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Longshore Insider
Interesting Court Cases from 2018, Part Two
Jan 28, 2019 - Jack Martone, The American Equity Underwriters, Inc.

This blog is a continuation of our review of notable Longshore and Harbor Workers’ Compensation Act (LHWCA) court cases from 2018.


Hamidullah Makhmoor v. Mission Essential Personnel, LLC and Zurich American Insurance Company,
BRB No. 18-0121, 10/03/2018 (Unpublished)
This was a case in which an interesting issue involved the correct process for identifying the relevant community for determining the hourly rate for the claimant’s attorney. This case arose in the jurisdiction of the federal Ninth Circuit Court of Appeals, where the relevant market inquiry focuses on where the litigation actually takes place. The claimant’s attorney was from Palm Beach, FL, so the “out of town” counsel rule, which allows using hourly rates out of the forum if local counsel is unavailable, was also an issue.

 The U.S. Department of Labor’s Administrative Law Judge (ALJ) ruled that Long Beach, CA and not Palm Beach, FL was the relevant community for determining an hourly rate in line with that prevailing in the community for similar services by lawyers of comparable skill, experience, and reputation. He also found that there were many competent attorneys in the Long Beach area such that the “out of town” counsel exception did not apply.

Although the Benefits Review Board (BRB) affirmed the ALJ on the relevant market and out of town counsel issues, it remanded the case. The ALJ’s decision was vacated and remanded so that the ALJ could perform an acceptable analysis using the Long Beach relevant market.

The case also included a discussion of what adjustment to the attorney’s fee is appropriate in a case where only partial success is achieved, since the claimant in this case failed to establish a work related psychological injury.  The ALJs have wide discretion in this area.

 

Clarence J. Simon v. Longnecker Properties, and Seabright Insurance Company; Director, Office of Workers’ Compensation Programs, U.S. Department of Labor, BRB No. 17-0579, 10/11/2-18 (Unpublished)
This is a case involving the section 33(g)(1) requirement that a claimant obtain the written permission of the employer and the insurance carrier before entering into a third-party settlement for an amount less than the claimant’s entitlement to compensation benefits under the Act.

In connection with a motion to dismiss a third-party lawsuit, a federal district court found that the claimant had entered into a settlement. The issue in the hearing under the Longshore Act was whether the doctrine of collateral estoppel applied to resolve the issue of whether, in fact, the claimant had entered into a “settlement”.

Note: Collateral estoppel is an equitable doctrine under which a court within its discretion gives preclusive effect to findings of fact or law made in previous court proceedings, briefly, where 1) the issue is identical, 2) the issue was fully litigated, 3) the issue was a necessary part of the prior judgment, and 4) the prior judgment is final and valid.

An interesting note in this case was the acknowledgement that the Longshore Act does not define “settlement” nor does it define what it means to have entered into a settlement with a third party. The BRB noted that Section 33(g) does not preempt state law in determining whether a “settlement” has been entered into.

In the context of this case, a settlement was entered into when the claimant signed a general release and filed a stipulation of dismissal with prejudice. The settlement occurred upon dismissal, not when the funds were received. Once entered into, a settlement cannot be repudiated.

The BRB applied collateral estoppel and barred the claimant’s Longshore claim under section 33(g)(1).

 

James Luckern v. Richard Brady & Associates and New Hampshire Insurance Company c/o Helmsman Management Services; Director, Office of Workers’ Compensation Programs, U.S. Department of Labor, BRB No. 18-0123, 10/30/2018 (Unpublished)
This case presented the recurring issue of the maritime status of construction workers. The claimant was injured while engaged in renovating the existing carpentry building at the Portsmouth Naval Shipyard. His work included installing roof frames into the existing roof in order to upgrade the heating and cooling systems in the building. He also installed railings to new wooden stairs and a wheelchair ramp. The carpentry shop is used to build parts for the Navy’s ships, and it remained in use while the claimant was working there.

So far, this is not a particularly interesting case. It’s well established that workers injured repairing or maintaining buildings or machinery essential to the shipbuilding, ship repair, or cargo handling processes meet status under the Longshore Act. It is irrelevant that the claimant’s work is not inherently maritime in nature.

There is an interesting discussion, however, by the Benefits Review Board (BRB) involving the distinction between claimant’s work renovating an existing building where maritime activity was currently being conducted at the time of the injury as opposed to work on a new structure intended for future maritime use. While this issue was not involved in the holding of coverage in this case, the discussion of timing and the nature of the structure indicate that new construction even on a covered situs such as a naval shipyard, may not meet status for Longshore Act coverage.

 

Dwayne D. Victorian v. International Matex Tank Terminals and Zurich American Insurance Company; Director, Office of Workers’ Compensation Programs, U.S. Department of Labor, BRB Nos. 17-0584 and 17-0584A, 07/24/2018
This case has several interesting points, which I can only very briefly note here.

The Longshore Act has referenced “terminals” in section 3(a) since it was enacted in 1927, but it does not define the word “terminal”. Nor has it been defined in any of the numerous cases finding “terminals” to be covered situses. (Is that the plural for situs? Siti? Interesting.)

The Administrative Law Judge (ALJ) in this case took it upon himself to remedy this situation. He resorted to Webster’s Dictionary and to the U.S. Department of Labor’s Occupational Safety and Health Administration’s (OSHA) definition of a “marine terminal” and concluded that the Longshore Act’s “terminal” is the “end of the transportation line” where product is received and shipped by vessels and where there is adjacent storage associated with cargo that moves between vessels and shore. So, he defined a “terminal” by means of physical attributes and a maritime purpose.

The employer had argued that its facility was not a “terminal” under section 3(a) because it was a multi-purpose facility used for manufacturing and treatment processes as well as for loading/unloading. This raised the interesting issue of mixed use properties. The BRB acknowledged that manufacturing did occur on the premises.

In this case, the manufacturing processes did not occur at separate, segregated facilities on the employer’s premises. There were no locations at the terminal that were “functionally and/or geographically distinct manufacturing and cargo handling areas”, where you could argue that the separate manufacturing locations are not covered situses, and that the workers in those locations are not engaged in maritime employment. The employer’s property in this case was not that type of mixed use facility.

Another interesting issue in this case concerned the question of suitable alternate employment.

Briefly, if an injured worker demonstrates that his injury prevents him from returning to his pre-injury duties then he is totally disabled unless the employer can convert total disability to partial disability by establishing a post-injury wage earning capacity in suitable alternate employment. The injured worker can still maintain his total disability status if he shows that he diligently pursued alternate employment opportunities but was unable to find a job. So what constitutes this due diligence?

In this case, the claimant and his wife testified that he applied for all of the jobs listed in the employer’s three labor market surveys but was not offered a job by any of the potential employers. This was basically good enough for a diligent job search.

Finally, there was a question with regard to maximum medical improvement (MMI), the point at which the injured worker is no longer undergoing treatment with a view toward improving his condition, or his condition is of lasting and indefinite duration and beyond a normal healing period; it is the point where temporary disability becomes permanent disability. 

If surgery is anticipated then MMI has not been reached, as was the situation in this case.

We’ll continue our review of 2018 cases next month.



ABOUT THE AUTHOR

John A. (Jack) Martone served for 27 years in the U.S. Department of Labor, Office of Workers’ Compensation Programs, as the Chief, Branch of Insurance, Financial Management, and Assessments and Acting Director, Division of Longshore and Harbor Workers’ Compensation. Jack joined The American Equity Underwriters, Inc. (AEU) in 2006, where he serves as Senior Vice President, AEU Advisory Services and is the moderator of AEU's Longshore Insider.
 
The opinions and comments expressed in this article are those of the authors and do not reflect the opinion of ALMA, AEU or AmWINS. None of ALMA, AEU, AmWINS or the authors are responsible for any inaccuracy of content or for any loss or damages incurred by any party as a result of reliance on information contained in this article. Content may not be published or reproduced without the written consent of the authors. Prior articles may not be updated for accuracy as pertinent information changes over time. The Longshore Insider is intended to provide general information about the industry and should not be construed as legal advice.
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