James Demetres v. East West Construction, Inc.
Filing
PUBLISHED AUTHORED OPINION filed. Originating case number: 2:13-cv-00155-RBS-DEM. [999511225] Copies to W. Moody, Jr. and W. Moody, Sr. [14-1180]--[Edited 01/15/2015 by SAW]
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PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 14-1180
JAMES THOMAS DEMETRES,
Plaintiff - Appellant,
v.
EAST WEST CONSTRUCTION, INC.,
Defendant - Appellee.
Appeal from the United States District Court for the Eastern
District of Virginia, at Norfolk.
Rebecca Beach Smith, Chief
District Judge. (2:13-cv-00155-RBS-DEM)
Argued:
October 30, 2014
Decided:
January 15, 2015
Before NIEMEYER and GREGORY, Circuit Judges, and DAVIS, Senior
Circuit Judge.
Affirmed by published opinion. Judge Gregory wrote the opinion,
in which Judge Niemeyer and Senior Judge Davis joined.
ARGUED: Earl Stanley Murphy, MOODY LAW FIRM, Portsmouth,
Virginia, for Appellant.
Danielle D. Giroux, HARMAN, CLAYTOR,
CORRIGAN & WELLMAN, Richmond, Virginia, for Appellee. ON BRIEF:
Stanley P. Wellman, HARMAN, CLAYTOR, CORRIGAN & WELLMAN,
Richmond, Virginia, for Appellee.
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GREGORY, Circuit Judge:
James
Thomas
Demetres
(“Demetres”)
appeals
the
district
court’s dismissal of his personal injury suit against East West
Construction,
Inc.
jurisdiction
pursuant
12(b)(1).
(“East
West”)
to
for
Federal
lack
Rule
of
of
subject
Civil
matter
Procedure
For the reasons stated herein, we affirm the judgment
of the district court.
I.
Demetres is a resident and citizen of North Carolina.
direct
employer,
Ashland
North
Carolina
corporation.
corporation.
Construction
Co.
East
(“Ashland”),
West
is
a
His
is
a
Virginia
In March of 2011, Ashland hired East West as a
subcontractor
to
prepare
a
site
in
Virginia
Beach
for
construction of a CVS Pharmacy, and designated Demetres as the
superintendent.
At the jobsite on March 28, 2011, a bulldozer, which was
operated
resulting
Demetres
by
in
an
employee
significant
subsequently
of
East
West,
injuries
received
and
workers’
backed
nearly
over
Demetres,
killing
compensation
him.
benefits
under North Carolina law through his employment with Ashland.
On March 27, 2013, Demetres filed a personal injury suit
against East West in the Eastern District of Virginia, alleging
negligence and seeking $100,000,000 in damages.
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East West filed a motion to dismiss for lack of subject
matter jurisdiction, pursuant to Federal Rule of Civil Procedure
12(b)(1).
It
Virginia
Workers’
§ 65.2-307,
argued
that
the
exclusivity
Compensation
barred
Act
Demetres’s
provision
(“VWCA”),
personal
Va.
injury
of
Code
suit.
the
Ann.
The
district court, relying largely on our decision in Garcia v.
Pittsylvania County Service Authority, 845 F.2d 465 (4th Cir.
1988),
granted
East
West’s
motion
and
dismissed
the
suit.
Demetres timely appealed.
II.
We review a district court’s dismissal for lack of subject
matter jurisdiction under Rule 12(b)(1) de novo. 1
Evans v. B.F.
Perkins Co., 166 F.3d 642, 647 (4th Cir. 1999).
The burden of
establishing
plaintiff.
engaging
in
subject
Id.
any
matter
jurisdiction
rests
with
the
A 12(b)(1) motion should be granted if, after
necessary
fact-finding,
1
the
court
determines
There was some discussion at oral argument and in the
district court about whether East West’s motion should be
characterized as a Rule 12(b)(6), rather than a Rule 12(b)(1),
motion.
Because the outcome would be the same regardless, we
have no need to decide that issue and proceed as if East West’s
motion properly invoked Rule 12(b)(1).
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that the movant is entitled to judgment as a matter of law.
See
Arbaugh v. Y&H Corp., 546 U.S. 500, 514 (2006). 2
Demetres makes two main arguments on appeal.
First, he
argues that the Full Faith and Credit Clause requires Virginia
to defer to the law of North Carolina, the state that paid him
benefits, in determining whether his suit is barred.
Second, he
argues that Supreme Court of Virginia precedent allows Virginia
to apply the law of the state that paid benefits, even if the
injury occurred in Virginia.
A.
Demetres argues that East West would be amenable to suit in
North Carolina and, because he accepted workers’ compensation
benefits in North Carolina through Ashland, the district court
should have applied North Carolina law to determine whether his
suit against East West should be barred.
rejected
this
argument
and,
applying
The district court
Virginia
law,
concluded
that the suit was barred.
Because this is a diversity action, the district court,
sitting in Virginia, was required to apply Virginia law.
Klaxon
Co.
v.
Stentor
Elec.
Mfg.
2
Co.,
313
U.S.
487,
See
496-97
“[I]n some instances, if subject-matter jurisdiction turns
on contested facts, the trial judge may be authorized to review
the evidence and resolve the dispute on her own.
If
satisfaction of an essential element of a claim for relief is at
issue, however, the jury is the proper trier of contested
facts.” Arbaugh, 546 U.S. at 514 (internal citations omitted).
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(1941); see also Res. Bankshares Corp. v. St. Paul Mercury Ins.
Co., 407 F.3d 631, 635 (4th Cir. 2005).
Virginia subscribes to
the lex loci delicti principle for determining the applicable
substantive law in tort suits.
Inc.,
431
S.E.2d
33,
34
Jones v. R.S. Jones & Assocs.,
(Va.
1993).
According
to
that
principle, the law of the place in which the injury occurred
governs
the
substantive
cause
of
action.
Id.
Because
the
injury that is the basis of this suit occurred in Virginia, the
substantive law of Virginia governs.
An injured employee who is covered by the VWCA is barred
from suing his employer in tort for injuries “arising out of and
in the course of the injured employee’s employment.”
See, e.g.,
Simms v. Ruby Tuesday, Inc., 704 S.E.2d 359, 362 (Va. 2011).
Section 65.2-307 of the Virginia Code provides:
The rights and remedies herein granted to an employee
when his employer and he have accepted the provisions
of
this
title
respectively
to
pay
and
accept
compensation on account of injury or death by accident
shall exclude all other rights and remedies of such
employee,
his
personal
representative,
parents,
dependents or next of kin, at common law or otherwise,
on account of such injury, loss of service or death.
Va. Code Ann. § 65.2-307(A) (emphasis added).
defines
a
“statutory
employer.”
That
Section 65.2-302
section
provides,
relevant part:
When any person (referred to in this section as
“contractor”) contracts to perform or execute any work
for another person which work or undertaking is not a
part of the trade, business or occupation of such
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in
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other person and contracts with any other person
(referred to in this section as “subcontractor”) for
the
execution
or
performance
by
or
under
the
subcontractor of the whole or any part of the work
undertaken by such contractor, then the contractor
shall be liable to pay to any worker employed in the
work any compensation under this title which he would
have been liable to pay if that worker had been
immediately employed by him.
Va. Code Ann. § 65.2-302(B) (emphasis added).
The Supreme Court of Virginia has interpreted the VWCA as
barring suits where, as here, injured employees of a general
contractor attempt to sue a subcontractor who was engaged in the
general
contractor’s
“trade,
business
or
occupation.”
See,
e.g., David White Crane Serv. v. Howell, 714 S.E.2d 572, 575
(Va.
2011)
(“Because
the
purpose
of
the
[VWCA]
is
to
bring
within its operation all persons who are engaged in the trade,
business or occupation of the contractor who engages to perform
the
work,
all
such
persons
are
entitled
to
the
protection
afforded by Code § 65.2-307.”); Pfeifer v. Krauss Constr. Co.,
546 S.E.2d 717, 719 (Va. 2001) (“If a particular subcontractor
and an injured employee’s common law or statutory employer are
both working on the same project and are also engaged in the
owner’s
or
general
contractor’s
work,
that
particular
subcontractor, as a statutory co-employee of the injured worker,
is also entitled to the common law immunity provided by the
exclusivity provision.”).
Notwithstanding whatever our own view
of the statutory text may be, when interpreting state law, we
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are obligated to defer to the state’s highest court.
See, e.g.,
Assicurazioni Generali, S.p.A. v. Neil, 160 F.3d 997, 1002 (4th
Cir. 1998) (“It is axiomatic that in determining state law a
federal court must look first and foremost to the law of the
state’s
highest
court,
implications.”).
giving
appropriate
effect
to
all
its
Here, East West, a construction subcontractor
preparing a worksite for Ashland, was clearly engaged in the
same “trade, business or occupation” as Ashland.
therefore
a
Court
Virginia
of
statutory
co-employee
precedent.
of
Thus,
Demetres
if
the
East West is
under
VWCA
Supreme
applies
to
Demetres’s claim, his suit is barred.
Demetres, however, argues that the VWCA does not apply to
his
claim,
because
he
obtained
benefits
in
North
Carolina.
Under the workers’ compensation laws of North Carolina, Demetres
argues that East West would not be immune from suit.
He further
argues that Virginia should give full faith and credit to his
right of action against East West under North Carolina law.
In Garcia v. Pittsylvania County Service Authority, a panel
of
this
employees
sustained
Court
of
held
a
while
that
North
working
contractor in Virginia.
the
VWCA
Carolina
on
a
barred
the
subcontractor
project
for
845 F.2d at 468.
a
claims
for
Virginia
of
two
injuries
general
Relying primarily on
the Supreme Court’s decision in Carroll v. Lanza, 349 U.S. 408
(1955), the panel concluded that “the law of Virginia controls
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for [an] accident which occurred in Virginia and was occasioned
by the negligence of an independent contractor with the [general
contractor]
who
was
doing
work
in
Virginia
and
required
Virginia law to have workers’ compensation insurance.”
by
Garcia,
845 F.2d at 467.
The Supreme Court in Carroll held that states with more
permissive workers’ compensation laws are not required to give
full faith and credit to states whose laws are more restrictive.
349
U.S.
at
413-14.
suit
There,
an
against
a
personal
injury
Arkansas,
after
Missouri.
Id. at 409-10.
collecting
injured
third
workers’
employee
party
brought
tortfeasor
compensation
a
in
benefits
in
At the time, Missouri barred suits by
injured employees against third parties, but Arkansas did not.
Id.
The Supreme Court held that the Full Faith and Credit
Clause
did
not
require
Arkansas
to
restrictive laws and bar the suit.
defer
to
Missouri’s
Id. at 413-14.
more
The Court
reasoned that Arkansas, as the state where the injury occurred,
had “a legitimate interest in opening her courts to suits of
this nature, even though in this case Carroll’s injury may have
cast no burden on her or on her institutions.”
Id. at 413.
The
Court expressly limited its holding to cases where a state seeks
to
permit
a
cause
another state.
of
action
that
is
barred
by
the
laws
of
See id. (stating that Carroll is not a case
“where the State of the forum seeks to exclude from its courts
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actions arising under a foreign statute” and that the situation
in Carroll is “a much weaker [case] for application of the Full
Faith and Credit Clause”).
Notwithstanding the Supreme Court’s limiting language, the
Garcia
panel
compensation
statutes.”
was
not
concluded
cases
that
Carroll
“involving
differing
Garcia, 845 F.2d at 466.
required
to
relax
applied
its
to
all
state
workers’
compensation
Thus, in Garcia, Virginia
more
restrictive
workers’
compensation bar to hear a suit permitted under the laws of
North Carolina.
Id. at 467.
The district court concluded that Garcia clearly foreclosed
Demetres’s claim.
Demetres v. E.W. Constr. Co., 995 F. Supp. 2d
539, 544 (E.D. Va. 2014) (relying on Garcia to conclude that
Demetres’s
“tort
suit
is
barred
[in
Virginia]”).
Like
the
district court, we conclude that, under Garcia, Demetres’s claim
is barred by the VWCA.
Demetres, however, argues that Garcia was wrongly decided,
that this Court erred in relying on Carroll, and that it should
have applied the Full Faith and Credit balancing test applied in
Hughes v. Fetter, 341 U.S. 609 (1951).
In Hughes, the Supreme
Court held that Wisconsin could not bar a wrongful death claim
arising out of Illinois law solely because the death occurred
outside of Wisconsin.
policies
of
both
Id. at 612.
Wisconsin
and
9
The Court balanced the
Illinois
and,
finding
that
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Wisconsin “has no real feeling of antagonism against wrongful
death
suits
Credit
in
Clause
general,”
required
concluded
Wisconsin
plaintiff’s wrongful death claim.
that
to
open
the
its
Full
Faith
courts
to
and
the
Id.
Demetres argues that the balancing test the Supreme Court
applied
in
Hughes
should
have
been
applied
in
Garcia.
Regardless of our opinion on the validity of the Garcia panel’s
analysis, however, we are bound to follow its decision.
See,
e.g., McMellon v. United States, 387 F.3d 329, 332 (4th Cir.
2004) (en banc) (stating the “basic principle that one panel
cannot overrule a decision issued by another panel”).
Thus,
even if we were to agree with Demetres that the analysis in
Garcia was faulty, we are powerless as a panel to overrule it. 3
3
Demetres also argues that the 1932 Supreme Court of
Virginia case Solomon v. Call, 166 S.E. 467 (Va. 1932),
expressly allows his claim to be heard in Virginia.
Solomon
held that an out-of-state employee, who was injured in Virginia
but collected workers’ compensation benefits in his home state,
may sue the third party tortfeasor responsible for his injuries
in Virginia.
Id. at 469.
The Supreme Court of Virginia has
never expressly overruled Solomon.
In Garcia, however, this
Court held that Solomon, to the extent that it would allow a
suit such as Demetres’s to proceed, was no longer the “present
law of Virginia on the subject.” Garcia, 845 F.2d at 467.
Since Garcia abrogated Solomon and barred a suit that
Demetres’s counsel admitted at oral argument was factually
indistinguishable from the instant case, we have no need to
address Solomon here. Today we are bound to follow Garcia, and
under Garcia, Demetres’s suit is barred.
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Only the full court, sitting en banc, can overrule a panel
decision.
decision
However, for the time being, we must follow the panel
in
Garcia
and
hold
that,
because
Demetres’s
injury
occurred in Virginia, and East West is a statutory co-employee
under Virginia law, his personal injury action is barred by the
VWCA.
AFFIRMED
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