ISSUE: Landmark Longshore Act cases – Number Six

Jack_crop 72dpiBefore I get to number six on my list of landmark Longshore Act cases decided at the U.S. Supreme Court, here is the list of numbers one to five as discussed here in the past couple of months.

Northeast Marine Terminal Co., Inc., et al. v. Caputo, et al., 432 U.S. 249 (1977)

Director, Office of Workers’ Compensation Programs v. Greenwich Collieries, 512 U.S. 267 (1994)

Estate of Cowart v. Nicklos Drilling Co., 505 U.S. 469 (1992)

Sun Ship, Inc. v. Commonwealth of Pennsylvania, et al., 447 U.S. 715 (1980)

Potomac Electric Power Company v. Director, Office of Workers’ Compensation Programs, 449 U.S. 268 (1980)

Number six involves a principle that I frequently refer to, that is frequently overlooked, but that is very much still good law.

The case is Director, Office of Workers’ Compensation Programs v. Perini North River Associates (Churchill), 459 U.S. 297 (1983).

Note:  I’m calling this case a “landmark”, not in the sense that the decision marked a turning point or new direction in the law, but rather, like the previously discussed decisions in Caputo, Sun Ship, Greenwich Collieries, Cowart, and PEPCO, it restates or refines a principle to the extent that the decision comes to constitute a one word short hand reference to that principle.  So, we here are talking about Perini coverage.

The case involved a construction worker on a barge being used in building a sewage treatment plant extending over the Hudson River.  The date of injury occurred after the passage of the 1972 Amendments to the Longshore Act.

There is no doubt that the injured worker would have been covered by the Longshore Act before the enactment of 1972 Amendments.   Pre-amendment coverage 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”.  The nature of the work being performed, whether “maritime” or otherwise, was not a factor.

The issue in the Perini case was:  what was the effect of the 1972 Amendments, which extended coverage landward and added a maritime “status” requirement for coverage, on the pre-Amendment coverage provision.  Did the Amendments replace the pre-Amendment coverage provision, so that the “status” requirement applied to all workers, or did the Amendments provide for additional areas of coverage leaving pre-Amendment coverage intact?

The claim had been denied by an Administrative Law Judge at the U.S. Department of Labor, the Benefits Review Board, and the U.S. Court of Appeals for the Second Circuit, all on the basis that the claimant had not been engaged in maritime employment.  The Supreme Court reversed and awarded benefits.

The Court noted that the consistent interpretation given to the Longshore Act by the U.S. Department of Labor, the courts, and the commentators before the enactment of the 1972 Amendments  was that (except for those workers specifically excepted in the statute) any worker injured upon navigable waters in the course of employment was “… covered without any inquiry into what he was doing (or supposed to be doing) at the time of his injury.”

The Court found nothing in the legislative history or in the 1972 Amendments themselves to indicate that Congress intended to withdraw coverage from employees injured on navigable waters in the course of their employment as that coverage existed before the 1972 Amendments.

This is the basis of Perini coverage.  In the 1972 Amendments Congress did not intend to withdraw coverage for any worker who would have been covered prior to the Amendments.  So, the usual “status” issues that I have discussed many times are irrelevant when the injury occurs over the navigable waters.

There are some open questions where the decision may vary among the several federal circuits.  For example, if the employee is over the water “transiently or fortuitously”, e.g.  he’s not working over the water but merely coming and going to work over the water, is his over the water injury covered?  This type of case will depend on the facts and the particular current circuit court’s interpretation of Perini.

But, generally speaking, the rule of Perini coverage is well established law.  If you are working over the navigable waters, your injury is covered by the Longshore 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, 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 Longshore Cases – Number Five

Jack_crop 72dpiCase number five on my list of the Supreme Court’s landmark Longshore cases is Potomac Electric Power Company v. Director, Office of Workers’ Compensation Programs, 449 U.S. 268 (1980).  This is known as the PEPCO decision.  It deals with claims for permanent partial disability.

Note:  This case arose under the District of Columbia Workmen’s Compensation Act, which until July 1980 was an extension of the Longshore Act and administered by the U.S. Department of Labor.

Under the Longshore Act, there are two ways to establish entitlement to permanent partial disability.

First, there are scheduled awards.  Section 8(c)(1) – (20) provides for compensation for a number of weeks based on loss of use of listed (or scheduled) body parts, including hearing loss and vision loss.

Example:

Section 8(c)(1) – 100% loss of use – arm = 312 weeks

8(c)(2) – 100% loss of use – leg = 288 weeks

8(c)(3) – 100% loss of use – hand = 244 weeks

Etc.

An injured worker with a medically determined 10% loss of use (impairment rating) of a leg will receive permanent partial disability compensation at the rate of two-thirds of his average weekly wage for 10% of 288 (28.8) weeks.  This is his “scheduled award”.

Second, section 8(c)(21) provides for permanent partial disability compensation in “all other cases” of partial disability, where the injury is to a non-scheduled part of the body (such as shoulder, back, neck).  In these cases the injured worker must establish a loss of wage earning capacity (LWEC), and his compensation is two-thirds of the difference between his pre-injury average weekly wage and his post-injury wage earning capacity.

The issue in the PEPCO case was whether a permanently partially disabled worker entitled to compensation under the schedule (he had a leg injury) may elect to claim a larger recovery under section 8(c)(21) based on an actual impairment of wage earning capacity.

The Court acknowledged instances, including the present case, in which the total compensation payable would be greater under the section 8(c)(21) LWEC measure than under the schedule for a scheduled body part.

In the PEPCO case, the U.S. Department of Labor’s Administrative Law Judge, and Benefits Review Board, as well as the federal Court of Appeals for the District of Columbia Circuit had all approved an award of permanent partial disability benefits based on a LWEC for a claimant with a leg injury.

The Supreme Court reversed.  It cited the language in section 8(c):

“Permanent partial disability:  In case of disability partial in character but permanent in quality the compensation … shall be paid to the employee, as follows….”

What follows is the Schedule.

Then the Court cited section 8(c)(21):

“Other cases:  In all other cases in the class of disability, the compensation shall be 66 2/3 per centum of the difference between the average weekly wages of the employee and the employee’s wage-earning capacity thereafter ….”

The Court considered the statutory language to be clear.  Payment under the schedule for an injury to a scheduled body part is mandatory.  The reference to “all other cases” in section 8(c)(21) indicates the intent not to authorize an alternative method for computation of disability benefits.  The claimant does not have an election.  An injury to a scheduled body part must be paid in accordance with the schedule.

Note:  The section 8(c) schedule applies only in cases of permanent partial disability.  Once it is determined that an employee is totally disabled, i.e., he cannot return to his pre-injury job, the schedule no longer applies.

Note:  The schedule presumes a loss of wage earning capacity.  In determining the degree of loss the effects of economic factors, such as the claimant’s age, education, the availability of job opportunities and the possibility of future loss of wage earning capacity, are not taken into consideration.  A scheduled award is based on physical impairment alone.

Note:  The minimum benefit provision of section 6(b)(2) does not apply to scheduled awards.

Note:  The site of the injury, not the site of disability, determines whether the schedule applies.  For example, a claimant who sustains a disability to the arm, a scheduled body part, which results from an injury to his shoulder, an unscheduled body part, does not have a scheduled award case.  He is compensated under section 8(c)(21) based on the site of the injury, i.e., the shoulder.

Note:  Section 8(c)(22) provides that where injury occurs to more than one member or parts of more than one member under the schedule, an award shall be made for each injury, and the awards run consecutively, except where the injury affects only two or more digits of the same hand or foot, in which case section 8(c)(17) applies.

Note:  An administrative law judge may evaluate a variety of medical opinions and observations plus the claimant’s description of his symptoms and the physical effects of his injury in determining the extent of disability under the schedule.   The Longshore Act does not require that impairment ratings under the schedule exclusively use the AMA Guides to Permanent Impairment (except for hearing loss and occupational disease cases for voluntary retirees).  In practice, however, scheduled awards are usually paid based on medical reports using the AMA Guides.

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: Supreme Court Landmark Cases- Number Four

Here is number four on my list of the Longshore Act’s landmark U.S. Supreme Court cases.

It’s Sun Ship, Inc. v. Commonwealth of Pennsylvania, et al., 447 U.S. 715 (1980).  This is the decision associated with establishing the principle of concurrent jurisdiction between state workers’ compensation laws and the Longshore Act.

Actually, Sun Ship did not create or introduce a new principle.  Concurrent jurisdiction already existed.  Following the Supreme Court’s decision in Southern Pacific Co. v. Jensen, 244 U.S. 205 (1917) and the passage of the Longshore Act in 1927, jurisdictional confusion existed based on the vague doctrine of “maritime but local”, applying state laws to injuries occurring over the water, and for injuries occurring in the so called “twilight zone”, where either federal or state law could apply (notably Davis v. Department of Labor, 317 U.S. 249 (1942) and C.D. Calbeck, et al. v. Travelers Insurance Company, et al., 370 U.S. 114 (1962)).

So while concurrent jurisdiction existed where state compensation laws could be applied on a case by case basis to injuries occurring over the water, new issues arose in the other direction when the 1972 Amendments to the Longshore Act extended federal coverage from over the navigable waters to certain land side areas.

This is where Sun Ship comes in.  The case involved five employees of shipbuilder Sun Ship who were injured on land after the effective date of the 1972 Amendments while engaged in activity covered by the Longshore Act.  The injured workers chose to file claims under the Pennsylvania Workmen’s Compensation Act.  The employer Sun Ship argued that the Longshore Act was the employees’ exclusive remedy.

This decision is usually cited for the proposition that the Longshore At did not supplant state workers’ compensation laws, it supplemented them.

The Court noted that there is nothing in the Longshore Act that expressly preempts state compensation laws and there is no sufficiently clear intent expressed in the Longshore Act from which you can infer the intent to preempt state law.

NOTE:  Remember for later:  Also, there is nothing in the Longshore Act indicating that a state cannot exclude injuries covered by the Longshore Act from its jurisdiction.

The Supreme Court in Sun Ship stated it simply: “Given that the pre-1972 Longshore Act ran concurrently with state remedies in the maritime but local zone, it follows that the post-1972 expansion of the Act landward would be concurrent as well.  For state regulation of worker injuries is even more clearly appropriate ashore than it is upon navigable waters.”

Accordingly, the Supreme Court held that states may constitutionally apply their workers’ compensation laws to land based injuries that fall within the coverage of the Longshore Act as amended in 1972.

To make a long, confusing story short, or better, to make a long story about a confusing situation short, we have concurrent state/Longshore Act jurisdiction not only for land side injuries, but occasionally for injuries over the water, in spite of the decision in Jensen, the language in Sun Ship limiting concurrent jurisdiction to landside injuries, and the U.S. Constitution’s emphasis on the need for national uniformity in maritime matters.

There’s some good news.  Remember that we noted earlier that there is nothing preventing states from excluding from their jurisdiction injuries covered by the Longshore Act.  Many states have done this and thereby have made matters more efficient, and fair, for employers and insurance carriers in those states, but many states have not.

Here is my unofficial list.  The “exclusive” states are those states that have excluded workers covered by the Longshore Act from the states’ workers’ compensation laws.  The “concurrent” states are those states where the Longshore Act and the state workers’ compensation act apply concurrently to workplace injuries.

Exclusive States 

FL, HI, IN, KY, LA, MD, ME, MS, NJ, OH, OK, OR, PA, TX, VA, WA

Concurrent States (and Territories)

AK, AL, CA, CT, DE, GA, IL, MA, MI, MN, MO, NC, NY, RI, SC, TN, WV, WI, Guam, USVI, CNMI

Note:  This list can change at any time.  Pennsylvania and Virginia have gone from “concurrent” to “exclusive” in recent years.

Concurrent jurisdiction is obviously not a good situation for employer/carriers.  It requires duplication and consequent extra expense in every aspect of the employers’ workers’ compensation programs.  You can see from the above list that there are many maritime states that are still concurrent.

Here’s a suggestion.  Amend the Longshore Act.  This way, it will not be necessary to wait for the remaining concurrent states individually to take action.  Simply add to the Longshore Act what the courts have indicated is missing, i.e., an express pre-emption of state workers’ compensation laws with regard to injuries covered by the Longshore Act.

Of course, how to do this and where to draw the line without ending up back where we started, with the vague, shifting boundary that concurrent jurisdiction was adopted to deal with, is the challenge.

A good start would be a small change to section 5(a) (33 U.S.C. 905(a)).

Section 5(a) currently reads:

“The liability of an employer … shall be exclusive and in place of all other liability of such employer to the employee … at law or in admiralty, on account of such injury or death ….”

I would simply change the wording to:

“The liability of an employer … shall be exclusive and in place of all other liability of such employer to the employee … at law or in admiralty or under any state workers’ compensation law, on account of such injury or death ….”

To provide the clear intent of express preemption you could add a section along these lines:

“Any state law that provides a remedy for an injured employee on account of such injury or death against an employer is expressly preempted when this Act applies.”

This language is just the barebones of a suggestion.  In the past, introduced but not adopted Longshore Act amendments have addressed the problem of concurrent jurisdiction with more comprehensive language.  It can be done under Congress’ admiralty and interstate commerce powers, Article III, Sec. 2 and Article I, Sec. 8 of the U.S. Constitution.

I don’t expect a change anytime soon.

So that’s it for Sun Ship.

 

 

 

jack_crop-72dpi

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: 2015 Part Three

This is a continuation of a brief list of calendar year 2015 Longshore Act related cases from the Benefits Review Board and the federal courts of appeal that I found interesting.

Crosby Forbes v. Norfolk Southern Railway Company c/o Norfolk Southern Corporation, BRB No. 14-0307, 4/16/15

This dispute involved the calculation of the claimant’s average weekly wage (AWW).  The claimant was a low seniority longshoreman with typical annual gaps in his employment history during periods when work was not available.  In the 52 weeks preceding his injury, he did not work for a total of 85 days due to his low seniority and the lack of work, and there were periods during which he received unemployment benefits.

The Administrative Law Judge (ALJ) derived the AWW by dividing the claimant’s actual earnings for the year preceding the injury by 52 weeks under section 10(c).  Among other things, the claimant objected to the use of 52 weeks as the divisor.  He argued that the ALJ should have subtracted the 85 days for which work was unavailable to him.

The ALJ noted that the claimant’s work history showed that he was not a 5 or 6 day worker, so section 10(a) did not apply for calculating the AWW.  He used section 10(c), which gives the ALJ considerable discretion to arrive at a reasonable AWW.

The Benefits Review Board affirmed the ALJ’s calculation, noting that the ALJ may account for time lost due to an unrelated injury, a strike, or other non-recurring events, but in this case the non-work time was a regular and recurring consequence of the claimant’s low seniority.  The ALJ’s method in this case reasonably accounted for the intermittent nature of the claimant’s work history and reasonably approximated his earning capacity at the time of the injury.  Basically, the ALJ found that this claimant missed time every year because of his low seniority, it was not a non-recurring event, and so the entire 52 weeks was used as the divisor.

Note:  The $5,610 that the claimant was paid in unemployment benefits was not included in the calculation, since these payments did not constitute “wages”.

Luigi A. Malta v. Wood Group Production Services; Director, Office of Workers’ Compensation Programs, U.S. Department of Labor, BRB No. 144-0312, 5/29/15

The claimant was employed as a warehouseman offshore in state waters, providing support on the “Central Facility” for various connected satellite oil and gas platforms.  The Central Facility consisted of living quarters for workers who were operating the satellite production platforms plus a warehouse and 3 cranes for loading and unloading vessels carrying supplies and equipment for the satellite platforms.  A large part of the claimant’s job was the loading and unloading of the supplies and equipment.

There is the well known Herb’s Welding, Inc. v. Gray, 470 U.S. 414 (1985), principle that work on fixed oil and gas platforms in state territorial waters is not maritime employment (so no status) and the fixed platforms are considered to be artificial islands (so no situs).  Did this claimant’s work fall outside Herb’s Welding for coverage under the Longshore Act?

The ALJ denied the claim for Longshore Act benefits.  He found that the claimant did not meet situs as the Central Facility was not an “other adjoining area” customarily used for maritime activity under section 3(a) of the Longshore Act.  He found that the operations at the location where the claimant worked were in furtherance of drilling for oil and gas, which is not a maritime purpose.

The BRB reversed.  The BRB found that the claimant’s job involved “loading and unloading a vessel”, covered employment in the plain words of the statute, thus making the Central Facility an area customarily used for a maritime function.  The nature of the cargo that is loaded/unloaded is not determinative.  There is no independent connection to maritime commerce required so the loading and unloading of equipment and supplies used in oil and gas exploration qualified as maritime employment.

Jason Mosier v. BAE Systems, BRB No. 14-0359, 6/23/15

This claim involved a wrist injury for which the employer paid temporary total disability benefits as well as a scheduled award for a 5% permanent impairment to the left arm. Two years later the claimant filed a claim for medical benefits for treatment of chronic wrist pain, depression, and post traumatic stress disorder related to the original wrist injury.

The employer maintained that these symptoms were unrelated to the wrist injury but rather were due to an intervening electrical injury that was not employment related.

The ALJ found that the claimant’s testimony was sufficient to invoke the section 20(a) presumption of causation in the claimant’s favor, that the presumption was rebutted by the employer, and that based on the record as a whole the claimant did not establish a compensable work related claim.

The BRB agreed with the ALJ that the claimant had established his prima facie case based on his testimony alone, but it remanded the case for the ALJ to reconsider the issue of the section 20(a) presumption since he had not discussed several of the medical reports.

The BRB also vacated the ALJ’s decision that the employer had rebutted the presumption of causation.  Since this case arose in the federal Eleventh Circuit court of appeals (states of AL FL, GA), the BRB was looking for medical evidence from the employer “ruling out” a causal connection between the harm and the claimant’s employment.  In the Eleventh Circuit, the BRB follows Brown v. Jacksonville Shipyards, Inc., 893 F.2d 294 (11th Cir. 1990)).

Note:  The BRB is aware that all of the other circuits have rejected the “ruling out” standard for rebutting the section 20(a) presumption, but it invoked it in this case nonetheless, following the law of the circuit.

Monty J. Carter v. Captain Elliott’s Party Boat and Texas Mutual Insurance Company, BRB No. 15-0016, 8/24/15

This was a “situs” case.  The claimant had the job title “port engineer”, and his regular duties involved repair, maintenance, and refurbishing of his employer’s vessels.  He also regularly maintained the employer’s dock and serviced spare parts and equipment.

At the time of his injury he was repairing a fence at one of the employer’s inland properties located 12 to 13 miles from its primary facility adjacent to navigable waters.  The claimant met status, since most of his work was maritime in nature.  But to be covered by the Longshore Act you must independently satisfy both status and situs.

The claimant argued that he spent 90% of his time doing maritime work on a covered situs, at the employer’s primary facility, and the work he did at the non-covered situs was exclusively related to the employer’s maritime activities so his injury should be covered.

This argument won’t work under the Longshore Act (although it might work under the Outer Continental Shelf Lands Act if there is a “substantial nexus” between a landside injury and the employer’s activities on the outer continental shelf).  The ALJ found that the location of the injury was not a covered situs and denied the claim.  The BRB affirmed.  In a case arising in the Fifth Circuit (LA, MS, TX) an area is an “adjoining area” only if it borders on or is contiguous with navigable waters.  Unlike status, situs is determined at the moment of injury, which in this case was on the employer’s inland property.

Note:  The problematic issue of “walking in and out of coverage” is status related.  Workers can and do walk in and out of situs.

Jeremy Schofield v. Federal Marine Terminals and Signal Mutual Indemnity Association, Limited, BRB No. 15-0035, 8/31/15

In this case, the indemnity compensation liability was settled for a lump sum under section 8(i).  The employer remained liable for future medical benefits.  The case ended up at the Benefits Review Board when the employer questioned the need for the claimant’s continuing use of narcotic medication.

The BRB acknowledged that, “Between March 2010 and January 2014 the claimant tested positive for marijuana and methadone, which had not been prescribed, as well as for higher than normal levels of prescription opiates and oxycodone.”

The employer’s medical specialists were of the opinion that the claimant was not a good candidate for opioid therapy and recommended that future treatment be targeted toward non-narcotic options.

To summarize, the ALJ concluded that the claimant was presented with two valid treatment options and that the claimant had the right to choose his own course of treatment.  Furthermore, the ALJ found that the claimant’s use of narcotic medications to treat his work-related back condition was reasonable and necessary.  The employer was liable for the claimant’s narcotics.  The BRB affirmed.

Nathaniel E. Raiford (Deceased) v. Huntington Ingalls Industries, Incorporated, BRB No. 15-0003, 8/24/15

This case involved a claimant who worked in a paint department for nearly 30 years, working the first shift.  He then was reassigned and moved to the second shift.  Shortly thereafter he suffered a stroke and did not return to work.  He had complained of sleeping pattern disruptions, problems with concentration, anxiety and depression following the shift change.

Were the stroke and its effects related to his employment and thus compensable under the Act?  Did the shift change constitute a working condition sufficient to establish the prima facie case and thus trigger the section 20(a) presumption of causation?

The ALJ found, and the BRB affirmed, that a shift change does not constitute working conditions for the purposes of the prima facie case and for the application of the section 20(a) presumption.

Work related stress may establish working conditions for a psychological injury, but not as a result of a legitimate personnel action.  The consequences of legitimate personnel actions on the part of the employer, such as layoffs and shift changes, will not constitute working conditions on which a claim can be based.

That’s it for 2015.

 

jack_crop-72dpiJohn 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.