Common Law Tort Claims Preempted by the DBA’s and LHWCA’s Exclusivity Provisions

Claimant was injured in a roadside bomb attack.  The employer and carrier paid medical and indemnity benefits pursuant to the Longshore and Harbor Workers’ Compensation Act (“LHWCA”) as extended by the Defense Base Act (“DBA”).  In addition, Claimant filed a federal civil lawsuit against the employer and carrier asserting common law claims for breach of contract, breach of fiduciary duty, fraud, and conspiracy to defraud.  In his complaint:

Nadheer alleged that, before his transfer to Erbil, he had requested transfer to a hospital in Jordan and that his insurance provider had denied this request.  He claimed that this violated a provision in the LHWCA that allows patients to select their own physicians and that he was never informed of this and various other rights of his under the LHWCA.  He further asserted that, as a result of deficient medical treatment he received in Erbil, he had suffered horrific pain and a degree of potentially permanent disability to his right arm.

Claimant’s federal case was dismissed for want of jurisdiction.  The DBA’s and LHWCA’s exclusivity deprived the district court of jurisdiction.  The United States Court of Appeals for the Fifth Circuit agreed.

The intentional misrepresentation claims failed because “state law claims for bad faith withholding or termination of compensation benefits are preempted by the LHWCA.”  The Fifth Circuit found no meaningful difference between withholding benefits and the alleged bad faith mis-administration of benefits.  Therefore, the LHWCA preempted the cause of action and Claimant’s proper recourse would be found in the LHWCA’s criminal penalty statute, 33 U.S.C. 931(c), if the allegations were true.

Claimant’s breach of contract claim was preempted, too.  He argued that the language used in the insurance policy created a contractual obligation separate from the LHWCA’s statutory obligation.  The Fifth Circuit disagreed.  The LHWCA is a comprehensive compensation scheme that provides benefits in lieu of all common law damages, including Claimant’s breach of contract claim.

Finally, the Fifth Circuit determined that Claimant’s action against the insurers must also fail.   Such actions are implicitly preempted by the LHWCA’s exclusivity provision.

Nadheer v. Insurance Co. of Pennsylvania, 2013 WL 69343, slip op. (5th Cir. 2013)

Great Time Had at Advanced Consulting’s Defense Base Act Conference

In my opinion, there are too few conferences focusing entirely on the administration and adjudication of Defense Base Act (“DBA”) claims.  Lucky for me, Advanced Consulting, Inc., hosted a great DBA conference in Dallas on January 16, 2013.  The conference, entitled “Managing Defense Base Act Claims: An Employer’s Guide” offered insight into a number of topics including dispute resolution at the Office of Workers’ Compensation Programs (“OWCP”), medical management, suitable alternative employment, DBA waivers, and burn pit litigation.

Some of the highlights:

  • The conference started with a presentation by Miranda Chiu and David Widener of the Division of Longshore and Harbor Workers’ Compensation.  Director Chiu highlighted the OWCP’s dispute resolution process, and how it resolves many disputed cases.  To demonstrate the success of the process, Director Chiu and District Director Widener presented very interesting statistics about the number of disputes in existence, the number of disputes resolved by the informal conference (which is an impressive number), and the time it takes to resolve a dispute at the OWCP versus the Office of Administrative Law Judges (“OALJ”).  My hope is that Director Chiu and District Director Widener will publish their PowerPoint presentation on the DLHWC’s “Education and Outreach” web page.
  • Andrew Blauert and Jared Korte of Labor Management Services, Inc., discussed medical management concerns.  Their message was clear: employers and carriers need to be proactive with respect to an injured worker’s medical needs.  A proactive approach is a win-win for all parties.  The injured worker heals faster which allows them to return to the workforce.  In turn, an employer’s and carrier’s liability lessens because they pay less than they would if the injured worker’s recovery is delayed.
  • Shaun Mundy Aulita presented the vocational rehabilitation portion of the conference, discussing labor market surveys and how to use them appropriately.
  • Larry Nelligan had a great presentation about burn pit exposure and toxic inhalation hazards.   Mr. Nelligan’s slide show is online here.  Take a look–and get ready for the eventual explosion of burn pit cases.

Finally, Advanced Consulting was nice enough to post the various presentations online.  This link to Advanced Consulting’s website will take you to the presentations.

Presumption of Negligence Not Applicable

Defendant’s pipe tank broke loose from its mooring to a crane barge and struck a recreational fishing boat, causing injury to Plaintiffs.  Plaintiffs filed a Partial Motion for Summary Judgment on the presumption of negligence.  The Motion was based upon the rule set forth in The Louisiana, 70 U.S. 164 (1865), which imposes a presumption of fault on a vessel that breaks free from its moorings and drifts into a stationary object.  The court found that because the fishing boat was in motion, it did not constitute a “stationary object” and that the presumption therefore did not apply.  Nonetheless, the court stated that the pipe tank would face a considerable challenge in establishing that it was not negligent in a manner that was a proximate cause of the collision.

Nassri v. Inland Dredging Co., 2013 WL 166211 (M.D. La. 2013).

SCOTUS Issued Summary Disposition Reversing A Casino Boat Case

Yesterday the Supreme Court of the United States (“SCOTUS”) issued a summary disposition in Lemelle v. St. Charles Gaming Co., Inc.  We previously discussed Lemelle here.  Briefly, in Lemelle, an intoxicated patron fell down the stairs of the M/V CROWN CASINO, a riverboat casino.  The plaintiff filed suit seeking damages under general maritime law, which he argued preempted a Louisiana statute limiting liability for loss connected with the service of alcoholic beverages.  The dispute became one of vessel status.  The Court of Appeal of Louisiana, Third Circuit, determined that the casino riverboat was not a vessel.

Interestingly, Louisiana’s Third Circuit cited to a prior federal Fifth Circuit opinion that discussed how the casino was only “theoretically” capable of maritime transport.  De La Rosa v. St. Charles Gaming Co., 474 F.3d 185, 187 (5th Cir. 2003).  But Louisiana’s Third Circuit did not stop there.  It also determined that the CROWN was “practically” incapable of transportation.

SCOTUS has now reversed.  It granted certiorari and vacated the Louisiana Third Circuit’s judgment.  Most importantly, it remanded the case for consideration in light of the Court’s recent decision in Lozman v. Riviera Beach.  More likely than not, the Court wants Louisiana’s Third Circuit to apply the “reasonable observer” test to the CROWN.  Depending on the Third Circuit’s opinion, we could be in for a change in the vessel status of casino boats.