collateral-source ruleThe Fifth Circuit issued an opinion on November 17, 2016, in Robert Deperrodil v. Bozovic Marine, Inc., (No. 16-30009). In a case involving the injury to a passenger aboard a crew boat in high seas, the District Court was called upon to determine whether under the collateral-source rule the plaintiff could recover $186,080.30, which was the amount billed for his medical care, rather than the amount that the insurer was eventually required to pay, $57,385.50, the balance having been written off. Generally the collateral-source rule bars a tortfeasor from reducing his liability by the amount the plaintiff recovers from independent sources. It is a substantive rule of law, as well as an evidentiary rule that disallows evidence of insurance or other collateral payments that may influence the fact finder.

The Fifth Circuit determined that there was no direct authority in the maritime tort context regarding the treatment of written off medical expenses for which liability existed under the Longshore and Harbor Workers’ Compensation Act (LHWCA) 33 USC 901 et. seq. It evaluated the law in its circuit and determined that Mississippi, Louisiana and Texas all had different approaches. The court then reviewed the Fifth Circuit decision in Manderson v. Chet Morrison Contractors, Inc., 666 F.3d 373, 381 (5th Cir. 2012), in which the question was whether the collateral-source rule allowed recovery of written off medical expenses when an employer paid the expenses as part of its maritime cure obligation.  In that case, about which Offshore Winds reported at the time, the Court held that it was error to award the amount charged rather than the amount that was paid.

The Court, in the instant case, while feeling that Manderson was not binding as it involved maritime cure and not a maritime tort or LHWCA insurance, the court considered that this was the most applicable of the various approaches to write-offs. It also felt that the rationale in Manderson was very persuasive because maritime cure and LHWCA insurance create similar obligations for employers. In so doing, it determined that LHWCA medical-expense payments are collateral to a third-party tortfeasor only to the extent paid; in other words, under those circumstances, the plaintiff may not recover for expenses billed, but not paid.

Proposed LHWCA Maximum Compensation ChangeThe Office of Workers’ Compensation Programs, Department of Labor, posted proposed rules affecting section 906 of the Longshore and Harbor Workers’ Compensation Act 33 U.S.C. § 901 et seq., Federal Register, Volume 81, No. 166, August 26, 2016. The Department invited written comments on the proposed regulations from interested parties by October 25, 2016. The proposed change is designed to address how the provision in Section 906 related to “maximum” compensation is to be applied. These changes focus upon the interpretation of 906(c). For the purpose of this discussion, it should be understood that compensation benefits are capped at 200% of the national average weekly wage (906(b)(1)). Additionally, the national average weekly wage is recalculated every year pursuant to 906(b)(3). Historically an increase in this figure has always occurred. Section 906(c) provides that: determinations made of the national average weekly wage with respect to a period “shall apply to employees or survivors currently receiving compensation for permanent total benefits or death benefits during such period, as well as those newly-awarded compensation during such period.”

As noted in the proposed regulations, the terms “currently receiving compensation” and “newly-awarded compensation” have been the subject of certain litigation over the years. It appears that what the proposed regulations do is to place into a regulation a Benefit Review Board (BRB) ruling that has never been tested in the U.S. Circuit Courts of Appeals. The BRB ruling in Marko v. Morris Boney Company, 23 BRBS 353 (1990), held that 33 U.S.C. § 906(c) required that a claimant who is totally and permanently disabled is to be provided an increase in the maximum allowable benefit annually rather than being held to a fixed maximum that would be established by the date of his disability. So, if an employee’s initial benefit, due to his high average weekly wage (AWW), is limited by the cap of the maximum benefit provided in 906(b)(1), he will not receive a full two-thirds of his AWW as a weekly benefit. If later annual increases in the maximum allowable benefit reach a point where they exceed two-thirds of the claimant’s AWW, he will not then be so limited and will receive his full benefits.  If the maximum were fixed, as a number of employers have asserted, this would not occur.

Should an employer be concerned about this reformulated regulation, depends upon whether its employees fall into a category where their compensation rate would be limited by the maximum allowed under Section 906(b)(1). For present purposes, the maximum rate that will come into effect on October 1st, 2016, is $1,436.48. To max out at this rate, an individual would need to have an AWW of $2,154.72 or an annual income of $112,045.44. If employees receive wages in or around this level, then the potential effect of the application of this regulation may be of concern to employers.

The proposed regulations also establish a standard based upon the Ninth Circuit’s decision in Roberts v. Director, OWCP, 625 F.3d 1204, 1208-09 (9th Cir. 2010), aff’d sub nom Roberts v. Sea-Land Services, Inc., 132 S.Ct. 1350 (2012), and the Eleventh Circuit decision in Boroski v. Dyncorp. Int’l, 662 F.3d 1197 (11th Cir. 2011). Both of these courts interpreted Section 906(c)’s “currently receiving compensation” language for permanent and total disability or death benefits, and they have allowed a step-up in the maximum where the claimant’s disability category changed from temporary total disability (TTD) to permanent total disability (PTD). Rather than limit the employee to the maximum at the time of injury, the employee’s rate was subject to the maximum as of the date that his disability was classed as permanent and total. In one of these cases, the claimant, originally injured in 2012, went from TTD to PTD in 2005, and at that time his rate was found to be controlled by the maximum in the 2005 fiscal year. Later, when a wage-earning capacity was established, thereby changing the rate to one of permanent partial disability, the 2002 maximum rate for the date of injury was found to be applicable.

James Baker Jr. v. Director, OWCP; Gulf Island Marine Fabricators, LLCJames Baker, Jr. v. Director, OWCP; Gulf Island Marine Fabricators, LLC, U.S. Fifth Circuit No. 15-60634 (August 19, 2016). In this case the Court of Appeals affirmed the Administrative Law Judge’s (ALJ) determination that Mr. Baker, an employee of Gulf Island Marine Fabricators, LLC (Gulf Island) did not qualify for benefits under the Longshore & Harbor Workers Compensation Act (LHWCA), 33 U.S.C. § 901 et seq., either directly or by application of the Outer Continental Shelf Lands Act (OCSLA), 43 U.S.C. § 1331 et seq.

Mr. Baker filed a claim with the U.S. Department of Labor alleging an injury in the course and scope of his employment with Gulf Island for which he sought benefits under the LHWCA. Gulf Island was in the business of constructing and repairing vessels, and specialized in maritime oil and gas structures. One of Gulf Island’s projects was to fabricate the topside living quarters for the tension-legged platform, Big Foot. Mr. Baker had been hired by Gulf Island to work as a carpenter in the fabrication of the living quarters. His entire employment was spent on this project. His work was within 100 yards of the Houma Navigation Canal to which the employer’s property abutted, but he always worked on dry land. Mr. Baker never went offshore to participate in work duties on the Outer Continental Shelf. The parties had stipulated that the “situs” prong of the jurisdictional test under the LHWCA was met as Mr. Baker performed his duties in an area adjacent to navigable water, but the employer disputed whether under the “status” prong of the jurisdictional test Mr. Baker was involved in maritime employment.

In applying the recent decisions of the U.S. Supreme Court in Stewart v. Dutra Construction Company, 543 U.S. 481 (2005) and Lozman v. City of Riviera Beach, Fla., 133 S.Ct. 735 (2013), the ALJ determined that the tension-legged platform, Big Foot, was not a “vessel” in the context of the LHWCA as that term has been defined by decisional law, and Mr. Baker was therefore not involved in maritime employment.

Mr. Baker also sought coverage under the Act by application of the OCSLA, asserting that the Supreme Court’s decision in Pacific Operators Offshore, LLP v. Valladolid, 132 S.Ct. 680 (2012), extended OCSLA coverage to one who was injured on land. As noted by the ALJ, the Supreme Court decision applying OCSLA extra-territorially required the injured employee to establish a significant causal link between the injury that he suffered and his employer’s onsite OCS operations conducted for the purpose of extracting natural resources from the OCS. In this instance, the ALJ found that Mr. Baker never set foot on the OCS and his employer had no role in transporting the Big Foot to the OCS, installing it there or operating it, ergo OCSLA did not provide him with an avenue to LHWCA coverage.

The ALJ’s decision was affirmed by the Benefit Review Board and Mr. Baker appealed to the U.S. Fifth Circuit Court of Appeals. The Fifth Circuit’s decision likewise analyzed the Dutra and Lozman decisions of the Supreme Court and concluded that the Big Foot was not a “vessel” under the LHWCA. It felt that this comported with its cited precedent denying vessel status to structures that were not designed or engaged in maritime transportation noting that mere flotation on water does not constitute a structure a vessel.

The Fifth Circuit also addressed the Pacific Operators holding indicating that Mr. Baker’s injury occurred on dry land while he was building the living and dining quarters for the Big Foot, and therefore, he did not satisfy the fact-specific test enunciated by the Supreme Court. The Court reasoned that Mr. Baker’s job of constructing living and dining quarters was too attenuated from Big Foot’s future purpose of extracting natural resources from the OCS for the OCSLA to cover his injury. Mr. Baker’s employment was located solely on land, whereas the employee in Valladolid spent 98% of his time on an offshore drilling platform. Furthermore, Mr. Baker’s particular job did not require him to travel to the OCS at all, making his work geographically distant from the OCS. Likewise, his employer had no role in moving the Big Foot to and installing it on the OCS. Based upon these specific facts of Mr. Baker’s employment, the Fifth Circuit concluded that the ALJ appropriately denied Mr. Baker’s claim.

Surveillance and Section 20a PresumptionThe recent decision of the U.S. Court of Appeals for the Fifth Circuit in Bis Salamis, Inc. v. Director, OWCP (Joseph Meeks), No. 15-60148 (March 17, 2016), highlights how the defense to a claim under the Longshore and Harbor Workers’ Compensation Act, 33 USC 901 et.seq. (LHWCA), can have a tortured journey through the liberal Benefits Review Board (BRB) until a successful result is reached in at least some of the U.S. Courts of Appeals. This opinion also underscores the importance of surveillance evidence when facing a prevaricating claimant.

In this matter the Fifth Circuit reversed the BRB which had twice reversed an Administrative Law Judge’s (ALJ) finding that the claimant’s testimony, video surveillance and other evidence presented by the employer showed that the claimant’s assertions were so unworthy of belief that they were not adequate to invoke the Section 20(a) presumption. Without the presumption aiding the claimant, the ALJ concluded that the claimant had failed to prove that his disability was related to his work activities. Not only did the claimant relate several versions of how his alleged accident occurred, he was also heard to say shortly after the event that he had been “hurt before but … never got anything for it.” There was also conflicting evidence as to whether the personnel basket transfer that was used to transport the claimant from a platform to a vessel and that was alleged to have caused the injury, resulted in a small jostling of personnel or involved a six to ten foot fall.

In his original opinion the ALJ concluded that the claimant was such an unreliable witness and dishonest individual that his testimony and the supporting opinions and reports of the doctors who relied on what he told them had virtually no probative value or evidentiary weight. The ALJ found that the only relevant fact that was established, as more likely than not to have occurred, was that the claimant was involved in an incident where he was tossed about in a personnel basket.

Underlying the ALJ’s initial opinion was his evaluation of  surveillance video showing the claimant capable of performing many activities without exhibiting pain or limitation at the time he reported to doctors that he was in intense pain and incapable of performing even the lightest of activities. The video also refuted the claimant’s testimony that he spent most of his time in bed and could not lift anything heavier than 10 lbs.

The Benefit Review Board (BRB) reversed the ALJ’s first opinion faulting the ALJ for failing to place his findings within the LHWCA’s framework or explicitly discussing the presumption on causation in the claimant’s favor under Section 920(a). The BRB felt that the ALJ had shifted the burden onto the claimant to prove the work relatedness of his injuries.

After the first remand to the ALJ, he again found that any testimony, findings or opinions based on the claimant’s statements and complaints were entitled to virtually no weight because he found the claimant to be so dishonest and unreliable. The ALJ acknowledged that employers are liable for instances that aggravate pre-existing conditions, but found that the claimant failed to meet even the slight prima facie burden to establish a compensable harm. The only harm the ALJ found claimant incurred was a lumbar strain for which claimant was treated and released to full duty.

On the second appeal to the BRB, it again reversed the finding that the ALJ’s order indicating it was not supported by substantial evidence because objective medical evidence in the record established that the claimant required treatment for his injuries and was prevented from going back to his hard labor job. On the second remand, the parties stipulated to the claimant’s average weekly wage and the ALJ entered an order awarding temporary total disability in compliance with the direction of the BRB. This was then appealed to the Fifth Circuit.

Applying the accepted standard of review in determining whether the ALJ’s decision was supported by substantial evidence, the Fifth Circuit concluded that an ALJ may make credibility determinations in asserting whether a claimant has established the prima facie showing required to obtain the benefit of the presumption under 20(a). The Court indicated that the BRB had improperly reasoned that even if the claimant was not credible, some of the medical evidence was sufficiently objective, that the ALJ should have accounted for it and applied the Section 20(a) presumption. The Court noted that it is established law that the ALJ may choose between reasonable inferences and that he exclusively empowered to weigh the evidence. It reiterated that an ALJ may accept or reject the conclusions of experts and is not required to accept the opinion or theory of a medical expert that contradicts his findings based on common sense. It noted that there was plentiful evidence demonstrating that the claimant had a preexisting degenerative back condition that could reasonably cause the pain he alleged. The court, however, found that there was no definitive evidence showing that the claimant’s suffered a traumatic injury, and that there was no evidence showing a difference in his spine before and after the incident on the personnel basket. The Court further noted that although some of the doctor’s findings were based on what they viewed as objective tests, it was not irrational for the ALJ to conclude that the claimant probably faked assertions of pain and limited range of motion which was refuted by the video surveillance.

department of labor logoOn Thursday, March 12, 2015, the Department of Labor Office of Workers Compensation Program (OWCP) filed in the Federal Register (Volume 80, No. 48) a direct final rule and request for comments with regard to changes to OWCP regulations intended to broaden the acceptable methods by which claimants, employers and insurers can communicate with OWCP and each other. The direct final rule becomes effective on June 10, 2015, without further action unless OWCP receives significant adverse comment to the rule by May 11, 2015. The notice issued by the OWCP provides that the revisions are procedural in nature and that they will apply to all matters pending on the date the rule is effective. These revisions either codify current practice or broaden the methods by which documents and information may be transmitted under the LHWCA.

In general the rules now recognize email transmission of documents as a means for communication between parties as long as the parties have either in writing or by email provided confirmation that the receiving party agrees to accept electronic transmission if it is sent through a reliable method. The rules also provide for a replication of this agreement. The revisions also provide for the use of the OWCP SEAportal method for serving documents on a District Director’s office, but does not exclude the existing means for delivery of documentation whether by mail, facsimile or hand delivery.

As we all know, the devil is in the details. It is therefore recommended that the LHWCA employer, insurer and practitioner review these revisions to be in compliance by their effective date.

Global Management Enterprises v. Commerce & Industry Insurance Co. clarifies whether oil spill clean-up injuries are covered under LHWCA.

In an unpublished per curiam decision, Global Management Enterprises, LLC v. Commerce & Industry Insurance Company, No. 13-31249, filed June 23, 2014, Judges Davis, Benavides and Prado determined that a worker who was injured while assisting with Deepwater Horizon oil spill clean-up efforts on an island in the Gulf of Mexico was not covered under the Longshore and Harbor Workers’ Compensation Act (LHWCA). Mr. De La Cruz was allegedly injured on the beach of an unnamed Gulf island while lifting a bag of oil-contaminated sand that would later be loaded onto a truck and eventually transferred to a vessel for removal from the island. 

Mr. De La Cruz was employed by Global Management Enterprises (Global), a temporary employment agency that was insured for workmen’s compensation payments by Chartis under a policy that excluded coverage for claims under the LHWCA. Due to the fact that De La Cruz had filed, but later withdrew, a Longshore Act claim while receiving state workmen’s compensation benefits, Chartis ceased workers’ compensation payments citing their policy’s LHWCA exclusion. Global then sued Chartis seeking the state workmen’s compensation coverage that they had purchased. 

The determinative situs issue for coverage under the LHWCA was whether the site of injury was an “other adjoining area customarily used by an employer in loading, unloading, repairing, dismantling, or building a vessel” 33 U.S.C. § 903(a). According to the decision by the Fifth Circuit in Depot Services v. Workers’ Compensation Programs, 714 F.3d 384 (5th Cir. 2013)(en banc), a work site, to be covered by the LHWCA, must (1) adjoin navigable waters and (2) customarily be used by an employer to facilitate one of the listed maritime activities. There was no dispute that the incident occurred at a site adjoining navigable waters. The remaining question was whether the beach was a location customarily used by an employer for covered activity. The panel concluded that the site of the injury was not. There was no evidence that any loading or unloading of vessels or repair of vessels transpired at the site where the claimant was injured. 

Interestingly, Chartis argued that the beach and pier where the crew would load the oil-laden sand aboard a vessel should be considered a single area, asserting that under Coastal Production Services, Inc. v. Hudson, 555 F.3d 426 (5th Cir. 2009) the site should be seen as interconnected with the longshoring activities. The Court in examining the material facts rejected this argument, finding that the proximity of the site of injury to the vessel loading activities was not sufficient to establish it as a component of the general area used for the overall loading process. 

While some had thought that the en banc decision in Depot Services v. Workers’ Compensation Programs had completely overruled Winchester and Hudson, this panel of the Fifth Circuit indicated that Winchester and Hudson were only overruled where they are inconsistent with the adjacency standard established in Depot Services. Citing a discussion in Winchester of the functional “customary use” component of situs they indicated the previous discussion remained binding precedent.

Smith v. Mt. Mitchell clarifies the definition of “child” under the LHWCA.

On February 25, 2014, the Benefits Review Board rendered its decision in Smith v. Mt. Mitchell, LLC, ____BRBS____ (D.O.L. Ben. Rev. Bd. Feb. 25, 2014), which affirmed an Administrative Law Judge’s decision and order, clarifying the meaning of the term “child” under the Longshore and Harbor Workers’ Compensation Act (LHWCA). The inquiry central to the Board’s decision was whether the claimant was “wholly dependent” on his father at the time of his father’s death.

The claimant’s father, the decedent, worked over thirty years as a pipefitter and welder for several maritime employers. During the span of his career, the decedent was exposed to asbestos and eventually contracted lung disease, from which he later died. Following the decedent’s death, the claimant, an adult who suffered from multiple medical conditions including Crohn’s disease, filed a claim for death benefits as a wholly dependent, disabled “child.”

The administrative law judge (ALJ) considered all available evidence regarding the claimant’s dependency and found that he did not qualify as a “child” under Section 2(14) of the LHWCA. Additionally, the ALJ found that the claimant did not qualify as the decedent’s “dependent” under Section 9(d) of the LHWCA. The claimant’s claim for benefits was ultimately denied.

On appeal to the Benefits Review Board, the claimant argued that the ALJ erred in determining that he was ineligible to recover benefits as a “child” under Section 9(b) of the LHWCA. The term “child” is defined in Section 2(14), which provides, in pertinent part, a “child” . . . include[s] only a person who is under eighteen years of age, or who, though eighteen years of age or over, is (1) wholly dependent upon the employee and incapable of self-support by reason of mental or physical disability, or (2) a student . . .” The claimant was over the age of eighteen and not a student. As such, he would only qualify as a “child” under the Act if he was “wholly dependent” on the decedent and incapable of self-support by reason of mental or physical disability.

The Board agreed with the reasoning and findings of the ALJ. Evidence showed that the claimant received Social Security disability benefits at least three times greater than the monthly expenses he received from the decedent. He alleged that he received $200 to $300 per month from his parents, but acknowledged that he received $1,357.80 per month in Social Security benefits. Despite his contention that public benefits should not be included in determining whether or not a disabled relative is “wholly dependent,” he cited no precedent that supported his assertion. To the contrary, however, case law shows that welfare benefits and other forms of government funding have been considered in determining dependency in claims for benefits. See, Doe v. Jarka Corp. of New England, 21 BRBS 142 (1988); Mikell v. Savannah Shipyard Co., 24 BRBS 100 (1990). Thus, the Board found no error in the ALJ’s inclusion of the claimant’s disability benefits in the determination of “wholly dependent” status.

In sum, where a disabled adult child seeks death benefits under Section 9(b) of the Act, one should be cognizant that any income he or she receives, regardless of the source, likely will be considered to determine “wholly dependent” status. This determination is fact specific. Should the additional income the child receives exceed the amount received from the decedent, that “surviving child” may not be considered a “child” at all.

 

Guest blogger Kourtni Mason is an attorney in the New Orleans office of King, Krebs & Jurgens. She practices primarily in the area of Admiralty & Maritime law. She is admitted to practice law in Louisiana.

 

 

The United States Court of Appeals for the Fourth Circuit, in Lincoln v. Director OWCP (Ceres Marine Terminals, Inc.) No. 13-1594 (March 11, 2014), was recently asked to address the effect of the employer filing a notice of controversion (LS-207) on the employer’s responsibility, vel non, for the payment of the claimant’s attorney’s fees pursuant to 33 U.S.C. § 928(a). The Longshore and Harbor Workers’ Compensation Act, 33 U.S.C. § 901 et seq., provides for fee shifting in certain circumstances where the employer can be cast for the liability of the employee’s attorney’s fees. § 928(a) provides, in part:

If the employer or carrier declines to pay any compensation on or before the thirtieth day after receiving written notice of a claim for compensation having been filed from the Deputy Commissioner, on the ground that there is no liability for compensation within the provisions of this Act, and the person seeking benefits shall thereafter have utilized the services of an attorney at law in the successful prosecution of a claim, there shall be awarded . . . a reasonable attorney’s fee against the employer or carrier . . .

Lincoln filed a claim with the District Director of the Office of Workers’ Compensation Programs on May 24, 2011, alleging that he sustained binaural hearing loss as a result of his work as a longshoreman with Ceres Marine Terminals, Inc. (Ceres). On May 26, Ceres responded by filing a LS-207, notice of controversion, with the District Director’s office claiming additional information was needed before it could determine what it believed was the correct disability payment. The information Ceres sought also included whether it was the last responsible exposing employer before Lincoln’s hearing loss was discovered. The District Director’s office formally served the notice of Lincoln’s claim on Ceres on June 14. On July 7, within 30 days of receipt of notice, Ceres made a voluntary payment to Lincoln amounting to one week of permanent partial disability payment under the maximum compensation rate applicable to the date of injury.

The parties eventually settled Lincoln’s hearing loss claim, leaving the issue of attorney’s fees and the liability therefore to be decided by the District Director. On May 15, 2012, the District Director entered a compensation order finding that Ceres was not liable for Lincoln’s attorney’s fees since it had made payment of “any compensation” within 30 days of receipt of notice of the claim from the District Director’s office. This ruling was affirmed by the BRB and appealed to the Fourth Circuit.

The Fourth Circuit in citing Andrepont vs. Murphy Exploration & Production Co., 566 F .3d 415 (5th Cir. 2009), a decision obtained by this author from the Fifth Circuit, reiterated that fee shifting under § 928(a) may not occur if the employer agrees that some amount is due the claimant for work related injury and “tenders any compensation.”

Lincoln’s attorneys argued that the filing of the controversion (LS 207) contradicted the payment made by Ceres and asserted that the payment made was therefore a mere sham to avoid fee liability. The Fourth Circuit rejected this argument indicating that § 928(a) did not address the employer’s obligation for filing a notice of controversion and contained only one explicit trigger, that being the payment of “any compensation” within 30 days of the employer’s receipt of official notice of a claim. Since Ceres met this requirement, it was entitled to the protections afforded under § 928(a).

On Tuesday, October 8, 2013, the United States Court of Appeals for the Fifth Circuit in BPU Management, Inc. v DOWCP (Donald Morgan) again addressed jurisdictional coverage under The Longshore and Harbor Workers’ Compensation Act (LHWCA). Following on the heels of New Orleans Depot Services, Inc., (NODSI) v. DOWCP, 718 Fed. 3rd 384, 387 (5th Cir. 2013) (en banc), which as discussed in a previous Offshore Winds blog post specifically addressed the confines of geographic situs, this panel of the Court addressed the functional component of the situs test.

In what appears to be a very common sensical approach to the “point of rest” concept as it was further defined by the Supreme Court in Northeast Marine Terminal, Co., Inc. v. Caputo, 432 U.S. 249, 267 (1977), the Fifth Circuit, based upon the particular factual setting of the claimant’s employment, posed the appropriate question. The determinative question as seen by the Court is whether the situs where the claimant was injured was customarily used for unloading a vessel.

The claimant, David Martin, had been employed with his employer between 1997 and 2006. The employer maintained a facility on the Texas Gulf Coast used for the production of industrial alumina from raw bauxite. The facility was situated along a navigable waterway so that vessels could easily unload feed stock materials and load finished products.

Bauxite would be unloaded from vessels at the employer’s dock using an overhead conveyer system which then carried the bauxite over a street and fence separating the dock area from the alumina processing facility. There the bauxite would be deposited into one of several bins located in a large covered storage area. The bauxite would remain in the storage area until needed later in the refining process. When required, the bauxite would be transferred by opening a trap door at the bottom of the bin. The bauxite would then drain into a screw feeder which broke down the bauxite into smaller pieces and deposited it onto a conveyor belt located in the cross tunnel.

Mr. Martin’s usual employment was as a dockworker to ensure that ships were properly docked and loaded or unloaded, but at other infrequent times he participated in the cleaning of bauxite debris in a cross tunnel. The back injury for which he sought compensation occurred while he was shoveling displaced bauxite back to the conveyor system located in the cross tunnel.

The courts below, finding situs had been established, reasoned that the cross tunnel where Martin was injured had a substantial nexus with the bulk site unloading process, indicating that it had a functional relationship with navigable waters. Because the storage buildings were used in unloading bauxite and did not house manufacturing facilities, the Court below deduced by elimination that the cross tunnel beneath the buildings was necessarily involved in the unloading process. The Fifth Circuit felt the focus of this inquiry to be misdirected and indicated that rather than determine if the site was used for manufacturing, the appropriate question was whether it was customarily used for unloading a vessel. If not, situs was not established.

In answering this question, the Fifth Circuit noted that once the bauxite was delivered to the storage area, the employer’s engineering employees managed and controlled the bauxite’s further movement. It also noted that when the bauxite was placed into the bins, it was placed on top of previously discharged bauxite and would sit in the long term storage stockpile until it migrated to the bottom to be selected by the employer’s process engineers for production and movement for crushing in the screw feeder and finally transported toward the metal extraction facility by the conveyer located on the situs of Mr. Martin’s injury.

Once the facts of this case are understood, one can clearly see a demarcation between the unloading process and further activity involved with the bauxite, thus the Fifth Circuit ruled Mr. Martin was not covered under the LHWCA. Whether this decision will significantly affect other situs cases, as will the NODSI case, supra, it remains to be seen. The decision does, however, seem to answer the question that a Longshore Act employee, under certain circumstances, can walk in and out of coverage during his daily activities.

On April 29, 2013, the Fifth Circuit issued an opinion for the en banc Court in New Orleans Depot Services, Inc. v. Director OWCP, 718 F.3d 384 (5th Cir. 2013) that effectively reformulated the 1972 situs jurisdictional requirement under the Longshore and Harbor Workers’ Compensation Act (LHWCA), 33 U.S.C. sec. 901 et.seq. The Court now will require that the situs upon which an employee is injured must border upon navigable waters for the employee to satisfy this prong of the dual jurisdiction test of the Act.

The reader will remember that prior to the amendments to the LHWCA in 1972, the Act’s jurisdiction applied over navigable water and ended at the water’s edge. In order to attune the coverage of the LHWCA to the changes in the shipping industry that increasingly drew stevedoring activities onto land, Congress in 1972 provided the following amendment to the act:

SEC. 3.(a) Except as otherwise provided in this section, compensation shall be payable under this Act in respect of disability or death of an employee, but only if the disability or death results from an injury occurring upon the navigable waters of the United States (including any adjoining pier, wharf, dry dock, terminal, building way, marine railway, or other adjoining area customarily used by an employer in loading, unloading, repairing, dismantling, or building a vessel). (emphasis added)

In its latest restatement of the situs requirement, the majority of the court rejected its previous definition of “other adjoining area” provided in Textports Stevedore Co. v. Winchester, 632 F.2d 504 (5th Cir. 1980). In that case, Mr. Winchester was injured in a gear room located more than five city blocks from the water’s edge. After 30 years of a broader test of what “adjoining” meant, the Court has now adopted the more objectively reasoned and restrictive “bordering upon navigable waters” definition of the Fourth Circuit in Sidwell v. Express Container Services, Inc., 71 F.3d 1134 (4th Cir. 1995).

Status Prong of LHWCA Test Also Addressed

In addition to this holding, seven judges provided a concurring decision concerning the status of the plaintiff, Mr. Zepeda, as a maritime employee, thereby addressing the second prong of the dual test for LHWCA jurisdiction. Noting that Mr. Zepeda was not involved in the actual process of moving cargo between ship and land transportation and was solely tasked with repairing empty containers, the concurring judges would find that he was not engaged in the type of duties that longshoremen traditionally perform in transferring goods between ship and land transportation. Mr. Zepeda therefore would not have met the criteria for maritime status. Only in the instance where the repair of a container was immediately necessary to prevent a stoppage in the loading or discharge of a vessel would the concurring judges find that container repairer had sufficient maritime nexus to suffice for the test of maritime status.

It is interesting to note that the author of the concurring opinion declared it to be an alternative ground to vacate the decision below and not to be considered as dictum. Practitioners may be hard pressed, however, to assert the concurring opinion as controlling precedent as it was adopted by less than a mathematical majority of the en banc Court. The concurring opinion is, however, noteworthy, as seven of the judges adopted its reasoning and these judges will be sitting on future panels of the Fifth Circuit.