By Evelyn Norton

Today, in Demetres v. East Construction, Inc., the Fourth Circuit affirmed a decision by the U.S. District Court for the Eastern District of Virginia dismissing a personal injury suit for lack of subject matter jurisdiction.

The Incident

Ashland Construction Co., a North Carolina corporation, hired East West, a Virginia corporation, as subcontractor to prepare a construction site in Virginia Beach.  James Demetres (“Mr. Demetres”), an employee of Ashland Construction Co., was designated as superintendent of the site.  On March 28, 2011, Mr. Demetres sustain significant injuries at the jobsite when a bulldozer operated by an East West employee backed over him.  Following the incident, Mr. Demetres received workers’ compensation benefits through his employment with Ashland Construction Co.

The District Court Dismissed the Personal Injury Suit

On March 27, 2013, Mr. Demetres filed a complaint against East West in the Eastern District of Virginia.  Mr. Demetres alleged negligence and sought $100,000,000 in damages.  East West filed a motion to dismiss for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1), arguing that the exclusivity provision of the Virginia Workers’ Compensation Act (“VWCA”) barred Mr. Demetres personal injury suit.  The Eastern District of Virginia granted the motion.  Mr. Demetres timely filed an appeal.

The Fourth Circuit Found that the District Court Properly Applied Virginia Law Barring Suit.

The Fourth Circuit reviewed the dismissal for lack of subject matter jurisdiction de novo.

On appeal, Mr. Demetres argued that the district court should have applied North Carolina law in determining whether his suit was barred.  Mr. Demetres reasoned that Supreme Court of Virginia precedent allows the law of the state that paid benefits to apply, even if the injury occurred in Virginia.

However, the Fourth Circuit observed that, as a diversity action, the district court was required to apply the law of the jurisdiction in which it sits–Virginia law.  In Virginia, the applicable substantive law is the law of the jurisdiction in which the injury occurred.  Thus, because Mr. Demetres’ injuries occurred in Virginia Beach, Virginia substantive law must govern.

Furthermore, the Supreme Court of Virginia has interpreted the VWCA to bar suits where injured employees of a general contractor try to sue a subcontractor engaging in the general contractor’s business.  Applying this precedent, the Fourth Circuit found that East West was engaged in the same business as Ashland Construction Co.  Therefore Mr. Demetres, as employee of the general contractor Ashland Construction Co., could not sue the subcontractor East West under the VWCA.   Thus, the VWCA barred the suit.

Holding

The Fourth Circuit held that Virginia is not required to relax its more restrictive workers’ compensation bar to hear Mr. Demetres claim.  Thus, the Fourth Circuit affirmed the district court’s decision to dismiss.

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