Consolidation of Baltimore Longshore District Office Into the Norfolk Longshore District Office

From the Department of Labor’s e-mail service:

The Baltimore Longshore District Office will physically close on September 30, 2014.  It will be consolidated into the Norfolk District Office.  Prior to the physical closure of the Baltimore District Office, the case work will transition to the Norfolk District Office for maximum efficiency.

Therefore, effective September 1, 2014, the Norfolk District Office has jurisdiction over past and future cases under the LHWCA, and its extensions, arising in the states of Delaware, Maryland, Pennsylvania, Virginia, West Virginia and the District of Columbia.

All forms submitted for the creation of a new case should still be submitted to the Longshore Central Case Create site in New York City.  After a case has been created, all case-specific mail should still be sent to the Longshore Central Mail Receipt site in Jacksonville, FL.

For more specifics about this consolidation, including the consolidation’s affect on the DOL’s scanning facilities, review Industry Notice 146.

Defense Base Act Claimant’s Temporary Job Was Not Suitable Alternative Employment

When an injured Longshore or Defense Base Act claimant cannot return to their usual work, an employer must demonstrate the availability of suitable alternative employment (“SAE”).  In many cases, the employer must establish that there are realistically available jobs within the geographic area where claimant resides, which the claimant is capable of performing, considering their age, education, work experience, and physical restrictions.  If the employer successfully demonstrates SAE, then the claimant must demonstrate that they diligently tried to secure employment.

A potential problem can arise when the claimant actually has obtained work following their injury, but the employment is temporary in nature.  That is what happened in McMiller v. Serv. Employees Int’l, a recent unpublished decision from the Benefits Review Board.  There, the Board noted that:

[W]here an injured employee obtains various temporary jobs following her injury, such fact does not necessarily defeat a claim for total disability. Carter, 14 BRBS at 97; see also Edwards v. Director, OWCP, 999 F.2d 1374, 27  BRBS 81 (CRT) (9th Cir. 1993), cert. denied, 511 U.S. 1031 (1994) (court held that short-lived employment did not establish that suitable alternative employment was realistically and regularly available on the open market)Mendez v. National Steel and Shipbuilding Co., 21 BRBS 22 (1988).

In McMiller, the claimant held a “short-lived position with Rose International” but that was insufficient employment to establish SAE.  And the employer failed to submit  any additional evidence concerning the availability of SAE, thus failing to satisfy its burden.  Accordingly, the claimant remained totally disabled.

What’s the takeaway?  Employers and carriers should always commission a labor market survey; and claimants should always continue their diligent search for work.

McMiller v. Serv. Employees Int’l, Inc., BRB No. 13-0579 (Jul. 29, 2014)

Second Circuit Upholds Denial of Defense Base Act Benefits Based on the ALJ’s Medical Credibility Findings

In a very brief unpublished opinion, the Second Circuit upheld a denial of Defense Base Act benefits.  The court summarized the dispute and outcome as follows:

Khan argues the ALJ failed to apply the presumption of 33 U.S.C. § 920(a) to his disability claim.  The ALJ correctly applied the presumption in determining whether Khan suffered from a work-related injury.  However, the § 920(a) presumption does not apply in determining whether any disability was caused or aggravated by a particular work-related injury.  A separate burden-shifting scheme governs that inquiry.  See Pietrunti v. Dir., Office of Workers’ Comp. Programs, 119 F.3d 1035, 1038 (2d Cir. 1997); Palombo v. Dir., Office of Workers’ Compensation Programs, 937 F.2d 70, 73 (2d Cir. 1991).  Under that scheme, the employee must first establish that the disability was caused by a work-related injury.  See Palombo, 937 F.2d at 73.  Here, the ALJ reviewed the entirety of the record and found the report by Doctor Brief to be more credible than the one provided by Doctor Singh as to causation.  Therefore, the BRB committed no error of law and the ALJ’s findings were supported by substantial evidence.  See Pietrunti, 119 F.2d at 1042 (“Credibility findings of an ALJ are entitled to great deference and therefore can be reversed only if they are patently unreasonable.” (quotation marks omitted)).

Khan v. Torres Aes, — Fed. Appx. —-, No. 13-3628 (2d Cir. Aug. 20, 2014).

For those interested in reviewing the Benefits Review Board’s opinion, click this link.

Jones Act Employees Could Not Sue a Dual-Listed Company

On August 12, 2014, the Eleventh Circuit published a decision discussing jurisdiction and business entity structure in the context of a Jones Act lawsuit.  The plaintiffs were three injured sea workers, each of whom collected maintenance and cure.  Those were the benefits that the injured sea workers and other employees agreed to in their contracts with Cunard Celtic Hotel Services, Ltd.  The plaintiffs became unsatisfied with the extent of their maintenance and cure, believing that the contracts impermissibly limited their compensation.  So, they filed a class action against Carnival Corporation and Carnival PLC.

The Defendants’ corporate structure was particularly important here.  Cunard operated “under the corporate umbrella of Carnival Corporation & PLC–the dual-listed company (“DLC”) comprised of Carnival Corporation (a Panamanian corporation headquartered in Miami, FL) and Carnival PLC (a British corporation headquartered in Southampton, England).” 

The district court dismissed the plaintiffs’ lawsuit, determining that the court did “not have personal jurisdiction over the dual-listed corporation Carnival Corporation and PLC.”  The plaintiffs appealed, asking the Eleventh Circuit to determine whether, under the laws of Florida, the Carnival Corporation & PLC, a dual-listed company, was subject to suit as a corporation, according to the doctrine of estoppel, or under a joint venture theory of liability.  It was not.

The Eleventh Circuit first explained the structure of a DLC:

A dual-listed company (DLC) is a corporate structure that binds two separate corporations into a unified economic enterprise, but allows the participating entities to maintain their individual legal identities.  The arrangement is established through the execution of an equalization agreement, a contract that defines and governs the relationship between the two companies.  Such a structure bears many merger-like qualities, such as common ownership of assets and integrated management, but also exhibits some hallmarks of corporate independence, such as separate stock exchange listings.  Almost always utilized by corporations of disparate national origin, DLCs are employed for a variety of reasons, including the advantages they potentially offer in the areas of tax, investor/public relations, and regulatory oversight.

But is a dual-listed company suable as a corporation?  No.  “Indeed, regardless of whether an entity exhibits qualities common to corporations, it is not properly subject to treatment as a corporation absent incorporation, the fundamental act of corporate creation and the dividing line between corporations and non-corporations.”

Further, Carnival & PLC was not estopped from denying that it was a corporation, even if it had publicly promoted itself as a single entity.  The plaintiffs lodged an interesting argument called “corporation by estoppel,” which the state of Florida codified:

No body of persons acting as a corporation shall be permitted to set up the lack of legal organization as a defense to an action against them as a corporation, nor shall any person sued on a contract made with the corporation or sued for an injury to its property or a wrong done to its interests be permitted to set up the lack of such legal organization in his or her defense.

The Eleventh Circuit reasoned that “the doctrine of corporation by estoppel is most appropriately used to maintain the expectations of parties to a contract, allowing a ‘corporation [to] sue and be sued as if it exited if the parties to the contract behaved as if it existed.’”  But here, the plaintiffs had employment contracts with Cunard, not Carnival & PLC.  The plaintiffs never alleged that they believed they were contracting with Carnival & PLC, or that Carnival & PLC was a legal entity capable of being sued.  Accordingly, the doctrine of corporation by estoppel was not applicable.

The court also determined that Carnival & PLC was not suable as a joint venture.  The plaintiffs sought to liken DLCs to “a joint venture on steroids.”  Not so.  A joint venture is “an association of persons or legal entities to carry out a single business enterprise for profit.”  Even though DLCs and joint ventures are collaborative in nature, “the scopes of the two structures are diametrically distinct, thereby rendering inappropriate the application of Florida’s joint venture laws to Carnival Corporation & PLC.”

Finally, the Eleventh Circuit concluded its opinion with a zinger–essentially stating that the plaintiffs outfoxed themselves:

Our ruling today–that Carnical Corporation & PLC is not properly suable in this action–may appear, at first glance, to produce a harsh and unfair result.  However, the Seafarers could have pressed their claims against another entity.  Indeed, it seems abundantly clear that the Seafarers could have brought an action against Carnival PLC (the Cunard Line’s parent company), but chose not to, instead making a tactical decision to pursue potentially broader claims against Carnival Corporation & PLC.  The Seafarers rolled the dice in targeting Carnival Corporation & PLC exclusively in this case; unfortunately for them, that roll did not pay off.

Sabo v. Carnival Corp., — F.3d —- (11th Cir. 2014).