Cortez v. Nacco Material Handling Group, Inc.

July 6, 2017 | By Pickett Dummigan LLP

Antonio Cortez was a mill worker, working for Sun Studs LLC, a limited liability company. Cortez was on the night shift when a co-worker, driving a Hyster forklift, backed into him, dragging him for a long distance and causing catastrophic injuries. The forklift was not equipped with a backup warning signal which would have warned Cortez that he was in danger. He brought a claim against several defendants, including the manufacturer and distributor of the forklifts, as well as his employer’s owner, Swanson Group, Inc.

In Oregon, the worker’s compensation laws preclude a worker from suing his or her employer under all but a few limited circumstances. This prohibition extends to owners and officers of corporations. This prohibition makes it very difficult for an injured worker to receive full compensation when his or her employer is negligent. However, Pickett Dummigan McCall attorneys J. Randolph Pickett, R. Brendan Dummigan, and Kristen West McCall, along with Peter O. Hansen of the Law Offices of Peter Hansen, and Robert K. Udziela, argued that the Oregon legislature had not specified that the owner of a limited liability company should be provided the same protection as a corporation’s owner.

The Court of Appeals, followed by the Oregon Supreme Court, agreed with that argument. The law did not protect certain types of LLC owners from liability for actions taken by their subsidiaries, and the case was permitted to go to trial. The Oregon legislature immediately moved to close what is saw as a loophole regarding limited liability companies. At the same time, however, they clarified the law to expand the circumstances under which injured workers can receive full compensation from officers, directors, and managers of their employers. The Cortez case was a victory for Oregon workers who are injured in the future.