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MCAVOY v. TEXAS EASTERN TRANSMISSION CORPORATION

March 9, 1960

RALPH MCAVOY, PLAINTIFF,
v.
TEXAS EASTERN TRANSMISSION CORPORATION, H.C. PRICE CORPORATION, AND BROWN AND ROOT, INC., DEFENDANTS. THE FIDELITY AND CASUALTY COMPANY OF NEW YORK, INTERVENOR.



The opinion of the court was delivered by: Henley, District Judge.

This is an action brought by the plaintiff, Ralph McAvoy, a citizen of Arkansas, against the defendants, Texas Eastern Transmission Corporation (Texas Eastern), a Delaware corporation, H.C. Price Corporation (Price), a California corporation, and Brown & Root, Inc. (Brown & Root), a Texas corporation, to recover a sum in excess of the jurisdictional minimum as damages for personal injuries sustained by the plaintiff in the State of Kentucky on August 15, 1958. It is alleged that plaintiff's injuries resulted from a pipe line explosion proximately caused by the joint and concurrent negligence of all three defendants.

According to the complaint Texas Eastern was the owner of the pipe line involved, sometimes referred to as the "Danville Loop." The line was being built by Price under a contract with Texas Eastern. Brown & Root had general charge and supervision of the construction of the line and the testing thereof under another contract with Texas Eastern. The complaint further alleged that Williams Service Company, a Louisiana concern, had a contract with Texas Eastern to test the pipe line under the supervision of Brown & Root, and that plaintiff who was an employee of Williams Service Company at the time of the accident had been employed in Louisiana.

Texas Eastern allegedly was guilty of negligence in supplying defective parts and materials for the testing of the pipe line, which parts and materials it was required to furnish under its contract with Williams Service Company. Price allegedly was guilty of negligence in installing the testing equipment and in failing to inspect said equipment, and Brown & Root is charged with negligence in its overall inspection duties, including the alleged duty of inspecting the testing equipment.

Subsequent to his injury plaintiff received workmen's compensation payments under the Louisiana workmen's compensation statute, LSA-R.S. § 23:1021 et seq. and his immediate employer, Williams Service Company, is not a party to this suit. However, an intervention has been filed on behalf of the workmen's compensation insurance carrier of Williams Service Company.

In their separate answers the defendants have tendered a number of defenses, including the plea that plaintiff's receipt of workmen's compensation bars his present action against all three defendants. At a pre-trial conference it was agreed that this plea, which presents no material issues of fact, would be disposed of prior to any trial on the purely factual issues. That plea has now been submitted on the pleadings, certain discovery materials brought into the record, and written briefs.

Since plaintiff was employed in Louisiana and has received workmen's compensation under the governing statute of that State, was injured in Kentucky, and has sued in Arkansas, the State of his residence, all three States have substantial contacts with this case and with the transactions out of which it arises. The scope of permissible tort action against third parties by an employee who has received workmen's compensation payments on account of injuries is narrower under the law of Louisiana than under the law of either Arkansas or Kentucky. Thus, a problem is presented by the plea now under discussion as to the proper law to be applied in determining plaintiff's rights to sue the respective defendants.

It is clear that plaintiff could maintain his action against all three defendants under the workmen's compensation statutes of both Arkansas and Kentucky. But plaintiff concedes that if the Louisiana statute is applied, the action cannot be maintained against Texas Eastern; and it is argued by the other defendants that under the Louisiana statute they share the immunity of Texas Eastern as members of the same "compensation family." It is further contended by the defendants that even if Kentucky law applies Kentucky would look to the law of Louisiana in determining the right of the plaintiff to sue in tort.

Brown & Root's contention that it shares Texas Eastern's immunity under the Louisiana statute finds strong support in the opinions of Judge Dawkins in Maddox v. Aetna Casualty & Surety Co., W.D.La., Shreveport Division, Docket No. 6000, affirmed, Maddox v. Aetna Casualty & Surety Co., 5 Cir., 259 F.2d 51, and in the cases cited by both the district court and the court of appeals in that case.*fn1 Those same authorities likewise may furnish some support for Price's claim that it is immune under the Louisiana Act. In these circumstances it will be assumed for purposes of this opinion that, if Louisiana law is to be applied, the plaintiff is not entitled to maintain this suit against any of the defendants.

In resolving the conflict of laws problem here presented this Court does not make its own independent choice of law. Rather, it endeavors to ascertain and apply the Arkansas law of conflicts of laws. Griffin v. McCoach, 313 U.S. 498, 61 S.Ct. 1023, 85 L.Ed. 1481; Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477; Leflar, The Law of Conflict of Laws, 1959 Ed., Section 7.*fn2

In Carroll v. Lanza, 349 U.S. 408, 75 S.Ct. 804, 99 L.Ed. 1183, the Supreme Court of the United States held that the Federal Constitution, U.S.Const. art. 4, § 1 does not require the State of the forum to recognize the exclusive remedy provisions of the workmen's compensation statute of another State, and that the State of the forum may permit a tort recovery by an injured employee even though a tort action by him would be prohibited by the workmen's compensation statute of the State where he was employed. The effect of that decision, which reversed the contrary holding of the Court of Appeals for this circuit, Lanza v. Carroll, 8 Cir., 216 F.2d 808, was to reinstate the original decision of this court, Carroll v. Lanza, D.C.Ark., 116 F. Supp. 491. In his original opinion in Lanza Judge Miller wrote (at page 502 of 116 F. Supp.):

    "The rule now seems to be that any state having a
  substantial connection with the employee-employer
  relationship may apply its own Workmen's Compensation
  Act. * * * And, a state having the right to apply its
  own Workmen's Compensation Act would also have the
  right to apply its own third party practice. * * *
    "In the instant case, the accident occurred in
  Arkansas and this State may apply its own Workmen's
  Compensation Law and its own third party
  procedure. * * *"

It has been said that for all practical purposes Lanza overruled the earlier decision in Bradford Electric Light Co. v. Clapper, 286 U.S. 145, 52 S.Ct. 571, 76 L.Ed. 1026, and that under the Lanza rule "the place of injury clearly has power to grant a tort recovery under its own law even though the place of contract or other place creating compensation rights would say that no tort right exists." Leflar, Section 139, pp. 267, 268.

It is a settled principle of Arkansas law that the right of an injured employee to recover in tort is to be determined by the law of the State where the injury occurred, not by the law of the forum, and not by the law of the State where the contract of employment was made. Trotter v. Ozarks Rural Electric Cooperative Corporation, 226 Ark. 722, 294 S.W.2d 498; Haynes Drilling Corporation v. Smith, 200 Ark. 1098, 143 S.W.2d 27; Standard Oil Co. of La. v. Richerson, 188 Ark. 882, 67 S.W.2d 1003; Standard Pipe Line Co. v. Burnett, 188 Ark. 491, 66 S.W.2d 637; Magnolia Petroleum Co. v. Turner, 188 Ark. 177, 65 S.W.2d 1; Logan v. Missouri Valley Bridge & Iron Co., 157 Ark. 528, 249 S.W. 21. Those cases established that Arkansas, as the State of the forum, will allow a tort recovery if such a recovery is permitted by the State where the accident occurred, notwithstanding such a recovery would be prohibited by the workmen's compensation statute of the State where the plaintiff was hired, but ...


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