United States District Court, W.D. North Carolina, Asheville Division
CANDY LOSSIAH, Administratrix of the Estate of ANTHONY EDWARD LOSSIAH, Plaintiff,
UNITED STATES OF AMERICA, Defendant.
REIDINGER UNITED STATES DISTRICT JUDGE.
MATTER is before the Court on Defendants' Motion
to Dismiss Complaint Pursuant to Fed.R.Civ.P. 12(b)(1) and
12(b)(6) [Doc. 9]; the Magistrate Judge's Memorandum and
Recommendation [Doc. 18] regarding the disposition of that
motion; and the Defendant's Objections to the Memorandum
and Recommendation [Doc. 20].
to 28 U.S.C. § 636(b) and the standing Orders of
Designation of this Court, the Honorable David S. Cayer,
United States Magistrate Judge, was designated to consider
the Defendant's motion and to submit a recommendation for
February 13, 2019, the Magistrate Judge filed a Memorandum
and Recommendation in this case containing conclusions of law
in support of a recommendation regarding the motion to
dismiss. [Doc. 18]. The Magistrate Judge advised the parties
that they had fourteen (14) days, or until February 27, 2019,
to file written objections to the recommendation.
[Id.]. On February 19, 2019, Defendant sought and
was granted by text order a seven-day extension of time to
file written objections to the recommendation, making
Defendant's objections due on March 6, 2019. [Doc. 19].
On March 5, 2019, Defendant timely filed Objections to the
Memorandum and Recommendation. [Doc. 20]. On March 18, 2019,
Plaintiff filed a Reply to Defendant's Objections. [Doc.
Court has reviewed the Memorandum and Recommendation and the
Defendant's Objections thereto and based thereon
concludes as follows.
undisputed that the Plaintiff's decedent, Anthony Edward
Lossiah (“Lossiah”), was a police officer
employed by the Eastern Band of Cherokee Indians (EBCI) who
was injured while on the job. This action is for medical
malpractice in the treatment Lossiah received for those
injuries at the Cherokee Indian Hospital (CIH or the
Hospital), which malpractice allegedly resulted in his death.
The Workers' Compensation action regarding the death has
already been settled.
respect to Defendant's Rule 12(b)(1) motion, the
Magistrate Judge recommended denial of that motion concluding
that Plaintiff's civil action for malpractice is not
barred by the Workers' Compensation Act (the
“Act”). [Doc. 18 at 4]. Namely, for purposes of
this lawsuit under the Federal Tort Claims Act (FTCA), the
CIH medical personnel who treated Lossiah are deemed to be
employees of the Public Health Service (PHS) pursuant to the
EBCI's Compact with the Department of Health and Human
Services (DHHS). Based thereon the Magistrate Judge concluded
that “[f]or purposes of this lawsuit” the medical
personnel who treated Lossiah were not employees of his
employer (EBCI), and thus the limited remedy against
one's employer under the Workers' Compensation
statute did not apply. Defendant objects to that conclusion
on the basis that CIH was “conducting the
business” of the EBCI, Lossiah's employer, when
Lossiah was treated at the Hospital and thus the Hospital
comes within the scope of the immunity of N.C. Gen. Stat.
§ 97-9. [Doc. 10 at 17-21; Doc. 20 at 6, n. 3].
Defendant's objection is, in part, well taken. The fact
(or rather the legal fiction) that the CIH's employees
are “deemed to be” employees of the PHS is not
dispositive. That only serves to bring this action within the
confines of the FTCA, and therefore makes the United States
the proper defendant. However, “the United States is
entitled to [any] protection of the immunity” provided
by any state law provision affording immunity to “a
similarly placed private employer.” Lomando v.
United States, 667 F.3d 363, 378-79 (3d Cir. 2011)
(citing 28 U.S.C. § 2674). See also Schwarder v.
United States, 974 F.2d 1118, 1121-22 (9th Cir. 1992).
This “private-party analogue” allows the
Defendant to step into the shoes of the CIH and avail itself
of all defenses the CIH would have had. FDIC v.
Meyer, 510 U.S. 471, 477 (1994).
97-9 of the Workers' Compensation Act requires employers
to secure payment of compensation to their employees in
accordance with the Act and provides: “[W]hile such
security remains in force, he or those conducting his
business shall only be liable to any employee for
personal injury or death by accident to the extent and in the
manner herein specified.” N.C. Gen. Stat. § 97-9
(emphasis added). “By its plain language, N.C. G.S.
§ 97-9 extends exclusivity protection beyond the
employer to ‘those conducting [the employer's]
business.'” Hamby v. Profile Products,
L.L.C., 361 N.C. 630, 636, 652 S.E.2d 231, 234 (2007).
Typically, this provision protects co-employees of an injured
workers' compensation claimant from being sued where the
co-employee's negligence caused or contributed to the
claimant's compensable injury. See Strickland v.
King, 293 N.C. 731, 733, 239 S.E.2d 243, 244 (1977)
(“[A]n employee subject to the Act whose injuries arise
out of and in the course of his employment may not maintain a
common law action against a negligent co-employee.”).
In Hamby, the North Carolina Supreme Court found
that the sole member-manager of an employer was conducting
the business of the employer where the member-manager was
“exclusively charged with management” of the
employer's business pursuant to the employer's
operating agreement. 361 N.C. at 636-38, 652 S.E.2d at
235-36. Applying Hamby, the Defendant argues that
the CIH was conducting the business of the EBCI because
“the Cherokee Hospital is a component unit of the
EBCI” and “the hospital is operated within the
structure of tribal governance created by the EBCI.”
[Doc. 10 at 18]. Therefore, the Defendant concludes,
“the exclusive remedy provision [of the Act] extends to
the Cherokee Hospital, and in turn the United States.”
[Id. at 19].
argument oversimplifies the analysis necessary for discerning
the meaning of “those conducting his [the
employer's] business” in § 97-9. North
Carolina's Workers' Compensation Act was enacted for
the purpose of “provid[ing] certain limited benefits to
an injured employee regardless of negligence on the part of
the employer, and simultaneously to deprive the employee of
certain rights that he had at common law.” Brown v.
Motor Inns of Carolina, Inc., 47 N.C.App. 115, 118, 266
S.E.2d 848, 849, disc. rev. denied, 301 N.C. 86
(1980). As such, the Workers' Compensation Act embodies a
certain policy trade-off. Underlying this trade-off are two
crucial facts: (1) that an injured employee is in serious
jeopardy because his/her livelihood is at stake during any
prolonged determination of an employer's liability, and
(2) that the employer's control over the workplace puts
the employer in a position to more easily prevent and avoid
employee injuries. Thus an employer is strictly liable for a
workplace injury, but to an extent less than common law
liability in negligence. A cornerstone of this trade-off, of
course, is the employer's control over the conditions of
the workplace and the employee's work activities. For
this reason, a parent corporation of the employer corporation
is not liable for a workplace injury, absent a showing of
direct or day-to-day control over the workplace activities by
the parent. Edwards v. GE Lighting Sys. Inc., 200
N.C.App. 754, 685 S.E.2d 146 (2009); Richmond v. Indalex,
Inc., 308 F.Supp.2d 648 (M.D. N.C. 2004). Determining
whether one is “conducting the employer's
business” is a matter of analyzing the subject
party's control. An employer has control over an
employee's co-worker. Thus, the co-worker is conducting
the employer's business, and the employer is liable
pursuant to § 97-9. Strickland, 293 N.C. at
733, 239 S.E.2d at 244. An LLC employer is liable pursuant to
§ 97-9 for the actions of the LLC's sole
member-manager because of the control that party has over the
workplace and the conditions of the claimant's
employment. Hamby, 361 N.C. at 363-38, 652 S.E.2d at
present case, the Cherokee Indian Hospital does not conduct
the EBCI's business, as that phrase is intended by §
97-9. The CIH is not involved in the day-to-day operations of
the EBCI or charged with managing the EBCI in any respect,
much less with regard to the ECBI police department or the
conditions or circumstances of Lossiah's employment. The
Hospital exists as a separate entity that is operated and
controlled by its own Board of the Cherokee Indian Hospital
Authority (CIHA). The CIHA is an umbrella body that operates
the CIH, as well as other clinics and health programs run for
the EBCI. The Eastern Band of Cherokee Indians Code of
Ordinances (“Tribal Code”) Section 130B-5 sets
forth the powers and duties of the Governing Board of the
CIHA. It provides, in part:
(1) The CIHA Governing Board shall be responsible for
direction and oversight of the Cherokee Indian Hospital, and
other health programs as may be assigned to the CIHA by
resolution of the Tribal Council.
(2) In the oversight of assigned health programs, the
Governing Board shall have the authority to hire an
experienced chief executive officer (CEO) to manage
day-to-day operations of the programs. The CEO shall serve at
the pleasure of the Governing Board.
(3) The Board shall establish personnel policies and
procedures for employees of the programs it
administers…. The Board shall have the authority to
set rates of pay … as necessary to attract and retain
qualified staff. The Principal, Vice Chief and Tribal Council
shall not be ...