ISSUE: Situs: High Seas, Foreign Territorial Waters

There is one current Longshore Act coverage question that I don’t feel comfortable with.

The question is usually along the lines of, “We’re sending workers overseas to do ship repair work (or some other work that meets Longshore Act ‘status’). Will the Longshore Act apply?” So, it’s a “situs” question, involving overseas work.

Things used to be uncertain enough with regard to this issue. Now the federal Ninth Circuit Court of Appeals has issued an opinion that clarifies the issue in the Ninth Circuit (states of WA, OR, MT, ID, CA, NV, AZ, AK, HI) but emphasizes the open nature of the question everywhere else.

Before the Ninth Circuit’s decision in Joseph Tracy v. Keller Foundation, Inc./Case Foundation Co. and ACE USA/ESIS v. Global Offshore Int’l, Inc. and Liberty Mutual Insurance Co.; and Director, Office of Workers’ Compensation Programs, the issue of whether the Longshore Act applied on the high seas and the territorial waters of other countries was difficult but manageable; there was just enough doubt to justify the opinion that an employer with Longshore Act workers on the high seas and in foreign territorial waters and adjoining areas should get Longshore coverage just to be safe.

It was a safe bet that the Longshore Act applied on the high seas, subject to conditions such as contacts with the United States and the temporary nature of the work assignment. And with regard to foreign territorial waters, although no federal circuit court had ruled on the question, we did have the Benefits Review Board’s decision in Weber v. S.C. Loveland Co. (28 BRBS 321 (1994)) for the proposition that Longshore Act coverage extended to the territorial waters of foreign countries. The Board’s rationale was based on the language of Section 39(b) of the Longshore Act, which authorizes the Secretary of Labor to establish “compensation districts, to include the high seas” and provides for judicial jurisdiction for proceedings involving injuries occurring on the high seas. Also the Board cited what it perceived as the trend in admiralty law to extend jurisdiction into foreign waters to provide uniform coverage for American workers, especially when all contacts, except for the site of the injury, are with the U.S. and the duration is temporary.

But now we have the Ninth Circuit’s decision in Tracy. The Court accepts the proposition that the Longshore Act applies on the high seas, but states, “… we hold that foreign territorial waters and their adjoining ports, and shore based areas are not the ‘navigable waters of the United States’ as the Act defines that phrase.” (Sorry, the Act does not define that phrase.) The Ninth Circuit also said that, “A determination that the Act applies to the high seas, where no single nation is sovereign, cannot compel the conclusion that Congress also intended the Act to apply to the territorial sea, internal waters, and adjoining land of other nations, ….” The Ninth Circuit cited the “strong presumption that enactments of Congress do not apply extraterritorially.”

So, now we know that at least for the Ninth Circuit the Longshore Act will not apply in foreign territorial waters, since the “situs” requirement for coverage is not met.

But how will this question be decided in the other Circuits? And the Board’s last word on the issue is Weber, which applies the Longshore Act in foreign territorial waters. In the Ninth Circuit, the Board will follow Tracy, but what will the Board do everywhere else, and what will the other circuits do? Who knows at this point?

While we have a clear decision in the Ninth Circuit, we have increased uncertainty with regard to injuries occurring within the jurisdiction of the other federal circuits. And it’s not easy to explain how, under a law which derives its rationale from the Admiralty and Commerce clauses of the federal Constitution and the need for uniformity in maritime matters, you will possibly get different answers to the same question in the different federal circuits (not that this situation is unique to this issue).

What’s the best answer today?

In the Ninth Circuit, the Longshore Act applies on the high seas subject to conditions, but not in the territorial waters of other countries.

In circuits outside of the Ninth, the Longshore Act probably applies on the high seas subject also to conditions, but we don’t know about the issue of foreign territorial waters. Will the other circuits follow the rationale of the Benefits Review Board in Weber, or will they follow the Ninth Circuit’s rationale in Tracy, or will they split?

Time will tell. In the meantime, maritime employers outside of the Ninth Circuit who are sending Longshore workers to foreign territorial waters or adjoining areas should get Longshore Act coverage for those workers. Where there’s any doubt at all, get coverage.

ISSUE: A Brief History of the Longshore Act – Part Three

1984 to Present

The Longshore Act was significantly amended again in 1984.  We were (and are) still trying to sort out the concepts of status and situs that were added in 1972.  Then along came the 1984 amendments to address some of the issues created by the 1972 amendments.   Chief among them were insurability concerns (insurance industry trade associations had strongly expressed the view that certain provisions of the Act made it very expensive and very difficult to price).  The 1984 amendments also added a specific list of exclusions in an attempt to clarify some coverage issues.

Insurability:  The unrelated death provision was eliminated, the annual weekly rate increase was capped at 5% (except for the old District of Columbia Compensation Act cases, which the 1984 Longshore Act amendments did not apply to), the maximum weekly rate was made applicable to death benefits, and the Special Fund assessment formula was modified to include a §908(f) (second injury) usage factor.

Excluded from coverage were: workers who are exclusively office clerical, secretarial, security, or data processing; employees of a club, camp, recreational operation, restaurant, museum or retail outlet; marina employees who are not engaged in construction, replacement, or expansion of such marina; temporary suppliers, transporters or vendors; aquaculture workers; individuals employed to build any recreational vessel under 65 feet in length, and individuals employed to repair or dismantle in connection with repair any recreational vessel (the removal of the length limitation for repair workers was added by amendment on February 17, 2009); and the holdover exclusions for a master or member of a crew of any vessel, any person engaged by a master to load or unload or repair any small vessel under 18 tons net, or any officer or employee of the United States or any agency thereof or of any State or foreign government, or of any political subdivision thereof. 

Among other changes, the 1984 amendments also changed the notice, claim filing and average weekly wage requirements for occupational disease cases, and changed the lump sum settlement approval procedures.

1984 was the last time that the Longshore Act was amended, except for the February 17, 2009 amendment affecting workers repairing recreational vessels.  Workers hired to repair or dismantle in connection with repair any recreational vessel are excluded from Longshore Act coverage regardless of the size of the vessel (with the condition that the workers must be covered by a state act workers’ compensation law).  Building recreational vessels is still subject to the under 65 foot limit. 

The courts are still struggling with the status and situs tests as there continues to be disagreement among the Federal Circuit Courts of Appeal as to the interpretation of “adjoining area” and “harbor worker”.  Even the questions of what is a vessel and who is a member of a crew continue to present problems as evidenced by the Supreme Court’s decision is Stewart v. Dutra Construction Co. Inc., 125 S. Ct. 1118 (2005), where to the surprise of some the Court adopted an extremely broad definition of “vessel” applicable to both the Longshore Act and the Jones Act.  This was followed by the 2013 Supreme Court’s decision in the case of Lozman v. The City of Riviera Beach, Florida, which narrowed Stewart somewhat from the “anything that floats is a vessel” rationale to a “reasonable observer” standard.

We have outlined the history of the Longshore Act mostly in the context of jurisdictional and coverage issues, but it’s not possible to include a comprehensive treatment of coverage in a brief history.  Just be aware that coverage issues are litigated now as much as ever.  The Act poses many challenges for maritime employers, and for many key issues there is no uniform, comprehensive answer.

For many workers, Longshore Act coverage and Jones Act coverage seem to overlap, even though the two are mutually exclusive.  Unfortunately for employers, formal adjudication is often necessary to determine coverage for these workers.  Similarly, the boundary between the Longshore Act and the various state acts can be uncertain, and as we have seen, in many states the coverage is concurrent.  There are many so called “concurrent states” in which injured workers can file claims under both the state act and the Longshore Act simultaneously or concurrently even in circumstances where it would seem that the exclusive provisions of the Longshore Act should preempt state action.  These are complex issues. 

I have to end this Brief History, Part Three somewhere so it might as well be here, but the timing is inconvenient.  There is a lot going on in the jurisprudence right now that will influence important Longshore Act issues going forward. 

Time will give us perspective on evaluating the influence of several recent developments.

1)  We’re still not quite sure what a recreational vessel is for purposes of the February 17, 2009 amendment. 

2)  The U.S. Supreme Court’s January 15, 2013, decision in the case of Lozman v. The City of Riviera Beach, FL, et al. on the vessel status issue has perhaps narrowed the test from the “whatever floats” approach suggested in Stewart v. Dutra Construction Co. (2005) to the “reasonable observer” standard based on the floating structure’s practical ability to serve as a means of transportation on water.

3)  The U.S. Supreme Court also decided in Pacific Operators Offshore, LLP v. Valladolid (January 11, 2012) that Section 1333(b) of the Outer Continental Shelf Lands Act (OCSLA) does not contain an outer continental shelf (OCS) situs of injury requirement.  The injury can occur anywhere.  The new “substantial nexus” test, between the injury and the employer’s OCS operations will determine OCSLA coverage. 

4)  In Joseph Tracy, Jr. v. Director, Office of Workers’ Compensation Programs, U.S. Department of Labor, et al., (September 2012) the Ninth Circuit held that the “navigable waters of the United States” as used in the Longshore Act does not include the territorial waters of other nations.  This has added uncertainty to what was already an uncertain issue.

5)  The recent situs and status case from the Fifth Circuit, New Orleans Depot Services, Inc. v. Director, Office of Workers’ Compensation Programs (Zepeda) (4/29/2013) completely changes the approach to situs in the Fifth Circuit and had a lot to say about status as well.

The state of Virginia on July 1, 2012, became an “exclusive” state in the context of concurrent jurisdiction, and South Carolina may soon join the ranks of “exclusives”.  

We’ll have to wait for the Brief History of the Longshore Act, Part Four to see how these decisions and developing events affect the interpretation of terms and the resolution of issues under the Act.

I will keep you up to date here at the AEU Longshore blog.

ISSUE: AEU Maritime Safety and Claims Forum

This is a guest blog provided by AEU’s Director of Loss Control Jimmy Burgin. In this posting, Jimmy reports on the most recent AEU Maritime Safety and Claims Forum.

Back in October 2012, The American Equity Underwriters, Inc. Safety Committee meeting changed its title to the AEU Safety and Claims Forum, but this change did not alter its reputation as being the premier maritime safety and claims meeting in the U.S. Our meeting of the AEU Maritime Safety and Claims Forum in Miami, Florida on April 9 – 11, 2013 was impressive and exceeded expectations among all that attended. This meeting is crafted specifically for members of the American Longshore Mutual Association, their brokers and special invitees.

Our first speaker was Jim McCready, an attorney who practices workers’ compensation defense and specializes in USL&H claims. Jim’s presentation centered on Section 20 of the Longshore Act, also known as the “Presumption”. Dr. Jim Baylis, an orthopedic physician specializing in injuries to the extremities explained the differences between an acute injury and chronic conditions. Teri Simpson, an investigator with Titan Investigative services, showed us the common techniques used in surveillance specifically social media.

A.J. Montalbano with AEU led the forum in a discussion about decisions following losses and how making the wrong decisions might cause additional loss. The discussion focused on: the accident scene, the investigation, subrogation, reporting requirements, claims strategy, scheduled and non scheduled injuries, light duty work and good treatment of injured workers.

As usual, breakout sessions for marine cargo handling and shipyard sub-groups were held. Both sessions focused on the continuing development of the AEU fall prevention guidance document that the forum is producing.

ALMA member JB Marine presented successful programs the company has implemented to increase safety performance.

The Forum keynote speaker was a Dupont Sustainable Solutions consultant. The consultant discussed how conscious and unconscious actions lead to losses and how companies can implement programs to increase the likelihood of safe work.

As usual, attendee feed back from this AEU Maritime Safety and Claims Forum indicated this was a very successful meeting. Many persons felt the meeting provided ideas to take back to their company to improve their safety program.

ISSUE: Situs and Status in the Fifth Circuit

A significant event in Longshore Act jurisprudence has just occurred.

The federal Fifth Circuit Court of Appeals issued a decision on April 29, 2013, in the case of New Orleans Depot Services, Inc. v. Director, OWCP, et al. (Zepeda). The Fifth Circuit (states of Texas, Louisiana, and Mississippi) overruled its own long standing, often cited, and influential precedent (Textports Stevedore Co. v. Winchester) on the issue of Longshore Act situs.

In reversing the decision of the Benefits Review Board that had awarded benefits to Mr. Zepeda and which was affirmed by the Fifth Circuit’s appellate panel, the en banc Fifth Circuit reinterpreted language in Section 903(a) of the Longshore Act. “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 water.

Now in the Fifth Circuit, the interpretation of “adjoining” means “to lie next to” or “to be in contact with”. The Fifth Circuit has adopted the “plain language of the statute” interpretation as used by the Fourth Circuit (states of Maryland, Virginia, West Virginia, North Carolina, and South Carolina) as analyzed in Sidwell v. Express Container Services, Inc.

The scope of Longshore Act situs in the Fifth Circuit has significantly narrowed.

The claimant in this case worked repairing and performing maintenance on cargo containers and chassis used in land, rail, and vessel transportation. He did not pick up or deliver the empty containers or fill them with cargo. He worked at a facility located about 300 yards from the water with a (non-maritime) bottling company located between his employer’s premises and the water. The property was not contiguous with the water at any point.

The issue was whether his job location met the situs requirement for Longshore Act coverage as an “other adjoining area” under Section 903(a).

The Administrative Law Judge, Benefits Review Board, and the Fifth circuit panel on appeal agreed that under the Fifth Circuit’s precedent in Winchester the location met the situs requirement as being close to or in the vicinity of navigable waters. Then the Fifth Circuit agreed to review the case en banc, i.e., by all the judges in the circuit as opposed to the usual 3 judge panel that hears appeals.

Note: in order to be covered by the Longshore Act an injured worker must meet a status and a situs requirement. These are separate elements and both must be satisfied separately.

Meeting the situs requirement for coverage involves satisfying two components – geographic and functional, i.e., where are you in relation to the navigable water and are you engaged in appropriate maritime activity in relation to that navigable water.

While recognizing that other circuits, such as the Ninth (states of Washington, Oregon, California, Alaska, Hawaii, etc.), Third (states of Pennsylvania, New Jersey, Delaware, and U.S. Virgin Islands), and First (states of Maine, New Hampshire, Rhode Island, Massachusetts, and Puerto Rico) (and other circuits as well) still use a more expansive interpretation of “adjoining”, the Fifth Circuit in Zepeda has now belatedly (Winchester was decided in 1980) recognized that its precedents had set up vague instructions and provided little guidance to other courts or litigants on how to determine whether a claimant satisfies the situs test. Now, in the Fourth and Fifth federal circuits an “other adjoining area” must touch the water.

Note: This new interpretation of “adjoining area” does not refer to the point of the injury, but to the employer’s overall facility or premises.

So, the geographic element of situs just got simpler in the Fifth Circuit.

If the en banc court had stopped there the ruling would have been sufficient to reverse the Board’s decision, since if either situs or status is not met then there is no entitlement. But the first of two Concurring opinions discusses the status element in this case to produce an alternative holding that the status element is also not met.

Note: To meet status: An individual working on a covered situs will qualify as a covered employee only if he is engaged in maritime employment – an occupational test focusing on loading and unloading a vessel or building, dismantling, or repairing a vessel. His activities must be integral or essential to the vessel related activities.

In this case, the “determinative consideration” that the first Concurring opinion used is whether the loading process could not continue in the absence of the worker’s activities. As stated in the opinion, “… the proper question when defining the status of an employee under the Longshore Act is whether the task that the employee engages in is the type of customary maritime work that a dockworker or longshoreman would have to perform in order to successfully transfer cargo between ship and land transportation.”

The opinion notes that some tasks are integral, essential, or necessary, while some are only tangentially connected to the process. I think that we’re all still on board at this point. Then maybe the point begins to be made a bit too fine. It is stated that, “This standard makes the capacity to interrupt ongoing longshoring activities paramount.” It seems to me that this type of test applied too strictly could be trouble.

We know from the type of analysis used by the U.S. Supreme Court in its decision in Chesapeake & Ohio Ry. Co. v. Schwalb (493 U.S. 40 (1989)) that all sorts of incidental occupations meet the status test, such as janitors cleaning up around conveyor belts and changing air conditioning filters, carpenters erecting a scaffold, construction workers building, maintaining, or repairing the buildings in which loading and unloading or shipbuilding/ship repair takes place, mechanics repairing the tools and equipment used in these traditional maritime activities, security guards patrolling vessels, warehouse workers moving cargo around in intermediate steps between unloading and land transportation, and on and on.

By “clarifying” the status question I believe that the first Concurring opinion calls much of this into question. It suggests that all of these activities are only essential if they are performed while actual loading/unloading is in progress and an immediate work stoppage will occur if they are not immediately performed – “The determinative consideration is that the ship loading process could not continue”.

Since the claimant’s job in this case was the repair of empty containers that were not actually at that time involved in vessel loading/unloading, he does not meet status. I guess that the only way that container repair can meet status in the Fifth Circuit going forward is if it is performed dockside during the loading/unloading process.

Maybe I’m overstating it, but the opinion seems insistent. Before you know it, we’ll be making status distinctions between workers doing the same jobs in the same place. Coverage will be based on the timing of their work and what else is going on at the terminal or shipyard at that time. Talk about walking in and out of coverage. These workers will be moving in and out of status without changing their locations or their jobs. We’ll see.

Two conclusions: Longshore Act situs in the Fifth Circuit is now limited to the contiguous or “next to” definition of “adjoining” to match the approach that the Fourth Circuit takes. Also, status may also now be much more restrictive in the Fifth Circuit.

Two questions: What will the other Circuits do now, if anything, to modify their more expansive approaches? And when can we now expect a new and seemingly now inevitable Supreme Court ruling on situs and status?

ISSUE: A Brief History of the Longshore Act – Part Two

II. 1927 – 1972

In 1927, finally convinced that the only way to provide workers’ compensation protection for land based workers injured over navigable waters was to enact a federal law, Congress passed the Longshoremen’s and Harbor Workers’ Compensation Act.  Section 903(a) set out the coverage, “…only if the disability or death results from an injury occurring upon the navigable waters of the U.S. (including any dry dock)” and no recovery was available under state law. 

Jurisdictional confusion ensued: Congress didn’t exactly solve the problem in 1927.  A major treatise writer characterized the period following enactment as one of “impenetrable confusion”.  It also was described by the Supreme Court as plagued by a “twilight zone” of coverage problems (Davis v. Department of Labor, 317 U.S. 249 (1942)).  A later Supreme Court used the phrase “jurisdictional monstrosity” in its discussion of coverage issues under the Longshore Act (Sun Ship Inc. v. Pennsylvania, 447 U.S. 715 (1980)).

NOTE:  The Davis Court described the situation in a way that is still relevant today.  “These marginal cases fall within a “twilight zone” in which the employees must have their rights determined case by case…. This Court can do no more than bring some order out of the remaining judicial chaos as marginal situations come before us.”  There is never a shortage of marginal cases.

The problem with Congress’ water’s edge solution was that workers were constantly walking in and out of coverage during the course of the workday.  This result was contrary to the goal of nationwide uniformity in maritime matters.  Courts constantly struggled to make sense of the jurisdictional confusion caused by these workers who were land based but worked over water.

The persistent problem of concurrent state and federal jurisdiction arose during this period as courts applied state laws to workers even on occasions when the worker was injured over the water (the Davis case) if the court found that the worker’s activity was “maritime but local”, while in other cases courts found federal law applied to injuries on land.  No one was sure who was covered when or where.

Concurrent state and federal jurisdiction was finally conclusively recognized by the Supreme Court, which found that the Longshore Act “supplemented” rather than supplanted state workers’ compensation laws (Sun Ship, Inc. v Pennsylvania, 447 U.S. 715 (1980)).

Other problems with the 1927 Longshore Act began to surface.  Although the Longshore Act and the Jones Act were mutually exclusive, the courts continued to confuse longshoremen with seamen.  In Seas Shipping v. Sieracki, 328 U.S. 85 (1946), the Supreme Court created the right of a longshoreman to sue a ship owner, who was not his employer, under the warranty doctrine of unseaworthiness.  (This was a seaman’s right, and in a much later Supreme Court decision (McDermott v. Wilander, 498 U.S. 337 (1991)) the Court attributed this result to the Sieracki Court’s confusing longshoremen with seamen.)

As a result of the Sieracki case, vessel owners found themselves liable to longshoremen for damages based on conditions caused partially or entirely by the stevedore employer.  This situation was addressed in a case that gave the ship owner the right to sue the stevedore employer for indemnification for losses paid by the ship owner to injured longshoremen on the basis of the contractual express or implied warranty of workmanlike service from the stevedore employer.  So now stevedore employers had their workers’ compensation loss and then their indemnification liability to the ship owner, (Ryan Stevedoring v. Pan-Atlantic Steamship Corp., 350 U.S. 124 (1956)).

Finally, in 1969, the Supreme Court pointedly invited Congress to amend the Longshore Act.  The dissent in Nacirema Operating Co. v. Johnson, 396 U.S. 212 (1969) protested the incongruity and unfairness of having coverage determined by “where the body falls” and argued instead that the Act was “status oriented, reaching all injuries sustained by longshoremen in the course of their employment”.  There were a total of four injuries in Johnson.  The only injured worker who recovered Longshore Act benefits was the one knocked into the water.  The majority stated that, “The plain fact is that Congress chose the line in Jensen separating water from land at the edge of the pier.  The invitation to move that line landward must be addressed to Congress, not to this Court.”

So, a number of factors had accumulated to put pressure on Congress to make changes in the Longshore Act:

1. The Sieracki seamen problem (unseaworthiness remedy for longshoremen);
2. The Ryan doctrine (warranty liability for stevedore employers);
3. The coverage uncertainties;
4. The $70 per week maximum Longshore Act rate was too low for the relatively highly paid maritime workers;
5. Technology – much of the work done by longshoremen and shipbuilders had moved on to land (crane’s servicing ship’s holds, containerization and pre-fabrication).

It was time for changes.

III. 1972 – 1984

The Longshore Act was significantly amended in 1972.  Among many other changes, Congress accepted the Supreme Court’s invitation and moved the jurisdiction line.  It replaced the water’s edge of 1927 with a two part status and situs test.  The amendments moved coverage landward to “adjoining areas” (situs) for “harbor workers” and others engaged in “maritime employment” (status). 

The 1972 amendments also overruled Sieracki and Ryan.  Remember, the years from 1946 to 1972 saw increasing controversy over the circular liability/double recovery problems of Sieracki/Ryan.   This circular liability situation was eliminated by the 1972 amendments in §905(b), which substituted negligence for unseaworthiness as the longshoreman’s remedy against vessels.  The injured worker could no longer sue the vessel owner for unseaworthiness.  If there was an award under a third party negligence suit (where the vessel owner is the third party), then the stevedore employer is repaid for the compensation benefits that he’s paid.  Also, the stevedore employer could not be sued by the vessel owner for indemnification.  So, the 1972 amendments eliminated the ship owner’s liability to the longshoremen for unseaworthiness and the stevedore’s liability to the ship owner for unworkmanlike service causing injury to workers.  (Under §905(b) of the Longshore Act, the longshoremen still have a negligence action under somewhat limited conditions against the vessel for full recovery.  Any recovery is a credit against compensation paid by the employer, so the longshoremen do not recover twice.)

In passing the 1972 amendments, Congress again sought the goal of a uniform, nationwide compensation system to apply regardless of whether maritime workers were injured on a vessel or in work areas adjoining navigable waters.  The amendments moved the line landward to include not only the traditional injuries on “navigable waters”, but also to so called enumerated areas described as “any adjoining pier, wharf, dry dock, terminal, building way, marine railway, or other adjoining areas customarily used  by an employer in loading, unloading, repairing, or building a vessel.”  Of course, the precise location and identification of what and where are the “situs” boundary lines – specifically what is an adjoining area – continues to be a subject of much judicial debate.

Congress extended coverage to workers in areas adjoining navigable waters, but it did not intend to extend coverage to everyone who happened to be in a maritime area.  The amendments added the “status” requirement to the newly expanded “situs” test.  The intent was to cover workers who perform some portion of an “integral part” of a maritime activity such as loading/unloading of cargo or ship building or ship repair.  Section 902(3) states, “The term employee means any person engaged in maritime employment, including any longshoreman, or other person engaged in longshoring operations, and any harbor worker including a ship repairman, shipbuilder, and ship breaker.” 

Note:  The authors of the preeminent textbook on admiralty reference the fact that the status requirement is not limited to the occupations listed in §902(3), but that those trades are only part of the larger group of activities that make up maritime employment.  In fact, they state, “the almost infinite range of the conditions of waterfront employment has been detailed in thousands of cases”.  (Gilmore & Black, The Law of Admiralty, 2nd Ed.)

The key is that compensation should not depend on the fortuitous circumstance of whether the injury occurred on land or over water.  There should be a uniform system applicable to workers who have a “realistically significant relationship to traditional activity involving navigation and commerce on navigable waters”.  (Odom Construction Co., Inc. v. U.S. Department of Labor, 622 F.2d. 110 (5th Cir. 1980) quoting Weyerhauser Co. v. Gilmore, 528 F.2d. 957 (9th Cir. 1975)).

There continue to be differences among the federal circuit courts as to the meaning of the terms “adjoining areas” and “customarily used” and the parameters of the “status” test.  The term “harbor worker” was not defined and continues to be open to interpretation.

Note:  In addition to the jurisdictional changes, the 1972 amendments created the Special Fund assessment, added a cost of living adjustment to weekly compensation paid for permanent disability or related death, changed the requirements for second injury fund relief, protected stevedore employers from indemnity liability to ship owners, and took the responsibility for formal hearings away from the U.S. Department of Labor’s Deputy Commissioners and placed formal adjudicative procedures with the Office of Administrative Law Judges and the Benefits Review Board under the Administrative Procedures Act.

Next Part Three – 1984 to Present

ISSUE: A Brief History of the Longshore Act – Part One

I.      1910 – 1927

         General Maritime Law

         U.S. Constitution

         Social Conscience

II.   1927 – 1972

         Longshoremen’s and Harbor Workers’ Compensation Act

         Twilight Zone and Coverage Confusion

         Change

III.  1972 – 1984

         Evolution – Out of the Water and On to the Land

         Status and Situs

         Administrative Changes

IV.   1984 – Present

          Exclusions

          Insurability

          Uncertainty Zone – Longshore Act, State Acts, Jones Act, FELA

Preface

The brief history of the Longshore and Harbor Workers’ Compensation Act (33 U.S.C. §§901) begins in 1927, when the original Act was passed, and includes significant amendments in 1972 and 1984, but the story of the circumstances and events that led to the passage of the Longshore Act begins much earlier.  It involves the history of international maritime commerce and the general maritime law, the U.S. Constitution, social and cultural movements in the United States, the roles of Congress and the Courts in the U.S. system, the limits of state and federal authority, and the continuing development of workers’ compensation law in the United States.

Before there were workers’ compensation laws and liability remedies such as the Jones Act there was the General Maritime Law.  This is international, judge made law that the U.S. courts apply and interpret.  In the event of injuries, seamen covered by the general maritime law are provided with the remedies of maintenance and cure and of general damages under the warranty of unseaworthiness.  The concept of maintenance and cure has been traced back to the Rules of Oleron in the thirteenth century and by tradition probably goes back to the Roman era.  These seamen’s rights were formally adopted in the United States by the Supreme Court in Harden v Gordon, 11 F.Cas. 480 (1823), and defined by the Court in The Osceola, 189 U.S. 158 (1903). 

NOTE:  In Harden v Gordon Chief Justice Story officially adopted seamen as wards of the court, describing them this way, “Seamen are generally poor and friendless, and acquire habits of gross indulgence, carelessness, and improvidence.”  To this day, courts are very solicitous of the rights of seamen.

General damages under the contractual warranty of unseaworthiness are based on transportation and lost wages, and maintenance and cure provides for housing, food and medical care until maximum medical improvement.  There are no tort damages for pain and suffering, loss of consortium, etc. and no right to a jury trial.  Recovery is not based on negligence, but on the condition of the vessel as not reasonably fit for its intended purpose.

There is a complex history of the general maritime law in the federal courts in the U.S. under the courts’ Admiralty jurisdiction.  But it’s the story of the workers who fell in the gap between the general maritime law and the states’ workers’ compensation laws in the U.S., between state and federal jurisdiction, and between Congress and the Courts that we are interested in.

I.    1910 – 1927

Historical context: The end of the nineteenth and the beginning of the twentieth centuries were periods of social unrest and humanitarian movements in the United States, involving protests over working conditions and the rights of workers in the wake of the abuses of the nineteenth century’s Industrial Revolution.  Following is a very partial list of the violent protests, union organizing, labor strife, etc., which characterized the transition from the Industrial Revolution to the Progressive Era:

1886 – Hay Market Square massacre – bomb explodes among protesters demanding an 8 hour workday;

1886 – American Federation of Labor founded;

1890 – United Mine Workers formed;

1894 – American Railway Union (Eugene V. Debs) strikes the Pullman Company;

1900 – ILGWU founded;

1903 – Mary Harris “Mother” Jones leads a week long march of child mill workers from Pennsylvania to New York;

1908 – Demonstrations in New York for the end of sweatshops and child labor;

1911 – Triangle Shirt Waist Company fire in New York kills 146 sweatshop workers,  mostly young girls.

The time had come for laws assuring workers of prompt, no fault wage replacement and medical treatment for work related injuries.  Workers’ compensation laws represented a compromise between employers and employees.  Workers gave up the right to sue their employers for negligence in a civil suit and in return the employer was required to pay statutory benefits for lost wages and medical costs regardless of fault.  Workers get a range of benefits available more quickly than from civil lawsuits and employers get predictability as to their liability for work related injuries as well as freedom from lawsuits.  Where a workers’ compensation remedy is available it is usually the worker’s exclusive remedy against his employer.

Constitutional problem: The states passed workers’ compensation laws.  But problems arose regarding the states’ authority to legislate workers’ compensation for workers over the navigable waters. 

The U.S. Constitution, in Article III, Section 2(Admiralty Clause) and in Article I, Section 8 (Commerce Clause), gives the federal Congress exclusive jurisdiction in all admiralty and maritime matters for the sake of nationwide uniformity and consistency.

This was the basis of the U.S. Supreme Court’s decision in Southern Pacific Co. v. Jensen, 244 U.S. 205 (1917).  The states’ authority to legislate workers’ compensation stopped at the edge of the navigable waters of the United States, at what came to be called the “Jensen Line”.

What Does “Navigable Waters of the United States” Mean?

The concept of “navigability” has different meanings in different contexts (Kaiser Aetna v. U.S., 444 U.S. 164 (1979)).   In George v. Lucas Marine Construction Co. (28 BRBS 230 (1994), affirmed 86 F.3d. 1162 (9^th Cir. 1996), the U.S. Department of Labor’s Benefits Review Board held that the appropriate test for navigability under the Longshore Act was the “navigability in fact” test established in admiralty law.  The Board cited the case of The Daniel Ball 10 Wall. 557, 19 L.Ed. 999 (1871), and quoted the Supreme Court’s definition of navigable:

“Those rivers must be regarded as public navigable rivers in law which are navigable in fact.  And they are navigable in fact when they are used, or are susceptible of being used, in their ordinary condition as highways for commerce, over which trade and travel are or may be conducted in the customary modes of trade and travel on water.  And they constitute navigable waters of the U.S. within the meaning of the Acts of Congress, in contra distinction from the navigable waters of the states, when they form in their ordinary condition by themselves, or by uniting with other waters, a continued highway over which commerce is or may be carried on with other States or foreign countries in the customary modes in which such commerce is conducted by water.”

In other words – navigable waterways of the United States are used for, or are capable of being used as arteries of interstate or international commerce.

Following Jensen, Congress tried twice to leave workers’ compensation to the states by amending the “Savings to Suitors” clause of the Judiciary Act of 1789.  (“Savings to Suitors” – if you had a common law cause of action in state courts before the Judiciary Act established the federal court system then you still had it after.)  Both times the Supreme Court ruled that these attempts were unconstitutional delegations of power to the states.  (Knickerbocker Ice Co. v. Stewart, 253 U.S. 219 (1922) and Washington v. Dawson & Co., 264 U.S. 219 (1924)).

We were ready for the Longshoremen’s Act.

Next – Part Two – the Longshoremen’s and Harbor Workers’ Compensation Act is passed.

ISSUE: U.S. Department of Labor

The Longshore Act is administered by the Division of Longshore and Harbor Workers’ Compensation (DLHWC), Office of Workers’ Compensation Programs (OWCP), in the U.S. Department of Labor (DOL).

There are significant changes underway in the management of the Longshore Division.

Miranda Chiu has retired as Director, DLHWC. The Acting Longshore Director, effective March 15th, is Antonio Rios, formerly the Deputy Director, Division of Federal Employees Compensation.

Brandon Miller has left as Chief, Branch of Insurance and Financial Management, and has been replaced, effective March 25th, by Rich Stanton, formerly with Maher Terminals.

So, currently, who, what, and where is the DOL that administers the Longshore Act?

The DLHWC consists of a National Office in Washington, DC and eleven District Offices located around the country.

The National Office management staff consists of the Acting Director, Tony Rios, and the two Branch Chiefs, Eric Richardson and Rich Stanton, along with their respective staffs. Eric’s staff handles second injury fund applications, district office administration, regulatory drafting and interpretation, coordination of legal matters with the Office of the Solicitor, policy formulation, and procedural matters. Rich’s staff administers the Special Fund, bills and collects the industry assessment, authorizes insurance carriers and self-insurers, collects and maintains collateral deposits, administers assessment reporting and reserve audits, administers insolvency cases, enforces the insurance provisions of the Longshore Act, and participates in policy formulation. These are partial lists.

District offices provide medical management, informal dispute resolution, education and outreach, and claims administration services under the direction of District Directors.

Following is a list of Longshore district offices along with their respective state jurisdictions:

Boston – District Director David B. Groeneveld, States of CT, ME, MA, NH, RI, VT, and DBA jurisdiction – east of the 75th degree west longitude, Newfoundland, and Greenland.

New York – District Director Richard V. Robilotti, States (and Territories) of NY, NJ, Puerto Rico, Virgin Islands and DBA – Mexico, Central and South America; areas east of the continents of North and South America to the 60th degree east longitude (including Iraq Afghanistan and Iran) and any other areas or locations not covered under any other district office

Baltimore – District Director Theresa Magyar, States of DE, DC, MD, PA, WV

Norfolk – District Director Theresa Magyar, State of VA

Jacksonville – District Director Charles Lee, States of AL, FL, GA, KY, NC, SC, TN

Houston – District Director David Widener, States of TX, OK, NM, IL, IN, IO, MI, MN, OH, WI, MO, NE, KS and DBA – Canada, west of the 75th degree and east of the 110th degree west longitude

New Orleans – District Director David A. Duhon, States of LA, AR, MS

San Francisco – District Director R. Todd Bruininks, States of CA (north of the northern boundaries of the counties of San Luis Obispo, Kern, and San Bernardino), AZ, NV

Honolulu – District Director R. Todd Bruininks, State of HI, and DBA – all areas west of the continents of North and South America to 60 degrees east longitude (excluding Iran, Iraq, and Afghanistan)

Long Beach – District Director Marco Adame, State of CA (South of the northern boundaries of the counties of San Luis Obispo, Kern, and San Bernardino)

Seattle – District Director R. Todd Bruininks, States of AK, OR, WA, CO, ID, MT, ND, SD, UT, WY and DBA – Canada west of the 110th degree west longitude, and all areas in the Pacific Ocean north of the 45th degree north latitude

As you can see, National Office management is largely new, and there are several District Directors managing more than one office, so DOL is spread pretty thin right now.

Claims issues that cannot be resolved at the District Office level are referred for formal hearing to the Office of Administrative Law Judges (OALJ) within DOL. Appeals from decisions at the OALJ go to the DOL’s Benefits Review Board (BRB).

The DLHWC management is evaluated and measured by how quickly the Program resolves claim disputes, and by how effectively it enforces key reporting and entitlement elements of claims, such as initial reporting of injuries by employers and timeliness of payments to injured workers.

For further information please visit the DLHWC website at http://www.dol.gov/owcp/dlhwc. There you will find a lot of useful information, such as Forms, FAQs, Procedure Guides, Benefit Guides, texts of the laws, as well as links to the OALJ and BRB websites.