKERS' COMPENSATION ACT

The Longshore and Harbor Workers' Compensation Act "is a no-fault federal compensation scheme designed to give protection to injured maritime workers while at the same time affording employers some degree of predictability with regard to those workers' recoveries." White v. Bethlehem Steel Corp., 222 F.3d 146, 148 (4th Cir. 2000). It is a federal workmen's compensation statute that provides compensation to certain employees for disability or death resulting from an injury occurring on the navigable waters of the United States and certain adjoining facilities. Peter v. Hess Oil Virgin Islands Corp., 903 F.2d 935, 938 (3rd Cir. 1990); 33 U.S.C. § 903(a). As with state workers' compensation laws, after which the Longshore and Harbor Workers' Compensation Act is modeled, the employer³ is required to provide compensation for disability or death irrespective of fault. 33 U.S.C. § 904. In return, again as is the case with the corresponding state laws, the employer is immune from tort liability. Id. § 905(a). When an employer has fulfilled its obligations under the act by paying benefits to the injured employee, "further tort-based contribution from the employer is foreclosed." Triguero v. Consolidated Rail Corp., 932 F.2d 95, 98 (2nd Cir. 1991). That immunity extends to third-party claims for contribution. Id.

Here, Temps Plus and Dawson argue...