Tort Claim Fails Under Defense Base Act's Borrowed Servant Rule

Tort Claim Fails Under Defense Base Act's Borrowed Servant Rule

Research Triangle Institute ("RTI") contracted to rebuild municipal water and sewage facilities in following the 2003 invasion. RTI obtained Ladd's services as a civilian engineer by contract with his direct employer, Chemonics International, Inc. ("Chemonics"). Ladd was seriously injured in when his vehicle's left front tire blew, causing the vehicle to plunge into a canal.  He and his wife ("the Ladds") subsequently sued RTI, contending in relevant part that that RTI had failed to supply vehicles for operations in consistent with those promised during orientation; that Ladd's driver, allegedly an RTI employee, had been negligent; and that the vehicle in which Ladd had been driven was defective or in poor condition.  RTI raised the affirmative defense that Ladd was receiving workers compensation benefits under the provisions of the Defense Base Act, 42 U.S.C. § 1651 ("the DBA"), which constituted his sole remedy. The district court awarded RTI summary judgment, finding that Ladd was a statutory employee of RTI under the borrowed servant doctrine and that the suit was barred under the DBA.  The Ladds appealed.

In Ladd v. Research Triangle Institute, 2009 U.S. App. LEXIS 14848 (4th Cir. July 2, 2009), affirmed the district court's decision.  The Fourth Circuit first observed that the DBA provides that "the provisions of the Longshore and Harbor Workers' Compensation Act [33 U.S.C. 901 et seq. ("the LHWCA")] shall apply in respect to the injury or death of any employee engaged in any employment . . . under a contract entered into with the United States . . . where such contract is to be performed outside the continental United States . . . ." 42 U.S.C.A. § 1651(a)(4) and that in White v. Bethlehem Steel Corp., 222 F.3d 146 (4th Cir. 2000), it had determined that the borrowed servant doctrine applied under the LHWCA to provide immunity from suit both to an employee's general or contract employer and to other "employers who 'borrow' a servant from" that employer.  Turning to the instant case, the Fourth Circuit said that it was clear that RTI exercised the requisite "authoritative direction and control" over Ladd. Ladd's contract with Chemonics expressly stated that, "[w]hile in , [Ladd] will report directly to RTI's Chief of Party …." The contract also provided that Ladd's salary was subject to approval by RTI. The relationship between Ladd and RTI was also explored in Ladd's deposition, where Ladd stated that RTI had control over him in Iraq, that RTI had the power to have him fired, and that RTI could reassign him to different parts of Iraq.

Because the facts clearly showed that RTI exercised "authoritative direction and control" over Ladd in Iraq, the Fourth Circuit held that the district court did not err in concluding that Ladd was the borrowed servant of RTI for the purposes of fulfilling its USAID contract there. As a borrowed servant, Ladd was a statutory employee of RTI under the LHWCA and the DBA. Accordingly, the Ladds' suit was barred by the DBA as a matter of law. See generally Larson's Workers' Compensation Law, §§ 149.01 et seq.