## Facts

- James Earl Byrd, a lineman employed by contractor R. H. Bouligny, Inc., was injured while connecting power lines to a new substation when he contacted a live wire.
- Blue Ridge Rural Electric Cooperative, Inc., a South Carolina corporation, had hired Bouligny to build and reconvert electrical lines and construct substations and related facilities.
- Byrd received workers’ compensation benefits from his direct employer.
- Byrd then sued Blue Ridge in federal court for negligence under diversity jurisdiction (North Carolina plaintiff; South Carolina defendant).
- Blue Ridge raised an affirmative defense under the South Carolina Workmen’s Compensation Act, arguing Byrd was its “statutory employee” because the work was part of Blue Ridge’s trade, business, or occupation, making workers’ compensation the exclusive remedy.

## Issues

1. Whether the court of appeals erred by directing judgment for Blue Ridge without remanding to allow Byrd an opportunity to present evidence opposing the statutory-employee defense.
2. In a diversity case, whether federal court must follow state practice treating statutory-employee status as a question for the judge, or instead submit disputed factual questions underlying the defense to a jury consistent with federal practice and the Seventh Amendment.

## Decision

- The Supreme Court reversed the court of appeals and remanded.
- The Court held it was error to direct judgment for Blue Ridge without giving Byrd a fair opportunity to introduce evidence on the statutory-employee issue, given that the defense had been struck at trial after only the defendant’s proof.
- The Court held that, notwithstanding state practice assigning the statutory-employee determination to the judge, Byrd was entitled in federal court to have the factual issues raised by the defense tried to a jury.
- The Court concluded the state judge-allocation rule was not so connected to the state-created compensation right that it must control in federal court, and any potential outcome effect did not override the federal interest in preserving the federal judge–jury allocation.

## Legal Principles

- In diversity cases, state substantive law governs, but federal courts generally apply federal procedural practice, including the federal allocation of factfinding between judge and jury.
- A state rule assigning a particular issue to the judge is not controlling in federal court if it is not sufficiently tied to the definition or scope of the state-created right.
- The possibility that following federal practice could affect outcomes does not automatically require use of state practice; federal courts may apply federal practice where there is a strong federal interest.
- Preservation of the federal jury’s role in resolving disputed facts, reflected in the Seventh Amendment and federal judicial structure, is a substantial federal interest that can outweigh a comparatively weak state interest in judge-only resolution of a particular defense.
- An appellate court should not foreclose development of the record by directing judgment on an affirmative defense when the opposing party lacked a fair opportunity to present rebuttal evidence at trial.

## Conclusion

The Court held that the court of appeals improperly directed judgment for the defendant without permitting further evidentiary development and that, in federal diversity litigation, disputed facts underlying a state workers’ compensation immunity defense may be submitted to a jury despite state practice allocating the issue to the judge.


Byrd v. Blue Ridge Rural Elec. Coop., Inc., 356 U.S. 525 (1958)