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Adams v. C3 Pipeline Construction Inc.

No. 20-2055.  D.N.M. Judge Matheson. Sexual Harassment—Timeliness of Appeal—Employer versus Independent Contractor Determination—Joint Employer Doctrine—Motion for Discovery—Motion to Amend Pleadings—Premises Liability.

November 1, 2021

Plaintiff worked for defendant C3 Pipeline Construction Inc. (C3) on a pipeline construction crew. C3 provided construction and maintenance services under a contract with Alpha Crude Connector, LLC (ACC) on an ACC crude oil pipeline system in New Mexico and Texas. The Plains defendants are ACC’s corporate successors in interest. A Master Service Agreement (MSA) governed the relationship between Plains defendants and C3. The MSA provided that C3 was an independent contractor; its employees were employees of C3 and subject to its sole and exclusive supervision, direction, and control; and under no circumstances would a C3 employee be deemed an employee of Plains defendants.

Plaintiff sued Plains defendants and C3 in New Mexico state district court alleging violations of Title VII, the New Mexico Human Rights Act, and various New Mexico tort laws. She maintained that C3 employees Carrithers, Robertson, and Arnault sexually harassed her and conditioned her continued employment on her performance of sexual favors. Among other actions, she alleged that Arnault forced her to participate in sexual activity with him to keep her job and threatened to fire her for complaining. Plaintiff alleged that she and other employees informed corporate management of the harassment but no action was taken to investigate the complaints.

Plains defendants removed the action to federal court and filed a motion for summary judgment with their answer. They argued that they did not employ plaintiff, Carrithers, Robertson, or Arnault, who were all solely employed by C3. Plaintiff filed an opposition brief and a Fed. R. Civ. P. 56(d) motion for discovery. She raised a new theory of liability in her motion, arguing that under New Mexico premises liability law, Plains defendants owed her a duty to prevent harmful acts by third parties. The district court granted Plains defendants’ motion for summary judgment, denied the Rule 56(d) motion, and denied plaintiff’s implied request to amend the pleadings with the premises liability claim. The district court also ordered plaintiff to effect service on C3. Following service and entry of default against C3, the court granted default judgment against C3. A jury then reached a damages verdict against C3, awarding plaintiff $55 million, which the court reduced to $20,050,000. The court then entered a final judgment.

As a threshold matter on appeal, the Tenth Circuit considered Plains defendants’ motion to dismiss the appeal as untimely. Here, the appeal was filed 10 months after the summary judgment rulings but within 21 days of the final judgment as to C3. The C3 order was the only final and appealable order because the district court contemplated further proceedings against C3 when it granted summary judgment to the Plains defendants. Accordingly, the appeal was timely.

On the merits, plaintiff argued that the district court erred in granting summary judgment to Plains defendants by concluding they were not an employer under Title VII and New Mexico law. Here, Plains defendants lacked the authority to fire C3 employees; did not control the payroll, tax documents, or benefits of C3 employees; did not supervise plaintiff or her coworkers; and lacked authority to hire, fire, discipline or otherwise manage C3 employees. Therefore, Plains defendants did not jointly employ C3’s workers and could not be liable under Title VII. Similarly, C3’s workers were independent contractors and not employees of the Plains defendants under New Mexico law. Accordingly, the district court did not err in granting summary judgment.

Plaintiff also argued that the district court erred in denying her Rule 56(d) motion for discovery. However, plaintiff’s counsel’s affidavit failed to state with specificity how discovery would yield probable facts that would rebut the summary judgment motion. Therefore, the district court did not abuse its discretion in denying the motion.

Lastly, plaintiff argued that the district court erred in declining her leave to amend her complaint to add a premises liability claim under New Mexico law. Here, the district court erred in denying plaintiff’s request because it misread plaintiff’s affidavit and failed to consider all available materials in determining whether she could state a premises liability claim.

Plains defendants’ motion to dismiss the appeal was denied. The grant of summary judgment to Plains defendants on the federal and state law claims and the denial of plaintiff’s motion for discovery under Rule 56(d) were affirmed. The denial of plaintiff’s implied request to amend her complaint to allege a claim for premises liability under New Mexico law was vacated and the case was remanded for further proceedings.

Official US Court of Appeals for the Tenth Circuit proceedings can be found at the US Court of Appeals for the Tenth Circuit website.

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