Archives for September 2011

Southern District of Texas Addresses Exclusivity of the Defense Base Act

Section 1651(c) of the Defense Base Act (“DBA”) is the provision entitled, “Liability as exclusive.”  It states: “The liability of an employer, contractor…under this Act shall be exclusive and in place of all other liability of such employer, contractor, subcontractor, or subordinate contractor to his employees (and their dependents) coming within the purview of this Act, under the workmen’s compensation law of any State, Territory, or other jurisdiction, irrespective of the place where the contract of hire of any such employee may have been made or entered into.”  42 U.S.C. § 1651.

Recently, the Southern District of Texas had the opportunity to address the DBA’s exclusivity provision.  The decedent worked as a truck driver for Defendant contractor in Iraq.  Camp Anaconda was under constant threat of the hijack of convoy trucks, which were then used as explosive devices; therefore no unaccompanied convoys were permitted to attempt to enter the Camp.  Members of decedent’s convoy misinterpreted a radio command, which resulted in decedent’s convoy returning to the entrance of Camp Anaconda unaccompanied.  As a result of the standing order, decedent was shot by a United States military gunner.  The decedent’s daughter filed complaints for wrongful death, negligence, fraud and fraud in the inducement, and intentional infliction of emotional distress, among others, in the Southern District of Texas.  The court relied on the exclusivity provision of the DBA, as well as the recent decisions in Fisher and Jones to deny all of Plaintiff’s claims on grounds of preemption, except for her IIED claim.  See 42 U.S.C. §1651(c); Fisher v. Halliburton, 703 F.Supp. 2d 639, 643 (2010); Jones v. Halliburton Co., No. 4:07-cv-2179, 2011WL2066621 (S.D.Tex., May 24, 2011).  Intentional torts fall outside the scope of workers’ compensation schemes like the DBA.

Martin v. Halliburton, No. H-09-0328, 2011 WL 3925404 (S.D. Tex., Sept. 2, 2011).

Second Circuit Holds that Disputed Psychological DBA Claim Was Timely Filed

After working for nine years as an officer for the Kansas Department of Corrections, Claimant went to work for Employer in Kosovo, where she would apprehend fugitive parolees.  She started her new job on April 17, 2004.  Her first day of work, however, was marred with tragedy when she and five others were shot by a Jordanian soldier.  Three victims died.  It was not until April 16, 2006, that Claimant filed a claim for benefits under the Longshore and Harbor Workers Compensation Act (“LHWCA”), as extended by the Defense Base Act, for her underlying psychological injuries.  The question presented to the United States Court of Appeals for the Second Circuit was whether this claim was barred by the statute of limitations for failure to timely file a claim.

Section 13 of the LHWCA contains a statute of limitations, offering different filing periods based upon whether or not the underlying injury was a “traumatic injury” or an “occupational disease.”  Claimant’s psychological claim was treated as a “traumatic injury,” which gave her a one-year period in which to file the claim.  Under Section 13(a), “[t]he time for filing a claim shall not begin to run until the employee or beneficiary is aware, or by the exercise of reasonable diligence should have been aware, of the relationship between the injury or death and the employment.”  

The key for the Second Circuit was whether Claimant knew or should have known that the injury would permanently impair her earning power.  Employer argued that substantial evidence supported its denial.  For instance, Claimant (1) changed assignments for Employer; (2) sought psychological counseling from the Army; (3) obtained a prescription for sleeping and anti-anxiety medication from a psychiatrist; (4) submitted to a psychological evaluation ordered by Employer and even sought an independent psychological evaluation; and (5) was experiencing symptoms of PTSD.  The Second Circuit disagreed, determining that while Claimant may have recognized she was psychologically distressed, her work was largely unaffected for one year after the shooting.  Therefore, Claimant timely filed a claim within one year of the time when she knew or should have known that she had suffered a permanent impairment of her earning power.

Dyncorp Int’l v. Director, OWCP, — F.3d —-, 2011 WL 3873793 (2d Cir. 2011).

Note: The Second Circuit mis-quoted Section 13(a), exchanging “reasonable diligence” for “due diligence.” 

Final Determination of National Average Weekly Wage

Using data compiled by the Bureau of Labor Statistics, the Department of Labor made a final determination as to the national average weekly wage that will go into effect on October 1, 2011.  The final calculations are slightly higher than the estimated increase.

National Average Weekly Wage: $647.60

Maximum Compensation: $1,295.20

Minimum Compensation: $323.80

Percentage Increase: 3.05%

TINTOMARA Oil Spill Litigation: Towboat’s Excess Insurer That Deposited Policy Limits Into Court By Way of Interpleader Was Not Required to Include Legal Interest

In March 2010, Houston Casualty Company filed an Interpleader in the high profile consolidated USDC suits arising out of the July 2008 collision between a tug/oil tow and an ocean tanker in the Port of New Orleans.  Houston Casualty was the excess liability insurer of DRD Towing, owner of the towboat MEL OLIVER whose oil tow struck the upbound TINTOMARA which led to a catastrophic pollution event. 

Due to the various claims filed against DRD, its primary liability carrier filed an interpleader action within three weeks of the casualty and deposited its primary limits into the court registry. One and a half years later, the towboat’s excess insurer, Houston Casualty, filed a similar interpleader action and deposited its $9-million policy limits with the court.  The owner of the oil barge, ACL, opposed the Houston Casualty’s motion to deposit the policy limits, arguing the excess carrier must also deposit prejudgment interest on the interpleader sums in order to be released from liability for the casualty. 

ACL argued that Houston Casualty unreasonably delayed filing its action to deposit funds and thereby unjustly benefited from retaining its funds and depriving the potential claimants of the legal interest that would have accrued if the funds had been deposited sooner.  U.S. District Judge Ivan Lemelle agreed with ACL and ordered Houston Casualty to pay $495,369.86 in accrued pre-judgment interest at the rate of 3.5%.   

On appeal, the U.S. Fifth Circuit reversed Judge Lemelle, observing that an excess insurer’s liability does not arise until the primary carrier’s limits are exhausted.  Because the primary policy was not yet exhausted by judgments or settlements at the time Houston Casualty filed its interpleader, the 5th Circuit panel ruled that Houston Casualty neither “unreasonably” delayed nor was “unjustly” enriched by not filing its interpleader earlier. Consequently, Houston Casualty was not required to pay pre-judgment interest on its policy limits.

Gabarick v. Laurin Maritime (America) Inc. et al, CA No. 08-CV-4007 (5 Cir. 2011).