ISSUE: Office of Administrative Law Judges (OALJ), Part Two

Jack_crop 300dpiThe Decision

Once the hearing is terminated and the record is closed the ALJ writes his decision. The decision contains findings of fact, and conclusions of law, and it contains the Compensation Order of the ALJ.

NOTE: The U.S. Supreme Court invalidated the so-called “true doubt rule” in 1994, i.e., the unwritten doctrine that held that where the evidence is equal on both sides of any issue then all doubts must be resolved in the claimant’s favor. The Supreme Court held that under the APA there is no such doctrine. Under Section 556(d) of the APA, the claimant bears the ultimate burden of proof, for example, on the issue of nature and extent of disability. To prevail on any issue, other than the issue of rebutting the section 20 statutory presumptions by substantial evidence, the party bearing the burden of proof on an issue must win its case by presenting a preponderance of the evidence. (Based on this allocation of the burden of proof, if the evidence is in fact exactly equal as to nature and extent of disability, then the claimant would have failed to establish entitlement.)

The ALJ sends the Decision to the District Director, who “files” it and “issues” it, and who mails a copy to each party by the close of business the next day. The ALJ’s Compensation Order is effective when “filed”. Section 919(e) states, “The order rejecting the claim or making the award (called a compensation order) shall be filed in the office of the deputy commissioner (in this context this means district director), and a copy thereof shall be sent by registered mail or by certified mail to the claimant and to the employer at the last known address of each.”

The act of “filing” makes the compensation order “effective”, and the ambiguous term “filing” is not defined. The consensus is that “filing” occurs once the initial acts of the district director have occurred, i.e., the district director receives the Compensation Order, dates it, and files it in his office, all in the most generic sense. Filing does not include the next step of mailing the Order to the parties (as usual in the Ninth Circuit the approach may be different. There, the act of “filing” may include mailing the Order to the parties). In most instances, the Order has been filed, it is effective, compensation is due, but at that point, it has not yet been mailed to the parties.

Any party may request reconsideration of the compensation order from the ALJ within 10 days of the effective date, or a party may file an appeal with the Benefits Review Board (BRB) within 30 days by filing a notice of appeal with the office of the Clerk of the Board. A timely request for reconsideration will keep the 30 day appeal time from running until the reconsideration request is dealt with by the ALJ.

NOTE: Section 914(f) provides, “If any compensation, payable under the terms of an award, is not paid within 10 days after it becomes due, there shall be added to such unpaid compensation an amount equal to 20 per centum thereof ….” The compensation is due when the compensation order is filed in the office of the district director. As we’ve seen, the Compensation Order is filed, thus effective, with the 10 day clock running, before it is mailed to the parties. Neither the request to the ALJ for Reconsideration of his Order nor the filing of a notice of appeal to the BRB will interrupt the 10 day time limit. Only an Order of the BRB granting a stay based on a showing of prejudice based on “irreparable harm” to the employer will interrupt the time limit. The term “irreparable harm” is generally interpreted to mean severe financial hardship of the brink of bankruptcy variety. The Board rarely grants even a temporary stay.

The mailing to the parties by the district director is accompanied by “proof of service”. This is the certification of the district director that the Order was mailed on the date stated and to each of the parties listed.

NOTE: Section 919(c) states that the deputy commissioner (in this context the ALJ), “shall within twenty days after such hearing is had, by order, reject the claim or make an award in respect of the claim.” Although this is an unconditional statement in the statute, it is not to be taken literally. The “20 day rule” doesn’t mean what it says. An aggrieved party must show that it was prejudiced by any delay beyond 20 days. Since the “20 day rule” apparently can not realistically be met, good luck showing prejudice. At any rate, by the time that you are (very unlikely) successful at getting a remand from the BRB because of failure by the ALJ to meet the 20 day requirement, significant additional time has elapsed. It’s best to ignore the 20 day rule.

Section 8 of the APA (5 U.S.C. section 557) states that ALJ decisions must include “a statement of findings and conclusions, and the reasons or basis therefor, on all material issues of fact, law, or discretion presented in the record.”

The ALJ has to detail the rationale behind his decision, and must specify which evidence was relied on and why. The ALJ must make specific, unambiguous findings on every issue.

The Compensation Order must resolve all questions of fact and conclusions of law, and the hearing record (the Compensation Order, the transcript of the hearing, and all exhibits and submissions of the parties) constitutes the entire record in the case. It is on the basis of this record that an aggrieved party may appeal the decision to the Benefits Review Board. It must be clear for appellate review how and why the ALJ made his decision.

In the course of discussing the evidence, weighing the evidence, and providing reasons for his findings, ALJ decisions can become quite lengthy as the ALJ seeks to avoid remand by the Board. ALJs frequently discuss each and every relevant piece of the typically voluminous medical record in cases where nature and extent of disability is at issue.

So, the ALJ has issued his Compensation Order, and it is filed and served by the district director. We have now arrived at the DOL’s third tier for the adjudication of Longshore claims.

This brings us to Part Three for next time, The Appeal.

ISSUE: Office of Administrative Law Judges (OALJ), Part One

Jack_crop 72dpiThe U.S. Department of Labor (DOL), through the Division of Longshore and Harbor Workers’ Compensation (DLHWC), in the Office of Workers’ Compensation Programs (OWCP), administers the Longshore and Harbor Workers’ Compensation Act and extensions, the Defense Base Act, the Outer Continental Shelf Lands Act, and the Nonappropriated Fund Instrumentalities Act.

The Longshore Act provides for a three step process for the adjudication of claims.

Step One – Informal mediation at DLHWC district offices,

Step Two – Formal hearings at the OALJ,

Step Three – Appellate review at the Benefits Review Board (BRB)

DLHWC maintains district offices where District Directors (DD) and their staffs provide informal dispute resolution services and medical management. District offices are located in Boston, New York, Baltimore, Norfolk, Jacksonville, New Orleans, Houston, San Francisco, Long Beach, Seattle and Honolulu. Claims examiners may hold Informal Conferences, issue recommendations, and generally try to avoid delays and resolve claim disputes in an expeditious manner.

What happens when a party disagrees with a district office’s recommendation, or the parties are otherwise unable to resolve one or more issues at the informal district office level? Upon the request of any party the DD transfers the file to the OALJ. Information transferred includes Forms LS-18 (Pre-Hearing Statement) filed by each party, along with all evidence that the parties intend to submit for the record at the formal hearing; the information transferred does not include any memoranda or recommendations prepared in the district office. The DD’s instructions to the parties states, “All documents and other exhibits to be submitted at the formal hearing must be furnished by the party who intends to submit them. All exhibits must be listed and identified on the LS-18”.

At this point, you’re at Step Two in the process of adjudication. Once a case is transferred, the District Director no longer has control over the file. There is no simultaneous jurisdiction on any issue.

The OALJ is a function of the DOL in which the Administrative Law Judges operate independently. The Agency hires ALJs from lists provided by the Office of Personnel Management (OPM). OPM holds periodic competitive examinations and maintains lists of eligible candidates for agencies seeking to hire ALJs.

When the case referral arrives at the OALJ a docket number is assigned, and the case goes to an OALJ regional office. When a docket is full for a particular location, hearings will be held.

OALJ Regional Offices are located in Boston MA, Cherry Hill NJ, Cincinnati OH, Covington LA, Newport News VA, Pittsburgh PA, and San Francisco CA. The OALJ National Office is in Washington DC.

The pre-hearing stage is used by the parties for discovery procedures, such as, obtaining documents from opposing parties, by subpoena if necessary, and for conducting interrogatories and depositions.

At the pre-hearing stage, the assignment of a Settlement Judge may be requested. The Settlement Judge is a fully qualified ALJ acting as a mediator using alternative dispute resolution techniques. The process is “off the record”, and the purpose is to settle the case and avoid a formal hearing. It is based on the voluntary participation of all the parties, and the settlement process can be terminated at any time by any party. There is no fee for this mediation service.

If the efforts of the Settlement Judge are unsuccessful the case goes forward for formal hearing.

Formal hearings at the OALJ are conducted in accordance with the Administrative Procedures Act (APA) provisions at 5 U.S.C. section 554. This is the result of the transfer of hearing functions from Deputy Commissioners to the OALJ as part of the 1972 Amendments to the Longshore Act.

NOTE: Section 19(d) (33 U.S.C. 919(d)) of the Longshore Act was amended in 1972 to provide that, “All powers, duties, and responsibilities … in the deputy commissioners with respect to such hearings shall be vested in such administrative law judges.”

The 1972 Amendments did not change references to deputy commissioners elsewhere in the statute. You can read the title “District Director” as generally interchangeable with the holdover title “Deputy Commissioner”, except where deputy commissioner means ALJ. At this point, case law and the 1984 Amendments have sorted out the separate authority previously belonging to the successors to the pre-72 title “deputy commissioner”. For example, the 1984 Amendments resolved an ambiguity and expressly provide that both ALJs and District Directors can approve lump sum settlements under section 8(i).

The Longshore Act in sections 19, 23, 24, and 27, as well as the implementing regulations at 20 C.F.R. 702.331 – 702.351 pertains to formal hearings. The OALJ Rules of Practice and Procedure applies in situations not specifically addressed in the Act and regulations, while the Federal Rules of Civil Procedure (FRCP) is a final resource for situations not covered by any other provision.

The formal hearing itself is basically a trial. Witnesses testify and are cross examined, written and oral evidence is proposed and if accepted by the ALJ marked with an exhibit number and made a part of the record, a complete transcript of the entire proceeding is made, and the ALJ has the authority to enforce attendance, compel testimony, preserve order, administer oaths, and issue subpoenas.

There are, however, significant differences between adjudication through an administrative hearing conducted by an ALJ under the Administrative Procedures Act and trials conducted by judges in the courts of the Judiciary Branch.

Section 23(a) of the Longshore Act provides that an ALJ, “shall not be bound by common law or statutory rules of evidence or by technical or formal rules of procedure.” The ALJ has very wide latitude and discretion in conducting the hearing and ruling on the admissibility of evidence.

An ALJ can resolve any issue pertinent to the Longshore claim that arises at the hearing, including new issues, by, for example, adding new parties or by holding the record open at the close of the hearing for the admission of additional evidence. Hearsay evidence is generally admissible if the ALJ considers it to be relevant and probative. In fact, the ALJ’s decision may be based entirely on hearsay or circumstantial evidence.

Any ruling by the ALJ with regard to the admissibility or exclusion of evidence is reversible on appeal only if arbitrary, capricious, or an abuse of discretion.

Miscellaneous provisions pertaining to formal hearings:

Hearings are open to the public, and the ALJ decisions are published.

No person shall be required to attend any proceeding as a witness outside his state or more than 100 miles from his residence unless he is paid mileage and a fee.

Witness fees are the same as in federal district courts.

A claimant is not required to travel more than 75 miles for a hearing.

A representative of the Solicitor of Labor (SOL) may appear at any formal hearing, representing the Director, Office of Workers’ Compensation Programs.

The purpose of the hearing is to satisfy the requirement of the APA that the parties have the opportunity for submission and consideration of all of the facts, an opportunity to make their argument, to attend a hearing, and to receive a written decision that includes a statement of findings and conclusions, and the reasons and basis therefor on all material issues of fact, law, or discretion in the record.

Next – Part Two – The Decision

ISSUE: Exemption for Small Vessel Facilities

Jack_crop 72dpiBased on telephone calls and e-mails that I’ve received, there has been renewed interest in a topic I discussed back in November 2013. This involves section 3(d) of the Longshore Act (33 U.S.C. 903(d)).

There is a provision in the Longshore Act that allows certain small vessel facilities to be certified by the U.S. Department of Labor as exempt from Longshore Act workers’ compensation coverage. Please read the AEU Longshore blog dated November 21, 2013 for a full discussion.

I would like to stress that this provision has been around since the 1984 amendments, and there are good reasons why certification has been sparingly requested and granted. Brokers and employers should understand the qualifications and conditions that attach to the small vessel facility exemption.

I don’t want to repeat the entire previous discussion, so I’ll just reiterate a few points that I think should be emphasized.

The facility must build, repair, or dismantle “exclusively” small vessels, as “small” is defined in section 3(d):

“3(d)(3) For purposes of this subsection, a small vessel means –

   (A) a commercial barge which is under 900 lightship displacement tons; or
   (B) a commercial tugboat, towboat, crew boat, supply boat, fishing vessel, or other work vessel which is under 1,600 tons gross.”

Exclusively means 100%, no exceptions.

If the facility works on any military or Coast Guard vessels then it does not meet the requirements for exemption.

The exemption does not cover injuries that occur over the navigable waters of the United States or upon any adjoining pier, wharf, dock facility over land for launching vessels, or facility over land for hauling, lifting, or drydocking vessels. So even in a section 3(d) certified facility there will be work that is covered by the Longshore Act.

The exemption does not apply to facilities that receive Federal maritime subsidies (the construction differential subsidy (CDS) or operating differential subsidy under the Merchant Marine Act of 1936, 46 U.S.C. section 1101 et seq.).

The facility’s employees must be covered by state workers’ compensation law as a condition of the exemption.

Most importantly, you should be aware of this language from the U.S. Department of Labor’s regulations implementing section 3(d), “When a vessel other than a small commercial vessel enters a facility which has been certified as exempt from coverage, the exemption shall automatically terminate as of the date such vessel enters the facility. The exemption shall also terminate on the date a contract for a Federal maritime subsidy is entered into, and in the situation where the facility undertakes to build a vessel other than a small vessel, when the construction first takes on the characteristics of a vessel, i.e., when the keel is laid. All duties, obligations, and requirements imposed by the Act, including the duty to secure compensation liability as required by sections 4 and 32 of the Act, and to keep records and forward reports, are effective immediately.” (20 C.F.R. 702.175)

An exempt facility can become an uninsured facility without the owners realizing it. Or if it has USL&H coverage in place based on the activities excluded by the terms of the exemption, then it still faces a serious situation. If the facility unknowingly loses its exemption, it can begin to accumulate penalties for failing to timely report injuries to the Department of Labor on Form LS-202. The penalty for failing to timely report injuries is up to $11,000 per occurrence.

Make sure that you are fully informed with regard to the requirements and conditions that apply to a section 3(d) small vessel facility exemption.

ISSUE: Concurrent Jurisdiction

Jack_crop 72dpiI’ve discussed the so-called “concurrent jurisdiction” problem on previous occasions. This refers to the inequitable state of affairs confirmed by the U.S. Supreme Court in Sun Ship v. Pennsylvania, 447 U.S. 715 (1980). The decision held that the Longshore and Harbor Workers’ Compensation Act (33 U.S.C. 901 et seq.) does not supplant state workers’ compensation laws, it supplements them. This means that maritime workers covered by the Longshore Act are often simultaneously covered by state act compensation laws. The workers have the benefit of double coverage, and the maritime employers have the burden of redundant exposure.

When the Longshore Act was extensively amended in 1984, Sun Ship was not overruled, so concurrent jurisdiction was preserved.

While all state workers’ compensation laws are “concurrent” with the Longshore Act under Sun Ship, many states have expressly provided in their insurance laws words to the effect that if you are covered by a federal liability or compensation statute then you are not covered by that state’s workers’ compensation law.

Slowly, but in what may be an inexorable trend, states are moving from “concurrent” Longshore Act/state act status, to “exclusive” status, whereby workers covered by the Longshore Act are not covered by state act.

Virginia did it, effective July 1, 2012.

Pennsylvania has now done it. The State’s General Assembly Bill No. 2081 was signed into law on June 18, 2014. It amends the State’s workers’ compensation law by adding straightforward language to the definition of employee:

“Section 104. The term ‘employe’, as used in this act is … exclusive of persons subject to coverage under the Longshore and Harbor Workers’ Compensation Act or the Merchant Marine Act of 1920 ….”

So add another state to the list of “exclusive” states. Here’s my unofficial list:

Concurrent States: AL, AK, CA, CT, GA, IL, MA, MI, MN, MO, NC, NY, RI, SC, TN, WV, WI

Exclusive States: FL, HI, IN, KY, LA, ME, MD, MS, NJ, OH, OK, OR, PA, TX, VA, WA

No state, to my knowledge, has gone from “exclusive” back to “concurrent”.

It remains my opinion that this action in Pennsylvania takes nothing unfairly away from maritime workers. It redresses an inequity by fairly placing Pennsylvania maritime employers on an even playing field with other employers in the State, and importantly, with other maritime employers in several neighboring states, with regard to workers’ compensation coverage. Maritime workers remain properly covered by what is considered to be the most liberally interpreted workers’ compensation law in the country. The workers are simply no longer in the uniquely privileged position of having double coverage.

It’s curious to me that workers with such a unique, unearned privilege somehow convince themselves that this fortuitous benefit of double coverage is their due while they overlook the competitive disadvantage in which this places their employers in the industry that provides their livelihood.

At any rate, this is another step in the right direction.

ISSUE: AEU Safety and Claims Forum

Safety Forum May 2014The American Equity Underwriters, Inc. (AEU) conducted its latest Safety & Claims Forum in St. Louis on May 7th and 8th, 2014. Following each previous semi-annual Forum I’ve devoted space here to discussions of the events. These Forums provide important opportunities for education and professional growth for ALMA Members.

The growth trend continued for the AEU Forum, and this latest event was the best attended yet, with over 100 participants, comprised of ALMA Members, their brokers, and invitees.

The Keynote Speaker was Joseph White with Dupont Sustainable Solutions. His presentation was entitled, “Reaching the Heart: The Art & Science of Persuasion”. It reviewed cognitive and affective intellect as they relate to injury avoidance, rewards and anticipated outcomes.

The closing speaker was Julio Malera. His presentation was entitled, “It Only Takes Everything You’ve Got”. He discussed how to develop and practice the skills needed to fully develop potential.

In between Mr. White’s and Mr. Malera’s presentations, this Forum featured presentations to the entire group as well as a large number of breakout sessions, offering more than enough for everyone. Here is simply a list of the subjects covered.

Effective Environmental Inspections

“Beat The Drum: Leadership’s Role in Building a Safety Culture”, discussing the roles of leading versus managing, how to avoid unintentional consequences and build and continually reinforce the safety culture that you want.

Training and Developing Your Safety Professionals

Machine Guarding: Point of Operations Guards

Claims – ADA Accommodations vs. Permanent Light Duty presented by attorney Robert Nienhuis

Incentive Programs

Marine Chemist: Effective Closed Space Safety Program

Jones Act Versus Longshore Act: The Uncertainty Zone

Completing the LS-202, Employer’s First Report of Injury

Communications Between the Employer and the AEU Claims Specialist

Q & A Claims Panel Discussion

Marine Cargo Handling and Health Breakout Agenda

Crane and Gear Certifications

New Safety Related Ideas & Technology

Members Helping Members

OSHA Website Resources for Marine Cargo Handling

Becoming SHARP Certified

Marine Cargo Handling Lessons Learned and Solutions

Shipyard Safety and Health Breakout Agenda

Electronic Inspections

Fire Safety Plans

Revisit Past Safety Solutions

Lessons Learned: Sharing Ideas for Improvement

Speakers were comprised of industry experts, ALMA Members offering their own actual experience, and AEU subject matter experts. If all of this seems like an extraordinarily comprehensive and ambitious program, you’re right, it was. And judging from the unanimous feedback, it was an extraordinary success.

The next AEU Safety and Claims Forum will be held in Baltimore in October 2014.

Issue: Photographs and Subrogation

Royce sm head shotThis is a guest blog, provided by Royce Ray. Royce is the Director, Subrogation Recovery Unit, with The American Equity Underwriters, Inc. He is a Certified Subrogation Recovery Professional (CSRP), with over 20 years experience in the area of personal injury law. He is an expert.

Here’s Royce 

In my August 2010 Blog article, I emphasized the importance of an early investigation to successful subrogation. One element of such an investigation should be photographs (and plenty of them!). Indeed, photographs can add significant value to a third party claim and consequently, make a subrogation claim more valuable, which will save you money on your comp insurance.

When I think about the critical parts of a good investigation, the old adage “a picture is worth a thousand words” immediately comes to mind. Few things are more persuasive to a jury in an injury case than graphic depictions of what happened. It is one thing for a jury to hear a witness’ description of a scene or event. It is entirely different for a jury to see a picture. Which one do you think would be more persuasive, vivid color photographs or witness testimony?

The time to take plenty of photos is during the initial subrogation investigation. The incident scene will rapidly change as time passes. Consequently, the quicker that you can document with photographs the better.

You should take many pictures, even of items that you think are not important. Often things that appear unimportant during the initial incident investigation will be important later. Once that happens, if you do not have a photo of the item in controversy it is too late and you will be at a disadvantage. The best way to prevent that is to get photos showing lots of different perspectives, distances, heights, views, angles, close-ups, surfaces, and conditions. A yard stick, tape measure or other object can help demonstrate distances and relative sizes. If possible, you should get pictures of the employee’s injuries. If a product liability claim is possible, detailed pictures of the product and all of its components (including all labels) should be taken as well.

Video footage of the area being investigated must be strongly considered as video can be even more powerful at conveying information than pictures. Sometimes you will face circumstances where you need to take photographs or video but do not have time to retrieve a quality camera. Many cell phones and blackberries have decent cameras or video recorders. These applications will suffice in an emergency.

An important word of caution before taking videos, especially before using any device with audio recording capability: you should thoroughly familiarize yourself with any applicable Federal and state criminal laws that govern electronic eavesdropping (preferably you should consult with an attorney).

Be sure to create a log that details who took the photos, the date, time, and place that they were taken, a description of what each photo shows and why they were taken. This information will come in handy months or years later because as time passes you can demonstrate the intent of the photo without having to rely on memory. And, generally testimony from the person who took the photos is needed to lay the proper foundation for getting the photographs admitted into evidence for consideration by a jury.

It is a mistake to assume that taking a few pictures here and there is adequate. You can never have enough photographs. In the computer age, there is no reason not to have lots of good photographs, for taking, storing and organizing large numbers of quality digital photographs is inexpensive and easy.


ISSUE: Periodic Update on Recent Events

Jack_crop 72dpiThis is an update regarding recent significant events involving the Longshore Act.

The good news is that, considering “recent” to be from January 1, 2013, to the present, there hasn’t been too much new of national significance. The exception has been some personnel changes and new administrative procedures implemented by the U.S. Department of Labor, which administers the Longshore Act.

The Division of Longshore and Harbor Workers’ Compensation is under new management at the National Office in Washington, DC. The new Longshore Director is Antonio Rios. The new Chief, Branch of Insurance, Financial Management, and Assessments is Rich Stanton, and the new Chief, Branch of Policies, Procedures, and Regulations is Jennifer Valdivieso.

Also, the DOL issued Industry Notice No. 144 on November 14, 2013. It contained important new instructions for mailing injury reports, claims forms, and correspondence in Longshore cases effective December 2, 2013. The New York Longshore District Office is designated the “Central Case Create” site. All new reports of injury and claim forms are to be mailed to: U.S. Department of Labor, OWCP, Division of Longshore and Harbor Workers’ Compensation, 201 Varick Street, Room 740, P. O. Box 249, New York, NY 10014-0249.

After a case has been created, the Jacksonville, FL district office is designated as the “Central Mail Receipt” site. All case specific mail is to go to the following address: U.S. Department of Labor, OWCP, Division of Longshore and Harbor Workers’ Compensation, 400 West Bay Street, Suite 63A, Box 28, Jacksonville, FL 32202.

All checks (for deposit to the Special Fund or in response to penalties), as well as inquiries, forms, and other documents concerning self-insurance authorization, security deposits, and Special Fund assessments are to go to the following address: U.S. Department of Labor, OWCP, Division of Longshore and Harbor Workers’ Compensation, Branch of Financial Management, Insurance, and Assessments, 200 Constitution Avenue, NW, Room C-4319, Washington, DC 20210.

There have been no Longshore cases decided at the U.S. Supreme Court since January 2013.

There have been some interesting cases at the various federal circuit courts of appeals and at the DOL’s Benefits Review Board.

In the federal Fifth Circuit (states of TX, LA, MS), the case of New Orleans Depot Services, Inc. v. Director, Office of Workers’ Compensation Programs, et al. (Zepeda), (April 2013) was a major event. The en banc Fifth Circuit reinterpreted language in section 903(a) of the Longshore Act with regard to situs. Now in the Fifth Circuit, “adjoining”, as in “other adjoining area customarily used by an employer in loading, unloading, repairing, dismantling, or building a vessel” no longer means “neighboring” or “in the vicinity of” navigable waters. Now in the Fifth Circuit, the interpretation of “adjoining” means, “to lie next to” or “to be in contact with”. The Fifth Circuit has thus adopted the interpretation of “adjoining” as used in the Fourth Circuit (states of MD, VA, WV, NC, SC). The Fourth and Fifth Circuits are the only two federal circuits so far that interpret “adjoining” in this restrictive way.

The Fifth Circuit, in Gary Chenevert v. Travelers Indemnity Company, (March 2014) confirmed that an insurance company which makes voluntary LHWCA payments to an injured worker on behalf of the employer acquires a subrogation lien on any recovery by the worker in a Jones Act suit against the employer based on the injuries for which the LHWCA benefits were paid. The key is that the Longshore insurance company was not the same insurance company that insured the employer for Jones Act liability, so it was not a case of the employer subrogating against itself.

Back on December 30, 2011, the DOL issued Industry Notice No. 137 regarding the DOL’s new regulations for Recreational Vessels. The new Regulations (20 C.F.R. 701.301-701.505) were effective January 30, 2012. The Regulations implement the February 17, 2009 amendment to section 2(3)(F) (33 U.S.C. 902(3)(F)) which removed the sixty five foot limitation for the exclusion from Longshore Act coverage for workers employed to repair or dismantle in connection with repair any recreational vessel. Under the amendment, all workers employed to repair recreational vessels are excluded from Longshore Act coverage.

A primary issue is the interpretation of what is meant by “recreational vessel”. The case law so far has been sparse by way of interpretation, but on January 28, 2014, the Benefits Review Board issued its decision in Luis E. DeJesus v. Viking Yacht Company, Inc. and SeaBright Insurance Company, and Director, Office of Workers’ Compensation Programs, BRB No. 12-0581. The Administrative Law Judge had found that the claimant was covered by the Longshore Act because some of the boats that he worked on were company owned “stock vessels”, used for boat shows, sales demos, and sea trials for prospective buyers, and so in his opinion the boats were commercial rather that recreational. The Benefits Review Board reversed the decision and excluded the claimant from Longshore Act coverage under the recreational vessel exclusion and implementing regulations.

The Board focused on the type of work that the claimant was performing and the use of the vessels at the time of the repair, and it found that the use of the stock vessels for sales demos and sea trials did not convert the vessels to commercial use under the Regulations.

More litigation will be necessary before we can be confident as to how the courts will interpret the section 2(3)(F) recreational vessel exclusion.

The Fifth Circuit again, in the case of Larry Naquin, Sr. v. Elevating Boats, L.L.C., (March 2014) issued a surprising (to me) decision affirming a district court’s jury based finding that a vessel repair supervisor was a Jones Act seaman. There was a strong dissent in the case to the effect that the plaintiff was a land based worker not entitled to the Jones Act negligence remedy, but nevertheless this case is another example of the chronic uncertainty in determining coverage issues between the Jones Act and the Longshore Act.

The Benefits Review Board issued a coverage decision in the case of Anne M. Smith v. Huntington Ingalls Industries, Inc. – Newport News Shipbuilding, BRB No. 13-0331, March 19, 2014) in which it analyzed the duties of a mail room worker. The claimant worked in the mail services department of Newport News Shipbuilding and the issue was whether the Longshore Act’s clerical exclusion (section 2(3)(A)) applied. The Board held that the claimant meets Longshore Act status and that the clerical exclusion did not apply. In addition to paper documents and mail the claimant also regularly handled parts and tools, both incoming and outgoing, and thus her duties were integral to the employer’s shipbuilding operations.

The federal Ninth Circuit Court of Appeals (states of WA, OR, MT, ID, CA, NV, AZ, AK, HI) issued two decisions regarding claims for survivor’s benefits under circumstances involving a suicide and an attempted suicide (Schwirse and Kealoha). The court indicated that the “irresistible suicidal impulse” analysis was incorrect, and instead the analysis should be focused on a test for a direct chain of causation between working conditions, a workplace injury, and the suicide. The court also indicated that section 3(c) of the Act did not place the burden of proving willful intent on the employer as an affirmative defense, but rather that the claimant had to prove compensability based on a preponderance of the evidence on the record as a whole.

The Fifth Circuit issued a situs decision involving a multi-use facility in the case of BPU Management, Inc./Sherwin Alumina Co. v. Director, OWCP (Martin), 732 F.3d 457 (5th Cir. 2013). The court traced the movement of ore as it was unloaded and moved through several stages and locations at the employer’s facility from the dock to the manufacturing processes. The case offers a good discussion of how to fix the point at which maritime cargo handling ends and manufacturing begins in this type of facility.

I was going to mention that the Fifth Circuit held that a modification under section 22 of the Longshore Act based on a mistake of fact does not require that the mistake involve new or previously unknown facts.   This was the case of Island Operating Co., Inc. v. Director, OWCP, but the Fifth Circuit has already monopolized this list.


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