Once planting season began, Lowry recruiters became “crew leaders.” They oversaw planters in the fields, settled disputes between the planters, communicated with the farmers, reported injuries suffered by the planters to Lowry, and arranged the planters' transportation back to Mexico. They also decided which planters would work on which farms. Crew leaders selected “straw bosses” to be their on-the-ground supervisors during the planting, and these Lowry employees trained the planters. At the end of each week, Harang filled out a time sheet for the planters, but it was the crew leaders' responsibility to report the planters' hours to Lowry. Every week, Lowry paid the planters.

On the farms, the planters worked side-by-side with Harang's employees. Harang tractor drivers hauled the sugarcane carts while the Lowry planters followed behind in groups of three, pulling the cane from the carts and planting it in the ground. Harang provided the necessary equipment – the tractors, carts, and sugarcane all belonged to Harang. But it typically did not exert direct control over the planters. If its owner had a problem with the planters' work, he would contact Lowry's office manager, who would contact the crew leader, who would in turn communicate the concern to the planters. And only Lowry could fire its planters – Harang could voice concern about a planter in the hope that Lowry would find a substitute, but it could not terminate the planter's employment.

The Case

Two Lowry recruits – Alejandro Jorge-Chavelas and Alfredo Moreno-Abarca, Mexican citizens in the United States on work visas – were severely injured while working for Lowry on Harang's farm. Their legs were crushed when a Harang employee drove into the sugarcane cart they were sitting on.

Harang's insurers (collectively, “Farm Bureau”) contended that the two injured workers were Harang's employees and, therefore, that their injuries were excluded from Farm Bureau's general liability insurance policy.

Mr. Jorge-Chavelas and Mr. Moreno-Abarca sued Harang in federal district court. After the district court denied competing motions for summary judgment, a stipulated bench trial followed. The parties agreed that Harang was at fault and that total damages would be $2.5 million (the limit of the Farm Bureau insurance policy).

The district court had to decide the employment status of Mr. Jorge-Chavelas and Mr. Moreno-Abarca and, relatedly, whether Harang was immune from suit. Concluding that the plaintiffs were not Harang's employees and that the workers' compensation laws did not otherwise provide Harang with immunity, the district court entered judgment in favor of Mr. Jorge-Chavelas for $1,937,500 and Mr. Moreno-Abarca for $562,500.

The dispute reached the Fifth Circuit.

The Fifth Circuit's Decision

The circuit court affirmed.

In its decision, the circuit court explained that, under applicable Louisiana law, an independent contractor engaged primarily in manual labor had a claim for workers' compensation against the independent contractor's principal – and the principal was immunized from a negligence suit.

Farm Bureau argued that this statute applied not just to independent contractors, but also to the employees of independent contractors, which meant in this case that the principal (Harang) was immune from suit by the employees (Mr. Jorge-Chavelas and Mr. Moreno-Abarca) of the principal's independent contractor (Lowry), but the Fifth Circuit was not persuaded.

The circuit court reasoned that the statute said otherwise, addressing only independent contractors – that is, one who had a contractual relationship with the principal.

Therefore, it concluded, Louisiana law did not obligate a principal to provide workers' compensation to the employees of its independent contractors, and it did not afford Harang immunity from the lawsuit filed by Mr. Jorge-Chavelas and Mr. Moreno-Abarca.

Concluding that Mr. Jorge-Chavelas and Mr. Moreno-Abarca were neither Harang's “presumed” nor “borrowed” employees, the Fifth Circuit upheld the district court's judgment.

The case is Jorge-Chavelas v. Louisiana Farm Bureau Casualty Ins. Co., No. 18-30388 (5th Cir. March 7, 2019). Attorneys involved include: For ALEJANDRO JORGE-CHAVELAS, ALFREDO MORENO-ABARCA, Plaintiffs – Appellees: Daniel Brian Davis, James Ridgley Bullman, Randall Eugene Estes, Estes Davis Law, L.L.C., Baton Rouge, LA; Samuel Bradley Rhorer, Zachary Stevens Walker, Rhorer Law Firm, Baton Rouge, LA. For LOUISIANA FARM BUREAU CASUALTY INSURANCE COMPANY, LOUISIANA FARM BUREAU MUTUAL INSURANCE COMPANY, Defendants – Appellants: Robert Heath Savant, Mark Thomas Assad, Elizabeth Carville, Andrew Lane Plauche, Jr., Esq., Plauche Maselli Parkerson, L.L.P., New Orleans, LA. For AMERICAN INTERSTATE INSURANCE COMPANY, Intervenor Plaintiff – Appellee: Barry Jamar Rozas, Henry Harvey LeBas, LeBas Law Offices, A.P.L.C., Lafayette, LA.