917 F.3d 847
5th Cir.2019Background
- Two Mexican citizens working on H arang’s sugarcane farm were severely injured when a Harang employee ran over the cart they were on; Harang conceded fault and total damages were stipulated at $2.5 million.
- Plaintiffs were recruited, hired, paid weekly, and supervised by Lowry Farms, Inc.; Lowry obtained visas, provided housing/transportation, paid wages, and carried workers’ compensation insurance.
- Harang contracted with Lowry on a per-acre basis, provided tractors/carts/equipment, assigned fields, and completed time sheets, but did not hire, fire, directly supervise, or set hours for individual planters.
- Farm Bureau (Harang’s insurer) argued Harang had statutory immunity under Louisiana workers’ compensation law (or that the plaintiffs were Harang’s employees), and also relied on a general-liability exclusion if plaintiffs were Harang employees.
- The district court held plaintiffs were Lowry’s employees (not Harang’s), denied Harang immunity, and entered judgment for plaintiffs; the Fifth Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does La. Rev. Stat. § 23:1021(7) (manual-labor independent-contractor exception) make a principal immune to tort suits by employees of the independent contractor? | Plaintiffs: §1021(7) covers only the independent contractor, not its employees; Harang lacks immunity. | Farm Bureau: When a contractor is covered under §1021(7), its employees should also be treated as covered, giving the principal immunity. | Held: §1021(7) applies to independent contractors themselves, not to their employees; Harang not immune under §1021(7). |
| Can plaintiffs be deemed Harang employees under the ‘‘presumed employee’’ statute (§ 23:1044)? | Plaintiffs: No express or implied employment agreement with Harang; presumption overcome. | Farm Bureau: Plaintiffs rendered services for Harang and thus are presumed employees. | Held: Presumption rebutted—no express/implied agreement with Harang; plaintiffs are not Harang employees. |
| Are plaintiffs "borrowed employees" (special employer) of Harang, triggering joint liability and immunity? | Plaintiffs: Lowry retained control; factors weigh against borrowed-servant status. | Farm Bureau: Plaintiffs worked on Harang’s operations with Harang’s equipment, supporting borrowed-employee status. | Held: Applying the borrowed-servant multi-factor test, Lowry controlled planters; plaintiffs not Harang’s borrowed employees. |
| Does finding (or not) of employment status affect insurer coverage (Harang’s liability policy exclusion)? | Plaintiffs: They were Lowry employees, so Harang’s insurer cannot invoke employee-exclusion for Harang’s insured. | Farm Bureau: If plaintiffs are Harang employees, the general-liability policy excludes coverage. | Held: Plaintiffs were Lowry’s employees, not Harang’s; Harang’s insurer cannot rely on an employee exclusion or workers’ compensation immunity. |
Key Cases Cited
- Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938) (federal courts apply state substantive law in diversity cases)
- Gulf & Miss. River Transp. Co. v. BP Oil Pipeline Co., 730 F.3d 484 (5th Cir. 2013) (framework for making an Erie guess about state law)
- Lushute v. Diesi, 354 So. 2d 179 (La. 1977) (manual-labor contractor exception applies to contractor "in carrying out the terms of his contract")
- Lumar v. Zappe Endeavors, L.L.C., 946 So. 2d 188 (La. App. 5 Cir. 2006) (intermediate court decision treating contractor limitations as applying to contractor’s employees)
- Daigle v. McGee Backhoe & Dozer Serv., 16 So. 3d 4 (La. App. 5 Cir. 2009) (intermediate court declined to apply Lumar’s reasoning to allow contractor’s employee to recover under principal via §1021(7))
- Champagne v. Am. Alt. Ins. Corp., 112 So. 3d 179 (La. 2013) (presumption in favor of preserving tort remedies unless statute clearly limits them)
- Capps v. N.L. Baroid-NL Indus., Inc., 784 F.2d 615 (5th Cir. 1986) (discussion of legal nature of borrowed-servant determination and fact-intensive factor analysis)