ISSUE: A Brief History of the Longshore Act – Part Three

Jack_crop 72dpi1984 to Present

The Longshore Act was significantly amended again in 1984.  We were (and are) still trying to sort out the concepts of status and situs that were added in 1972.  Then along came the 1984 amendments to address some of the issues created by the 1972 amendments.   Chief among them were insurability concerns (insurance industry trade associations had strongly expressed the view that certain provisions of the Act made it very expensive and very difficult to price).  The 1984 amendments also added a specific list of exclusions in an attempt to clarify some coverage issues.

Insurability:  The unrelated death provision was eliminated, the annual weekly rate increase was capped at 5% (except for the old District of Columbia Compensation Act cases, which the 1984 Longshore Act amendments did not apply to), the maximum weekly rate was made applicable to death benefits, and the Special Fund assessment formula was modified to include a §908(f) (second injury) usage factor.

Excluded from coverage were: workers who are exclusively office clerical, secretarial, security, or data processing; employees of a club, camp, recreational operation, restaurant, museum or retail outlet; marina employees who are not engaged in construction, replacement, or expansion of such marina; temporary suppliers, transporters or vendors; aquaculture workers; individuals employed to build any recreational vessel under 65 feet in length, and individuals employed to repair or dismantle in connection with repair any recreational vessel (the removal of the length limitation for repair workers was added by amendment on February 17, 2009); and the holdover exclusions for a master or member of a crew of any vessel, any person engaged by a master to load or unload or repair any small vessel under 18 tons net, or any officer or employee of the United States or any agency thereof or of any State or foreign government, or of any political subdivision thereof. 

Among other changes, the 1984 amendments also changed the notice, claim filing and average weekly wage requirements for occupational disease cases, and changed the lump sum settlement approval procedures.

1984 was the last time that the Longshore Act was amended, except for the February 17, 2009 amendment affecting workers repairing recreational vessels.  Workers hired to repair or dismantle in connection with repair any recreational vessel are excluded from Longshore Act coverage regardless of the size of the vessel (with the condition that the workers must be covered by a state act workers’ compensation law).  Building recreational vessels is still subject to the under 65 foot limit. 

The courts are still struggling with the status and situs tests as there continues to be disagreement among the Federal Circuit Courts of Appeal as to the interpretation of “adjoining area” and “harbor worker”.  Even the questions of what is a vessel and who is a member of a crew continue to present problems as evidenced by the Supreme Court’s decision is Stewart v. Dutra Construction Co. Inc., 125 S. Ct. 1118 (2005), where to the surprise of some the Court adopted an extremely broad definition of “vessel” applicable to both the Longshore Act and the Jones Act.  This was followed by the 2013 Supreme Court’s decision in the case of Lozman v. The City of Riviera Beach, Florida, which narrowed Stewart somewhat from the “anything that floats is a vessel” rationale to a “reasonable observer” standard.

We have outlined the history of the Longshore Act mostly in the context of jurisdictional and coverage issues, but it’s not possible to include a comprehensive treatment of coverage in a brief history.  Just be aware that coverage issues are litigated now as much as ever.  The Act poses many challenges for maritime employers, and for many key issues there is no uniform, comprehensive answer.

For many workers, Longshore Act coverage and Jones Act coverage seem to overlap, even though the two are mutually exclusive.  Unfortunately for employers, formal adjudication is often necessary to determine coverage for these workers.  Similarly, the boundary between the Longshore Act and the various state acts can be uncertain, and as we have seen, in many states the coverage is concurrent.  There are many so called “concurrent states” in which injured workers can file claims under both the state act and the Longshore Act simultaneously or concurrently even in circumstances where it would seem that the exclusive provisions of the Longshore Act should preempt state action.  These are complex issues. 

I have to end this Brief History, Part Three somewhere so it might as well be here, but the timing is inconvenient.  There is a lot going on in the jurisprudence right now that will influence important Longshore Act issues going forward. 

Time will give us perspective on evaluating the influence of several recent developments.

1)  We’re still not quite sure what a recreational vessel is for purposes of the February 17, 2009 amendment. 

2)  The U.S. Supreme Court’s January 15, 2013, decision in the case of Lozman v. The City of Riviera Beach, FL, et al. on the vessel status issue has perhaps narrowed the test from the “whatever floats” approach suggested in Stewart v. Dutra Construction Co. (2005) to the “reasonable observer” standard based on the floating structure’s practical ability to serve as a means of transportation on water.

3)  The U.S. Supreme Court also decided in Pacific Operators Offshore, LLP v. Valladolid (January 11, 2012) that Section 1333(b) of the Outer Continental Shelf Lands Act (OCSLA) does not contain an outer continental shelf (OCS) situs of injury requirement.  The injury can occur anywhere.  The new “substantial nexus” test, between the injury and the employer’s OCS operations will determine OCSLA coverage. 

4)  In Joseph Tracy, Jr. v. Director, Office of Workers’ Compensation Programs, U.S. Department of Labor, et al., (September 2012) the Ninth Circuit held that the “navigable waters of the United States” as used in the Longshore Act does not include the territorial waters of other nations.  This has added uncertainty to what was already an uncertain issue.

5)  The recent situs and status case from the Fifth Circuit, New Orleans Depot Services, Inc. v. Director, Office of Workers’ Compensation Programs (Zepeda) (4/29/2013) completely changes the approach to situs in the Fifth Circuit and had a lot to say about status as well.

The state of Virginia on July 1, 2012, became an “exclusive” state in the context of concurrent jurisdiction, and South Carolina may soon join the ranks of “exclusives”.  

We’ll have to wait for the Brief History of the Longshore Act, Part Four to see how these decisions and developing events affect the interpretation of terms and the resolution of issues under the Act.

I will keep you up to date here at the AEU Longshore blog.

ISSUE: AEU Maritime Safety and Claims Forum

Safety Forum April 2013This is a guest blog provided by AEU’s Director of Loss Control Jimmy Burgin. In this posting, Jimmy reports on the most recent AEU Maritime Safety and Claims Forum.

Back in October 2012, The American Equity Underwriters, Inc. Safety Committee meeting changed its title to the AEU Safety and Claims Forum, but this change did not alter its reputation as being the premier maritime safety and claims meeting in the U.S. Our meeting of the AEU Maritime Safety and Claims Forum in Miami, Florida on April 9 – 11, 2013 was impressive and exceeded expectations among all that attended. This meeting is crafted specifically for members of the American Longshore Mutual Association, their brokers and special invitees.

Our first speaker was Jim McCready, an attorney who practices workers’ compensation defense and specializes in USL&H claims. Jim’s presentation centered on Section 20 of the Longshore Act, also known as the “Presumption”. Dr. Jim Baylis, an orthopedic physician specializing in injuries to the extremities explained the differences between an acute injury and chronic conditions. Teri Simpson, an investigator with Titan Investigative services, showed us the common techniques used in surveillance specifically social media.

A.J. Montalbano with AEU led the forum in a discussion about decisions following losses and how making the wrong decisions might cause additional loss. The discussion focused on: the accident scene, the investigation, subrogation, reporting requirements, claims strategy, scheduled and non scheduled injuries, light duty work and good treatment of injured workers.

As usual, breakout sessions for marine cargo handling and shipyard sub-groups were held. Both sessions focused on the continuing development of the AEU fall prevention guidance document that the forum is producing.

ALMA member JB Marine presented successful programs the company has implemented to increase safety performance.

The Forum keynote speaker was a Dupont Sustainable Solutions consultant. The consultant discussed how conscious and unconscious actions lead to losses and how companies can implement programs to increase the likelihood of safe work.

As usual, attendee feed back from this AEU Maritime Safety and Claims Forum indicated this was a very successful meeting. Many persons felt the meeting provided ideas to take back to their company to improve their safety program.

ISSUE: Situs and Status in the Fifth Circuit

Jack_crop 72dpiA significant event in Longshore Act jurisprudence has just occurred.

The federal Fifth Circuit Court of Appeals issued a decision on April 29, 2013, in the case of New Orleans Depot Services, Inc. v. Director, OWCP, et al. (Zepeda). The Fifth Circuit (states of Texas, Louisiana, and Mississippi) overruled its own long standing, often cited, and influential precedent (Textports Stevedore Co. v. Winchester) on the issue of Longshore Act situs.

In reversing the decision of the Benefits Review Board that had awarded benefits to Mr. Zepeda and which was affirmed by the Fifth Circuit’s appellate panel, the en banc Fifth Circuit reinterpreted language in Section 903(a) of the Longshore Act. “Adjoining” as in “… other adjoining area customarily used by an employer in loading, unloading, repairing, dismantling, or building a vessel”, no longer means “neighboring” or “in the vicinity of” navigable water.

Now in the Fifth Circuit, the interpretation of “adjoining” means “to lie next to” or “to be in contact with”. The Fifth Circuit has adopted the “plain language of the statute” interpretation as used by the Fourth Circuit (states of Maryland, Virginia, West Virginia, North Carolina, and South Carolina) as analyzed in Sidwell v. Express Container Services, Inc.

The scope of Longshore Act situs in the Fifth Circuit has significantly narrowed.

The claimant in this case worked repairing and performing maintenance on cargo containers and chassis used in land, rail, and vessel transportation. He did not pick up or deliver the empty containers or fill them with cargo. He worked at a facility located about 300 yards from the water with a (non-maritime) bottling company located between his employer’s premises and the water. The property was not contiguous with the water at any point.

The issue was whether his job location met the situs requirement for Longshore Act coverage as an “other adjoining area” under Section 903(a).

The Administrative Law Judge, Benefits Review Board, and the Fifth circuit panel on appeal agreed that under the Fifth Circuit’s precedent in Winchester the location met the situs requirement as being close to or in the vicinity of navigable waters. Then the Fifth Circuit agreed to review the case en banc, i.e., by all the judges in the circuit as opposed to the usual 3 judge panel that hears appeals.

Note: in order to be covered by the Longshore Act an injured worker must meet a status and a situs requirement. These are separate elements and both must be satisfied separately.

Meeting the situs requirement for coverage involves satisfying two components – geographic and functional, i.e., where are you in relation to the navigable water and are you engaged in appropriate maritime activity in relation to that navigable water.

While recognizing that other circuits, such as the Ninth (states of Washington, Oregon, California, Alaska, Hawaii, etc.), Third (states of Pennsylvania, New Jersey, Delaware, and U.S. Virgin Islands), and First (states of Maine, New Hampshire, Rhode Island, Massachusetts, and Puerto Rico) (and other circuits as well) still use a more expansive interpretation of “adjoining”, the Fifth Circuit in Zepeda has now belatedly (Winchester was decided in 1980) recognized that its precedents had set up vague instructions and provided little guidance to other courts or litigants on how to determine whether a claimant satisfies the situs test. Now, in the Fourth and Fifth federal circuits an “other adjoining area” must touch the water.

Note: This new interpretation of “adjoining area” does not refer to the point of the injury, but to the employer’s overall facility or premises.

So, the geographic element of situs just got simpler in the Fifth Circuit.

If the en banc court had stopped there the ruling would have been sufficient to reverse the Board’s decision, since if either situs or status is not met then there is no entitlement. But the first of two Concurring opinions discusses the status element in this case to produce an alternative holding that the status element is also not met.

Note: To meet status: An individual working on a covered situs will qualify as a covered employee only if he is engaged in maritime employment – an occupational test focusing on loading and unloading a vessel or building, dismantling, or repairing a vessel. His activities must be integral or essential to the vessel related activities.

In this case, the “determinative consideration” that the first Concurring opinion used is whether the loading process could not continue in the absence of the worker’s activities. As stated in the opinion, “… the proper question when defining the status of an employee under the Longshore Act is whether the task that the employee engages in is the type of customary maritime work that a dockworker or longshoreman would have to perform in order to successfully transfer cargo between ship and land transportation.”

The opinion notes that some tasks are integral, essential, or necessary, while some are only tangentially connected to the process. I think that we’re all still on board at this point. Then maybe the point begins to be made a bit too fine. It is stated that, “This standard makes the capacity to interrupt ongoing longshoring activities paramount.” It seems to me that this type of test applied too strictly could be trouble.

We know from the type of analysis used by the U.S. Supreme Court in its decision in Chesapeake & Ohio Ry. Co. v. Schwalb (493 U.S. 40 (1989)) that all sorts of incidental occupations meet the status test, such as janitors cleaning up around conveyor belts and changing air conditioning filters, carpenters erecting a scaffold, construction workers building, maintaining, or repairing the buildings in which loading and unloading or shipbuilding/ship repair takes place, mechanics repairing the tools and equipment used in these traditional maritime activities, security guards patrolling vessels, warehouse workers moving cargo around in intermediate steps between unloading and land transportation, and on and on.

By “clarifying” the status question I believe that the first Concurring opinion calls much of this into question. It suggests that all of these activities are only essential if they are performed while actual loading/unloading is in progress and an immediate work stoppage will occur if they are not immediately performed – “The determinative consideration is that the ship loading process could not continue”.

Since the claimant’s job in this case was the repair of empty containers that were not actually at that time involved in vessel loading/unloading, he does not meet status. I guess that the only way that container repair can meet status in the Fifth Circuit going forward is if it is performed dockside during the loading/unloading process.

Maybe I’m overstating it, but the opinion seems insistent. Before you know it, we’ll be making status distinctions between workers doing the same jobs in the same place. Coverage will be based on the timing of their work and what else is going on at the terminal or shipyard at that time. Talk about walking in and out of coverage. These workers will be moving in and out of status without changing their locations or their jobs. We’ll see.

Two conclusions: Longshore Act situs in the Fifth Circuit is now limited to the contiguous or “next to” definition of “adjoining” to match the approach that the Fourth Circuit takes. Also, status may also now be much more restrictive in the Fifth Circuit.

Two questions: What will the other Circuits do now, if anything, to modify their more expansive approaches? And when can we now expect a new and seemingly now inevitable Supreme Court ruling on situs and status?