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In re Cooper Marine & Timberlands Corp.

United States District Court, E.D. Arkansas, Jonesboro Division

December 14, 2016

IN THE MATTER OF COOPER MARINE & TIMBERLANDS CORPORATION, as Owner Pro Hac Vice and Operator; GATX THIRD AIRCRAFT, LLC, as Owner of Barge CMT 123, Official No. 1067600
v.
COOPER MARINE & TIMBERLANDS CORPORATION; LOGISTIC SERVICES, INC.; STEEL DYNAMICS COLUMBUS, LLC; KINDER MORGAN BULK TERMINALS, INC.; KINDER MORGAN MARINE SERVICES, LLC; and KINDER MORGAN ENERGY PARTNERS, L.P. DEFENDANTS KASSANDRA NIEVES, Individually and as Personal Representative of the Estate of Juan Nieves, and His Surviving Heirs and Dependents PLAINTIFF AND COOPER MARINE & TIMBERLANDS CORPORATION; LOGISTIC SERVICES, INC.; and STEEL DYNAMICS COLUMBUS, LLC THIRD-PARTY PLAINTIFFS
v.
DAWSON EMPLOYMENT SERVICE, INC.; and TEMPS PLUS, INC. THIRD-PARTY DEFENDANTS ROBERT L. COLEMAN, Special Administrator for the Estate of Nicolas Perez Hernandez, and His Surviving Heirs and Dependents PLAINTIFFS
v.
COOPER MARINE & TIMBERLANDS CORPORATION; LOGISTIC SERVICES, INC.; STEEL DYNAMICS COLUMBUS, LLC; KINDER MORGAN BULK TERMINALS, INC.; KINDER MORGAN MARINE SERVICES, LLC; and KINDER MORGAN ENERGY PARTNERS, L.P. DEFENDANTS AND COOPER MARINE & TIMBERLANDS CORPORATION; LOGISTIC SERVICES, INC.; and STEEL DYNAMICS COLUMBUS, LLC THIRD-PARTY PLAINTIFFS
v.
DAWSON EMPLOYMENT SERVICE, INC.; and TEMPS PLUS, INC. THIRD-PARTY DEFENDANTS

          OPINION AND ORDER

          J. LEON HOLMES UNITED STATES DISTRICT JUDGE

         Juan Nieves and Nicolas Perez Hernandez were killed while working on a barge on the Mississippi River near Blytheville, Arkansas. Cooper Marine & Timberlands Corporation and GATX Third Aircraft, LLC, initially brought an action for exoneration from or limitation of liability pursuant to 46 U.S.C. § 30511. Representatives of the decedents then commenced separate actions against Cooper Marine, Logistic Services, Inc., and Steel Dynamics Columbus, LLC. Through discovery, the representatives in both actions determined that Kinder Morgan Bulk Terminals, Inc., Kinder Morgan Energy Partners, L.P., and Kinder Morgan Marine Services, LLC, could be liable and amended their respective complaints to include these entities as defendants. Cooper Marine, Logistic Services, and Steel Dynamics then made crossclaims against Kinder Morgan Bulk Terminals, Kinder Morgan Energy Partners, and Kinder Morgan Marine Services. Additionally, Cooper Marine, Logistic Services, and Steel Dynamics, as third-party plaintiffs, sued Temps Plus, Inc., and Dawson Employment Service, Inc., alleging that these nonparties may be liable to them for all or part of the claims against them. See Fed. R. Civ. P. 14(a)(1). Because the actions involve common questions of law and fact, the Court granted the parties' joint motion to consolidate the three actions for discovery purposes only.[1] See Fed. R. Civ. P. 42(a).

         Kinder Morgan Bulk Terminals and Kinder Morgan Energy Partners have moved for summary judgment, arguing that (1) Kinder Morgan Bulk Terminals is immune from liability under the Longshore and Harbor Workers' Compensation Act, 33 U.S.C. § 901 et seq., and (2) Kinder Morgan Energy Partners played no role in the deaths of decedents. Cooper Marine, Logistic Services, and Steel Dynamics oppose the motion. For the following reasons, the motions for summary judgment are denied. Document #98 (225), Document #84 (350).

         I.

         On March 8, 2014, pursuant to a contract with Steel Dynamics, Logistic Services loaded steel coils on a BIG 420 and CMT 123B barge for shipment from its Columbus, Mississippi facility to the Kinder Morgan Bulk Terminals unloading facility near Blytheville, Arkansas. Document #66 at 4-5 (225). The CMT 123B barge was loaded with a total of 46 coils, each of which weighed more than thirty tons. Document #105-1 at 4 (225). Steel Dynamics manufactured the coils and provided the wooden saddles onto which the coils were loaded and secured. Document #105-2 at 4 (225). A Cooper Marine tug took custody of the barges and delivered them to a Kinder Morgan Marine Services fleet terminal in Arkansas. Document #66 at 5 (225). Kinder Morgan Marine Services then towed the barges to the Kinder Morgan Bulk Terminals coil dock. Id. The BIG 420 barge was unloaded first without incident. Document #105-4 at 6 (225). During the unloading of the CMT 123B barge, however, the barge suddenly rolled to the inshore side and sank. Document #66 at 5 (225). Nieves and Perez Hernandez were on the CMT 123 barge when it sank and were both killed. Id.

         Both workers were temporary employees provided to Kinder Morgan Energy Partners by staffing agencies. Nieves was employed through Temps Plus, while Perez Hernandez was employed through Dawson. Document #105-5 at 16 (225); Document #105-6 at 14 (225). Temps Plus and Dawson each had similar contracts with Kinder Morgan Energy Partners, in which each acted as an independent contractor supplying the labor requested by Kinder Morgan Energy Partners. Document #105-7 (225); Document #105-8 (225). Both decedents had initially been placed with Kinder Morgan Energy Partners as torch cutters. Kinder Morgan Energy Partners requested Temps Plus to send it a cutting torch operator, and on June 14, 2010, Temps Plus assigned Nieves to work as a cutting torch operator for Kinder Morgan Energy Partners. Document #105-5 at 5 (225). Likewise, Kinder Morgan Energy Partners requested Dawson to send it a cutting torch operator, and on May 21, 2012, Dawson assigned Perez Hernandez to work as a cutting torch operator for Kinder Morgan Energy Partners. Document #105-6 at 9-10 (225). On the day of the accident, however, Nieves and Perez Hernandez were not working as cutting torch operators but were on a barge unloading steel coils. Document #66 at 5 (225).

         The staffing contracts between Kinder Morgan Energy Partners and Temps Plus and Dawson explicitly provided that nothing in the agreement was intended to create an employer-employee relationship between Kinder Morgan Energy Partners and employees of Temps Plus and Dawson. Document #105-7 at 4, ¶ 4.1 (225); Document #105-8 at 3, ¶ 4.1 (225). The contracts required Temps Plus and Dawson to furnish and pay for the workers' salary, compensation, benefits, and training and supplies. Document #105-7 at 3-4, ¶¶ 3.4, 4.5 (225); Document #105-8 at 3-4, ¶¶ 3.4, 4.5 (225); Document #107 at ¶ 4 (225). Under the contracts, Temps Plus and Dawson were also responsible for handling disciplinary actions, training, job evaluations, and other supervisory tasks. Document #105-7 at 10, ¶ 1.2 (225); Document #105-8 at 9, ¶ 1.2 (225). Additionally, Temps Plus and Dawson remained liable for all damages caused by the performance of their employees. Document #105-7 at 10, ¶ 1.6 (225); Document #105-8 at 9, ¶ 1.6 (225). The contracts also required Temps Plus and Dawson to carry insurance, such as employer's liability insurance and workers' compensation insurance compliant with the Longshore Act. Document #105-7 at 6, ¶ 9.1 (225); Document #105-8 at 5, ¶ 9.1 (225).

         Kinder Morgan Energy Partners was required to provide Temps Plus and Dawson with labor classifications, which could only be revised by mutual agreement. Document #105-7 at 2, ¶ 3.1 (225); Document #105-8 at 2, ¶ 3.1 (225). The labor classifications, in turn, determined the labor markup rate Temps Plus and Dawson charged Kinder Morgan Energy Partners for their services. Document #108-1 at 30-31. For assignments that required coverage under the Longshore Act, Temps Plus charged Kinder Morgan Energy Partners a 44% markup rate, but it charged a 38% rate for employees not needing such coverage. Document #105-5 at 8 (225). Dawson charged Kinder Morgan Energy Partners a rate of 45% and 40% respectively. Document #108-1 at 30 (225). The cutting-torch-operator assignment did not require coverage under the Longshore Act. Document #105-5 at 14 (225); Document #108-1 at 31 (225). At the time of the accident, Temps Plus was charging Kinder Morgan Energy Partners a 38% rate for Nieves's employment, and Dawson was charging Kinder Morgan Energy Partners a 45% rate for Perez Hernandez's employment.[2]Document #105-5 at 11 (225); Document #108-1 at 31 (225). Neither Temps Plus nor Dawson received communication from Kinder Morgan Energy Partners of the changes in position of Nieves and Perez Hernandez. Document #105-5 at 10-11 (225); Document #105-6 at 12 (225). After the accident, Temps Plus and Dawson each filed a report with the U.S. Department of Labor, noting the positions of Nieves and Perez Hernandez as torch cutters “at the time of the incident.” Document #98-1 at 95 (350); Document #108-1 at 87 (225).

         II.

         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.

         III.

         Kinder Morgan Bulk Terminals argues that it is a borrowing employer of Nieves and Perez Hernandez and entitled to tort immunity under the Longshore Act. See 33 U.S.C. § 905(a). Kinder Morgan Energy Partners argues that because it was not involved in unloading the barges, it played no role in the deaths of Nieves and Perez Hernandez.

         Under the Longshore and Harbor Workers' Compensation Act, an employer's liability in the case of an employee's injury or death is limited to the liability prescribed under section 904 of the Act. Id. In other words, the Act makes an employer immune from tort liability. Courts have extended this immunity to employers who “borrow” an employee from the employee's general employer. See, e.g., White v. Bethlehem Steel Corp., 222 F.3d 146, 149 (4th Cir. 2000).

         In Standard Oil v. Anderson, 212 U.S. 215, 29 S.Ct. 252, 53 L.Ed. 480 (1909), the Supreme Court first recognized the “borrowed-servant” doctrine in the context of respondeat superior liability. The Court explained that “[o]ne may be in the general service of another, and, nevertheless, with respect to particular work, may be transferred, with his own consent or acquiescence, to the service of a third person, so that he becomes the servant of that person with all the legal consequences of the new relation.” Id. at 220, 29 S.Ct. at 253. Beginning with Ruiz v. Shell Oil Co., 413 F.2d 310 (5th Cir.1969), courts applied this ...


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