ISSUE: Situs: High Seas, Foreign Territorial Waters

Jack_crop 72dpiThere is one current Longshore Act coverage question that I don’t feel comfortable with.

The question is usually along the lines of, “We’re sending workers overseas to do ship repair work (or some other work that meets Longshore Act ‘status’). Will the Longshore Act apply?” So, it’s a “situs” question, involving overseas work.

Things used to be uncertain enough with regard to this issue. Now the federal Ninth Circuit Court of Appeals has issued an opinion that clarifies the issue in the Ninth Circuit (states of WA, OR, MT, ID, CA, NV, AZ, AK, HI) but emphasizes the open nature of the question everywhere else.

Before the Ninth Circuit’s decision in Joseph Tracy v. Keller Foundation, Inc./Case Foundation Co. and ACE USA/ESIS v. Global Offshore Int’l, Inc. and Liberty Mutual Insurance Co.; and Director, Office of Workers’ Compensation Programs, the issue of whether the Longshore Act applied on the high seas and the territorial waters of other countries was difficult but manageable; there was just enough doubt to justify the opinion that an employer with Longshore Act workers on the high seas and in foreign territorial waters and adjoining areas should get Longshore coverage just to be safe.

It was a safe bet that the Longshore Act applied on the high seas, subject to conditions such as contacts with the United States and the temporary nature of the work assignment. And with regard to foreign territorial waters, although no federal circuit court had ruled on the question, we did have the Benefits Review Board’s decision in Weber v. S.C. Loveland Co. (28 BRBS 321 (1994)) for the proposition that Longshore Act coverage extended to the territorial waters of foreign countries. The Board’s rationale was based on the language of Section 39(b) of the Longshore Act, which authorizes the Secretary of Labor to establish “compensation districts, to include the high seas” and provides for judicial jurisdiction for proceedings involving injuries occurring on the high seas. Also the Board cited what it perceived as the trend in admiralty law to extend jurisdiction into foreign waters to provide uniform coverage for American workers, especially when all contacts, except for the site of the injury, are with the U.S. and the duration is temporary.

But now we have the Ninth Circuit’s decision in Tracy. The Court accepts the proposition that the Longshore Act applies on the high seas, but states, “… we hold that foreign territorial waters and their adjoining ports, and shore based areas are not the ‘navigable waters of the United States’ as the Act defines that phrase.” (Sorry, the Act does not define that phrase.) The Ninth Circuit also said that, “A determination that the Act applies to the high seas, where no single nation is sovereign, cannot compel the conclusion that Congress also intended the Act to apply to the territorial sea, internal waters, and adjoining land of other nations, ….” The Ninth Circuit cited the “strong presumption that enactments of Congress do not apply extraterritorially.”

So, now we know that at least for the Ninth Circuit the Longshore Act will not apply in foreign territorial waters, since the “situs” requirement for coverage is not met.

But how will this question be decided in the other Circuits? And the Board’s last word on the issue is Weber, which applies the Longshore Act in foreign territorial waters. In the Ninth Circuit, the Board will follow Tracy, but what will the Board do everywhere else, and what will the other circuits do? Who knows at this point?

While we have a clear decision in the Ninth Circuit, we have increased uncertainty with regard to injuries occurring within the jurisdiction of the other federal circuits. And it’s not easy to explain how, under a law which derives its rationale from the Admiralty and Commerce clauses of the federal Constitution and the need for uniformity in maritime matters, you will possibly get different answers to the same question in the different federal circuits (not that this situation is unique to this issue).

What’s the best answer today?

In the Ninth Circuit, the Longshore Act applies on the high seas subject to conditions, but not in the territorial waters of other countries.

In circuits outside of the Ninth, the Longshore Act probably applies on the high seas subject also to conditions, but we don’t know about the issue of foreign territorial waters. Will the other circuits follow the rationale of the Benefits Review Board in Weber, or will they follow the Ninth Circuit’s rationale in Tracy, or will they split?

Time will tell. In the meantime, maritime employers outside of the Ninth Circuit who are sending Longshore workers to foreign territorial waters or adjoining areas should get Longshore Act coverage for those workers. Where there’s any doubt at all, get coverage.