Decision: Double M Construction v. Kansas Corporation Commission

February 6th. The Kansas Supreme Court has issued its decision in Double M Construction v. Kansas Corporation Commission (No. 100,312). In a unanimous opinion, written by Justice Rosen, the Court upheld the Commission’s imposition of a $25,000 fine upon Double M for failing to follow the law that governs excavations near underground gas lines. Note: this case was argued while Chief Justice McFarland was still a member of the court. She was recused from the case and her place taken by Judge Melissa Standridge of the Court of Appeals.

A company called Double J Pipeline subcontracted some Labette County excavation work to Double M Construction, an Oklahoma-based firm. Under the contract between the two companies  Double M was not to be responsible for any damage to underground utilities. Double J called the Kansas One Call system to notify of intent to excavate and arrange for underground lines to be marked, as required under the Kansas Underground Utility Damage Prevention Act (KUUDPA). Due to an error, the wrong area was marked by Kansas One Call. Double J called again and Kansas One Call arranged to mark the correct area. Before Kansas One Call had done so Double J directed Double M to begin digging the unchecked area. Double M struck a gas line and a worker was killed. The Kansas Corporation Commission assessed a $25,000 penalty upon Double M for failing to follow the KUUDPA, on the grounds that it states that the excavator must notify Kansas One Call of its intent to excavate.

On appeal to the District Court (where the Commission’s verdict was affirmed) and the Kansas Supreme Court, Double M claims that it was not liable for the failure to notify Kansas One Call, and the events that followed because that was Double J’s responsibility under its contract. It also argued that even if the statute applied to it, that this interfered with its right to contract which is protected under the Due Process clause of the Fourteenth Amendment. Double M also argued that the law was inequitable since as an Oklahoma company it was unaware of it, and argued that at common law liability rests with the main contractor and not the subcontractor(s).

The Court rejected all these arguments. It notes that its ruling is driven by the plain language of the KUUDPA which (apart from an exception for private home owners on their own property) requires that any excavator notify Kansas One Call. Since Double M was an excavator under the meaning of the act, it and no one else, was required to make the phone call. Since it did not do that it is liable. Double M’s argument about common law liability is rejected since the legislature can override common law by statute, and therefore that is inapplicable. Double M’s argument about the law being inequitable is rejected since all persons are presumed to know the law: ignorance is not a defense. Finally, Double M’s Constitutional argument (which seems to have been based on Lochner-era concepts) is rejected: the legislature has the right to pass laws which govern what contracts may legally be signed. If that were not enough, it notes that the contract was entered into after the passage of the act. Freedom of Contract does not extend to being able to enter into a contract that rewrites the law.

Justice Rosen has fun with all this with the following quip:

“Double M would have this court find that a corporation that specializes in excavation, enters into a contract to excavate, and then carries out an excavation is not really an excavator under the statute. It proposes that a creature that looks like a duck, walks like a duck, and quacks like a duck is not a duck if it contracts with a goose to assume the duties and liabilities of a duck.”

Having rejected all of Double M’s argumencts, the Court affirms the Corporation Commission’s ruling, noting that because Double M did not follow the plain, unambiguous wording of the law and do the Kansas One Call notifications itself an accident resulting in property damage and death occurred: precisely what the law was enacted to prevent.

Tags: Decisions_2-6-2009, Rosen opinion