Judge's Benchbook:
Longshore & Harbor Workers' Compensation Act

Supplement - January 2005
Topic 4 - Compensation Liability

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Compensation Liability - Contractor/Subcontractor Liability 4.1.1




Topic  4.1.1    Compensation Liability�Employer Liability�Contractor/Subcontractor Liability]


Love v. AAA Temporaries, Inc . ___ So.3d ___ (No. 2003 CA 2735)(La. App. 1 Cir. Nov. 10, 2004).


            In this procedural matter, a plaintiff temporary worker filed suit against the agency assigning the worker and the company employing the worker, for injuries sustained while working as a deckhand on a barge.  A finding of the company's tort liability was contingent upon a determination of whether it possessed LHWCA coverage under Section 4 at the time of the accident.  The appellate court found that although tort liability was contingent on whether there was coverage at the time of the accident and that this determination was pending on appeal, the trial court still retained jurisdiction to determine the issue of liability.



Topic 4.1.1     Compensation Liability�Contractor/Subcontractor Liability


Maumau v. Healy Tibbits Builders, Inc ., (Unpublished)(BRB Nos. 03-0830 and 04-0311)(Sept. 8, 2004).


            The Board upheld the ALJ's determination that in a Section 4(a) subcontractor case, where the subcontractor fails to secure compensation, the general contractor is liable for attorney fees.  While Section 4(a) mentions only �compensation,� it must be read in conjunction with Section 5(a), under which an employer, as the general contractor, is liable for the benefits awarded to claimants because of its subcontractors.  Since the subcontractor failed to comply with the insurance coverage requirements of the LHWCA, the employer must be treated as the �employer� for compensation purposes.  The ALJ concluded that, as is the case with any employer liable for compensation under the LHWCA, it is additionally liable for an award of an attorney's fees if the provisions of Section 28(a) or (b) are satisfied.  The Board affirmed this analysis and interpretation. 

Topic  4.1.1    Compensation Liability�Contractor/subcontractor Liability


Hebert v. Pride International , (Unpublished) (Civ. No. 03-0804)(E. D. La. March 5, 2004); 2004 U.S. Dist. LEXIS 3436.


            This OCS summary judgment matter dealt with whether a worker was a borrowed employee making his exclusive remedy workers' compensation benefits under the LHWCA. Noting Fifth Circuit case law, the federal district court listed the nine factors a court must consider in making a borrowed employee determination.

Topic  4.1.1    Compensation Liability�Contractor/Subcontractor Liability


Sobratti v. Tropical Shipping and Const. Co., Ltd ., 267 F. Supp. 2d  455 (D. Vir. Isls. 2003), 2003 WL 21418333.


            The issue here is whether a trial court correctly granted a borrowing employer summary judgment when a worker injured upon a vessel filed a LHWCA claim and then filed an action in the Virgin Islands Territorial trial court against the borrowing employer. [The Federal District Court of the Virgin Islands serves as the appellate court of the Territorial Court.]  Prior to the filing of the trial court action, OWCP had found the claimant to be covered by the LHWCA and the borrowing employer, Tropical Shipping, to be responsible. Claimant received benefits from Tropical Shipping.  He then filed a negligence action against Tropical Shipping, claiming he fell into a �twilight zone� status of uncertain LHWCA coverage.


             The Virgin Islands Federal District Court concluded the summary judgment against the claimant was proper given the claimant's prior admissions on the issue of borrowed employee.  It found that his assertions �conclusively determined the issue of Tropical's employer status thereby removing any genuine dispute on that issue.�  The court noted that, �The factual basis of appellant's entire negligence claim was that he was working for Tropical at the time he was injured; that Tropical had a duty, as his employer, to provide safe equipment and failed to do so in this instance by providing him with a defective ladder, and that Tropical's safety standards were breached.  Additionally, the assertions in the initial pleadings were consistent with Sobratti's claims to the administrative agency, for the purpose of recovering benefits under the LHWCA.  Throughout the administrative proceedings following his injury, Sobratti continuously asserted and relied on the fact that he was an employee of Alltempts, performing duties for Tropical.�   In sum, the court found that the record was replete with admissions and facts which establish that Tropical was the borrowed employer with control over the claimant's work at the time he was injured and that Tropical was protected under Section 5 of the LHWCA.

Topic  4.1.1    Compensation Liability�Contractor/Subcontractor Liability


Hudson v. Forest Oil Corp ., (Unpublished) (No. Civ. A. 02-2225)(E.D. La. June 2, 2003); 2003 WL 21276385; aff�d at 372 F.3d 742 ( 5 th Cir. 2004).


            In this �borrowing employer� case, the insurer of the claimant's formal employer paid compensation benefits and sought reimbursement from the insurer of the borrowing employer.  The federal district court rejected this claim for reimbursement.  The insurer of the formal employer had first cited Total arine Servs., Inc. v. Director, OWCP , 87 F.3d 774 ( 5th Cir. 1996), for the proposition that when a formal employer has already paid benefits, it is entitled to reimbursement for the borrowing employer.  However, Total arine is distinguishable since its holding was conditioned on the fact that there was no valid and enforceable indemnification agreement.  In the instant case there was such an agreement.  The formal employer also argued that any indemnification and waiver of subrogation clauses were invalid under the Louisiana Oilfield Anti-Indemnity Act (LOAIA), La. Rev. Stat. Ann. � 9:2780.  The federal district court found the statute inapplicable and thus the indemnification and waiver of subrogation were valid.