Appeals Reversal Awarded in Employers’ Liability for Gross Negligence Case

Amarillo Court of Appeals reverses $1,576,000 award in an Employers’ Liability for Gross Negligence case, holding there was legally insufficient evidence to support the jury’s determination that the employer possessed actual subjective awareness of the risk that caused the death of its employee.¹

In the latest sign that courts are cognizant of the high standard of proof required in such cases, the Amarillo Court of Appeals recently overturned a verdict in excess of one million dollars in an employers’ liability for gross negligence case. In an employers’ liability case, the heirs of a deceased worker may sue the employer for exemplary damages only if the death was the result of gross negligence.² To succeed, however, the plaintiff must prove by clear and convincing evidence that the company was subjectively aware (the subjective element) of an extreme risk of death or serious bodily injury (the objective element), but the company nevertheless proceeded with conscious indifference to that risk. Following the Texas Supreme Court’s Diamond Shamrock v. Hall³ decision, the Court in Agrium U.S., Inc. v. Clark, held the evidence was legally insufficient to meet the subjective element necessary to establish gross negligence.

An employee of Agrium U.S. Inc. died during the course and scope of his employment. The employee was replacing a discharge valve on a pressurized line. The employee removed the plate covering the valve without first depressurizing the line. While the employee was removing the plate, pressure in the line caused the plate to strike the employee. The employee subsequently died from the injuries.The court noted that the plaintiff put forth a “plethora of evidence.” The evidence presented included: (1) OSHA citations; (2) Agrium’s failure to install additional redundant safety systems or inspect existing ones; (3) the lack of pertinent policies assuring that pressure valves were opened and locked-out to prevent their closure while repairs were performed; (4) de minimis formal training on how to repair the discharge valve or remove the cover plate; (5) Agrium’s failure to affix warning labels on the compressor as recommended by the manufacturer; and (6) evidence regarding the manner in which the employee could have safely changed the defective valve. Despite the foregoing evidence, the court held that there was no clear and convincing evidence establishing that Agrium had the requisite “subjective awareness” of the risk. First, the court noted that it was undisputed that Agrium had a general policy regarding the repair of pressurized lines that required that all energy be released/de-pressurized. Second, the company required all employees to obtain a “safety work permit” prior to engaging in the type of repairs undertaken by the deceased employee. The court found it convincing that the foregoing procedures had been effective for years and that had it been followed and the line been fully depressurized, [the employee] would have not been injured by an exploding cover plate”
Therefore, the court found that:

It is beyond doubt that other measures could have been taken by all involved to prevent the incident or reduce the risk involved. But what cannot be ignored is the fact that Agrium had in place procedures which obviated the danger inherent in working on pressurized lines. And we find no evidence of record suggesting that had those procedures been completely followed, the incident would have nonetheless occurred. Nor did we find evidence that like incidents had occurred in the past despite full compliance with the procedures.

Given this evidence, the court concluded that this case was akin to Diamond Shamrock Refining Co. v. Hall, 168 S.W.3d 164, 170 (Tex. 2005). In Diamond Shamrock, the Texas Supreme Court held that the employer could not be found grossly negligent for the failing to install redundant safety measures where the existing procedures had been effective historically. Here, like Diamond Shamrock, Agrium had procedures in place that had been effective for years. In fact, the evidence established that had such procedures, although not perfect, been put in practice by the deceased employee, he would not have died. Accordingly, the court held that it was obligated to follow Supreme Court precedent and hold that the evidence was legally insufficient to support the judgment.

This opinion seems to stand for the proposition that where the employer has general policies and procedures in place that, if followed, would have prevented the death of the employee, it will be difficult for a plaintiff to prove the subjective element of gross negligence. Of course, this conclusion assumes that the employer actually enforces its policies and procedures, and that those policies have been successful in the past in preventing similar injuries.

1 Agrium U.S., Inc. v. Clark, 179 S.W.3d 765 (Tex. App.-Amarillo 2005, pet. filed).
2 Tex. Labor 408.001.
3 Diamond Shamrock Refining Co. v. Hall, 168 S.W.3d 164, 170 (Tex. 2005).

Amarillo Court of Appeals reverses $1,576,000 award in an Employers’ Liability for Gross Negligence case, holding there was legally insufficient evidence to support the jury’s determination that the employer possessed actual subjective awareness of the risk that caused the death of its employee.¹

In the latest sign that courts are cognizant of the high standard of proof required in such cases, the Amarillo Court of Appeals recently overturned a verdict in excess of one million dollars in an employers’ liability for gross negligence case. In an employers’ liability case, the heirs of a deceased worker may sue the employer for exemplary damages only if the death was the result of gross negligence.² To succeed, however, the plaintiff must prove by clear and convincing evidence that the company was subjectively aware (the subjective element) of an extreme risk of death or serious bodily injury (the objective element), but the company nevertheless proceeded with conscious indifference to that risk. Following the Texas Supreme Court’s Diamond Shamrock v. Hall³ decision, the Court in Agrium U.S., Inc. v. Clark, held the evidence was legally insufficient to meet the subjective element necessary to establish gross negligence.

An employee of Agrium U.S. Inc. died during the course and scope of his employment. The employee was replacing a discharge valve on a pressurized line. The employee removed the plate covering the valve without first depressurizing the line. While the employee was removing the plate, pressure in the line caused the plate to strike the employee. The employee subsequently died from the injuries.The court noted that the plaintiff put forth a “plethora of evidence.” The evidence presented included: (1) OSHA citations; (2) Agrium’s failure to install additional redundant safety systems or inspect existing ones; (3) the lack of pertinent policies assuring that pressure valves were opened and locked-out to prevent their closure while repairs were performed; (4) de minimis formal training on how to repair the discharge valve or remove the cover plate; (5) Agrium’s failure to affix warning labels on the compressor as recommended by the manufacturer; and (6) evidence regarding the manner in which the employee could have safely changed the defective valve. Despite the foregoing evidence, the court held that there was no clear and convincing evidence establishing that Agrium had the requisite “subjective awareness” of the risk. First, the court noted that it was undisputed that Agrium had a general policy regarding the repair of pressurized lines that required that all energy be released/de-pressurized. Second, the company required all employees to obtain a “safety work permit” prior to engaging in the type of repairs undertaken by the deceased employee. The court found it convincing that the foregoing procedures had been effective for years and that had it been followed and the line been fully depressurized, [the employee] would have not been injured by an exploding cover plate”
Therefore, the court found that:

It is beyond doubt that other measures could have been taken by all involved to prevent the incident or reduce the risk involved. But what cannot be ignored is the fact that Agrium had in place procedures which obviated the danger inherent in working on pressurized lines. And we find no evidence of record suggesting that had those procedures been completely followed, the incident would have nonetheless occurred. Nor did we find evidence that like incidents had occurred in the past despite full compliance with the procedures.

Given this evidence, the court concluded that this case was akin to Diamond Shamrock Refining Co. v. Hall, 168 S.W.3d 164, 170 (Tex. 2005). In Diamond Shamrock, the Texas Supreme Court held that the employer could not be found grossly negligent for the failing to install redundant safety measures where the existing procedures had been effective historically. Here, like Diamond Shamrock, Agrium had procedures in place that had been effective for years. In fact, the evidence established that had such procedures, although not perfect, been put in practice by the deceased employee, he would not have died. Accordingly, the court held that it was obligated to follow Supreme Court precedent and hold that the evidence was legally insufficient to support the judgment.

This opinion seems to stand for the proposition that where the employer has general policies and procedures in place that, if followed, would have prevented the death of the employee, it will be difficult for a plaintiff to prove the subjective element of gross negligence. Of course, this conclusion assumes that the employer actually enforces its policies and procedures, and that those policies have been successful in the past in preventing similar injuries.

1 Agrium U.S., Inc. v. Clark, 179 S.W.3d 765 (Tex. App.-Amarillo 2005, pet. filed).
2 Tex. Labor 408.001.
3 Diamond Shamrock Refining Co. v. Hall, 168 S.W.3d 164, 170 (Tex. 2005).