ISSUE: Circuit Conflicts

Jack_crop 72dpiI’ve occasionally referred to the fact that you do not always get the same answer to the same question from one federal circuit court of appeals to another with regard to certain issues arising under the Longshore Act. Some of these issues in conflict are big, important questions, while others involve finer points of practice or interpretation. In any case, since the goal of the Admiralty and Commerce clauses of the U.S. Constitution is national uniformity in maritime matters, any conflicts among the federal circuits are problematic for maritime employers.

This list of potential circuit conflicts is in no way exhaustive; rather it is intended to be simply illustrative of the fact that there may be differences on certain issues.

Here is a breakdown of the federal circuits by state:

First Circuit – ME, NH, RI, MA, Puerto Rico
Second Circuit – NY, CT, VT
Third Circuit – PA, NJ, DE, U.S. Virgin Islands
Fourth Circuit – MD, VA, WV, NC, SC
Fifth Circuit – LA, TX, MS
Sixth Circuit – OH, KY, TN, MI
Seventh Circuit – WI, IL, IN
Eighth Circuit – MN, IO, MO, AR, NE, SD, ND
Ninth Circuit – WA, OR, MT, ID, CA, NV, AZ, AK, HI
Tenth Circuit – WY, UT, CO, KS, OK, NM
Eleventh Circuit – AL, GA, FL

Here, in no particular order, is my Top Ten list of Federal circuit conflicts involving issues arising under the Longshore Act.

1. Situs – Until very recently the Fourth Circuit was the only federal court of appeals to hold the view that an “other adjoining area” under Section 3(a) of the Longshore Act must actually be contiguous, or touch, the navigable water to be a covered situs. Now, the Fifth Circuit has overruled its holding in Winchester, and it has joined the Fourth Circuit in its restrictive approach to situs. The Fourth and Fifth Circuits are, so far, the only circuits to hold the view that “adjoining” means actually touching.

2. Situs – a “pier” is an enumerated site under Section 3(a) for Longshore Act coverage. But what is a “pier”? In the Ninth Circuit, and probably in the Second Circuit as well, a pier is any structure built on pilings and extending out over the water, even if it is not used for traditional maritime activity. This is not a unanimous position. For example, in the Fifth Circuit, as well as the Eleventh, a maritime function is needed to convert the structure into the kind of “pier” that is an enumerated site.

3. Defense Base Act – in some circuits, in cases arising under the Defense Base Act, appeals from decisions of the U.S. Department of Labor’s Benefits Review Board go to federal District Court, and in others the appeals go to the federal Court of Appeals. Currently, the breakdown is as follows: Appeals to District Court – in the federal Fourth, Fifth, Sixth, and Eleventh Circuits. Appeals to the Court of Appeals – in the federal Seventh and Ninth Circuits. The remaining Circuits have not decided this issue.

4. Borrowed Employee – this one isn’t so much a conflict as a slight difference in the mode of analysis as to what facts and circumstances create a “borrowed employee” relationship wherein an employee of one employer is considered to be the employee of another employer. For example, the Fourth Circuit uses what is referred to as the “authoritative direction and control” test, while the Fifth Circuit uses what is referred to as the nine-factor “Ruiz-Gaudet” test (Gaudet v. Exxon Corp., 562 F. 2nd 351, 5th Cir. 1977). You may expect to encounter variations or combinations in the other circuits.

5. Per diem – should per diem payments to employees be included in the Average Weekly Wage calculation to determine the weekly compensation rate? At first thought, you might think that the answer is no, since payments for meals and lodging expenses while an employee travels would not be considered as “wages” for income tax purposes by the IRS. But nothing is that simple. Some circuits will look more closely than others at the circumstances of the payments, in order to determine whether they are truly reimbursements for travel costs actually incurred, or simply wages by another name.

6. Status – bridge construction workers – although bridge work is generally considered to be covered by state workers’ compensation laws, since bridges are considered to be extensions of land and work on bridges is not considered to be work over the navigable waters, there are aspects of bridge work that can bring that work under the coverage of the Longshore Act. For example, working from a barge or floating work platform may bring the work under the Longshore Act. One area of uncertainty among the federal circuits involves the worker who loads and unloads construction materials at the bridge site. For example, the Second Circuit is likely to consider this to be non-maritime employment, since a bridge is not a maritime structure. You may encounter variations among the circuits on this issue.

7. Pre-emption – Section 5(a) makes the Longshore Act the employee’s exclusive remedy against the employer, giving the employer immunity and pre-empting lawsuits by the employee “at law or in admiralty”. This is a complicated area, however. Many times, the question becomes to what extent Section 5(a) precludes injury related tort claims brought pursuant to state laws, particularly in so-called “concurrent” states, where the workplace injury is covered simultaneously by the state act workers’ compensation law and the federal Longshore Act. You have to be careful in “concurrent” states where state law may allow a remedy, or an election of remedies outside of the state’s workers’ compensation law.

8. Latent Traumatic Injuries – in the case of a traumatic injury, an injured worker’s Average Weekly Wage is established at the time of the injury. What about the case of a traumatic injury that results in a delayed diagnosis or manifestation of symptoms, similar to what happens in cases of occupational diseases? In the Ninth Circuit, for example, depending on the circumstances, in a latent traumatic injury case, the court may consider the date of manifestation as the date on which to establish the worker’s Average Weekly Wage. No other circuit has adopted this approach.

9. Suitable Alternate Employment – If an injured worker cannot return to his pre-accident job as a result of his injury, he will be considered to be totally disabled unless the employer can establish that “suitable alternate employment” is available that the worker can do in view of his vocational factors such as age, background, education, etc. and that this employment is reasonably available in the worker’s community.

You are likely to encounter differences among the various circuits as to what is needed to meet the employer’s burden to establish the availability of suitable alternate employment. For example, the Ninth Circuit may require that the employer pinpoint specific jobs while most other circuits will not require the employer to identify specific employers ready to hire the injured worker.

You will certainly encounter subtle differences among the circuits as to what the employer’s vocational evidence must show regarding the availability of suitable alternate employment.

10. Ten Day Rule – Section 914(f) requires that payment pursuant to a compensation order must be in the claimant’s hands within 10 days. All circuits except for the Fifth Circuit agree that this means 10 calendar days. In the Fifth Circuit, the employer has 10 business days to pay an award.

11. Interest – interest is mandatory on past due compensation under the Longshore Act, but the Act doesn’t specify at what rate the interest should be calculated nor whether the interest should be calculated on a simple or compound basis. Simple interest has been used by the U.S. Department of Labor for many years.

In September 2012, the Ninth Circuit adopted compound interest, and the Benefits Review Board will probably also use compound interest in cases arising in the other circuits. This conflict will most likely be resolved simply because compound interest is clearly the direction that this issue is headed in.

There are more issues in conflict, and I know that this is much too brief an outline, but I’ll have to leave it alone for now.

For next time: some circuit conflicts that have recently been resolved.