ISSUE: Situs

An interesting question came up recently involving the issue of “situs” under the Longshore Act. I thought that I’d discuss it here and in the process review the whole “situs” concept.  Looking back over previous discussions, it seems that I’ve spent more time on “status” than on “situs” anyway.

For reference, here are some previous topics:

Status –

11/23/09 – Can You Exclude Corporate Officers?

12/22/10 – Coverage – Nurses

01/20/11 – Coverage – Truck Drivers

04/13/11 – Coverage – Divers

07/19/11 – Part Time Coverage

09/13/11 – Coverage – Railroad Workers

Situs –

08/21/09 – Does the Longshore Act Apply Overseas?

09/29/09 – What Are Navigable Waters of theU.S.?

09/23/10 – Perini Coverage

Mixed –

06/10/10 – Oil Spill Dilemmas

07/13/10 – Coverage – Bridges

So, first some general principles with regard to “situs” and then I’ll get to that interesting question.

Section 903(a) (33 U.S.C. 903(a)) states,

“Except as otherwise provided in this section, compensation shall be payable under this Act in respect of disability or death of an employee, but only if the disability or death results from an injury occurring upon the navigable waters of the United States (including any adjoining pier, wharf, dry dock, terminal, building way, marine railway, or other adjoining area customarily used by an employer in loading, unloading, repairing, dismantling, or building a vessel) 

General Principles

            – “Situs” is determined by the nature of the location of the injury as of the time of the injury. 

            – It matters which federal Circuit the injury arose in.  In the Fourth Circuit (VA, SC, NC, MD, WV) “other adjoining area” usually means an area that is  contiguous to or actually touches the water, while the other Circuits use an analysis that involves both geography and function to determine “situs”.

            – There is case law holding that the Longshore Act applies on the high seas within certain limitations and conditions.

            – “Navigable waters of theUnited States” most simply means water that carries or is capable of carrying interstate or international commerce.

            – The “enumerated sites” in section 903(a) (pier, wharf, dry dock, terminal,  building way, marine railway) probably do not have to be customarily used by an employer in loading, unloading, repairing, dismantling, or building a vessel in order to qualify as covered sites, but again this could vary in degree among the   federal Circuits.

-         Distance from the water is not necessarily determinative.  You can be over a mile away from the water, or otherwise in the vicinity of navigable waters, and “situs” will depend on why you’ve located there, the use of the surrounding properties, what’s between you and the water, and what your functional relationship with the water is. 

-         The Longshore Act applies in Guam, the U.S. Virgin Islands, and the Commonwealth of the Northern Marianas, but does not apply in Puerto Rico.

-         Both “situs” and “status” must be separately satisfied for Longshore Act coverage.

-         Mixed use properties (for example, loading/unloading and manufacturing) can be tricky.  If there are separate, distinct facilities for both maritime and non-maritime use within the same property boundaries, you may have both covered and non-covered sites.  A property can be adjacent to navigable waters and still not be a covered “situs” if it is not customarily used for maritime activity.

Those are some general principles with regard to “situs”.  Now, here’s a question that came up recently.

A container repair facility operates along a highway and basically across the street from a navigable river.  The containers that it works on arrive and depart exclusively by truck from a port that is eight miles away down the highway.  Is this facility a covered “situs”?

It does adjoin a navigable water (the river), and it is used for maritime activity (container repair).  Its container repair employees do meet the “status” requirement for Longshore Act coverage.

So is it a covered “situs”?  In my opinion, it is not.  Although it satisfies the geographic nexus part of the “situs” test since it is right across the street from the navigable river, does it meet the “function” test?  My assumption here is that both geography and function must be in relation to the same body of water.  This facility’s function is related to the port where the containers come from, which is eight miles away from the facility.  Although distance from the water is not necessarily determinative, I think that eight miles is too far to satisfy the geographical nexus requirement.

So, this container repair facility satisfies the geography test in relation to the river and the function test in relation to the port, which is eight miles away.  Since in my opinion both tests must be satisfied in relation to one (the same) body of water, this facility is not a covered “situs”, even though it is conducting maritime activity along a navigable waterway.

Actually, what at first appears to be an anomalous concept, that is, a container repair facility located next to a navigable waterway that is not a Longshore Act covered situs, is clearly supported in the case law (see, for example, Cunningham v Bath Iron Works Corp., 37 BRBS 76 (2003).

Summary – you can have a functional relationship to one body of navigable water that is too far away – and a geographical relationship to a different navigable body of water that you do not use – result – you do not meet the “situs” requirement for Longshore Act coverage.

It’s a pretty interesting situation.

ISSUE: Divers

What about divers?  Are they covered by the Longshore Act or are they crewmembers under the Jones Act and general maritime law?

As usual, many coverage questions produce conditional opinions, and the best you can come up with is a best guess at a most likely outcome.   

But questions with regard to divers tend to be even more difficult than usual.  You could say that their duties and circumstances of employment are diverse.  There’s a broad spectrum of employment ranging from land based dock building and repair, to harbor based maintenance and ship repair, to the largest offshore oil and gas operations, and back to inland industrial storage tank and reservoir work and over to self-employed independent contractors hired temporarily for their specific expertise.  One end of the spectrum is land based Longshore Act workers’ compensation and the other end is Jones Act service to a vessel.  But there’s a large middle ground.

To review the tests for coverage:

The Longshore Act contains a status and situs requirement.  You must be engaged in maritime employment involving shipbuilding, ship repair, ship breaking, or the loading or unloading of cargo, or any activity integral to those operations.  This includes constructing, repairing and maintaining the buildings and equipment used in these operations.  There is no moment of injury test.  Any regular part of a worker’s duties that is maritime in nature confers full time Longshore Act status.

The Longshore Act also contains a separate situs provision.  The injury must occur over the navigable waters of the United States, or on any adjoining pier, wharf, dry dock, terminal, building way, marine railway, or other adjoining area customarily used by an employer in maritime employment.  Situs is determined as of the moment of injury.

There is a two part test for Jones Act crewmember status:  the worker must contribute to the mission or function of the vessel, and he must have an employment relationship to a vessel or fleet of vessels under common control that is substantial in terms of both nature and duration.

The two coverages are mutually exclusive since the Longshore Act explicitly excludes Jones Act seamen and the Jones Act only covers seamen, but as we have seen, a large “uncertainty zone” between the Acts causes an overlap where coverage questions constantly arise.

As one judge put it, “It is impossible to define the phrase ‘member of a crew’ in general terms:  the words are colloquial and their fringe will always be ragged.  Perhaps the best hope is that, as the successive variants appear, they will finally serve rudely to fix the borders”, (Hawn v American S.S. Co., 107 F.2^nd 999 (2^nd Cir. 1939)).  This is quoted from a 1939 decision, and we are still fixing the borders.

Many divers actually have mixed duties.  When they are not diving they are performing other tasks such as loading/unloading, maintenance, repair, etc. This makes it very difficult in the broad middle of the employment spectrum to predict whether you have a Longshore Act or a Jones Act exposure.

First, let’s remove some divers from the Longshore Act on the basis of situs.  Large water tanks under industrial facilities, sewage treatment plants, land locked reservoirs, etc. are not navigable waters of the U.S. (and probably not “other adjoining areas”).  So, no Longshore Act coverage (and for the same reasons, probably not Jones Act).

The diver who works from land in dock and pier construction and repair is most likely a harbor worker covered by the Longshore Act.

The diver who works from barges or floating work platforms engaged in the construction and repair of land based marine facilities is probably still covered by the Longshore Act, although we are getting further along the spectrum toward the Jones Act.

The diver who works in a harbor from a vessel doing such things as building artificial reefs, maintaining and repairing buoys and markers, and inspecting vessels is further down the spectrum and has probably just gone past the middle into Jones Act coverage.

The diver who lays underwater cable from a cable laying vessel, or who works off a floating platform in oil and gas exploration and production is most likely on the Jones Act crewmember side.

Frequently, it comes down to the nature of the worker’s relationship to a vessel (remember the test is a relationship that is substantial in terms of nature and duration).  In an attempt to simplify the analysis and application of the coverage tests, the courts frequently use a 30% rule of thumb.  If the worker spends less than 30% of his total work time on the vessel then he is probably not a Jones Act crewmember.  This usually includes time spent traveling to and from the vessel, and these close cases always involve a detailed accounting of the worker’s time.

The crucial issue in cases involving divers frequently seems to be the “substantial employment relationship to a vessel in terms of duration” portion of the two part test.  The “contribute to the mission or function of the vessel” and the “substantial employment relationship to a vessel in terms of nature” are the easy parts for the typical diver.

In view of the relatively short length of many diving contracts, there is a suggestion that the courts will relax the “substantial duration” test somewhat for divers.  One federal circuit has held that 10 days is not too brief to constitute substantial duration as a matter of law, and another has affirmed that 4 weeks satisfies the substantial duration test.  For the “substantial duration” part of the test, the 30% rule is important.    

Due to the uncertainty inherent in many coverage issues involving divers, the bad news is that maritime employers often find themselves fully insuring workers separately under two mutually exclusive statutes.  Nonetheless, it is a good idea to carry both coverages in any uncertain situation to be on the safe side.

ISSUES: Updates and Situs

Here is a collection of comments and notes that refer back to previous discussions.

ONE  - United States Circuit Courts of Appeal – We know that there are disagreements on Longshore Act issues among the various federal courts of appeal, and one of these days I may get ambitious enough to try to summarize the more prominent circuit conflicts.  In the meantime, keep in mind that the circuit in which the injury occurred determines which court will decide the appeal, and the U.S. Department of Labor’s Benefits Review Board usually applies the law of the appropriate federal circuit when adjudicating cases before it.  So here’s a breakdown of the U.S. Circuit Courts of Appeal:

First Circuit – Maine, New Hampshire, Rhode Island, Massachusetts, Puerto Rico

Second Circuit – New York, Connecticut, Vermont

Third Circuit – Pennsylvania, New Jersey, Delaware, U.S. Virgin Islands

Fourth Circuit – Maryland, Virginia, West Virginia, North Carolina, South Carolina

Fifth Circuit – Louisiana, Texas, Mississippi

Sixth Circuit – Ohio, Kentucky, Tennessee, Michigan

Seventh Circuit – Wisconsin, Illinois, Indiana

Eighth Circuit – Minnesota, Iowa, Missouri, Arkansas, Nebraska, South Dakota and North Dakota

Ninth Circuit – Washington, Oregon, Montana, Idaho, California, Nevada, Arizona, Alaska, Hawaii

Tenth Circuit – Wyoming, Utah, Colorado, Kansas, Oklahoma, New Mexico

Eleventh Circuit – Alabama, Georgia, Florida

The location of the injury can make a big difference in the outcome of a litigated Longshore case.

TWO – U.S. Department of Labor – I recently listed significant changes that have occurred in the management of the Office of Workers’ Compensation Programs in the U.S. Department of Labor.  Positions are starting to be filled, and people are moving around.  DOL has just announced that Eric Richardson, the District Director in the Longshore Division’s Long Beach district office is moving to Washington, DC to replace Miranda Chiu as Chief, Branch of Policies and Procedures.  As you may recall, Miranda had announced her retirement to be effective the end of March but then agreed to stay on temporarily in the position of Acting Director when Director Mike Niss retired at the end of February.  Stay tuned.

THREE – Jones Act – I think that the last word is now in with regard to the bogus issue of whether the Jones Act hindered the clean up effort in the aftermath of the Deepwater Horizon explosion and oil spill.  The President Obama appointed, non-partisan National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling confirmed in its final report that the Jones Act did not prevent foreign vessels from assisting with the clean-up.

FOUR – Medical Marijuana – Back on 09/08/2010 I expressed the opinion that the legalization of the medical use of marijuana appeared to be a developing trend among the various states.  At that time I found fourteen states where the medical use of marijuana is legal (Alaska, California, Colorado, Hawaii, Maine, Michigan, Montana, Nevada, New Jersey, New Mexico, Oregon, Rhode Island, Vermont, and Washington).  You can now add Arizona and the District of Columbia to the list, but subtract Montana, which is in the process of repealing its medical marijuana law.  Delaware and Florida appear to be getting close to legalization.  So we’ll see how it goes, since more than a dozen states still have bills aimed at legalization pending in their legislative processes.

FIVE – Situs – It seems that recently we have stressed “status” when discussing contested issues of Longshore Act coverage and neglected “situs”.  For example, the discussion of truck drivers on 01/20/2011, the discussion of the case involving the nurse on 12/22/2010, and recent references to the Caputo principle of part time maritime work equaling full time Longshore Act exposure all related to the issue of occupational status under the Act. 

So, now, just a brief reminder that you must separately satisfy both the “status” and the “situs” tests for Longshore Act coverage.  The injury must occur 1) over the navigable waters (discussed on 09/29/2009), or 2) on an enumerated site (pier, wharf, dry dock, terminal, building way, or marine railway), or 3) in an “other adjoining area” customarily used by an employer for maritime activity.

Unlike “status”, “situs” is determined at the moment of injury.

If the worker is not injured upon navigable waters or on an enumerated site, then the issue is whether the injury occurred on an “other adjoining area”.  So, what is an “other adjoining area”?

As usual, this is a case by case determination, but there are a few general principles that can help the analysis.

The situs does not have to be used exclusively or even primarily for maritime purposes, as long as it is customarily used for significant maritime activity.  And the maritime use does not have to be continuous, but under certain circumstances can be intermittent.

If a particular area is associated with items used as part of the loading/unloading or shipbuilding/ship repair processes it need not itself be directly involved in loading/unloading a vessel or in shipbuilding or ship repair, or even physically connected to the point at which those processes take place.  For example, a shed used to store longshoremen’s gear located several blocks away from the nearest gate to the terminal and outside the property line of the port may be a covered site.  Also, a garage away from the water’s edge used to store and repair heavy equipment used in loading/unloading may also be a covered site.

Except for the federal Fourth Circuit Court of Appeals (states of Maryland, Virginia, West Virginia, North Carolina, and South Carolina), where “adjoining” literally means “lying next to”, the site does not have to touch navigable water.  It can be in the vicinity, or neighboring area of navigable waters, as long as it has a reasonable geographic and functional connection with customary maritime activity on those navigable waters.

The federal Ninth Circuit Court of Appeals (states of Washington, Oregon, Montana, Idaho, California, Nevada, Arizona, Alaska, and Hawaii) sometimes uses its so-called “Herron factors” to determine whether a particular site is an “other adjoining area”.  This involves an analysis of the particular suitability of the site for maritime use, whether adjoining properties are devoted primarily to use in maritime commerce, the proximity of the site to the water, and whether the site is as close to the water as is feasible given all of the circumstances.  Several other federal courts of appeal take a similar approach, combining an analysis of geography and function.

Multi-use facilities or manufacturing sites may include covered and non-covered areas and usually require a complex analysis to determine whether the site of the injury is in a covered area.

Finally, because of the occupational analysis under Caputo, walking in and out of coverage is usually not an issue in “status” cases.  A maritime employee, however, who leaves a maritime site during the course of his employment and is injured in a non-covered area is not covered by the Longshore Act.

I’m not sure how helpful this has been, but at least take it as a reminder that both “status” and “situs” must be satisfied for Longshore Act coverage.

ISSUES: Outer Continental Shelf Lands Act

You may have heard that the Longshore Act is going to the U.S. Supreme Court, by way of the Outer Continental Shelf Lands Act (OCSLA) (43 U.S.C. 1331 et.seq.).

The OCSLA is an extension of the Longshore and Harbor Workers’ Compensation Act.  Other extensions are the Defense Base Act and the Nonappropriated Fund Instrumentalities Act.

The OCSLA was enacted in 1953 for the purpose of establishing a body of law governing activities on the outer continental shelf (OCS).  Among other parts, OCSLA applies the provisions of the Longshore and Harbor Workers’ Compensation Act to workers injured or killed as a result of operations on the OCS conducted for the purpose of exploring for, developing, removing, or transporting by pipeline the natural resources of the seabed of the OCS.  The offshore energy industry had started up on a large scale, but the area was outside the coverage of state laws.  The OCSLA provided that non-maritime federal law would apply on the OCS, and in the instance where no federal law applied then the law of the adjacent state would apply as surrogate federal law.

The outer continental shelf consists of all submerged lands lying seaward and outside of the area of lands beneath navigable waters as defined in the Submerged Lands Act and of which the subsoil and seabed appertain to the United States and are subject to its control.

The Supreme Court has granted the petition for a writ of certiorari in the case of Pacific Operations Offshore LLP v Valladolid, Docket No. 10-507, a case recently decided by the U.S. Circuit Court of Appeals for the Ninth Circuit (Washington, Oregon, Montana, Idaho, California, Nevada, Arizona, Alaska, and Hawaii).  The issue is whether or not the OCSLA contains a situs of injury provision for workers’ compensation purposes.

The question is whether the injury causing disability or death giving rise to a claim must occur actually on the outer continental shelf, or rather may the injury occur anywhere during activities as a result of operations conducted on the outer continental shelf.  Put another way, the question is whether or not section 1333(a) of the OCSLA, which broadly extends federal jurisdiction to the OCS, provides a situs requirement for section 1333(b), the benefits provision that extends Longshore Act workers’ compensation benefits to workers injured “as a result of operations conducted on the outer continental shelf ….”

The fatally injured worker in the Valladolid case was employed by an employer engaged in operations covered by the OCSLA.  He was doing work covered by OCSLA.  Most of his work was performed on the employer’s offshore drilling platforms, but the accident occurred on land at the employer’s onshore facility.

The Supreme Court has granted the petition because there is a conflict among the federal circuits on the issue of whether or not there is a workers’ compensation situs test in the OCSLA.  The Fifth Circuit (Louisiana, Texas, and Mississippi) has held that the injury must occur on the OCS to be covered by OCSLA.  The Third Circuit (Pennsylvania, New Jersey, Delaware, and the U.S. Virgin Islands), and now the Ninth Circuit, have held that there is no situs requirement, but rather that the injury may occur (presumably) anywhere but only that it must arise out of or in connection with OCSLA covered operations.

The expectation is that the Supreme Court will resolve the conflict, and provide a test for OCSLA coverage.

This case should be watched closely by all employers involved in operations on the OCS for the purpose of exploring for, developing, removing or transporting by pipeline the natural resources of the OCS.  The decision may mean that many of these employers have an OCSLA exposure that they previously have not recognized or anticipated.

Yes, AEU does provide OCSLA coverage.