Longshore and Harbor Workers’ Compensation Act – Concurrent Jurisdiction

PART ONE OF TWO

Workers’ compensation claims are covered simultaneously by the Federal Longshore and Harbor Workers’ Compensation Act and by state’s workers’ compensation law in so called “concurrent” states.  This presents problems for maritime employers.

BACKGROUND

The U.S. Constitution makes uniformity in maritime matters a priority.  This is written into the Admiralty Clause (Art. III, Section 2).  State laws cannot conflict with uniform national policy in this area.  This is written into the Supremacy Clause (Art. VI). Powers not expressly granted to the federal government are reserved to the states (Tenth Amendment).  There’s tension built into the system.

1910 – States begin enacting workers’ compensation laws;

1917 – U.S. Supreme Court holds that the states’ new workers’ compensation laws do not cover workers injured over navigable waters (Southern Pacific Ry. Co. v. Jensen, 244 U.S. 205 (1917));

1927 – Congress enacts the Longshore and Harbor Workers’ Compensation Act, covering workers injured over the navigable waters of the U.S.;

1972 – Longshore Act is amended to extend coverage landward for maritime workers;

1980 – U.S. Supreme Court holds that the Longshore Act does not supplant state workers’ compensation laws, but supplements them (Sun Ship v. Pennsylvania, 447 U.S. 715 (1980));

1984 – Longshore Act is amended and Sun Ship is not overruled, so concurrent jurisdiction is preserved.

Concurrent states – AL, AK, CA, CT, GA, IL, IN, KY, MI, MN, MO, NY, PA, RI,  SC, VA, WV, WI

Exclusive states – FL, HI, LA, ME, MD, MS, NJ, OH, OK, OR, TX, WA

The “exclusive” states have expressly provided in their state insurance laws that if you are covered by a federal statute then you are not covered by state workers’ compensation law.  Typical language appears in the Florida law:  “No compensation shall be payable with respect to disability or death of any employee covered by the Federal Employers Liability Act, the Longshore and Harbor Workers’ Compensation Act, or the Jones Act.”  But, in the “concurrent” states, the state workers’ compensation law may apply to workers who are also covered by the Longshore Act.

SECTION 905(a)

Section 905(a) of the Longshore and Harbor Workers’ Compensation Act (33 U.S.C. 905(a)) states, “The liability of an employer prescribed in section 4 shall be exclusive and in place of all other liability of such employer to the employee, his legal representative, husband, or wife, parents, dependents, next of kin, and any one otherwise entitled to recover damages from such employer at law or in admiralty on account of such injury or death recover damages from such employer at law or in admiralty on account of such injury or death….”

This language makes the Longshore Act exclusive with regard to suits for damages “at law or in admiralty”.  State workers’ compensation claims are not considered to be suits at law or in admiralty.  Thus, section 905(a) does not prevent state law from applying concurrently to Longshore Act claims

INCREASED COSTS FOR EMPLOYERS

Concurrent jurisdiction increases costs for employers:

–         litigation costs are increased as employers must defend two claims,

–         claims administrators must maintain two files under two regulators,

–         attorney fees must sometimes be paid for claimant attorneys under two laws,

–         there are occasionally duplicative benefits,

–         there are two different insurance requirements,

–         rules of evidence differ (for example, drug use defenses),

–         possibly two different subrogation actions,

–         there are different settlement procedures,

–         there are different medical fee schedules,

–         there are surprises (for example, the Longshore Act statute of limitations for filing a claim is tolled during the pendency of a state act claim)

Part II next week

Longshore Act Question Number 5

What’s the Difference Between the Jones Act and the Longshore Act?

There’s a big difference. And for maritime employers, it is frequently difficult to recognize the difference between the two Acts and to choose correctly between them.

The Jones Act provides seamen with a personal injury negligence remedy, and the Longshore and Harbor Workers’ Compensation Act is a workers’ compensation statute. The two are mutually exclusive in their coverage. The Jones Act covers seamen (masters or members of a crew of a vessel) and the Longshore Act covers land based maritime workers.

As a practical matter there’s an overlap in coverage that causes problems for employers who must have the correct insurance coverage and for injured workers who must choose the correct remedy.

The courts struggle with this. The federal Fifth Circuit Court of Appeals has observed, “Thus, despite our continued insistence that a Jones Act ‘seaman’ and a ‘crew member’ excluded from the Longshore Act are one and the same (in other words that the statutes are mutually exclusive) we recognize that in a practical sense, a ‘zone of uncertainty’ inevitably connects the two Acts” .

COVERAGE

The Longshore Act has a status and a situs requirement for coverage. Section 902(3) provides that the term “employee” means any person engaged in maritime employment, including any longshoreman or other person engaged in longshoring operations, and any harbor worker, including a ship repairman, shipbuilder, and ship breaker. Section 903(a) states that a claim must occur upon the navigable waters of the United States or on an adjoining landward area customarily used by an employer in loading, unloading, repairing, dismantling, or building a vessel. Coverage includes a wide range of occupations, in addition to the traditional maritime occupations of longshoreman and shipbuilder, and includes maintenance and repair workers, construction workers, contractors of all kinds, and everyone whose work requires them to be on the navigable waters.

The Jones Act uses an occupational test for coverage, related to a worker’s relationship to a vessel. The worker’s duties must contribute to the function of the vessel or to the accomplishment of its mission, and the worker must have an employment connection to a vessel in navigation, or to an identifiable group of vessels under common ownership, that is substantial in both duration and nature.

Is a worker land based (Longshore Act) or is he sea based with his employment relationship connected to a vessel (Jones Act)? This is a fact intensive inquiry, and frequently it can go either way. Courts often resort to a 30% rule of thumb. If a worker spends less than 30% of his total work time aboard a vessel or in the service of the ship then he is probably not a Jones Act seaman.

JURISDICTION

There’s a big difference here.

The Longshore Act is administered by the U.S. Department of Labor. It provides for no fault, prompt payment of statutory wage replacement benefits and medical treatment. It is designed to be predictable for the employer and quick for the worker. The Department of Labor offers informal dispute resolution services, formal adjudication at the Office of Administrative Law Judges, administrative appeals to the Benefits Review Board, and judicial review by appeal to the United States Circuit Courts of Appeal.

The Jones Act is a negligence remedy, enforced by filing a complaint in court. There is the right to a jury trial. There is no government agency involved. Factors for recovery include pain and suffering, past and future wage loss, past and future fringe benefit value, medical expenses, loss of quality of life, and a host of other damage measures. Note: The stakes were raised a bit higher recently when the U.S. Supreme Court held that punitive damages may be available under the general maritime law if an employer or carrier willfully or wantonly denies maintenance and cure to a seaman.

CHOICE

A Jones Act recovery can be much greater than a workers’ compensation benefit. An injured worker can be expected to seek his Jones Act rights even if there is only a small possibility that he could qualify as a seaman. The injured worker can be expected to seek recovery under both the Jones Act and the Longshore Act, either simultaneously or sequentially.

The worker must be aware of the time limits for filing his claims and the possible effects that filing a claim under one Act may have on his rights under the other Act. The courts have acknowledged this: “Well recognized are the difficulties faced by the injured maritime workers who must choose whether and by what means they will pursue remedies that in substantive theory are perfectly mutually exclusive (the Compensation Act which for present purposes applies to all but seamen, and the Jones Act, which applies only to seamen), but which seem in practice to frequently overlap each other’s borders”. The court could fairly have included maritime employers among those faced with this difficulty.

The courts have not achieved uniformity on the application of such issues as res judicata and collateral estoppel – that is, when and how a claim under one Act will be affected or precluded by a claim under the other Act. It does seem likely that the acceptance of voluntary payments under the Longshore Act will not preclude a Jones Act suit by the injured worker. A final Order of a court, however, which adjudicates the factual issue of seaman status, awarding damages under the Jones Act will likely preclude a Longshore Act claim. Likewise, a final administrative Award under the Longshore Act, which fully adjudicates the worker’s non-seaman status, will likely preclude a subsequent Jones Act suit.

So what’s the difference between the Jones Act and the Longshore Act? The Jones Act gives seamen a negligence remedy and the Longshore Act is a workers’ compensation law for land based maritime workers. You’re either one or the other since the two laws are mutually exclusive, but it’s often hard to tell where an injured worker belongs.

And the broader the definition of vessel becomes, and the less seaman status has to do with vessel navigation, the more problematic it will be sorting out coverage issues in the “uncertainty zone”. This is an area where it is advisable to consult experts, either an organization that specializes in maritime insurance coverages or an experienced maritime attorney.

Longshore Act Question Number 3

What Is the Difference Between State Act Comp and the Longshore and Harbor Workers’ Compensation Act?

One is state and the other is federal.

Wow! That one was easy. Next!…..What? Not buying it? OK, I’ll try again.

But first, the shortest history in the history of history.

– The Industrial Revolution in the United States during the nineteenth century led to the social consciousness of the Progressive Era,

– Which led to the passage of the first workers’ compensation law in New York State (or Wisconsin, take your pick) in 1910,

– Which led to conflict with the uniformity principles of the Admiralty and Commerce clauses of the U.S. Constitution,

– Which led to the U.S. Supreme Court’s decision in 1917 that the states could not extend their workers’ compensation laws to land based maritime workers while the workers were over the navigable waters of the United States,

– Which led to the enactment of the Longshoremen’s and Harbor Workers’ Compensation Act in 1927 extending federal workers’ compensation protection to shore based workers injured while temporarily on navigable waters,

– Which led to the 1972 amendments to the Longshore Act extending coverage landward to adjoining areas customarily used for maritime purposes,

– Which led to the 1980 U.S. Supreme Court decision that the Longshore Act did not “supplant” state laws, but rather “supplemented” state laws,

– Which led to today. We’re still trying to sort out issues of overlapping and concurrent state/federal jurisdiction in the hundreds of occupations carried on in and around navigable waters that could be either state or Longshore or both simultaneously depending on the state in which the injury occurred and the facts of the case.

So we have workers’ compensation laws in each of the 50 states and the various territories coexisting alongside the Longshore Act.

In an earlier posting (September 9, 2009) I offered my unofficial lists of states with concurrent (dual) jurisdiction and states that have “exclusive” jurisdiction. I’ll repeat the lists here.

Concurrent states – Alabama, Alaska, California, Georgia, Illinois, Indiana, Kentucky, Minnesota, New York, Missouri, Pennsylvania, Rhode Island, South Carolina, Virginia, Wisconsin, West Virginia.

Exclusive states – Florida, Hawaii, Louisiana, Maine, Maryland, Mississippi, New Jersey, Ohio, Oklahoma, Oregon, Texas, Washington.

These lists are subject to change at any time as state insurance laws change.

Note: “Concurrent” in this context simply means that in some states there are some injuries that are covered by both the state’s workers’ compensation law and by the Longshore Act. A state that is listed as “exclusive” on the other hand has amended its workers’ compensation law with language to the effect that if you are covered by a federal workers’ compensation law then you are not covered by that state’s law.

So, the Longshore Act is a workers’ compensation law for the protection of injured workers, just like the laws in the 50 states and the territories. These state laws usually cover different workers, but there is frequent overlap and uncertainty, especially in the “concurrent” states, where injured workers routinely file claims under both state act and Longshore Act and employers face redundant administrative, legal, expense, and sometimes benefit costs.

Here are some differences:

– The Longshore Act usually costs more to insure (see Question Number 7);

– The Longshore Act was enacted by the U.S. Congress as opposed to the state legislatures;

– The Longshore Act is administered by the U.S. Department of Labor and not by state agencies;

– The Longshore Act is generally more liberally administered and pays higher benefits than the state acts;

– The Longshore Act covers “maritime” employees (and there’s a library of case law trying to decide what that means) as opposed to “local” workers covered by state law; and,

– The most important difference for employers is that state workers’ compensation laws and the Longshore Act are separate exposures. And because of the overlapping jurisdictions and coverage uncertainties an employer must be careful and make sure that he has the correct coverage.

Top Ten Longshore Questions

As I’ve said, over the years the same Longshore questions have been coming up again and again, and now with AEUs Longshore BLOG there’s a source where these questions can be answered. So here’s my list of the “Top Ten” recurring Longshore questions:

16. Does the Longshore Act apply only to U.S. citizens?

15. Does the Longshore Act apply overseas?

14. What are the “navigable waters of the United States”?

13. What is a subdivision of a state government?

12. Can you exclude corporate officers under the Longshore Act?

11. Can small employers opt out of the Longshore Act?

10. How do you measure the 10 day rule for paying Formal Awards under §914(f)?

9. Does the Longshore Act apply in Guam? In Puerto Rico? In the Virgin Islands? In

the Commonwealth of the Northern Marianas?

8. What does “joint and several” liability mean? And what does “several not joint”

liability mean? And why is this very important?

7. Why is Longshore Act insurance so expensive?

6. Is the Longshore Act fair to employers?

5. What’s the difference between the Longshore Act and the Jones Act?

4. What is a vessel? What is a crewmember?

3. What is the difference between state act comp and the Longshore Act?

2. Where can I buy Longshore Act insurance?

1. Do I need Longshore Act insurance?

The answers to these, and any other questions introduced by BLOG visitors, will be offered in upcoming postings. In the meantime, if there’s a particular question you are interested in please leave a comment with your question.