Fifth Circuit Upholds Denial of Longshoreman’s Claim, Affirms MBLB Win

Today’s post provides us with an opportunity to brag on one of our own, Rob Popich, who successfully argued Hymel v. Dir., OWCP, for the Employer and Carrier.  The Fifth Circuit’s new, unreported Hymel decision is the third victory Mr. Popich earned in this case, having previously prevailed in front of an administrative law judge (“ALJ”), the Benefits Review Board (“BRB”), and now the Fifth Circuit.

Claimant, a longshoreman, filed a claim after he alleged injury as a result of a work-related incident wherein he was struck by a forklift. In accordance with the Longshoremen and Harbor Workers’ Compensation Act, a claimant is entitled to a presumption of application if he can establish 1) he suffered harm and 2) conditions existed at work, or an accident occurred at work, that could have caused, aggravated, or accelerated the condition. (See 33 U.S.C. § 920.)  The employer then has the opportunity to rebut the presumption by presenting substantial evidence establishing the absence of a connection between the injury and the employment.

Through his presentation of evidence to the ALJ, Mr. Popich successfully rebutted the presumption in favor of the Claimant: the ALJ determined Claimant’s credibility was questionable, and his testimony was inconsistent. Based on this evidence, the ALJ found in favor of Employer and Carrier. The Claimant appealed to the BRB hoping to convince it that the ALJ’s finding of facts were not supported by substantial evidence or consistent with the law. However, the BRB affirmed the ALJ’s determination in favor of Employer and Carrier. Claimant then appealed to the Fifth Circuit.

The Fifth Circuit, being limited in its scope of review to consideration of errors of law, had to determine if the BRB adhered to its statutory standard review of factual determinations made by the ALJ.

Claimant first argued the ALJ’s characterization of witness testimony was improper; the ALJ had determined Claimant did not provide a medical provider with all of information necessary for a diagnosis when Claimant neglected to reveal he was previously injured due to an unrelated incident.  The Fifth Circuit held that the ALJ did not, in fact, mischaracterize witness testimony, as the ALJ was in the best position to assess credibility and conflicting evidence.  Second, Claimant argued the ALJ incorrectly found his testimony inconsistent.  Again, the Fifth Circuit noted the ALJ was in the proper position to weigh the testimony of various witnesses, more than one of which recalled the work incident differently than Claimant.  Third, Claimant alleged the introduction of personnel files were improper.  In disagreeing with this argument, the Fifth Circuit noted the ALJ did not abuse their discretion in admitting this evidence, as it was not bound by traditional rules of evidence.

In reaching its conclusions, the Fifth Circuit looked to dicta of Avondale Indus., Inc. v. Dir., OWCP, 977 F.2d 186 (5th Cir. 1992) which stated that “[T]he ALJ’s decision need not constitute the sole inference that can be drawn from the facts . . . . As fact finder, the ALJ determines questions of credibility of witnesses and of conflicting evidence.”  The ALJ had simply weighed the evidence and made a credibility determination, which the ALJ is entitled to do.  Further, the Fifth Circuit noted the ALJ is not bound by formal rules of evidence; admissibility of evidence can depend solely on whether it is such evidence as a reasonable mind might accept as probative.  In conclusion, the Fifth Circuit held that the BRB did not err in finding the ALJ’s determinations supported by substantial evidence and in accordance with the law.

NASA Issues Final Rule Clarifying A Contractor’s Resonsibility to Obtain and Maintain Longshore and Defense Base Act Insurance

The Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA) recently issued a Final Rule discussing a contractor’s responsibility to maintain Longshore and Defense Base Act coverage.  This link will take you to a PDF of the Final Rule, which is reprinted below:

Summary:

DoD, GSA, and NASA are issuing a final rule amending the Federal Acquisition Regulation (FAR) to clarify contractor and subcontractor responsibilities to obtain workers’ compensation insurance or to qualify as a self-insurer, and other requirements, under the terms of the Longshore and Harbor Workers’ Compensation Act (LHWCA) as extended by the Defense Base Act (DBA).

DATES:

Effective: July 1, 2014.

FOR FURTHER INFORMATION CONTACT:

Mr. Edward N. Chambers, Procurement Analyst, at 202-501-3221 for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at 202-501-4755. Please cite FAC 2005-74, FAR Case 2012-016.

SUPPLEMENTARY INFORMATION:

I. Background

DoD, GSA, and NASA published a proposed rule in the Federal Register at 78 FR 17176 on March 20, 2013, to make the necessary regulatory revisions to revise the FAR to clarify contractor and subcontractor responsibilities to obtain workers’ compensation insurance or to qualify as a self-insurer, and other requirements, under the terms of the LHWCA, 33 U.S.C. 901, et seq., as extended by the DBA, 42 U.S.C. 1651, et seq. Three respondents submitted comments on the proposed rule.

II. Discussion and Analysis

The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (the Councils) reviewed the comments in the development of the final rule. A discussion of the comments and the changes made to the rule as a result of those comments are provided as follows:

A. Summary of Significant Changes

This final rule includes one change to align the FAR with Department of Labor’s (DOL) regulations and implementation of section 30(a) of the LHWCA. This change involves deleting proposed paragraph (b) of FAR clause 52.228-3, which stated that the actions set forth under paragraphs (a)(2) through (a)(8) may be performed by the contractor’s agent or insurance carrier. The DOL’s regulations place the responsibility for reporting injuries on the employer, see 20 CFR 703.115. The removal of proposed FAR 52.228-3 paragraph (b) also promotes consistency with the statutory requirements.

B. Analysis of Public Comments

1. Support of the Proposed Rule

Comment: Two respondents expressed support for the rule.

Response: The public’s support for this rule is acknowledged.

2. Clarify Term “Days”

Comment: One respondent recommends that the ten-day reporting period within the report of injury requirements set forth in proposed FAR 52.228-3 paragraph (a)(2) should be revised to read “ten business days.” The respondent asserts this modification will clarify the reporting period.

Response: The intent of this rule is to alert contractors to their obligations under the LHWCA, rather than to alter those obligations. The respondent’s suggested revisions could result in altering a contractor’s obligations and therefore are beyond the scope of the FAR rule. The DOL’s regulation interprets the ten-day injury reporting period set forth in LHWCA section 30(a), 33 U.S.C. 930(a), as ten calendar days. See 20 CFR 702.201(a) (using unqualified term “days” to describe reporting period). Thus, adding “business” days would alter the intent of the law.

3. Inclusion of “Work-Related” Terminology

Comment: The respondent states that the terms injury and death should be modified by adding the phrase “work-related” before both. The respondent asserts that this modification will serve to clarify a contractor’s obligation.

Response: The Councils do not recommend adding the phrase “work-related” to the terms “injury” and “death.” The added phrase is not necessary as the LHWCA defines an injury in 33 U.S.C. 902(2) and the concept of work-relatedness is subsumed in the term “injury.” Moreover, the question whether a particular injury is work-related is often a difficult issue to resolve, and a contractor may not be able to decide whether a particular injury arose out of and in the course of employment within the meaning of the statute. By leaving the terms “injury” and “death” unqualified, contractors will be encouraged to err on the side of reporting any incident that may be work-related.

4. Inclusion of “Actual” Terminology

Comment: One respondent suggests that the provision should specify that the contractor’s “actual/constructive” knowledge of the injury triggers the reporting period. The respondent recommends this revision to further clarify a contractor’s obligation.

Response: DOL’s governing rules use the unqualified term “knowledge of an employee’s injury or death” when describing the event that triggers the reporting period. This FAR rule simply tracks that language.

5. Conflicts With Current Practice

Comment: One respondent states that FAR 52.228-3 paragraph (b), which allows the contractor’s agent or insurance carrier to submit the first report of injury referenced in paragraph (a)(2), is inconsistent with section 30(a) of the LHWCA, 33 U.S.C. 930(a), as extended by the DBA, and the DOL’s current practice. The respondent argues that it is inappropriate to redefine this statutory provision through a FAR clause. The respondent recommends the proposed paragraph (b) should be amended to conform to current practice both under the DBA and LHWCA.

Response: The Councils concur with the respondent. The intent of this FAR rule is to clarify and inform contractors of their obligations under the DBA and the DOL’s regulations, not to alter those requirements. Section 30(a) of the LHWCA, as implemented by the DOL’s regulations, places the responsibility for reporting injuries on the employer. See 20 CFR 703.115. Accordingly, the Councils are removing the proposed FAR 52.228-3 paragraph (b) to promote consistency with the statutes referenced above.

6. Contractors Should Provide Insurance

Comment: One respondent states that the contractors should have sufficient insurance to be able to pay compensation if an employee is injured.

Response: The Councils concur that the views of this respondent are in accord with the intent of the law, this FAR rule, and the existing FAR clause 52.228-3.

III. Executive Orders 12866 and 13563

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under Section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

IV. Regulatory Flexibility Act

DoD, GSA, and NASA have prepared a Final Regulatory Flexibility Analysis (FRFA) consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. The FRFA is summarized as follows:

DoD, GSA, and NASA do not expect this rule to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because this rule merely clarifies the existing prescriptions and clauses relating to contractor and subcontractor responsibilities to obtain workers’ compensation insurance or to qualify as a self-insurer, and other requirements, under the terms of the LHWCA as extended by the DBA, and implemented in DOL Regulations. No comments from small entities were submitted in reference to the Regulatory Flexibility Act request under the proposed rule.

The rule imposes no reporting, recordkeeping, or other information collection requirements. The rule does not duplicate, overlap, or conflict with any other Federal rules, and there are no known significant alternatives to the rule.

Interested parties may obtain a copy of the FRFA from the Regulatory Secretariat. The FAR Secretariat has submitted a copy of the FRFA to the Chief Counsel for Advocacy of the Small Business Administration.

Government Accepting Comments About the Longshore Act’s Pre-Hearing Statement

When a Longshore or Defense Base Act claim starts, it is administered by the Office of Workers’ Compensation Program’s Division of Longshore and Harbor Workers’ Compensation.  In the event that a dispute arises, a party may request referral to the Office of Administrative Law Judges.  To do so, the referring party submits a Form LS-18, Pre-Hearing Statement.

Forms used by the government often have an expiration date and the Pre-Hearing Statement is no different.  The present Form LS-18 is scheduled to expire on July 31, 2014.  Accordingly, the Office of Workers’ Compensation Program has asked the Office of Management and Budget (“OMB”) to review the Pre-Hearing Statement and approve its continued use, without change, in accordance with the Paperwork Reduction Act.

In the event you care to do so, the OMB is now accepting public comments about the Pre-Hearing Statement.  The OMB is interested in comments that evaluate whether the proposed collection of information is necessary for the performance of the Office of Administrative Law Judges; evaluate the accuracy of the agency’s estimate of the burden of the proposed collection of information; enhance the quality, utility, and clarity of the information to be collected; and minimize the burden of the collected information “through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submission of responses.”

For more information about OWCP’s Pre-Hearing Statement Request or the open comment period that ends on July 25, 2014, please view the memorandum at this link.

Beach Cleaner Was Not Injured On a Longshore Situs

In an unpublished decision, the Fifth Circuit addressed Longshore and Harbor Workers’ Compensation Act coverage for an employee cleaning beaches after the Deepwater Horizon oil spill.  The facts were not disputed:

On August 21, 2010, Global [Management Enterprise] employee Librado De La Cruz was allegedly injured while lifting a bag of oil-laden sand that would later be loaded onto a truck and transferred to a vessel for removal.  It is undisputed that De La Cruz spent up to two hours actively loading and unloading the vessel at the pier, and six or seven hours cleaning the beaches.  At the time of the incident, De La Cruz was working on a beach located a few feet from Gulf waters and around a half-mile from the pier at which the vessel docked.

After his injury, Global’s insurer began paying state workers’ compensation benefits.  De La Cruz then filed a Longshore Act claim which caused the insurer to cease paying benefits , citing the policy’s longshoreman exclusion.  Accordingly, the question in this case became whether Claimant “sustained the alleged injury at a location covered by the Act.”

Here, De La Cruz was injured on a beach.  For a worksite to fall under the Longshore Act, it must (1) adjoin navigable waters; and (2) customarily be used by an employer to facilitate the loading, unloading, repairing, dismantling, or building of a vessel.  De La Cruz was most definitely injured at a location adjoining navigable waters.  But, he was not injured at “a location customarily used by an employer for a covered activity.”

The Fifth Circuit highlighted a few facts which supported its conclusion.  For instance, there were no structures on the beach, which was a remote island known only as G1.  There was no evidence that the island was ever the home of longshore activities.  And despite the carriers argument, the court would not view “the beach and the pier together . . . as a single area customarily used for longshore activities.”  The “single area” argument–though clever–failed because “the beach and dock are not interconnected parts of a larger area used to facilitate longshore activity.”

Ultimately, the Fifth Circuit held that De La Cruz was not injured on a situs covered by the Longshore Act.  Therefore, he was not entitled to Longshore benefits, and the carrier was not entitled to cease paying compensation based on a longshore exclusion in the policy.

Global Mgmt. Enters., LLC v. Commerce & Indus. Ins. Co., No. 13-31249, slip op. (5th Cir. June 23, 2014)