A recent appellate decision out of Louisiana provides important clarity—and welcome reassurance—for workers’ compensation insurers and employers seeking to pursue and recover benefits from third-party tortfeasors independently. In Madden Gulf Coast LLC v. Hilark Industries, Inc., 2023 WL 8420961 (La. App. 2023), the court confirmed that an employer or its insurer can independently pursue a subrogation claim against a negligent third party, even when the injured employee chooses not to file suit.
Statutory Foundation: La. R.S. § 23:1101(B)
At the heart of the Madden decision is Louisiana Revised Statute § 23:1101(B), which provides that when an employee is injured due to the fault of a third party, both the employee and the employer (or its compensation insurer) “may bring suit against such third person.” The employer’s claim is limited to the amount of compensation benefits paid; however, this statutory right of action is not dependent on the employee’s participation.
Case Overview and Court’s Holding
In Madden, the employer’s insurer filed suit directly against Hilark Industries, alleging its negligence caused the employee’s injuries. The defendant argued that the employer lacked standing to proceed without the employee’s involvement. The First Circuit Court of Appeal rejected this argument, holding that the employer’s subrogation right exists independently and may be exercised without the employee. This decision aligns with longstanding Louisiana jurisprudence, which recognizes that “[t]he employer’s claim is for reimbursement of compensation and medical expenses paid and is not derivative of the employee’s tort claim” (see La. R.S. 23:1101; [MWL Louisiana Subrogation Chapter]).
The implications are significant. Often, injured employees are hesitant to pursue third-party litigation due to personal reasons, lack of interest, or ongoing treatment. Madden allows insurers and employers to protect their reimbursement rights without delay or uncertainty. As explained in our Louisiana subrogation treatise, courts have historically allowed these independent actions to proceed, even permitting employers to intervene in employee-filed suits.
Ultimately, Madden underscores the practical and legal tools available to carriers navigating Louisiana’s unique civil law system. By affirming that a workers’ compensation lienholder need not wait for an employee’s lead, it reinforces the principle that recovery rights don’t stand still—they stand alone.
If you are a carrier with Louisiana exposures and questions about how to preserve or assert your subrogation rights, contact Jim Busenlener at jbusenlener@mwl-law.com for guidance tailored to your jurisdiction.
