Willoughby v. United States Ex Rel. United States Department of the Army , 730 F.3d 476 ( 2013 )

Case: 12-40915 Document: 00512376124 Page: 1 Date Filed: 09/17/2013
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
September 17, 2013
No. 12-40915 Lyle W. Cayce
Clerk
JOHN E. WILLOUGHBY; WENDY WILLOUGHBY,
Plaintiffs - Appellants
v.
UNITED STATES OF AMERICA, on behalf of the United States Department
of the Army,
Defendant - Appellee
Appeal from the United States District Court
for the Eastern District of Texas
Before DeMOSS, DENNIS, and PRADO, Circuit Judges.
PER CURIAM:
Plaintiffs-Appellants John and Wendy Willoughby (together, “the
plaintiffs” or “Willoughby”) appeal from dismissal of their Federal Tort Claims
Act claim against the United States Army. John Willoughby, an employee of a
private Army contractor, was injured on the job when he tripped and fell.
Willoughby received workers’ compensation benefits through his employer’s
policy. The employer’s contract with the Army required the employer to provide
workers’ compensation benefits for employees, which were then treated as an
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No. 12-40915
expense that the Army would reimburse. Because Willoughby found the benefits
he received to be insufficient to cover his needs, he sued the Government for
negligence and premises liability.
The Government moved to dismiss, invoking Texas’ workers’ compensation
exclusive-remedy rule. Under Texas law, general contractors who require
subcontractors to provide workers’ compensation insurance to their employees
and who pay for that coverage are “statutory employers” protected by the
exclusive-remedy provision. The plaintiffs argued that the Government was
unlike a “statutory employer” because the Government did not follow certain
Texas regulations governing statutory employers. The district court granted the
motion to dismiss, and Willoughby appealed. Finding no error, we affirm.
I.
The plaintiffs allege that on June 8, 2007, John Willoughby was injured
while working at the federal Red River Army Depot (“RRAD”) when he tripped
over a bundle of cables and fell onto the floor of the Depot, requiring significant
medical treatment.1 At the time of the accident, Willoughby was employed by
a government contractor, Lear Siegler Services, Inc. (“LSI”), as a mechanic at
RRAD. LSI had contracted with the U.S. Army to provide additional workforce
to support the Army’s mission at RRAD. Willoughby received workers’
compensation benefits for his injury through LSI’s workers’ compensation
insurance plan, which the Government required LSI to provide to its employees
working at RRAD. However, because Willoughby found the benefits he received
to be insufficient to cover his needs, he sued the Government for negligence and
premises liability.
1
Wendy Willoughby alleges that she suffered a loss of companionship as a result of her
husband’s injuries. The parties do not dispute that Wendy Willoughby’s claims are derivative
of her husband’s claims against the United States. For simplicity’s sake, both Willoughbys’
claims are discussed as if they were unitary.
2
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Willoughby filed suit against the Government in the United States District
Court for the Eastern District of Texas. The Government moved to dismiss
under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), arguing that it was
entitled to assert the state-law defense that recovery against it was precluded
by Texas’ Workers’ Compensation Act’s exclusive remedy rule because the
Government, through LSI, had already paid Willoughby the workers’
compensation benefits he was due.2 After a hearing, the district court concluded
that the Government was entitled to raise the exclusive-remedy defense as a
Texas “statutory employer,”3 and granted the motion to dismiss. The plaintiffs
appealed.
II.
The district court had jurisdiction over this suit under the Federal Tort
Claims Act (“FTCA”). 28 U.S.C. §§ 1346(b), 2674. Willoughby timely exhausted
his administrative remedies by submitting a claim for personal injury with the
Department of the Army, which the Army denied. The question of whether the
United States has waived sovereign immunity pursuant to the FTCA goes to the
court’s subject-matter jurisdiction, see, e.g., In re FEMA Trailer Formaldehyde
Prods. Liab. Litig. (Miss. Plaintiffs), 668 F.3d 281, 289 (5th Cir. 2012); Spotts v.
United States, 613 F.3d 559, 566-67, 573 (5th Cir. 2010), and may therefore be
resolved on a Rule 12(b)(1) motion to dismiss, see, e.g., Ramming v. United
States, 281 F.3d 158, 161 (5th Cir. 2001).
This Court has jurisdiction to review the final decisions of district courts.
28 U.S.C. § 1291. The district court entered final judgment in favor of the
defendant on July 19, 2012, and the plaintiffs filed their notice of appeal on
August 13, 2012, making the appeal timely. See FED. R. APP. P. 4(a)(1)(A).
2
See TEX. LAB. CODE § 408.001(a) (exclusive-remedy provision).
3
See id. §§ 406.123(a), (e), 408.001(a).
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III.
We conduct a de novo review of orders granting the Government’s motion
to dismiss an FTCA complaint under Rules 12(b)(1) and 12(b)(6). E.g.,
Ramming, 281 F.3d at 161. The plaintiffs, as the parties asserting federal
subject-matter jurisdiction, bear the burden of proving that its requirements are
met. See id. “When a Rule 12(b)(1) motion is filed in conjunction with other
Rule 12 motions, the court should consider the Rule 12(b)(1) jurisdictional attack
before addressing any attack on the merits.” Id. (citation omitted).
“In applying Rule 12(b)(1), the district court has the power to dismiss for
lack of subject matter jurisdiction on any one of three separate bases: (1) the
complaint alone; (2) the complaint supplemented by undisputed facts evidenced
in the record; or (3) the complaint supplemented by undisputed facts plus the
court’s resolution of disputed facts. Here, the district court did not resolve any
disputed facts, so we . . . consider the allegations in the plaintiff’s complaint as
true. Our review is limited to determining whether the district court’s
application of the law is correct and, to the extent its decision was based on
undisputed facts, whether those facts are indeed undisputed. We then ask if
dismissal was appropriate.” Spotts, 613 F.3d at 565-66 (quotation marks,
citations, alterations, and footnote omitted).
IV.
A.
The Federal Tort Claims Act (“FTCA”) is the exclusive remedy for suits
against the United States or its agencies sounding in tort. 28 U.S.C. § 2679(a).
The FTCA grants a limited waiver of sovereign immunity and allows tort claims
against the United States “in the same manner and to the same extent as a
private individual under like circumstances.” Id. § 2674. “[T]he words ‘like
circumstances’ do not restrict a court’s inquiry to the same circumstances, but
require it to look further afield.” United States v. Olson, 546 U.S. 43, 46-47
4
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(2005) (citing Indian Towing Co. v. United States, 350 U.S. 61, 64 (1955); S. Rep.
No. 1400, 79th Cong., 2d Sess., 32 (1946) (stating that purpose of FTCA was to
make the tort liability of the United States “the same as that of a private person
under like circumstance, in accordance with the local law”)). All that is required
is “a similar analogy” because the plain text of § 2679 uses the modifier “like”
rather than “the same,” and that language reflects a deliberate choice on the
part of Congress to delimit the scope of the FTCA’s limited waiver of sovereign
immunity. See id.; Indian Towing, 350 U.S. at 64; see also, e.g., United States
v. Nordic Vill., Inc., 503 U.S. 30, 33-34 (1992) (“[T]he Government’s consent to
be sued must be construed strictly in favor of the sovereign[.]”) (citation and
quotation marks omitted).
“Whether a private person in ‘like circumstances’ would be subject to
liability is a question of sovereign immunity and, thus, is ultimately a question
of federal law. Because the federal government could never be exactly like a
private actor, a court’s job in applying the standard is to find the most
reasonable analogy. Inherent differences between the government and a private
person cannot be allowed to disrupt this analysis. The Fifth Circuit has
consistently held that the Government is entitled to raise any and all defenses
that would potentially be available to a private citizen or entity under state law.
Therefore, if a private person under ‘like circumstances’ would be shielded from
liability pursuant to a state statute, lower courts must decline to exercise
subject-matter jurisdiction.” In re FEMA Trailer Formaldehyde Prods. Liab.
Litig., 668 F.3d at 288-89 (citing Olson, 546 U.S. at 44) (other citations omitted).
The government is authorized by Congress to provide workers’
compensation insurance for federal employees;4 however, Congress has not
4
See, e.g., Federal Employees’ Compensation Act (FECA), 5 U.S.C. §§ 8101 et seq.
5
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granted permission for the government to provide coverage to contractors.5
Accordingly, the United States cannot directly pay workers’ compensation
benefits to non-federal employees or employees of independent contractors.6
Instead, the Army provided in its contract with LSI that LSI must provide
workers’ compensation coverage for its employees in compliance with Texas law,
but the Army agreed to pay the cost of the premiums directly to LSI as an
“allowable cost.”7 The government argues that under the Texas Workers’
Compensation Act, it is entitled to raise the exclusive remedy defense because
Willoughby received workers’ compensation benefits that the government
contractually required LSI to provide.
The Texas Workers’ Compensation Act (“TWCA”) provides that workers’
compensation benefits are the exclusive remedy for employees against employers
for work-related injuries and deaths.8 In some situations general contractors
5
Cf. 42 U.S.C. § 1651(a) (providing that the Government must provide workers’
compensation coverage to employees on certain military bases); 48 C.F.R. § 28.309(a)
(requiring the Government to provide such coverage to certain contractors by contract
pursuant to § 1651(a)); id. § 52.228-3 (setting out required language for contract provision
required by § 28.309(a)).
6
See McWhinnie v. United States, No. 08-6071, 2009 WL 8764296, at *3 (6th Cir. Nov.
25, 2009) (unpublished).
7
The master contract provided, in relevant part: “[T]he contractor shall pay their
employees at least the wages and fringe benefits found by the Department of Labor to prevail
in the locality (Clause I-24 ‘Service Contract Act, as amended’). This is a requirement of all
subcontracts under this contract. The prime contractor is resposible [sic] to make sure all
subcontractors comply with this requirement.” Contract ¶ A-2 (citing 48 C.F.R. § 22.10).
Section 22.1002-1 (a subsection of § 22.10) of the Code of Federal Regulations provides, in
relevant part, that “General Service contracts over $2,500 shall contain mandatory provisions
regarding minimum wages and fringe benefits, safe and sanitary working conditions,
notification to employees of the minimum allowable compensation, and equivalent Federal
employee classifications and wage rates.” 48 C.F.R. § 22.1002-1. The master contract lists,
as a fringe benefit, “Workers’ Compensation Insurance (Defense Base Act),” incorporating by
reference 48 C.F.R. § 52.228-3. Contract at ¶ I-38. The Task Order for LSI also incorporated
§ 52.228-3. Task Order at ¶ IF0395.
8
TEX. LAB. CODE § 408.001(a) (“Recovery of workers’ compensation benefits is the
exclusive remedy of an employee covered by workers’ compensation insurance coverage or a
6
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may be liable for the injuries sustained by the employees of their subcontractors
if the subcontractor is under- or uninsured. Texas, however, extends its
exclusive-remedy protection to general subcontractors who, by written
agreement, require their subcontractors to obtain workers’ compensation
insurance. TEX. LAB. CODE § 406.123(a). Section 406.123(a) of the TWCA
provides:
A general contractor and a subcontractor may enter into a written agreement
under which the general contractor provides workers’ compensation insurance
coverage to the subcontractor and the employees of the subcontractor.
Id. A premises owner is considered a “general contractor” within the meaning
of section 406.123 if the owner “provides” workers’ compensation to a contractor
who performs work for the owner. Entergy Gulf States, Inc. v. Summers, 282
S.W.3d 433, 438-39 (Tex. 2009).
If the general contractor or premises owner “provides” workers’
compensation insurance in this manner, it becomes a statutory employer of the
subcontractor’s employees for the purposes of the TWCA:
An agreement under this section makes the general contractor the employer of
the subcontractor and the subcontractor’s employees only for purposes of the
workers’ compensation laws of this state.
TEX. LAB. CODE § 406.123(e). If a general contractor or premises owner adheres
to the requirements of section 406.123, then as a “statutory employer” it is
effectively immune from the claims brought by a subcontractor because the
employee’s workers’ compensation benefits are his or her exclusive remedy. See
id. § 408.001(a). To become a statutory employer under Texas law, a premises
owner or general contractor need not personally obtain or directly pay for the
legal beneficiary against the employer of an agent or employee of the employer for the death
of or a work-related injury sustained by the employee.”).
7
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insurance or benefits. HCBeck, Ltd. v. Rice, 284 S.W.3d 349, 353 (Tex. 2009)
(citing TEX. LAB. CODE § 406.123(a)). Rather, “[t]he Act only requires that there
be a written agreement to provide workers’ compensation insurance coverage.”
Id.
However, the TWCA and the Texas Administrative Code set out additional
procedural requirements that statutory employers must follow, for instance:
(f) A general contractor shall file a copy of an agreement entered into under
[section 406.123] with the general contractor’s workers’ compensation
insurance carrier not later than the 10th day after the date on which the
contract is executed . . .
(g) A general contractor who enters into an agreement with a subcontractor
under [section 406.123] commits an administrative violation if the
contractor fails to file a copy of the agreement as required by Subsection
(f).
TEX. LAB. CODE § 406.123(f)-(g). The Administrative Code sets out similar
requirements:
An agreement between a general contractor and a subcontractor made in
accordance with the Texas Labor Code, § 406.123(a),(d),(e) or (l) shall:
(1) be in writing;
(2) state that the subcontractor and the subcontractor’s employees are
employees of the general contractor for the sole purpose of workers’
compensation coverage;
(3) indicate whether the general contractor will make a deduction for the
premiums;
(4) specify whether this is a blanket agreement or if it applies to a specific
job location and, if so, list the location;
(5) contain the signatures of both parties;
(6) indicate the date the agreement was made, the term the agreement will
be effective, and estimated number of workers affected by the
agreement.
8
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28 TEX. ADMIN. CODE § 112.101(a). In a similar vein, section 406.005 of the
TWCA requires employers to notify each employee of whether the employee is
covered by workers’ compensation insurance at a “conspicuous location” at the
employer’s principal place of business in language adopted by the Labor
Commissioner, or else be held in administrative violation. TEX. LAB. CODE
§ 406.005. Essentially, these additional procedures ensure that the employees
receive sufficient notice of their rights and the terms of the workers’
compensation insurance benefits available to them.
B.
The parties agree that in this case the Government has taken the basic
steps it needs to take to avail itself of the exclusive-remedy rule as a statutory
employer, viz., by requiring, in writing, that LSI provide its employees with
workers’ compensation benefits. See HCBeck, 284 S.W.3d at 353 (“The Act only
requires that there be a written agreement to provide workers’ compensation
insurance coverage.”); Entergy, 282 S.W.3d at 438-39 (holding a premises owner
is a “general contractor” for purposes of the statutory employer provision). What
the parties dispute is the significance of the Government’s failure to adhere to
the letter of the filing and notice requirements in the above code and regulatory
provisions. Willoughby argues that if the Government is not required to give
notice that its independent contractors’ employees are covered by the TWCA, as
Texas law requires of other employers in the State, the employees will not be
assured of receiving the required notice such that they can make an informed
election regarding their coverage.
This Court has held that the government does not waive its sovereign
immunity under the FTCA in situations involving minor procedural differences
between the government and private actors. In Owen v. United States, 935 F.2d
734 (5th Cir. 1991), this Court held that the United States could take advantage
of Louisiana’s cap on medical-malpractice damages applicable by statute to
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state-licensed medical providers who provide proof of financial responsibility and
participate in a patients’ compensation fund, despite the fact that the United
States had not contributed to the fund as is required of state providers. Id. at
737. We reasoned that because the tort victim would be subject to the damages
cap if the tortfeasor had been an in-state provider, and because the solvency of
the Government could not reasonably be questioned, the Government was “like”
employers who participated in the scheme. See id. at 737-38. Similarly, in
Roelofs v. United States, 501 F.2d 87 (5th Cir. 1974), this Court held that the
Army was entitled to assert Louisiana’s statutory employer defense to an FTCA
claim because the Army required its contractor to maintain workers’
compensation insurance for its employees; the court rejected the plaintiffs’
argument that because the Government cannot be forced by a state to purchase
workers’ compensation insurance, it is inherently on unequal footing with state
private actors. Id. at 90-92.
While the facts of Roelofs are similar to this case, there the plaintiffs did
not allege that the Government failed to follow substantive filing and notice
regulations, as Willoughby argues here.9 However, the filing and notice
regulations here are akin to the damages cap at issue in Owen. Here, as in
Owen, the government’s failure to adhere to the procedural requirements did not
make a meaningful difference in the outcome of the litigation from the plaintiff’s
perspective.10 Willoughby has not claimed that he did not know that he was
covered by workers’ compensation insurance, or that he would have done
anything differently, such as opted out of LSI’s workers’ compensation
9
For the same reason, this case is distinguishable from a district court case, Doss v.
United States, 793 F. Supp. 2d 859 (E.D. Tex. 2011), with facts similar to those in this case.
10
As another court has explained, in Owen, “the effect of the statutory scheme placed
the tort victim in exactly the same position that would have resulted had the victim been
injured by any other similarly-situated private party.” Hill v. United States, 81 F.3d 118, 121
(10th Cir. 1996).
10
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insurance, had the government given him the notice required by Texas law that
he was covered by the TWCA.
Of course, the notice requirement is important because it allows employees
to make an informed choice about their workers’ compensation insurance
coverage options. Employees are permitted to opt out of workers’ compensation
coverage and to retain their common-law rights of action to recover damages for
personal injuries against the employer, albeit on a fault basis. See TEX. LAB.
CODE § 406.034. Section 406.034 allows employees to opt out of the workers’
compensation system, including the applicability of the exclusive-remedy bar.
See id.; see also Tex. Workers’ Comp. Comm’n v. Garcia, 893 S.W.2d 504, 532
(Tex. 1995).11 Thus, the notice requirement serves a critical function in ensuring
that the employee is able to make an informed election concerning his or her
rights.12
11
Section 406.034 provides, in relevant part:
(a) Except as otherwise provided by law, unless the employee gives notice
as provided by Subsection (b), an employee of an employer waives the
employee’s right of action at common law or under a statute of this state
to recover damages for personal injuries or death sustained in the course
and scope of the employment.
(b) An employee who desires to retain the common-law right of action to
recover damages for personal injuries or death shall notify the employer
in writing that the employee waives coverage under this subtitle and
retains all rights of action under common law. . . .
(d) An employee who elects to retain the right of action or a legal beneficiary
of that employee may bring a cause of action for damages for injuries
sustained in the course and scope of the employment under common law
or under a statute of this state. . . .
TEX. LAB. CODE §§ 406.034(a), (b), (d).
12
Ferguson v. Hosp. Corp. Int’l, Ltd., 769 F.2d 268, 271 (5th Cir. 1985) (“Because the
workers’ compensation scheme remains voluntary in Texas, an employer’s notice . . . is
critical[.]”), superseded on other grounds as stated in, e.g., Warnke v. Nabors Drilling USA,
L.P., 358 S.W.3d 338, 344 n.5 (Tex. App. 2011); cf., e.g., Esquivel v. Mapelli Meat Packing Co.,
11
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However, Willoughby has not alleged or implied that he lacked notice of
his right to opt out of his workers’ compensation insurance coverage or that he
would have opted out if the government had given him the required notice.
Instead, he argues that the government may never assert this state-law defense
because Texas cannot force the government to adhere to the filing and notice
regulations or to pay the administrative fines for failing to do so. We rejected
that argument in Roelofs and held that, notwithstanding the fact that the
Government cannot be forced to purchase workers’ compensation insurance or
else be fined, the government may nevertheless be under “like circumstances”
as a private employer. See 501 F.2d at 90-02. This theoretical difference simply
is not enough under the “like circumstances” test. Because Willoughby does not
allege a lack of notice or prejudice from any lack of notice, the federal
government is in “like circumstances” as a Texas statutory employer.
Accordingly, Willoughby’s workers’ compensation benefits are his exclusive
remedy, and his claims against the Government were properly dismissed.
V.
For the foregoing reasons, we AFFIRM the judgment of the district court.
932 S.W.2d 612, 616 (Tex. App. 1996) (“[C]overage, and, hence the exclusivity bar of the
workers’ compensation statute[,] does not hinge on whether notice has been provided to the
employee.”).
12