The Alfred Firm has secured a life-changing, but confidential, settlement on behalf of a scaffold-builder who suffered career-ending injuries at a refinery located in Orange, Texas. We were able to successfully resolve our client's case despite multiple legal blockades that were specifically enacted to protect oil refineries from lawsuits, regardless of their clear liability.
Enter the Chapter 95 defense.
For more than two decades, anyone who has brought an injury lawsuit against an oil refinery in Texas has almost certainly been met with a Chapter 95 defense. This article provides a simplified overview of: 1) what Chapter 95 actually is; 2) how refineries use it to avoid compensating contractors that are injured on the refinery’s premises; and 3) how a recent Texas Supreme Court opinion could affect how Chapter 95 is applied by courts going forward.
Refinery Defendants Often Rely on Chapter 95 to Escape Liability
Chapter 95 of the Texas Civil Practice and Remedies Code provides refinery owners protection from liability for lawsuits brought by contract workers performing work on the premises when certain conditions are met.
Under Chapter 95, owners are liable for injuries to a contractor or subcontractor’s employees only if they: 1) exercise or retain some control over the manner in which the work is performed; and 2) have actual knowledge of the danger or condition that injures the employee.
Also, in order for that limitation to apply, the employee’s injuries must “arise from the condition or use of an improvement to real property where the contractor or subcontractor constructs, repairs, renovates, or modifies the improvement.”
Contractor Companies Enter Agreements that Protect Refineries from Lawsuits by their Employees
Refineries are in a position of great power and leverage when negotiating with subcontractors. This allows them to require subcontractor companies to contractually agree to terms where the contractor bears the exclusive responsibility to train and supervise its own employees on workplace safety and to "control the contractor employees' work".
Refineries that engage in planned and unplanned construction typically hire contractors to do the work. Because of the contract that requires the contractor company to control the details of its employee’s work, and one of the contractor's employees is subsequently injured, the refinery will quickly assert Chapter 95 as a defense to liability. In the absence of evidence that the refinery had actual knowledge of the danger that caused that contractor’s injury (and then failed to adequately warn of that danger), the refinery is essentially immune from a liability finding.
This makes Chapter 95 a highly effective weapon for defending lawsuits brought by contractors in both state and federal court. Until recently, the scope of Chapter 95 practically had no limits.
Recent Texas Supreme Court Opinion May Protect Contractor Employees from Unsafe Refineries
In March of 2021, the Texas Supreme Court issued its opinion in Los Compadres Pescadores, LLC v. Valdez, providing new guidance as to the applicability of Chapter 95 and narrowing the scope of cases that fall within its protections. Cause No. 19-0643, 2021 WL 1148228 (Tex. Mar. 26, 2021).
In Los Compadres Pescadores, two construction contractors were electrocuted by an overhead high-voltage power line while installing concrete pilings that were required for the foundation of a condominium building. The property owner asserted a Chapter 95 defense, arguing in favor of a broad interpretation of the definition of improvement to encompass the entire workplace.
Previously, the Supreme Court held that the employee’s injuries must result “from a condition or use of the same improvement on which the contractor (or its employee) is working when the injury occurs.” Ineos USA, LLC v. Elmgren, 505 S.W.3d 555, 567 (Tex. 2016) (emphasis added).
However, in addressing the applicability of Chapter 95 in Los Compadres Pescadores, the Texas Supreme Court rejected the argument that the fourth requirement of the statute is satisfied whenever the injury arises from a dangerous condition of the claimant's "workplace". The Texas Supreme Court also added that, “a workplace, at least as Los Compadres uses that term, is merely the location in which a worker constructs an improvement. Defining "improvement" to include the entire workplace would negate the statute's explicit, limited applicability to injuries "that arises from the condition or use of an improvement to real property."
New Texas Supreme Court Case Can Help Your Refinery Injury Case
The Texas Supreme Court’s holding in Los Compadres Pescadores imposes important limitations on Chapter 95’s scope. Specifically, the Texas Supreme Court seems to have rejected the refineries' commonly used practice of seeking to apply Chapter 95 to any incident that occurs at the entire refinery. This effectively narrows the scope of cases that fall within the protections provided by Chapter 95.
This means that refineries may no longer be able to rely on Chapter 95 to avoid liability by simply alleging that their general workplace - essentially their entire plant - is the improvement that the contractor was working on. Instead, refineries will likely now have to prove that your injury was caused by a dangerous condition of the specific improvement you were working on for Chapter 95 to be applicable to your potential lawsuit.
This is a big win for injured contractors statewide that will, hopefully, result in more accountability by refineries that subject its contract workers to unsafe work conditions on its premises.
About Johnny Alfred III
Johnny Alfred III is a trial lawyer who focuses his practice on workplace injuries, refinery explosions, construction accidents, catastrophic personal injuries, 18 wheeler crashes, auto collisions, real property matters, and patent/intellectual property litigation. As both an attorney and an engineer, Johnny leverages his practical engineering experience and deep understanding of complex technical issues to help his clients obtain maximum results.
