Archives for June 2012

Another Tort Suit Dismissed Because of DBA Exclusivity

The United States District Court for the District of Maryland recently issued a Memorandum Opinion in Vance v. CHF International, wherein it held that the Defense Base Act (“DBA”) was the exclusive remedy for the plaintiffs’ tort claims.  The plaintiffs in Vance were the personal representatives of an employee killed while driving to work in Peshawar, Pakistan.  DBA benefits were paid following the employee’s death, but the plaintiffs sought tort damages in federal court. 

The DBA is a uniform, federal compensation scheme for civilian contractors.  It is the exclusive remedy for injured workers.  See Fisher v. Halliburton, 667 F.3d 602, 610 (5th Cir. 2012).   The decedent’s contract fell under the public works provision of the DBA.  See  42 U.S.C. § 1651(a)(4).  As explained by the court:

The work appears to constitute work performed under a service contract connected with a government-related construction project and work done in connection with the national defense.  The Program indicates that it is being undertaken to counter extremist influences in Pakistan, which is a goal of the United States’ war on terror.  The [P]rogram also includes construction projects such as rebuilding agricultural infrastructure in [Pakistan’s Federally Administered Tribal Area].

In addition to the common law torts, the District Court also dismissed the plaintiffs’ intentional infliction of emotional distress claim.  The court adopted the reasoning of the Fifth Circuit in Fisher, 667 F.3d at 618, which concluded that “allowing an injured employee to recover from his employer under this theory of intentional-tort liability would inject into the DBA’s workers’ compensation scheme an element of uncertainty at odds with the statute’s basic purpose: providing prompt reliev for employees, and limited and predictable liability for employers.”  

Because the DBA applied, the tort suit could not be maintained.

Vance v. CHF Int’l, No. 11-3210, 2012 WL 2367075, slip op. (D. Md. June 20, 2012).


Proposed Amendment to the Defense Base Act

Representative Elijah Cummings recently proposed H.R. 5891, known as the “Defense Base Act Insurance Improvement Act of 2012.”  The purpose of H.R. 5891 is to “amend the Defense Base Act to require the provision of insurance under that Act under a Government self-insurance program, and to require an implementation strategy for such self-insurance program.”  The bill would require the government to create a self-insurance program that excludes private carriers, and it essentially relieves employers (i.e. contractors) of paying compensation.  Instead, benefits would be funded by the government agency whose contract was “affected.”  Beyond that, the bill requires the development and execution of an implementation strategy to for the self-insurance program, including the development of a strategy for transferring Defense Base Act (“DBA”) and War Hazards Compensation Act (“WHCA”) claims to the program.

More likely than not, this bill is destined to fail.  And for good reason.  H.R. 5891 leaves too much unsaid.  For the sake of argument, suppose that the respective government agencies are able to develop the required implementation plan and receive the DBA and WHCA claims.  What happens next?  How are benefits paid?  Will both indemnity and medical benefits remain the same?  Or is H.R. 5891 a precursor to greater change throughout the DBA world?

For more commentary about the bill, check out John Kawczynski’s article at LexisNexis’ Worker’s Compensation Law Community.

Maryland Appellate Court Declines to Deviate From Chandris’ Durational Requirement for Determining Seaman Status

In May 2008, William Dize (“plaintiff”) filed a Jones Act claim against his employer, the Association of Maryland Pilots (“Association”), claiming that it negligently caused him to contract silicosis by failing to provide adequate protection during a sandblasting project.  The Association answered the lawsuit and challenged the court’s jurisdiction, arguing that plaintiff was not a seaman under the Jones Act but, rather, was a shoreside worker covered by the Longshore and Harbor Workers’ Compensation Act or the Maryland Workers’ Compensation Act.

The Association sought summary judgment on the issue of plaintiff’s seaman status.  It argued that plaintiff did not spend 30% of his time working onboard a vessel.  In opposition, plaintiff maintained that there were genuine factual issues as to whether he was a Jones Act seaman.  He asserted that, in addition to the time he spent on a vessel, he also performed general maintenance on the Association’s pilot launches and otherwise spent all of his time in the service of a fleet of pilot launches.

During the summary judgment hearing, the Association argued that the court could only consider plaintiff’s time spent on the water in its status determination.  Further, the Association argued that even if the court considered time on land spent in service of the vessel, plaintiff still failed to meet the 30% threshold adopted by the United States Supreme Court in Chandris, Inc. v. Latsis, 515 U.S. 347 (1995).  Plaintiff’s counsel countered that Chandris’ 30% rule was merely a “rule of thumb” that can be departed from in appropriate cases.

The trial court agreed with the Association and granted its motion for summary judgment.  The court identified the dispositive question as “whether the 30% requirement . . . applie[d] only to time spent on the water or [whether] it should include other time spent in the performance of duties that might be viewed as seamen’s duties or that contributed to the operation of vessels.”  The court observed that the durational requirement in Chandris was to ensure that the seaman’s service “regularly exposes him to the perils of the sea.”  Further, the plaintiff did not offer any justification for departure from the 30% rule of thumb or any reason why that threshold was not an appropriate tool under the facts of the case.  On appeal, the Court of Special Appeals of Maryland agreed with the trial court that the plaintiff was not a seaman under the Jones Act and affirmed the entry of summary judgment in favor of the Association.

Dize v. Assoc. of Maryland Pilots, 2012 WL 1959300 (Md. Ct. Spec. App. 2012).

The “Substantial Evidence” Test Outlined in a Hearing Loss Case

Recently the United States Court of Appeals for the Fifth Circuit addressed an employer’s burden of providing “substantial evidence” in rebutting evidence amounting to a prima facie hearing loss claim.  This case arose from a Longshore and Harbor Workers’ Compensation Act hearing loss claim and came on appeal when the Benefits Review Board (“BRB”) overruled an Administrative Law Judge (”ALJ”) twice and held the Employer liable for a retired employee’s entire hearing loss.

The retired employee, Claimant, in this matter worked as a longshoreman for most of his career and worked for the instant Employer from 1982 until he retired in 1988.  The Claimant first noticed hearing loss in 1976 and obtained hearing amplification for same.  In March of 2006, he filed a hearing loss claim against his last employer.

At the initial formal hearing, the ALJ found for the Employer, holding that the Employer successfully rebutted the Section 20(a) presumption.  The ALJ concluded that, based on the record as a whole, the Employer had not the caused Claimant’s hearing loss.  On appeal, the BRB vacated the decision noting that the evidence relied on by the ALJ to satisfy the “substantial evidence” test could not contribute to rebutting the presumption.  The BRB excluded the expert testimony of the Department of Labor’s (“DOL”) independent medical examiner as well as most of the testimony of the Employer’s choice of audiologist.

The DOL’s medical examiner assessed that the relationship between Claimant’s hearing loss and the noise exposure was possible, but not definite, because of Claimant’s pre-existing hearing issues.  This evidence was deemed impermissible as rebuttal evidence in light of the aggravation rule (indicating that if an employer hires a worker with pre-existing disability and during the instant employment the worker aggravates its pre-existing disability, the employer then becomes liable for the entirety of the disability).  Moreover, Employer’s expert concluded that because the Claimant’s hearing was better than the average person for his age, noise exposure could not have caused the loss.  The BRB found this evidence impermissible due to the fact that the average person’s hearing was unrelated to the instant claim and every employer takes employees as it finds them (even if the employee is an “egg-shell” plaintiff).  Furthermore, the Employer’s expert provided evidence of noise levels at different longshore locations that assisted in rebutting the presumption, but was ultimately found irrelevant to Claimant’s claim concerning his own, actual exposure.

On remand, the ALJ noted that the only remaining evidence to rebut the Section 20(a) presumption was that Claimant’s pre-existing, non-work related otosclerosis functioned as a built-in earplug which could have reduced the impact of noise exposure.  This, the ALJ found, was insufficient to amount to “substantial evidence” to rebut Claimant’s prima facie case.  However, the ALJ found that only 8.4% binaural hearing loss of a recorded 75%-90% loss was compensable because the Claimant did not show that his non-work related hearing loss predated his work with Employer.

The BRB affirmed the revised decision of the ALJ , except that it held that the ALJ erred in finding that Claimant must prove that his non-work related hearing loss predated his work with Employer.  In light of the Section 20(a) presumption, the BRB held, that the entire hearing loss would be work-related and the Employer failed to provide substantial evidence that any portion of Claimant’s hearing loss was due to an intervening cause subsequent to Claimant’s retirement.  The BRB found that Employer was therefore liable for an 80% binaural hearing loss.

The Employer appealed to the Fifth Circuit challenging the BRB’s exclusion of evidence after the first formal hearing and the conclusion that the Employer was liable for an 80% binaural loss in its second decision.  The Fifth Circuit reasoned that when the Section 20(a) presumption is invoked, the burden shifts to the Employer to rebut via facts, not speculation.  If the presumption is rebutted via “substantial evidence,” the ALJ is charged with weighing the evidence of the record.  The Fifth Circuit noted that the ALJ did, in fact, adhere to this legal process.  In weighing the evidence, the ALJ credited the Employer’s expert’s background, credentials, and opinion over the Claimant’s expert.  The ALJ found the DOL’s medical examiner most credible and noted that this expert could not definitively say whether Claimant’s hearing loss was work-related or not.

The Fifth Circuit further reasoned that the BRB’s opinion and analysis fell short in many regards.  First, the BRB placed an unreasonable burden on the Employer, “to demonstrate the absence of a work-related injury.”  The appeals court further noted that the BRB inappropriately and arbitrarily declared portions of the Employer’s expert testimony inadmissible.  The court noted that the ALJ is charged with assessing the relevance and credibility of testimony, not the BRB.  The Employer’s expert’s credentials were unimpeachable and the fact that he considered it scientifically reasonable to compare noise levels with various longshore locations was “certainly relevant.”  Moreover, the BRB had, itself, considered noise level surveys relevant in the past and therefore the use of noise level surveys by Employer’s expert goes to the weight of the evidence, not admissibility, which was under the ALJ’s control as factfinder.  The appeals court noted that BRB also erred in excluding Employer’s expert’s comparison of the Claimant’s recorded hearing loss with his peers.  This evidence, the Fifth Circuit reasoned, was offered for an alternative explanation on causation – that Claimant’s hearing loss may have been caused by the normal aging process instead noise exposure at work.  Furthermore, the fact that the DOL’s examiner also assessed that aging was a possible cause of Claimant’s hearing loss added more the weight of the evidence of which ALJ was in control.

Overall, the Fifth Circuit found that the BRB impermissibly raised the Employer’s burden of providing “substantial evidence” to rebut a presumption to completely disproving Claimant’s case.  In the past, the Fifth Circuit has held that the BRB may not adopt standards requiring an employer’s rebuttal evidence to effectively “rule out” a claimant’s case.  Furthermore, the evidentiary standard of “substantial evidence” is less demanding than the ordinary civil requirement of a “preponderance of evidence.”  Thus, requiring a higher standard than “substantial evidence,” as the BRB did in this matter, is contrary to law.  In discounting the BRB’s errors, the Fifth Circuit concluded that “substantial evidence” supported the ALJ’s initial decision denying compensation to the Claimant.  The decision of the BRB was reversed and the initial decision of the ALJ was reinstated.

Ceres Gulf, Inc. v. Dir., OWCP, — F.3d —- (5th Cir. 2004).