FILED
United States Court of Appeals
Tenth Circuit
PUBLISH July 2, 2008
Elisabeth A. Shumaker
UNITED STATES COURT OF APPEALS Clerk of Court
TENTH CIRCUIT
SHON ANDERSON,
Plaintiff-Appellant,
v. No. 07-3128
COMMERCE CONSTRUCTION
SERVICES, INC.,
Defendant-Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
(D.C. NO. 06-CV-2073-CM-JPO)
Ryan L. Woody, Matthiesen, Wickert & Lehrer, S.C., Hartford, Wisconsin (Gary
L. Wickert, Matthiesen, Wickert & Lehrer, S.C., Hartford, Wisconsin, and Aaron
J. Racine and Patrick M. Reidy, Monaco, Sanders, Gotfredson, Racine & Barber,
LLC, Kansas City, Missouri, with him on the briefs), for Appellant.
Craig C. Blumreich, Larson & Blumreich, Chartered, Topeka, Kansas, for
Appellee.
Before TYMKOVICH, GORSUCH, and HOLMES, Circuit Judges.
TYMKOVICH, Circuit Judge.
In this choice of law case, Shon Anderson, a Nebraska subcontractor’s
employee, was injured while performing demolition work in Kansas. Anderson
collected workers’ compensation benefits from his Nebraska employer, but he
could have collected such benefits from the general contractor in Kansas
overseeing the project. Anderson subsequently filed a negligence suit in Kansas
federal district court against the general contractor.
We must decide whether the exclusive remedy provision of the Kansas
workers’ compensation statute applies. If it does, Anderson’s suit is barred by
Kansas law. We conclude Kansas courts would resolve this issue by applying the
lex loci delicti choice of law rule: the law of the place where the tort occurs
governs the claim. Applying Kansas law to the facts here, Anderson’s exclusive
remedy was to accept workers’ compensation benefits from either his direct
employer or the general contractor. Having collected benefits from his direct
employer, Kansas law barred him from filing a negligence claim against the
general contractor.
We have jurisdiction pursuant to 28 U.S.C. § 1291. Finding no legal error,
we AFFIRM the district court order granting summary judgment.
I. Background
A Kansas school district hired Commerce Construction Services, Inc., to
remodel a high school in Towanda, Kansas. Commerce, a Kansas corporation,
subcontracted with Midwest Environmental, Inc., a Nebraska corporation, to
perform the demolition work. Anderson was a construction worker employed by
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Midwest. In addition, Anderson was a Missouri resident at the time of the
accident.
While on the job, Anderson was severely injured when a wall collapsed.
He applied for and collected workers’ compensation benefits from Midwest’s
insurance carrier pursuant to Nebraska law. Anderson could have instead
collected workers’ compensation benefits from Commerce because Commerce
carried a workers’ compensation policy as required by Kansas employment law.
While collecting workers’ compensation benefits from Midwest, Anderson
filed a lawsuit against Commerce for negligence in Kansas federal court.
Commerce responded by filing a summary judgment motion and arguing that the
suit was barred because, under the Kansas Workers’ Compensation Act,
Anderson’s exclusive remedy was to collect workers’ compensation benefits.
According to the Act, an employer cannot be held liable for negligence if the
plaintiff can collect benefits for the injury through the state workers’
compensation system. See Kan. Stat. Ann. § 44-501(b). 1 And under Kansas law,
1
Kan. Stat. Ann. § 44-501, provides in part:
(b) Except as provided in the workers compensation act,
no employer, or other employee of such employer, shall
be liable for any injury for which compensation is
recoverable under the workers compensation act nor
shall an employer be liable to any third party for any
injury or death of an employee which was caused under
circumstances creating a legal liability against a third
party and for which workers compensation is payable by
(continued...)
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a general contractor is a statutory employer of a subcontractor’s employees.
Robinett v. Haskell Co., 12 P.3d 411, 414 (Kan. 2000) (citing Kan. Stat. Ann.
§ 44-503(a)). Thus, under Kansas law, a subcontractor’s employee may recover
workers’ compensation benefits from either his immediate employer or his
statutory employer. Id. at 414. But in exchange, “[a] statutory employer is
immune from a common-law suit for damages . . . even when the injured
employee chooses to receive workers compensation benefits from his or her
immediate employer.” Id.
Anderson contends Nebraska law, which would permit Anderson’s suit,
should apply instead of Kansas law. Under the Nebraska Workers’ Compensation
Act, an employee may sue a third party responsible for his injuries, even if the
employee already received workers’ compensation benefits for the injury. Neb.
Rev. Stat. § 48-118. 2 For purposes of this statute, a contractor who is not the
worker’s direct employer is considered a “third party.” See Rehn v. Bingaman, 36
N.W.2d 856, 859–60 (Neb. 1949). Nebraska law therefore would permit
1
(...continued)
such employer. (emphasis added)
2
Neb. Rev. Stat. § 48-118, provides in part:
Nothing in the Nebraska Workers’ Compensation Act
shall be construed to deny the right of an injured
employee or of his or her personal representative to
bring suit against such third person [for negligence].
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Anderson to sue Commerce because Commerce was a third party and not
Anderson’s direct employer.
The district court concluded Kansas law applies. Because Kansas law bars
Anderson’s suit, the court granted Commerce summary judgment. This timely
appeal follows.
II. Standard of Review
We review de novo the grant of summary judgment to determine whether
any genuine issues of material fact were in dispute and, if not, whether the district
court correctly applied the substantive law at issue. Viernow v. Euripides Dev.
Corp., 157 F.3d 785, 792 (10th Cir. 1998). “Because the parties do not dispute
the facts, we have before us a purely legal question.” Locke v. Saffle, 237 F.3d
1269, 1270–71 (10th Cir. 2001). We therefore review de novo the district court’s
choice of law determination. King v. PA Consulting Group, Inc., 485 F.3d 577,
585 (10th Cir. 2007); see also Salve Regina Coll. v. Russell, 499 U.S. 225, 239
(1991) (“The obligation of responsible appellate review and the principles of a
cooperative judicial federalism underlying Erie 3 require that courts of appeals
review the state-law determinations of district courts de novo.”).
III. Discussion
This case turns on whether Nebraska or Kansas law applies. To resolve
this question, we apply the choice of law rules of the state in which the district
3
Erie R. Co. v. Tompkins, 304 U.S. 64 (1938).
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court sits. Mem’l Hosp. of Laramie County v. Healthcare Realty Trust, Inc., 509
F.3d 1225, 1229 (10th Cir. 2007) (citing Klaxon Co. v. Stentor Electric Mfg. Co.,
313 U.S. 487, 496 (1941)).
Anderson makes three choice of law arguments. He contends (1) Kansas
courts would not apply the lex loci delicti choice of law rule to the facts here; (2)
instead, Kansas courts would apply principles from the Restatement (Second) of
Conflict of Laws; or (3) Kansas courts would apply an equitable choice of law
rule advocated by a leading workers’ compensation scholar. Anderson also
argues the Full Faith and Credit Clause of the Constitution prohibits federal
courts from applying Kansas workers’ compensation law to the case. For the
following reasons, we disagree.
A. Lex Loci Delicti
In tort cases, Kansas courts have long applied the traditional lex loci delicti
choice of law rule. Ling v. Jan’s Liquors, 703 P.2d 731, 735 (Kan. 1985).
According to this rule, the law of the state where the tort occurred governs the
merits of the litigation. Id. While of venerable origin, the rule is no longer
followed by a majority of the states. See 9-144 Larson’s Workers’ Compensation
Law § 144.01[5] (2007) (“More fashionable are the [choice of law] theories of
‘significant contacts’ and ‘legitimate interests.’”). Nonetheless, the rule “is well
established under Kansas law and there is no indication that Kansas intends to
abandon the rule.” Miller v. Dorr, 262 F. Supp. 2d 1233, 1238 (D. Kan. 2003)
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(citing Kansas cases). Under this rule, Kansas law would govern the dispute
because Anderson was injured in Kansas.
B. Most Significant Relationship Test
But Anderson argues Kansas courts would not apply the rule of lex loci
delicti under the particular facts of this case, and instead would apply the “most
significant relationship test” recommended by the Restatement (Second) of
Conflict of Laws. 4 Specifically, Anderson points to section 185 of the
4
The most significant relationship test is described in sections 6 and 145 of
the Restatement. Section 6(2) sets out the following principles relevant to
resolving choice of law issues:
(a) the needs of the interstate and international systems,
(b) the relevant policies of the forum,
(c) the relevant policies of other interested states and the relative
interests of those states in the determination of the particular issue,
(d) the protection of justified expectations,
(e) the basic policies underlying the particular field of law,
(f) certainty, predictability and uniformity of result, and
(g) ease in the determination and application of the law to be applied.
Restatement (Second) of Conflict of Laws § 6 (1971). Furthermore, section 145
clarifies how these principles should generally be applied in tort cases:
(1) The rights and liabilities of the parties with respect to an issue in
tort are determined by the local law of the state which, with respect
to that issue, has the most significant relationship to the occurrence
and the parties under the principles stated in § 6.
(2) Contacts to be taken into account in applying the principles of § 6
to determine the law applicable to an issue include:
(a) the place where the injury occurred,
(b) the place where the conduct causing the injury
(continued...)
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Restatement, 5 which he claims has already been recognized by a federal district
court interpreting Kansas choice of law rules, Miller, 262 F. Supp. 2d at
1237–39. 6
Miller and Restatement § 185
In Miller, the plaintiff—a resident of North Carolina—was employed as a
truck driver by Jevic Transportation. The plaintiff was injured in a car accident
while on the job in Kansas, and Jevic paid him workers’ compensation benefits in
compliance with North Carolina law. The defendants—the negligent driver and
the driver’s employer Eugene Prockish Trucking—were both residents of Kansas.
4
(...continued)
occurred,
(c) the domicil, residence, nationality, place of
incorporation and place of business of the parties, and
(d) the place where the relationship, if any, between the
parties is centered.
These contacts are to be evaluated according to their relative
importance with respect to the particular issue.
Id. § 145.
5
Sections 183 through 185 of the Restatement specifically describe how
the most significant relationship test should be applied in tort cases involving
conflicting workers’ compensation statutes. See generally Hughes Wood Prods.,
Inc. v. Wagner, 18 S.W.3d 202, 205–207 (Tex. 2000) (describing how the most
significant relationship test applies in workers’ compensation cases); Symeon C.
Symeonides, Choice of Law in the American Courts in 2000: As the Century
Turns, 49 Am. J. Comp. L. 1, 32–36 (2001) (same).
6
We ordinarily look to state court interpretations of state law in resolving
questions of state law. We examine Miller because the parties argue it and the
case is a thoughtful precedent on the question presented.
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The plaintiff sued the defendants in Kansas federal district court for personal
injury and loss of services. While the suit was pending, the plaintiff reached a
settlement with the defendants. The plaintiff then asked the court to allocate the
settlement between himself and Jevic. Under subrogation principles, Jevic was
entitled to reimbursement for the benefits it paid the plaintiff. Id. at 1234–37.
Subrogation is “[t]he principle under which an insurer that has paid a loss
under an insurance policy is entitled to all the rights and remedies belonging to
the insured against a third party with respect to any loss covered by the policy.”
Black’s Law Dictionary 1467 (8th ed. 2004). In the context of workers’
compensation, subrogation involves the right of an employer or insurer to obtain
reimbursement from a third party for benefits it paid to an injured employee.
Based on these principles, the Miller court needed to determine whether the
settlement should be allocated according to North Carolina or Kansas law. 7 No
Kansas state court had previously decided which rule should be used to resolve a
choice of law question in a subrogation case. Miller, 262 F. Supp. 2d 1237. To
settle this question of first impression, the district court turned to section 185 of
the Restatement (Second) of Conflict of Laws.
7
Kansas and North Carolina differ on how a court should allocate
settlement proceeds. Unlike Kansas, North Carolina gives courts discretionary
authority to reduce or eliminate the employer’s subrogation lien. Miller, 262 F.
Supp. 2d 1237.
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According to section 185, “[t]he local law of the state under whose
workmen’s compensation statute an employee has received an award for an injury
determines what interest the person who paid the award has in any recovery for
tort or wrongful death that the employee may obtain against a third person on
account of the same injury.” Restatement (Second) of Conflict of Laws § 185
(1971). Based on this section, the district court concluded North Carolina law
governed the subrogation issue because the North Carolina law also regulated the
workers’ compensation benefits paid to the plaintiff by his employer. Miller, 262
F. Supp. 2d at 1239.
Anderson takes from Miller the proposition that Kansas courts would apply
Restatement section 185 rather than the doctrine of lex loci delicti in subrogation
actions involving conflicting workers’ compensation statutes. Anderson further
argues the present case is a subrogation action because his Nebraska employer,
Midwest, will be entitled to reimbursement if he prevails in the lawsuit. Putting
these two premises together, he concludes Kansas courts would apply Restatement
section 185 to resolve the choice of law issue we are faced with here.
We disagree. Unlike in Miller, we are not being asked to resolve which
state’s subrogation provision applies. Instead, the question is which state’s
exclusive remedy provision governs. Thus, Anderson’s claim is about the
availability of a tort remedy, not about the allocation of a financial recovery
between him and an insurance company.
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Anderson nonetheless implies that even if the present case is not a
traditional subrogation action, the court should extend Miller’s reasoning. He
contends Miller stands for the general proposition that the state law governing the
payment of the plaintiff’s workers’ compensation claim should also regulate the
employer’s rights and responsibilities. “[Exclusive] application of that state’s
workers compensation statute preserves the legislative give and take considered in
fashioning the workers’ remedy.” Aplt. Br. 14 (quoting Miller, 262 F. Supp. 2d at
1239). Piecemeal application of different states’ workers’ compensation laws
“creates a risk of an outcome not contemplated by either legislature in drafting
the respective statutes.” Id. (quoting Miller, 262 F. Supp. 2d at 1239). Based on
these general principles, Anderson argues because Nebraska law regulated the
benefits he collected, Nebraska law should also determine whether Commerce can
be sued for negligence.
While well put, the argument is too clever by half. Like Nebraska’s
scheme, the Kansas workers’ compensation system also reflects a carefully
crafted statutory compromise between employees and employers. Under this
system, statutory employers such as Commerce are required to provide mandatory
coverage to subcontractor employees such as Anderson. In exchange for
extending mandatory coverage and paying into the state system, employers are
protected from common law claims for workplace injuries. If a court applied
Nebraska’s exclusive remedy law and permitted Anderson’s suit, the court would
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be disrupting this legislative compromise between Kansas employers and
employees.
The district court therefore properly concluded that Miller, and by
extension section 185, were not analogous to Anderson’s workplace accident
claim. And the court did not err in applying Kansas’s longstanding lex loci
delicti rule to resolve the choice of law issue in this case. 8
Restatement § 184
In the alternative, Commerce prevails even if Kansas courts would apply
the Restatement’s most significant relationship test instead of the lex loci delicti
choice of law rule. We agree with Commerce’s argument that under the
Restatement’s test, Kansas courts would conclude Kansas’s exclusive remedy law
governs and therefore Anderson’s suit is barred.
Under the Restatement, a court applying the most significant relationship
test to a worker’s tort claim would rely on section 184 rather than section 185 to
determine which state’s exclusive remedy provision applies. Unlike section 185,
which describes rules for resolving conflicting subrogation statutes, section 184
8
Anderson also cites Kelley v. Summers, 210 F.2d 665 (10th Cir. 1954), for
the proposition that Kansas courts do not apply the lex loci delicti doctrine in
cases involving conflicting workers’ compensation acts. Kelley does not support
Anderson’s argument; we did not resolve a choice of law dispute in Kelley.
Instead, we concluded neither Kansas’s nor Texas’s exclusive remedy provision
shielded the defendant company from liability. See id. at 672–73. Because we
were not confronted with conflicting workers’ compensation statutes, we did not
rely on the doctrine of lex loci delicti to analyze the case. Therefore, Kelley is
distinguishable from the present case.
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specifically addresses the issue presented here: the availability of a tort remedy.
See, e.g., Stuart v. Colorado Interstate Gas Co., 271 F.3d 1221, 1231 (10th Cir.
2001) (applying Restatement section 184 to determine whether Wyoming courts
would apply Wyoming’s or Colorado’s exclusive remedy provision).
According to section 184, we should apply the law of the state where the
plaintiff was injured if the employer was required to insure the risk incurred:
Recovery for tort or wrongful death will not be permitted in any state
if the defendant is declared immune from such liability by the
workmen’s compensation statute of a state under which the defendant
is required to provide insurance against the particular risk and under
which . . . the plaintiff could obtain an award for the injury, if this is
the state . . . where the injury occurred.
Restatement (Second) of Conflict of Laws § 184(b)(1) (1971) (emphasis added).
The rationale behind this rule is two-fold:
[T]o deny a person the immunity granted him by a workmen’s
compensation statute of a given state would frustrate the efforts of
that state [1] to restrict the cost of industrial accidents and [2] to
afford a fair basis for predicting what these costs will be.
Id. § 184 cmt. b.
Applying section 184 to the facts of this case, Kansas’s exclusive remedy
provision would protect Commerce from liability. Anderson was injured while
working in Kansas. Because Commerce was a statutory employer of Anderson,
Anderson could have obtained a workers’ compensation award from Commerce. 9
9
For the purpose of Restatement section 184, it does not matter that
Anderson chose to obtain the workers’ compensation award through Midwest
(continued...)
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Therefore, under section 184 of the Restatement, Anderson is barred from suing
Commerce for negligence. Permitting Anderson to sue Commerce would
otherwise undermine Kansas’s efforts to “restrict the cost of industrial accidents
and to afford a fair basis for predicting what these costs will be.” Id.
Anderson nonetheless argues Restatement section 184 cannot coexist with
Restatement section 185. “If a state has already adopted Restatement § 185, it
should not also adopt § 184.” Aplt. Reply Br. 4. He contends that because the
federal district court in Miller adopted section 185, we should likewise not apply
section 184 in the present case.
As a threshold matter, Miller is not binding precedent; it is a federal district
court decision. But more fundamentally, Anderson fails to identify any authority
suggesting section 184 and section 185 cannot coexist. Nor have we found any
cases supporting Anderson’s argument. The better argument based on the
language of the Restatement and the cases adopting it is that section 184 applies
to conflicting exclusive remedy laws while section 185 applies to conflicting
9
(...continued)
(regulated under Nebraska law) rather than Commerce (regulated under Kansas
law). See Restatement (Second) of Conflict of Laws § 184 & cmt. b (explaining
the state’s immunity provision applies if the worker could have obtained a
workers’ compensation award from a company regulated by that state’s law).
Courts applying Restatement section 184 have reached a similar conclusion. See,
e.g., Stuart, 271 F.3d at 1231; Garcia v. Pub. Health Trust of Dade County, 841
F.2d 1062, 1066 n.4 (11th Cir. 1988); Snyder v. Celsius Energy Co., 866 F. Supp.
1349, 1357–60 (D. Utah 1994); Marion Power Shovel Co. v. Hargis, 698 So. 2d
1246, 1247–48 (Fla. Dist. Ct. App. 1997).
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subrogation rules. Because the rules address different situations, they are not
mutually exclusive.
Therefore, even under the Restatement’s most significant relationship test,
Kansas law applies and therefore Anderson’s suit is barred.
C. Professor Arthur Larson’s Rule
Anderson alternatively urges us to adopt a portion of Professor Arthur
Larson’s treatise on workers’ compensation law, which Anderson describes as
“Larson’s rule.” Aplt. Br. 10–11. Under this choice of law methodology,
if a damage suit is brought in the forum state by the employee
against the employer or statutory employer, the forum state will
enforce the bar created by the exclusive-remedy statute of a state that
is liable for workers’ compensation as the state of employment
relation, contract, or injury.
9-144 Larson’s Workers’ Compensation Law § 144.01[2]. But as we understand
Professor Larson’s rule, a court would still conclude Kansas’s law applies to
Anderson’s claim. Kansas is a “state that is liable for workers’ compensation as
the state of employment relation, contract or injury.” Id. The injury occurred in
Kansas, and Commerce’s workers’ compensation insurance covered Anderson.
Therefore, Commerce prevails under this rule.
D. Full Faith and Credit Clause
Finally, Anderson argues for the first time on appeal that by applying
Kansas’s exclusive remedy provision to the present case, the district court
violated the Full Faith and Credit Clause. By not arguing this issue before the
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district court, Anderson waived it. Wolfe v. Barnhart, 446 F.3d 1096, 1103 (10th
Cir. 2006); see also 9-144 Larson’s Workers’ Compensation Law § 144.01[3] (“It
is now firmly established by the decision of the Supreme Court of the United
States in Carroll v. Lanza 10 that a state may decline to apply the exclusive remedy
provision of a sister state[’s workers’ compensation statute] when different from
its own without violating the Full Faith and Credit Clause.”).
IV. Conclusion
In sum, we conclude Kansas courts would apply the lex loci delicti rule to
determine which state’s exclusive remedy provision applies. Under this choice of
law rule, Kansas law applies, and therefore it bars Anderson’s negligence claim.
Even if Kansas courts instead adopted the most significant relationship test or
Professor Larson’s rule, the suit would still be barred.
Therefore, we AFFIRM the district court order granting Commerce
summary judgment.
10
Carroll v. Lanza, 349 U.S. 408 (1955).
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