AEU Longshore Blog ISSUE: Landmark Cases Number 11- Gizoni

Case number eleven on my list of landmark U.S. Supreme Court Longshore cases is a Jones Act case, but with significant consequences for the adjudication of claims under the Longshore Act.

The employer in the case of Southwest Marine, Inc. v. Byron Gizoni, 502 U.S. 81 (1991), operated a ship repair facility.  It owned several floating platforms and barges which it moved around by tugboats.  The tugs positioned the platforms alongside vessels under repair.  The platforms were used to move equipment, materials, supplies, and vessel components around the shipyard.  Once in place, the platforms supported the ship repair personnel.

The plaintiff in this case was a rigging foreman who worked on and rode the floating platforms as they were towed into place.  He occasionally served as lookout and gave maneuvering signals to the tugboat operators and secured lines from the platforms to the vessels under repair.

The plaintiff received voluntary payment of workers’ compensation benefits under the Longshore Act from the employer’s workers’ compensation insurance carrier, but he filed a seaman’s lawsuit against his employer seeking tort damages under the Jones Act.

Many questions were raised in this case, and its pivotal holdings have complicated the overlapping coverage and jurisdictional issues between the (mutually exclusive) Longshore and Harbor Workers’ Compensation Act and the Jones Act.

Among the key questions:

  1. May a maritime worker whose occupation is one of those enumerated in the Longshore Act (ship repair) nonetheless be a seaman under the Jones Act?
  2. Does the exclusivity provision of section 905(a) of the Longshore Act apply to a “ship repairman” who may also be a Jones Act seaman?
  3. Does the voluntary payment and receipt of Longshore Act benefits preclude a subsequent Jones Act lawsuit?
  4. Is it essential to the administration of the Longshore Act by the U.S. Department of Labor that its resolution of the issue of coverage should preempt a Jones Act lawsuit??
  5. Does the doctrine of equitable estoppel apply to the situation whereby a worker must elect his remedy between the Longshore Act and the Jones Act?
  6. Must a maritime worker aid in the navigation of a vessel in order to qualify as a seaman?
  7. Were the floating repair platforms in this case “vessels” for purposes of the Jones Act?

In the Jones Act lawsuit, the federal district court granted summary judgment to the employer based on the facts that the floating platforms were not vessels and that the claimant was a ship repairman, not a seaman, and was precluded from suing his employer by the exclusivity provision in section 5(a) of the Longshore Act (33 U.S.C. 905(a)).

The federal Ninth Circuit Court of Appeals reversed the district court’s grant of summary judgment on the issue of seaman status, finding that questions of fact existed as to seaman status and whether the platforms were vessels.  The Ninth Circuit also reversed the district court’s ruling that the claimant was precluded from bringing suit by the Longshore Act’s exclusivity provision.

The U.S. Supreme Court granted review.  The federal Fifth Circuit had held to the contrary on several of these issues in Pizzitolo v. Electro-Coal Transfer Corp., 812 F.2d 977 (1987) so a circuit conflict existed.  The Supreme Court affirmed the Ninth Circuit’s rulings, and in the process established several important principles.

  1. Does exclusivity protect the employer from suit?

Section 5(a) states,

“Exclusiveness of liability

The liability of an employer … shall be exclusive and in place of all other liability of such employer to the employee … and anyone otherwise entitled to recover damages from such employer at law or in admiralty on account of such injury or death ….”

Of course, section 5(a) provides the employer with immunity from lawsuits by employees covered by the Longshore Act.  But if the “employee” could arguably be a Jones Act seaman, excluded from Longshore Act coverage by section 2(3)(G), then the exclusivity provision would not apply to bar his seaman’s suit.

  1. What about the voluntary payment of benefits under the Longshore Act? That was an easy one.  The Supreme Court stated, “It is universally accepted that an employee who receives voluntary payments under the Longshore Act without a formal award is not barred from subsequently seeking relief under the Jones Act.
  2. Is it essential to the administration of the Longshore Act that its resolution of the issue of coverage should preempt a Jones Act lawsuit? No.  Resolution of the question of coverage is not left in the first instance to the U.S. Department of Labor in its administration of the Longshore Act.  The injured worker decides which remedy to pursue (and he may pursue both simultaneously).
  3. Does the doctrine of equitable estoppel apply to the situation whereby a worker must elect his remedy between the Jones Act and the Longshore Act? No.  The doctrine of equitable estoppel does not apply to prevent an injured worker from taking inconsistent positions in his pursuit of mutually exclusive remedies.  Because of the credit to the employer provided in section 3(e) of the Longshore Act, the critical element of detrimental reliance is not present. Congress did not intend to require an election of remedies in the first instance.
  4. Must a maritime worker aid in the navigation of a vessel in order to qualify as a seaman? No.  This was no longer part of the test for seaman status at the time the Gizoni case reached the Supreme Court.  The Court states, “Our decision in Wilander (McDermott v. Wilander, 498 U.S. 337 (1991)), jettisoned any lingering notion that a maritime worker need aid in the navigation of a vessel in order to qualify as a seaman under the Jones Act.  A maritime worker need only be doing a ship’s work, not aid in its navigation, to qualify as a seaman.”
  5. Were the floating repair platforms in this case “vessels” for purposes of the Jones Act? Questions of fact existed on this issue so that summary judgment was not appropriate (remember that the federal district court had granted summary judgment to the employer).
  6. So we are left with the primary, basic question. May a maritime worker whose occupation is one of those enumerated in the Longshore Act nonetheless be a seaman under the Jones Act?  There’s obviously been a lot of water under the bridge on this issue since the Gizoni decision in 1991, and the answer is obviously “yes”.  The Ninth Circuit had held that a “ship repairman” can still be a “seaman”, and the Supreme Court affirmed.

The Gizoni decision in a nutshell:  Even though a worker’s occupation is enumerated in the Longshore Act the worker can not be precluded from entitlement to Jones Act benefits if he can successfully pass the test for seaman status.  The injured worker does not have to choose between two mutually exclusive remedies.  He is not precluded by the doctrines of judicial estoppel or collateral estoppel from pursuing both remedies simultaneously.

NOTE:  In Gizoni the issue of coverage had never been litigated to a conclusion with regard to the Longshore claim.  There have been cases where an adjudication of status under the Longshore Act has precluded a subsequent Jones Act claim.  We may not have seen the last word on the possible application of estoppel doctrines in this context.

NOTE:  While the worker may pursue both remedies, in the final analysis when the smoke clears (or if you prefer, at the end of the day) he will receive only one award, either under the Longshore Act or the Jones Act.  If it’s under the Jones Act as a seaman then the Longshore employer will receive the section 3(e) credit.

 

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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.

ISSUE: Landmark Case Number 10

The case of P.C. Pfeiffer Co. v. Ford, 444 U.S. 69 (1979), is another early “status” case.  It is “early” (dates of injury April 12, 1973 and May 2, 1973) in the sense that at that time the courts were struggling to interpret the brand new “status” coverage provisions that had been created in the 1972 Amendments to the Longshore Act.  Remember that prior to the 1972 Amendments the test for coverage was based only on the location of the injury.  Anyone injured in the course of employment over the navigable waters of the United States or on a dry dock was covered.  The Amendments added coverage in specified landside areas for employees engaged in “maritime employment”.

The key issue in these early cases was the interpretation of what constituted maritime employment.

Ford is a “status” case involving two workers who were injured while performing their duties landward of the “point of rest” alongside the vessel on the dock. The U.S. Department of Labor’s (DOL) Administrative Law Judges (ALJ) had originally denied the workers’ claims by application of the “point of rest” doctrine.

NOTE: The now discredited so-called “point of rest” doctrine argued that maritime employment includes only the portion of the unloading process that takes place before the longshoremen place cargo from the vessel onto the dock and the portion of the loading process that takes place to the seaside of the last point of rest on the dock.  In other words, loading and unloading only occurs between the vessel and the dock.

The DOL’s Benefits Review Board reversed the ALJ’s denials and found that the workers were covered by the Longshore Act. The federal Court of Appeals for the Second Circuit affirmed.  Then on remand from the Supreme Court for reconsideration in light of its intervening Caputo decision the Court of Appeals reaffirmed its earlier opinion awarding benefits.  So what were these workers doing that complicated the coverage question?

Mr. Ford, a warehouseman, was injured while fastening military vehicles on to railroad flat cars. The vehicles had been delivered to port by ship, put in storage, and then placed on the rail cars by longshoremen on the day prior to the injury.

The consolidated case involved Mr. Bryant, who was injured while unloading a bale of cotton from a dray wagon into a pier warehouse. Cotton arriving at the port from inland shippers entered cotton compress warehouses, then went by dray wagon to pier storage warehouses, and subsequently was moved by longshoremen from the warehouse onto vessels for shipping.

Mr. Ford had been working out of the Warehousemen’s local union on the day of the accident. Union rules limited the types of jobs that warehousemen could perform.  They could not move cargo directly from a vessel either to a point of rest on the dock or, in this case, on to a railcar.  These movements were performed only by longshoremen.

Neither claimant was directly involved in handling cargo between the dock and the vessel. Did their duties constitute “maritime employment”?

NOTE: Remember, these were early cases.  Today these activities would be considered clear instances of maritime employment.  The issue was not clear back when these cases were being adjudicated.

Held: Ford and Bryant were engaged in maritime employment at the time of their injuries because they were engaged in intermediate steps of moving cargo between ship and land transportation.

The principle is that persons moving cargo directly from ship to land transportation are engaged in maritime employment, and a worker responsible for some portion of that activity is as much an integral part of the process of loading or unloading a ship as a person who participates in the entire process.

NOTE: The truck driver carrying the cotton away from or to the terminal and the locomotive engineer transporting the military vehicles away from the terminal are not engaged in maritime employment even though they were present on a covered situs.  They are engaged in land transportation.  Ford’s job of fastening the vehicles to the railroad flatcars was the last step in transferring the cargo from sea to land transportation.

The Longshore Act is going to follow cargo handling from the vessel to the warehouse, from warehouse to warehouse, from terminal to terminal, until it is placed on to land transportation. In the other direction, the Longshore Act will follow cargo from where it is removed from land transportation until it ends up on a vessel.  All intermediate steps are covered.

 

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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.

 

ISSUE: Landmark Cases Number Nine – Schwalb

The latest addition to my list of landmark Longshore Act cases is Chesapeake & Ohio Ry. Co. v. Schwalb, 493 U.S. 40 (1989).

Three employees of an interstate railroad were injured while working at a coal loading facility owned and operated by their employer. They each filed a negligence lawsuit against the employer under the Federal Employers Liability Act (FELA).  The trial courts in the state of Virginia dismissed the lawsuits on the grounds that the workers were covered by the Longshore Act, and that this workers’ compensation law was their exclusive remedy against their employer.

The Virginia Supreme Court reversed the trial courts’ dismissals and found that the employees had a tort remedy under FELA. The U.S. Supreme Court granted appellate review, because the state court’s interpretation of the concept of “status” under the Longshore Act differed from the approach taken in several federal courts.

Schwalb is a key “status” case that reinforces the landmark principles of Northeast Marine Terminal Co., Inc. v. Caputo, 432 U.S. 249 (1977).  In light of Caputo, the Schwalb decision is straightforward and uncomplicated.

Nancy Schwalb was injured while performing janitorial services at a location where coal was being unloaded from railway cars onto a vessel. One of her duties was to clear spilled coal from around and underneath conveyor belt rollers which carried the coal to a loading tower where it was dumped into the hold of a ship.

The Supreme Court of Virginia had taken the position that employees performing purely maintenance duties are not covered by the Longshore Act, likening such workers to clerical workers who it viewed as peripheral to the maritime process.

The U.S. Supreme Court had explained in Caputo that Congress, in amending the Longshore Act in 1972, intended to solve the problem of workers walking in and out of coverage.  Under the pre-1972 Amendments Longshore Act employees would walk in and out of Longshore Act coverage during their workday as they performed some tasks over water and other tasks ashore.  Congress intended, “to provide continuous coverage throughout their employment to those amphibious workers who, without the 1972 Amendments, would be covered only for part of their activity”.

Congress had in mind coverage for, “… persons whose employment is such that they spend at least some of their time in indisputably longshoring operations ….”

Specifically with regard to Schwalb, the Court stated that those employees who are injured while repairing or maintaining equipment essential to the loading or unloading process are covered. The determinative consideration is that the ship loading process could not continue unless the equipment was operating properly.

“Someone who repairs or maintains a piece of loading equipment is just as vital to and integral a part of the loading process as the operator of the equipment. When machinery breaks down or becomes clogged or fouled because of the lack of cleaning the loading process stops.”

So, from Schwalb we have the now familiar expansive formulation of the interpretation of “status”.

“Maritime” employment, within the meaning of 33 U.S.C. Section 902(3), includes not only the specified occupations or employees who physically handle cargo, but also land based activity occurring within the relevant situs if it is an “integral or essential part of loading or unloading a vessel”.

The Schwalb Court also reinforced a key principle of Caputo.

“It is not essential to our holding that the employees were injured while actually engaged in these essential tasks. They are covered by the LHWCA even if, at the moment of injury, they had been performing other work that was not essential to the loading process.”

There is no walking in and out of status. Workers who meet maritime status for any part of their employment are covered throughout their employment.  There is no minimum amount of time required.  It is simply necessary that some regularly assigned part of the employee’s duties be “maritime” and you have a full time Longshore worker.  And there is no “moment of injury” test.

 

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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.

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.