The Supreme Court Refused to Review Lincoln v. Director, OWCP

On October 14, 2014, the Court issued its second Order List for the 2014 term.  One of the cases that the Supreme Court denied was Lincoln v. Director, OWCP.

Lincoln was an interesting case that involved the attorneys fee provision of the Longshore and Harbor Workers’ Compensation Act (“LHWCA”) and the meaning of the term “compensation.”  The facts of Lincoln are fairly straight forward.  The employee filed a hearing loss claim on May 24, 2011.  Initially, the employer filed a notice of controversion stating that the hearing loss was noise-induced, but it needed additional information to determine the correct disability payment.  On June 14, 2011, the district director served notice that the claim was filed.  Then, on July 7, 2011, the employer voluntarily paid employee $1,256.84, amounting to compensation for “0.5% [binaural] hearing loss” and the equivalent of one week of permanent partial disability benefits under the maximum compensation rate.

The dispute in this case arose after the claimant’s attorney filed a petition for attorney’s fees.  The employer opposed the petition, arguing that fees were not owed due to non-compliance with the LHWCA’s attorney fee statute, 33 U.S.C. § 928.  Fees were not owed under Section 28(a) because “compensation” had been paid within thirty days of receiving notice of the claim from the district director.  Further, the employer argued that fees were not owed under Section 28(b) because an informal conference had never taken place.  The district director, Benefits Review Board, and the United States Court of Appeals for the Fourth Circuit disagreed.

The Fourth Circuit’s decision explores the definition of “compensation.”  The claimant argued that the $1,256.84 payment was not an actual payment of “compensation,” as intended by the LHWCA.  The argument was reminiscent of a fairly recent case, Green v. Ceres Marine Terminals, where the employer paid $1 in “compensation,” but the BRB held that the $1 payment was not “true” compensation.  The Fourth Circuit distinguished Lincoln from Green, finding that the $1 payment in Green was “untethered to the underlying claim,” but that the $1,256.84 payment in Lincoln was “directly tied to Lincoln’s alleged injury.”

Now that the Supreme Court has denied review, Lincoln is over.

This link will take you to the Fourth Circuit’s Lincoln decision.

This link will take you to the Benefits Review Board’s Lincoln decision.

The Supreme Court Denied Review in Dize and Other Maritime Cases

The Supreme Court is back in session.  On October 6, 2014, the Court issued its Orders list, wherein a large number of cases were denied certiorari.  Accordingly, the Court will not review:

Dize v. Association of Maryland Pilots.  The question presented in Dize was whether, when applying the Chandris, Inc. v. Latsis thirty-percent rule–that, ordinarily, a qualifying “seaman” under the Jones Act must spend thirty percent or more of his time in service of a vessel in navigation–a court may consider the time a maritime worker spends in the service of a vessel in navigation that is moored, dockside, or ashore, as the Third, Fifth, Sixth, and Ninth Circuits have held, or whether a court must categorically exclude such time, as the Eleventh Circuit and the Maryland Court of Appeals have held.

Gonzalvez v. Celebrity Cruises, Inc.  The petitioners asked the Court to consider whether seamen are statutorily exempt from the 3-month limitations period under Chapter 1 of the Federal Arbitration Act.  This case arose from dispute about sharing gratuities under the Seaman’s Wage Act.  This link will take you to Lisa Schaeffer’s Lexis article “U.S. Supreme Court Denies Cert for Celebrity Cruise Line Workers.”

Downer v. Royal Caribbean Cruises, Ltd.  This case asked inter alia whether the Eleventh Circuit’s decision compelling arbitration for seafarers’ claims against a cruise line, under foreign law, deprives them of their American statutory rights in violation of the “effective vindication doctrine.”

Lyles v. Seacor Marine.  In Lyles, the plaintiff lost a Jones Act and maintenance and cure claim nearly ten years before trying to reassert his claims.  The Fifth Circuit denied the plaintiff’s claims and also admonished the plaintiff, writing that “future frivolous, repetitive, or otherwise abusive filings may result in the imposition of sanctions, including dismissal, monetary sanctions, and restrictions on his ability to file pleadings in this court or any court subject to [Fifth Circuit] jurisdiction.”

Supreme Court Refuses to Hear Work Comp RICO Case

The Supreme Court of the United States refused certiorari in Jackson v. Sedgwick Claims Management Services, Inc., denying petitioner’s request for review.  The Jackson case questioned whether a plaintiff could recover under the Racketeer Influenced and Corrupt Organizations Act (“RICO”) when an employer, its workers’ compensation benefits claims administrator, and an examining physician deny or terminate workers’ compensation benefits in an allegedly fraudulent manner.  Previously, an en banc Sixth Circuit denied relief, stating that the plaintiffs had “not pled an injury to their ‘business or property’ that is compensable under § 1964(c) . . . .”   RICO is “not a means for federalizing personal injury tort claims arising under state law.”

The Sixth Circuit’s opinion is here.

The Petition for Writ of Certiorari filed on behalf of petitioners Clifton Jackson and Christopher Scharnitzke is here.

The Brief of respondent Sedgwick Claims Management Services is here.

SCOTUSBlog’s case page, which includes amicus briefs, is here.

Note: Although this is not a Longshore or Defense Base Act claim, the denial is important for all workers’ compensation schemes including federal workers’ compensation schemes like the LHWCA or DBA.

Supreme Court Overturns the Port of Los Angeles’s Placard Requirement

From the Supreme Court’s syllabus in American Trucking Associations, Inc.  v. City of Los Angeles, California:

The Port of Los Angeles, a division of the City of Los Angeles, is run by a Board of Harbor Commissioners pursuant to a municipal ordinance known as a tariff.  The Port leases marine terminal facilities to operators that load cargo onto and unload it from docking ships.  Federally licensed short-haul trucks, called “drayage trucks,” assist in those operations by moving cargo into and out of the Port.  In 2007, in response to community concerns over the impact of a proposed port expansion on traffic, the environment, and safety, the Board implemented a Clean Truck Program.  As part of that program, the Board devised a standard-form “concession agreement” to govern the relationship between the Port and drayage companies.  The agreement requires a company to affix a placard on each truck with a phone number for reporting concerns, and to submit a plan listing off-street parking locations for each truck.  Other requirements relate to a company’s financial capacity, its maintenance of trucks, and its employment of drivers.  The concession agreement sets out penalties for violations, including possible suspension or revocation of the right to provide drayage services.  The Board also amended the Port’s tariff to ensure that every drayage company would enter into the agreement.  The amended tariff makes it a misdemeanor, punishable by fine or imprisonment, for a terminal operator to grant access to an unregistered drayage truck.

Petitioner American Trucking Associations, Inc. (ATA), whose members include many of the drayage companies at the Port, sued the Port and City, seeking an injunction against the concession agreement’s requirements.  ATA principally contended that the requirements are expressly preempted by the Federal Aviation Administration Authorization Act of 1994 (FAAAA), see 49 U.S.C. § 14501(c)(1).  ATA also argued that even if the requirements are valid, Castle v. Hayes Freight Lines, Inc., 348 U.S. 61, 75 S.Ct. 191, 99 L.Ed. 68, prevents the Port from enforcing the requirements by withdrawing a defaulting company’s right to operate at the Port.  The District Court held that neither § 14501(c)(1) nor Castle prevented the Port from proceeding with its program.  The Ninth Circuit mainly affirmed, finding only the driver-employment provision preempted and rejecting petitioner’s Castle claim.

Held :

1.  The FAAAA expressly preempts the concession agreement’s placard and parking requirements. Section 14501(c)(1) preempts a state “law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier … with respect to the transportation of property.”  49 U.S.C. § 14501(c)(1).  Because the parties agree that the Port’s placard and parking requirements relate to a motor carrier’s price, route, or service with respect to transporting property, the only disputed question is whether those requirements “hav[e] the force and effect of law.”  Section 14501(c)(1) draws a line between a government’s exercise of regulatory authority and its own contract-based participation in a market.  The statute’s “force and effect of law” language excludes from the clause’s scope contractual arrangements made by a State when it acts as a market participant, not as a regulator.  See, e.g., American Airlines, Inc. v. Wolens, 513 U.S. 219, 229, 115 S.Ct. 817, 130 L.Ed.2d 715.  But here, the Port exercised classic regulatory authority in imposing the placard and parking requirements. It forced terminal operators—and through them, trucking companies—to alter their conduct by implementing a criminal prohibition punishable by imprisonment.  That counts as action “having the force and effect of law” if anything does.

The Port’s primary argument to the contrary focuses on motives rather than means.  But the Port’s proprietary intentions do not control.  When the government employs a coercive mechanism, available to no private party, it acts with the force and effect of law, whether or not it does so to turn a profit.  Only if it forgoes the (distinctively governmental) exercise of legal authority may it escape § 14501(c)(1)’s preemptive scope.  That the criminal sanctions fall on terminal operators, not directly on the trucking companies, also makes no difference.  See, e.g., Rowe v. New Hampshire Motor Transp. Assn., 552 U.S. 364, 371–373, 128 S.Ct. 989, 169 L.Ed.2d 933.

2.  This Court declines to decide in the case’s present, pre-enforcement posture whether Castle limits the way the Port can enforce the financial-capacity and truck-maintenance requirements upheld by the Ninth Circuit.  Castle rebuffed a State’s attempt to bar a federally licensed motor carrier from its highways for past infringements of state safety regulations.  But Castle does not prevent a State from taking off the road a vehicle that is contemporaneously out of compliance with such regulations.  And at this juncture, there is no basis for finding that the Port will actually use the concession agreement’s penalty provision as Castle proscribes.