ISSUE: Civil Penalties- Going Up

On July 1, 2016, the U.S. Department of Labor (DOL) published an “interim final rule” in the Federal Register. It announced the upward adjustment of the amounts of civil penalties assessed or enforced in its regulations.  The Federal Civil Penalties Inflation Adjustment Act of 1990 as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 requires agencies to adjust the levels of civil monetary penalties for inflation.  These adjustments apply to any penalties assessed after August 1, 2016, whose associated violations occurred after November 2, 2015.

In case you’re still reading, these adjustments affect several provisions of the Longshore and Harbor Workers’ Compensation Act and its extensions, the Defense Base Act, the Outer Continental Shelf Lands Act, and the Nonappropriated Fund Instrumentalities Act.

To make a long story short, here’s how the Longshore Act is affected:

Form LS-202, Employer’s First Report of Injury – the current maximum penalty amount for late reporting is $11,000 per occurrence. Effective August 1, 2016, the new maximum penalty amount is $22,587 per occurrence.

Form LS-208, Employer’s Final Report of Payment – the current maximum penalty amount for late reporting is $110 per occurrence. Effective August 1, 2016, the new maximum penalty amount is $275.

Discrimination under section 48(a) (33 U.S.C. 948(a)) (old section 49) – the current minimum penalty amount is $1,100 and the current maximum penalty amount is $5,500. Effective August 1, 2016, the new minimum penalty amount is $2,259 and the new maximum penalty amount is $11,293.

To place this information in context, I’ve summarized below my previous blog discussions with regard to Form LS-202 and Fines and Penalties.

Form LS-202, Employer’s First Report of Injury or Occupational Illness

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

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

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

More on Form LS-202.

This is from the Procedure Manual for Claims Examiners in the Division of Longshore and Harbor Workers’ Compensation in the U.S. Department of Labor (DOL):

“Under Section 30(a) of the Act, an employer must, within ten days from the date of any injury which causes loss of one or more shifts of work, or death (or from the date that the employer has knowledge of a disease, or infection as a result of such injury), furnish an employer’s report of injury or death to the District Director in the appropriate District Office (this is now the New York District Office. See the discussion of Industry Notice No. 144 above.).  In the event that the employer does not have immediate knowledge of the injury, the ten day period begins to run from the date that the employer obtains such knowledge.”

The timely reporting of injuries to the DOL by the employer is very important. In some ways it’s to the advantage of the employer, and there are penalties attached to failure to comply with the 10 day requirement.

On November 9, 2009, the DOL published Industry Notice No. 130: “Subject:  Initiative to Improve Timeliness in Employer’s First Report of Injury and Initial Payment of Compensation.”  In this Notice, the DOL announced its intention to “scrutinize more closely” the “timeliness in filing first reports of injury.”

This Notice did not add any new reporting requirements nor change in any way the Section 30(a) ten day requirement. Rather, it reflected the DOL’s intent to improve the industry’s compliance with the existing standard.  This initiative by DOL is in conformance with the requirements of the Government Performance and Results Act of 1993 (GPRA), which requires that agencies set goals and measure progress against those goals.

So, what must the employer do under Section 30(a)? It’s simple.  The employer must send Form LS-202 to the appropriate DOL district office (New York) within 10 days of a lost time injury, or 10 days from the date that it has knowledge of the injury.  The term “lost time injury” means time lost beyond the day or shift of the injury.  A report of injury should also be filed if no time is lost but it is anticipated that the incident will result in an impairment rating and a claim for a scheduled award under Section 8(c).  Note:  The reports are timely so long as they are mailed within the 10 days as evidenced by the postmark.

The report can be filed by regular mail, or it may be filed electronically once the employer has registered with DOL as an electronic filer.

Keep in mind:

  • the report must be mailed within 10 days. Don’t wait to verify all of the information or to complete an investigation.   It is more important to report the injury timely;
  • the Form LS-202 is not “evidence” of any fact stated in the report. The employer can describe reported events as “alleged” if it wishes, but it’s not necessary;
  • the statute of limitations for filing a claim does not begin to run until the employer files the Form LS-202. If the employer never files the Form LS-202, the claim filing time requirement never begins to run against the injured worker;
  • it is the employer’s obligation to file the Form LS-202, not the insurance carrier’s. If the employer sends the report to its insurance company within 10 days, and the insurance company then files it with the DOL too late, the employer has failed to comply with the requirement;
  • the information on the Form must be accurate. Incorrect statements can be inconvenient to explain later on, and there are harsh provisions in the Act to deal with intentional false statements.

 

PENALTY

The 1984 amendments to the Longshore Act changed the basis for the assessment of penalties under Section 30(a). The language of “failure or refusal to send any required report” was changed to “knowingly and willfully” failing or refusing to send a report.  “Knowingly” means that the employer knew or should have known of the requirement, and “willfully” means either intentionally disregarding the statute or being plainly indifferent to its requirements.

The maximum penalty for failing to file Form LS-202 within 10 days was set in the 1984 amendments at $10,000 per occurrence. Then, effective November 17, 1997, the maximum was increased to $11,000 under the provisions of the Federal Civil Penalties Inflation Adjustment Act of 1990 as amended by the Debt Collection Improvement Act of 1996. Effective August 1, 2016, the maximum penalty amount is $22,587.

Fines and penalties assessed under various provisions of the Act go into the Special Fund, but raising money for the Fund is not the purpose of the penalty provisions. Far less than 1% of Special Fund receipts in any given year are due to fines and penalties.  The Section 30(a) requirement in particular and DOL’s current compliance initiative are intended to improve the administration of the Act.

ISSUE: Fines and Penalties

There 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.”

Effective August 1, 2016, the maximum penalty amount is $275.

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(a) –  See discussion regarding Form LS-202 above.

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)

“Sec. 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.”

Effective August 1, 2016, the minimum penalty amount is $2,259 and the maximum penalty amount is $11,293.

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.

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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 Nine – Schwalb

The latest addition to my list of landmark Longshore Act cases is Chesapeake & Ohio Ry. Co. v. Schwalb, 493 U.S. 40 (1989).

Three employees of an interstate railroad were injured while working at a coal loading facility owned and operated by their employer. They each filed a negligence lawsuit against the employer under the Federal Employers Liability Act (FELA).  The trial courts in the state of Virginia dismissed the lawsuits on the grounds that the workers were covered by the Longshore Act, and that this workers’ compensation law was their exclusive remedy against their employer.

The Virginia Supreme Court reversed the trial courts’ dismissals and found that the employees had a tort remedy under FELA. The U.S. Supreme Court granted appellate review, because the state court’s interpretation of the concept of “status” under the Longshore Act differed from the approach taken in several federal courts.

Schwalb is a key “status” case that reinforces the landmark principles of Northeast Marine Terminal Co., Inc. v. Caputo, 432 U.S. 249 (1977).  In light of Caputo, the Schwalb decision is straightforward and uncomplicated.

Nancy Schwalb was injured while performing janitorial services at a location where coal was being unloaded from railway cars onto a vessel. One of her duties was to clear spilled coal from around and underneath conveyor belt rollers which carried the coal to a loading tower where it was dumped into the hold of a ship.

The Supreme Court of Virginia had taken the position that employees performing purely maintenance duties are not covered by the Longshore Act, likening such workers to clerical workers who it viewed as peripheral to the maritime process.

The U.S. Supreme Court had explained in Caputo that Congress, in amending the Longshore Act in 1972, intended to solve the problem of workers walking in and out of coverage.  Under the pre-1972 Amendments Longshore Act employees would walk in and out of Longshore Act coverage during their workday as they performed some tasks over water and other tasks ashore.  Congress intended, “to provide continuous coverage throughout their employment to those amphibious workers who, without the 1972 Amendments, would be covered only for part of their activity”.

Congress had in mind coverage for, “… persons whose employment is such that they spend at least some of their time in indisputably longshoring operations ….”

Specifically with regard to Schwalb, the Court stated that those employees who are injured while repairing or maintaining equipment essential to the loading or unloading process are covered. The determinative consideration is that the ship loading process could not continue unless the equipment was operating properly.

“Someone who repairs or maintains a piece of loading equipment is just as vital to and integral a part of the loading process as the operator of the equipment. When machinery breaks down or becomes clogged or fouled because of the lack of cleaning the loading process stops.”

So, from Schwalb we have the now familiar expansive formulation of the interpretation of “status”.

“Maritime” employment, within the meaning of 33 U.S.C. Section 902(3), includes not only the specified occupations or employees who physically handle cargo, but also land based activity occurring within the relevant situs if it is an “integral or essential part of loading or unloading a vessel”.

The Schwalb Court also reinforced a key principle of Caputo.

“It is not essential to our holding that the employees were injured while actually engaged in these essential tasks. They are covered by the LHWCA even if, at the moment of injury, they had been performing other work that was not essential to the loading process.”

There is no walking in and out of status. Workers who meet maritime status for any part of their employment are covered throughout their employment.  There is no minimum amount of time required.  It is simply necessary that some regularly assigned part of the employee’s duties be “maritime” and you have a full time Longshore worker.  And there is no “moment of injury” test.

 

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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 Eight- Herb’s Welding

I’m adding another case to my list of landmark Longshore Act cases, not because this case is a true “landmark” in the traditional sense of the word, but rather simply based on the frequency with which it’s cited to with regard to the key coverage issue of “status”.

The case is Herb’s Welding, Inc. v. Gray, 470 U.S. 414, decided by the U.S. Supreme Court in 1985.

Mr. Gray was a welder who built and maintained oil pipelines and platforms. He was injured (date of injury 7/11/75) while welding a gas flow line on a fixed offshore oil drilling platform in Louisiana state waters.

The employer’s workers’ compensation insurance carrier paid benefits under the state’s workers’ compensation law; Mr. Gray filed a claim under the Longshore Act; and the employer contested.

The U.S. Department of Labor’s (DOL) Administrative Law Judge (ALJ) denied the claim based on the fact that Mr. Gray was not engaged in maritime employment and thus did not meet “status” under the Longshore Act. He based his decision on a U.S. Supreme Court decision in a Death on the High Seas Act (DOHSA) lawsuit (Rodrigue v. Aetna Casualty & Surety Co., 395 U.S. 352 (1969)).

NOTE: The Rodrigue case was a wrongful death action brought in admiralty under the DOHSA after two petroleum workers were killed on fixed offshore platforms on the outer continental shelf of the United States (ocs).  The issue was whether the case arose under admiralty jurisdiction and whether the DOHSA applied.  The Supreme Court held that admiralty jurisdiction did not reach the situs of fixed platforms under the admiralty’s traditional locality test.  The Outer Continental Shelf Lands Act (OCSLA) and thus surrogate state law applied to the claims.

In the Gray case, the DOLs Benefits Review Board (BRB) reversed the ALJs denial of the Longshore Act claim and awarded benefits, but not under the Longshore Act. The BRB held that Mr. Gray was entitled to benefits under the OCSLA even though the injury occurred in state territorial waters.  The BRB based its decision on the “as a result of” language in 43 U.S.C. Section 1333(b).

NOTE: Section 1333(b) reads:

“With respect to disability or death of an employee resulting from any injury occurring as the result of operations conducted on the Outer Continental Shelf for the purpose of exploring for, developing, removing or transporting by pipeline the natural resources, or involving rights to the natural resources, of the subsoil and seabed of the outer Continental Shelf, compensation shall be payable under the provisions of the Longshoremen’s and Harbor Workers’ Compensation Act.”

The Fifth Circuit affirmed the award of benefits, not under OCSLA but under the Longshore Act, finding that the claimant met the Longshore Act’s “situs” and “status” requirements under the Act.

This back and forth between the denial of Longshore Act benefits by the ALJ, the award by the BRB under OCSLA, and an award under the Longshore Act by the Fifth Circuit, finally reached the Supreme Court, which held by a 5 to 4 majority that the claimant did not meet “status” and thus was not entitled to Longshore Act benefits.  In the process the Court left several questions unanswered.

The Supreme Court stated that, “Mr. Gray was a welder. His work had nothing to do with the loading or unloading process, nor is there any indication that he was even employed in the maintenance of equipment used in such tasks.  He built and maintained pipelines and the platforms themselves.  There is nothing inherently maritime about those tasks.”

The holding in the case was simply stated: “Because Gray’s employment was not ‘maritime’ in nature he does not qualify for benefits under the LHWCA.  We need not determine whether he satisfied the Act’s situs requirement.”

So, it’s a specifically limited holding, dealing with the question of “status”. Oil and gas work on fixed platforms in state waters is not covered by the Longshore Act, because it is not maritime employment.

Floating in the background but not decided or discussed were several other important coverage issues.

Was the claimant covered under Perini?

NOTE: Under Director, Office of Workers’ Compensation Programs v. Perini North River Associates (Churchill), 459 U.S. 297 (1983), any employee injured while performing his job on navigable waters is covered by the Longshore Act as amended in 1972 just as he would have been covered prior to the Amendments.

This question was disposed of in a footnote, which found no Perini application since the claimant was not injured “on the navigable waters” and would not have been covered prior to the 1972 Amendments. The fixed platform on which he was injured was considered to be an “artificial island”.

The claimant traveled to and from the platforms every day by boat. What about this as it might pertain to Perini over the water coverage?  The Supreme Court stated, “We express no opinion whether such coverage (LHWCA) extends to a worker injured while transiently or fortuitously upon actual navigable waters.”  (The Court still has not expressed its opinion on this question.)

Was Mr. Gray covered under OCSLA as the BRB had ruled? The Court stated, “We express no opinion on his argument that he is covered by (OCSLA).”  The issue had not been fully briefed and argued, and had not been discussed by the Fifth Circuit.

NOTE: In 2012, in Pacific Offshore Operators LLP v. Valladolid the Supreme Court resolved the OCSLA situs of injury conflict between the Fifth and Ninth circuits by affirming the Ninth Circuit’s holding that there is no requirement in OCSLA that an injury must occur on the outer continental shelf (ocs).  What is needed for OCSLA coverage is “substantial nexus” between an injury and the employer’s on-ocs extractive operations.  Today, under the Valladolid test Mr. Gray might be covered under OCSLA if he could meet the substantial nexus test.

It turned out in the Gray case that the ALJ was right, the BRB had the right idea ahead of its time (but later changed its position anyway – it’s a long story) and the Fifth Circuit had it wrong.

NOTE: Herb’s Welding is limited to the holding with regard to the Longshore Act status of oil and gas workers on fixed platforms in state waters.  Subsequent cases have illustrated how Longshore coverage can exist on fixed platforms in state waters.  The recent case of Luigi A. Malta v. Wood Group Production Services and Director, Office of Workers’ Compensation Programs, U.S. Department of Labor, BRB No. 14-0312 (5/29/15), involved an injury to an offshore “warehouseman”.  He worked on a fixed platform in Louisiana state waters, like Mr. Gray.  His job, however, working on a fixed platform called the Central Facility, was primarily loading and unloading supplies and equipment used in the drilling activities on satellite platforms.

The ALJ found based on Herb’s Welding that the claimant was not engaged in maritime employment, and also that he was not injured on a covered situs.  The ALJ implied that maritime commerce was not involved since what was loaded and unloaded was supplies and equipment used in drilling activities rather than traditional commercial cargo.

The BRB reversed the denial of benefits. It found that, “The nature of the cargo that was loaded and unloaded is not determinative of the situs inquiry.”  It does not have to have a maritime commercial purpose to be “cargo”.  It just has to be coming on and off vessels.

The claimant in the Malta case met “status” as a maritime employee and thus the platform was an “other adjoining area” which was customarily used for maritime activity. Status and situs for coverage under the Longshore Act were met.

So Herb’s Welding is still good law, but there are workers on fixed platforms in state waters that do meet status and situs under the Longshore Act based on the nature of their job duties.

NOTE: I think that this all came out right.  If work on fixed platforms had been assumed by Congress to be maritime employment then extending Longshore benefits to the ocs through the OCSLA would have been redundant.

 

 

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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: A Guest Post (Subrogation) and a GLOSSARY Update

Subrogation

Here is another contribution from Royce Ray, AEU’s Director of Subrogation.

NOTE: Royce is a Certified Subrogation Recovery Professional (CSRP).  The CSRP designation is conferred by the National Association of Subrogation Professionals (NASP) on individuals who possess substantial industry experience and pass a comprehensive examination on subrogation investigation, management and recovery.  Royce has been a CSRP since 2009, and he is an experienced personal injury attorney, having practiced law for approximately seventeen years prior to joining AEU in 2007 as Director of Subrogation.

Here’s Royce:

“Over the years I have been asked, “What is the number one thing that you would want an ALMA (American Longshore Mutual Association) member to know about subrogation?” It’s a great question, and my answer may surprise you.

I would say to actively look for third party involvement immediately after any incident. The most widespread problem that hampers identification of viable subrogation is the failure to search for third party involvement.  Often I review incident reports that do not address this.  If third party involvement is not actively explored during an investigation, viable subrogation will not be uncovered and indeed may be forever lost.  The result:  a lost opportunity to save money on your workers’ compensation insurance.

There is a fascinating psychology experiment known as The Invisible Gorilla (see www.theinvisiblegorilla.com).  When you get a moment I encourage you to visit The Invisible Gorilla website.  In the now famous experiment subjects view players passing a basketball and are asked to count the number of times that the ball is passed.  A man dressed in a gorilla suit walks through the circle of players as they are passing the ball.  On average approximately fifty percent of the subjects report not seeing the gorilla, despite the fact that he appeared right before their eyes.

Several years ago I attended a national conference of subrogation professionals where one of the speakers compared identifying subrogation to not seeing the man in the gorilla suit. His observation is so true – if you do not deliberately look for subrogation, rest assured that much like the “invisible gorilla”, you will probably not find it.”

Thanks Royce.

 

Glossary Update

Several years ago I posted a discussion which began like this:

Have you noticed that conversations among lawyers who specialize in the Longshore Act frequently seem to consist of cryptic, single word references? The code word is usually a reference to a court case that stands for a principle of law that the lawyers are familiar with.  It is usually the name of the plaintiff in the case, but not always.

Here is a lengthy, but even so, incomplete, list of “Longshore” cases along with the shorthand version of the principle involved. Most of these are U.S. Supreme Court cases, but there are also a few cases from the federal Circuit Courts of Appeals.

There has been sufficient jurisprudence since this discussion to justify an update to include recent cases affecting the Longshore Act and extensions.

O’Leary – Not a new case, but it belongs on the list.  It established the Zone of Special Danger doctrine in cases arising under the Defense Base Act. (O’Leary v. Brown-Pacific-Maxon, Inc., 340 U.S. 504 (1951))

Valladolid – There is no situs of injury requirement in the Outer Continental Shelf Lands Act.  The test for coverage is that there must be “substantial nexus” between the injury and the employer’s extractive operations on the outer continental shelf. (132 S.Ct. 680 (2012))

Lozman – The current test for vessel status.  In the eyes of a reasonable observer the contrivance must be practically capable of serving as a means of transportation of people or things over water.  (133 S.Ct. 735 (2013))

Roberts – The maximum weekly compensation rate is applicable in a case when the claimant is “newly awarded compensation” as the phrase appears in section 6(c).  This is when he first becomes statutorily entitled to benefits no matter when, or whether, a compensation order is issued in his case.  (Dana Roberts v. Sealand Services, Inc.; Kemper Insurance Company; and Director, Office of Workers’ Compensation Programs, U.S. Department of Labor, 132 S.Ct. 1350 (2012)).

The Osceola – summarized the rights of seamen in the U.S. under the general maritime law (unseaworthiness and maintenance and cure, transportation and wages).  The confirmation of the absence of a negligence remedy against the seaman’s employer contributed to the passage of the “Jones Act” in 1920.  (The Osceola, 189 U.S. 158 (1903))

Jensen – the “Jensen Line” established the boundary of state workers’ compensation law jurisdiction at the edge of the navigable waters of the United States.  The gap in protection that it created for land based maritime workers led to the eventual passage of the Longshore Act in 1927. (Southern Pacific RR Company v. Jensen, 244 U.S. 205 (1917))

Davis – recognized the existence of a coverage “twilight zone” between the Longshore Act and state act workers’ compensation laws.  (Davis v. Department of Labor, 317 U.S. 249 (1942))

Cardillo – established the “last responsible employer” rule in occupational disease cases.  (Travelers Insurance Co. v. Cardillo, 225 F.2nd 137 (2nd Cir. 1955))

Caputo – repudiated the “moment of injury” test in Longshore cases.  If any part of a worker’s duties is maritime in nature then he is a full time Longshore worker.  (Northeast Marine Terminals v. Caputo, 432 U.S. 249 (1977))

Herron – Situs test for Longshore Act coverage in the Ninth Circuit (Washington, Oregon, Montana, Idaho, California, Nevada, Arizona, Alaska, and Hawaii).  (Brady-Hamilton Stevedore Co. v. Herron, 568 F.2nd 87 (9th Cir. 1978))

Ford – First landward stop for cargo is not the final step in unloading.  All intermediate steps are covered. P.C. Pfeiffer Co. v. Ford, 444 U.S. 69 (1979))

Winchester – Former situs test in the Fifth Circuit (Louisiana, Texas, and Mississippi).  (Textports Stevedore Co. v. Winchester, 632 F. 2nd 504 (5th Cir. 1980)) overruled by New Orleans Depot Services, Inc. v. Director, Office of Workers’ Compensation Programs (Zepeda), 718 F.3rd 384 (5th Cir. 2013)).  The Fifth Circuit now agrees with the Fourth Circuit that to be an “other adjoining area” for situs under the Longshore Act the situs must be contiguous with, or touching, navigable waters.

Sun Ship – The Longshore and Harbor Workers’ Compensation Act supplements state workers’ compensation laws, it does not supplant them.  This confirmed the principle of concurrent state and federal jurisdiction.  (Sun Ship, Inc. v. Commonwealth of Pennsylvania, 447 U.S. 715 (1980))

PEPCO – The Section 908(c) schedule is mandatory for injuries that fall within the schedule.  (Potomac Electric Power Co. v. Director, Office of Workers’ Compensation Programs, 449 U.S. 268 (1980))

Scindia – Established the vessel owner’s duties to longshore workers, one of reasonable care subject to the limitations as contained in the turnover duty, active control duty, and duty to intervene..  (Scindia Steam Navigation Co. Ltd. v. De Los Santos, 451 U.S. 156 (1981))

Perini – Situs over navigable waters confers status.  (Director, Office of Workers’ Compensation Programs v. Perini North River Associates (Churchill), 459 U.S. 297 (1983))

Herb’s Welding – Status case, work on fixed oil and gas platforms in state territorial waters is not maritime employment.  (Herb’s Welding v. Gray, 470 U.S. 414 (1985))

Schwalb – Status test, work must be “integral” or essential to the employer’s loading, unloading, shipbuilding, or ship repair activities.  (Chesapeake & Ohio Ry. Co. v. Schwalb, 493 U.S. 40 (1989))

Cowart – a claimant becomes a “person entitled to compensation” at the moment that the right to recovery vests whether or not he or she is actually receiving compensation.  (Estate of Cowart v. Nicklos Drilling Co., 505 U.S. 469 (1992))

Abbott – Claimant entitled to permanent total disability benefits during participation in DOL approved vocational rehabilitation plan.  (Louisiana Insurance Guaranty Association v. Abbott, 40 F. 3rd 122 (5th Cir. 1994))  Also see Castro in the Ninth Circuit.

Greenwich Collieries – There is no “true doubt rule” in Longshore cases.  The claimant is not entitled to judgment if the evidence is evenly balanced.  The proponent of a position bears the burden of proof by a preponderance of the evidence.  (Director, OWCP v. Greenwich Collieries, 512 U.S. 267 (1994)).  (See also Santoro v. Maher Terminals, Inc.)

Sidwell – Situs test in Fourth Circuit (Maryland, Virginia, West Virginia, North Carolina, and South Carolina).  (Sidwell v. Express Container Services, Inc. 71 F. 3rd 1134 (4th Cir. 1995))

Harcum – The Director, Office of Workers’ Compensation Programs, cannot initiate appeals to the federal Circuits (except for section 908(f) (second injury) issues).  The Director is not the designated champion of the claimant.  (Director, Office of Workers’ Compensation Programs v. Newport News Shipbuilding and Dry Dock Co. (Harcum), 514 U.S. 122 (1995))

Chandris – Test for seaman status.  (Chandris, Inc. v. Latsis, 515 U.S. 347 (1995))

Rambo – Even if there is no present loss of wage earning capacity a claimant may be awarded a de minimus award but there must be a significant possibility of future loss of earnings.  (Metropolitan Stevedores v. Director, Office of Workers’ Compensation Programs (Rambo II), 521 U.S. 121 (1997))

Price – Aggravation rule in traumatic injury cases.  (Metropolitan Stevedore Co. v. Crescent Wharf & Warehouse Co. (Price), 339 F. 3rd 1102 (9th Cir. 2002))

Stewart – Broad definition of a vessel includes “every description of watercraft or other contrivance used, or capable of being used, as a means of transportation on water” (Stewart v. Dutra Construction Co., 543 U.S. 481 (2005)).  This case has been superseded by Lozman’s new “reasonable observer” test for vessel status (see above).

 

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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.