Iowa’s high court has ruled in favor of a workers’ compensation insurer in a case in which a group of employees and former employees of a manufacturing plant alleged that the insurer failed to protect workers from injury when it opted not to inspect, or negligently inspected, the plant for safety conditions.
The Iowa Supreme Court made its ruling in a case brought by Dillon Clark, Agnes Dusabe, Musa Ezeirig, Zarpka Green, Dusty Nyonee, and Abraham Tarpeh, employees and former employees of TPI Iowa LLC, a wind blade manufacturing facility located in Newton, Iowa.
The company, which employs hundreds of employees at its Newton plant, was cited last year by Iowa’s Occupational Safety and Health Administration for workplace safety violations that included fire hazards, airborne contaminants, faulty record keeping, fall hazards and a lack of employee training.
IOSHA took action against TPI after workers complained the company failed to protect them from exposure to dangerous chemicals that caused severe skin injuries. The Associated Press reported that some workers were fired after they reported injuries.
The Iowa Supreme Court, in an opinion released May 3, said the plaintiffs’ petition presented a “variety of claims against … various defendants,” including TPI, affiliates, officers and directors, and its workers’ compensation insurer, Insurance Company of the State of Pennsylvania (ICSOP).
In its May 3 opinion, however, the court only considered the claims against ICSOP, which were “based on the failure to inspect the premises, or in the alternative, negligent inspection.”
The plaintiffs alleged that the “insurance carrier failed to conduct or negligently conducted an insurance inspection at the company’s manufacturing facility and that the omission or action caused serious health problems for plaintiffs.” They sought compensatory damages as well as punitive damages.
In answer to the claims brought by the plaintiffs, ICSOP moved to dismiss the petition based on the section of the Iowa Code that states in pertinent part: “No inspection of any place of employment made by insurance company inspectors . . . shall be the basis for the imposition of civil liability upon the inspector or upon the insurance company …”
The plaintiffs argued, however, that the “provision is unconstitutional as violative of equal protection, inalienable rights, and due process” provided by the Iowa Constitution.
The district court disagreed and found in favor of the insurer and granted the carrier’s motion to dismiss the case.
On appeal, the Supreme Court discounted the plaintiffs’ claims of unconstitutionality, citing, among other things, the “grand bargain” established by workers’ compensation law, under which workers relinquished “their common law right to seek a full range of compensatory and punitive damages available at common law and instead became eligible for limited statutorily-based compensation.”
The court acknowledged that workers’ comp case law has “developed over time” but held that the “immunity for workers’ compensation insurance companies’ inspections is part of the grand bargain.”
Finding no claim “for negligent inspection against a workers’ compensation carrier,” the court said “it follows that there is no right to a jury trial on a nonexistent claim. Thus, plaintiffs’ due process claim also fails.”
The court then affirmed the action of the district court in dismissing the claim against ICSOP.
TPI recently agreed to pay $100,000 penalties to settle with IOSHA, which originally fined the plant $155,000 for the workplace safety violations, according to the Associated Press.
Iowa regulators gave TPI until Aug. 31 to fix the residual safety hazards, the AP reported. The settlement requires TPI to restrict employee contact with hazardous chemicals, eliminate fall dangers and alter how the factory stores combustible liquids. The company has adopted new polyethylene suits to protect workers against the chemicals.
Other cases brought against TPI and other defendants are pending, according to the AP.
Related:
- Iowa Wind Turbine Maker Settles with State Over Safety Violations
- Regulators Fine Iowa Company over Workplace Safety Violations
Topics Carriers Claims Commercial Lines Workers' Compensation Business Insurance Iowa Manufacturing
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