ISSUE: Random Notes

Number 1. Joint and Several Liability

I occasionally see references to the nature of ALMA member’s liability as “Joint and Several”. This is a serious misstatement.

In fact, ALMA members are NOT, and never have been, subject to joint and several liability.

As provided in ALMA’s bye-laws, members’ liability is “several and not joint”.

There’s a big difference.

Joint and several liability exists, for example, in federal maritime tort law when a plaintiff sues and wins a judgment against multiple tortfeasors. The plaintiff may collect the full value of the judgment from any single one of the defendants, even a defendant only 1% responsible for the plaintiff’s damages.  That defendant must then seek contribution from the co-defendants through third party legal action.  This is clearly inequitable in many instances.

“Joint and several” liability can leave one party “holding the bag”.

This most definitely is NOT the nature of the liability of ALMA members. The ALMA Bye-Laws provide, in Article V, Section 5.1:

“The Members accepted for and provided with insurance coverage by the Association shall severally and not jointly, but each in its own name only, mutually insure each other in accordance with the provisions in the Member’s Coverage Agreement and the provisions of these Bye-Laws ….”

Should a Supplementary Contribution (or Call) ever be necessary then each member’s liability will be based on that Member’s Contribution for that Underwriting Period in relation to the total of all Contributions for that period.

Each ALMA member will only be responsible for its fair share.

NOTE: ALMA has never had the need for a Supplementary Contribution or Call.  ALMA’s Underwriting and Reserving are designed so that the necessity of a Supplementary Contribution or Call at any time is extremely unlikely.

Note Number 2. Hearing Loss Claims

Recently I complained about the lack of equity for maritime employers in the adjudication of hearing loss claims under the Longshore Act.

I thought that I’d give the U.S. Department of Labor’s Benefits Review Board (BRB) the last word on this issue, since it is the adjudicator. Here’s an excerpt from a recent Board hearing loss decision (in a case in which the entire hearing loss award went against the employer that had employed the worker for one shift, his last day of work):

“It is outside the Board’s scope of review to change the last employer rule or to apply a rule that provides a more equitable approach to compensation. The last employer rule came about as an administratively feasible option for allocating liability in occupational disease cases, while effectuating the beneficent purpose of the Act.  In the original responsible employer hearing loss case (Travelers Insurance Company v. Cardillo, 225 F.2nd 137 (2nd Cir.) cert. denied, 350 U.S. 913 (1955)) the U.S. Court of Appeals for the Second Circuit observed that prior to the passage of the Act, an employer representative suggested that the Act should contain a provision limiting the proportion of the total award for which an employer could be liable, to the same ratio as the extent of the damage done during the period worked for that employer.  However, Congress declined to amend the Act, with the understanding that, absent such a provision, a ‘last employer’ would be liable for the full amount recoverable, even if, medically, the injury would in all probability, not be fully attributable to that last employment.  Therefore, as the last employer rule apportions liability in a fundamentally equitable manner, in that all employers will be the last employer a proportionate share of the time we reject employer’s assertion that it is against public policy to hold it liable for the claimant’s hearing loss ….”

Aside from proving that the Board uses too many commas, this is a very clear statement that the last employer rule as established in 1955 is here to stay as far as hearing loss under the Longshore Act is concerned. The Cardillo court made it perfectly plain; liability in full is assigned to the last employer that exposed the worker to the condition that led to the disease prior to the time the disability resulting from the disease became manifest, even though the disease in the particular worker’s case, “may not have been attributable at all to employment by the last employer”.

Note Number 3. Landmark Cases

Here is the list of landmark Longshore Act Supreme Court decisions that I’ve discussed in previous weeks (you can look them up):

  1. Northeast Marine Terminal Co., Inc. v. Caputo, 432 U.S. 249 (1977)
  2. Director, OWCP v. Greenwich Collieries, 512 U.S. 267 (1994)
  3. Estate of Cowart v. Nicklos Drilling Co., 505 U.S. 469 (1992)
  4. Sun Ship, Inc. v. Commonwealth of Pennsylvania, et al., 447 U.S. 715 (1980)
  5. Potomac Electric Power Co. v. Director, OWCP, 449 U.S. 268 (1980)
  6. Director, OWCP v. Perini North River Associates (Churchill), 459 U.S. 297 (1983)
  7. O’Leary v. Brown-Pacific-Maxon, Inc., 340 U.S. 504 (1951)

Here are the (landmark in my opinion) cases coming up for discussion in the near future:

  1. Herb’s Welding, Inc. v. Gray, 470 U.S. 414 (1985)
  2. Chesapeake & Ohio Ry. Co. v. Schwalb, 493 U.S. 40 (1989)
  3. P.C. Pfeiffer Co. v. Ford, 444 U.S. 69 (1979)
  4. Pacific Operators Offshore, LLP v. Valladolid, 132 S.Ct. 680 (2012)
  5. Southwest Marine, Inc. v. Byron Gizoni, 502 U.S. 81 (1991)

And that should do it for what I consider to be the most important Longshore Act Supreme Court cases. If I’ve overlooked any please let me know.

 

 

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John A. (Jack) Martone served for 27 years in the U.S. Department of Labor, Office of Workers Compensation Programs, as the Chief, Branch of Insurance, Financial Management, and Assessments and Acting Director, Division of Longshore and Harbor Workers’ Compensation.  Jack joined The American Equity Underwriters, Inc. (AEU) in 2006, where he serves as Senior Vice President, AEU Advisory Services and is the moderator of the AEU Longshore Blog.

ISSUE: Landmark Cases- Number Seven- Zone of Special Danger

I’m adding to my list of landmark Longshore Act Supreme Court decisions with a case that arose under the Defense Base Act (42 U.S.C. 1651, et seq.) (DBA). The case is O’Leary v. Brown-Pacific-Maxon, Inc., 340 U.S. 504 (1951).  It established the doctrine of the Zone of Special Danger in DBA cases (this is without a doubt one of the most misleading names ever applied to a judicial doctrine, but more on this later).

Basically, the Supreme Court in O’Leary took an existing theory of causation in the workers’ compensation context and tacked this on to the DBA, where it became known as the Zone of Special Danger doctrine (in capital letters), and the rest is history.

NOTE: The fatal accident in this case occurred during performance of a construction project in Guam when the employee attempted to rescue two swimmers by diving into a dangerous channel where swimming was expressly forbidden.

The formulation from O’Leary as it is usually cited is as follows:

“The test of recovery is not a causal relation between the nature of employment of the injured person and the accident. Nor is it necessary that the employee be engaged at the time of the injury in activity of benefit to his employer.  All that is required is that the ‘obligations or conditions’ of employment create the ‘zone of special danger’ out of which the injury arose.”

Recovery would be available for an injury arising out of “… one of the risks of the employment, an incident of the service, foreseeable, if not foreseen, and so covered by the statute.”

Note: The “statute” referred to in the above quote was not the DBA, but O’Leary was a DBA case, capital letters were applied to the doctrine and we had the DBA’s Zone of Special Danger.

For background, I’ve summarized and discussed the Defense Base Act here on several occasions.

Basically the DBA covers all employees working overseas for private employers on U.S. military bases or on any lands used by the U.S. for military purposes outside of the continental U.S. in any Territory or possession, as well as all employees working on public works contracts with any U.S. Government agency outside of the U.S.

A recent case from the U.S. Department of Labor’s Benefits Review Board (BRB) illustrates how broadly the doctrine of the Zone of Special Danger has come to be applied (and I think that this case would have come as a big surprise to the O’Leary court).

The case is Steven Ritzheimer v. Triple Canopy, Inc., and Allied World National Assurance Co., and Director, Office of Workers’ Compensation Programs, U.S. Department of Labor, BRB No. 15-0233, 2/23/2016.

The BRB granted oral argument and issued an en banc decision in this case of a claimant who was employed in Israel as a “force protection officer” pursuant to his employer’s contract with the U.S. Department of Defense.

The injury occurred when the claimant slipped getting out of the shower in his apartment. Here’s how the BRB described it:  “While showering in his apartment, the shower curtain came out of the bathtub, and the bathroom floor became wet.  When the claimant stepped out of the tub, he slipped on the floor ….” The BRB affirmed an Administrative Law Judge’s (ALJ) decision that this accident was covered under the DBA by application of the Zone of Special Danger.

The BRB listed the ALJ’s significant findings of “relevant” fact:

  • The bathroom in the claimant’s apartment was comparable to bathrooms in the U.S.,
  • The apartment’s furnishings did not include a bathmat,
  • The apartment was paid for by the employer,
  • The claimant’s job required a professional appearance, including good personal hygiene,
  • Weather conditions and the weight of his gear left the claimant sweaty and dusty after work,
  • The claimant also showered on his days off,
  • The claimant was “on call” 24 hours per day, 7 days per week, although he never worked 7 days per week or 24 hours per day.

Citing back to O’Leary, the ALJ found that the employer’s requirement that employees maintain good hygiene was a “condition and obligation” of the employment.  In the ALJ’s words, “The obligations and conditions of claimant’s employment made it necessary for him to engage in the showering activity that resulted in his injuries.”

NOTE: Surprisingly (maybe not), this is not the first DBA case resulting from an injury in a shower, but it is the first one occurring in the claimant’s off duty hours in his private apartment seemingly completely unrelated to work.

The ALJ and BRB rejected the employer’s argument that the act of showering in his private apartment on his own time was a personal activity completely disconnected from his employment.

So this is where we are with the Zone of Special Danger. I used to say that to describe DBA coverage as 24 hour, all activity coverage was not completely accurate.  I think that I may have to revise my opinion.  Admittedly, there are behaviors that would not be covered by the DBA, but based on this case and the existing case law they would have to be pretty far out there, most likely involving criminal activity or the indulging of truly unique personal idiosyncrasies.

So we have a “Zone” that covers DBA cases everywhere. It is a Zone of “Special Danger”.  But as the federal First Circuit Court of Appeals describes it, “Although the requisite ‘special danger’ covers risks peculiar to the foreign location or risks of greater magnitude than those encountered domestically, the zone also includes risks that might occur anywhere but in fact occur where the employee is injured.  ‘Special’ is best understood as ‘particular’ but not necessarily ‘enhanced’ (Battelle Memorial Institute v. DiCecca, 792 F.3rd 214 (1st Cir. 2015)). Yes, this is what we used to call doubletalk.

The doctrine is not limited to recreational or social activities in isolated areas nor is it limited to any element of special dangers of the employment in a particular locale increasing the risk of injury.

It is not necessary to establish proof of a heightened danger in order to invoke coverage under the doctrine. It apparently includes purely personal, off duty activities.

In fact, the Zone of Special Danger for DBA coverage has been applied to injuries suffered by non-U.S. citizens working in their home countries. You can’t get any less special than that.

So the Zone of Special Danger is not limited to any particular zone, there’s nothing special about the nature of the circumstances in which it applies, and there is no element of danger involved or required.

It’s not “Holy”, it’s not “Roman”, and it’s not an “Empire” for you history buffs (thank you Voltaire).

I’m calling O’Leary a “landmark” Longshore Act case, although it’s really not a “landmark” in that the zone of special danger phrase (small letters) already existed, and it’s not a Longshore Act case (it’s DBA).  But I think it’s appropriate since the case involves a Zone of Special Danger doctrine that applies everywhere, does not require “special” circumstances, and does not require any element of “danger”.

 

 

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John A. (Jack) Martone served for 27 years in the U.S. Department of Labor, Office of Workers Compensation Programs, as the Chief, Branch of Insurance, Financial Management, and Assessments and Acting Director, Division of Longshore and Harbor Workers’ Compensation.  Jack joined The American Equity Underwriters, Inc. (AEU) in 2006, where he serves as Senior Vice President, AEU Advisory Services and is the moderator of the AEU Longshore Blog.

ISSUE: Future Landmark Cases- Hearing Loss

Recently I’ve discussed issues arising under the Longshore Act that present conflicts among the federal circuit courts of appeal or other uncertainties.  These issues would benefit from a resolution at the U.S. Supreme Court.  These discussions have included issues such as concurrent jurisdiction, the interpretation of the term “adjoining” in section 3(a) of the Longshore Act, and the extent of Longshore Act coverage on the high seas and foreign territorial waters.

I’m going to discuss hearing loss claims now.  I know that the problems associated with these claims are more suited to correction by legislative amendment, but the state of the jurisprudence at present, through such judicial doctrines as the “Aggravation Rule” and the “Last Employer Rule” (and its more pernicious variant the “Last Maritime Employer Rule”) has maritime employers paying for, 1) Longshore Act benefits for pre-employment/non-work related hearing loss, 2) post employment/non-work related hearing loss, 3) post employment injurious exposure with other employers, and 4) hearing loss claims filed sometimes decades after the last alleged maritime exposure.

Hearing loss is an area where the maritime employer, under the theory of workers’ compensation entitlement, is paying for the effects of non-maritime exposure, non-work related conditions, aging, and generally life’s wear and tear.

This will be brief.  I don’t expect change any time soon, and it may well be hopeless, but I can’t resist.

First, some points with regard to hearing loss claims, which under the Longshore Act in some ways are treated as occupational disease cases and in other ways are treated as traumatic injury cases.

Legally, hearing loss under the Longshore Act is not an “occupational disease”.  It is compensated under Section 8(c)(13) of the schedule.  It is a traumatic injury in that the harm occurs immediately upon exposure.

Hearing loss is treated as an occupational disease for the identification of the responsible employer under the Aggravation Rule.

The date of injury in a hearing loss claim is the date of last exposure, which is when the average weekly wage and responsible employer are established.

BUT, the Sections 12 and 13 notice and claim filing timeliness requirements do not begin to run until the claimant has actual receipt of an audiogram and accompanying report which shows a hearing loss AND the claimant must be aware of the relationship between his work and his hearing loss.

I’m now going to list a few cases which illustrate the kinds of results that are typical in hearing loss cases. This list is representational and by no means comprehensive.  Following this list I will offer my futile suggestions for how the courts can return some semblance of fairness for the maritime employer in meeting his responsibility for compensating work related hearing loss.

Worthington v. Newport News Shipbuilding and Dry Dock Co., 18 BRBS 200 (1986) – the employer is liable for the entire binaural hearing loss where the left ear loss is due to noise exposure and the right ear loss is due to a birth defect.

Morgan v. General Dynamics Corp., 15 BRBS 107 (1982) – the claimant is entitled to compensation for his entire hearing loss where he had pre-existing non-work related hearing loss in his right ear due to Meniere’s disease, which was aggravated by work related acoustic trauma.

Primc v. Todd Shipyards Corp., 12 BRBS 190 (1980) – a claimant with a 100% hearing loss in one ear that preexisted his employment is entitled to compensation for his entire binaural impairment.

Robinson v. Bethlehem Steel Corp., 3 BRBS 495 (1976) – the BRB holds that the administrative law judge (ALJ) erred in apportioning the claimant’s hearing loss to discount the natural effects of aging.

Dubar v. Bath Iron Works Corp., 25 BRBS 5 (1991) – the BRB holds that the ALJ acted within his discretion in awarding the claimant benefits based on evidence reflecting the extent of his hearing loss in 1988 even though the claimant last worked at a covered situs in 1971.

Labbe v. Bath Iron Works Corp., 24 BRBS 159 (1991) – the claimant worked in covered maritime employment from 1941 to 1963 and in non-covered employment from 1963 until he voluntarily retired in 1979.  He was awarded benefits for work related hearing loss against the maritime employer based on an October 1986 audiogram.  The BRB states that the “… claimant need not recreate the precise extent of his hearing loss at the date covered Longshore employment terminated.”

Steevens v. Umpqua River Navigation, 35 BRBS 129 (2001) – with his last covered employment in 1975, the claimant was entitled to hearing loss benefits for the totality of his hearing loss based on two audiograms from 1998.

So the basic problem is that the maritime employer is often liable for the employee’s entire hearing loss even though some (or most) of the loss was not sustained while he worked for that maritime employer.  The maritime employer is paying for hearing loss due to many non-occupational causes such as aging and disease, as well as for non maritime workplace exposure.

The solution is simple.  Ask the courts to remove non-occupational factors and to apportion liability to assign responsibility to each employer according to actual injurious exposure.  Courts are capable of apportioning comparative liability in many other contexts.

Not so simple.  This simple solution runs counter to longstanding and well entrenched judicial doctrines designed to be equitable and for the benefit of judicial economy.  Equity has not been achieved.

Change is extremely unlikely.  I don’t want to continue to belabor the issue.  But put it on the wish list.

 

 

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John A. (Jack) Martone served for 27 years in the U.S. Department of Labor, Office of Workers Compensation Programs, as the Chief, Branch of Insurance, Financial Management, and Assessments and Acting Director, Division of Longshore and Harbor Workers’ Compensation.  Jack joined The American Equity Underwriters, Inc. (AEU) in 2006, where he serves as Senior Vice President, AEU Advisory Services and is the moderator of the AEU Longshore Blog.

ISSUE: Future Landmark Cases- High Seas, Foreign Waters

We observed last time that the issues involved in the “concurrent” jurisdiction question included the competing concepts of individual state police powers versus the need for uniform federal maritime jurisdiction.

The high seas/foreign waters issue with regard to Longshore Act coverage also involves the limits and extent of federal maritime or admiralty jurisdiction, except that here we’re looking outward rather than inward at the states.

Leaving aside questions of due process (jurisdiction over the parties) and convenient forum, a primary question is whether the overseas coverage of the Longshore Act should be coextensive with federal maritime statutes such as the Jones Act and the Death on the High Seas Act (DOHSA).  This question arises quite often as U.S. employers send their workers beyond U.S. territorial waters on to the high seas and to other countries to do work that meets maritime “status” for coverage under the Longshore Act.

We do not have an actual circuit conflict on this question, but that’s because only one circuit has given a clear answer on the question of Longshore Act coverage in foreign territorial waters.  We do, however, have uncertainty.

Here’s a brief survey of where we stand right now:

Cove Tankers Corp. v. United Ship Repair Inc., 683 F.2nd 38 (2nd Cir. 1982) – two ship repairmen injured when a boiler exploded on a voyage from New York to Philadelphia when the vessel had deviated 135 miles offshore.  The federal Second Circuit Court of Appeals held that the Longshore Act covered the injuries.

Reynolds v. Ingalls Shipbuilding Division, Litton Systems, Inc., 788 F.2nd 264 (5th Cir.), cert. denied, 479 U.S. 885 (1986) – injury occurring beyond state territorial waters (14 miles offshore)  during sea trials held covered by the Longshore Act.

Kollias v. D & G. Marine Maintenance, 29 F.3rd 67 (2nd Cir. 1994), cert. denied 513 U.S. 1146 (1998) – the Second Circuit held that Section 39(b) of the Longshore Act (33 U.S.C. 939(b)) indicates Congressional intent to cover the high seas under the Longshore Act.  The court notes that this statutory reference to “the high seas” overcomes the general presumption against extraterritorial application of U.S. statutes.  The Longshore Act was applied to this case where the injury occurred 200 miles offshore.

Weber v. S.C. Loveland Co., 28 BRBS 321 (1994) – this decision by the U.S. Department of Labor’s Benefits Review Board (BRB) applies the Longshore Act to an injury that occurred in the port of Kingston, Jamaica.  The BRB, citing foreign application of  the Jones Act and the DOHSA, based its decision on, “… the trend in admiralty law to extend coverage into foreign waters to provide uniform coverage for American workers, especially when all contact except for the site of the injury, are with the U.S.”

Keller Foundation/Case Foundation v. Tracy, 696 F.3rd 835 (9th Cir. 2012), cert. denied 133 S. Ct. 2825 (2013). – the Ninth Circuit held that the Longshore Act applies on the high seas, but that the foreign territorial waters and their adjoining ports and shore based areas are not the “navigable waters of the United States”.  The Ninth Circuit cited the strong presumption that Acts of Congress do not apply extraterritorially absent a clear statutory indication, and unlike the Second Circuit it did not find this clear indication in the Longshore Act.

So, does the Longshore Act cover an American citizen injured on the high seas or in foreign territorial waters in the course of his maritime employment?

We seem to have consistent agreement (2nd Circuit, 5th Circuit, 9th Circuit, and the BRB) that the Longshore Act applies on the high seas, at least when the employee is on the high seas situs temporarily and all other contacts of his employment are with the U.S.  And in the process of deciding its high seas cases the Second Circuit in Kollias indicated that it sees no problem with extraterritorial application of the Longshore Act.  The court cited the statement in section 39(b) authorizing the Department of Labor to establish compensation districts for injuries occurring on the high seas.

But we have uncertainty if the injury occurs in the territorial waters or adjoining land areas of a foreign country if your case is going to end up on appeal anywhere but in the Ninth Circuit.

If your case is going to end up on appeal in the Ninth Circuit, then the answer seems to be clear.  The Longshore Act does not apply in foreign waters.

NOTE:  What federal circuit your appeal ends up in is based on the place where the injury occurred.

What about everywhere else outside of the Ninth Circuit’s jurisdiction?

The last word from the BRB (in Weber) was that, subject to a few conditions, the Longshore Act applies in foreign waters.  No federal circuit other than the Ninth has decided this question, and as we saw that circuit held to the contrary in Tracy.

What will happen when the next case involving an injury occurring in foreign territorial waters arises outside of the Ninth Circuit?  Will the BRB follow its own precedent in Weber or will it adopt the reasoning of the Ninth Circuit?  Will other circuits, such as the Second and the Fifth, follow the reasoning indicated in their high seas cases and apply the Longshore Act, or will they adopt the reasoning of the Ninth Circuit?

It does seem to be a stretch to include foreign territorial waters in the definition of “navigable waters of the united States”.  On the other hand, there is the concept of uniform coverage for American workers temporarily overseas for maritime work that has to be considered.  And the BRB cited the Jones Act and the DOHSA, which have been applied in foreign waters.  The BRB sees this as indicating a trend that U.S. maritime law will follow American workers overseas.

At any rate, maritime employers need a uniform answer on the issue of the application of the Longshore Act in foreign territorial waters.  As seen above, the U.S. Supreme Court has declined to review this issue on more than one occasion.  Eventually, we’ll need an answer.

 

 

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John A. (Jack) Martone served for 27 years in the U.S. Department of Labor, Office of Workers Compensation Programs, as the Chief, Branch of Insurance, Financial Management, and Assessments and Acting Director, Division of Longshore and Harbor Workers’ Compensation.  Jack joined The American Equity Underwriters, Inc. (AEU) in 2006, where he serves as Senior Vice President, AEU Advisory Services and is the moderator of the AEU Longshore Blog.