author: ZAMPANO, Senior District Judge.

text:
    Mark Richard WALKER, Plaintiff, v. PREFORMED LINE PRODUCTS CO. and Western Electric Co., Inc., Defendants.
    No. CV 82-1815.
    United States District Court, W.D. Louisiana, Lafayette-Opelousas Division.
    Sept. 13, 1984.

      Michael D. Lopresto, New Iberia, La., for plaintiff.
    Edward P. Landry, Landry, Watkins & Bonin, New Iberia, La., for intervenor.
    Robert E. Couhig, Jr., Michael D. Carbo, Adams & Reese, New Orleans, La., for Preformed Line Products Co.
    Joseph Onebane, Gorton T. Whitman, Onebane, Donohoe, Bernard, Torian, Diaz, McNamara & Abell, Lafayette, La., for Western Elec.
   MEMORANDUM OF DECISION

ZAMPANO, Senior District Judge.

In this action the plaintiff, Mark Walker, seeks to recover damages against Preformed Line Products Company (“Preformed”) and Western Electric Company, Inc. (“Western Electric”) as a result of the serious injuries he suffered when an aerial support cable broke as he was splicing telephone wireworks during the course of his employment with the South Central Bell Telephone Company (“South Central Bell”) on August 28, 1981.

A four-day bench trial was held at which 13 witnesses were heard by way of oral testimony and depositions. Although the defendants deny responsibility for the accident and plaintiffs injuries, the Court is convinced that the plaintiff amply sustained his burden of proof on his negligence and strict liability causes of action against the defendants.

I. FINDINGS OF FACT

A. THE PARTIES

1. The plaintiff, Mark Walker, is a citizen of the State of Louisiana who, on August 28, 1981, had been employed as a lineman for over two years by South Central Bell.

2. The defendant, Preformed, is an Ohio corporation engaged in the design and manufacture of various telephone equipment, including “wraps” known as “B-strand connectors” and “B-strand reducers” which are used to splice aerial strands in cable to which were attached telephone lines or wireworks.

3. The defendant, Western Electric, a New York corporation is a subsidiary of American Telephone and Telegraph Company and a one-half owner of Bell Telephone Laboratories, Inc. (“Bell Laboratories”). For many years prior to 1981, Western Electric purchased B-strand connectors and B-strand reducers from Preformed and sold the products to South Central Bell.

B. THE B-STRAND CONNECTORS

4. Two basic operations are involved in the installation of overhead telephone lines. First, a support cable, consisting in part of strong strands of steel wires for self-support, is suspended in the air between poles by a ground crew. Attached to and hanging from the cable are sections of telephone wireworks. After the support cable is in place, a follow-up team of linemen complete the project by splicing the sections of the wireworks hanging from the cable.

In addition to serving as a hanger for the wireworks, the cable provides the aerial support for the ladders and seat slings of the linemen as they move along the cable joining the sections of the wireworks.

Both Preformed and Western Electric had knowledge of the purpose and function of the support cable.

5. In performing the initial phase of the work, the ground crew unrolls the cable from large reels. As the cable is unrolled from the reels, the end points of the strands of the cable are joined by splicing them with “wraps.”

6. Support cables are made with four different size strand diameters: 1/4 inch, 5/16 inch, 3/8 inch, and 7/16 inch.

7. It is common knowledge in the trade that, without proper safeguards, the splicing of strands of unequal diameters may be a source of danger to linemen. Thus, in the ordinary course of splicing procedures, only a 1/4 inch (6.6M) strand should be joined to another 1/4 inch strand, only a 5/16 inch (6M) strand should be spliced to another 5/16 inch strand, and so forth.

8. The joinder of identical strands within the cable is accomplished by applying a wrap known as a B-strand connector to the ends of the strands. Because the differences in the diameters of the strands are almost imperceptible to the naked eye, a standard “color coding” marking system was developed to identify the proper connector to be applied to the strands contained within the different cables used in the business. The color yellow on the connector indicated a wrap for a cable with 1/4 inch strands, the color black denoted a wrap for a cable with 5/16 inch strands, the color orange designated a wrap for a cable with a 3/8 inch strands, and the color green designated a wrap for a cable with 7/16 inch strands.

9. For almost 30 years prior to 1981, Preformed manufactured and sold B-strand connectors to Bell Laboratories and, commencing in the early 1970’s, to Western Electric.

10. Preformed produced connectors to accommodate the four sizes of strand diameters in the different cables: 1/4 inch, 5/16 inch, 3/8 inch, and 7/16 inch. Because of the known danger involved in splicing strands of dissimilar diameters, Preformed utilized two methods to identify and alert the ultimate user to the different sizes of connectors.

11. First, Preformed marked the different connectors, approximately at midpoint, with a single, small slash or dot of paint according to the color coding scheme known through the industry: a splash of yellow for the 1/4 inch connector, a splash of black for the 5/16 inch connector, a splash of orange for the 3/8 inch connector, and a splash of green for the 7/16 inch connector.

12. Second, Preformed’s design specifications called for a water proof tag, setting forth a description of the connector and its size, to be securely attached to each connector.

C. THE B-STRAND REDUCER

13. In 1966, it became evident to Preformed that the evolving needs of the telephone industry required a wrap that was capable of joining cables containing strands of dissimilar diameters.

14. In response to the demand, Preformed designed, patented, and manufactured a new wrap, known as a B-strand reducer.

15. The reducers were produced in three sizes to accommodate joinder of a 5/16 inch strand to a 1/4 inch strand, a 3/8 inch strand to a 5/16 inch strand, and a 7/16 inch strand to a 3/8 inch strand.

16. Preformed and Western Electric knew that the reducer was not designed to, nor could it safely be used to, connect cables containing strands of identical diameters.

17. To the naked eye, in the absence of suitable identification markings, the reducer wrap was identical in appearance to the connector wrap. Both wraps were applied by the user in the same way.

18. The record amply discloses that Preformed and Western Electric, in the early stages of production and sale of the reducer, were warned of and were well aware of the probability that a lineman could easily confuse the two wraps, and therefore apply a reducer wrap instead of a connector wrap unless proper and adequate markings clearly distinguished the two different products. Both companies knew that such a misapplication to a support cable created a risk of injury to a lineman in a sling seat splicing wire works.

19. On November 9, 1966, prior to any sales of the reducer, Mr. Jack Snyder, a sales representative for Preformed in New York, informed Preformed that: “[a]ll have said if you come out with a reducer that looks like a splice you should splash it up with plenty of color marks so that it couldn’t possibly be mistaken for our regular splices.”

20. In a reply on November 16, 1966, Mr. William Hershey, the assistant manager of telephone products sales at Preformed, wrote:

Just for my information, will you find out what color they would want on the 1/4" side. We not only have the problem of perhaps using the splice on the wrong size strand, but also we have to make sure that the lineman puts the side on the 1/4" strand, etc. See if some of your smarter customers can come up with a way to make this foolproof.

21. As requested, Mr. Snyder made the following recommendations to Preformed officials on November 28, 1966:

1. Stick with the two colors you have already established for 5/16" (black) and 1/4" (yellow).
2. Increase the width of the color splashes on the reducer. One....it will show up better than on a regular splice and two.....it will make them different from the splice, [ellipses in original].
3. Color code each side of the reducer in its appropriate color.
4. We assumed the reducer would be subseted and hence two wraps of tape would be needed at each end to hold subsets together. Here again you could use one black and one yellow tape on the proper side with the word “Reducer” imprinted on the tape over and over. If you can’t color code these tapes, by all means imprint them with the word “Reducer” over and over.

22. On December 12, 1966, Mr. Fred J. Lekson, a Preformed employee demonstrating the new reducer to customers in the field, wrote to his brother, Mr. Max Lekson, Preformed’s manager of sales, that the 1/4 inch side of the reducer should be color coded yellow and the 5/16 inch side of the reducer should be color coded black. To explain his recommendation he submitted the following sketch:

23. On December 28, 1966, Mr. Jack Scanlon, another Preformed sales representative demonstrating the new reducer wrap to customers in the field, notified Preformed officials that the demonstrations revealed “a great lack of knowledge on the proper application, not only in the guide grip, but also the splice.”

24. A few months later, on March 22, 1967, Mr. T.J. Finn, a test engineer at Preformed, informed Mr. Max Lekson that it was “required” that the reducer have “a definite size identification on each end.”

25. As a result of these communications, Mr. Max Lekson became increasingly concerned over the need for an adequate color coding design for the reducer as a safety measure for linemen. He discussed a multi-color design for the reducer with Mr. P.G. Clark, an engineer with Bell Telephone Laboratories. Mr. Lekson testified that Mr. Clark rejected multiple colors on the reducer because he didn’t want the product to look like a “barber’s pole.” (Mr. Clark died prior to 1981).

26. Preformed decided not to market its 5/16 inch to 1/4 inch reducer with the identification markings recommended by its sales representatives and test engineer. Rather, it sold the reducer with single color identification marks: a dot of yellow was painted on the mid-point of the reducer with three small splashes of yellow painted along the smaller side of the strand.

27. In addition, because it recognized that the color marks on the reducer may not be sufficient for a lineman to distinguish the reducer from a connector, Preformed decided to add an identification tag on the reducer. Specifications required that the tag be durable and be attached to the reducer so as to withstand “shipping and handling.”

28. In the late 1960’s, Western Electric, acting as the purchasing arm of Bell Laboratories, made an independent examination of the reducer and concluded that, except for some minor changes, it was functionally suitable. It further determined, after independent review, that Preformed’s methodology of color coding and tagging the reducer was adequate for safety purposes.

29. However, the tags placed on the reducers by Preformed did not conform to specifications in that they became easily detached from the reducers, did not withstand shipping and handling, and generally were missing by the time the reducers were used in the field by linemen.

30. Prior to 1981, despite periodic inspections of the reducers, Western Electric’s experts failed to detect Preformed’s breach of the specifications pertaining to the tags.

31. After independent review of all aspects of the design and composition of the reducer, Western Electric became the major purchaser of the reducers. Its orders included specifications which essentially adopted Preformed’s design and marketing characteristics, including color coding and tagging.

32. Western Electric, in turn, resold the reducers to individual operating companies, including South Central Bell. The reducers were shipped in boxes containing 50 subsets. A document entitled “Application Procedure and Safety Considerations, Preformed Line Products” (“Application Sheet”), enclosed in the box did not set forth the exact color coding identification scheme for the reducers.

33. In the mid-1970’s and continuing through the year 1980, Preformed attempted to convince officials at Western Electric to accept additional color coding on the reducer “[t]o provide an added measure of safety ____” (Gemra deposition p. 40). Western Electric consistently rejected the recommendation. Preformed, in order not to jeopardize its huge sales of reducers to Western Electric, did not make any changes to the color coding scheme on the reducer until 1982. In that year, Mr. Richard Gemra, the newly appointed Development Engineer at Western Electric, approved the additional color markings.

34. Mr. George Hollon, plaintiffs expert, testified that: 1) tests revealed that a 1/4 inch strand wrapped with a 5/16 inch to 1/4 inch reducer initially held under tension and with a person’s weight on it, but broke within a short time thereafter; and 2) safe and proper practice required that in order to avoid misapplication by a lineman, the reducer should have been color coded with yellow-black markings with a durable identification attached to it.

D. THE PLAINTIFF’S ACCIDENT

35. On August 27, 1981, a team of South Central Bell linemen was on assignment to hang five miles of telephone line in Jeanerette, Louisiana. The ground crew consisted of Clint Lambert, Jeff Miller, and Brett McDonald. The plaintiff was not a member of the ground crew. Lambert and Miller had had two years of experience with South Central Bell; McDonald had been with the company for only six months.

36. As the work of the ground crew progressed, it became necessary for the crew to splice two cables with Vi inch strands. Lambert asked McDonald to get him a “wrap” from the truck. McDonald asked what size was needed, to which Lambert replied “6.6” (Vi inch). McDonald then inquired, “[H]ow can I tell?” Lambert stated, “[C]heck the tags.” After searching through the truck, McDonald reported to Lambert that none of the wraps had tags on them. Lambert then instructed McDonald to get “one marked with yellow.” McDonald did so, and Lambert applied the wrap to the strand ends of the cables. The joined cables formed the support cable which was then pulled taut and suspended in the air.

37. The following day the plaintiff, working alone as a follow-up lineman, arrived at the site for the first time to splice the wireworks hanging from the support cable. He carefully checked the integrity of the cable by throwing a rope over the cable at mid-span and pulling on the rope with full weight. The cable held firmly. He then climbed a ladder approximately 18 feet, attached his seat sling to the cable, and commenced splicing the wireworks attached to the cable.

38. During the course of the splicing procedures, the strands of the cable, which had been erected by the ground crew the previous day, broke apart. The plaintiff fell to the ground, sustaining rather serious injuries.

39. It is uneontroverted that the reason the strands of the cable parted was that a reducer wrap, rather than a connector wrap, was employed to connect the 1/4 inch strands contained in the cables that were joined by the ground crew the day before. The reducer wrap was Vi inch on one end, 5/16 inch on the other.

40. The evidence disclosed that, at the time of the accident, both Lambert and McDonald were familiar with the standard color coding scheme used to identify the various sizes of connectors. However, neither had knowingly applied a reducer previously nor had knowledge of the special color coding identification marks utilized by Preformed on its reducer.

41. It is also noteworthy that John Via-tor, a supervisor of linemen with over 30 years experience at South Central Bell and the investigator assigned to determine the cause of plaintiffs accident, testified that prior to plaintiffs accident he did not have a ready familiarity with the special color coding marking which distinguished a reducer from the color coding on the commonly used connector.

42. McDonald would not have selected a reducer instead of a connector if the reducer had yellow-black color coding.

43. McDonald would not have selected a reducer instead of a connector if the reducer had an identification tag on it.

44. Lambert would not have applied the reducer to the strands if the reducer had yellow-black color coding.

45. Lambert would not have applied the reducer to the strands if the reducer had an identification tag on it.

46. Plaintiffs accident and injuries would not have occurred if the reducer had been properly color coded and tagged.

E. PLAINTIFF’S INJURIES AND LOSSES

47. The extent of plaintiffs injuries was not seriously contested at trial. He sustained a concussion, a severely cracked wrist, numbness in five digits of his right hand, damage to the median and ulnar nerves in the right hand, cartilage damage to his right knee, and various abrasions to his body.

48. The plaintiff has had a long and arduous road to recovery. He has been hospitalized on four occasions for surgical procedures to his wrist and knee. Among other treatments he has incurred are: a closed reduction and placement of a fixation device to hold the reduction in place on his wrist, a wrist cast for several months, a lateral meniskectomy to repair a tear of the lateral meniscus of the right knee, osteotomy to shorten the ulna bone in his right wrist in order to realign the joint in a more normal fashion, the placement of a steel plate into the arm, and a bone graft. In addition, credible medical testimony indicates further surgery on his wrist will be required.

49. Permanent injuries include numbness, lack of full motion, pain and swelling of the right wrist, and some disability of the knee. Assigned disability percentages are as follows: 20 percent impairment of the upper extremity and 15 percent impairment of the lower extremity.

50. Medical expenses to date are $19,-575.69, with anticipated medical costs in the future of over $3,000.00. Lost wages are $15,894.09 with anticipated future lost wages of $3,150.00.

51. Intervenor South Central Bell claims reimbursement for medical and compensation payments in the sum of $25,-112.49.

II. CONCLUSIONS OF LAW

1. This Court has jurisdiction over this action pursuant to 28 U.S.C. § 1332.

2. The plaintiff sustained his burden of proof on all essential elements of his cause of action in strict liability against Preformed.

3. The plaintiff sustained his burden of proof on all essential elements of his causes of action in negligence against Preformed and Western Electric.

4. Plaintiff was free from contributory negligence and “fault.”

5. Neither South Central Bell nor plaintiffs coworkers acted unreasonably under the circumstances.

6. Any acts or omissions of South Central Bell and plaintiff’s coworkers did not constitute intervening causes which insulate Preformed and Western Electric from liability.

7. All contested issues of fact and law are resolved in plaintiff’s favor and against the defendants.

8. Judgment may enter in behalf of the plaintiff and against the defendants.

9. The intervenor is entitled to reimbursement.

III. DISCUSSION

Plaintiff grounds his action against the defendants on two distinct theories of liability: strict liability and negligence.

A. THE CASE AGAINST PREFORMED

In the landmark case of Weber v. Fidelity & Casualty Insurance Co. of N.Y., 259 La. 599, 250 So.2d 754, 755-56 (1971), the doctrine of strict liability in tort under Louisiana law was established as follows:

A manufacturer of a product which involves a risk of injury to the user is liable to any person ... who without fault on his part, sustains an injury caused by a defect in the design, composition, or manufacture of the article, if the injury might reasonably have been anticipated. However, the plaintiff claiming injury has the burden of proving that the product was defective, i.e., unreasonably dangerous to normal use, and that the plaintiff’s injuries were caused by reason of the defect.
If the product is proven defective by reason of its hazard to normal use, the plaintiff need not prove any particular negligence by the maker in its manufacture or processing; for the manufacturer is presumed to know of the vices in the things he makes, whether or not he has actual knowledge of them.

Under the foregoing principles, the four elements necessary to support the imposition of strict liability are: a product unreasonably dangerous to normal use, a product in normal use at the time of injury, an injury caused by the defective product and the reasonable forseeability of such an injury. Pawlak v. Brown, 430 So.2d 1346, 1351 (La.App.), writ denied, 439 So.2d 1072 (La.1983); Byrd v. Hunt Tool Shipyards, Inc., 650 F.2d 44, 47 (5 Cir.1981).

The Louisiana law of negligence in products liability cases is conventional: the plaintiff must prove that the product created an unreasonable risk of injury, that the defendant knew or should have known of the risk, that the defendant failed to prevent or adequately warn of the risk, and that the product was a proximate cause of the plaintiff’s injuries. Kent v. Gulf States Utilities Co., 418 So.2d 493, 497 (La.1982). Thus, the concepts of strict liability and negligence in Louisiana are substantially the same, except that the defendant’s lack of actual or constructive knowledge of the risk involved is not a defense to a claim of strict liability, but does preclude a recovery in negligence. Bridges v. Chemrex Specialty Coatings, Inc., 704 F.2d 175, 178 (5 Cir.1983); Madden v. Louisiana Power and Light Co., 334 So.2d 249, 253 (La.App.1976).

The Court, applying these principles of law to the facts fully supported by evidence at trial, has little difficulty in concluding the plaintiff sustained his burden of proof against Preformed on both causes of action.

UNREASONABLY DANGEROUS PRODUCT

The evidence established that for many years prior to 1966 Preformed designed, manufactured and sold a “B-strand connector,” a splicing wrap used by telephone linemen to connect aerial strands of cable. The connector was intended only to join strands of the same diameter. It was common knowledge at Preformed that utilizing a connector to splice strands of cable with dissimilar diameters was dangerous and created a risk of injury to the user. Because differences in strand diameters were almost imperceptible by eye, Preformed, quite sensibly, placed markings on its connectors in conformity with the distinct col- or coding standards known to and easily recognizable by those employed in the trade: yellow for the 1/4 inch connector, black for the 5/16 inch connector, orange for the 3/8 inch connector, and green for the 7/16 inch connector.

In 1966, in order to meet the demands of the marketplace, Preformed designed and patented a “B-strand reducer” which could safely connect strands of cable with disparate diameters. At the time of design and manufacture, Preformed knew that its new reducer, identical in appearance to its connector, could not be used safely by linemen to splice strands of cable with similar diameters. Thus, it was recognized at Preformed that a lineman, splicing wireworks in a sling seat supported in the air by a cable, would be exposed to injury if a reducer, rather than a connector, had been accidentally employed by the ground crew to join one of the support cables with 1/4 inch strands to another of the support cables containing 1/4 inch strands.

With this known risk to linemen in mind, Preformed’s sales representatives, who were demonstrating the product to customers in the field in 1966, urged that the new reducer bear color-coded markings which would clearly distinguish it from the connector. Mr. William Hersey, an official at Preformed in November 1966, recognized the need for a “foolproof” color coding system "to make sure that the lineman puts the 1/4" side on the 1/4" strand, etc.” Preformed’s test engineer reported that “size identification” markings on both ends of the reducer were “required.” In particular, because the industry already had established color markings for the various strand diameters in cable, recommendations were made that the 1/4 inch side of the reducer be color coded in yellow and the 5/16 inch side of the reducer be color coded in black. The cost for this color coding system was minimal.

It seems obvious to the Court that the color coding recommended by Preformed’s own employees, representatives and engineers, if adopted, would have clearly enabled a lineman, with even a modicum of experience, to differentiate a reducer from a connector and, in all probability, would have prevented the injury to the plaintiff in this case. The Court is fortified in its conclusion after an inspection of the reducer wrap at trial, and by the credible testimony of Mr. George Hollon, an expert called by the plaintiff.

Unfortunately, Preformed decided not to market its reducer with different colors to identify dissimilar strand ends of wrap, such as a black-yellow color coding for the 5/16 inch to 1/4 inch reducer. Rather, it manufactured and sold the reducer employing only one color. On the 5/16 inch to 1/4 inch wrap, a dot of yellow was placed on the middle of the reducer with three slashes of yellow painted along the smaller side of the strand to be joined. In addition, a small identification tag was attached to the reducer.

In the Court’s opinion, Preformed’s deliberate decision to reject the recommendations of its own agents and experts concerning the proper color coding for the reducer evinced a gross and callous disregard for the safety of ultimate users. Even in the absence of expert advice, plain common sense should have dictated to Preformed that there was a likelihood a lineman in the workplace might confuse the yellow slash marks on the reducer for the yellow slash mark on the connector and, as a consequence, a dangerous misapplication would result.

The evidence revealed that proper color coding was the most effective economical method to identify the various diameter sizes of strands and wires for lineman. However, identification tags attached to the products might be considered a reasonable alternative, particularly for an inexperienced lineman on the job. In the instant case, it was virtually uncontroverted that the tags placed on the reducers by Preformed prior to plaintiffs accident did not conform to .specifications, and became detached from the wraps by the time they were used by linemen. None of the wraps stored in South Central Bell’s supply truck from which McDonald obtained the wrap in question for Lambert had identification tags.

Under these circumstances, the Court concludes that: 1) the reducer, as placed into commerce by Preformed without appropriate color coding and without adequate tags, was an unreasonably dangerous product in design, composition and identification, and 2) Preformed’s conduct, in marketing the reducer as it did, constituted a lack of due care and a breach of duty owed to an ultimate user of its product. See Pawlak, 430 So.2d at 1349-50; Avery v. Maremont Corp., 628 F.2d 441, 447 (5 Cir.1980); Chappuis v. Sears, Roebuck & Co., 358 So.2d 926, 930 (La.1978); Ducote v. Chevron Chemical Co., 227 So.2d 601, 604 (La.App.1969).

NORMAL USE

Although it is true, as Preformed contends, that McDonald’s and Lambert’s use of a reducer to splice similar strands in the support cable was improper, it does not follow that the reducer was not in “normal use” at the time.

“Normal use” under Louisiana law “encompasses all reasonably foreseeable uses of a product.” LeBouef v. Goodyear Tire & Rubber Co., 623 F.2d 985, 989 (5 Cir.1980) (emphasis in original). An unintended use as well as a use for which the product was not designed may be considered a “normal use,” if the product was employed in a manner and for a purpose reasonably to be foreseen by the manufacturer. Cobb v. Insured Lloyds, 387 So.2d 13, 18 (La.App.), writ denied, 394 So.2d 615 (La.1980); Bradco Oil & Gas Co. v. Youngstown Sheet & Tube Co., 532 F.2d 501, 503-04 (5 Cir.1976), cert. denied, 429 U.S. 1095, 97 S.Ct. 1111, 51 L.Ed.2d 542 (1977); Amco Underwriters of the Audubon Ins. Co. v. American Radiator & Standard Corp., 329 So.2d 501, 504 (La.App.1976).

Here, the exact risk, anticipated and sought to be avoided at the time of the reducer’s design and manufacture, was that a lineman might utilize a reducer in situations that required a connector, and vice versa. A misapplication in use was not only foreseeable but, without adequate safeguards, was actually expected by Preformed’s agents and experts. Therefore, the Court finds that the inadvertent use of the reducer by the ground crew to connect the plaintiff’s support cable, though improper, was within a “normal use” of the product. Woods v. International Harvester Co., 697 F.2d 635, 637-39 (5 Cir.1983); Branch v. Chevron International Oil Co., Inc., 681 F.2d 426, 429 (5 Cir.1982); Foster v. Ford Motor Co., 616 F.2d 1304, 1310-11 (5 Cir.1980); Pawlak, 430 So.2d at 1350; Cobb, 387 So.2d at 18.

CAUSATION

At pretrial, the parties stipulated that the cable, supporting the plaintiff in the air while he was splicing wireworks, broke because the reducer ceased to hold the strands at the place of splice. As a result, the plaintiff fell to the ground and sustained injuries.

FORESEEABILITY OF INJURY

It was not disputed that a lineman, splicing wireworks attached to an aerial cable, would also depend on that cable to provide support for his ladder and sling seat. It was common knowledge at Preformed that a defective or misapplied wrap eventually would fail to hold the strands in the cable at the place of splice, and that such a situation presented a hazard and risk of injury to a lineman. The type of accident that occurred in this case was readily apparent to and feared by Preformed’s agents and experts at the time of the design, manufacture, and marketing of the reducer. Hall v. Chrysler Corp., 526 F.2d 350, 352 (5 Cir.1976).

PREFORMED’S DEFENSES

Preformed claims that it manufactured the reducer according to specifications submitted by Western Electric, a sophisticated buyer, and that Western Electric, and not Preformed, must accept full responsibility for any defect in the design or composition of the reducer. Under Louisiana law, a manufacturer’s liability may be precluded in instances where a sophisticated purchaser designed and requested a product for a particular application. Byrd, 650 F.2d at 47 n. 1. However, Preformed, and not Western Electric, was the designer, manufacturer and patent holder of the reducer. Western Electric merely “approved” Preformed’s work by submitting its own drawings of Preformed’s standards, with only minor changes not relevant to this action. Under these circumstances, the Western Electric specifications were nothing more than an indication the reducer “fulfilled the company’s need, and certainly cannot serve to relieve the manufacturer of responsibility for design or manufacturing defects.” Madden, 334 So.2d at 254.

Even assuming arguendo that the final decision with respect to color coding the reducer rested with Western Electric, Preformed had an independent duty to remedy the misleading and confusing color coding placed on the reducer which created a trap for linemen. Byrd, 650 F.2d at 48; Crane v. Sears, Roebuck & Co., 218 Cal.App.2d 855, 32 Cal.Rptr. 754, 756 (1963). Moreover, it was not disputed that Preformed had the further duty to attach the tags securely to the reducers to aid linemen to identify the product. Its breaches of these duties also constitute negligence.

Preformed further asserts that it “assumed” and “expected” that Western Electric, in distributing the reducer, would provide adequate safeguards for the use of the product. But there is no evidence that Preformed investigated or was informed that Western Electric had taken any steps to color code or tag the reducer properly so as to avoid misapplication by the user. It seems clear that Preformed, in order to protect the ultimate user, had an independent duty either to remedy the obvious defect itself or to ensure that Western Electric took appropriate remedial action before reselling the reducer. Hall, 526 F.2d at 352; Suchomajcz v. Hummel Chemical Co., 524 F.2d 19, 27 (3 Cir.1975); Borel v. Fibreboard Paper Products Corp., 493 F.2d 1076, 1091 (5 Cir.1973); Crane, 32 Cal.Rptr. at 756. Preformed is not being charged for the tort of Western Electric; it is liable for failing to protect against the risk of injury inherent in foreseeable uses of the reducer. Its duty of due care extended not only to a purchaser in the distributive chain of the product but also to the ultimate user of the product. Byrd, 650 F.2d at 48.

Preformed next contends that, because yellow-black color coding on the reducer could be considered aesthetically offensive, it acted reasonably in rejecting the markings in order to preserve its business relationship with Western Electric. The Court has great difficulty in believing that the ludicrous “barber pole” comment by a now-deceased official at Western Electric was taken seriously by officials at Preformed. The questions come to mind: to whom would a few paint marks on reducers less than one-half inch in diameter and 20 feet above the ground be offensive? Vehicular traffic? Pedestrians looking skyward? A few birds?

Even assuming one could somehow be justified in concluding that Western Electric would cancel all orders for the much-needed, patented reducer because it lacked fashion in makeup, there were feasible alternatives available to protect linemen from the dangers of the reducer as marketed. Preformed could have tagged the product securely to avoid detachment prior to use, as required by specifications. Also, the reducer could have been packaged individually, at a modest cost, with identification information on the wrapping. Or, as one of Preformed’s agents recommended, the product itself could be imprinted with “reducer” in one color. In any event, if the duty of due care requires certain action, the failure to perform that action is not excusable on the ground of its possible adverse effect upon the manufacturer’s business. Brizendine v. Visador Co., 437 F.2d 822, 828 (9 Cir.1970).

Preformed’s claims of contributory negligence and “fault” on the part of the plaintiff lack factual support in the record. The standards for determining and the effect of a finding of “victim fault” and “contributory negligence” in strict liability and negligence cases under Louisiana law are comprehensively discussed in Hyde v. Chevron U.S.A., Inc., 697 F.2d 614, 622-30 (5 Cir.1983). The plaintiff neither knew nor had reason to suspect that the support cable had been secured by a reducer rather than a connector. Moreover, once the strands were wrapped, the misapplication was not apparent. Pursuant to the usual and customary procedures, the plaintiff tested the cable’s integrity before using it for support. As explained by the plaintiff and by his expert at trial, the spliced strands were initially strong enough to hold against plaintiffs weight, but, with the pressure of his sustained weight as he moved along the cable connecting the wire-works, the strands gradually parted and then broke. The Court finds that the plaintiff took all reasonable precautions for his safety prior to the accident. Pawlak, 430 So.2d at 1352; LeBouef 623 F.2d at 991; Chappuis, 358 So.2d at 930; Hall, 526 F.2d at 352.

The Court further rejects the arguments advanced that the acts or omissions of the ground crew in applying the wrong wrap, and/or of South Central Bell in allegedly failing to train the ground crew properly, constitute intervening causes which absolve Preformed. At the time of application, Lambert correctly instructed McDonald to identify the needed wrap by means of the tag. Had the identification tag been attached to the product, as it should have been, McDonald would not have selected a reducer instead of a connector. When the absence of the tag was reported to Lambert, he quite understandably advised McDonald to obtain the wrap which conformed to the standard color coding known to both men: yellow for a 1/4 inch connector. Had the wrap been color coded with black and yellow, McDonald would not have chosen the reducer and, even if he did, Lambert would have quickly recognized the error and would not have applied it to the strands. Due to the general unawareness among linemen, experienced as well as inexperienced, that under Preformed’s special color coding system three yellow dots were a substitute for the “black” markings commonly associated with “5/16 inch,” the Court is satisfied that neither Lambert nor McDonald acted unreasonably under the circumstances.

Pointing to the information set forth in its catalog and “Application Sheet” furnished at the time of sale and distribution of the reducer, Preformed contends that linemen should have been instructed on the reducer’s color coding system by their employer, South Central Bell. It argues that had South Central Bell adequately trained the ground crew, the accident would not have occurred. However, the evidence established: 1) that neither Preformed's catalog nor “Application Sheet” contained sufficient explanations concerning the slight differences between the color coding on the reducer and the connector; and 2) that, in the light of the persistent recommendations made to Preformed over the years to change the reducer’s color coding system for safety reasons, Preformed knew or should have known that the reducer’s special markings were not effectively or understanding^ being communicated by the employer to linemen in the field. The Court finds that Preformed lacked a reasonable basis for its “assumption” and “expectation” that linemen, through school and “on the job” training, would have a realistic working familiarity with the reducer’s unique color coding to be alert to and to avoid inadvertent misapplication. See Gordon v. Niagara Machine & Tool Works, 574 F.2d 1182, 1186-90 (5 Cir.1978); Dulin v. Circle F Industries, Inc., 558 F.2d 456, 467-68 (8 Cir.1977); see also Melancon v. Western Auto Supply Co., 628 F.2d 395, 399 (5 Cir.1980).

In any event, even assuming subsequent causative acts by plaintiffs employers and coworkers, the conduct complained of does not relieve Preformed of responsibility. It is settled law that the intervention of an independent, intervening cause does not insulate the original tortfeasor from liability if that intervention was probable or foreseeable. In other words, a negligent act continues to be a proximate, concurring cause of injury if the intervening act was a reasonably foreseeable result of the original negligence. Gordon, 574 F.2d at 1191-95; Moyer v. Martin Marietta Corp., 481 F.2d 585, 591-94 (5 Cir.1973); see also Abdallah v. Caribbean Security Agency, 557 F.2d 61, 63 and cases cited at n. 3 (3 Cir.1977); Transcontinental Gas Pipe Line Corp. v. Mobile Drilling Barge, 424 F.2d 684, 689 (5 Cir.), cert. denied, 400 U.S. 832, 91 S.Ct. 65, 27 L.Ed.2d 64 (1970); Travelers Insurance Co. v. Brown, 338 F.2d 229, 239-40 (5 Cir.1964).

In this case, for reasons set forth at length above, the Court is convinced that the intervening acts were not only foreseeable consequences of a situation created by the design, composition and marketing features of the reducer, but also were actually expected by Preformed’s agents and experts. Therefore, Preformed’s acts and omissions are found to be a direct and proximate cause of plaintiff’s accident and injuries.

B. THE CASE AGAINST WESTERN ELECTRIC

A nonmanufacturer seller of a defective product is liable in tort under Louisiana law only if it knew or should have known that the product sold was defective. See, e.g., Winans v. Rockwell International Corp., 705 F.2d 1449, 1453 & n. 7 (5 Cir.1983); Reeves v. Great Atlantic & Pacific Tea Co., 370 So.2d 202, 209 (La.App.), writ denied, 371 So.2d 835 (La.1979); Spillers v. Montgomery Ward & Co., 294 So.2d 803, 807 (La.1974).

In this case, Western Electric acted in concert with Preformed in almost all aspects of the reducer’s marketing features. Its highly skilled and knowledgeable technicians examined and approved the design and identification of the product. It expressly ratified the defective color coding system placed on the reducer by Preformed. By incorporating the reducer’s color coding system into its own purchase order specifications, Western Electric effectively adopted the overall composition of the reducer, which it then sold to South Central Bell. At all relevant times herein, it had full knowledge of the inherent danger a misapplication of the reducer posed to South Central Bell’s linemen whose safety depended on the integrity of aerial support cables. Its stubborn and unjustifiable refusal for years, despite the entreaties of agents and experts at Preformed, to authorize a modification of the color scheme on the reducer strains credence. In the light of the uncontroverted testimony on the matter, the Court is compelled to conclude that Western Electric’s conduct demonstrated a blatant insensitivity to the reducer’s known risk of injury to linemen.

Moreover, Western Electric further breached its duty of due care owed to South Central Bell and its linemen when it did not detect and withhold from distribution all reducers not tagged in accordance with specifications. Western Electric officials acknowledged that the company had an independent, nondelegable duty to examine the reducer’s marketing features to ensure contract performance by Preformed. The failure to control the quality of the identification tags on the reducer placed a product into the stream of commerce that was reasonably foreseeable to be a danger to the ultimate user. Benoit v. Ryan Chevrolet, 428 So.2d 489, 493 (La.App.1983); Gordon, 574 F.2d at 1185; Amco Underwriters, 329 So.2d at 503; see also Chappuis, 358 So.2d at 930 (strict liability).

To the extent that Western Electric tracks Preformed’s contentions with respect to causation and contributory negligence, the Court, for the reasons stated previously, resolves all issues raised in favor of the plaintiff.

The only defense advanced by Western Electric that merits additional comment pertains to the claim that it “expected” South Central Bell to train linemen concerning the proper use of a reducer. The short answer to this contention is that officials at Western Electric were informed by Preformed for several years prior to plaintiff’s accident that an alteration in the color coding system on the reducer was required “for safety reasons.” The reducer was used only by linemen. Therefore, it is inferable that Western Electric over a long period of time knew or should have known that linemen were not receiving adequate instructions concerning the application of the reducer in the field. Under these circumstances, Western Electric lacked a reasonable basis for its “assumption” that South Central Bell was conveying sufficient information to its linemen to avoid an inadvertent application of a reducer instead of a connector. See Gordon, 574 F.2d at 1188-89.

In any event, as in the case against Preformed, the evidence disclosed that the plaintiffs accident was precisely the type that was readily foreseeable by Western Electric in the event of a misapplication of a reducer. It had the knowledge, authority, and opportunity to remedy the risk of injury posed by the reducer to a lineman such as plaintiff, but failed to do so. The intervening acts or omissions of South Central Bell and plaintiff’s coworkers did not break the chain of causation established by Western Electric’s negligence and, therefore, cannot serve to relieve Western Electric of liability. See, e.g., Gordon, 574 F.2d at 1191-95; Moyer, 481 F.2d at 592-93; Travelers Insurance Co., 338 F.2d at 239-40. The Court finds that Western Electric’s negligence was a proximate cause of plaintiff’s accident and injuries.

C. DAMAGES

The plaintiff is 28 years old, married, with two children. Prior to the accident, he was a healthy, hard working individual. As a result of the accident, he has incurred four surgeries, permanent impairment of his right leg and right hand, a significant amount of pain and inconvenience, lost wages and medical expenses. In addition, he will have another operation and will suffer future pain and discomfort, lost wages, and medical expenses.

There is no fixed standard by which the exact amount of damages is measured. However, based on the documentary and testimonial medical evidence and this Court’s observation of the plaintiff at trial, fair and reasonable compensation in this case is found to be as follows: $19,575.69 for past medical expenses, $3,500.00 for future medical expenses, $15,894.09 for past lost wages, $3,150.00 for future lost wages, $60,000.00 for past pain, suffering, and mental anguish, $20,000.00 for future pain, suffering, and mental anguish, $25,-000.00 for loss of function in the wrist, and $12,500.00 for loss of function in the knee.

Accordingly, judgment shall enter against Preformed and Western Electric, in solido, in the sum of $159,619.78, plus interest from date of judicial demand, Byrd, 650 F.2d at 49, of which plaintiff shall reimburse intervenor in the amount of $25,112.49, plus interest from date of judicial demand.

      . The fact that color code changes were actually made in 1982, a year following plaintiff’s accident, has played no part whatsoever in this Court’s rulings on liability in this case. Cook v. McDonough Power Equipment, Inc., 720 F.2d 829, 831 (5 Cir.1983). The color code change in that year is only mentioned to establish a point of reference for the occurrence of other events which do have relevance in this lawsuit.
      Mr. Gemra’s deposition, taken on June 3, 1983, was introduced as an exhibit by Preformed at trial. At the time of his deposition he stated he had been employed at Western Electric for approximately four years, or since 1979. He further testified that he had knowledge that Preformed "had been for several years trying to convince the responsible individuals prior to my tenure with the company (Western Electric) to add [an additional set of] markings.” (Gemra deposition p. 40) (emphasis added). These discussions continued after Mr. Gemra became Development Engineer at Western Electric in 1979, culminating in the change actually being made in 1982.
      Therefore, it is logical to infer, as set forth in Finding of Fact number 30, that several years prior to 1979 and continuing thereafter during Mr. Gemra’s employment in 1979 and 1980, officials of both defendants had discussions concerning the need for additional color coding on the reducer for safety reasons, but failed to take action to effect a change.


source: Caselaw Access Project

author: JOHNSTONE, District Judge.

license: Public Domain

text:
    Goldie MOFFITT, etc., Plaintiff, v. Elbert AUSTIN, et al., Defendants.
    Civ. A. No. C 83-0326-P(J).
    United States District Court, W.D. Kentucky.
    Sept. 19, 1984.
    Nicholas J. Harding of Western Kentucky Legal Services, Owensboro, Ky., and Amy Kuilema of Louisville Legal Aid Society, Inc., Louisville, Ky., for plaintiff.
    Richard V. Beliles, Louisville, Ky., for defendants.
   MEMORANDUM OPINION

JOHNSTONE, District Judge.

Plaintiffs bring this action to enforce their rights under the Fourteenth Amendment pursuant to 42 U.S.C. § 1983, and under Titles XI-B and XIX of the Social Security Act and federal and state regulations adopted pursuant thereto. It is now before the court on plaintiffs’ motion for partial summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. By an order of this court entered May 24, 1984, this case stood submitted for partial summary judgment on July 2, 1984.

The defendants from the Kentucky Cabinet of Human Resources did not file a response. Defendant Paul Osborne from the Kentucky Peer Review Organization did file a response, but it substantially failed to answer most of the arguments presented by the plaintiffs.

Plaintiffs’ motion is concerned solely with the validity of certain standard notices and procedures used by defendants to determine whether medicaid recipients in intermediate care facilities are eligible to continue receiving medicaid benefits. Any ruling on appropriate relief for plaintiffs shall be reserved for later negotiation between the parties or for settlement by the court.

Jurisdiction over this suit exists under 28 U.S.C. §§ 1331 and 1334.

Plaintiffs were certified as a class pursuant to Rule 23 of the Federal Rules. They are patients at intermediate care facilities in Kentucky who receive or have received Kentucky Medical Assistance Program benefits, and who are subject to having their benefits terminated by defendants. Defendants are Elbert Austin, Secretary of the Kentucky Cabinet for Human Resources (CHR), James Gooding, Director of the Medical Assistance Division of the CHR, and Paul Osborne, Executive Director of Kentucky Peer Review Organization (KPRO). The court finds that at all times pertinent to this law suit defendants acted under color of state law. This finding is not contested.

CHR is responsible for administering the Kentucky Medical Assistance Program which is a part of the federal medicaid program created by Title XIX of the Social Security Act, 42 USC §§ 1396 et seq. Medicaid provides medical assistance benefits to qualified patients in intermediate care facilities (ICF). An ICF provides services to people who need less care than that offered by a hospital or skilled nursing home but who do require some health care. 42 U.S.C. § 1396.

CHR must distribute medicaid benefits pursuant to a plan approved by the Secretary of Health, Education and Welfare. As a part of its plan it must have a system of hearings available to applicants and recipients who are dissatisfied with any action taken or not taken by CHR. 904 KAR 2:055 sets forth the methods by which Kentucky fulfills this hearing requirement. These regulations were promulgated pursuant to KRS 205.231 which states that any applicant dissatisfied with an action concerning his public assistance may appeal to a hearing officer. On receipt of such an appeal, the recipient “shall be given reasonable notice and opportunity for a hearing.”

KPRO is a Professional Standards Review Organization. Such review organizations are required by federal statute. They review the services covered by medicaid and determine the necessity and appropriateness of the health care provided to medicaid recipients.. 42 U.S.C. § 1320c. CHR has a contract with KPRO for KPRO to conduct the state’s review of the health care needed by medicaid recipients in intermediate care facilities.

KPRO reviews the needs of patients receiving benefits periodically as provided in the contract and according to the requirements set forth in state law. See 904 KAR 2:055. If KPRO decides that the patient no longer requires the level of health care that he is receiving, it refers the case to a Physician Advisor who reviews the case and, if he agrees with the preliminary decision, sends an Adverse Determination Notice to the patient, the physician of record, the facility, and the CHR. If the patient is dissatisfied with the adverse determination, he is entitled to and may request a reconsideration of the determination by a committee composed of at least one physician. At the reconsideration proceeding the committee may consider the findings of the physician advisor, the complete patient record, any additional documentary information submitted by a party, and any oral presentations. The committee may admit any party to the proceedings at its discretion. If the Committee’s decision upholds the adverse determination, the patient is sent a Committee Notification form informing him of that fact and his right to appeal to CHR where he has the right to receive an evidentiary hearing. His benefits are reduced or suspended pending a decision on appeal. If the appeal is in his favor his benefits are reinstated. This would include any benefits he should have received while he awaited an appeal. See 904 KAR 2:055 and KPRO Procedures Section 230 in Appendix to Plaintiffs’ Motion for Summary Judgment.

Plaintiffs allege that the standard notice forms sent to intermediate care facility medicaid patients to inform them of an “Initial Determination” and of the committee’s reconsideration decision do not comply with due process requirements. They also claim that the reconsideration procedure itself is constitutionally inadequate because recipients of benefits are entitled to a hearing prior to suspension of benefits, and the reconsideration is not a hearing. This court agrees.

Adequate notice and a hearing are clearly required before any individual is finally deprived of a property interest. Mathews v. Eldridge, 424 U.S. 319, 332, 96 S.Ct. 893, 902, 47 L.Ed.2d 18 (1976).

The threshold issue here then is whether plaintiffs have a property interest in the continued receipt of medicaid benefits. This court finds that they do.

In Goldberg v. Kelly, 397 U.S. 254, 90 S.Ct. 1011, 25 L.Ed.2d 287 (1970), the Court held that termination of welfare payments without a pretermination hearing was a denial of procedural due process. The Court reasoned that, “termination of aid pending resolution of a controversy over eligibility may deprive an eligible recipient of the very means by which to live while he waits.” Id. at 267, 90 S.Ct. at 1020. Medicaid, like welfare, is based upon need. (Deposition of J. Gooding at 5). Moreover, the Supreme Court has indicated that direct financial medicaid benefits cannot be withdrawn without giving the patients notice and an opportunity for a hearing. See O’Bannon v. Town Court Nursing Center, 447 U.S. 773, 787, 100 S.Ct. 2467, 2476, 65 L.Ed.2d 506 (1980). Thus, it is apparent that the continued receipt of medicaid payments is a property interest protected by the Fifth Amendment.

Minimum due process required by the 5th Amendment was described in Goldberg. That decision held that due process principles “require that a recipient have timely and adequate notice detailing the reasons for a proposed termination, and an effective opportunity to defend by confronting any adverse witness by presenting his own arguments and evidence orally.” Goldberg, 397 U.S. at 267-68, 90 S.Ct. at 1020. These constitutional standards were explicitly incorporated in the federal regulations controlling state distribution of medicaid payments. 42 CFR 431.205(d).

At the time of any action which affects a medicaid recipient’s claim, the agency must notify him:

(1) Of his right to a hearing,
(2) Of the method by which he may obtain a hearing
(3) That he may represent himself or use legal counsel ... or other spokesman. 42 CFR 431.206.

Notice of the adverse action must contain:

(a) A statement of what action the agency intends to take;
(b) The reasons for the intended action;
(c) The specific regulations that support ... the action; and,
(d) An explanation of ... the individual’s right to request an evidentiary hearing if one is available, or a State agency hearing ____ 42 CFR 431.-210.

In light of the above described standards mandated by federal regulation and Goldberg v. Kelly, it is apparent that the notices procedures in this case do not comport with due process.

The Adverse Determination Notification consists of a form letter with blanks to be filled in by a Long Term Care Coordinator, an employee of KPRO. See KPRO Procedures Section 230 at 11. The coordinator is instructed to fill in the blank for “The reason for this determination is,” with “Your care needs no longer meet the criteria for intermediate care,” or “[ajccording to information in your medical record you no longer require the care provided in an intermediate care facility.” Id. at 230-6.

The Committee Notification form also contains no reference to the reasoning used by the committee or the regulations involved. The notices of two plaintiffs contained only the general statements: “It is my decision, after due consideration of the medical data, that the adverse [decision] should be upheld,” and “[f]urther stay at I.C.F. (intermediate care facility) not necessary [sic] P.C. (personal care) level is suggested to the family who objected to our decision.” None of the defendants have alleged that these notices are atypical.

Neither of the standard notices contain specific reasons for the determination, nor do they contain specific regulations that support the action, both of which are required by the regulations. See 42 CFR 431.210. Goldberg v. Kelly specifically holds that due process requires “adequate notice detailing the reasons for a proposed termination.” Goldberg, 397 U.S. at 267-68, 90 S.Ct. at 1020 (emphasis added).

The Sixth Circuit has ruled that there are four elements to adequate notice: a detailed statement of the intended action, the reason for the change in status, citation to the specific statutory section requiring reduction or termination, and specific notice of the recipient’s right to appeal. Garrett v. Puett, 707 F.2d 930, 931 (6th Cir.1983).

The notices at issue here are deficient under these Sixth Circuit standards. They are exceedingly general and sparse in their statement of intended action, and their reasons given for change are boiler-plate. The coordinators are instructed to give one generic reason for each type of change — termination of benefits, change in care required, etc. In addition, there is no citation to statutes or regulations.

The purpose of notice is to “clarify what the charges are in a manner adequate to apprise the individual of the basis for the government’s proposed action.” Wolff v. McDonnell, 418 U.S. 539, 564, 94 S.Ct. 2963, 2978, 41 L.Ed.2d 935 (1974). The court is compelled to agree with the plaintiffs that the notice provided them is inadequate to allow them to prepare a defense to KPRO’s decision that they no longer need care. Furthermore, the notices do not contain provisions specifically required by federal regulations and Goldberg v. Kelly. Therefore, this court holds that the standard notices used by the Kentucky Peer Review Organization to notify plaintiffs of Initial Adverse Determination and Committee Consideration are insufficient to satisfy due process.

Next the court turns to plaintiffs’ allegation that the Reconsideration proceeding does not comply with the due process standards enunciated in Goldberg v. Kelly and promulgated in the federal regulations.

In Goldberg, the Court held that welfare payments could not be discontinued without an evidentiary hearing. The hearing must be at a meaningful time and in a meaningful manner. Goldberg, 397 U.S. at 267, 90 S.Ct. at 1020. The Goldberg Court held that the recipient must be able to appear personally before the final decision-maker, to present evidence orally, and to confront and cross-examine adverse witnesses. Id. Moreover, he must be permitted to retain counsel if he so desires. This would generally protect the interests of the recipient. Id. at 270, 90 S.Ct. at 1022. Finally, the decisionmaker’s conclusion must rest solely on evidence adduced at the hearing. Id.

In addition to the requirements of Goldberg, state medicaid systems are required to have a hearing system to determine whether medicaid benefits should be denied, altered, or terminated. 42 CFR 431.25. The hearing system must meet the due process standards enunciated in Goldberg as well as any additional standards set forth in the Social Security Act or the regulations promulgated pursuant to that Act. 42 CFR 431.204(d).

The federal regulations provide that any patient who is dissatisfied with an action taken by the agency may request a hearing. 42 CFR 431.220. If a recipient requests a hearing, his services cannot be reduced or terminated by the agency until after the hearing. 42 CFR 431.230. Hearings must be at a reasonable time, date, and place, by one or more impartial officials or other individuals who have not been directly involved in the initial determination of the action. 42 CFR 431.240. The recipient must be given the right to examine his case file and all pertinent documents before and during the hearing, bring witnesses, establish facts, present an argument and question any evidence or testimony, “including the opportunity to confront and cross-examine adverse witnesses.” 42 CFR 432.242.

It is clear to this court that the reconsideration proceeding used by KPRO is not a hearing as that term is defined in Goldberg and the federal regulations.

Defendant Osborne conceded that the reconsideration is not a hearing. Deposition of P. Osborne at 94-95. See also Deposition of J. Rogers at 114. It is simply a discussion between the parties involved in the original decision. Osborne at 94. No rules of evidence are applied, Osborne at 94; Rogers at 114, and the testimony is not taken under oath. Rogers at 113. There is no record of the proceeding other than minutes kept by the secretary and the decisionmaker can consult evidence other than that adduced at trial in making his conclusions. Osborne at 94-95. Thus, the decision does not rest solely on the evidence adduced at the hearing as is required by due process. See Goldberg, 397 U.S. at 271, 90 S.Ct. at 1022. There is no subpoena procedure whereby plaintiffs can compel witnesses to appear. Rogers at 113-14. Moreover, parties may be admitted separately into the proceedings to make an oral presentation at the Committee’s discretion. See KPRO Procedures Section 230. Thus, there apparently is no right to confront and cross examine adverse witnesses,which is required by Goldberg and the federal regulations. Id. Finally, there is nothing in the record to indicate that patients are informed of their right to have counsel present or that patients are permitted the opportunity to review prior to and during trial the evidence that has been compiled against them. See KPRO Procedures and Depositions of Osborne and Rogers.

For these reasons this court cannot reconcile Kentucky’s practice of suspending medicaid recipients’ benefits pending an appeal of reconsideration whether or not the state reinstates those benefits after an evidentiary hearing on appeal.

It is clear to the court that the Fifth Amendment, Goldberg v. Kelly, and the federal regulations require a hearing before benefits are suspended. It is equally as clear that a reconsideration is not a hearing as it has been defined by statutory and case law. Therefore, we hold that under the Constitution and under the federal regulations the reconsideration procedure is an inadequate method of suspending medicaid benefits.

As was set out above, this order concerns only the validity of the notices and procedures involved in this ease. Any ruling on the relief appropriate to remedy the invalidity of these practices is reserved for later negotiation and settlement by the parties and, if necessary, the court.

An appropriate order shall accompany this memorandum opinion.


author: JOHN W. OLIVER, Senior District Judge.

text:
    Kay RAINSBARGER and Susan Stidham, Plaintiffs, v. COLUMBIA GLASS & WINDOW CO., Defendant. and Nancy BARNES, Plaintiff, v. COLUMBIA GLASS & WINDOW CO., Defendant.
    Nos. 83-0351-CV-W-1, 83-0708-CV-W-6-1.
    United States District Court, W.D. Missouri, W.D.
    Oct. 9, 1984.

      Thomas E. Thompson, Stoup & Thompson, Kansas City, Mo., Steven C. Effertz, Independence, Mo., for plaintiffs Rainsbarger and Stidham.
    Cathleen Connealy, Kansas City, Mo., for plaintiff Barnes.
    Stephen S. Brown, Terry L. Karnaze, Niewald Waldeck Norris & Brown, Stanford C. Madden, Kansas City, Mo., for defendant Columbia Glass.
   MEMORANDUM AND ORDERS

JOHN W. OLIVER, Senior District Judge.

I.

The individual claims of the three plaintiffs in the above entitled Title VII cases were settled some time ago. Plaintiff Barnes, in consideration of the payment of $8,000.00 executed a release on August 7, 1984. On September 4, 1984 counsel for plaintiffs Rainsbarger and Stidham and counsel for the defendant jointly filed a notice of settlement which reflected the agreement that the defendant would pay and plaintiffs Rainsbarger and Stidham would accept $4,000.00 and $3,000.00, respectively, in full settlement of their • claims.

The parties, however, did not settle the amount of attorneys’ fees and expenses that might be awarded the plaintiffs as costs pursuant to 42 U.S.C. § 2000e-5(k). The defendant’s insurers have agreed as of October 1, 1984 to pay the sum of $33,-900.00 for a complete release of all claims for attorneys’ fees, expenses and costs in both cases. Counsel for the three plaintiffs, although afforded ample opportunity to do so, have failed to agree on how the $33,900.00 should be divided. The Court is thus required to rule on the various pending motions, applications, and requests which have been made by the parties.

The Court must therefore rule (1) plaintiff Barnes’ application for a hearing with regard to assessment of plaintiff Barnes’ attorneys’ fees and expenses as costs; (2) a motion of the law firm of Stoup & Thompson entitled “Motion for Consolidation of Attorneys’ Fee and Request for Consolidation,” which prayed that the Court “make its determination of attorneys’ fees and costs to be awarded plaintiff’s counsel in the above-captioned case [referring to Rainsbarger and Stidham v. Columbia Glass & Window Co., 600 F.Supp. 299] and that said determination be consolidated with pending application for attorneys’ fees filed by Cathleen Connealy, counsel for plaintiff Nancy Barnes”; (3) an application of defendant for attorneys’ fees; and (4) the request of counsel for the defendant that it and its insurers be discharged from the responsibility of taking part in further conferences or hearings relating to the question of how defendant’s total settlement offer of $39,-900.00 should be divided between counsel for the respective plaintiffs in the two cases.

Although the law firm of Stoup & Thompson suggests that the division of the $39,900.00 should be arbitrated, no one has suggested that there is any necessity for any additional hearing. Indeed, counsel for all parties have consistently maintained that under the highly unusual manner in which the three plaintiffs’ cases were settled, that any disagreement in regard to the award of attorneys’ fees should and would be determined by this Court.

The only case in which somewhat similar factual circumstances were presented is Forrest v. New York City Crim. Justice Agency, 549 F.Supp. 211 (S.D.N.Y.1982). Although Forrest is distinguishable on its facts from the two cases before this Court in that it involved only one plaintiff and did not reflect any agreement of that plaintiff to accept a final settlement offered by the defendant, that case does establish the jurisdiction of the Court to act under the unique circumstances of this case. See also and compare Levin v. Parkhouse, 484 F.Supp. 1091 (E.D.Pa.1980).

II.

The record in the above cases shows that both plaintiff Barnes and the law firm of Stoup & Thompson and Mr. Effertz have amended their prior claims for attorneys’ fees. All are now agreed that the offer of $33,900.00 made by defendant’s insurer should be accepted. All have accordingly reduced their earlier fee claims to a precise amount of the $33,900.00 which each now contend should be awarded to them.

Ms. Connealy’s October 1, 1984 letter states: “we should receive $22,142.00.” Ms. Connealy’s statement must thus be considered as an amendment which reduced plaintiff Barnes’ original application for fees to a final claim of $22,142.00. Mr. Effertz’ October 1, 1984 letter to the Court clearly indicates that he would be satisfied if he received $858.00 of any fees that may be awarded counsel for plaintiffs Rainsbarger and Stidham. Thus, Mr. Effertz’ original claim for a direct award of attorneys’ fees must be considered as being amended to state a final claim for only $858.00 of the defendant’s $33,900.00 settlement offer.

The pending motion for consolidation filed by the law firm of Stoup & Thompson, which contained a prayer that the Court make a determination of the amount of attorneys’ fees and costs to be directly awarded to that law firm for services they rendered as plaintiffs’ counsel in the Rainsbarger and Stidham case, is a bit more complicated. For it is clear that the law firm of Stoup & Thompson has no standing whatsoever to file an application for a direct award of attorneys’ fees under section 2000e-5(k). That section provides “in any action or proceeding under this subchapter the court, in its discretion, may allow the prevailing party, ... a reasonable attorney’s fee as part of the costs ____” (Emphasis ours). A law firm representing a plaintiff or a defendant in a Title VII case simply cannot be viewed as a “prevailing party” in Title VII litigation and therefore has no standing to file an application for a direct award for attorneys’ fees.

The pending motion filed by the law firm of Stoup & Thompson will, however, be treated as an application filed by plaintiffs Rainsbarger and Stidham for an award of attorneys’ fees. Stoup & Thompson’s statement in its October 1, 1984 letter to the Court that the $33,900.00 offer by the defendant’s insurers “should be accepted in full and final settlement of attorneys’ fees and expenses” in both cases and claim stated in that letter that Stoup & Thompson is entitled to $13,208.75 of the $33,900.00 must also be considered as an amendment of their claim for attorneys’ fees made in their original motion. In short, the claim of the law firm of Stoup & Thompson that it is entitled to a direct attorneys’ fee award of $13,208.75 out of the defendant’s $33,900.00 settlement offer will be considered as an amended application of plaintiffs Rainsbarger and Stidham for an award of attorneys’ fees in that amount to that law firm.

Stoup & Thompson’s motion for consolidation will be denied for the reason that the application for a hearing made in connection with the Barnes’ case has been expressly withdrawn by plaintiff Barnes’ counsel and because Stoup & Thompson has not suggested that any further hearing is necessary under the circumstances. Indeed, Stoup & Thompson’s October 1, 1984 letter to the Court stated that:

It is our recommendation that the $33,-900.00 be accepted in full and complete settlement of the obligation of the defendant to pay attorneys’ fees and expenses and that the plaintiffs’ attorneys agree upon a neutral third party to arbitrate their differences. It is suggested that the parties attempt to agree upon a neutral third party attorney to decide how the attorneys’ fee is to be divided.

The record shows that the parties have not and will not agree to arbitrate their differences before a neutral third-party attorney. All of the letters presently before the Court show that it must decide how the $33,900.00 is to be divided.

III.

The application of defendant Columbia Glass & Window Co. for attorneys’ fees will be denied for obvious reasons. First, it cannot be said that the defendant is the “prevailing party” in either case within the meaning of section 2000e-5(k). Second, the record simply does not support defendant’s conclusory allegation that plaintiffs and their counsel exercised bad faith, unreasonable or vexatious conduct in the prosecution of their respective actions against the defendant.

We turn now to the manner in which the parties settled the plaintiffs’ cases and failed to settle the amount of attorneys’ fees that might have been awarded to the prevailing party in these actions.

IV.

On June 27, 1984, the Court was advised that the Barnes case had been settled when the defendant filed a motion to extend certain deadlines contained in this Court’s March 28,1984 order. That motion simply recited that “On June 21, 1984 an agreement in principle was reached between plaintiff Nancy Barnes Cardwell and defendant to settle her separate claim against this defendant.” The Court was not advised and did not then understand that the statement in defendant’s motion was anything other than a routine statement that the Barnes case had been completely settled in the same manner as any other Title VII case is settled and that stipulations for dismissal and other paperwork would be immediately forthcoming.

On August 22, 1984, however, plaintiff Barnes filed her application for a hearing with regard to assessment of plaintiff Barnes’ attorneys’ fees and expenses as costs. That application stated that:

COMES NOW Plaintiff Barnes, by counsel, and informs the Court that plaintiff Barnes’ claims herein have been settled, reserving plaintiffs attorneys’ fees and expenses for agreement, or for a decision by the Court if no agreement is reached. Negotiations failing, plaintiff requests the Court to hear the matter and determine Plaintiff Barnes’ counsel’s fees and expenses to be awarded, at a time in the near future agreeable to the Court and counsel. (Emphasis ours).

Because the Court had never heard of a Title VII case or any other case being “settled” in such a manner, the Court, on August 23, 1984, entered a memorandum which stated that:

Plaintiff’s counsel has filed an application for a hearing with regard to assessment of plaintiff Barnes’ Attorneys’ fees and expenses as costs. Without waiting for response from counsel for defendant, the Court directs counsels’ attention to the Supreme Court’s admonition: “A request for attorney’s fees should not result in a second major litigation.” Hensley v. Eckerhart, 461 U.S. 424, 437, 103 S.Ct. 1933, 1941, 76 L.Ed.2d 40, 51 U.S. L.W. 4552, 4555 (U.S. May 16, 1983). Although the Court has heretofore been advised that Case Number 83-0708-CV-W-6-1 had been settled, it was not advised that the “settlement” of Nancy Barnes’ case had failed to include an agreement on the amount of attorney’s fees and expenses to be awarded plaintiff’s counsel.
In order to attempt to make some progress in resolving the problem counsel have created for themselves, an order will be made, consistent with the admonition in Hensley.

Orders were therefore entered on August 23, 1984 which required the parties to attempt to resolve their differences in regard to the amount of attorneys’ fees to be paid Nancy Barnes’ counsel and, failing in that, to file a response to that order which required the parties to set forth their respective positions in regard to the attorneys’ fees question.

On September 7, 1984, a response to that order was filed. That response made clear that plaintiff Nancy Barnes, who had received only $8,000.00 in settlement, was claiming an allowance of attorneys’ fees and expenses for her counsel in the sum of $61,294.85, plus a claimed enhancement for contingency and delay. The August 7, 1984 release executed by plaintiff Barnes contained a statement to the effect that “This release does not effect any separate claim which the firm of Wells, Slough, Connealy and Irvin may have for attorneys’ fees and expenses under Title VII of the Civil Rights Act of 1964 as amended by the Equal Employment Opportunity Act in 1972.” It is thus apparent that the law firm that represented plaintiff Barnes, like the law firm that represented plaintiffs Rainsbarger and Stidham, was under the same erroneous impression that counsel for a Title VII plaintiff must be said to have some sort of independent claim for a direct award of attorneys’ fees under section 2000e-5(k).

On September 4, 1984, before the Court had an opportunity to take any action in regard to the manner in which the Barnes case had been “settled,” Mr. Effertz representing Rainsbarger and Stidham, and Mr. Brown representing the defendant, filed a “Notice to the Court of Settlement” which stated the following in its entirety:

Come now the plaintiffs, Kay Rainsbarger and Susan Stidham, by and through their attorney of record, Steven C. Effertz, and the defendant Columbia Glass & Window Co. by and through its attorney Stephen S. Brown and hereby advises the Court that the claims of plaintiffs Kay Rainsbarger and Susan Stidham have been compromised and settled by verbal confirmation of acceptance of settlement offers made in this case by defendant on August 28, 1984.
This notice is being given to advise the Court of this settlement, and once the appropriate documents have been drafted and executed by the parties, a stipulation of dismissal will be filed. In the meantime, counsel for plaintiff and defendant respectfully request this Court remove this matter from the pretrial conference docket in September and trial docket the first week of October, 1984.

On the next day the law firm of Stoup & Thompson filed its motion for the consolidation and original claim for a direct award of attorneys’ fees with expenses. Although the notice of settlement filed with the Court did not state that the question of attorneys’ fees had been excluded from the settlement of the Rainsbarger and Stidham case, the suggestions in support of the motion for consolidation reflected that Mr. Effertz had been “handling” that case since May 16, 1984 and that he claimed a fee of $3,660.00 for the time he expended on the case from May 26, 1984 through August 29, 1984, the date on which the case was “settled.” An affidavit attached to the motion showed that Stoup & Thompson claimed that it should be awarded a direct fee of $24,453.00 for the time it represented plaintiffs Rainsbarger and Stidham.

V.

The record shows that the Court has had two lengthy conferences with counsel in connection with the attorneys’ fee question that was presented by the manner in which the parties elected to settle the two above entitled Title VII cases. Discussion at the conferences established that the separation of the settlement of the plaintiffs’ respective claims from the settlement of the amount of attorneys’ fees that might be awarded those plaintiffs under section 2000e-5(k) was occasioned by the total and unquestioned acceptance on the part of counsel for all parties of the notion expressed in what was an apparently unpublished article authored by one Mark W. Bennett, a person who was unknown to counsel for any of the parties.

That article, a copy of which was forwarded to defendant’s counsel by plaintiff Barnes’ counsel in a letter dated April 2, 1984, was entitled “Settlement of Cases in Which Statutory Attorneys’ Fees are Authorized: An Ethical Dilemma.” That article, the existence of which the Court did not learn about until defendant’s September 12, 1984 brief was filed, suggested that a “reasonable” solution to the alleged ethical dilemma would be “for trial courts to insist upon settlement of the damage aspect of the case separate from the award of statutorily authorized attorneys’ fees.”

Counsels’ attention was directed at the first conference with the Court to the fact that the notion that counsel for Title VII plaintiffs could not ethically settle both a plaintiff’s Title VII claim and that plaintiff’s claim in regard to the amount of attorneys’ fees that might be awarded to the Title VII plaintiff under section 2000e-5(k) had been expressly rejected by the Supreme Court in White v. New Hampshire Dept. of Emp’l. Sec., 455 U.S. 445, 453, n. 15, 102 S.Ct. 1162, 1167, n. 15, 71 L.Ed.2d 325 (1982). Section 2000e-5(k) simply does not create any right in counsel for either the plaintiff or the defendant in a Title VII case to make a claim for a direct award of attorneys' fees. A Title VII plaintiff’s claim for an award of attorneys’ fees and expenses is as subject to compromise and settlement as any other portion of a Title VII plaintiff’s total claim under the statute.

Counsels’ attention was also directed to the fact that the notion expressed in various briefs filed by plaintiffs’ counsel that attorneys’ fees were to be automatically awarded for all hours expended on a particular case, regardless of the result obtained, had also been expressly rejected by the Supreme Court in Hensley v. Eckerhart, 461 U.S. 424, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983). Specific attention was directed to the Supreme Court’s conclusion stated in that ease that “the extent of a plaintiff’s success is a crucial factor in determining the proper amount of award of attorneys’ fees” and its statement that the “degree of success obtained [is] the most critical factor to be evaluated.”

In addition, counsels’ attention was directed to the obvious implications of the recent Eighth Circuit decisions in Jaquette v. Black Hawk County, Iowa, 710 F.2d 455 (8th Cir.1983), and Young v. Powell, 729 F.2d 563 (8th Cir.1984). Judge Hunter’s decision in Taylor v. Franklin Drapery Co., Inc., 443 F.Supp. 795. (W.D.Mo.1978), was discussed as reflecting Western District of Missouri practice. Counsel were also advised that the settlements that they had announced on behalf of their respective clients would be enforced in accordance with the applicable law as stated in Fulgence v. J. Ray McDermott & Co., 662 F.2d 1207 (5th Cir.1981), a case which this Court has heretofore cited with approval in its unreported memorandum opinion in Lupercio v. Burlington Northern Railroad Company, No. 81-0716-CV-W-1 (October 1, 1982).

And finally, counsels’ attention was again directed to the Supreme Court’s admonition in Hensley v. Eckerhart, supra, that “a request for attorneys’ fees should not result in a second major litigation” and that “ideally, of course, litigants will settle the amount of a fee.” Counsel were requested to re-open their negotiations consistent with the admonition of the Supreme Court just quoted at the last conference held on September 26, 1984.

The letters from counsel for various parties under date of October 1, 1984 are helpful to the extent that they reflect the agreement of all counsel that all claims of all plaintiffs for attorneys’ fees, expenses and costs in both cases should be settled for $33,900.00. While counsel for the respective plaintiffs have substantially amended and reduced their respective claims for attorneys’ fees and expenses, it is clear that plaintiffs’ counsel are still adamant in attempting to maintain their respective positions in regard to how the defendant’s increased offer of $33,900.00 should be divided.

VI.

It is not necessary that the Court make any findings in regard to what attorneys’ fees might have been properly awarded plaintiffs’ counsel had the plaintiffs prevailed at trial to the same extent that each plaintiff was willing to accept in settlement of their respective Title VII claims. For the defendant, by making its $33,900.00 offer, has conceded that defendant’s insurers will pay plaintiffs’ attorneys’ fees and expenses in that total amount in order to obtain final dismissal with prejudice of both cases. In like manner, all counsel for all three plaintiffs have stated their agreement that the defendant’s $33,900.00 offer should be accepted and that the large amounts which counsel for each plaintiff originally claimed should be awarded have all been substantially reduced to specific claims of only a portion of the total $33,-900.00.

It is thus clear the question to be decided is how the $33,900.00 should be divided. The determination of that question is not difficult.

We are satisfied from all the circumstances that the obviously better settlement obtained for plaintiff Barnes sustains the position of her counsel that attorneys’ fees and expenses should be awarded her counsel in the amount of counsel’s reduced claim of $22,142.00. By the same token, we are further satisfied that the results obtained in the Rainsbarger and Stidham case do not justify that law firm’s amended claim of attorneys’ fees for the firm of Stoup & Thompson in the amount of $13,-208.75. Mr. Effertz’ candid statement in the last paragraph of his October 1, 1984 letter to the Court is in accordance with this Court’s observation of how counsel divided the labor performed in the preparation of both the cases for trial.

Mr. Effertz appropriately stated that “Although I refuse to take sides on this issue, I will agree with Cathleen Connealy’s statement and position that she took the lead counsel role in this case.” Careful examination of all the time records and other data before the Court supports Mr. Effertz’ statement and also supports a finding that the Stoup & Thompson firm devoted far more time to unproductive and unnecessary effort than did Cathleen Connealy’s law firm.

Mr. Effertz reduced his original claim to the sum of $858.00. We are satisfied that he is entitled to that amount and whatever other amount that may be paid him by the firm of Stoup & Thompson for the services he rendered plaintiffs Rainsbarger and Stidham during the period of time he was associated with the Stoup & Thompson law firm.

Approval of the reasonableness of the reduced amended claim of plaintiff Barnes’ counsel and approval of $858.00 to Mr. Effertz results in the allocation of the remaining $10,900.00 of the $33,900.00 settlement to the firm of Stoup & Thompson in accordance with their reduced amended claim for $13,208.75. We recognize that a commitment was made to plaintiffs Rainsbarger and Stidham by their counsel that each plaintiff would “receive an additional $2,000.00 from myself and the firm of Stoup & Thompson out of attorneys’ fees in this case, if both myself and Stoup & Thompson receive at least 50% of the fees requested.”

It is obvious that Mr. Effertz and Stoup & Thompson will, in fact, receive more than 50% of their amended claims for attorneys’ fees. Plaintiffs Rainsbarger and Stidham are each accordingly entitled to the additional $2,000.00 promised them by their attorneys.

Should it become necessary to enforce the settlement announced by the notice of settlements of the Rainsbarger and Stidham case, it is to be understood that plaintiff Rainsbarger is entitled to $4,000.00 to be paid by the defendant and plaintiff Stidham is entitled to $3,000.00 to be paid by the defendant and each plaintiff is entitled to an additional $2,000.00 to be paid out of the attorneys’ fees awarded their counsel.

VII.

For the reasons stated, it is

ORDERED (1) that plaintiff Barnes’ application for a hearing with regard to assessment of plaintiff Barnes’ attorneys’ fees and expenses as costs, should be and the same is hereby denied as moot. It is further

ORDERED (2) Stoup & Thompson’s motion for consolidation of attorneys’ fee and request for consolidation, should be and the same is hereby denied. It is further

ORDERED (3) that defendant’s application for attorneys’ fees, should be and the same is hereby denied. It is further

ORDERED (4) that the $33,900.00 settlement offered by defendant’s insurers and accepted by plaintiffs shall be divided as follows: $22,142.00 for counsel for plaintiff Barnes; $10,900.00 to counsel for plaintiffs Rainsbarger and Stidham; $858.00 for Mr. Effertz for the services he has separately rendered plaintiffs Rainsbarger and Stidham. It is further

ORDERED (5) that within ten (10) days of the date of this order, the parties shall complete the final settlement of both of the above cases in accordance with the division of the $33,900.00 as above ordered and in accordance with what has been stated above in regard to plaintiffs Rainsbarger and Stidham’s right to receive an additional $2,000.00 each from the attorneys’ fees awarded them for their counsel; and, within the same period of time, to make all appropriate filings necessary for the dismissal of both of the above cases with prejudice.