Fifth Circuit: Maritime Carpenter Not Covered by LHWCA

The Fifth Circuit recently issued a new decision addressing the limits of jurisdiction under the Longshore and Harbor Workers’ Compensation Act.  The claimant, a maritime carpenter, was allegedly injured at the employer’s waterside fabrication yard in Houma, La.  At the time of the incident, the claimant was assisting in the construction of a housing module that was to be incorporated into a tension leg offshore oil platform in the Gulf of Mexico.  The claimant filed a claim under the LHWCA, alleging he was covered by the Act as a shipbuilder, or in the alternative that he was covered by its extension under the Outer Continental Shelf Lands Act.


Following a formal hearing, the Administrative Law Judge determined that the claimant was not covered by the Act and denied benefits.  The Claimant appealed to the Benefits Review Board, which affirmed the ALJ’s decision.  The Claimant appealed again to the U.S. Fifth Circuit Court of Appeals.


The Fifth Circuit evaluated the purpose of the housing module as an eventual component part of the platform.  The Court turned to the Supreme Court’s Lozman and Dutra decisions to determine what constitutes a “vessel”.  Because the platform was not practically intended for maritime transportation, it did not qualify as a vessel.  Further, because the housing module was not a vessel, the claimant was not engaged in maritime employment as a shipbuilder at the time of the incident and therefore did not meet the “status” requirement of the LHWCA.  The Court then turned to the Supreme Court’s recent decision in Pacific Operators Offshore v. Valladolid to determine whether he was covered under OCSLA.  In Valladolid, the Supreme Court held that for a claimant to be covered under OCSLA, he must establish a “substantial nexus” between the injury and extractive operations on the OCS.  The Fifth Circuit concluded that the claimant’s onshore job of building a dining quarters for an offshore platform was too attenuated from OCS operations and therefore he was not covered by the OCSLA.  The Court affirmed the denial of benefits.


Baker v. Gulf Island Marine Fabricators, LLC

Louisiana’s Third Circuit Discusses Vessel Status of a Work Platform

Wooden hammerClaimant worked as an operator/deck hand for Employer for approximately eight months, when in February 2013, he suffered a partial amputation of his right thumb at work. Claimant required two surgeries for his thumb injury, and he timely received benefits under the Longshore and Harbor Workers Compensation Act. In May 2013, Claimant filed suit against Employer for money damages under the Jones Act claiming he qualified for status as a Jones Act seaman under 46 U.S.C.A. § 30104. Employer terminated Claimant’s Longshore benefits and began paying maintenance and cure under the provisions of the Jones Act. On December 6, 2013, Employer filed a Motion for Summary Judgment that Claimant was not a Jones Act seaman. The trial court granted the Motion for Summary Judgment. Claimant appealed to the Louisiana State Court of Appeal for the Third Circuit arguing the trial court misapplied Article 966.

Claimant’s work duties included both on-the-shore and “on the water” activities. He testified at his deposition that he spent 30-40% of his work time on the shore loading fertilizer onto trucks for delivery from Employer’s warehouse facility, and in the Biloxi-Gulfport area using an excavator to move sand to Employer’s port facility. Claimant spent the remaining 60-70% of the time working for Employer “on the water” on a floating, fixed platform in the Red River. The work platform was tied securely to the bottom of the river with pipes and a system of chains and cables. The platform had no navigational functions and was completely fixed in place. An excavator on the platform was used to unload fertilizer from transport barges. The barges were pushed to the work platform by a fleet boat or a line boat. Claimant tied the transport barge to the work platform and unload them. Once unloaded, the transport barge was moved away from the platform using the fleet boat. Claimant never got on Employer’s boat or was attached to a vessel of any kind. The work done by Claimant was accomplished on the work platform, on shore, and occasionally on the transport barges, which is where claimant was working at the time of injury. Claimant had no involvement in moving products on the river. For these reasons, the trial court found that the work platform at issue did not constitute a “vessel,” and Claimant did not qualify as a seaman under the Jones Act.

Qualification as a Jones Act seaman required claimant to show (1) that his duties “contributed to the function of the vessel or to the accomplishment of its mission” and (2) “a connection to a vessel in navigation (or to an identifiable group of such vessels) that is substantial in terms of both its duration and nature.” The determination of whether a given craft is a vessel is ordinarily resolved as a matter of law, however, fact issues may be presented. 1 U.S.C. § 3 defines “vessel” as a water-craft or other artificial contrivance used, or capable of being used, as a means of transportation on water (either practically possible or merely theoretical). A watercraft is not capable of being used for maritime transport in any meaningful sense if it has been permanently moored or otherwise rendered practically incapable of transportation or movement. From a practical standpoint, it must be designed to a practical degree for carrying people or things over water and subject to the peril of navigation to which craft used for transportation are exposed.

Similarly, the work platform in question was moored in place with no movement since 2010, it was secured by two pipes deeply embedded in the river, it had no United States Coast Guard documentation, it had no independent means of propulsion and no raked bow, it could not independently be navigated or be steered, if the work platform were to be moved it would be an extensive process requiring at least two tug boats and five personnel, and the platform had never moved during the time Claimant was employed by Employer. The Third Circuit thus concluded that the work platform where claimant worked 60-70% of the time was not designed to serve a transportation function and did not do so, and it did not qualify as a vessel in navigation for the purpose of allowing Claimant to maintain a Jones Act claim.

Albert Ross Armand v. Terral River Service, Inc., CA-14-610 (La. Ct. App. 3 Cir. 12/10/14).

BRB: Employer’s “Stock Vessels” Retained Their “Recreational Vessel” Status

In a case of first impression concerning the amended version of Section 2(3)(F) of the Longshore and Harbor Workers’ Compensation Act, and its implementing regulation, 20 C.F.R. § 701.501, the Benefit Review Board reviewed the Decision and Order and the Supplemental Decision of the Administrative Law Judge holding Claimant, who worked at Employer’s sport-fishing and recreational yacht facilities, engaged in commercial services within the meaning of the regulation and the Act, the vessels Claimant worked on were non-recreational, and Claimant was a longshoreman entitled to benefits under the Act.  The Benefit Review Board reversed the ALJ, finding Claimant repaired only recreational vessels, he is covered by Florida state workers’ compensation law, and he is excluded from coverage under Section 2(3)(F) of the Act.

The facts on appeal were not in dispute.  Claimant worked for Employer at its two Riviera Beach, Florida facilities repairing recreational yachts ranging from 42 to 82 feet in length.  Services at the Florida facility included general repairs and maintenance of sport-fishing yachts manufactured and sold by employer’s New Jersey division, as well as other sport-fishing boats and private motor yachts.  Employer’s Florida facilities also maintained and repaired the stock vessels the new Jersey division used in boat shows and sea trials to entice customers to purchase the yachts.  On February 2, 2010, Claimant suffered a forehead contusion while working on a 63.5 foot yacht.  Employer paid Claimant medical and disability benefits for the injury under Florida state workers’ compensation law, but Claimant filed a claim contending his injuries should be covered under the Longshore and Harbor Workers’ Compensation Act.  The Administrative Law Judge accepted Claimant’s assertion that because he repaired and maintained some vessels that were used by Employer’s New Jersey division for boat shows and sea trials (which included taking passengers out on the water), those vessels were “commercial,” not “recreational,” as those vessels were used for the commercial purpose of promoting sales for the New Jersey division.

Section 2(3)(F) of the Act states, in pertinent part, “the term ’employee’ … does not include individuals employed to build any recreational vessel under 65 feet in length, or individuals employed to repair any recreational vessel … if individuals described  are subject to coverage under a State workers’ compensation law.  The term “recreational vessel” is defined by 20 C.F.R. § 701.501(a) as a vessel (1) being manufactured or operated primarily for pleasure; or (2) leased, rented, or chartered to another for the latter’s pleasure.  Section  701.501(b)(2) states, in pertinent part, “a vessel being repaired … is not a recreational vessel if the vessel had been operating, around the time of its repair in one or more of the following categories on more than an infrequent basis: (1) passenger vessel;  (2) small passenger vessel; (3) uninspected passenger vessel; (4) vessel routinely engaged in commercial service, or (5) vessel that routinely carrier passengers for hire.”

Employer contended it used vessels at the New Jersey facility to move passengers, but it had no license to do so and was merely showcasing the boat’s primary purpose as a recreational vessel for pleasure.  Employer argued, the ALJ erroneously extended the definition of “commercial service” to convert its stock vessels to non-recreational status when the purpose of the promotional vessels is non-commercial in nature.  In resolving the tension between Sections 701.501(a) and (b), the regulations note, “occasional non-recreational use does not alter the vessel’s core recreational purpose and should not take the vessel outside of the ‘recreational vessel’ definition.  To clarify this point and to resolve the tension, the final rule provides that a vessel remains recreational unless it falls within the designated Coast Guard vessel categories on a more than infrequent bases during the time the vessel is in operation.”  The BRB further clarified the definition of recreational as “any unchartered passenger vessel used for pleasure carrying no passengers-for-hire (i.e. paying passengers); and any chartered passenger vessel used for pleasure with no crew provided and with fewer than 12 passengers, none of whom is for hire.  All other passenger -carrying vessels fall into one of the following three non-recreational categories: uninspected passenger vessel, small passenger vessel, and passenger vessel.”   In the case at hand, Employer’s vessels were primarily for sale as recreational sport-fishing yachts.  Their occasional use at boats shows or to bring passengers out on the water did not alter their primary recreational use, thus could not alter their classification to the category of commercial vessels.

Of note, although the number of stock vessels in the facilities fluctuated, at the time of Claimant’s injury, only nine of the forty vessels being serviced were stock vessels, thus it would be interesting to know if the outcome of the case might have been different had the ratio of stock boats to purely recreational sport-fishing vessels been different.  The BRB’s decision was published on January 28, 2014, and counsel for Claimant has indicated he does not intend to appeal the decision even though he disagrees with the BRB’s final adjudication.

DeJesus v. Viking Yacht Co., Inc., — Ben. Rev. Bd. Serv. (MB) —-, 2014 WL 352618 (2014) (published).

5th Circuit Rules That Offshore Floating Oil and Gas Platform Moored on the OCS Floor Is Not a Vessel and Not Subject to Maritime Lien

A recent “unpublished”  decision from the U.S. Fifth Circuit addressed the issue of whether a maritime lien can attach to on offshore floating production platform.  In Warrior Energy Services Corp. v. ATP Titan M/V, Action No. 13-30587 (5 Cir. 2014), several oilfield contractors, Warrior and others, contracted with ATP Oil & Gas to provide certain services and supplies to the ATP TITAN M/V (”TITAN”), a floating oil and gas production facility owned by ATP Titan, LLC.  The TITAN is moored on the Outer Continental Shelf, miles offshore from Louisiana.

ATP Oil & Gas filed for bankruptcy and did not pay the contractors for their services.  Warrior and the other contractors then filed a USDC action against platform owner ATP Titan and asserted a maritime lien against the TITAN.  ATP Titan filed a motion to dismiss the USDC action as well as the maritime lien on the basis the TITAN was not a vessel and the court lacked jurisdiction.  Warrior et al conceded that its claims before the court were dependent upon the TITAN’s status as a vessel.  On motion for summary judgment, Judge Sara Vance ruled the TITAN was not a vessel and she dismissed the contractors’ lawsuit on jurisdictional grounds.

Addressing the issue of vessel status, the 5th Circuit panel looked to the U.S. Supreme Court’s vessel status decisions in Stewart v. Dutra and Lozman v. City of Riviera Beach. The dispositive question was whether the TITAN’s “use as a watercraft as a means of transportation on water is a practical possibility or merely a theoretical one.” (citing Dutra). The court went on to note that the TITAN is moored to the OCS floor by 12 mooring chains connected to 12 anchor piles imbedded over 200 feet into the seafloor. It is further immobilized by “an oil and gas production infrastructure”.  The TITAN has not been moved since it was installed in 2010 and it has no means of self-propulsion, apart from the ability to reposition itself within a 200 foot range by manipulating its mooring lines.  Moreover, moving the TITAN would require 12 months of preparation, at least 15 weeks for its execution and would cost more than $70-million.  Based on these factors, the 5th Circuit ruled that the TITAN was not practically capable of transportation on water and, therefore, as a matter of law, was not a vessel.

Editor’s Note: The contractors complained to the 5th Circuit that Judge Vance relied on its unpublished opinion in a similar case: Mendez v. Anadarko Petroleum Corp.  By way of a footnote, the panel acknowledged that Mendez was not “controlling precedent” but could be cites as “persuasive authority” given its factual similarity with the subject ATP case.