Article from Billings Gazette on Duty of Care bill

By on November 15, 2009

Below you will find an article from the Billings Gazette on the Duty of Care bill.  Same article was in the Casper Star Tribune

Workplace liability re-examined

By DUSTIN BLEIZEFFER Casper Star-Tribune | Posted: Sunday, November 15, 2009 12:00 am

CASPER — Leroy Fried was killed, crushed by a beam while he and his crew were setting up a drilling rig, Aug. 2, 2004.

“He was a dad. He was a grandpa. He was a husband. I have grandbabies who will never know their grandpa Leroy,” said his widow, Cheryl Fried.

Fried plans to face the Joint Judiciary Committee on Monday as it votes on whether to take up a bill called “Duty owed to employees of independent contractors.”

Supporters of the bill say it would hold accountable oil and gas operators for their own portion of negligence — decided by a jury — in accidents on work locations they control.

The industry vehemently opposes the bill and has the support of Gov. Dave Freudenthal in heading off the effort.

“I didn’t support it last time. I’m not going to support it this time. Creating one more person to sue doesn’t really change the work ethic on the site,” Freudenthal recently told a group of oil and gas industry leaders.

Divisive issue

“Duty of care” is a deeply divisive issue in Wyoming, where the oil and gas industry earns $34 billion in gross revenues and contributes $2.5 billion in annual revenue to state coffers. Yet many workers and families say they’re fed up with the fact that Wyoming is ranked worst in the nation for workplace fatalities, according to information from state and local officials and the Centers for Disease Control and Prevention.

One lawmaker pushing the bill, Rep. Keith Gingery, R-Jackson, suggests that oil and gas operators are held harmless for their own liability in part because of their political influence in the state.

It was an activist state Supreme Court that essentially rewrote the case law on duty of care in the mid-1990s, and it’s time the Legislature weighs in on the matter, Gingery said.

“Somebody’s got to tell them (industry) we’re not a colony. We’re a state,” Gingery said. “These big companies come out of Houston and Denver and tell us how to run our state, and it’s frustrating. They’ve put a lot of pressure on a lot of people to kill this bill.”

Fried’s case

After Leroy Fried was killed on a rig owned by Cyclone Drilling Co., Cheryl collected death benefit payments from the Wyoming workers’ compensation fund — enough to bury her husband, pay some bills and pay off her mobile home in Riverton.

She was able to collect because Cyclone Drilling had paid into the state workers’ compensation fund. As a contributor to the fund, Cyclone enjoys immunity for its own potential negligence in such accidents.

That’s the workers’ compensation compromise: No matter who is at fault – employer or employee – both enjoy legal immunity, and the injured are entitled to certain benefits.

But the operator of the site, Ultra Resources, didn’t pay into the workers’ compensation fund for contractor employees — as is common in the industry. Yet operators such as Ultra have some level of control over their oil and gas drilling locations, according to supporters of the duty-of-care bill.

Therefore, operators could potentially share in the negligence that contributes to accidents.

Cheryl Fried wanted to know if a jury would assign any portion of liability for her husband’s death to Ultra Resources. If so, and if Fried won any monetary award, she’d be required to pay back a portion of workers’ compensation benefits back to the state’s fund.

In fact, dozens of injured workers have taken it upon themselves to win back hundreds of thousands of dollars for the Wyoming’s workers’ compensation fund from nonpaying parties found negligent by a jury.

But Cheryl never got her day in court.

Case history

In dismissing the lawsuit on a summary judgment motion from Ultra, a district court judge found that “in essence, the operator owes no duty of care to the independent contractor’s employees.”

The judge cited the 1996 case of Dow v. Louisiana Land and Exploration Co. in which the 10th U.S. Circuit Court of Appeals upheld a decision by the Wyoming Supreme Court. The legal view expressed in this case was that no duty is owed to employees of independent contractors unless the plaintiff can prove the operator assumed “pervasive” control of the work site.

Dow v. Louisiana has guided Wyoming’s legal view on the matter ever since.

“ ‘Pervasive’ is such a high standard, nobody can ever get to court,” Gingery said.

Until the 1996 Dow case, the courts often cited the 1986 Cappellen v. OXY case, in which the court stated that oil and gas operators indeed can influence the safety of contract workers, or “direct the manner of the independent contractor’s performance.”

But there is no duty of care written in Wyoming law.

Without the state’s view written in statute, case law on duty of care is a tussle between those who prefer the Cappellen view and those who prefer the Dow view. For the past 13 years, the latter has prevailed with few exceptions.

“Should the courts be writing the law, or should the Legislature be writing the law? In my opinion it should be the Legislature,” Gingery said.

Jury or settlement?

Patrick Murphy, attorney with the Casper firm Williams, Porter, Day and Neville, said the proposed legislation would go far beyond codifying existing case law — no matter which case you prefer.

“It would allow, in almost every case, the lawsuit against the Wyoming property owner to go forward to trial,” Murphy said.

Does that mean a plaintiff wants to make his or her case to a jury? Not necessarily, according to Murphy.

“The plaintiffs’ bar wants a vehicle that would allow them to extract settlements from Wyoming property owners where the law does not now allow it,” Murphy said. “It would rewrite and undo more than 18 Wyoming Supreme Court cases since 1986.”

Gingery said the industry has tried to convince lawmakers that writing the duty-of-care law into statute would put any property owner at risk of frivolous lawsuits. But that’s not true.

“It’s kind of goofy, because this has always been the law in Wyoming,” Gingery said.

He said the state Supreme Court perverted the duty-of-care law when it placed the “pervasive” burden of proof upon the shoulders of workers and their families. That essentially shields oil and gas operators from Wyoming’s duty-of-care law.

“The Supreme Court rewrote the law,” Gingery said. “Oil and gas companies should not operate with immunity in our state. We don’t allow that to any business. We don’t allow it for mining companies or trucking companies.”

Murphy insists that current law does require a duty of reasonable care if an operator’s company man assumes direction and control of work performed by the contract drillers.

“For those who would so involve themselves in the work that they can direct and manage to a significant degree, then they also have a legal responsibility to do it safely,” Murphy said.

So why aren’t plaintiffs getting past summary judgment when filing suit against oil and gas operators?

“Because they are not able to demonstrate that the company was able to exercise that quantum level of control,” Murphy said.

Politics and influence

Gingery co-sponsored a similar bill during the last legislative session with Sen. Tony Ross, R-Cheyenne. The bill failed introduction by one vote.

At the close of the session, the governor and legislative leaders announced the formation of a task force on workplace safety issues. Its charge was to find out what’s behind Wyoming’s worst-in-the-nation workplace fatality rate.

“The bill was the impetus for the safety council being created,” Gingery said. “It would have never been created if it hadn’t been for the duty-of-care bill.”

As for any lopsided political influence on this bill, or others, Bruce Hinchey, of the Petroleum Association, of Wyoming denies the industry has any advantage.

“If we had enough political influence, then our taxes would be zero,” he said.

Hinchey said current law on duty of care is based upon the facts and not emotions, and that’s the way it should be. In fact, if oil and gas operators are further exposed to the duty-of-care law, then they might have less incentive to carry forward with the safety programs they currently have in place.

“The bill is end-around run on the system, and that’s all it is. It’s touted as a bill to make the workplace safer, and it’s not,” Hinchey said.

Sure, the oil and gas industry contributes some $2.5 billion in annual revenue to state coffers. Does that give it a prominent voice in Wyoming politics?

You bet, Murphy said.

“I don’t know why it shouldn’t. He who pays gets a voice, and I don’t have a problem with that concept,” Murphy said.

Rep. Mary Throne, D-Cheyenne, opposed the bill during the last legislative session.

“It’s not crystal clear to me that the common law has changed as suggested. It depends on how you interpret the cases,” Throne said. “There’s also the argument that if you write something into statute, you actually throw out the case law that’s helpful to the issue.”

Empty seat at the table

Cheryl Fried points out that if her husband had been killed on a rig on the Wind River Indian Reservation, her lawsuit would have moved forward to trial because the tribal court does not recognize the “pervasive” burden of proof.

Yet oil and gas companies still drill plenty of oil and gas wells on the reservation.

“But we couldn’t get our foot in the door,” Fried said.

Fried said she feels like she was denied the opportunity to seek justice, and that allows the industry to dehumanize the issue.

“It feels like Leroy’s life was nothing to these companies. He was just another number. They didn’t know anything about him other than he worked,” Fried said.

Contact Dustin Bleizeffer at [email protected] or 307-577-6069.


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