Schuler et al v. Battelle Energy Alliance, LLC

Filing 73

MEMORANDUM DECISION AND ORDER - IT IS HEREBY ORDERED that Defendants Motion for Permission to Appeal, or in the Alternative, Motion for Certification of Question to the Idaho Supreme Court (Dkt. 69 ) is DENIED. Signed by Judge Candy W. Dale. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (jd)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO

AARON SCHULER,
Case No. 4:18-CV-00234-CWD

Plaintiff,

MEMORANDUM DECISION AND
ORDER (DKT 69)

v.
BATTELLE ENERGY ALLIANCE,
LLC,
Defendant.

INTRODUCTION
Pending before the Court is Battelle Energy Alliance, LLC’s Motion for Permission
to Appeal, or, in the Alternative, Motion for Certification of Question to the Idaho Supreme
Court. (Dkt. 69.) The motion has been fully briefed.
Having fully reviewed the record herein, the Court finds that the facts and legal
arguments are adequately presented in the briefs and record. Accordingly, in the interest of
avoiding delay, and because the Court conclusively finds that the decisional process would
not be significantly aided by oral argument, the motion will be decided on the record
without oral argument. For the reasons that follow, the Court will deny the motion.
FACTUAL AND PROCEDURAL BACKGROUND
On June 14, 2017, Aaron Schuler, a long-haul semi-truck driver, employed by
Cardmoore Trucking Limited Partnership (Cardmoore) arrived to make a delivery at the
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Advanced Test Reactor Complex (ATR Complex), located at the Idaho National
Laboratory (INL) site near Idaho Falls, Idaho. (Dkt. 1 at 2.) The ATR Complex is a high
security location which houses a nuclear reactor designed to test nuclear fuels and
materials for the United States Navy. (Dkt. 1, 54, 34.) Schuler sustained serious injuries
while making the delivery when a security barrier was lowered and crushed his leg.
Schuler’s employer, Cardmoore, assigned Schuler as the transport driver for the
June 14, 2017 delivery. 1 Cardmoore is a subsidiary of Combined Transport Logistics
Group, Inc. (Combined). GE Hitachi Nuclear Energy had contracted with Combined to
transport the June 14, 2017 delivery to the ATR Complex. Combined is incorporated in
Oregon. Schuler claimed and received worker’s compensation benefits in Oregon through
Combined after he was injured at the INL site.
Schuler has brought this negligence action against Battelle Energy Alliance, LLC
(BEA) who manages and operates the INL and its facilities, including the ATR Complex,
as a private contractor for the United States Department of Energy (DOE). BEA
employed the security guards involved in the incident resulting in Shuler’s injuries. The
Amended Complaint raises five negligence claims against BEA: negligence - respondeat
superior liability; negligent entrustment; negligent supervision; negligent failure to
properly train; and negligent failure to properly maintain and repair. (Dkt. 57.)
On January 14, 2019, BEA filed a motion for summary judgment, arguing it was
both a Category 1 and Category 2 statutory employer of Schuler and, therefore, immune

1

The complete series of contracts and relationships between the entities involved in this case are discussed in their
entirety in the Court’s order on summary judgment, which is incorporated herein. (Dkt. 56.)

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from third-party liability under Idaho’s worker’s compensation law. (Dkt. 15.) The
parties fully briefed the motion and oral argument was held on May 30, 2019. In its June
12, 2019 Memorandum Decision and Order, the Court rejected both of BEA’s statutory
employer arguments, and denied the motion for summary judgment. (Dkt. 56.) Following
that decision, BEA filed a motion for reconsideration which the Court also denied. (Dkt.
59, 66.) BEA now requests permission to appeal, or, alternatively, for certification of
questions to the Idaho Supreme Court. (Dkt. 69.)
DISCUSSION
1. Certification for Permissive Appeal
As a general rule, a party may seek review of a district court’s rulings only after
the entry of final judgment. In re Cement Antitrust Litig., 673 F.2d 1020, 1027 (9th Cir.
1982). Under 28 U.S.C. § 1292(b), however, a district court may certify an order for
immediate appeal where: (1) the order involves a controlling question of law; (2) as to
which there is a substantial ground for difference of opinion; and (3) an immediate appeal
from the order may materially advance the ultimate termination of the litigation. 28
U.S.C. § 1292(b).
Interlocutory certification is a narrow exception to be applied sparingly and in
exceptional circumstances. In re Cement, 673 F.2d at 1026. “The standard to certify a
question of law is high and a district court generally should not permit such an appeal
where it ‘would prolong the litigation rather than advance its resolution.’” Association of
Irritated Residents v. Fred Schakel Dairy, 634 F. Supp. 2d 1081, 1087 (E.D. Cal. 2008)
(quoting Syufy Enter. v. Am. Multi–Cinema, Inc., 694 F. Supp. 725, 729 (N.D. Cal.
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1988)). “In applying these standards, the court must weigh the asserted need for the
proposed interlocutory appeal with the policy in the ordinary case of discouraging
piecemeal appeals.” Id. (quoting In re Heddendorf, 263 F.2d 887, 889 (1st Cir. 1959)).
The party pursuing the interlocutory appeal bears the burden of demonstrating the
certification requirements of § 1292(b) are met. Couch v. Telescope Inc., 611 F.3d 629,
633 (9th Cir. 2010).
“The decision to certify an order for interlocutory appeal is committed to the
sound discretion of the district court.” Villarreal v. Caremark, LLC, 85 F. Supp.3d 1063,
1067 (D. Ariz. 2015) (United States v. Tenet Healthcare Corp., 2004 WL 3030121, at *1
(C.D. Cal. Dec. 27, 2004) (citing Swint v. Chambers County Comm’n, 514 U.S. 35, 47
(1995)). “As such, ‘[e]ven when all three statutory criteria are satisfied, district court
judges have ‘unfettered discretion’ to deny certification.’” Id. (quoting Brizzee v. Fred
Meyer Stores, Inc., 2008 WL 426510, at *3 (D.Or. Feb. 13, 2008) (quoting Ryan, Beck &
Co., LLC v. Fakih, 275 F. Supp.2d 393, 396 (E.D.N.Y. 2003))). If the district court grants
certification, “the court of appeals nevertheless has discretion to reject the interlocutory
appeal, and does so quite frequently.” James v. Price Stern Sloan, Inc., 283 F.3d 1064,
1067 n.6 (9th Cir. 2002) (citing 16 Wright, Miller & Cooper § 3929, at 363).
BEA argues all three of the § 1292(b) requirements for interlocutory certification
are met. (Dkt. 69.) Schuler opposes BEA’s motion, arguing the second requirement -- a
substantial ground for difference of opinion -- has not been satisfied. (Dkt. 70.) The Court
has reviewed the parties’ arguments on this motion as well as the materials filed in
relation to the motion for summary judgment, the motion for reconsideration, its prior
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orders, and the entire record herein. Having done so, the Court finds BEA has not shown
there is a substantial ground for difference of opinion or that exceptional circumstances
exist in this case that justify interlocutory certification.
BEA maintains a substantial ground for difference of opinion exists because the
Court’s ruling on the statutory employer question is contradictory to the outcomes,
applications, and rationales applied in other Idaho cases, namely: Bake v. Starr, 203 P.3d
1246 (Idaho 2009); Kolar v. Cassia County Idaho, 127 P.3d 962 (Idaho 2005); Robison v.
Bateman-Hall, Inc., 76 P.3d 951 (Idaho 2003); and Warren v. Staymates, et al., Bingham
County Case No. CB-2008-591 (attached at Dkt. 18-3, Ex. C). (Dkt. 69, 71.) The Court
disagrees.
The Court addressed the Idaho cases cited by BEA in its prior orders when ruling
on the issue of whether BEA was a Category 1 or Category 2 statutory employer of
Schuler. (Dkt. 56.) In its decision on summary judgment in particular, the Court
considered, discussed, and distinguished the facts of this case from those in Blake, Kolar,
and Robison; concluding the facts here were “readily distinguishable” from and had “no
parallel” to, the facts of those Idaho cases. (Dkt. 56 at 21-26.) The same is true of the
Warren case.
In Warren, the court concluded, as relevant here, that an employee of BEA could
not recover in tort from another subcontractor at INL because the DOE was the statutory
employer of BEA and the subcontractor and, therefore, DOE’s immunity extended to the
subcontractor: stating, “since [the employee] could recover worker’s compensation from
the DOE (if [BEA] had not carried worker’s compensation insurance), she cannot recover
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in tort from the DOE or the DOE’s subcontractor….” (Dkt. 18-3 at 15.) Again, the facts
in this case are wholly distinct from Warren.
Here, there was no employee-employer relationship, either direct or indirect,
between Schuler and BEA. The chain of contractual relationships giving rise to Schuler’s
employment that resulted in his delivery of materials to the ATR Complex on June 14,
2017, was entirely separate and distinct from BEA’s contractual relationship with DOE to
manage the ATR Complex. (Dkt. 56.) Further, the work being carried out by Schuler –
driving the truck transporting and delivering materials to the ATR Complex -- was far
removed from BEA’s contract with DOE to manage and operate the ATR Complex. (Dkt.
56 at 25) (“BEA was, quite simply, not in the trucking or transportation business.”).
BEA, therefore, was not a statutory employer of Schuler under either Category I or
Category II.
The Court’s analysis and ruling on the statutory employer issue is not inconsistent
or in conflict with Idaho case law. The facts in this case are simply different from those in
the Idaho cases cited by BEA. That those courts reached a different outcome on the
statutory employer question based on the facts presented in those cases, does not establish
a substantial ground for difference of opinion. Each case is unique and specific to its own
set of facts. And, this Court’s ruling on the statutory employer issue is particular to the
facts of this case. BEA’s disagreement with the Court’s analysis and resulting decision on
the statutory employer issue simply does not create a substantial ground for difference of
opinion. Assoc. of Residents, 634 F. Supp.2d at 1090-91 (citations and quotations
omitted); see also Stiner v. Brookdale Senior Living, Inc., 383 F. Supp.3d 949, 958 (N.D.
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Cal. 2019) (Arguing that the Court misapplied the existing law to the facts alleged is
clearly insufficient to show a substantial ground for difference of opinion.).
Further, the Court finds that BEA’s argument seeks to expand Idaho worker’s
compensation immunity too far. The DOE’s potential immunity as a statutory employer
does not extend to completely separate and distinct contractual relationships or to
encompass all branches of operations at the ATR Complex . (Dkt. 56 at 24-27.) Were
BEA correct, anyone who found themselves at the ATR Complex in the course and scope
of their employment with an unrelated entity, would be barred from ever raising a thirdparty negligence claim against BEA. That is not what is intended or provided for under
Idaho worker’s compensation law.
Just the opposite, Idaho Code § 72-223 expressly allows an employee to bring an
action in tort for damages against a third party that is not the individual’s employer. That
is precisely what Schuler has done here. This is a negligence action, not a workers
compensation case. Schuler’s claims in this case seek tort damages resulting from BEA’s
negligence. Schuler is not seeking worker’s compensation from BEA, nor could he,
because BEA was not Schuler’s employer. Unlike the Idaho cases BEA relies on, there
was no employer-employee relationship between BEA and Schuler. The facts of this case
are far removed from the facts presented in the Idaho cases. BEA cannot use worker’s
compensation law to avoid potential liability for its negligence to a third party, i.e.,
Schuler, with whom BEA had no employment relationship.
For these reasons, the Court finds BEA has failed to show there is a substantial
ground for difference of opinion. BEA has, therefore, not established a proper basis for
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permissive appeal under 28 U.S.C. § 1292(b) nor demonstrated that exceptional
circumstances exist which warrant interlocutory certification. The motion will be denied.
2. Certification of Question to the Idaho Supreme Court
Idaho Appellate Rule 12.3 provides that a United States District Court may certify
a question of law to the Idaho Supreme Court if two conditions are met: (1) the question
certified is a controlling question of law in the pending action as to which there is no
controlling precedent in the decisions of the Idaho Supreme Court; and (2) the immediate
determination of Idaho law with regard to the certified question would materially advance
the orderly resolution of the litigation in the United States Court. Idaho App. R. 12.3(a);
see also White v. Valley County, No. 1:09-cv-00494-EJL-CWD, 2012 WL 13018504, at
*1 (D. Idaho Aug. 10, 2012). Certification is generally beneficial to assure: state law will
be applied uniformly and in accordance with the interpretations given by each state’s
high court; state courts will have the benefit of having the final say on a matter of state
law; and the federal courts can avoid the difficult task of attempting to divine how a state
court would rule on a matter of state law. See Lehman Bros. v. Schein, 416 U.S. 386, 391
(1974) (noting that certification “does, of course, in the long run save time, energy, and
resources and helps build a cooperative juridical federalism”).
“Use of the certification procedure in any given case rests in the sound discretion
of the federal court.” Micomonaco v. Washington, 45 F.3d 316, 322 (9th Cir. 1995). And,
“[t]here is a presumption against certifying a question to a state supreme court after the
federal district court has issued a decision.” All. for Prop. Rights & Fiscal Responsibility
v. City of Idaho Falls, 742 F.3d 1100, 1108 (9th Cir. 2013) (citing Thompson v. Paul, 547
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F.3d 1055 (9th Cir. 2008)). Consequently, after the district court issues its decision, the
movant must demonstrate “particularly compelling reasons” why they should be “allowed
a second chance at victory.” Id. (citing In re Complaint of McLinn, 744 F.2d 677, 681
(9th Cir. 1984)).
Here, BEA seeks to certify three questions to the Idaho Supreme Court:
1.

Is a contractor of a statutory employer that is not a direct upstream
contractor of the claimant a “contractor” within the meaning of
Idaho Code § 72-102(13)(a), and therefore, entitled to Category 1
statutory employer immunity?

2.

Is an agent of a statutory employer that is not a direct upstream
contractor of the claimant an “agent” within the meaning of Idaho
Code § 72-209(3), and therefore, entitled to Category 1 statutory
immunity?

3.

Is a contractor that is normally equipped with manpower and tools
(e.g. tractors, trailers, and qualified drivers) needed to carry out a
particular task (e.g. freight transportation), which it would have been
capable of performing, and contractually-authorized to perform, but
for retention of an independent contractor to perform that task,
precluded from claiming Category 2 statutory employer immunity
solely because it is not engaged in the particular or specialized
industry of the task at issue (e.g. freight transportation)?

(Dkt. 69-1 at 13.) BEA argues these questions are controlling questions of law and that
there is no controlling precedent. (Dkt. 69-1 at 13.) Whether BEA is a Category 1 or
Category 2 statutory employer are controlling issues in this case. There is, however,
controlling precedent in Idaho on those issues.
The Idaho Supreme Court has “developed significant case law to help give”
meaning to the statutory definition of “employer” as used in Idaho Code § 72-223. (Dkt.
56 at 10) (quoting Robison, 76 P.3d at 954.) BEA itself acknowledges that the Idaho
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Supreme Court has a “well-developed body of case law” concerning Category 1 and
Category 2 statutory employer status, including the cases cited and relied upon by BEA
when moving for summary judgment and again in this motion. (Dkt. 71 at 9) (The Idaho
Supreme Court has “decided numerous statutory employer cases, and that there is a welldeveloped body of law in this area in Idaho.”).
On this motion, however, BEA now asserts there is no controlling precedent on
the questions sought to be certified, because the Court’s “new and novel” analysis of the
Kolar and Blake decisions presents issues of first impression proper for review by the
Idaho Supreme Court. (Dkt. 69, 71.) The Court disagrees.
The Court’s decision is not a “new” or “novel” application of Idaho law nor does
it create an issue of first impression. The Court looked to the established and existing
Idaho state law on the statutory employer issue, including the cases cited by BEA, and
applied that law to the facts in this case. That the outcome of the case was different from
what BEA expected does not give rise to a new or novel issue of first impression,
necessitating certification. The outcome in this case is different because the facts here are
different. Again, BEA was not the statutory employer of Schuler under either Category I
or Category II. BEA had no employment relationship with Schuler, either directly or
indirectly. BEA did not hire Schuler to do anything and had no part in the chain of
contracts giving rise to Schuler’s employment. BEA’s contract with DOE to manage and
operate the ATR Complex is wholly separate and distinct from the series of contracts
resulting in Schuler’s employment that brought him to the ATR Complex on June 14,
2017.
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In sum, Idaho has well-established controlling precedent on the statutory employer
issue which the Court applied to the facts in this case. Certification of a question is not
warranted. Further, granting certification at this stage, after the Court has issued its ruling
on summary judgment and denied BEA’s motion to reconsider, would inappropriately
provide BEA a third bite at the apple where no compelling reasons have been shown for
doing so. See Hayden Lake Recreational Water & Sewer Dist. v. Haydenview Cottage,
LLC, No. 2:11-CV-00284-CWD, 2012 WL 13135916, at *3 (D. Idaho Mar. 2, 2012); All.
For Prop. Rights & Fiscal Responsibility, 742 F.3d at 1108. For all of these reasons, the
motion will be denied.
ORDER
THEREFORE IT IS HEREBY ORDERED that Defendant’s Motion for
Permission to Appeal, or in the Alternative, Motion for Certification of Question to the
Idaho Supreme Court (Dkt. 69) is DENIED.

DATED: October 18, 2019

_________________________
Honorable Candy W. Dale
United States Magistrate Judge

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