A federal bankruptcy judge has ruled workers employed by members of the now-defunct Louisiana Oilfield Contractors Association (LOCA) self-insurance fund can pursue their employers for their comp claims. However, the pending proceedings of the fund’s Chapter 11 bankruptcy will prevent them from seeking redress from other members of the fund. The judge also lifted an order that had stayed all claims against LOCA member employers while the bankruptcy went forward. The judge explained as follows:
“Movants [injured workers] possess workers’ compensation claims against the LOCA member companies that employed them at the time of their injury. Movants seek to expand that liability to other LOCA members solely by virtue of their membership in the fund. This argument essentially eliminates the employment relationship as an essential element of a workers’ compensation claim.”
The ruling goes on to say that the agreement of in solido liability signed when a member accepts coverage through the fund does not create an independent cause of action because said liability exists with respect to the “liabilities of the fund” as a whole, for for individual claims.