Are you a company that utilizes independent contractors in your operations? The South Carolina
Supreme Court now says you may be held liable in the negligent selection of your independent
contractor.
On June 21, 2023, the South Carolina Supreme Court settled the question of whether a principal in an
independent contractor relationship may be subject to liability for physical harm proximately caused by
the principal’s own negligence in selecting the independent contractor. The Court answered in the
affirmative.
The Question came from the Fourth Circuit on these facts: A principal hired an independent contractor
to transport certain product; a driver for the independent contractor hit a vehicle driven by the plaintiff
and injured the plaintiff. Plaintiff filed suit against the principal and its parent company. The case was
removed, and the Federal District Court for the district of South Carolina granted principal and parent
company’s motion to dismiss, finding plaintiff did not allege an employer-employee relationship
between principal and independent contractor or its driver, nor did plaintiff otherwise allege any basis
on which principal could be liable for the negligence of its independent contractor. However, the court
delayed entry of the judgment to allow plaintiff to seek leave to amend the complaint. Plaintiff then
filed a motion to amend the complaint, adding a claim that principal itself was negligent in selecting the
independent contractor. The district court denied the motion to amend and plaintiff appealed to the
United States Court of Appeals for the Fourth Circuit, which subsequently certified the question for the
South Carolina Supreme Court.
The Court began its analysis by affirming the “general rule” articulated in the Court’s prior jurisprudence that a principal “is not vicariously liable for the negligent acts of an independent contractor.” On this specific question, however, the Court clarified one point: where the principal and independent contractor are named, the plaintiff contends the independent contractor has committed a negligent act, and thus, will also be a defendant. Like in many cases where the principal and independent contractor are both named, there are separate claims as to each. “In most cases in which the plaintiff sues the contractor and the principal … the plaintiff’s theory is the contractor’s negligence was one proximate case of the injury, but also, the principal’s negligent failure to select a competent and careful contractor was another proximate cause of the injury.” In answering the question in the affirmative, the Court presented a history of South Carolina Court’s analysis on this question, while recognizing the question has not been squarely before the Court. The Court also noted that “every other state in the Fourth Circuit has … recognized a duty to hire a competent independent contractor.” Indeed, “thirty-seven states have [held a principal] owes a duty [of reasonable care] in selection of an independent contractor.” The Court went on to emphasize this point: “As our own research reveals, no state has held that a principal is insulated from the consequences of its own negligence simply because its contractor was also negligent in causing the injury.”
The briefs of the principal, as well as the South Carolina Chamber of Commerce and The South Carolina
Trucking Association, Inc., argued that answering the question “yes” would create unlimited liability
upon any shipping or transports good, and open the floodgates and expand the scope of liability to any
principal who does not turn over every stone. However, the Court rejected these positions, finding that
plaintiffs still have the burden to prove the principal did not exercise reasonable care, which will depend
on the degree to which the work involves a risk of physical harm, and that the actions or inactions of the principal was the proximate cause of the physical harm. The Court maintains that these guiding
principles will avoid unwarranted liability for principals who act reasonably in hiring independent
contractors.
Lucinda Ruh v. Metal Recycling Services, LLC, Op. No. 28163 (S.C. June 21, 2023).
