Recent Significant Decisions -- Monthy Digest # 149
Longshore & Harbor Workers' Compensation Act
August - September 2000
A.A. Simpson, Jr.
Associate Chief Judge for Longshore
Thomas M. Burke
Associate Chief Judge for Black Lung
I. Longshore
A. Court of Appeals
Kreschollek v. Southern Stevedoring Co. , ___ F.3d ___,(Third Circuit 2000) (Case No. 99-5599)(July 28, 2000) ( amended August 8, 2000 ).
A private insurer's decision to withhold benefits does not amount to governmental action, and the due process clause is, therefore, not applicable. Thus, a claimant has no protectable property right in the continued receipt of benefits in light of the lack of a prior finding of entitlement.
Here the Third Circuit followed American Mfr. Mut. Ins. Co. v. Sullivan , 526 U.S. 40 (1999) which dealt with a similar state worker's compensation claim. In Sullivan , the Court held that "an insurer's decision to withhold payment and seek utilization review of the reasonableness and necessity of particular medical treatment is not fairly attributable to the State." Sullivan at 58. The Court further noted that, employees do not have a property interest in workers compensation benefits when they have not demonstrated that they are entitled to them and a state statute requires that they prove "that an employer is liable for a work-related injury, and ... that the particular medical treatment at issue is reasonable and necessary." Sullivan at 61.
[Topic 19.1 The Claim: Generally]
Staftex Staffing v. Director, OWCP , ___ F.3d ___, (5th Cir. 2000)(Case No. 99-60587)(issued July 18, 2000; revised July 25, 2000).
The Fifth Circuit held that the plain wording of Section 28(b) permits claimants to obtain attorney's fees only where there has been an informal conference and a written recommendation on the disputed issue(s), and the employer refuses to accept the recommendation. There are several perplexing aspects to this decision. First, the terminology used, often is confusing. For instance, the decision at one point dwells on archaic LHWCA language which speaks in terms of the Board holding informal conferences. Likewise, the decisions that it cites for support are equally poorly worded and at one point it becomes apparent that there is some confusion as to the Director's function, with there being an implication that the Director is head of the Board.
[Topic 28.2.3 Attorney Fees District Director's Recommendation]
Lara v. Harveys Iowa Management Co., Inc. , ___ F.Supp. 2 ___2000 WL 1133759(S.D. Iowa)(Case No. 1-98-CV-90058)(Aug. 8, 2000).
A cocktail server and bartender on a riverboat casino can sue her employer under the Jones Act to recover for injuries she sustained while working on the riverboat. In denying the casino's Motion for Summary Judgment, the federal district judge found that a jury could reasonably find that she was a maritime employee substantially connected in terms of duration and nature to a fully functioning gaming vessel located on the Missouri River.
The judge cited other "heartland" cases wherein casino workers have been found to be Jones Act seamen. Weaver v. Hollywood Casino , 2000 WL 705995 (N.D.Ill. May 22, 2000)(slot machine attendant injured on board gambling boat); Wiora v. Harrah's Illinois Corp. , 68 F.Supp. 2d 988 (N.D. Ill. 1999)(waitress on riverboat); Greer v. Continental Gaming Co. , 5 S.W. 3d 559 (Mo. Ct. App. 1999) (injured housekeeper).
[Topic 1.4.3.1 Coverage Floating Dockside Casinos]
Gravatt v. The City of New York , ___ F.3d ___ (2nd Cir. 2000)(Case No. 99-7898)(Sept. 18, 2000).
The Second Circuit found that a dual-capacity employer-vessel is liable to its covered employees under Section 905(b) only to the extent that it breached its duties of care in its capacity as a vessel , and is not liable for negligence committed in its capacity as an employer . Here the employee was a journeyman dock builder employed by Simpson & Brown, Inc. (S&B), a construction contractor retained by the City of New York to repair one of its bridges. The employee was injured while working on a barge chartered by S&B at the mid-river construction site. Since the negligence causing Claimant's accident was solely caused by the vessel, Claimant could recover punitive damages from Employer in its capacity as vessel.
[Topics 5.1.1 Exclusive Remedy; 5.2 Third Party Liability]
Bunge Corp. v.Carlisle and T. Michael Kerr, Deputy Assist. Sec. ,OWCP , ___ F.3d ___ (7th Cir. 2000) (Case No. 99-3853)(Sept. 19, 2000).
In this occupational disease case, the Director has urged the Seventh Circuit to reject the ALJ's definition of occupational disease which incorporated a "peculiar or increased degree" standard and to define occupational disease as one which simply "arises naturally out of such employment." In declining to reach the broader policy oriented question, the court noted that several circuits have used the "peculiar or increased degree" standard and that it is a reasonable test, in light of both the legislative history and policy objectives. The "occupational disease" definition used by the ALJ (and approved by the Seventh Circuit) was: "any disease arising out of exposure to harmful conditions of the employment, when those conditions are present in a peculiar or increased degree by comparison with employment generally."
[Topic 2.2.13 Occupational Diseases: General Concepts]
The court further noted that when a claim involves an occupational disease, such as in the case at hand, there is a two year statute of limitations period in which to file a claim for benefits.
[Topic 13.1.2 Time for Filing Claims Occupational Diseases]
The Seventh Circuit also found that there was substantial medical evidence to support the ALJ's opinion on MMI. While one doctor opined that further surgery was needed, the ALJ accepted the opinion of the doctor who felt that Claimant was permanently disabled and that the chance of being able to return to his former work was very limited even with an attempt to repair his corporal tunnel problems surgically. Both doctors had agreed that Claimant's condition would always affect his ability to engage in activity requiring use of his hands and arms and that if Claimant tried to return to his old job, the symptoms of his condition would be likely to recur. Thus the ALJ was correct in finding that surgery would fail to alleviate or cure Claimant's underlying conditions and that surgery which only addresses the symptoms of a condition, but not the condition itself is not a viable option.
[Topics 8.1.1 Nature of Disability--Generally; 8.1.4 Nature of Disability Generally Permanency Is Not Reached Where Surgery Is Anticipated; 23.5 ALJ Can Accept or Reject edical Testimony]
As to determining suitable alternate employment, the Seventh Circuit adopted the "more moderate " test of the First, Forth and Fifth Circuits (Employers must simply present, evidence that a range of jobs exists that is reasonably available and that the disabled employee could realistically secure and perform) rather than the "stricter" test of the Ninth Circuit (Employer must identify specific positions for a specific employer, that the claimant can perform and that the claimant could likely obtain). In adopting this standard, the Seventh Circuit "explained" that "A more stringent test might result in more claimants choosing to forgo rehabilitation and the opportunity to find gainful employment in an alternative environment."
[Topic 8.2.4.1 Partial Disability/Suitable Alternate Employment Burdens of Proof]
Universal Maritime Service Corp. v Spitalieri and Director, OWCP , ___ F.3d ___ (2nd Cir. 2000) (Case No. 99-4175) (September 21, 2000), rev'g 33 BRBS 164 (1999) ( en banc , with 2 Administrative Appeals Judges dissenting).
An employer, who paid a claimant compensation benefits for a temporary total disability during a period after he recovered from his injuries and became capable of returning to his usual employment, is entitled to a credit for such overpayment to be applied to a schedule award for a permanent partial binaural hearing loss of 6.9 % arising out of the same accident.
When a crane flipped, Claimant suffered head, neck, back and left leg injuries, as well as a partial hearing loss and psychiatric problems. Subsequently he was found to be temporary totally disabled by the first ALJ to hear this matter. Subsequently, armed with surveillance videotapes, Employer filed a Section 22 Modification request. The Second ALJ found that Claimant had reached MMI several years earlier and was no longer disabled. Thus he found that Claimant was no longer eligible for continuing benefits and that Employer was entitled to a credit for benefits paid since the date of MMI. Then, by a Decision and Order on Reconsideration, the Second ALJ awarded a scheduled disability to Claimant for a permanent partial binaural hearing loss arising out of the same accident. This was awarded against the credit the Employer had been awarded in the Order of Modification .
Subsequently the Board reversed the ALJ and on reconsideration en banc , held that "[s]ince the decision on modification terminated plaintiff's temporary total disability benefits, and did not decrease them, and as the plain language of [33 U.S.C. § 922] prohibits an order on modification from affecting compensation previously paid, the termination cannot be effective prior to the date of the decision on modification." 33 BRBS 164 at 2.
In overruling the Board the Second Circuit described the Board's position as "a narrowly technical and impractical construction" which is "demonstrably at odds with the intentions of the drafters" and "has no basis in common sense or in the statue." The court found that the exception for a "decrease" in the second sentence of Section 22 should be read to include a decrease to zero, i.e., a termination of benefits. Furthermore, the Second Circuit held that the statue grants the ALJ the broad authority to make a modification effective from the date when an injury occurred and any date after the injury when a change in conditions occurs.
[Topic 22.3.4 Modification: Change in Condition]
Motts v. M/V Green Wave , 210 F.3d 565 (5th Cir. 2000), aff'g in part and rev'g in part , 50 F.Supp. 2d 634 (S.D. Tex. 1999).
[Ed. Note. This is a Death on the High Seas Act (DOSHA) case, and not a LHWCA case. However it is included in the materials because there may be some confusion as to its applicability to longshore claimants suffering fatal longshore injuries occurring beyond U.S. territorial waters where DOSHA generally governs.]
While there is a line of Supreme Court and circuit court cases holding that DOSHA applies not only to deaths occurring on the high seas, but also to any accidents occurring on the high seas (even when death from these injuries later occurs on land), there is no direct holding that states that DOSHA supplants the LHWCA. beyond the U.S. territorial waters. (Some circuit courts have jurisprudentially extended LHWCA coverage beyond U.S. territorial waters.)
In Motts , the injured employee was a chief engineer on the ship. Thus, he was a seaman and not covered by the LHWCA. As noted, at present, there are no cases specifically addressing any perceived inconsistencies between DOAHA and the LHWCA.
[Topics 1.5.2 Coverage Navigable Waters; 2.8 Definitions; 2.9 United States]
B. Benefits Review Board
Justice v. Newport News Shipbuilding & Dry Dock Co. , ___ BRBS ___, (BRB No. 99- 1087)(July 19, 2000).
In this "last responsible employer" case, following his employment with Employer, the decedent worker had worked for NASA as a sheet metal mechanic and engineer technician from 1949 until 1985. The ALJ applied the last responsible employer rule and found Employer liable under the LHWCA. The parties attempted to stipulate that decedent was exposed to airborne asbestos dust and fibers during and in the course of his employment for NASA in sufficient quantities and of sufficient duration to cause asbestos related lung disease, including mesothelioma, and that his mesothelioma was caused, at least in part, by this exposure with NASA. The ALJ rejected this stipulation, finding that the parties cannot bind an entity which is not a party to the action. Employer filed a motion for reconsideration, stating that the purpose of the stipulation was not to bind NASA, but so that the court of appeals could have a "complete record" before it on the inevitable appeal following Board review.
The Board upheld the ALJ's finding of liability but reversed the ALJ's rejection of the parties' stipulation concerning decedent's exposure to injurious asbestos at NASA. It found that such a stipulation would not have been binding on NASA in any subsequent proceeding simply because NASA was not a party to the stipulation. The Board held that where a non-party's liability is not at issue, the parties may enter into stipulations involving the non-party. The Board distinguished this from the situation where private parties attempt to bind the Special fund to their stipulations without the agreement of the Director. In that situation, acceptance of the stipulation without question could affect the liability under the Act of a non-party to the stipulation.
[Topics 2.2.16 Occupational Disease and the Responsible Employer/Carrier; 23.5 Evidence ALJ Can Accept or Reject Medical Testimony]
Coffy v. Marine Terminals Corp. , ___ BRBS ___ (BRB No. 99-0864).
Here the Board would not upset the ALJ's acceptance of one medical opinion over another where the ALJ explained why she gave more weight to one opinion than the other. In the instant case, the ALJ accepted the medical view that Claimant's hearing loss was not caused by noise and was not work realated.
[Topics 8.13.13 Hearing Loss Rebutting the Section 20(A) Presumption in Hearing Loss Cases; 23.5 Evidence ALJ Can Accept or Reject Medical Testimony]
Ramos v. Global Terminal & Container Services, Inc. , ___ BRBS ___ (BRB No. 99-0134) (July 21, 2000).
A compensation Order issued by the district director (awarding permanent total disability benefits and Section 8(f) relief) which was based on stipulations entered into by the parties, can subsequently be modified via Section 22 modification request filed by Employer. Section 22 states that any party-in-interest, including an employer granted relief under Section 8(f), may apply for modification.
Claimant argued that there can not be a change in condition since there was no evidence regarding Claimant's condition at the time of the compensation order. However, the Board noted that, as a general rule, stipulations made by parties are binding upon those who made them; stipulations are offered in lieu of evidence and thus may be relied upon to establish an element of the claim. The Board noted, that while the parties may have stipulated that Claimant was totally disable, the party seeking modification may show that there has been a change of condition. In the instant case, Employer provided expert medical opinion that Claimant recovered from his injury from a neurological standpoint and that he was not precluded from performing his former longshore duties. The ALJ credited this evidence over Claimant's subjective complaints.
[Topic 22.3 Requesting Modification]
Uresti v. Port container Industries, Inc. , ___ BRBS ___, (BRB No. 99-432) (August 21, 2000).
This is a Decision and Order Denying Reconsideration by the Board. In this jurisdictional issue case (situs/status), the claimant worked as a truck driver carrying steel materials from the docks to storage warehouses or yards. His duties included waiting for the loading to occur, "flagging" the crane operator so that the load was placed properly on the trailer, and securing the load to the trailer prior to driving it to its place of storage within the port. Claimant was assisting in the unloading of angle irons from a rail car (by hooking and unhooking them) when he was injured. He was injured in a warehouse designated for loading and unloading trucks and railcars.
While both situs and status were at issue here, the pivotal issue was whether the regular maritime transportation of five percent of the materials was sufficient to constitute "customary use" of the area in the loading and unloading process. As a matter of law, the Board found that the five percent was sufficient.
On the original appeal, the Board reversed the ALJ's findings that Claimant did not satisfy the status and situs requirements for coverage under the Act. It held that, as the warehouse is located in the Port of Houston, and as a portion of the goods regularly passing through the warehouse are maritime cargo, the warehouse has a sufficient geographic and functional maritime nexus such that the site is covered under Section 3(a). The Board also held that claimant's job driving a truck within the port satisfied the status requirement, as hauling cargo from shipside to the storage facility is part of the overall process of unloading.
Since this case arises in the Fifth Circuit, the Board cited and relied on that circuit's jurisprudence. Textports Stevedore Co. v. Winchester , 632 F.2d 504, 12 BRBS 719 (1980) ( en banc ) (5th Cir. 1980), cert. denied , 452 U.S. 905 (1981); Nixson v. Mobil Mining & Minerals , ___ F.3d ___, (Case No. 99-60273) (5th Cir. Feb. 7, 2000), aff'g BRB No. 98-988 (March 2, 1999), petition for cert. filed , No. 00-44 (July 6, 2000). To be considered a covered situs, a site must have a maritime nexus, but it need not be used exclusively or primarily for maritime purposes. The Fifth Circuit has adopted a broad view of the situs test, refusing to restrict the test by fence lines or other boundaries. Specifically, the court stated that the perimeter of an "area" is to be defined by function and that the character of surrounding properties is but one factor to be considered. An area can be considered an "adjoining area" within the meaning of the LHWCA if it is in the vicinity of navigable waters, or in a neighboring area, and it is customarily used for maritime activity.
On reconsideration the Board noted that Claimant transported maritime cargo within the port area from dockside to various storage facilities and that such activity is considered an intermediate step in the loading process and is covered. Thus, Claimant had status.
The Board further noted that while the function of the warehouse in question is to load and unload railcars and trucks, and that 95 percent of the materials are transported only by either train or truck, there was also credited evidence that five percent of the materials passing through the warehouse travel within maritime commerce, as they have been or will be transported by ship. Moreover, the Board noted, the building is in the port and the function of the port, necessarily involves the movement of cargo. The Board found that looking at the function of the warehouse alone is to narrowly construe the term "area." and the Fifth Circuit has declined to do this.
[Topics 1.6.2 SITUS Over land; 1.7.1 STATUS Maritime Worker]
Feld v. General Dynamics Corp ., ___ BRBS ___, (BRB No. 00-0498)(August 22, 2000).
An employer's mere silence as to its litigation strategy is an insufficient ground by which a decision can be modified. In the instant case, the employer originally relied merely on medical evidence that the claimant was less than totally physically incapacitated to attempt to establish that claimant was partially disabled. Subsequently, after the original decision and order was issued, the employer filed for modification attempting to rely on a recent labor market survey to establish a change in claimant's condition.
The Board noted that "the employer now possesses evidence of the kind it chose not to develop at the initial hearing, and there are no circumstances that would have prevented it from submitting evidence of suitable alternate employment at the initial hearing.....Moreover, employer offers no evidence or argument that claimant's employability has changed since the time of the initial proceeding; there is no indication, for example, that evidence of suitable alternate employment was not offered before because no jobs were available. Thus, there is no evidence to suggest that employer's decision to now present evidence is the result of an actual change in claimant's economic position, rather than just a change in employer's prosecution of the case." Slip op. At 6. Furthermore, the Board noted that the first ALJ had premised his award of total disability on the absence of suitable alternate employment and not on Claimant's total physical incapacitation.
The second ALJ, who dealt with the Section 22 Modification request, also addressed the 1984 amendment changing the assessment formula of Section 44 (the Trust Fund). Prior to the 1984 amendments the assessment formula under Section 44 did not take into account the number of claims any one employer placed into the Special Fund. After the 1984 amendments and implementing regulations, employers now have an incentive to mitigate a total award to partial as the employer's assessment is now directly tied to its use of the Special Fund. The ALJ on odification had found that while silence may be a waiver in appropriate circumstances, due to the pre-1984 Amendments assessment formula, this employer's silence should not be viewed as a waiver.
The Board rejected this rationale for several reasons. First, it noted that as the employer was not assured at the time of the initial proceeding that it would be awarded Section 8(f) relief. The Board reasoned that in order to reduce its liability to the fullest extent possible in the event Section 8(f) relief was not awarded, employer should have presented evidence of suitable alternate employment. Moreover, the Board noted that, "the passage of more than 10 years between the 1984 Amendments and employer's modification petition certainly forecloses a finding that it is in the interest of justice to modify claimant's award, assuming arguendo , that this is a proper basis for modification...Under the [ALJ's] rationale, employer should have been aware of the ramifications of its decision not to offer evidence of suitable alternate employment soon after the enactment of the 1984 Amendments." Slip op. at 7.
[Topics 22.3.2 Filing a Timely Request; 22.3.4 Change in Condition; 22.3.6 Legal Error or Change in the Law]