ISSUE: The Aggravation Rule

 

 

Jack_crop 72dpiI’m surprised that I haven’t yet discussed the Aggravation Rule here at AEU’s Longshore Blog.  So it’s about time.

First, let’s start with the “Last Employer Rule”.  This is a judge created rule that the courts use to mitigate the difficulties and delays inherent in trying to apportion liability among several employers for disability due to cumulative exposure in occupational disease cases.  The last employer to have exposed the worker to “injurious stimuli” prior to the date of injury is held liable for the entire resulting disability (the date of injury in occupational disease cases is the date of manifestation).

The Last Employer Rule is based on the assumption that it is equitable because all employers will be the last responsible employer a fair, proportional number of times, so aside from simplifying litigation, the rationale is that the rule is not unfair.

This may be a dubious proposition in general; in specific instances it can be quite inequitable, but the courts have adopted it.

It can certainly be inequitable as it is applied in Longshore Act cases.  As the Last Maritime Employer Rule, it assigns liability to the last responsible employer under the Longshore Act notwithstanding subsequent and intervening injurious exposure in non-covered employment.  An extreme example is the claimant who worked for Newport News Shipbuilding and Dry Dock Company for six months during the 1950s where he was exposed to asbestos and then worked for over thirty years for NASA where he was also exposed to asbestos.  His widow collected survivor’s benefits from Newport News under the Longshore Act.

The Last Employer Rule used in occupational disease cases has a counterpart in cases involving multiple party cumulative traumatic injuries.  It is known as the Aggravation Rule.

As a general proposition, the determination of the responsible employer in cumulative trauma claims turns on the distinction between whether the claimant’s disability is the result of the “natural progression” of a work related injury or an “aggravation” of that injury.

NOTE:  “Natural Progression” means that the disability would have occurred and been the same without the occurrence of a subsequent injury.

If the disability results from the natural progression of an initial injury, then the employer at the time of that initial injury is the Responsible Employer for the entire disability.  But if the conditions of employment with a subsequent employer aggravated, accelerated, or combined with the earlier injury, then the employer at the time of the second injury is liable for the entire resulting disability.

Of course there are inequitable applications.  In a well known Ninth Circuit case, the claimant continued to work after he was scheduled for bilateral knee surgery.  He worked a total of one shift for a stevedore employer, and the court found that this one shift caused a minor but permanent increase in the claimant’s disability; in other words, an aggravation.  The stevedore on that last day of work was found to be the responsible employer for the entire disability even though the claimant had worked only one day with that employer over the previous 20 years.  The court held that the one day of work was sufficient to aggravate the knee conditions that the last employer inherited from the previous employers.

As noted above, in a traumatic injury case, the pertinent issue is whether an employee’s disability is the result of the natural progression of his injury with earlier employers, or whether the condition was aggravated by an injury with a later employer.

The Last Employer Rule and the Aggravation Rule raise many questions.

  1. Does the last responsible employer in occupational disease cases get a credit against its liability under section 903(e) of the Longshore Act for settlements reached by the claimant with previous maritime employers for the same injurious exposure? The answer is “No”. Section 903(e) only provides a credit for payments made under “other” workers’ compensation laws or the Jones Act.
  2. In the case of two hearing loss exposures with two different employers confirmed by two separate audiograms, is the last maritime employer responsible for the entire hearing loss? Under certain circumstances, the answer is “No”. These constitute two separate injuries payable by separate employers. They are not merged under the Aggravation Rule.
  3. If the claimant executes a lump sum settlement under section 8(i) of the Longhshore Act with the last responsible employer does this end the claimant’s entitlement and let the previous employer(s) off the hook? The answer is “Not necessarily”. Where the settlement with the last responsible employer for whatever reason (in the court’s judgment) does not fully compensate a good faith claimant for his entire disability, the claimant may look to previous employers for full compensation. (Yes, this is an example of inconsistent application of the Rule by the courts.)
  4. In the case of successive traumatic aggravating injuries, can the last responsible maritime employer take a credit for previous scheduled award payments made by previous employers? The answer is “Yes”. In this situation, the Benefits Review Board, affirmed by the federal Courts of Appeal, has created an extra-statutory credit in order to avoid double recoveries. The credit is for the dollar amount of the prior payments and only applies to scheduled awards in cumulative trauma cases.
  5. An increase in pain or the manifestation of symptoms due to employment is an “injury” for application of the Aggravation Rule, regardless of any change in the underlying condition. It also triggers the section 20(a) presumption.
  6. The relative contribution of the pre-existing condition and the aggravating injury are not weighed. The employer at the time of the aggravating injury is responsible for the entire disability.
  7. In traumatic injury cases a claim must be filed within 1 year of the time that the claimant is aware, or should have been aware, of the relationship between the injury and his employment. When additional employers are added as defendants after a claim has been filed, the time limitation does not begin to run against any subsequently added employers until the initial employer against which the claimant timely filed his claim is found not to be liable. The only timeliness issue in these cases involves the claim against the first employer named.

There is obviously much to be said on both sides of the Aggravation Rule, but it is a fact of life in Longshore Act cases.  This has been only a very brief summary of how it works.

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 and Financial Management, and the 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: Situs – Unusual Situations

Jack_crop 72dpiAs we’ve frequently discussed, a worker must meet the maritime employment “status” test for Longshore Act coverage (section 2(3) of the Act), and he also must independently meet the “situs” or location  of injury requirement (section 3(a)).

Let’s take a look at some marginal situs situations.

There are three ways to meet “situs”:  1) “… if the disability or death results from an injury occurring upon the navigable waters of the United States …”, 2) on certain “enumerated” sites (such as a pier, wharf, dry dock. terminal, building way, or marine railway), or, 3) on an “other adjoining areas customarily used” for maritime activity.

The Longshore Act does not define “navigable waters of the United States”.  For both the Longshore Act and the seamen’s remedies under the Jones Act and the general maritime law the phrase is interpreted under the so-called “navigable in fact” test as set out in the U.S. Supreme Court’s decision in The Daniel Ball, 10 Wall. 557, 19 L.Ed. 999 (1871)

“(Rivers) are navigable in fact, when they are used, or susceptible of being used, in their ordinary condition, as highways of commerce, over which trade and travel are or may be conducted … and they constitute navigable waters of the United States, in contradistinction from the navigable waters of the State, 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.”

So, the water at the site of the injury must carry or be capable of carrying interstate or international commerce, or it must join up with other waters that are capable of carrying interstate or international commerce.

Whether or not the water is affected by the tides, or whether it may have been navigable at some point in the past, doesn’t matter.  The test for navigable waters under the Longshore Act is based on present use or susceptibility for future use in interstate or international commerce.  This was illustrated in a recent Benefits Review Board case (Daniel O’Donnell v. Nautilus Marine Protection, Inc. and State Compensation Insurance Fund) in which the Board affirmed an Administrative Law Judge’s finding that a stretch of the Los Angeles River was not “navigable in fact”  even though the U.S. Army Corps. of Engineers and the Coast Guard has it listed as navigable under their separate criteria.

This “navigable in fact” test seems like a straightforward, workable approach.  And it usually is.

Situs questions, however, occasionally come up that involve unusual situations.  There are cofferdams, bayous, industrial flumes, reservoirs, dams, marshes, lakes, swamps, all sorts of natural or unnatural, temporary or permanent diversions of otherwise navigable waters that test the limits of “navigable in fact”.

I thought that I would look at a few of these unusual situations and try to identify some general principles that can be used as other situations arise.

First, let’s consider bayous, swamps, and marshes together since they share common characteristics relevant to the “navigable in fact” test.

Bayous, swamps, and marshes frequently are tributaries to, connected with, or adjacent to, larger bodies of water.  They are usually characterized by shallow water and thick vegetation, and activity is often conducted by specialized vehicles that may or may not be “vessels”.   The question is, are these bodies of water navigable at the location where the injury occurred?  You have to apply the “navigable in fact” test.  Is waterborne activity only possible by the most specialized of vehicles and then with difficulty only within restricted areas?  Or does the area, or could the area, actually serve as a highway of interstate commerce?  It’s a case by case test.  Hint:  If your “vessel” has treads, is continuously getting stuck in the weeds, or has to be carried in to the area and assembled there in order to operate, you are most likely not on the navigable waters of the United States.

Next, let’s look at cofferdams.  What is a cofferdam?  I consulted a dictionary, because my personal vague impression was simply that a cofferdam is an area that is temporarily dry because the surrounding water has been pumped out and blocked off so that things like piers and bridges can be built.

I was pretty close.  My dictionary says that a cofferdam is, “1.  a temporary watertight enclosure for construction or repairs in waterlogged soil or under water, 2. a sealed void between two bulkheads that prevents the escape of liquids, heat, etc.”

So what about situs when an injury occurs within a cofferdam, an area that is temporarily dry but surrounded by navigable waters?  It may depend on the temporary nature of the seal and the fact that the area will be flooded and navigable again in the future, and on whether or not the project within the cofferdam involves the construction of an inherently maritime structure.  For example, a dry dock has a maritime purpose, but a bridge usually is not considered to be a maritime structure.

Situs may depend on whether the area temporarily withdrawn from navigable waters will be re-flooded at the end of the project and returned to navigability.  If this is the case, and the project involves a maritime purpose or structure, then I think that an injury within the cofferdam will meet situs.

What about lakes?  The question of Longshore Act situs on a lake simply comes down to the question of whether or not the lake is contained completely within a single state with no access from the lake to other bodies of water and other states.  If the lake is completely intra-state then it is not a navigable water of the United States.  Just make sure that you cannot travel by water from the lake to other bodies of water that are geographically inter-state or international, or that the lake is not on a border between states.

The body of water in question must be part of a, “continued highway over which commerce is or may be carried on with other States or foreign countries ….”

How about the many varieties of water diverted from otherwise navigable waters for man made contrivances and purposes?

This includes water from adjacent navigable rivers diverted to circulate into and out of the heating and cooling systems of industrial plants, or to form industrial reservoir tanks for storage or manufacturing purposes, sewage treatment operations, and any other variety of diverted water systems or pools.  Once underground pipes or vents remove the water from the navigable waterway it is likely that this is where navigability ends.  The water in these industrial water systems can be considered to have been permanently removed for the purpose of carrying interstate commerce.

Reservoirs and dams can be tricky, but the key remains interstate or international commerce.  First determine if the body of water dammed to form the reservoir is capable of carrying interstate commerce.  Then you have to determine what stretches of that body of water may no longer be navigable due to the formation of the dam and reservoir.   If the reservoir is landlocked within a single state then it is not a navigable water of the United States.  Watch out for a reservoir (or lake) on the border between two states.  That’s interstate.

An unusual situation arises when a project involves work beneath the sea or river bed, such as the digging of tunnels.  Work on or in the navigable waters of the United States meets situs.  What about underneath?  I think this probably would not meet situs.

Remember, we’re only discussing situs in the context of whether or not a body of water qualifies as “navigable waters of the United States”.  If you rule out situs on this basis, you still have to consider whether situs is met under the alternative grounds of whether the injury occurred on an enumerated site or on an “other adjoining area customarily used” for maritime employment.

So, I was looking for general principles to apply in unusual situs situations.  There’s really only one.  Since situs is determined at the moment of injury, the general principle is whether or not that situs presently carries, or is capable of carrying with reasonable improvements, interstate or international commerce.

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 and Financial Management, and the 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: Fines and Penalties

Jack_crop 72dpiThere are several sections in the Longshore Act that provide for civil or criminal fines and penalties.  These provisions variously apply either to claimants or employers as specified.  Here’s a list of the things that you can do or not do to earn a fine or penalty.

Section 8(j)

“8(j)(1) – the employer may inform a disabled employee of his obligation to report to the employer not less than semiannually any earnings from employment or self-employment, on such forms as the Secretary shall specify in regulations.

(2)  An employee who –

(A) fails to report the employee’s earnings under paragraph (1) when requested, or

(B) knowingly and willfully omits or understates any part of such earnings … forfeits his right to compensation with respect to any period during which the employee was required to file such report.”

Notes on Section 8(j):

“A disabled employee” is interpreted to mean one who is actually receiving compensation.

U.S. Department of Labor Form LS-200 is used to request reports of earnings.

Any amounts forfeited under section 8(j) are recovered by offset against future compensation as determined by the District Director.

The Longshore Act does not provide for recovery of an overpayment directly from the claimant.  The only recourse for recovery is to offset the overpayment against future compensation.

Section 8(j) was added in the 1984 Amendments.

Section 14(e)

“(e) If any installment of compensation payable without an award is not paid within fourteen days after it becomes due, as provided in subdivision (b) of this section, there shall be added to such unpaid installment an amount equal to 10 per centum thereof, which shall be paid at the same time as, but in addition to, such installment … unless such nonpayment is excused by the deputy commissioner ….”

Notes on section 14(e):

The employer is not liable under section 14(e) if it timely controverts the claim under section 14(d).

“Deputy Commissioner” means District Director.

Nonpayment is excused by the District Director based on a showing by the employer of conditions beyond its control.

Section 14(f)

“(f) If any compensation, payable under the terms of an award, is not paid within ten days after it becomes due, there shall be added to such unpaid compensation an amount equal to 20 per centum thereof, which shall be paid at the same time as, but in addition to, such compensation, unless review of the compensation order making such award is had as provided in section 21 and an order staying payments has been issued by the Board or court.”

Notes on section 14(f):

“…within ten days” outside the federal Fifth Circuit Court of Appeals means 10 calendar days.  Within the Fifth Circuit (states of LA, MS, TX) it means 10 business days.

There is no defense, equitable or otherwise, to the 10 day requirement of money in the claimant’s hands.

Section 14(g)

“(g) Notice of payment; penalty.  Within sixteen days after final payment of compensation has been made, the employer shall send to the deputy commissioner a notice, in accordance with a form prescribed by the Secretary of Labor, stating that such final payment has been made, the total amount of compensation paid, the name of the employee and of any other person to whom compensation has been paid, the date of the injury or death, and the date to which compensation has been paid.  If the employer fails to so notify the deputy commissioner within such time the Secretary of Labor shall assess against such employer a civil penalty in the amount of $100.”

Notes on Section 14(g):

The form prescribed by the Secretary of Labor is Form LS-208.

Section 15(a)

“15. (a) No agreement by an employee to pay any portion of premium paid by his employer to a carrier or to contribute to a benefit fund or department maintained by such employer for the purpose of providing compensation or medical services and supplies as required by this Act shall be valid, and any employer who makes a deduction for such purpose from the pay of any employee entitled to the benefits of this Act shall be guilty of a misdemeanor and upon conviction thereof shall be punished by a fine of not more than $1,000.”

Section 28(e)

“(e) A person who receives a fee, gratuity , or other consideration on account of services rendered as a representative of a claimant, unless the consideration is approved by the deputy commissioner, administrative law judge, Board, or court, or who makes it a business to solicit employment for a lawyer, or for himself, with respect to a claim or award for compensation under this Act, shall, upon conviction thereof, for each offense be punished by a fine of not more than $1,000 or be imprisoned for not more than one year, or both.”

Notes on Section 28(e)

This was added by the 1984 Amendments.

Section 30(e)

“(e) Any employer, insurance carrier, or self-insured employer who knowingly and willfully fails or refuses to send any report required by this section or knowingly or willfully makes a false statement or misrepresentation in any such report shall be subject to a civil penalty not to exceed $10,000 for each such failure, refusal, false statement, or misrepresentation.”

Notes to section 30(a):

This penalty was changed in the 1984 Amendments.  The amount was increased from $500 and the “knowingly and willfully” language was added.

Section 31(a)(1)

“Se. 31.(a)(1) Any claimant or representative of a claimant who knowingly and willfully makes a false statement or representation for the purpose of obtaining a benefit or payment under this Act shall be guilty of a felony, and on conviction thereof shall be punished by a fine not to exceed $10,000, by imprisonment not to exceed five years, or by both.”

This section was changed by the 1984 Amendments, when a misdemeanor became a felony.

Section 31(c)

“(c) A person including, but not limited to, an employer, his duly authorized agent, or an employee of an insurance carrier who knowingly and willfully makes a false statement or representation for the purpose of reducing, denying, or terminating benefits to an injured employee, or his dependents pursuant to section 9 if the injury results in death, shall be punished by a fine not to exceed $10,000, by imprisonment not to exceed five years, or by both.”

This section was added by the 1984 Amendments.

Section 37

“Sec. 37.  No stevedoring firm shall be employed in any compensation district by a vessel or by hull owners until it presents to such vessel or hull owners a certificate issued by a deputy commissioner assigned to such district that it has complied with the provisions of this Act requiring the securing of compensation to its employees.  Any person violating the provisions of this section shall be punished by a fine of not more than $1,000, or by imprisonment for not more than one year, or by both such fine and imprisonment.”

Note:  This Certificate, Form LS-239, may be obtained by the employer by request to the District Director in the district where the covered operations will take place.

Section 38(a)

“Sec. 38. (a) Any employer required to secure the payment of compensation under this Act who fails to secure such compensation shall be guilty of a misdemeanor and, upon conviction thereof, shall be punished by a fine of not more than $10,000, or by imprisonment for not more than one year or by both such fine and imprisonment; and in any case where such employer is a corporation, the president, secretary, and treasurer thereof shall be also severally liable to such fine or imprisonment as herein provided for the failure of such corporation to secure the payment of compensation;….“

Note:  The amount of the fine was increased from $1,000 to $10,000 by the 1984 Amendments.

Section 38(b)

“(b) Any employer who knowingly transfers, sells, encumbers, assigns, or in any manner disposes of, conceals, secretes, or destroys any property belonging to such employer, after one of his employees has been injured within the purview of this Act, and with intent to avoid the payment of compensation under this Act to such employee or his dependents, shall be guilty of a misdemeanor and, upon conviction thereof, shall be punished by a fine of not more than $10,000, or by imprisonment for not more than one year, or by both such fine and imprisonment; and in any case where such employer is a corporation, the president, secretary, and treasurer thereof shall be also severally liable to such penalty or imprisonment as well as jointly liable with such corporation for such fine.”

Note:  The amount of the fine was increased from $1,000 to $10,000 by the 1984 Amendments.

Section 41(f)

“(f) Any employer who, willfully, violates or fails or refuses to comply with the provisions of subsection (a) of this section (furnish and maintain safe places of employment) … shall be guilty of an offense, and, upon conviction thereof, shall be punished for each offense by a fine of not less than $100 nor more than $3,000; and in any case where such employer is a corporation, the officer who willfully permits any such violation to occur shall be guilty of an offense, and, upon conviction thereof, shall be punished also for each offense by a fine or not less than $100 nor more than $3,000.”

Section 48(a) (as recodified; section 49 in printed versions of the Act)

Sec. 49. It shall be unlawful for any employer or his duly authorized agent to discharge or in any other manner discriminate against an employee as to his employment because such employee has claimed or attempted to claim compensation from such employer, or because he has testified or is about to testify in a proceeding under this Act…. Any employer who violates this section shall be liable to a penalty of not less than $1,000 or more than $5,000 ….”

Note:  The 1984 Amendments raised the range from $100/$1,000 to $1,000/$5,000, and added the phrase, “The discharge or refusal to employ a person who has been adjudicated to have filed a fraudulent claim for compensation is not a violation of this section.”

General Notes to Fines and Penalties:

The Federal Civil Penalties Inflation Adjustment Act of 1990 as amended by the Debt Collection Improvement Act of 1996 has the effect of periodically changing the amounts of civil penalties provided for in the Act.  For example, the maximum penalty for failing to file Form LS-202, Employer’s First Report of Injury, within 10 days was set in the 1984 Amendments at $10,000.  Effective November 17, 1997, the maximum was increased to $11,000.

Fines and penalties assessed under the various provisions of the Act go into the Special Fund, but raising money for the Fund is not the purpose of the fine and penalty provisions.  An insignificant amount of Special Fund receipts in any given year are due to fines and penalties.  The fine and penalty provisions are intended solely to improve administration of the Act.

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 and Financial Management, and the 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: Presumptions

Jack_crop 72dpiSection 20 of the Longshore and Harbor Workers’ Compensation Act (33 U.S.C. 920) contains several key presumptions.  It states:

In any proceeding for the enforcement of a claim for compensation under this Act it shall be presumed, in the absence of substantial evidence to the contrary –

  1. That the claim comes within the provisions of this Act.
  2. That sufficient notice of such claim has been given.
  3. That the injury was not occasioned solely by the intoxication of the injured employee.
  4. That the injury was not occasioned by the willful intention of the injured employee to injure or kill himself or another.

What Is a Presumption?

A presumption is a procedural tool that shifts the burden of proof.  It is not evidence.  It does not strengthen a party’s case.  What it does do is advance a party’s case by shifting the burden of proof on an issue to the other party.  The section 20 presumptions are for the claimant’s benefit in Longshore cases.

Rebuttable Presumptions

The section 20 presumptions are “rebuttable”.  The employer can rebut each of the presumptions by providing “substantial evidence” to the contrary.  “Substantial evidence” is “sufficient to support a rational conclusion by a reasonable person”.  It does not have to be sufficient to decide an issue by a “preponderance” of evidence.  The employer does not have to provide sufficient evidence to defeat the claim at the rebuttal stage (but the employer can lose at this stage).  The employer must produce “substantial evidence” to remove the presumption from the case.

Once a presumption is rebutted it drops from the case, and the issue in question must then be decided by a preponderance of the evidence based on consideration of the record as a whole.

The Section 20(a) Presumption

“(a) That the claim comes within the provisions of the Act.”

I discussed this presumption back on April 19, 2012, so this will merely be a summary.

This presumption arises at the point at which the claimant makes his prima facie case.  To do this, the claimant must show that he has suffered some harm or pain and that an accident occurred or working conditions existed that could have caused the harm.  Subjective complaints of pain, standing alone, are sufficient to establish the prima facie case.  The claimant is not required at this stage to produce any additional evidence, medical or otherwise.  He does not have to trace his injury or harm to a specific time, or diagnose the source of his pain.

At this point the section 20(a) presumption comes into play and provides the claimant with a rebuttable presumption that the injury is causally related to his employment.

The employer must then try to rebut the presumption by providing substantial evidence that the alleged accident did not happen, or by providing substantial evidence that severs the connection between the alleged disability and the work environment.  The employer needs a combination of medical evidence (an unequivocal medical opinion that the injury or harm could not have been caused by the work environment), a favorable credibility determination by the Administrative Law Judge, or negative evidence (records do not corroborate the claimant’s version of events).

The section 20(a) presumption has limits.  It does not apply to:

  1. Establish the fact of injury,
  2. Establish jurisdiction or coverage,
  3. Establish nature and extent of disability,
  4. Establish a loss of wage earning capacity.

NOTE:  In spite of frequent references to a “presumption of coverage” in the Longshore Act, there is, in fact, no such presumption in the law.  There is, however, the section 20(a) presumption of causation.

The section 20(a) presumption establishes a causal connection between the harm and the claimant’s job.  If the employer is unable to rebut the presumption then the claimant wins on the issue of causation.  If the employer successfully rebuts the presumption then the issue of causation must be decided based on consideration of the record as a whole with the claimant bearing the burden of proof.

The Section 20(b) Presumption

“(b) That sufficient notice of such claim has been given”.

There are two particular timeliness provisions with regard to claims in the Longshore Act.

Section 12(a) states that, “Notice of an injury or death in respect of which compensation is payable under this Act shall be given within thirty days after the date of such injury or death ….”

Section 13(a) states that, “Except as otherwise provided in this section, the right to compensation for disability or death under this Act shall be barred unless a claim therefore is filed within one year after the injury or death ….” (two years in occupational disease cases)

The section 20(b) presumption places the burden of proof on the employer to rebut by substantial evidence the presumption that the claimant has met the notice and claim timeliness requirements.

NOTES regarding the section 20(b) presumption:

Even without the presumption, the employer will find it difficult to prevail on timeliness issues.  The U.S. Department of Labor (DOL) can excuse the untimely section 12 notice requirement unless the employer can show that it has been prejudiced by an untimely notice of injury, and the Administrative Law Judges and Benefits Review Board are reluctant to deny claims based on issues of untimeliness.

The federal circuit courts of appeal disagree on whether the section 20(b) presumption applies to both the sections 12 and 13 requirements.  The Benefits Review Board, however, applies the section 20(b) presumption to both the notice and claim filing requirements.

Before it can challenge timeliness, the employer must show that it satisfied the requirement in section 30(f) that the injury must be reported to DOL within 10 days on Form LS-202.  If Form LS-202 is not filed, then the timeliness requirement does not begin to run.

The Section 20(c) Presumption

“20(c) – That the injury was not occasioned solely by the intoxication of the injured employee.”

Section 20(c) must be read in conjunction with section 3(c).  The Longshore Act makes a defense available to the employer.  Section 3(c) states, “No compensation shall be payable if the injury was occasioned solely by the intoxication of the employee or by the willful intention of the employee to injure or kill himself or another.”

An employer asserting the section 3(c) intoxication defense must first rebut the section 20(c) presumption that the injury was not occasioned solely by intoxication if it is to prevail.

The requirement that intoxication be the “sole” cause of the injury places a heavy burden of proof on the employer even if it manages to rebut the presumption by producing substantial evidence that the claimant was intoxicated and that the injury was caused solely by the intoxication.  Practically speaking, the employer must conclusively rule out every other possible contributing cause of the accident.

This situation emphasizes the necessity for comprehensive and immediate accident investigation, including drug and alcohol testing, photographs, identification of witnesses, and preservation of physical evidence.

It is important to remember that while intoxication might be the primary cause of the death or injury, that does not mean that it is the “sole” cause.  If any other possible contributing factor is identified then the presumption is not rebutted and the 3(c) defense fails.

The Section 20(d) Presumption

“(d) – That the injury was not occasioned by the willful intention of the injured employee to injure or kill himself or another.”

Once again, the section 3(c) defense provides that, “No compensation shall be payable if the injury was occasioned solely by the intoxication of the employee or by the willful intention of the employee to injure or kill himself or another.”

Once again, an employer asserting this defense must first rebut the section 20(d) presumption that the injury was not occasioned by willful intent.

This presumption comes into play most frequently in cases involving fights at work or in cases involving the suicide of the injured worker.

If a claimant is involved in an altercation on the work premises, the presumption under section 20(d) is that any injury he suffers is not the result of his willful intent to injure himself or another.

Since an injured worker would be extremely unlikely to admit that he was injured in the course of willfully intending to injure another person (possibly exposing himself to collateral liability or criminal charges) it is difficult to rebut the presumption.  In the circumstances following a work fight, the injured worker will invariably claim that he was an innocent bystander or the victim of unprovoked aggression.  As will all others in attendance.

Cases involving suicide are more challenging on the issue of causation.

There are two presumptions available to the claimant in this circumstance.  The section 20(a) presumption of causation applies as well as the section 20(d) presumption against willful intent.

So, in basic terms, the survivor who files a claim for benefits under the Act has two presumptions in his/her favor:  1) that the death is related to work, and 2) that the death was not the result of willful intent on the part of the deceased to injure or kill himself or another.

The employer may rebut either of the presumptions by producing substantial evidence to the contrary.  If the presumptions are rebutted, they drop out of the case, and the issues are then decided on the record as a whole by a preponderance of the evidence.

The employer may then try to defend the claim under section 3(c), by establishing that, in the event of suicide, that the suicide was the result of willful intent on the part of the deceased.

The first question that may arise is, can suicide not be the result of willful intent, especially where there is a “suicide note” left behind, or there are other indications of pre-planning?  The mere fact of suicide, however, does not establish willful intent.

The concept of “irresistible suicidal impulse” has evolved in cases involving suicide.  If the decedent’s suicide was caused by an irresistible suicidal impulse resulting from an employment related condition then this overcomes willful intent and the section 3(c) defense fails.

Recently, the federal Ninth Circuit Court of Appeals has changed its focus in its causation analyses away from the question of the existence of an irresistible impulse resulting from employment related conditions into an analysis more in terms of a chain of causation based on whether the work injury and its effects precluded the formation of a rational and willful intent to commit suicide.

The Ninth Circuit states that a survivor’s claim in the case of suicide is compensable where there is, “a direct and unbroken chain of causation” between a compensable work related injury and the suicide where the injury and its consequences directly result in the claimant’s loss of normal judgment.  In the opinion of the Ninth Circuit, this approach better comports with modern psychiatry and the no-fault nature of the Longshore Act.

Once again, it is important to remember that the section 20 presumptions are rebuttable.  If the employer fails to rebut a presumption by producing substantial evidence, then the claimant will prevail on that issue.

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 and Financial Management, and the 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: Perini Coverage

Jack_crop 72dpiI think that this is a good time to mention again a longstanding but perennially overlooked coverage concept.  (I resisted the urge to use Perini-ally overlooked.  You’re welcome.)

It’s a straightforward coverage principle.

There is no maritime “status” requirement for an employee injured in the course of his employment over the navigable waters of the United States and who is not otherwise excluded by a provision of the Longshore Act.   Under these circumstances, “situs” confers “status”.

We’re referring to the U.S. Supreme Court’s 1983 decision in the case of Director, Office of Workers’ Compensation Programs v. Perini North River Associates (Churchill), 459 U.S. 297.

Let’s start at the beginning.  When the Longshore Act was enacted in 1927, and up until the 1972 Amendments, coverage under the Act was determined by the location of the injury.  If the injury occurred over the navigable waters of the U.S. or on a dry dock then the worker was covered by the Longshore Act, unless an express exclusion applied, such as “master or member of a crew of any vessel”.

Pre-72 Amendments coverage was simply a function of the location of the injury.  Any worker over the water, regardless of the work he was doing, was covered.

The ’72 Amendments expanded coverage landward and added a maritime “status” requirement, but nothing in the language of the Amendments withdrew coverage from any employee who had been covered prior to the Amendments.

This is the basis of “Perini” coverage.  As the Supreme Court held, Congress, in the 1972 Amendments, did not intend to withdraw coverage from any worker who would have been covered prior to the Amendments.  There is no “status” test for injuries occurring over the navigable waters.

In the 1984 Amendments Congress added certain exclusions for occupations or employees of certain types of enterprises as listed in sections 2(3)(A)-(F) (33 U.S.C. 902(3)(A)-(F)).  These exclusions apply even if the injury occurs over navigable waters.  There was nothing in the 1984 Amendments, however, that indicated that injuries occurring over the water did not remain covered.  In other words, Congress did not overrule Perini.

So, the usual maritime “status” issues that I have discussed many times are irrelevant when the injury occurs over the navigable waters.  I know that I keep repeating myself.  Perini coverage does not depend on the nature of the worker’s duties (unless, of course, an express exclusion applies).

There is one other issue (along with the question of the applicability of an exclusion) to be alert for when considering “Perini” coverage.

The question may arise whether a worker who commutes to and from land based work as a passenger on a boat over the water is eligible for “Perini” coverage if he is injured during the commute.

The issue is whether the worker was over the water transiently or fortuitously and not in the course of his employment.

What is “transiently or fortuitously”?  I don’t exactly know, but here’s a hint.  “A worker injured on the water who performs a ‘not insubstantial’ amount of his work on navigable waters is neither transient nor fortuitous.

How much is “not insubstantial”?  I don’t exactly know.  It must be “more than a modicum”.

How much is “more than a modicum”?  I don’t know.

Let’s say that if more than 5% of an employee’s regular duties require him to be over the water then this would be considered “not insubstantial” and “more than a modicum”.  This would separate the (transient and fortuitous) commuter from the worker eligible for “Perini” Longshore Act coverage.  As long as traveling over the water is a regular part of a worker’s job duties then you have a real issue of “Perini” coverage.  It’s working as opposed to merely commuting as a passenger.

So, don’t forget.  Work over the water is covered by the Longshore Act regardless of the maritime status of the worker.

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 and Financial Management, and the 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: Modification Under Section 22

Jack_crop 72dpiI recently referred to a case which involved modification under section 22 of the Longshore Act (33 U.S.C. 922).  In this case, the federal Fifth Circuit Court of Appeals confirmed that modification of a final Award may be available for a mistake of fact, not only based on new evidence, but on evidence that was available at the time of the original hearing and Compensation Order.

I’d like to take another look at section 22.  Once again, it states:

“Upon his own initiative, or upon the application of any party in interest … on the ground of a change in conditions or because of a mistake in a determination of fact by the (ALJ), the (ALJ) may, at any time prior to one year after the date of the last payment of compensation, whether or not a compensation order has been issued, or at any time prior to one year after the rejection of a claim, review a compensation case … and issue a new compensation order which may terminate, continue, reinstate, increase, or decrease such compensation, or award compensation.”

Section 22 modification provides the only means for changing a final decision.  It is very liberally interpreted to favor accuracy over finality.  A prominent commentator states that section 22 provides, “perhaps the most permissive ‘mistake’ reopening rule on record”.

We know that to obtain modification based on a mistake of fact a party does not need new evidence.  It may present evidence that was available at the time of the first hearing.

Section 22 also liberally permits modification based on “change in conditions”, or changed circumstances.  This most frequently involves changes in the claimant’s medical or economic condition, wage earning capacity, or ability to work.  It potentially covers a wide range of circumstances and events subsequent to the Award.  Here are just a few of many possibilities.

Scenario One – based on surveillance video and a functional capacity evaluation, the employer believes that a totally disabled claimant receiving benefits pursuant to an order is no longer totally disabled.  The employer requests modification under section 22 based on a labor market survey.  The employer is seeking to change the award from total disability to partial disability based on the claimant’s ability to work.

The employer presents evidence of a wage earning capacity based on its evidence of suitable alternate employment, i.e., realistically available jobs within the geographic area where the claimant resides which he is capable of performing considering his age, education, work experience and physical restriction, which he could secure if he diligently tried.

Scenario Two - a claimant has a compensation order awarding a scheduled award based on a 15% permanent loss of use of the left leg.  Within one year of the payment of the scheduled award in a lump sum, the claimant writes a letter to the U.S. Department of Labor’s District Director requesting additional compensation.  He presents a medical report showing deterioration in his medical condition.  He is non-specifically claiming either a larger scheduled award or total disability.

This letter will very likely be considered as a request for modification under section 22.

Scenario Three – a claimant is receiving benefits pursuant to a compensation order awarding permanent partial disability based on a loss of wage earning capacity.  The employer believes that the claimant’s earning capacity has increased due to additional skills, training, and experience that he has acquired since the Award was issued in his case.  The employer requests modification based on a change in condition, i.e., a higher wage earning capacity.

Note:  Increased earnings due strictly to COLA’s or seniority raises will probably not be considered as an increase in the worker’s earning capacity.

Essentially, modification can be requested based on changed conditions in a variety of situations, seeking to change total disability to partial, or partial disability to total, or to increase or decrease wage earning capacity, or to modify in any other way an otherwise final compensation order, including an order denying benefits.

Miscellaneous considerations relating to section 22:

Modification must be requested prior to one year from the last payment of compensation under a compensation order, or one year from the denial of a claim.

If a claim is denied then the time to request modification begins to run on the date that the order becomes final, at the conclusion of the appellate process.

Payment of medical benefits under section 7(a) does not constitute the payment of “compensation” for purposes of the section 22 time limit.

Section 22 cannot be used to correct legal mistakes or errors in strategy.  Legal errors may only be challenged by a timely motion for reconsideration or by appeal.

A lump sum settlement under section 8(i) cannot be modified under section 22 once the compensation order approving the settlement is final.

As the Fifth Circuit acknowledged, there is the potential for abuse here for both parties.

For example, successive modification petitions may be filed as long as each one is filed within 1 year of the rejection of the previous claim.  Once a party requests modification it is entitled to the same procedures available in an original claim, including a de novo hearing before an Administrative Law Judge, review by the Benefits Review Board, and an appeal to the federal Court of Appeals.  The employer must defend each request for modification.

New evidence is not required.  Modification may be based on further reflection of the evidence initially submitted, or by the introduction of evidence available but not presented at the time of the original adjudication.

Clearly there is the potential for an interminable series of modification requests under a provision that strongly emphasizes accuracy over finality.

While the potential is there, there does not seem to have been widespread abuse of the modification provision.

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 and Financial Management, and the 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: Part Three

Jack_crop 72dpiThis is the conclusion of a brief review of some interesting Longshore Act and Jones Act cases that were decided in calendar year 2014.

William C. Skye v. Maersk Line, 11th Circuit, 5/15/14

This is a Jones Act case for damages for injury allegedly resulting from overwork and an erratic sleep schedule.  The claimant suffered from left ventricular hypertrophy, which his doctor attributed to long work hours and lack of sleep.  The plaintiff claimed that he was negligently saddled with excessive hours and arduous duties to the point that he was overworked.  He testified that he regularly worked as Chief Mate for 90 to 105 hours per week.

At the trial at the federal district court the jury found in favor of the plaintiff and awarded substantial damages, but the Eleventh Circuit Court of Appeals reversed and rendered judgment in favor of Maersk.

The appeals court’s decision was based on the principle that an injury caused by work related stress is not compensable under the Jones Act, since the Jones Act only concerns injuries caused by physical perils pursuant to Consolidated Railcorp v. Gottshall,  512 U.S. 532 (1994), a Supreme Court decision in a case arising under the Federal Employers Liability Act.

The physical damage due to work related stress in this case was not caused by a physical peril, since the damage was not caused by physical impact either directly or within the “zone of danger”.  A work schedule is not a physical peril.

NOTE:  The claimant in this case demonstrated a physical injury, but the alleged cause of the injury was work related stress.  It seems harsh, but under the Jones Act there is no recovery for negligently inflicted physical injury unless the worker suffered a physical impact directly or was within the “zone of danger” of fear of a physical impact.

Island Operating Company, Inc.; Louisiana Workers’ Compensation Corporation v. Director, Office of Workers’ Compensation Programs; Martin B. Taylor, Jr., 5th Circuit, 12/20/13

This is a Longshore case involving the aggravation rule and modification under section 22 of the Longshore Act.

The aggravation issue was resolved simply; the claimant had pre-existing knee issues, aggravated by his work with the employer.  There was no specific traumatic injury that led to the claimant’s Longshore Act claim in 5/06, but working conditions that aggravated the pre-existing condition supplied the injury arising out of and in the course of employment.

The employer established suitable alternate employment, and commenced paying the claimant compensation for permanent partial disability based on a loss of wage earning capacity.

In 1/10, within the time limits allowed under section 22, the claimant filed a claim for modification of his Award, based on medical evidence showing a 25% impairment rating to each knee.  Modification was granted.  The ALJ modified the previous award to include a 25% scheduled award for each knee.

Section 22 states, “Upon his own initiative, or upon the application of any party in interest … on the ground of a change in conditions or because of a mistake in a determination of fact by the (ALJ), the (ALJ) may, at any time prior to one year after the date of the last payment of compensation, whether or not a compensation order has been issued, or at any time prior to one year after the rejection of a claim, review a compensation case … and issue a new compensation order which may terminate, continue, reinstate, increase, or decrease such compensation, or award compensation.”

The employer appealed the modification Award to the Board, arguing that the medical evidence supporting the modification which added the scheduled awards had been available at the time of the original hearing, and if modification were granted under these circumstances there would be the potential for the endless re-litigation of issues.  The employer argued that modification based on a mistake in a determination of fact should be based only on new, previously unavailable evidence.

So, the issue was what constitutes “a mistake in a determination of fact” such that a prior judgment may be modified.

The Board stressed the principle that section 22 modification is intended to replace finality with accuracy and should be broadly applied.  It affirmed the modification, which was affirmed in turn at the Fifth Circuit.

NOTE:  A claimant may receive payment concurrently for an award of permanent partial disability based on a scheduled award (PPS) and an award of permanent partial disability based on a loss of wage earning capacity (PPL).   There is little in the Act by way of hard and fast rules covering concurrent payments for different types of disability, and each case has to be looked at individually.  An ALJ has discretion in designing awards.  The goal is to balance full compensation for injured workers while avoiding “double dipping”.   Here are some general provisions relating to concurrent awards in cases of permanent partial disability:

  • The combined rate for the two awards can be paid up to two-thirds of the worker’s average weekly wage in accordance with section 8(a), even if this exceeds the maximum weekly compensation rate for a single injury.
  • If necessary because of the limitation in the weekly payment allowable (to 2/3 of the worker’s AWW), the number of weeks for the scheduled award(s) may be increased to provide that the schedule is paid in full (more weeks at a lower rate to the full dollar amount of the award).
  • You can receive two (or more) scheduled awards for two (or more) separate injuries based on the same accident or for separate injuries or separate accidents. The awards run consecutively.

The appellate court acknowledged the employer’s concern about the potential for serial requests for modification under section 22, but advised by way of the familiar refrain, “the remedy lies with Congress and not with this court.”

So, once again it is confirmed that the modification provision in section 22 of the Longshore Act will be very liberally applied.

McBride v. Estis Well Service, LLC, 5th Circuit, 9/25/14

This Fifth Circuit en banc decision (reversing the decision of a three judge panel) is a welcome recent statement on the issue of what damages are recoverable by seamen or their personal representatives under the Jones Act and the general maritime law.

To say as the Court did that this issue is “the subject of national debate with no clear consensus” borders on understatement with a hint of irony.

Mix pecuniary losses, non-pecuniary losses, and punitive damages with the Jones Act, the general maritime law’s warranty of seaworthiness and maintenance and cure, throw in the Federal Employers Liability Act and the Death on the High Seas Act, and you can find jurisprudential support for just about any result you’re looking for with regard to recoverable damages.

To make a very long story shorter, now based on McBride in the Fifth Circuit (states of TX, LA, MS), damages under the Jones Act and the general maritime law’s warranty of seaworthiness are limited to “pecuniary damages”; in other words, no non-pecuniary and no punitive damages as controlled by Miles v. Apex Marine Corp., 498 U.S. 19 (1990).

Note:  “pecuniary losses” compensate for actual losses, and exclude “those losses which result from the deprivation of the society and companionship which are equally incapable of being defined by any recognized measure of value”, Michigan Central Railroad Co. v. Vreeland, 227 U.S. 59 (1913).  Examples of tort damages that are considered to be non-pecuniary include loss of consortium, loss of society, and grief.

Note:  In actions for maintenance and cure under the general maritime law, punitive damages may be available for the wanton and willful refusal to pay, based on Townsend v. Atlantic Sounding Company, 129 S. Ct. 2561 (2009).

So now there’s at least some clarity in the Fifth Circuit.  Seamen cannot recover punitive damages for Jones Act negligence or general maritime law unseaworthiness.

The Fifth Circuit’s decision traced a coherent path to its holding.  It goes through the Federal Employers Liability Act (FELA 1908) allowing pecuniary damages only, to the Supreme Court’s decision in Vreeland (1913) following and establishing the non-pecuniary damages bar in FELA, to the Jones Act’s incorporation of FELA’s ban on non-pecuniary damages (1920), and Death on the High Seas Act (DOHSA, 1920) bans on non-pecuniary damages, and the Supreme Court’s decision in Miles holding that in view of what Congress specifically allowed in the Jones Act and DOHSA (pecuniary damages only), it is not for the courts to expand by way of the general maritime law.

Note again:  The exception is the separate general maritime law action for maintenance and cure, where punitive damages may be available.

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 and Financial Management, and the 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.

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