ISSUE: Random Notes

Number 1. Joint and Several Liability

I occasionally see references to the nature of ALMA member’s liability as “Joint and Several”. This is a serious misstatement.

In fact, ALMA members are NOT, and never have been, subject to joint and several liability.

As provided in ALMA’s bye-laws, members’ liability is “several and not joint”.

There’s a big difference.

Joint and several liability exists, for example, in federal maritime tort law when a plaintiff sues and wins a judgment against multiple tortfeasors. The plaintiff may collect the full value of the judgment from any single one of the defendants, even a defendant only 1% responsible for the plaintiff’s damages.  That defendant must then seek contribution from the co-defendants through third party legal action.  This is clearly inequitable in many instances.

“Joint and several” liability can leave one party “holding the bag”.

This most definitely is NOT the nature of the liability of ALMA members. The ALMA Bye-Laws provide, in Article V, Section 5.1:

“The Members accepted for and provided with insurance coverage by the Association shall severally and not jointly, but each in its own name only, mutually insure each other in accordance with the provisions in the Member’s Coverage Agreement and the provisions of these Bye-Laws ….”

Should a Supplementary Contribution (or Call) ever be necessary then each member’s liability will be based on that Member’s Contribution for that Underwriting Period in relation to the total of all Contributions for that period.

Each ALMA member will only be responsible for its fair share.

NOTE: ALMA has never had the need for a Supplementary Contribution or Call.  ALMA’s Underwriting and Reserving are designed so that the necessity of a Supplementary Contribution or Call at any time is extremely unlikely.

Note Number 2. Hearing Loss Claims

Recently I complained about the lack of equity for maritime employers in the adjudication of hearing loss claims under the Longshore Act.

I thought that I’d give the U.S. Department of Labor’s Benefits Review Board (BRB) the last word on this issue, since it is the adjudicator. Here’s an excerpt from a recent Board hearing loss decision (in a case in which the entire hearing loss award went against the employer that had employed the worker for one shift, his last day of work):

“It is outside the Board’s scope of review to change the last employer rule or to apply a rule that provides a more equitable approach to compensation. The last employer rule came about as an administratively feasible option for allocating liability in occupational disease cases, while effectuating the beneficent purpose of the Act.  In the original responsible employer hearing loss case (Travelers Insurance Company v. Cardillo, 225 F.2nd 137 (2nd Cir.) cert. denied, 350 U.S. 913 (1955)) the U.S. Court of Appeals for the Second Circuit observed that prior to the passage of the Act, an employer representative suggested that the Act should contain a provision limiting the proportion of the total award for which an employer could be liable, to the same ratio as the extent of the damage done during the period worked for that employer.  However, Congress declined to amend the Act, with the understanding that, absent such a provision, a ‘last employer’ would be liable for the full amount recoverable, even if, medically, the injury would in all probability, not be fully attributable to that last employment.  Therefore, as the last employer rule apportions liability in a fundamentally equitable manner, in that all employers will be the last employer a proportionate share of the time we reject employer’s assertion that it is against public policy to hold it liable for the claimant’s hearing loss ….”

Aside from proving that the Board uses too many commas, this is a very clear statement that the last employer rule as established in 1955 is here to stay as far as hearing loss under the Longshore Act is concerned. The Cardillo court made it perfectly plain; liability in full is assigned to the last employer that exposed the worker to the condition that led to the disease prior to the time the disability resulting from the disease became manifest, even though the disease in the particular worker’s case, “may not have been attributable at all to employment by the last employer”.

Note Number 3. Landmark Cases

Here is the list of landmark Longshore Act Supreme Court decisions that I’ve discussed in previous weeks (you can look them up):

  1. Northeast Marine Terminal Co., Inc. v. Caputo, 432 U.S. 249 (1977)
  2. Director, OWCP v. Greenwich Collieries, 512 U.S. 267 (1994)
  3. Estate of Cowart v. Nicklos Drilling Co., 505 U.S. 469 (1992)
  4. Sun Ship, Inc. v. Commonwealth of Pennsylvania, et al., 447 U.S. 715 (1980)
  5. Potomac Electric Power Co. v. Director, OWCP, 449 U.S. 268 (1980)
  6. Director, OWCP v. Perini North River Associates (Churchill), 459 U.S. 297 (1983)
  7. O’Leary v. Brown-Pacific-Maxon, Inc., 340 U.S. 504 (1951)

Here are the (landmark in my opinion) cases coming up for discussion in the near future:

  1. Herb’s Welding, Inc. v. Gray, 470 U.S. 414 (1985)
  2. Chesapeake & Ohio Ry. Co. v. Schwalb, 493 U.S. 40 (1989)
  3. P.C. Pfeiffer Co. v. Ford, 444 U.S. 69 (1979)
  4. Pacific Operators Offshore, LLP v. Valladolid, 132 S.Ct. 680 (2012)
  5. Southwest Marine, Inc. v. Byron Gizoni, 502 U.S. 81 (1991)

And that should do it for what I consider to be the most important Longshore Act Supreme Court cases. If I’ve overlooked any please let me know.

 

 

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John A. (Jack) Martone served for 27 years in the U.S. Department of Labor, Office of Workers Compensation Programs, as the Chief, Branch of Insurance, Financial Management, and Assessments and Acting Director, Division of Longshore and Harbor Workers’ Compensation.  Jack joined The American Equity Underwriters, Inc. (AEU) in 2006, where he serves as Senior Vice President, AEU Advisory Services and is the moderator of the AEU Longshore Blog.

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