Frantom v. United States

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF LOUISIANA

SHREVEPORT DIVISION

MICHAEL S. FRANTOM CIVIL ACTION NO. 20-385

VERSUS JUDGE ELIZABETH E. FOOTE

USA MAGISTRATE JUDGE HORNSBY

MEMORANDUM RULING

Before the Court are cross-motions for summary judgment filed by Michael Frantom

(“Frantom”), Intervenors J.D. Frost Trucking Company, L.L.C. (“J.D. Frost”) and Louisiana

Construction and Industry Self-Insurers’ Fund, and Defendant United States of America.1

All motions raise the same issue—whether the United States qualifies as Frantom’s

“statutory employer” under Louisiana law. For the following reasons, Frantom’s and

Intervenors’ motions for partial summary judgment on the statutory employer defense

under the Louisiana Workers’ Compensation Act are GRANTED. The United States’ cross-

motion for summary judgment is DENIED.

Background

All parties largely agree on the relevant facts. In 2018, Frantom served as a truck

driver employed by J.D. Frost.2 That same year, J.D. Frost contracted with the United

States Postal Service (“USPS”) to transport mail between postal facilities in Western

Louisiana.3 As a result, on April 6, 2018, Frantom was at the USPS Shreveport Processing

1 Record Documents 23, 28, and 35.

2 Record Documents 35-1 at ¶ 2, 37-1 at ¶ 2, and 39-1.

3 Record Documents 35-1 at ¶s 2−3, 37-1 at ¶s 2−3, and 39-1.

and Distribution Center so the facility could load his truck with mail.4 Frantom was to

transport this mail to another USPS facility in Louisiana.5 While he waited, an overhead

industrial fan fell from the facility’s loading dock ceiling and then struck and injured

Frantom.6

Frantom filed suit in March 2020 seeking damages from the United States under

the Federal Torts Claims Act (“FTCA”).7 J.D. Frost and its workers’ compensation insurer,

the Louisiana Construction and Industry Self-Insurers’ Fund, intervened in this action in

October 2020 asserting their subrogation rights for expenses which they previously paid

on behalf of Frantom or will be required to pay on his behalf.8

In its answer to Frantom’s complaint and to the Intervenors’ complaint, the United

States asserts that it is entitled to the “statutory employer” defense under the Louisiana

Workers’ Compensation Act (“LWCA”) and, therefore, not liable under the FTCA.9 Frantom

and Intervenors have each respectively filed a motion for summary judgment arguing that

the United States does not qualify as a statutory employer under the LWCA.10 The United

States opposed the motions and, in turn, filed its own motion for summary judgment

arguing that all claims against it must be dismissed because it qualifies as a statutory

employer.11

4 Record Documents 35-1 at ¶ 4, 37-1 at ¶ 4, and 39-1.

5

6 Record Documents 35-1 at ¶s 1 and 4−5, 37-1 at ¶s 1 and 4−5, and 39-1.

7 Record Document 1.

8 Record Document 15.

9 Record Documents 8 and 34.

10 Record Documents 23 and 28.

11 Record Document 35.

Law and Analysis

A. Summary Judgment Standard

Federal Rule of Civil Procedure 56(a) directs a court to “grant summary judgment

if the movant shows that there is no genuine dispute as to any material fact and the

movant is entitled to judgment as a matter of law.” Summary judgment is appropriate

when the pleadings, answers to interrogatories, admissions, depositions, and affidavits on

file indicate that there is no genuine issue of material fact and that the moving party is

entitled to judgment as a matter of law. , 477 U.S. 317, 322

(1986). When the burden at trial will rest on the non-moving party, the moving party

need not produce evidence to negate the elements of the non-moving party’s case; rather,

it need only point out the absence of supporting evidence at 322–23.

If the movant satisfies its initial burden of showing that there is no genuine dispute

of material fact, the nonmovant must demonstrate that there is, in fact, a genuine issue

for trial by going “beyond the pleadings” and “designat[ing] specific facts” for support.

, 37 F.3d 1069, 1075 (5th Cir. 1994) (citing , 477 U.S. at

325). “This burden is not satisfied with some metaphysical doubt as to the material facts,”

by conclusory or unsubstantiated allegations, or by a mere “scintilla of evidence.”

(internal quotation marks and citations omitted). However, “[t]he evidence of the non-

movant is to be believed, and all justifiable inferences are to be drawn in his favor.”

, 477 U.S. 242, 255 (1985) (citing

, 398 U.S. 144, 158–59 (1970)). While not weighing the evidence or evaluating the

credibility of witnesses, courts should grant summary judgment where the critical evidence

in support of the nonmovant is so “weak or tenuous” that it could not support a judgment

in the nonmovant’s favor. , 997 F.2d 62, 67 (5th Cir. 1993).

Additionally, Local Rule 56.1 requires the movant to file a statement of material

facts as to which it “contends there is no genuine issue to be tried.” The opposing party

must then set forth a “short and concise statement of the material facts as to which there

exists a genuine issue to be tried.” W.D. La. R. 56.2. All material facts set forth in the

movant’s statement “will be deemed admitted, for purposes of the motion, unless

controverted as required by this rule.”

B. Statutory Employer Defense

Frantom filed suit for personal injury damages against the United States under the

FTCA. While the United States is generally entitled to sovereign immunity, the FTCA

waives sovereign immunity and “permits suits against the United States sounding in state

tort for money damages.” , 556 F.3d 326, 335 (5th Cir. 2009).

This waiver is limited, however, and the United States is only liable under the FTCA “in

the same manner and to the same extent that a private individual under like

circumstances” would be liable. 28 U.S.C. § 2674. The FTCA directs that tort claims

against the United States are decided “in accordance with the law of the place where the

act or omission occurred.” 28 U.S.C. § 1346(b)(1). In this case, Frantom alleges that his

damages stem from an accident occurring in Louisiana. Consequently, Louisiana law

applies.

Under the LWCA, an employer is liable for compensation benefits to an employee

injured in an accident arising out of and in the course of his or her employment. La. R.S.

§ 23:1031. In those instances, the LWCA is the “exclusive remedy against the employer

for such injury.” La. R.S. § 23:1032(A). While this tort immunity naturally covers direct

employers, it also covers non-direct employers termed “principals” classified as “statutory

employers.” , 807 F.3d 730, 732 (5th Cir. 2015); La. R.S. §

23:1061(A)(1). Section 1061(A) governs statutory employment. It states in part:

[W]hen any “principal” as defined in R.S. 23:1032(A)(2), undertakes to execute any

work, which is a part of his trade, business, or occupation and contracts with any

person, in this Section referred to as the “contractor”, for the execution by or under

the contractor of the whole or any part of the work undertaken by the principal,

the principal, as a statutory employer, shall be granted the exclusive remedy

protections of R.S. 23:1032 . . . .

La. R.S. § 23:1061(A)(1).

But Louisiana law specifies only two bases for finding a statutory employment

relationship. The first basis exists when the principal is the middle of two contracts−this

is titled the “two-contract theory.”

, 2002-1072, p. 8 (La. 4/9/03); 842 So. 2d 373, 378. The second

basis for statutory employment exists when “there is a written contract recognizing the

principal as the statutory employer.” ; La. R.S. § 23:1061(A)(3). Because the

United States claims the USPS was a statutory employer under both theories, it “bears the

burden of proving its entitlement to immunity.” ,

2011-2201, p. 7 (La. App. 1 Cir. 6/8/12); 93 So. 3d 754, 758. In doing so, the Court must

strictly construe the “immunity statutes . . . against the party claiming the immunity.”

The Court will address whether the United States qualifies as a statutory employer for

each basis separately.

1. The Two-Contract Defense

First, the United States is unable to prove it was a statutory employer based on the

two-contract theory. A principal is only classified as a statutory employer under this theory

when:

(1) the principal enters into a contract with a third party; (2) pursuant to that

contract, work must be performed; and (3) in order for the principal to fulfill its

contractual obligation to perform the work, the principal enters into a subcontract

for all or part of the work performed.

, 842 So. 2d at 379; La. R.S. § 23:1061(A)(2). In other words, this defense only

applies when the principal is sandwiched between two contracts. The United

States argues the USPS meets this theory’s first element because it entered contracts with

its third-party customers.12 Specifically, these customers include those for whom the USPS

collects, handles, transports, returns, and holds mail for a fee.13 Next, the United States

contends it meets the theory’s second and third elements because the USPS subcontracted

its transportation obligations to J.D. Frost, Frantom’s employer.14 Therefore, the United

States argues it occupied the position as a principal sandwiched between the “contracts”

with its customers and the contract with J.D. Frost.15 Nevertheless, while the USPS

have a contract with J.D. Frost, the United States does not offer evidence of the contracts

it claims it entered with its third-party customers. Instead, it simply describes the USPS’s

broad obligations as a mail carrier.16

12 Record Document 35-2, at 8−9.

13

14

15

16 at 8.

Without a third-party contract, the United States’ interpretation of this defense

would lead to an overly broad application of the two-contract theory. Indeed, business

who provides services would be a statutory employer absent a third-party contract so long

as it sublets work to another entity. But this is not enough to declare a party immune

from liability under the two-contract theory. ,

, No. 12-804, 2016 WL 687639, at *2 (E.D. La. Feb. 19, 2016) (acknowledging the

necessity of the existence of a contract under Section 1061(A)(2)). Rather, the statute’s

purpose “is to establish a compensation obligation on the part of the principal who

obligates itself to a party for the performance of work and who then

subcontracts with intermediaries whose employees perform any part of that work.”

, 96-494, p. 4 (La. App. 5 Cir. 11/26/96); 685 So. 2d

329, 332 (emphasis added). Here, the United States is one contract short.

Further, the USPS’s duties are outlined by federal law. For example, the USPS has

a statutory obligation to “maintain an efficient system of collection, sorting, and delivery

of the mail nationwide” and “to provide types of mail service to meet the needs of different

categories of mail and mail users.” 39 U.S.C.A. § 403(b)(1)−(2). These are obligations

imposed by law, not by contract. Even so, the United States cites no authority

for the idea that such wide-ranging statutory mandates constitute “contracts” under

Louisiana law.17 The Court is, therefore, unwilling to adopt such a broad interpretation of

the two-contract theory. Thus, this defense is unavailable to the United States.

17 The United States cites for the idea that the USPS enters into third-party “contracts”

with its customers. No. 14-566, 2015 WL 11236544, at *3 (N.D. Ga. June 9, 2015) (“[T]he court finds that

under the circumstances presented here, the Postal Service is a ‘contractor’ and ‘statutory employer’ of

Plaintiff and immune from tort liability.”). Notably, however, the court in was not applying Louisiana

2. The Trade, Business, or Occupation Defense

Next, the United States is likewise foreclosed from proving the trade, business, or

occupation defense. When the two-contract theory does not apply, a statutory

employment relationship exists under this other basis when: “(1) a principal undertakes

work that is part of his trade, business, or occupation by means of a written contract with

a contractor that is the employee's immediate or statutory employer; and (2) the contract

between the principal and contractor recognizes the principal as a statutory employer.”

, 2017-1577, p. 7 (La. App. 1 Cir. 9/4/19); 2019 WL

4201475, at *3 (emphasis removed) (citing La. R.S. § 23:1061(A)(1) & (3)). This defense

is based in part on Section 1061(A)(3), which states:

Except in those instances covered by [the two-contract theory] . . . a statutory

employer relationship between the principal and the contractor's

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 the statutory employer

La. R.S. § 23:1061(A)(3) (emphasis added).

Frantom argues that the contract between the USPS and J.D. Frost “contains no

provision recognizing the United States of America as a principal or statutory employer.”18

The United States does not argue otherwise. Instead, it claims that no specific contractual

provision is required because Frantom was performing work within the “trade, business,

law. Nonetheless, Frantom directs the Court’s attention , a case decided within

the same district yet directly opposed to this proposition. No. 01-891, 2003 U.S. Dist. LEXIS 29110, at *8

n.4 (N.D. Ga. June 12, 2003) (“Although the United States asserts that it is indeed a "contractor" inasmuch

as, according to the United States, it has a "contract" with postal customers for the delivery of mail, it has

wholly failed to direct the court's attention to any evidence or legal authority that actually supports this

broad assertion.”).

18 Record Document 23-2 at 6.

or occupation” of the USPS−namely, the transportation of mail.19 It contends this fact

alone is enough to grant the USPS tort immunity.20 To support its argument, the United

States relies on , No. 03-1550, 2004 WL 193129 (E.D. La. Jan.

30, 2004), and , No. 97-3406, 1998 WL 637379

(E.D. La. Sept. 16, 1998). Both cases, however, cite and discuss case law analyzing

Section 1061’s former iteration before its 1997 amendment.21 , , 2004

WL 193129, at *3 (citing , 582 F. Supp. 75, 76 (W.D. La.

1984)) (discussing the “trade, business, or occupation” defense as applied to the former

statute); ., 1998 WL 637379, at * 1 (considering a tort which

occurred in October 1995, more than a year before the current statute’s enactment).

Section 1061(A)(3) is a relatively recent addition to Louisiana law. Before the

legislature revised Section 1061 in 1997, “ ‘principal’ was a statutory employer of

employees of ‘contractors’ that performed part of the principal’s ‘trade, business, or

occupation.’” , No. 16-13948, 2018 WL

5472792, at *5 (E.D. La. Oct. 29, 2018) (emphasis added) (citing 1989 La. Sess. Law Serv.

Act 454 (H.B. 1431) (West)). As a result, years of workers’ compensation cases analyzed

19 Record Document 35-2 at 5−6.

20

21 The former language of Section 1061 stated in relevant part:

Where any person, in this Section referred to as “principal”, undertakes to execute any work which

is a part of his trade, business, or occupation or which he had contracted to perform and contracts

with any person, in this Section referred to as “contractor”, for the execution by or under the

contractor of the whole or any part of the work undertaken by the principal the principal shall be

liable to pay to any employee employed in the execution of the work or to his dependent, any

compensation under this Chapter which he would have been liable to pay if the employee had been

immediately employed by him . . . .

S.B. 922, 1997 Leg., Reg. Sess. (La. 1997).

what work qualified as part of a principal’s “trade, business, or occupation” under the old

statute. , , 95-1830, pp. 3−6 (La. 9/13/96);

681 So. 2d 329, 331−32 (discussing the history of pre-1997 Section 1061);

, 488 So. 2d 934, 938 (La. 1986) (analyzing the “trade, business,

or occupation” defense under an older version of Section 1061). For example, courts once

considered whether the principle contracted for “routine and customary” work, whether

the principal could perform the work itself, or whether a given contract was common in

the principal’s industry. , 488 So. 2d at 938.22

But the statue’s most recent version amended the old language23 and added an

additional requirement. Following the 1997 revision, a statutory employer relationship

“ exist,” except by the two-contract theory or evidence of a contract which defines

a principal as a statutory employer. La. R.S. § 23:1061; S.B. 922, 1997 Leg., Reg.

Sess. (La. 1997). Consequently, in addition to a principal contracting for work that is part

of its trade, business, or occupation, there must be a contract recognizing the principal

as a statutory employer. La. R.S. § 23:1061(A)(1) & (3);

, 443 F. Supp. 3d 937, 947 (W.D. Tenn. 2020) (applying Louisiana law and

acknowledging the necessity of a contract which recognizes the principal as a statutory

employer); , 2016 WL 687639, at *2 (same); , 2004-1988,

pp. 9−13 (La. App. 1 Cir. 6/14/06); 938 So. 2d 1032, 1039−42 (applying Section 1061(A)

22 The passage of the most recent 1997 statute expressly overruled the statutory employer tests as stated

in and . S.B. 922, 1997 Leg., Reg. Sess. (La. 1997).

23 Section 1061 now also outlines a modified “trade, business, or occupation” standard. Specifically, “work

shall be considered part of the principal's trade, business, or occupation if it is an integral part of or essential

to the ability of the principal to generate that individual principal's goods, products, or services.” La. R.S. §

23:1061(A)(1).

as amended in 1997); Jackson v. St. Paul Ins. Co., 2004-0026, pp. 8—9 (La. App. 1 Cir.

12/17/04); 897 So. 2d 684, 689 (applying Section 1061(A) when a contract explicitly

recognized a defendant as a contractor’s statutory employer). In other words, “[a]

contract involving work for a principal's trade, business, or occupation is... a necessary

but not sufficient element of a statutory employer relationship.” Donahue, 2018 WL

5472792, at *5 (emphasis in original).

Therefore, even if the United States is correct and the work furthered by Frantom

was within the trade, business, or occupation of the USPS—a fact which Frantom does not

dispute—they do not contend that the contract between the USPS and J.D. Frost

recognizes the USPS as a statutory employer. Thus, the United States cannot meet its

burden or enjoy tort immunity under Section 1061(A)(3)’s plain language.

Conclusion

For these reasons, Plaintiff's and Intervenors’ motions for partial summary

judgment preventing the United States from claiming a statutory employer status based

on Section 106124 are GRANTED. The Defendant’s cross-motion for summary judgment?°

is DENIED and the United States is therefore unable to avail itself of tort immunity as a

statutory employer.

THUS DONE AND SIGNED thi sc.day of September, 2021.

NEFED “SIA DISTRICT JUDGE

4 Record Documents 23 and 28.

2° Record Document 35.

11