In Voces v. Energy Resource Technology, GOM, LLC, et al. the United States Court of Appeals for the Fifth Circuit reviewed the longstanding general rule in Louisiana known as the independent contractor defense, which provides that a principal is not liable for the negligent acts of an independent contractor acting pursuant to the contract.
The facts in Voces are similar to what occur in the oil field on a daily basis. Defendant Energy Resource Technology GOM, LLC, (“ERT”) hired independent contractor Offshore Specialty Fabricators, LLC (“OSF”) to remove an oil and gas platform. The contract between ERT and OSF provided that OSF would perform all work as an independent contractor and that OSF was responsible for providing all necessary services, equipment, materials, personnel, and engineering to safely remove the platform. The contract also spelled out OSF’s duties and responsibilities, which included written operating procedures, the performance of all work in accordance with the written operating procedures, the review of operating procedures, and the performance of work with personnel trained to do so in a safe manner. During the removal process, ERT maintained a Company Man aboard the platform to monitor OSF’s work for compliance with the contract.
The decommissioning of the platform proceeded without incident until a tragic accident claimed the life of Peter Voces, a welder employed by OSF. Following Mr. Voces’ death and a Bureau of Safety and Environmental Enforcement (BSEE) panel investigation, the decedent’s wife filed suit. Mrs. Voces claimed that ERT was vicariously liable for the negligence of its contractor OSF and independently liable for its own negligence. Her claims against ERT were based on the presence of the ERT Company Man aboard the platform.
As stated above, the independent contractor defense is a general Louisiana rule that a principal is not liable for the negligent acts of an independent contractor; there are exceptions to this rule. Specifically, the “operational control” exception applies when the principal retains or exercises operational control over the independent contractor’s acts or expressly or impliedly authorizes an unsafe practice. This exception is routinely satisfied in situations where a Company Man is present.
ERT moved to dismiss Ms. Voces’s claims based on the independent contractor defense. The District Court agreed and determined that Mrs. Voces could not prevail on her vicarious liability claim because she could not prove that ERT maintained the requisite operational control over OSF’s acts or that ERT expressly or impliedly authorized OSF’s unsafe practices. On review, the U.S. Fifth Circuit reiterated that determining operational control depends in great measure upon whether and to what degree the right to control the work has been contractually reserved by the principal. Operational control exists only if the principal has direct supervision of the step-by-step process of accomplishing the work such that the contractor is not entirely free to do the work in his own way. The Fifth Circuit also held that a principal may demand in its contract that an independent contractor develop safe work practices without triggering the operational control exception.
Further, it is critical to note that a principal may monitor (via a Company Man) its independent contractor’s work for compliance with contractual demands without triggering the operational control exception. As such, the mere fact that a principal takes an interest in the safety of the employees of its independent contractors and stations a Company Man on the platform does not, in and of itself, constitute operational control. Here, the Fifth Circuit found that ERT’s Company Man never dictated the work methods or operative details of the platform removal procedure. Instead, the ERT Company Man merely inspected OSF’s procedures and work to ensure OSF’s contractual compliance. Accordingly, the 5th Circuit included that ERT did not exercise operational control.
Last, the Court considered whether ERT could be held liability for its own negligent acts. Again, Mrs. Voces placed great emphasis on the presence of ERT’s Company Man aboard the platform. However, the Court was not persuaded. Indeed, the Court advised that it has not located any Louisiana authority holding that a principal assumes a duty to ensure the safety of an independent contractor’s employees by merely stationing a Company Man on an oil platform for the purpose of overseeing a contractor’s compliance with his contractual obligations. A Company Man does not affirmatively assume any duty to provide an independent contractor’s employees with a safe workplace simply by observing their unsafe work habits. Accordingly, the Judgment of the District Court dismissing the claims of the Voces Plaintiffs against ERT was affirmed.