U.S. Fifth Circuit

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NuStar Energy Services v. M/V COSCO AUCKLANDIn NuStar Energy Services, Inc. v. M/V COSCO AUCKLAND, No. 17-20246 (5th Cir. Jan. 14, 2019), the U.S. Fifth Circuit concluded NuStar, the physical supplier of bunkers/marine fuel to the M/V COSCO AUCKLAND, lacked standing to appeal the district court’s ruling that O.W. Bunker Far East (S) Pte Ltd., the contract supplier of bunkers, had validly assigned its maritime lien against that vessel to ING Bank N.V. In line with its earlier decision of Valero Mktg. & Supply Co. v. M/V ALMI SUN, 893 F.3d 290, 295 (5th Cir. 2018) and other decisions of the Second, Ninth and Eleventh Circuits, the Fifth Circuit concluded that NuStar did not hold a maritime lien against the vessel even though the vessel interests were aware that NuStar would physically supply the bunkers, and the vessel’s employees oversaw and accepted the delivery of the fuel.

Because NuStar did not have a valid maritime lien, the district court’s conclusion that OW Far East had assigned its maritime liens to ING Bank would not affect NuStar in any concrete way and thereby rendered NuStar’s interest in challenging the validity of the assignment moot. Accordingly, the Fifth Circuit concluded it lacked jurisdiction to review the district court’s ruling that OW Far East validly assigned its maritime lien to ING Bank.

The Fifth Circuit noted in closing: “Of course, our inability to review the district court’s judgment as to ING means that this case is not resulting in circuit precedent on the question whether the liens are assignable to ING. So to the extent this issue arises in other OW Bunker cases in this circuit, it remains an open question.”  While there still is no precedent emanating from the U.S. Fifth Circuit concerning the validity of the assignments of maritime liens to ING Bank, the decisions of other courts have confirmed the validity of such assignments.  See Barcliff, LLC v. M/V DEEP BLUE, 876 F.3d 1063, 1074-75 (11th Cir. 2017); ING Bank N.V. v. M/V TEMARA, ___ F. Supp. 3d ___ (S.D.N.Y. 2018), on remand; NuStar Energy Servs., Inc. v. M/V COSCO AUCKLAND, 2016 WL 9307626 at *6 (S.D. Tex. 2016), appeal dismissed on this point.

NOTE: King & Jurgens, LLC and its predecessor, King, Krebs & Jurgens, PLLC, have represented ING Bank N.V. in scores of maritime arrests and attachments of vessels in the ports of the United States to collect for non-payment of bunkers contractually supplied by the OW Bunker Group. King & Jurgens, LLC, however, was not involved in the NuStar litigation discussed in this blog post.

LHWCA Requirement of Notification Strictly EnforcedOn September 11, 2018, the U.S. Court of Appeals for the Fifth Circuit, in the matter of McGill C. Parfait v. Director, OWCP, Performance Energy Services LLC and Signal Mutual Indemnity Association Ltd., No. 16-60662, granted the respondents’ motion to dismiss Mr. McGill’s Petition for Review based upon the petitioner’s non-compliance with 33 USC § 933(g). In doing so, the Court noted that neither knowledge of a mediation taking place nor publication of a judgment satisfied the requirement to provide notice of a settlement and a judgment against joint tortfeasors that arose out of his work-related injury.

The petitioner, McGill C. Parfait, was an employee of Performance Energy Services LLC (“employer”) who sustained injuries to his chest and back in an accident that occurred on June 30, 2013, while working for his employer on a site covered by the Longshore and Harbor Workers’ Compensation Act, 33 USC § 901 et. seq. (“LHWCA”). After a formal hearing on his claim under the LHWCA, the Administrative Law Judge (“ALJ”) awarded him $1,493.60 in temporary total and temporary partial disability benefits for his chest injury. The ALJ denied his claim for benefits related to his back injury. Mr. Parfait appealed the ALJ’s award to the Benefits Review Board (“BRB”), which affirmed. He then lodged his Petition for Review with the Fifth Circuit challenging the BRB’s ruling denying total permanent disability benefits for his back injury.

Mr. Parfait also filed a third-party action against Apache Corporation (“Apache”) and Wood Group PSN, Inc. (“Wood”) for the injuries for which he had sought compensation benefits under the LHWCA. While Mr. Parfait’s appeal to the BRB was under submission, the employer learned from counsel for Apache that petitioner had settled his claim against them. The employer also learned, after inquiring of Wood’s counsel, that after a jury trial a judgment had been entered in favor of Mr. Parfait against Wood. After the Petition for Review was lodged in the Fifth Circuit, the employer and its carrier moved to dismiss it, alleging that Mr. Parfait failed to obtain their approval of the third-party settlement or to notify them of it and the third-party judgment as required by § 33(g) of the LHWCA. In the absence of this notification all rights to benefits due an employee under the LHWCA are terminated and forever lost.

In an effort to address the motion to dismiss, the Fifth Circuit submitted questions to counsel for both parties. Based upon the response to these questions, the Fifth Circuit learned that:

  1. Parfait compromised his suit against Apache in the Southern District of Texas with petitioner receiving a net of $325,000.
  2. Following a jury trial, in April of 2017, Mr. Parfait received a favorable verdict against Wood and a judgment was entered under which Mr. Parfait enjoyed a net recovery of $41,542.17.
  3. Counsel for employer/carrier was specifically invited to attend a mediation session that was held on March 10, 2016, and was contacted during the mediation session by claimant’s counsel. (The content of that communication, however, was never divulged.)
  4. Parfait’s counsel asserted that the Judgment in the jury trial against Wood was published by the district court on June 2, 2017, and asserted that the employer/carrier would have been plainly aware of its existence.

Where an employee has sued third-party tortfeasors as a result of his employment-bred injury, he is required under § 33(g), at the risk of losing his benefits for failing to do so, to obtain the written approval of his employer for any settlement he enters into if it is in an amount less than what would be the total liability of the employer under the LHWCA. Additionally, where the employee either settles his case for any amount or obtains a judgment, the employee must provide notice to the employer of this fact. The seminal case applying § 933(g) of the LHWCA is Estate of Cowart v. Nicklos Drilling Co., 505 U.S. 469 (1992) in which the Supreme Court applied a strict interpretation of the language contained in § 933(g).  The court stated,

An employee is required to provide notification to his employer, but is not required to obtain written approval, in two instances: 1) where the employee obtains a judgment, rather than a settlement, against a third-party; and 2) where the employee settles for an amount greater than or equal to the employer’s total liability. Under our construction, the written approval requirement of 33(g)(1) is inapplicable in those instances, but the notification requirement of 33(g)(2) remains in force.  Id. at 475

In the instant case, the Fifth Circuit noted that whether the net result of the settlement with Apache satisfied the employer’s total liability or not, Mr. Parfait was still required to provide 933(g)(2) notice, which he did not give. Furthermore, Mr. Parfair failed to give his employer notice of the actual judgment against Wood. The fact that the employer/carrier were on notice of the mediation, were invited to attend it and that some alleged unknown discussion occurred between claimant’s counsel and employer’s counsel at the time of the mediation, was of no moment, as the actual results of the settlement were not made known by the claimant to his employer. The Fifth Circuit cited a number of unpublished decisions of the BRB, which had held to a strict interpretation to § 933(g)(2) describing the affirmative duty of the employee to notify the employer. The employer’s mere knowledge of settlements or the absence of prejudice to the employer was found not to suffice to prevent the absolute bar to compensation from being invoked in these instances.

In re Crescent Energy ServicesThis past January, the Fifth Circuit in In re: Larry Doiron, Inc., 879 F. 3d 568 (5th Cir. 2018), overruled the six-factor test it had distilled in Davis & Sons v. Gulf Oil Corp. to determine whether a contract is maritime or non-martime, and adopted a simplified two-part analysis, based on the United States Supreme Court’s ruling in Norfolk Southern Railway Co. v. Kirby, 543 U.S. 14, 125 S. Ct. 385 (2004). Noting that the much-maligned Davis & Sons inquiry had led to a line of Fifth Circuit cases that were inconsistent, confusing, and difficult to apply, the Court replaced the Davis & Sons analysis with a new two-pronged test which simply asks the following:

First, is the contract one to provide services to facilitate the drilling or production of oil and gas on navigable waters?

Second, if the answer to the above question is “yes,” does the contract provide or do the parties expect that a vessel will play a substantial role in the completion of the contract? If so, the contract is maritime in nature.

In addition to providing greater clarity to the oil and gas industry on the question of whether any particular contract is maritime, it has also been anticipated that the new Doiron test would increase the number of contracts that would qualify as maritime. This analysis appears to be correct thus far, at least in the context of certain contracts for plug and abandonment (P&A) work.

In its first decision since Doiron, the Fifth Circuit, in In re: Crescent Energy Servs., LLC, 896 F.3d 350 (5th Cir. 2018), applied the new test to find that a contract to P&A three inland wells was maritime. In In re: Crescent, a contractor was hired to perform P&A work on the wells which were located on several small fixed platforms in coastal waters off Lafourche Parish. The work order bid submitted by the P&A contractor listed three vessels among the equipment to be used for the job. Importantly, one of these vessels was a spud barge specifically designed to P&A wells. Because of the small size of the fixed platforms, the barge served as a work platform outfitted with the equipment necessary to perform the P&A work, including a crane permanently attached to the barge. In re: Crescent Energy Servs., LLC, 2016 WL 6581285, at *3 (E.D. La. Nov. 7, 2016). Most of the P&A equipment was operated from the barge, including the wireline unit. The crew also lived and slept on the vessel during the project. Id. Applying the Davis & Sons test in effect at the time, the district court for the Eastern District of Louisiana held that the P&A was maritime. Id. at *5.  

The contractor’s insurers appealed the ruling to the Fifth Circuit. In asserting that the first part of the test – whether the P&A contract was to provide services to facilitate the drilling or production of oil and gas on navigable waters – was not satisfied, the insurers advanced two arguments. First, the insurers claimed that the contract did not facilitate the drilling or production of oil and gas because decommissioning oil wells was more analogous to the non-maritime activity of construction of offshore platforms. In re: Crescent Energy Servs., LLC, 896 F. 3d at 356. The Fifth Circuit rejected this argument, reasoning that the life-cycle of oil and gas drilling includes site restoration when production ends and the well is abandoned. Id. Thus, like the processes of exploration and production, the P&A stage is also part of the overall drilling cycle, and therefore, “involved the drilling and production of oil and gas.” Id. Second, the insurers argued that the P&A work did not occur on “navigable waters” because the underlying injury occurred on the platform, rather than on one of the vessels supplied by the contractor. The Fifth Circuit rejected this position because, while the location of the worker’s injury may be relevant to determining situs for purposes of maritime tort law, the issue was completely “immaterial in determining whether the worker’s employer entered into a maritime contract” under the new Doiron test. Id at 356-357. (quoting Doiron, 879 F.3d at 573–74). Given that all parties conceded that the wells were located within the territorial inland waters of Louisiana and that that the vessels involved in this contract were able to navigate to them, the Court held that the P&A contract was to facilitate the drilling or production of oil and gas on navigable waters. Id. at 357.

Turning to the second question – whether the contract provides or do the parties expect that a vessel will play a substantial role in the completion of the contract – the Court concluded that the parties expected that the vessels, primarily the spud barge, would play a substantial role in the P&A work. Specifically, the Court noted that the work order identified the vessels as equipment that would be used to perform in the P&A job. Id. at 360. In addition, the spud barge, the key vessel used in the operations, contained the only crane used in the work which moved materials to and from the barge and the platforms. Id. Moreover, the testimony at trial established that much of the equipment used in the operations was kept on the barge, which served as a work platform and crew quarters because of the small size of the platforms. Id. The Court took particular note of the fact that the equipment remaining on the vessel included the wireline unit. Because the wireline unit’s “purpose [was] central to plugging and abandoning the well,” the Court reasoned that the unit “was central to the entire P&A contract.” In light of the foregoing, the Court concluded that the spud barge and the other vessels “were expected to perform an important role, indeed, a substantial one” in the P&A work, and therefore, the contract was maritime. Id. at 361.

In sum, while In re: Crescent cannot be said to stand for the proposition that all contracts between oil companies and contractors for P&A work of inland and offshore wells will qualify as maritime, the decision certainly provides helpful guidance on the issue. Based on the Court’s rationale, P&A work that takes place at wells located at small platforms, which necessarily requires a vessel to store equipment, serve as a workplace, and house the work crew, will qualify as maritime. The case that the contract is maritime may be particularly strong where critical P&A equipment, such as a wireline unit, is operated from the vessel because of a lack of space for the equipment on the platform. Another critical factor in the Crescent holding was that the work order bid identified vessels among the equipment that was to be used in the P&A work. Therefore, parties contracting for P&A work and seeking to have the contract classified as maritime would be prudent to include in the relevant work order a description of the vessel(s) to be used in the project to clearly reflect their intent and understanding that a vessel is to play a substantial role in the P&A work. Conversely, in P&A jobs where a vessel is primarily used to transport personnel to the worksite and most of the equipment is moved to the offshore platform and operated from the platform, then the vessel will likely not have the requisite degree of significance for the contract to qualify as maritime. More decisions applying the new Doiron standard will provide greater clarity on these issues in the future.

As anticipated previously, the en banc Fifth Circuit in In re Larry Doiron, Inc., jettisoned the two-tier, six-factor test of Davis & Sons, Inc. v. Gulf Oil Corp. in favor of a new “simplified” test to determine whether “a contract for the performance of specialty services to facilitate the drilling or production of oil and gas on navigable waters is maritime,” and thereby adopted a conceptual approach. Doiron at 2.

The new tests are as follows: “Is the contract one to provide services to facilitate the drilling or production of oil and gas on navigable waters?” Doiron at 12. If so, “does the contract provide or do the parties expect that a vessel will play a substantial role in the completion of the contract”? Id. If so, then the contract is maritime in nature.

Under circumstances in which it is unclear as to the scope of the contract or the parties’ expectations as to whether vessels will be involved, the en banc Court indicated that the following factors of Davis & Sons may provide clarity: (1) the work actually performed under the contract; (2) the extent of vessel involvement in the job required by the contract at issue; and (3) the extent to which the vessel’s crewmembers (i.e., seamen) perform work under the contract at issue.

In the wake of this decision, it appears that contracts to perform well casing services from drilling vessels will remain maritime contracts. I anticipate that wireline and coiled tubing activities on a well that required the use of a vessel should now be viewed as maritime contracts. Accordingly, this decision has expanded the number of energy service contracts that will qualify as maritime in nature, and thus, the contract provisions concerning choice of law, indemnity and insurance will be determined under the general maritime law (absent a choice of law provision adopting state law).

Last Employer Rule in Occupational DiseaseOn May 17, 2017, the United States Court of Appeals for the Fifth Circuit rendered a decision affirming an Administrative Law Judge’s decision in Bollinger Shipyards, Inc., et al. v. Director, OWCP, et al., No. 16-60370.  This matter arose as a claim filed under the Longshore and Harbor Workers’ Compensation Act, 33 USC § 901 et. seq.  The plaintiff, Kenneth Worthy, filed a claim against his past employer, Bollinger Shipyards, Inc., for an occupational illness as a result of exposures to hazardous substances, including welding fumes, sandblasting dust, industrial cleaning solvents and other fumes and chemicals resulting in a diagnosis of chronic, obstructive pulmonary disease (COPD).

After a number of years working as a welding supervisor occasioning his exposure to the above-noted fumes, Mr. Worthy was examined by a physician in 2008, who indicated that he could no longer wear a respirator, as required by his job, due to airway obstruction. Mr. Worthy had been out of work due to other injuries at that time, and upon his attempt to return to work after recovering from these injuries, Bollinger required him to be again examined with regard to his pulmonary condition. On March 22, 2010, the company physician, Dr. Bourgeois, diagnosed Mr. Worthy with COPD based upon the results of a pulmonary function test. At that time, Mr. Worthy was told by the physician that he could not return to work and was advised to see a pulmonologist. It was also recommended that he apply for Social Security Disability.  Instead of doing this, Mr. Worthy applied for work with a separate employer and worked as a welding supervisor from March 29 – May 18, 2010, when he was fired for sleeping on the job.

After Mr. Worthy filed his claims against Bollinger for his respiratory condition, he was seen by yet another physician that performed a further pulmonary function test which gave similar results as were obtained in March 2010. This doctor also indicated to Mr. Worthy that he could not return to any job that exposed him to fumes or dust.

At the trial of the matter before an Administrative Law Judge, Bollinger asserted that it was not liable for Mr. Worthy’s occupational disease due to the fact that Mr. Worthy was exposed to further lung irritants while in the employ, however short-lived, of a later maritime employer. The issue presented addressed the application of the “last employer rule” as defined by the Second Circuit’s widely-adopted rule in Travelers Insurance v. Cardillo, 225 F.2d 137 (2nd Cir. 1955).  Under this rule, the responsible employer in occupational disease cases is the last employer during whose employment the claimant was exposed to injurious stimuli, prior to becoming aware that he was suffering from an occupational disease.

The application of this rule usually arises in the situation where the individual has terminated his employment as a result of a diagnosis identifying a disability and limitations precluding the claimant’s continued work. In the instant, however, after Mr. Worthy was diagnosed with COPD, he sought and obtained further employment for several months performing similar duties as he had for Bollinger. Under these facts, Bollinger argued that the ALJ should have focused solely on the date of disability (last date of employment) to determine the last responsible employer, citing Liberty Mutual Insurance v. Commercial Union Insurance, 978 F.2d 750, 756 (1st Cir. 1992). The Fifth Circuit determined that it did not need to address the situation when diagnosis and disability dates were different because the Administrative Law Judge found that both of these events occurred on March 22, 2010, and this issue was not truly raised by Bollinger before the Benefits Review Board, and was therefore forfeited.

Bollinger also attempted to avoid liability by asserting that Mr. Worthy’s pulmonary condition was made worse after his brief stint of work with the subsequent employer based upon a post-employment pulmonary function test indicating a decline in pulmonary functioning. The Fifth Circuit, noting the standard discretion applied to fact finding of an ALJ, refused to accept this prong of Bollinger’s appeal and indicated that the ALJ was not convinced by the evidence submitted by Bollinger supporting this conclusion.

2017 Longshore Conference

The 2017 Annual Longshore Conference was held last week at the Intercontinental Hotel in New Orleans. The annual conference, which is presented by Loyola University New Orleans College of Law in conjunction with the U.S. Department of Labor, is a two-day program/CLE for maritime practitioners and industry professionals handling claims arising under the Longshore and Harbor Workers’ Compensation Act (LHWCA), Defense Base Act (DBA) and other extension acts.

This year’s programming kicked off with a session dedicated to recent decisions under the LHWCA, including a discussion of Bis Salamis Inc, v. Dir. Office of Workers’ Comp. Programs, 819 F. 3d 116 (5th Cir. 2016), a Fifth Circuit case regarding the effect of a claimant’s credibility (or, more accurately, lack thereof) on establishing causation. The Bis Salamis case was the subject of an earlier Offshore Winds blog post by Doug Matthews. Day One’s programming continued with a question and answer session with the Office of Administrative Law Judges, who discussed case assignments and allotments, how the various district offices operate, and provided guidance in practicing before the OALJ. The ALJs took questions from audience members, several of which were directed to what lawyers can do to help speed up the process of judicial decision-making in claims before the Department of Labor. The (not-so-helpful) response of the ALJs in a nutshell? Write better and more concise briefs.

Following the ALJs were presentations on the interplay between other benefits schemes (such as state workers’ compensation statutes) and the LHWCA; trends and forecasts in DBA claims and the business of military contracting in general; and an eye-opening presentation regarding pain management and the opioid crisis in America. Day Two included presentations addressing several other timely topics of interest to Longshore and DBA practitioners, including Section 22 modifications and trends, professionalism in settlement negotiations, and a panel of District Directors of the Office of Workers’ Compensation Programs, who discussed practicing before the OWCP.

Some takeaways from the Conference:

  • The issue of whether a particular claimant was injured on a covered situs under 33 U.S.C. § 903(a) continues to be frequently litigated, and often turns on whether the claimant’s injury occurred in an “adjoining area” within the meaning of the Act;
  • Similarly, while the issue of whether a structure is a vessel under the LHWCA continues to be frequently litigated, it is becoming more well-settled that a very large tension leg platform is not a vessel, due to the lack of self-propulsion, steering mechanism, and rudder, and its dedicated time on site; and
  • Under the LHWCA, traumatic injuries get a one year statute of limitations; but occupational diseases get a two year statute of limitations. With respect to claimants experiencing delayed expression PTSD, it can be difficult determining which limitations period applies.

The Loyola Longshore Conference is held annually in New Orleans.

Bosarge v. Cheramie MarineIn defending personal injury claims, defendants frequently have to deal with jury interrogatories that infer the plaintiff actually experienced an incident that caused or contributed to his complaints, despite there being a question as to whether an incident occurred. For example, the first question the jury often is asked to answer is a variant of whether the defendant was negligent in causing plaintiff’s injuries – thereby creating the impression that a compensable accident has occurred.

In Bosarge v. Cheramie Marine, L.L.C., No. 16-30187 (5th Cir. Jan. 10, 2017), the U.S. Fifth Circuit in a per curiam decision concluded that the district court did not abuse its discretion in submitting the following interrogatory as the first question the jury needed to answer: “Do you find by a preponderance of the evidence that Plaintiff Richard Bosarge had an accident on July 18, 2014?” The evidence at trial conflicted on this point. Capt. Bosarge testified that his lower back was allegedly injured while he was in his bunk and the vessel struck a large wave. Cheramie Marine presented countervailing evidence that the waves were not violent, Capt. Bosarge stated that he thought his back was hurting from being seasick, and further that Capt. Bosarge did not report to the Master of the vessel as having had any accident at all.1 Accordingly, where there is evidence that no accident occurred, defendants now can cite to the Fifth Circuit’s Bosarge decision as authority to submit a similar jury interrogatory.

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1 Capt. Bosarge’s claim for maintenance and cure was dismissed based on the jury’s finding that he intentionally concealed material medical facts concerning his prior low back complaints in accordance with McCorpen v. Central Gulf S.S. Corp., 396 F.2d 547 (5th Cir. 1968) and its progeny.

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.

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.