Dual Persona Doctrine not an Exemption to Exclusive Remedy

Thursday, December 15, 2011 | 0

In Soto v Nabisco, Inc., et al., 2011 WL 5831369 (Pa.Super.), 2011 PA Super 249, released on Nov. 21, 2011, the Superior Court of Pennsylvania upheld the decision of the Court of Common Pleas, Philadelphia County which dismissed Roque Soto’s third-party liability claim based upon the employer statutory immunity under the Pennsylvania Workers’ Compensation Act (WCA).

Soto began his employment with Nabisco at its Philadelphia Bakery sometime around 1999-2000. In July 2001, Nabisco merged into Kraft and ceased to exist as a separate company. Due to the merger, Soto became an employee of Kraft. On Nov. 1, 2007, Soto injured his arm and hands while operating a Ritz Cracker Cutting Machine designed and built by Nabisco, but used exclusively by Kraft employees since the merger. There was no dispute between the parties that the accident occurred within the course and scope of Soto’s employment and caused amputation of his left arm and a de-gloving wound and avulsion injuries to his right hand.

After his injury, Soto filed a third-party tort claim against Kraft and various other entities claiming that under the “dual persona” doctrine, Pennsylvania's WCA allows third-party tort recovery – although the employer is the ultimate payer – if the employer has a distinct and separate role that could subject it to liability for injuries to an employee. Soto defined Kraft's “dual persona” nature as (1) his employer and (2) the successor in interest to Nabisco, the manufacturer of the defective machine that caused his injuries at work. Soto also maintained that Kraft's position as successor in interest to Nabisco exposed Kraft to third-party liability in this context.

In its analysis of the case, the Superior Court noted that the only thing that changed in Soto’s employment situation was that his paycheck now came from Kraft instead of Nabisco. He continued to work in the same capacity at the same location. The Court found that the Ritz Cracker Cutting Machine was equipment Nabisco had manufactured specially for cutting Ritz crackers, it was used solely by Nabisco employees, and later used solely by Kraft employees; it was not available to the public at large. At no time was the special equipment sold to an outside company or put in the stream of commerce; it was merely transferred from Nabisco to Kraft by virtue of the merger.

Ultimately, in affirming the decision of the Court of Common Pleas, the Superior Court held as follows:

    Were Pennsylvania courts to accept the “dual persona” doctrine as a valid exception to the exclusivity of the WCA, the doctrine would not apply in this case for the following reasons. If [Soto] had been injured while working for Nabisco, workers compensation would be his sole remedy; any third-party claim against Nabisco as the manufacturer of the equipment would fail. To allow [Soto] to sue Kraft, solely as the successor in interest to Nabisco, for third-party damages effectively enlarges [Soto’s] remedies as a result of the merger, in contravention of the “dual persona” doctrine, which was designed to preserve but not expand liability. If Nabisco as the employer would have no third-party liability beyond workers compensation, then Kraft as the successor employer should have no third-party liability under the circumstances of this case. Declining to apply the “dual persona” doctrine as an exception to the exclusivity of Pennsylvania's Workers' Compensation Act in the present context, we ensure the preservation but prevent the expansion of liabilities or remedies.

The Superior Court’s holding that the dual persona doctrine is inapplicable in cases where the plaintiff would not have been able to bring suit against the predecessor company even if a merger had never occurred is in accord with decisions by courts from Florida, Massachusetts, Michigan, and Washington, all of which are cited in the court’s decision.

<i>Kevin J. Cooper is an associate attorney for the Roetzel & Andress law firm in Toledo, Ohio. This column was reprinted with his permission from the firm's employment law blog, http://www.ralawemployment.blogspot.com.</i>