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

II. 1927 – 1972Jack_crop 300dpi

In 1927, finally convinced that the only way to provide workers’ compensation protection for land based workers injured over navigable waters was to enact a federal law, Congress passed the Longshoremen’s and Harbor Workers’ Compensation Act.  Section 903(a) set out the coverage, “…only if the disability or death results from an injury occurring upon the navigable waters of the U.S. (including any dry dock)” and no recovery was available under state law. 

Jurisdictional confusion ensued: Congress didn’t exactly solve the problem in 1927.  A major treatise writer characterized the period following enactment as one of “impenetrable confusion”.  It also was described by the Supreme Court as plagued by a “twilight zone” of coverage problems (Davis v. Department of Labor, 317 U.S. 249 (1942)).  A later Supreme Court used the phrase “jurisdictional monstrosity” in its discussion of coverage issues under the Longshore Act (Sun Ship Inc. v. Pennsylvania, 447 U.S. 715 (1980)).

NOTE:  The Davis Court described the situation in a way that is still relevant today.  “These marginal cases fall within a “twilight zone” in which the employees must have their rights determined case by case…. This Court can do no more than bring some order out of the remaining judicial chaos as marginal situations come before us.”  There is never a shortage of marginal cases.

The problem with Congress’ water’s edge solution was that workers were constantly walking in and out of coverage during the course of the workday.  This result was contrary to the goal of nationwide uniformity in maritime matters.  Courts constantly struggled to make sense of the jurisdictional confusion caused by these workers who were land based but worked over water.

The persistent problem of concurrent state and federal jurisdiction arose during this period as courts applied state laws to workers even on occasions when the worker was injured over the water (the Davis case) if the court found that the worker’s activity was “maritime but local”, while in other cases courts found federal law applied to injuries on land.  No one was sure who was covered when or where.

Concurrent state and federal jurisdiction was finally conclusively recognized by the Supreme Court, which found that the Longshore Act “supplemented” rather than supplanted state workers’ compensation laws (Sun Ship, Inc. v Pennsylvania, 447 U.S. 715 (1980)).

Other problems with the 1927 Longshore Act began to surface.  Although the Longshore Act and the Jones Act were mutually exclusive, the courts continued to confuse longshoremen with seamen.  In Seas Shipping v. Sieracki, 328 U.S. 85 (1946), the Supreme Court created the right of a longshoreman to sue a ship owner, who was not his employer, under the warranty doctrine of unseaworthiness.  (This was a seaman’s right, and in a much later Supreme Court decision (McDermott v. Wilander, 498 U.S. 337 (1991)) the Court attributed this result to the Sieracki Court’s confusing longshoremen with seamen.)

As a result of the Sieracki case, vessel owners found themselves liable to longshoremen for damages based on conditions caused partially or entirely by the stevedore employer.  This situation was addressed in a case that gave the ship owner the right to sue the stevedore employer for indemnification for losses paid by the ship owner to injured longshoremen on the basis of the contractual express or implied warranty of workmanlike service from the stevedore employer.  So now stevedore employers had their workers’ compensation loss and then their indemnification liability to the ship owner, (Ryan Stevedoring v. Pan-Atlantic Steamship Corp., 350 U.S. 124 (1956)).

Finally, in 1969, the Supreme Court pointedly invited Congress to amend the Longshore Act.  The dissent in Nacirema Operating Co. v. Johnson, 396 U.S. 212 (1969) protested the incongruity and unfairness of having coverage determined by “where the body falls” and argued instead that the Act was “status oriented, reaching all injuries sustained by longshoremen in the course of their employment”.  There were a total of four injuries in Johnson.  The only injured worker who recovered Longshore Act benefits was the one knocked into the water.  The majority stated that, “The plain fact is that Congress chose the line in Jensen separating water from land at the edge of the pier.  The invitation to move that line landward must be addressed to Congress, not to this Court.”

So, a number of factors had accumulated to put pressure on Congress to make changes in the Longshore Act:

1. The Sieracki seamen problem (unseaworthiness remedy for longshoremen);
2. The Ryan doctrine (warranty liability for stevedore employers);
3. The coverage uncertainties;
4. The $70 per week maximum Longshore Act rate was too low for the relatively highly paid maritime workers;
5. Technology – much of the work done by longshoremen and shipbuilders had moved on to land (crane’s servicing ship’s holds, containerization and pre-fabrication).

It was time for changes.

III. 1972 – 1984

The Longshore Act was significantly amended in 1972.  Among many other changes, Congress accepted the Supreme Court’s invitation and moved the jurisdiction line.  It replaced the water’s edge of 1927 with a two part status and situs test.  The amendments moved coverage landward to “adjoining areas” (situs) for “harbor workers” and others engaged in “maritime employment” (status). 

The 1972 amendments also overruled Sieracki and Ryan.  Remember, the years from 1946 to 1972 saw increasing controversy over the circular liability/double recovery problems of Sieracki/Ryan.   This circular liability situation was eliminated by the 1972 amendments in §905(b), which substituted negligence for unseaworthiness as the longshoreman’s remedy against vessels.  The injured worker could no longer sue the vessel owner for unseaworthiness.  If there was an award under a third party negligence suit (where the vessel owner is the third party), then the stevedore employer is repaid for the compensation benefits that he’s paid.  Also, the stevedore employer could not be sued by the vessel owner for indemnification.  So, the 1972 amendments eliminated the ship owner’s liability to the longshoremen for unseaworthiness and the stevedore’s liability to the ship owner for unworkmanlike service causing injury to workers.  (Under §905(b) of the Longshore Act, the longshoremen still have a negligence action under somewhat limited conditions against the vessel for full recovery.  Any recovery is a credit against compensation paid by the employer, so the longshoremen do not recover twice.)

In passing the 1972 amendments, Congress again sought the goal of a uniform, nationwide compensation system to apply regardless of whether maritime workers were injured on a vessel or in work areas adjoining navigable waters.  The amendments moved the line landward to include not only the traditional injuries on “navigable waters”, but also to so called enumerated areas described as “any adjoining pier, wharf, dry dock, terminal, building way, marine railway, or other adjoining areas customarily used  by an employer in loading, unloading, repairing, or building a vessel.”  Of course, the precise location and identification of what and where are the “situs” boundary lines – specifically what is an adjoining area – continues to be a subject of much judicial debate.

Congress extended coverage to workers in areas adjoining navigable waters, but it did not intend to extend coverage to everyone who happened to be in a maritime area.  The amendments added the “status” requirement to the newly expanded “situs” test.  The intent was to cover workers who perform some portion of an “integral part” of a maritime activity such as loading/unloading of cargo or ship building or ship repair.  Section 902(3) states, “The term employee means any person engaged in maritime employment, including any longshoreman, or other person engaged in longshoring operations, and any harbor worker including a ship repairman, shipbuilder, and ship breaker.” 

Note:  The authors of the preeminent textbook on admiralty reference the fact that the status requirement is not limited to the occupations listed in §902(3), but that those trades are only part of the larger group of activities that make up maritime employment.  In fact, they state, “the almost infinite range of the conditions of waterfront employment has been detailed in thousands of cases”.  (Gilmore & Black, The Law of Admiralty, 2nd Ed.)

The key is that compensation should not depend on the fortuitous circumstance of whether the injury occurred on land or over water.  There should be a uniform system applicable to workers who have a “realistically significant relationship to traditional activity involving navigation and commerce on navigable waters”.  (Odom Construction Co., Inc. v. U.S. Department of Labor, 622 F.2d. 110 (5th Cir. 1980) quoting Weyerhauser Co. v. Gilmore, 528 F.2d. 957 (9th Cir. 1975)).

There continue to be differences among the federal circuit courts as to the meaning of the terms “adjoining areas” and “customarily used” and the parameters of the “status” test.  The term “harbor worker” was not defined and continues to be open to interpretation.

Note:  In addition to the jurisdictional changes, the 1972 amendments created the Special Fund assessment, added a cost of living adjustment to weekly compensation paid for permanent disability or related death, changed the requirements for second injury fund relief, protected stevedore employers from indemnity liability to ship owners, and took the responsibility for formal hearings away from the U.S. Department of Labor’s Deputy Commissioners and placed formal adjudicative procedures with the Office of Administrative Law Judges and the Benefits Review Board under the Administrative Procedures Act.

Next Part Three – 1984 to Present

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

I.      1910 – 1927Jack_crop 72dpi

         General Maritime Law

         U.S. Constitution

         Social Conscience

II.   1927 – 1972

         Longshoremen’s and Harbor Workers’ Compensation Act

         Twilight Zone and Coverage Confusion

         Change

III.  1972 – 1984

         Evolution – Out of the Water and On to the Land

         Status and Situs

         Administrative Changes

IV.   1984 – Present

          Exclusions

          Insurability

          Uncertainty Zone – Longshore Act, State Acts, Jones Act, FELA

Preface

The brief history of the Longshore and Harbor Workers’ Compensation Act (33 U.S.C. §§901) begins in 1927, when the original Act was passed, and includes significant amendments in 1972 and 1984, but the story of the circumstances and events that led to the passage of the Longshore Act begins much earlier.  It involves the history of international maritime commerce and the general maritime law, the U.S. Constitution, social and cultural movements in the United States, the roles of Congress and the Courts in the U.S. system, the limits of state and federal authority, and the continuing development of workers’ compensation law in the United States.

Before there were workers’ compensation laws and liability remedies such as the Jones Act there was the General Maritime Law.  This is international, judge made law that the U.S. courts apply and interpret.  In the event of injuries, seamen covered by the general maritime law are provided with the remedies of maintenance and cure and of general damages under the warranty of unseaworthiness.  The concept of maintenance and cure has been traced back to the Rules of Oleron in the thirteenth century and by tradition probably goes back to the Roman era.  These seamen’s rights were formally adopted in the United States by the Supreme Court in Harden v Gordon, 11 F.Cas. 480 (1823), and defined by the Court in The Osceola, 189 U.S. 158 (1903). 

NOTE:  In Harden v Gordon Chief Justice Story officially adopted seamen as wards of the court, describing them this way, “Seamen are generally poor and friendless, and acquire habits of gross indulgence, carelessness, and improvidence.”  To this day, courts are very solicitous of the rights of seamen.

General damages under the contractual warranty of unseaworthiness are based on transportation and lost wages, and maintenance and cure provides for housing, food and medical care until maximum medical improvement.  There are no tort damages for pain and suffering, loss of consortium, etc. and no right to a jury trial.  Recovery is not based on negligence, but on the condition of the vessel as not reasonably fit for its intended purpose.

There is a complex history of the general maritime law in the federal courts in the U.S. under the courts’ Admiralty jurisdiction.  But it’s the story of the workers who fell in the gap between the general maritime law and the states’ workers’ compensation laws in the U.S., between state and federal jurisdiction, and between Congress and the Courts that we are interested in.

I.    1910 – 1927

Historical context: The end of the nineteenth and the beginning of the twentieth centuries were periods of social unrest and humanitarian movements in the United States, involving protests over working conditions and the rights of workers in the wake of the abuses of the nineteenth century’s Industrial Revolution.  Following is a very partial list of the violent protests, union organizing, labor strife, etc., which characterized the transition from the Industrial Revolution to the Progressive Era:

1886 – Hay Market Square massacre – bomb explodes among protesters demanding an 8 hour workday;

1886 – American Federation of Labor founded;

1890 – United Mine Workers formed;

1894 – American Railway Union (Eugene V. Debs) strikes the Pullman Company;

1900 – ILGWU founded;

1903 – Mary Harris “Mother” Jones leads a week long march of child mill workers from Pennsylvania to New York;

1908 – Demonstrations in New York for the end of sweatshops and child labor;

1911 – Triangle Shirt Waist Company fire in New York kills 146 sweatshop workers,  mostly young girls.

The time had come for laws assuring workers of prompt, no fault wage replacement and medical treatment for work related injuries.  Workers’ compensation laws represented a compromise between employers and employees.  Workers gave up the right to sue their employers for negligence in a civil suit and in return the employer was required to pay statutory benefits for lost wages and medical costs regardless of fault.  Workers get a range of benefits available more quickly than from civil lawsuits and employers get predictability as to their liability for work related injuries as well as freedom from lawsuits.  Where a workers’ compensation remedy is available it is usually the worker’s exclusive remedy against his employer.

Constitutional problem: The states passed workers’ compensation laws.  But problems arose regarding the states’ authority to legislate workers’ compensation for workers over the navigable waters. 

The U.S. Constitution, in Article III, Section 2(Admiralty Clause) and in Article I, Section 8 (Commerce Clause), gives the federal Congress exclusive jurisdiction in all admiralty and maritime matters for the sake of nationwide uniformity and consistency.

This was the basis of the U.S. Supreme Court’s decision in Southern Pacific Co. v. Jensen, 244 U.S. 205 (1917).  The states’ authority to legislate workers’ compensation stopped at the edge of the navigable waters of the United States, at what came to be called the “Jensen Line”.

What Does “Navigable Waters of the United States” Mean?

The concept of “navigability” has different meanings in different contexts (Kaiser Aetna v. U.S., 444 U.S. 164 (1979)).   In George v. Lucas Marine Construction Co. (28 BRBS 230 (1994), affirmed 86 F.3d. 1162 (9th Cir. 1996), the U.S. Department of Labor’s Benefits Review Board held that the appropriate test for navigability under the Longshore Act was the “navigability in fact” test established in admiralty law.  The Board cited the case of The Daniel Ball 10 Wall. 557, 19 L.Ed. 999 (1871), and quoted the Supreme Court’s definition of navigable:

“Those rivers must be regarded as public navigable rivers in law which are navigable in fact.  And they are navigable in fact when they are used, or are susceptible of being used, in their ordinary condition as highways for commerce, over which trade and travel are or may be conducted in the customary modes of trade and travel on water.  And they constitute navigable waters of the U.S. within the meaning of the Acts of Congress, in contra distinction from the navigable waters of the states, when they form in their ordinary condition by themselves, or by uniting with other waters, a continued highway over which commerce is or may be carried on with other States or foreign countries in the customary modes in which such commerce is conducted by water.”

In other words – navigable waterways of the United States are used for, or are capable of being used as arteries of interstate or international commerce.

Following Jensen, Congress tried twice to leave workers’ compensation to the states by amending the “Savings to Suitors” clause of the Judiciary Act of 1789.  (“Savings to Suitors” – if you had a common law cause of action in state courts before the Judiciary Act established the federal court system then you still had it after.)  Both times the Supreme Court ruled that these attempts were unconstitutional delegations of power to the states.  (Knickerbocker Ice Co. v. Stewart, 253 U.S. 219 (1922) and Washington v. Dawson & Co., 264 U.S. 219 (1924)).

We were ready for the Longshoremen’s Act.

Next – Part Two – the Longshoremen’s and Harbor Workers’ Compensation Act is passed.

ISSUE: Longshore and Harbor Workers’ Compensation Act Amendments of 2011

Part Four

This is a continuation of a series listing key proposed changes to the Longshore Act contained in S. 669 now pending in the 112th Congress.

Thirty One – New Section 908(k) proposes to clarify the provision for the maximum rate payable in cases where the employee qualifies concurrently for compensation for disability caused by 2 or more injuries.  It states that, “In no case shall the amount of compensation payable for all such injuries when combined exceed the lesser of (1) 75 percent of spendable earnings at the time of the last injury, or (2) the maximum rate of compensation, as determined under section 6(b), at the time of the last injury.”  Aside from the issue of ‘spendable earnings’, this overturns case law in some instances.

Thirty Two – Section 909(a) is amended to increase the amount of reasonable funeral expenses payable from $3,000 to $7,500.

Thirty Three – Section 916 is amended by striking “no assignment” and adding, “(b) Limitation – Benefits due or payable under this Act shall be subject to withholding and any other legal process in the same form and manner, and in the same extent, as withholding and other legal processes apply under section 206 of the Employment Retirement Income Security Act of 1974 (29 U.S.C. 1056)”.

Thirty Four – Section 902(1) is amended to clarify the definition of “person”.  The definition of “person” does not include the Secretary (of Labor).

Thirty Five – The definition of “wages” in Section 902(13) is amended to provide that “wages” does not include “… an incentive or 1 time payment, severance pay, a settlement of an employment law claim, a bonus that is not guaranteed, container royalties, stock, or stock options.”

Thirty Six – New Section 902(25) provides a definition of fraud, to include “… failing to provide material information that could result in the obtaining or denying, in whole or in part, of compensation under this Act.”

Thirty Seven – New Section 904(c)(3) requires a finding by the treating physician of the percentage of the employee’s disability that was a result of an injury arising out of and occurring in the course of the employment involved and what percentage of such disability was the result of prior injury and other nonoccupational factors.

Thirty Eight – New Sections 904(e)(1)(A) and 904(e)(1)(B) deal with the last responsible employer doctrine.  Subsection (B) provides that “the employer responsible for the benefits under this section shall retain all rights and defenses that any employer who contributed to the injury or death would otherwise have had.”

Thirty Nine – New Section 904(e)(3) defines “Noncontributing Employment Exposure”.  Employment exposure is noncontributing if the medical condition that resulted in the injury or death was diagnosed before employment commenced, or the employer did not expose the employee to conditions capable of causing or contributing to the injury or death.

Forty – Section 908(a)(13)(B)(iii) provides that the measurement of presbycusis shall be in accordance with the methodology adopted in section 1910.95 of title 29, Code of Federal Regulations, appendix F, applied to the applicable decibel levels for hearing loss determinations as provided in clause (ii).

Forty One – Section 908(a)(13)(B)(iv) provides clarification for the weighing of audiogram evidence by providing statutory audiogram standards.

Forty Two – Section 908(j)(1) is changed.  The present language, “The employer may inform a disabled employee of his obligation to report to the employer not less than semiannually any earnings from employment or self-employment, on such forms as the Secretary shall specify in regulations” is changed by striking “a disabled employee” and inserting “an employee”.  This intends to change current case law.

Forty Three – Section 910(a)(4) changes Section 10(c) by replacing the phrase “average annual earnings” with “average weekly wages” each time it appears.

Forty Four – New Section 910(e) defines “spendable earnings”.

“METHOD OF CALCULATION – The spendable earnings of an employee shall be the average weekly wage, as calculated under subsection (a), reduced by subtracting the Federal, State, and local taxes that would have been withheld based on standard deductions and on the domicile of the employee at the time of the injury, and reduced by subtracting the tax that would have been withheld under section 3101 of the Internal Revenue Code of 1986.”

Forty Five – Section 912(a)(3) provides that the notice of hearing loss in a hearing loss case shall be given not later than 1 year after the last date of employment or not later than 1 year after the diagnosis of a non-traumatic injury, whichever occurs first.

Forty Six – New Section 920(a)(4) provides that “No other presumptions shall be authorized under the Act.”  Presumably we would no longer see references to an unwritten presumption of coverage.  And goodbye as well to Mr. Matulic’s presumption (work 75% of the year prior to the injury and you are presumed to have worked the full year with the result that under section 910(a) the average weekly wage is inflated).

Forty Seven – New Section 920(c)(1) provides more guidance for adjudicators under new Rules of Evidence.

(E)     in cases involving occupational disease or repetitive exposure both causation and sufficient exposure to support causation shall be proven by clear and convincing evidence; and

(F)     pain or other subjective complaints alone, in the absence of objective relevant medical findings, is not compensable.

(2)    JUNK SCIENCE –

(A)     Expert Testimony – With respect to a claim under this Act, expert testimony shall not be considered if it does not meet the requirements of Rule 702 of the Federal Rules of Evidence.

(B)     Medical Opinion – In order to be considered with respect to a claim under this Act, a medical opinion shall be based on not less than 1 peer reviewed study that – (i) has been published in a major medical journal; and (ii) is accepted by the majority of the scientific community.

I hear you.  That’s enough.  There are more changes contained in the proposed amendments, but I think I’ve got at least most of the more important ones.

These proposals contain some very employer friendly changes (e.g., the section 907 changes in treating physician, the section 908 introduction of spendable earnings, the section 921 stay on payments under an Order); they contain plenty of advice and instruction for the Office of Administrative Law Judges and the Benefits Review Board (e.g., the changes in the section 920 presumptions, the section 901A statement of intent, the section 920(c) and elsewhere new rules of evidence); they contain equitable provisions simply seeking to introduce fairness into the administration of the Act (e.g., the section 914(f) penalty provision, the section 910(a) calculation of average weekly wage, the section 904(c) exclusion of nonoccupational factors, the sections 912 and 913 notice and claim time limits, the section 904(e) changes in last responsible employer liability, the section 905(a) attempt to resolve concurrent jurisdiction issues, and the section 922(b) provision for restitution for fraud); and they contain provisions that the insurance industry believes represent sound business practice (the section 908(f) elimination of the second injury provision and the section 944 change in the assessment formula for insurance carriers to a premium based ratio).

Without a doubt, these are significant amendments.  It is now up to Congress.