Benefits Review Board Accepts Electronic Filings

This following notice is posted on the Benefits Review Board’s home page.

Notice Regarding Availability of Electronic Filing and Electronic Service

All parties to appeals before the Benefits Review Board (BRB) may now use the Board’s Electronic File and Service Request (EFSR) system.  The EFSR portal allows parties to file new appeals electronically, receive electronic service of Board issuances, file briefs and motions electronically, and check the status of existing appeals via a web-based interface accessible 24 hours every day in lieu of paper documents.

The EFSR system is open to any party to an appeal before the Board.  An e-Filer must register as a use and must be validated by the Board before e-filing any document.  An e-Filer will complete an online registration form.  A valid e-mail address is required to register as an e-Filer.  Once registered, an e-Filer will be able to use the EFSR for electronic filing (eFile), which is the submission of forms and documents to the Board through the Internet instead of using postal mail and fax.  After the Board has accepted an e-Filing, it is handled just as it would be had it been filed in a more traditional manner.  e-Filers will also have access to electronic service (eService), which is simply a way to receive documents issued by the Board through the Internet in lieu of mailing paper notices/documents.

Information regarding registration for access to the EFSR system, as well as a step by step user guide and FAQs can be found at: https://dol-appeals.entellitrak.com

If you have any questions or comments, please contact us at: Boards-EFSR-Help@dol.gov

This is great news for Longshore and Defense Base Act cases.  Electronic filing saves costs and time.  The Federal Judiciary has used electronic filing for years via the PACER system.  Immediate docket updating and printing is very helpful for litigation.

The BRB’s e-filing registration process is quick and painless.  You provide contact information, establish a security question, and the confirm receipt of an e-mail from the e-Filing system.  Done and done.

DOL Issued 2014-15 National Average Weekly Wage Increase for Longshore Claims

On October 1, 2014, the National Average Weekly Wage applicable to Longshore claims (including Longshore extensions like the Defense Base Act) will increase pursuant to Section 10 of the Longshore and Harbor Workers’ Compensation Act.  The new compensation rates are:

National Average Weekly Wage: $688.51
Maximum Compensation: $1,377.02
Minimum Compensation: $344.26
Percentage Increase: 2.25%

Punitive Damages Available to Seamen in Asbestos Litigation

Judge Eduardo Robreno recently ruled that punitive damages were available to seamen in the consolidated asbestos products liability multidistrict litigation pending in the Eastern District or Pennsylvania.  After discussing the history of punitive damages and maritime law, Judge Robreno reasoned (with internal citations omitted, and emphasis added):

Having concluded that maritime law does not impose a general bar on punitive damages in unseaworthiness claims, the Court turns to the question of whether punitive damages are appropriate when such claims arise in the context of asbestos cases.  This issue underpins the availability of punitive damages and necessarily must be addressed in this context.

Although various rationales have historically been used to justify punitive damage awards, the consensus today is that punitive damages are not intended to compensate the plaintiff for a loss suffered, but instead are “imposed for purposes of retribution and deterrence.”  Courts also generally limit punitive damages to cases “where a defendant’s conduct is ‘outrageous,’ owing to ‘gross negligence,’ ‘willful, wanton, and reckless indifference or the rights of others,’ or behavior even more deplorable.’”  Put simply, punitive damages are aimed at punishing and deterring particularly egregious conduct.

Some judges and commentators have suggested that those rationales do not apply in the context of today’s asbestos litigation.  They note that there is little conduct left to deter in that area as the Occupational Safety and Health Administration (“OSHA”) began regulating occupational exposure to asbestos in 1971, and–although not banned outright in all products–asbestos is now tightly regulated.  Moreover, asbestos litigation has since ballooned to enormous proportions, prompting dozens of companies to declare bankruptcy.  Critics of punitive damages say that, because of those numerous and high-profile bankruptcies, the “message of deterrence, both specific and general, has been heard loud and clear,” obviating deterrent effect of a punitive damages award.

As for the retributive function of punitive damages, some scholars suggest that the significant time lapse between the relevant conduct and the current litigation undermines the need for retribution.  for most, if not all, companies involved in asbestos litigation, “the economic players today are quite different from those who made the risk decisions decades ago at the time of exposure.”  For that reason, “[p]unitive awards in asbestos cases usually do not punish the individuals who were responsible for the offensive conduct,” but instead “inflict harm on current shareholders, customers, and employees” of the defendant corporation.  Some commentators therefore conclude that punitive damages awards serve neither of their intended functions in the asbestos context, and so “use of that weapon is no longer justified.”

In addition to challenging the overarching rationales behind punitive damages, some commentators add that punitive damages are unlikely to be appropriate in most current asbestos cases.  The factors relevant to an assessment of punitive damages include, among other things: “(1) the act itself, including the  motives of the wrongdoer, the relations between the parties, and provocation or want of provocation; (2) the extent of harm to the injured person, including the expense to which plaintiff had been put in bringing a lawsuit; (3) the wealth of the defendant; and (4) the existence of multiple claims.  Critics of punitive damages contend that, in most asbestos cases, those factors caution against awarding punitive damages.  They offer a variety of reasons supporting that proposition, including that today’s defendants are often peripheral players who neither manufactured or distributed asbestos and were unaware of its dangers, that enormous litigation spending has already ensued[,] that injury costs are fully internalized by defendants, and that punitive damages awards deplete available funds and thus penalize future claimants.  For all of those reasons, these critics suggest that the public is generally ill-served by punitive damages awards in asbestos cases.

Finally, critics of punitive damages further note that asbestos cases, like many mass tort cases, pose the “multiple punishments problem.”  First identified in the 1960s by Judge Henry Friendly, the “multiple punishments problem” arises when “a defendant, who has injured multiple potential plaintiffs by a single act or course of conduct, faces multiple punitive damages awards for that conduct.”  In such a situation, there is a risk that the defendant will be repeatedly punished for the same conduct, which could result in a punishment “so irrational as to offend the due process clause of the Fourteenth Amendment.”  In light of that concern, several courts . . . have indicated that a successive punitive damages award would be improper if there is evidence “that the aggregate of prior awards has reached the maximum amount tolerable under the Due Process Clause.”

But despite the persuasiveness of many of those arguments as a matter of public policy, they do not provide a strong doctrinal foundation for the Court to conclude that punitive damages are generally unavailable in asbestos cases.  First of all, the Third Circuit made clear in its en banc decision in Dunn v. HOVIC that the multiple punishments problem is not–standing alone–a proper basis for barring punitive damages in all asbestos cases.  Indeed, the majority in Dunn explicitly stated that, as a general matter, “multiple punitive damages awards are not inconsistent with the due process clause or substantive tort law principles.”  The court explained that duplicative awards can be reduced or overturned on due process grounds only as to an individual defendant, and only if that defendant has presented evidence “demonstrating the amount of punitive damages it has actually paid in the past.”  Other courts have responded to similar arguments even more pointedly.  For example, the Fifth Circuit held that the “multiple punishments problem” is not a basis for denying punitive damages in asbestos cases, emphatically rejecting the notion that “when a defendant injures tens of thousands and manifests reckless disregard for the victims’ lives and welfare, punitive damages should be unavailable as a matter of law.”  In light of those holdings, it is not within this Court’s authority to disallow punitive damages claims overall as a matter of public policy due solely to the potential for repetitive punishment.

Furthermore, many of the other critiques of punitive damages presume certain facts that may not present in every case.  For example, although many of the defendants in the instant litigation may be “peripheral defendants who did not engage in conscious, flagrant wrongdoing” it is possible that at least some do not meet that description.  Similarly, despite the overall sums spent on asbestos litigation, there may be some defendants who are not in dire financial straits, and thus are able to pay future compensatory damages on top of a punitive damages award.  In other words, not every feature of the overall asbestos litigation is necessarily present in every case.

Moreover, the punitive damages standard itself prevents awards in such cases.  Simply because punitive damages are theoretically available does not mean they are appropriate in any and all cases.  A peripheral defendant who did not engage in flagrant wrongdoing likely has not committed the “outrageous” conduct necessary for a punitive damages award, and the wealth of the defendant and the existence of multiple claims are factors to be considered when assessing appropriate damages.  Because courts are able to consider these factors in the context of individual cases, the decision regarding the overall propriety of punitive damages in asbestos cases seems more like a legislative determination based on social policy than a judicial one.

There is one critique, however, that arguably could apply in all cases–namely, that the deterrence and retribution rationales for punitive damages are not implicated in asbestos cases because of the significant time lapse since the relevant conduct.  It is true that deterring the future use of asbestos is unlikely to be considered a legitimate rationale for a punitive damages award, as federal regulation has largely ensured that result.  It is also true that punitive damages awarded today are unlikely to punish the correct actor, as the relevant players have changed.  But there are counterarguments here as well; in particular, a punitive damages award could (at least hypothetically) deter future willful or reckless conduct regarding a different risky product.  As the Sixth Circuit has explained, “[w]hether a defendant’s particular course of conduct has ceased is irrelevant to the accomplishment of the broader general deterrence function of punitive damages awards.”  . . .

More importantly, there are virtually no cases in which a federal court barred a punitive damages award solely on the basis that–as a general matter–the rationales for punitive damages are no longer applicable in asbestos cases.  As with the other critiques of punitive damages generally, this one has stayed firmly within the domains of academics and partisans, while courts have continued to address the punitive damages claims based on the specific facts of each case.

In sum, the policy considerations cautioning against the punitive damage awards in asbestos cases do not provide a basis for a judicial ruling that under maritime law punitive damages are unavailable in all such cases as a matter of law.  That conclusion does not, however, suggest that there is no room for the Court to impose certain and in some cases restrict limitations as to the kind of conduct which would warrant them or the appropriate size of punitive damage awards.  . . .

. . .

For the foregoing reasons, the Court concludes that punitive damages are not off-limits as a matter of law to seamen bringing claims of unseaworthiness in asbestos cases, but, however, may be subject to limitations under the specific circumstances of the individual cases.

In Re: Aspestos Products Liability Litigation, MDL No. 875 (July 9 , 2014).

Please click this link to read the opinion.

Tip of the hat to Megan Coluccio for the article she posted at JDSupra.

Do You Need a Medicare Set Aside for Your Longshore or Defense Base Act Settlement?

In every case where a Longshore worker or Defense Base Act contractor agrees to close or limit their right to future medical benefits, the parties must consider whether a Medicare Set Aside is needed.  What is a Medicare Set Aside and why is it needed?  Essentially, the Centers for Medicare and Medicaid Services (“CMS”) does not want to pay for workers’ compensation injuries.  The Medicare Secondary Payer laws protect CMS from workers’ compensation litigants who may want to shift the liability for payment of future medical benefits to CMS.

Consequently, in certain situations, the parties to a workers’ compensation settlement must prepare “a financial agreement that allocates a portion of a workers’ compensation settlement to pay for future medical services related to the workers’ compensation injury, illness or disease.  These funds must be depleted before Medicare will pay for treatment related to the [injury].”  Moreover, CMS will want proof (in the future) that the injured worker actually spent the settlement proceeds devoted to future medical expenses on those expenses.

So, when is a Medicare Set Aside needed?  Although CMS’s and Medicare’s interest must be considered in every settlement, a Medicare Set Aside is only needed when certain criteria are met.  The following questions may help you determine if you need an MSA for your Longshore or Defense Base Act settlement.

Does the settlement close or limit future medical benefits? 

If so, CMS’s or Medicare’s interests must be considered.

Is the claimant 65 years old or older, or has the claimant been on SSDI for 24 months or longer?
Is the total value of the settlement (including indemnity, liens, future medical benefits and attorney’s fees) more than $25,000?

If so, a Medicare Set Aside is likely needed, and CMS review of the MSA is recommended by CMS.

Is the claimant on SSDI but not yet Medicare eligible?
Has the claimant applied for SSDI benefits?
Has the claimant been denied for SSDI but is appealing the denial?
Is the claimant 62 1/2 years old?

If the answer to all of the preceding questions was, “No,” then CMS review of the Medicare Set Aside is not necessary.

However, if any of the preceding questions can be answered in the affirmative, then a Medicare Set Aside may be necessary.  There is one more question to ask:

Is the total value of the settlement (including indemnity, fees, future medical benefits and attorney’s fees) over $250,000?

If not, then CMS review of the MSA is not necessary.

If so, then CMS review of the MSA is recommended by CMS.

In conclusion, the government is very clear that it does not want to pay medical benefits for an on-the-job injury.  Stiff penalties exist for parties who fail to secure a Medicare Set Aside.  In the event an MSA is needed, hire an expert to prepare the document and take care of the submission process.