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Horvitz & Levy defeated a nuclear verdict by persuading the Court of Appeal to extend a doctrine that protects the hirers of independent contractors to a parent company of the hiring entity.
An employee of DGC Operations, LLC (OPS) was fatally injured while conducting a lockout/tagout (LOTO) procedure at a large natural gas power plant in Riverside County owned by Sentinel. Sentinel had hired OPS to run the plant and manage safety. The decedent’s wife and adult son brought a wrongful death action against several entities, including Diamond Generating Corporation (DGC), a parent corporation of both OPS and Sentinel. After other entities settled, the plaintiffs went to trial against DGC.
DGC retained Horvitz & Levy to assist with the trial and help preserve the argument that DGC was shielded from liability under Privette v. Superior Court (1993) 5 Cal.4th 689 and its progeny. The Privette doctrine generally protects hirers of independent contractors from tort liability for injuries to the contractor’s employees, subject to limited exceptions. At trial, the superior court refused to instruct the jury on Privette and denied DGC’s dispositive motions under the Privette doctrine. The court instead allowed plaintiffs to proceed under a negligent undertaking theory of liability.
Plaintiffs presented evidence that DGC had supervised safety at the power plant, including conducting the plant manager’s annual performance reviews and receiving plant safety reports. However, plaintiffs’ own star witness conceded that DGC had never assumed OPS’s statutory and contractual duties to ensure the safety of the LOTO procedure, and only OPS employees, not anyone from DGC, worked on the LOTO procedure the day of the accident. Nevertheless, the jury found DGC liable and awarded the two heirs $150 million, assigning 97% fault to DGC, 2% fault to OPS, and 1% fault to the decedent. The trial court then remitted damages to $104 million in response to posttrial motions prepared by Horvitz & Levy.
Horvitz & Levy represented DGC in appealing the judgment on several grounds, including a lead argument that DGC was entitled to judgment as a matter of law or a new trial under the Privette doctrine. DGC urged that as a part-owner of the hirer, Sentinel, DGC was entitled to Privette’s protections no less than Sentinel itself because it was within the “chain of delegation” that led to the hiring of the contractor, OPS.
The Court of Appeal accepted Horvitz & Levy’s lead argument and reversed, wiping the $104 million judgment off the books. Expressly disagreeing with other appellate decisions narrowly construing Privette as applying only to hirers themselves, the Court of Appeal held that DGC could be entitled to Privette’s protections as a part owner of the hirer, and that the trial court therefore erred in refusing to instruct the jury on Privette. The Court of Appeal then ordered a new trial to determine whether DGC was liable under the “affirmative contribution” exception to Privette recognized in Hooker v. Department of Transportation (2002) 27 Cal.4th 198.
