ISSUE: Landmark Cases Number Eight- Herb’s Welding

I’m adding another case to my list of landmark Longshore Act cases, not because this case is a true “landmark” in the traditional sense of the word, but rather simply based on the frequency with which it’s cited to with regard to the key coverage issue of “status”.

The case is Herb’s Welding, Inc. v. Gray, 470 U.S. 414, decided by the U.S. Supreme Court in 1985.

Mr. Gray was a welder who built and maintained oil pipelines and platforms. He was injured (date of injury 7/11/75) while welding a gas flow line on a fixed offshore oil drilling platform in Louisiana state waters.

The employer’s workers’ compensation insurance carrier paid benefits under the state’s workers’ compensation law; Mr. Gray filed a claim under the Longshore Act; and the employer contested.

The U.S. Department of Labor’s (DOL) Administrative Law Judge (ALJ) denied the claim based on the fact that Mr. Gray was not engaged in maritime employment and thus did not meet “status” under the Longshore Act. He based his decision on a U.S. Supreme Court decision in a Death on the High Seas Act (DOHSA) lawsuit (Rodrigue v. Aetna Casualty & Surety Co., 395 U.S. 352 (1969)).

NOTE: The Rodrigue case was a wrongful death action brought in admiralty under the DOHSA after two petroleum workers were killed on fixed offshore platforms on the outer continental shelf of the United States (ocs).  The issue was whether the case arose under admiralty jurisdiction and whether the DOHSA applied.  The Supreme Court held that admiralty jurisdiction did not reach the situs of fixed platforms under the admiralty’s traditional locality test.  The Outer Continental Shelf Lands Act (OCSLA) and thus surrogate state law applied to the claims.

In the Gray case, the DOLs Benefits Review Board (BRB) reversed the ALJs denial of the Longshore Act claim and awarded benefits, but not under the Longshore Act. The BRB held that Mr. Gray was entitled to benefits under the OCSLA even though the injury occurred in state territorial waters.  The BRB based its decision on the “as a result of” language in 43 U.S.C. Section 1333(b).

NOTE: Section 1333(b) reads:

“With respect to disability or death of an employee resulting from any injury occurring as the result of operations conducted on the Outer Continental Shelf for the purpose of exploring for, developing, removing or transporting by pipeline the natural resources, or involving rights to the natural resources, of the subsoil and seabed of the outer Continental Shelf, compensation shall be payable under the provisions of the Longshoremen’s and Harbor Workers’ Compensation Act.”

The Fifth Circuit affirmed the award of benefits, not under OCSLA but under the Longshore Act, finding that the claimant met the Longshore Act’s “situs” and “status” requirements under the Act.

This back and forth between the denial of Longshore Act benefits by the ALJ, the award by the BRB under OCSLA, and an award under the Longshore Act by the Fifth Circuit, finally reached the Supreme Court, which held by a 5 to 4 majority that the claimant did not meet “status” and thus was not entitled to Longshore Act benefits.  In the process the Court left several questions unanswered.

The Supreme Court stated that, “Mr. Gray was a welder. His work had nothing to do with the loading or unloading process, nor is there any indication that he was even employed in the maintenance of equipment used in such tasks.  He built and maintained pipelines and the platforms themselves.  There is nothing inherently maritime about those tasks.”

The holding in the case was simply stated: “Because Gray’s employment was not ‘maritime’ in nature he does not qualify for benefits under the LHWCA.  We need not determine whether he satisfied the Act’s situs requirement.”

So, it’s a specifically limited holding, dealing with the question of “status”. Oil and gas work on fixed platforms in state waters is not covered by the Longshore Act, because it is not maritime employment.

Floating in the background but not decided or discussed were several other important coverage issues.

Was the claimant covered under Perini?

NOTE: Under Director, Office of Workers’ Compensation Programs v. Perini North River Associates (Churchill), 459 U.S. 297 (1983), any employee injured while performing his job on navigable waters is covered by the Longshore Act as amended in 1972 just as he would have been covered prior to the Amendments.

This question was disposed of in a footnote, which found no Perini application since the claimant was not injured “on the navigable waters” and would not have been covered prior to the 1972 Amendments. The fixed platform on which he was injured was considered to be an “artificial island”.

The claimant traveled to and from the platforms every day by boat. What about this as it might pertain to Perini over the water coverage?  The Supreme Court stated, “We express no opinion whether such coverage (LHWCA) extends to a worker injured while transiently or fortuitously upon actual navigable waters.”  (The Court still has not expressed its opinion on this question.)

Was Mr. Gray covered under OCSLA as the BRB had ruled? The Court stated, “We express no opinion on his argument that he is covered by (OCSLA).”  The issue had not been fully briefed and argued, and had not been discussed by the Fifth Circuit.

NOTE: In 2012, in Pacific Offshore Operators LLP v. Valladolid the Supreme Court resolved the OCSLA situs of injury conflict between the Fifth and Ninth circuits by affirming the Ninth Circuit’s holding that there is no requirement in OCSLA that an injury must occur on the outer continental shelf (ocs).  What is needed for OCSLA coverage is “substantial nexus” between an injury and the employer’s on-ocs extractive operations.  Today, under the Valladolid test Mr. Gray might be covered under OCSLA if he could meet the substantial nexus test.

It turned out in the Gray case that the ALJ was right, the BRB had the right idea ahead of its time (but later changed its position anyway – it’s a long story) and the Fifth Circuit had it wrong.

NOTE: Herb’s Welding is limited to the holding with regard to the Longshore Act status of oil and gas workers on fixed platforms in state waters.  Subsequent cases have illustrated how Longshore coverage can exist on fixed platforms in state waters.  The recent case of Luigi A. Malta v. Wood Group Production Services and Director, Office of Workers’ Compensation Programs, U.S. Department of Labor, BRB No. 14-0312 (5/29/15), involved an injury to an offshore “warehouseman”.  He worked on a fixed platform in Louisiana state waters, like Mr. Gray.  His job, however, working on a fixed platform called the Central Facility, was primarily loading and unloading supplies and equipment used in the drilling activities on satellite platforms.

The ALJ found based on Herb’s Welding that the claimant was not engaged in maritime employment, and also that he was not injured on a covered situs.  The ALJ implied that maritime commerce was not involved since what was loaded and unloaded was supplies and equipment used in drilling activities rather than traditional commercial cargo.

The BRB reversed the denial of benefits. It found that, “The nature of the cargo that was loaded and unloaded is not determinative of the situs inquiry.”  It does not have to have a maritime commercial purpose to be “cargo”.  It just has to be coming on and off vessels.

The claimant in the Malta case met “status” as a maritime employee and thus the platform was an “other adjoining area” which was customarily used for maritime activity. Status and situs for coverage under the Longshore Act were met.

So Herb’s Welding is still good law, but there are workers on fixed platforms in state waters that do meet status and situs under the Longshore Act based on the nature of their job duties.

NOTE: I think that this all came out right.  If work on fixed platforms had been assumed by Congress to be maritime employment then extending Longshore benefits to the ocs through the OCSLA would have been redundant.

 

 

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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.