Isabel YANEZ, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee

NOONAN, Circuit Judge,

concurring and dissenting:

I concur in the opinion of the court holding that Privette v. Superior Court, 5 Cal.4th 689 , 21 Cal.Rptr.2d 72 , 854 P.2d 721 (1993), decided while this case was still before the district court, doomed the plaintiffs cause. I disagree, however, that some portion of that cause still has a half-life after Privette . In reaching my conclusion, I believe that I do what a federal court should do in applying relevant state law: that is, follow the reasoning of the state’s highest court even as to a particular theory of liability not expressly dealt with by that court and certainly as to a theory of liability expressly rejected by the state’s highest court and erroneously revived by the aberrant decision of a lower state court.

Section JplJp Liability

Privette dealt with peculiar risk, not liability for retained control. Its reasoning is not limited to peculiar risk. After Privette , an independent contractor’s employee cannot obtain workers’ compensation and then ob *876 tain a second recovery from the person who contracted with his employer to have that employer perform the job: “when the contractor’s failure to provide safe working conditions results in injury to the contractor’s employee, additional recovery from the person who hired the contractor — a nonnegli-gent party — advance no societal interest that is not already served by the workers’ compensation system.” Privette, 21 Cal.Rptr.2d 72, 73 , 854 P.2d 721, 723 . This conclusion is peremptory. As far as California law is concerned, it is authoritative as to the societal interests to be served in tort. Privette states explicitly that workers’ compensation ensures both “that injuries ... will be compensated” and “that adequate safeguards are taken to prevent such injuries.” Id.

It might be objected that this language applies only to a person that the Supreme Court of California characterizes as “nonneg-ligent,” while section 414 liability applies to a negligent person who has hired a contractor. But Privette goes further. Because of the exclusivity of workers’ compensation, allowing the employee to recover against the person who has hired the contractor produces the “anomalous result” that the liability of that person is greater than that of the employer whose negligence also caused the employee’s injury. Id. at 78, 854 P.2d at 727-28 . Privette approved of the reasoning of other courts that the exclusivity of workers’ compensation should protect the party to the contract who pays indirectly for the cost of the coverage through the contract price. Id. at 78, 854 P.2d at 727-28 . The court found persuasive the reasoning contained in a special note to chapter 15 of the tentative draft of the Restatement. Id. at 79, 854 P.2d at 728-29 . That note applied explicitly to section 414 liability as well as to section 413 and section 416 liability: “when the Sections in this Chapter speak of liability to ‘another’ or ‘others’, or to ‘third persons’, it is to be understood that the employees of the contractor, as well of those of the defendant himself, are not included.” Rest.2d Torts, Tent.Draft No. 7, Apr. 16, 1962, ch. 15, special note, pp. 17-18. Privette further noted that allowing a second recovery after workers’ compensation benefits were paid would give employees of independent contractors “an unwarranted windfall,” while the exclusivity of workers’ compensation would work an injustice against the party to the contract by preventing him from obtaining indemnity from the independent contractor responsible for the injury.

This set of reasons applies equally to “retained control” liability, unless the control is such that the person contracting for the work is actually acting as the employer, in which case his workers’ compensation insurer would cover the injuries and he would benefit from the exclusivity of workers’ compensation. If the control of the party to the contract is not sufficient to make him an employer, then under Privette the exclusive remedy for an employee’s injury is through the insurer of his employer, in this case the insurer of the independent contractor.

Applying California law, we are bound not to produce a result that the California Supreme Court has stigmatized as anomalous, that the California Supreme Court has declared gives an unjustified benefit to the plaintiff employee, that the California Supreme Court has found to be unjust to the party to the contract with the independent contractor. The court here, however, does all these things by continuing to treat the California section 414 cases as possessing vitality. That to my mind is not a fair and faithful application of the current law of the state whose rules we are applying.

Even if section 414 liability survived Pri-vette, the court would be misapplying established California law: According to section 414, Comment b, the rule “is usually though not exclusively, applicable when a principal contractor entrusts a part of the work to subcontractors, but himself or through a foreman superintends the entire job.” Clearly this usual application is not possible here. The question then is if in California an unusual application is warranted here. According to California cases, it is not: “an owner’s demand that the independent contractor comply with safety regulations does not make the owner a guarantor that the regulations are, in fact, respected.” Smith v. ACandS, Inc., 31 Cal.App.4th 77, 91 , 37 Cal.Rptr.2d 457 (1994); see also McDonald v. Shell Oil Co., 44 Cal.2d 785 , 285 P.2d 902, 904 *877 (1955) (“owner may retain broad general power of supervision and control ... without changing the relationship from that of owner and independent contractor”).

Language here reflects law. No legal term has been coined to describe the party to the contract who the employee of the other party to the contract seeks to hold hable in addition to his own employer. Of course, if “the party to the contract” was a principal and the other party his agent, he could be hable. Or if the party to the contract was a landowner he might be hable in some way for the conditions on the property. But the person who is merely a party to an agreement requiring an independent contractor to perform work on that independent contractor’s premises has no special name. And he has no special name because common sense, like California law, does not put him in a category of common Habihty.

Section íl3 Liability

Owens was incorrect in its dicta that the Privette court “intended its holding to apply only in those situations where third-party habihty is vicarious rather than direct.” Owens v. Giannetta-Heinrich Const. Co., 23 Cal.App.4th 1662 , 29 Cal.Rptr.2d 11, 14 (1994). Not only does the language in Pri-vette suggest the contrary, but Privette explicitly overrules several so-called “direct” habihty cases. The court in our case is incorrect in its dicta to treat Oioens as reviving section 413 habihty.

The Privette court cites five cases for California's expansion of peculiar risk habihty to cover employees, Woolen and its progeny, Ferrel Van Arsdale, Griesel and Aceves. Of these five, four were so-called “direct” section 413 cases in which the contracts failed to provide for precautions. Woolen v. Aerojet, 57 Cal.2d 407, 410 , 20 Cal.Rptr. 12 , 369 P.2d 708 (1962); Ferrel v. Safway Steel Scaffolds, 57 Cal.2d 651, 656 , 21 Cal.Rptr. 575 , 371 P.2d 311 (1962); Griesel v. Dart Indus., Inc., 23 Cal.3d 578, 582 , 153 Cal.Rptr. 213 , 591 P.2d 503 (1979); Aceves v. Regal Pale Brewing Co., 24 Cal.3d 502, 510 , 156 Cal.Rptr. 41 , 595 P.2d 619 (1979). To the extent that these cases extended pecuhar risk habihty to employees, Privette exphcitly overruled them without distinguishing between section 416 and section 413 habihty. Privette, 21 Cal.Rptr.2d at 80 n. 4, 854 P.2d at 730 n. 4. How Owens could conclude that section 413 habihty survives Privette is beyond imagination. We have no obhgation to accept this maverick misreading of the Supreme Court of California.