TOPIC 2

Topic 2.2.2  Definitions—Section 2(2) Injury—Arising Out of Employment

Announcement--Possible Gulf War Fire/Lung Cancer Link

            According to the Associated Press, a committee of the Institute of Medicine [a branch of the National Academy of Science, an independent group chartered by Congress to advise the government on scientific matters], states that Gulf War personnel exposed to pollution from the well fires, exhaust and other sources may face an increased lung cancer risk.  More than 600 oil well fires were ignited by Iraqi troops during their retreat from Kuwait in 1991.

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Topic  2.2.3  Injury

Metropolitan Stevedore Co. v. Crescent Wharf and Warehouse Co., ___ U.S. ___, ___ S.Ct. ___, (S.Ct. No. 03-1457)(Cert. denied Oct. 12, 2004).              

            Let stand Ninth Circuit decision that the last stevedoring company to employ a longshoreman before he underwent bilateral knee replacement surgery is liable for his disability benefits.

Topic  2.2.3    Injury

Metropolitan Stevedore Co. v. Cresent Wharf and Warehouse Co., [Price], 339 F.3d 1102(9th Cir. 2003), cert. denied, ___ U.S. ___, ___ S.Ct. ___ (October 12, 2004).

            The Ninth Circuit found that under the “two-injury variant” of the “last responsible employer” rule, where the disability is a result of cumulative traumas, the responsible employer depends upon the cause of the worker’s ultimate disability. If the worker’s ultimate disability is the result of the natural progression of the initial injury and would have occurred notwithstanding a subsequent injury, the employer of the worker on the date of the initial injury is the responsible employer. However, if the disability is at least partially the result of a subsequent injury aggravating, accelerating or combining with a prior injury to create the ultimate disability, the employer of the worker at the time of the most resent injury is the responsible, liable party.

            In the instant case, the Ninth Circuit turned its attention to just how minuscule the aggravation, acceleration or combination can be. Here the claimant worked as an industrial mechanic and fork lift driver for several companies for varying periods. After experiencing pain in his knees that increased significantly over time, he sought medical care and his doctor told him that x-rays revealed medial joint line “collapse” requiring total bilateral knee replacement surgery. His last employer before this visit to his doctor was Cresent City Marine Ways. In the months following, the claimant received injections and other prescribed pain medications to avoid or delay the need for surgery. X-rays showed degeneration of the knee condition with no cartilage remaining. His knees were described as “bone on bone.” The claimant asked his doctor to schedule the knee replacement surgery. His last employer before this visit to his doctor was Cresent Wharf and Warehouse. On his last day of employment before the scheduled surgery, the claimant worked a forklift for Metropolitan Stevedore. Claimant testified that his condition “got progressively worse” over the course of the day. After surgery he filed a claim against Metropolitan Stevedore.

            The ALJ determined that injuries suffered on that last day caused some minor but permanent increase in the extent of his disability and increased his need for knee surgery, even though the surgery had already been scheduled. Since the claimant had still been able to do his job to some extent the day before the surgery, he had not progressed to the point of maximum disability, i.e., total inability to use his legs. There was gradual wearing away of the bone even on the last day before surgery, so his employment with Metropolitan caused a marginal increase in the need for surgery. Thus the aggravation was a “disability,” as defined by the LHWCA.

            The Ninth Circuit found that the ALJ had correctly concluded that Metropolitan was the last responsible employer. In making its holding, the circuit court refused to use “diminished earning capacity” as the identifying feature of “disability” in two injury cases. In upholding the ALJ, the court agreed that in traumatic, two injury cases, disability is more appropriately defined as a physical harm. In explaining the difference in approach taken in this two traumatic injury case, as opposed to an occupational disease claim, the Ninth Circuit stated, “In occupational disease claims, it is necessary to define disability in terms of loss of earning capacity, because the lack of medical certainty with respect to these diseases makes it difficult to connect the progression on the disease with particular points in time or specific work experiences. However, cumulative traumatic injuries are not necessarily fraught with the same inherent ambiguity and can be correlated more directly with identifiable work activities at particular times.”

            The Director, like Metropolitan Stevedore, had urged the court to use diminished earning capacity as a benchmark, and had also argued for a rule that assigned liability to the claimant’s last employer before the need for surgery arose. The Ninth Circuit declined to make this departure from its prior approach finding that such a departure would introduce new uncertainty into the process of determining liability under the last employer rule.

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Topic  2.2.4    Injury–Physical Harm as an Injury

Jones v. CSX Transportation, 287 F.3d 1341 (11th Cir. 2002).

[ED. NOTE: This case is included for informational purposes only.]

            This is a claim under the Federal Employers' Liability Act (FELA) for emotional distress damages based on the fear of contracting cancer. The district court dismissed that claim because the plaintiffs made no showing of any objective manifestations of their emotional distress. In upholding that dismissal, the circuit court found that by requiring an objective manifestation it could avoid "unpredictable and nearly infinite liability." It noted that several other circuits also require objective manifestations, and that this includes some that have dealt with Jones Act claims. The plaintiffs had based their claims for emotional distress on Metro-North Commuter R.R. Co. v. Buckley, 521 U.S. 424 (1997) (Held, a worker exposed to asbestos could not recover for negligently inflicted emotional distress based on his fear of contracting cancer until he exhibited symptoms of a disease.) The plaintiffs in Jones argued that they had exhibited symptoms of an asbestos-related disease, i.e. asbestosis. However, because the sole ground of CSX's motion was the plaintiffs' failure to show objective manifestations of their emotional distress, and because the district court granted partial summary judgment on this basis alone, the circuit court did not address the question of whether Buckley permits recovery for the plaintiffs' fear of contracting cancer when they have exhibited symptoms of an asbestos-related disease but not of cancer specifically.

Topic  2.2.4    Definitions–Physical Harm as an Injury

[ED. NOTE: The following FECA case is included for informational value only.]

Moe v. United States of America, 326 F.3d 1065 (9th Cir. 2003).

            Here the Ninth Circuit held that psychological injury accompanied by physical injury, regardless of the order in which they occur, is within the scope of the Federal Employee’s compensation Act (FECA).  In the instant case, the federal employee suffered from Post-Traumatic Stress Disorder (PTSD) after someone went on a shooting rampage at a medical facility.  The employee’s PTSD aggravated her preexisting ulcerative colitis, requiring the removal of her colon.  The Ninth Circuit saw no reason for the chronological order of physical and psychological injuries to impact FECA’s scope.

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Topic 2.2.5     Multiple Injuries

Metropolitan Stevedore Co. v. Crescent Wharf and Warehouse Co., ___ U.S. ___, ___ S.Ct. ___, (S.Ct. No. 03-1457)(Cert. denied Oct. 12, 2004).              

            Let stand Ninth Circuit decision that the last stevedoring company to employ a longshoreman before he underwent bilateral knee replacement surgery is liable for his disability benefits.

Topic  2.2.5    Multiple Injuries

New Haven Terminal Corp. v. Lake, 337 F.3d 261 (2d Cir. 2003).

            The Second Circuit reversed an ALJ’s termination of permanent partial disability benefits for a 1993 injury and remanded to determine whether a settlement for a 1997 injury overcompensated the worker in order to bypass the last employer rule. The court noted that it was concerned that a last employer, such as the one here, may offer an inflated award that overcompensates a claimant for the damages due proportionately to the last injury, so that the claimant will not take advantage of the last employer rule for the earlier injury and instead seek the rest of the compensation from an earlier employer. The court explained that “Because the aggravation rule must be defended against such manipulation an ALJ should inquire whether the claimant’s explanation for the settlement is credible, and if not, should reject the claim against the earlier employer.” Additionally, the court noted that on remand, the ALJ should address specifically whether, and estimate to what extend, the first injury contributed to the second. “When a claimant cannot recover from the last employer because of a settlement, we will permit recovery from an earlier employer where the claimant has acted in good faith and has not manipulated the aggravation rule.” The court further noted that there is no statutory authority for a previous employer to use the aggravation rule as a shield from liability. “Permitting the prior employer to use the aggravation rule as a defense to limit full recovery would frustrate the statute’s goal of complete recovery for injuries.”

Topic  2.2.5    Multiple Injuries

Metropolitan Stevedore Co. v. Cresent Wharf and Warehouse Co., [Price], 339 F.3d 1102(9th Cir. 2003), cert. denied, ___ U.S. ___, ___ S.Ct. ___ (Oct. 12, 2004).

            The Ninth Circuit found that under the “two-injury variant” of the “last responsible employer” rule, where the disability is a result of cumulative traumas, the responsible employer depends upon the cause of the worker’s ultimate disability. If the worker’s ultimate disability is the result of the natural progression of the initial injury and would have occurred notwithstanding a subsequent injury, the employer of the worker on the date of the initial injury is the responsible employer. However, if the disability is at least partially the result of a subsequent injury aggravating, accelerating or combining with a prior injury to create the ultimate disability, the employer of the worker at the time of the most recent injury is the responsible, liable party.

            In the instant case, the Ninth Circuit turned its attention to just how minuscule the aggravation, acceleration or combination can be. Here the claimant worked as an industrial mechanic and fork lift driver for several companies for varying periods. After experiencing pain in his knees that increased significantly over time, he sought medical care and his doctor told him that x-rays revealed medial joint line “collapse” requiring total bilateral knee replacement surgery. His last employer before this visit to his doctor was Cresent City Marine Ways. In the months following, the claimant received injections and other prescribed pain medications to avoid or delay the need for surgery. X-rays showed degeneration of the knee condition with no cartilage remaining. His knees were described as “bone on bone.” The claimant asked his doctor to schedule the knee replacement surgery. His last employer before this visit to his doctor was Cresent Wharf and Warehouse. On his last day of employment before the scheduled surgery, the claimant worked a forklift for Metropolitan Stevedore. Claimant testified that his condition “got progressively worse” over the course of the day. After surgery he filed a claim against Metropolitan Stevedore.

            The ALJ determined that injuries suffered on that last day caused some minor but permanent increase in the extent of his disability and increased his need for knee surgery, even though the surgery had already been scheduled. Since the claimant had still been able to do his job to some extent the day before the surgery, he had not progressed to the point of maximum disability, i.e., total inability to use his legs. There was gradual wearing away of the bone even on the last day before surgery, so his employment with Metropolitan caused a marginal increase in the need for surgery. Thus the aggravation was a “disability,” as defined by the LHWCA.

            The Ninth Circuit found that the ALJ had correctly concluded that Metropolitan was the last responsible employer. In making its holding, the circuit court refused to use “diminished earning capacity” as the identifying feature of “disability” in two injury cases. In upholding the ALJ, the court agreed that in traumatic, two injury cases, disability is more appropriately defined as a physical harm. In explaining the difference in approach taken in this two traumatic injury case, as opposed to an occupational disease claim, the Ninth Circuit stated, “In occupational disease claims, it is necessary to define disability in terms of loss of earning capacity, because the lack of medical certainty with respect to these diseases makes it difficult to connect the progression on the disease with particular points in time or specific work experiences. However, cumulative traumatic injuries are not necessarily fraught with the same inherent ambiguity and can be correlated more directly with identifiable work activities at particular times.”

            The Director, like Metropolitan Stevedore, had urged the court to use diminished earning capacity as a benchmark, and had also argued for a rule that assigned liability to the claimant’s last employer before the need for surgery arose. The Ninth Circuit declined to make this departure from its prior approach finding that such a departure would introduce new uncertainty into the process of determining liability under the last employer rule.

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Topic  2.2.6 Aggravation/Combination

Metropolitan Stevedore Co. v. Crescent Wharf and Warehouse Co., ___ U.S. ___, ___ S.Ct. ___, (S.Ct. No. 03-1457)(Cert. denied Oct. 12, 2004).              

            Let stand Ninth Circuit decision that the last stevedoring company to employ a longshoreman before he underwent bilateral knee replacement surgery is liable for his disability benefits.

Topic  2.2.6    Aggravation/Combination

New Haven Terminal Corp. v. Lake, 337 F.3d 261 (2d Cir. 2003).

            The Second Circuit reversed an ALJ’s termination of permanent partial disability benefits for a 1993 injury and remanded to determine whether a settlement for a 1997 injury overcompensated the worker in order to bypass the last employer rule. The court noted that it was concerned that a last employer, such as the one here, may offer an inflated award that overcompensates a claimant for the damages due proportionately to the last injury, so that the claimant will not take advantage of the last employer rule for the earlier injury and instead seek the rest of the compensation from an earlier employer. The court explained that “Because the aggravation rule must be defended against such manipulation an ALJ should inquire whether the claimant’s explanation for the settlement is credible, and if not, should reject the claim against the earlier employer.” Additionally, the court noted that on remand, the ALJ should address specifically whether, and estimate to what extend, the first injury contributed to the second. “When a claimant cannot recover from the last employer because of a settlement, we will permit recovery from an earlier employer where the claimant has acted in good faith and has not manipulated the aggravation rule.” The court further noted that there is no statutory authority for a previous employer to use the aggravation rule as a shield from liability. “Permitting the prior employer to use the aggravation rule as a defense to limit full recovery would frustrate the statute’s goal of complete recovery for injuries.”

Topic  2.2.6    Aggravation/Combination

Metropolitan Stevedore Co. v. Cresent Wharf and Warehouse Co., [Price], 339 F.3d 1102 (9th Cir. 2003), cert. denied, ___ U.S. ___, ___ S. Ct. ___ (Oct. 12, 2004).

            The Ninth Circuit found that under the “two-injury variant” of the “last responsible employer” rule, where the disability is a result of cumulative traumas, the responsible employer depends upon the cause of the worker’s ultimate disability. If the worker’s ultimate disability is the result of the natural progression of the initial injury and would have occurred notwithstanding a subsequent injury, the employer of the worker on the date of the initial injury is the responsible employer. However, if the disability is at least partially the result of a subsequent injury aggravating, accelerating or combining with a prior injury to create the ultimate disability, the employer of the worker at the time of the most recent injury is the responsible, liable party.

            In the instant case, the Ninth Circuit turned its attention to just how minuscule the aggravation, acceleration or combination can be. Here the claimant worked as an industrial mechanic and fork lift driver for several companies for varying periods. After experiencing pain in his knees that increased significantly over time, he sought medical care and his doctor told him that x-rays revealed medial joint line “collapse” requiring total bilateral knee replacement surgery. His last employer before this visit to his doctor was Cresent City Marine Ways. In the months following, the claimant received injections and other prescribed pain medications to avoid or delay the need for surgery. X-rays showed degeneration of the knee condition with no cartilage remaining. His knees were described as “bone on bone.” The claimant asked his doctor to schedule the knee replacement surgery. His last employer before this visit to his doctor was Cresent Wharf and Warehouse. On his last day of employment before the scheduled surgery, the claimant worked a forklift for Metropolitan Stevedore. Claimant testified that his condition “got progressively worse” over the course of the day. After surgery he filed a claim against Metropolitan Stevedore.

            The ALJ determined that injuries suffered on that last day caused some minor but permanent increase in the extent of his disability and increased his need for knee surgery, even though the surgery had already been scheduled. Since the claimant had still been able to do his job to some extent the day before the surgery, he had not progressed to the point of maximum disability, i.e., total inability to use his legs. There was gradual wearing away of the bone even on the last day before surgery, so his employment with Metropolitan caused a marginal increase in the need for surgery. Thus the aggravation was a “disability,” as defined by the LHWCA.

            The Ninth Circuit found that the ALJ had correctly concluded that Metropolitan was the last responsible employer. In making its holding, the circuit court refused to use “diminished earning capacity” as the identifying feature of “disability” in two injury cases. In upholding the ALJ, the court agreed that in traumatic, two injury cases, disability is more appropriately defined as a physical harm. In explaining the difference in approach taken in this two traumatic injury case, as opposed to an occupational disease claim, the Ninth Circuit stated, “In occupational disease claims, it is necessary to define disability in terms of loss of earning capacity, because the lack of medical certainty with respect to these diseases makes it difficult to connect the progression on the disease with particular points in time or specific work experiences. However, cumulative traumatic injuries are not necessarily fraught with the same inherent ambiguity and can be correlated more directly with identifiable work activities at particular times.”

            The Director, like Metropolitan Stevedore, had urged the court to use diminished earning capacity as a benchmark, and had also argued for a rule that assigned liability to the claimant’s last employer before the need for surgery arose. The Ninth Circuit declined to make this departure from its prior approach finding that such a departure would introduce new uncertainty into the process of determining liability under the last employer rule.

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Topic  2.2.7    Natural Progression

Metropolitan Stevedore Co. v. Crescent Wharf and Warehouse Co., ___ U.S. ___, ___ S.Ct. ___, (S.Ct. No. 03-1457)(Cert. denied Oct. 12, 2004).              

            Let stand Ninth Circuit decision that the last stevedoring company to employ a longshoreman before he underwent bilateral knee replacement surgery is liable for his disability benefits.

Topic  2.2.7    Natural Progression

Metropolitan Stevedore Co. v. Cresent Wharf and Warehouse Co., [Price], 339 F.3d 1102 (9th Cir. 2003), cert. denied, ___ U.S. ___, ___ S.Ct. ___ (Oct. 12, 2004).

            The Ninth Circuit found that under the “two-injury variant” of the “last responsible employer” rule, where the disability is a result of cumulative traumas, the responsible employer depends upon the cause of the worker’s ultimate disability. If the worker’s ultimate disability is the result of the natural progression of the initial injury and would have occurred notwithstanding a subsequent injury, the employer of the worker on the date of the initial injury is the responsible employer. However, if the disability is at least partially the result of a subsequent injury aggravating, accelerating or combining with a prior injury to create the ultimate disability, the employer of the worker at the time of the most recent injury is the responsible, liable party.

            In the instant case, the Ninth Circuit turned its attention to just how minuscule the aggravation, acceleration or combination can be. Here the claimant worked as an industrial mechanic and fork lift driver for several companies for varying periods. After experiencing pain in his knees that increased significantly over time, he sought medical care and his doctor told him that x-rays revealed medial joint line “collapse” requiring total bilateral knee replacement surgery. His last employer before this visit to his doctor was Cresent City Marine Ways. In the months following, the claimant received injections and other prescribed pain medications to avoid or delay the need for surgery. X-rays showed degeneration of the knee condition with no cartilage remaining. His knees were described as “bone on bone.” The claimant asked his doctor to schedule the knee replacement surgery. His last employer before this visit to his doctor was Cresent Wharf and Warehouse. On his last day of employment before the scheduled surgery, the claimant worked a forklift for Metropolitan Stevedore. Claimant testified that his condition “got progressively worse” over the course of the day. After surgery he filed a claim against Metropolitan Stevedore.

            The ALJ determined that injuries suffered on that last day caused some minor but permanent increase in the extent of his disability and increased his need for knee surgery, even though the surgery had already been scheduled. Since the claimant had still been able to do his job to some extent the day before the surgery, he had not progressed to the point of maximum disability, i.e., total inability to use his legs. There was gradual wearing away of the bone even on the last day before surgery, so his employment with Metropolitan caused a marginal increase in the need for surgery. Thus the aggravation was a “disability,” as defined by the LHWCA.

            The Ninth Circuit found that the ALJ had correctly concluded that Metropolitan was the last responsible employer. In making its holding, the circuit court refused to use “diminished earning capacity” as the identifying feature of “disability” in two injury cases. In upholding the ALJ, the court agreed that in traumatic, two injury cases, disability is more appropriately defined as a physical harm. In explaining the difference in approach taken in this two traumatic injury case, as opposed to an occupational disease claim, the Ninth Circuit stated, “In occupational disease claims, it is necessary to define disability in terms of loss of earning capacity, because the lack of medical certainty with respect to these diseases makes it difficult to connect the progression on the disease with particular points in time or specific work experiences. However, cumulative traumatic injuries are not necessarily fraught with the same inherent ambiguity and can be correlated more directly with identifiable work activities at particular times.”

            The Director, like Metropolitan Stevedore, had urged the court to use diminished earning capacity as a benchmark, and had also argued for a rule that assigned liability to the claimant’s last employer before the need for surgery arose. The Ninth Circuit declined to make this departure from its prior approach finding that such a departure would introduce new uncertainty into the process of determining liability under the last employer rule.

Topic  2.2.7    Natural Progression

Delaware River Stevedores, Inc. v. Director, OWCP, 279 F.3d 233 (3rd Cir. 2002).

            At issue here was whether the claimant's condition was a natural progression of an original injury or the result of an aggravation or acceleration. In addressing the issue, the court agreed with the Board's assessment that "[i]f the conditions of a claimant's employment cause him to become symptomatic, even if no permanent harm results, the claimant has sustained an injury within the meaning of the Act" and that "where claimant's work results in a temporary exacerbation of symptoms, the employer at the time of the work events leading to this exacerbation is responsible for the resulting temporary total disability." The court then cited approvingly the last responsible employer rule as applied by Kelaita v. Director, OWCP, 799 F.2d 1308 (9th Cir. 1986) ("If on the other hand, the [subsequent] injury aggravated, accelerated or combined with claimant's prior injury, thus resulting in claimant's disability, then the [subsequent] injury is the compensable injury, and [the subsequent employer] is...responsible..."). Lastly, the court agreed with the Board that "[t]he fact that the earlier injury was the precipitant event' is not determinative." The determinative question is whether the claimant's subsequent work aggravated or exacerbated the claimant's condition first manifested earlier.

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Topic  2.2.18  Definitions—Representative Injuries/Diseases

Harris v. Elmwood Dry Dock & Repair, (Unpublished) (BRB No. 04-0171)(Oct. 19, 2004).

            At issue in this Section 20(a) case was whether the death of a deceased worker was causally related to his employment.  He died of septic shock caused by aeromanas hydrophilia.  Aeromonas hydrophilia is a bacterium commonly found in fresh water.  Aeromonas hydrophilia can enter the bloodstream from a cut or puncture would and contact with fresh water, by ingestion from drinking water into the gastro-intestinal tract, or by aspiration directly into the lungs.  Aeromonas hydrophilia may cause skin and soft tissue infection at the site of the cut or would, and intestinal tract infection.  In rare cases it causes pneumonia or sepsis. 

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Topic  2.2.8    Intervening Event/Cause Vis-A-Vis Natural Progression

Metropolitan Stevedore Co. v. Cresent Wharf and Warehouse Co., [Price], 339 F.3d 1102 (9th Cir. 2003), cert. denied, ___ U.S. ___, ___ S.Ct. ___ (Oct. 12, 2004).

            The Ninth Circuit found that under the “two-injury variant” of the “last responsible employer” rule, where the disability is a result of cumulative traumas, the responsible employer depends upon the cause of the worker’s ultimate disability. If the worker’s ultimate disability is the result of the natural progression of the initial injury and would have occurred notwithstanding a subsequent injury, the employer of the worker on the date of the initial injury is the responsible employer. However, if the disability is at least partially the result of a subsequent injury aggravating, accelerating or combining with a prior injury to create the ultimate disability, the employer of the worker at the time of the most recent injury is the responsible, liable party.

            In the instant case, the Ninth Circuit turned its attention to just how minuscule the aggravation, acceleration or combination can be. Here the claimant worked as an industrial mechanic and fork lift driver for several companies for varying periods. After experiencing pain in his knees that increased significantly over time, he sought medical care and his doctor told him that x-rays revealed medial joint line “collapse” requiring total bilateral knee replacement surgery. His last employer before this visit to his doctor was Cresent City Marine Ways. In the months following, the claimant received injections and other prescribed pain medications to avoid or delay the need for surgery. X-rays showed degeneration of the knee condition with no cartilage remaining. His knees were described as “bone on bone.” The claimant asked his doctor to schedule the knee replacement surgery. His last employer before this visit to his doctor was Cresent Wharf and Warehouse. On his last day of employment before the scheduled surgery, the claimant worked a forklift for Metropolitan Stevedore. Claimant testified that his condition “got progressively worse” over the course of the day. After surgery he filed a claim against Metropolitan Stevedore.

            The ALJ determined that injuries suffered on that last day caused some minor but permanent increase in the extent of his disability and increased his need for knee surgery, even though the surgery had already been scheduled. Since the claimant had still been able to do his job to some extent the day before the surgery, he had not progressed to the point of maximum disability, i.e., total inability to use his legs. There was gradual wearing away of the bone even on the last day before surgery, so his employment with Metropolitan caused a marginal increase in the need for surgery. Thus the aggravation was a “disability,” as defined by the LHWCA.

            The Ninth Circuit found that the ALJ had correctly concluded that Metropolitan was the last responsible employer. In making its holding, the circuit court refused to use “diminished earning capacity” as the identifying feature of “disability” in two injury cases. In upholding the ALJ, the court agreed that in traumatic, two injury cases, disability is more appropriately defined as a physical harm. In explaining the difference in approach taken in this two traumatic injury case, as opposed to an occupational disease claim, the Ninth Circuit stated, “In occupational disease claims, it is necessary to define disability in terms of loss of earning capacity, because the lack of medical certainty with respect to these diseases makes it difficult to connect the progression on the disease with particular points in time or specific work experiences. However, cumulative traumatic injuries are not necessarily fraught with the same inherent ambiguity and can be correlated more directly with identifiable work activities at particular times.”

            The Director, like Metropolitan Stevedore, had urged the court to use diminished earning capacity as a benchmark, and had also argued for a rule that assigned liability to the claimant’s last employer before the need for surgery arose. The Ninth Circuit declined to make this departure from its prior approach finding that such a departure would introduce new uncertainty into the process of determining liability under the last employer rule.

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Topic  2.2.10  Employee’s Intentional Conduct/Willful Act of 3rd Person

[ED. NOTE:  The following Michigan case is included for informational value only.]

Daniel v. Department of Corr., Mich.(No. 120460)(Mich. Supreme Court)(March 26, 2003).

            The Michigan Supreme Court ruled that a worker disciplined for sexual harassment is not eligible for depression-related compensation benefits since the injury was caused by intentional and willful action.  The court distinguished intentional and willful misconduct of a quasi-criminal nature from that of gross negligence where a worker can recover despite his responsibility for an injury.  Here a probation officer had propositioned several female attorneys and later alleged that he had felt “harassed.” by his accusers as well as by his supervisor who had suspended him.

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Topic  2.2.13  Occupational Diseases: General Concepts

Bath Iron Works Corp. v. U.S. Labor, [Onebeacon f/k/a Commercial Union York Insurance Co. v Knight], 336 F.3d 51(1st Cir. 2003).

            The First Circuit upheld the timeliness of a widow's claim for benefits filed more than 3 years after her husband's death. The ALJ had found that she had not had any reason to believe or suspect that there was an interrelationship between the worker's death and work-related asbestos exposure until shortly before the claim was filed. The death certificate had listed as the cause of death "adenocarcinoma, primary unknown" of "3 mos." duration. The ALJ found that even had the widow known that her husband died of mesothelioma, she had no reason to link that disease to her husband’s asbestos exposure in the workplace.

            In upholding the ALJ, the First Circuit found that Section 13(b)(2) creates a "'discovery rule' of accrual," deferring the commencement of the statute of limitations until an employee or claimant has or should have an awareness "of the relationship between the employment, the disease, and the death or disability." The court noted that the scope of its review is to determine that the ALJ used the correct legal standard. " An ALJ's ultimate conclusion of when a claimant 'becomes aware, or in the exercise of reasonable diligence or by reason of medical advice should have been aware, of the disability'...does not present a pure question of law amenable to de novo appellate review. Rather, this fact-intensive determination is one that a reviewing tribunal should disturb only if unsupported by 'substantial evidence.'" The First Circuit also concluded that Section 20(b) does create a presumption of timeliness under Section 13(b)(2), and that the burden is on the employer to demonstrate noncompliance with the requirements of Section 13(b)(2).

Topic  2.2.13  Occupational Diseases: General Concepts

[ED. NOTE:  The following is included for informational value only.]

Stavenjord v. Montana State Fund, Mont., 314 Mont.466 (Mont. S. Ct. 2003).

            Citing equal protection arguments, the Montana Supreme Court ruled that it is unconstitutional for workers’ compensation rules to treat occupational diseases differently from other job related injuries.

Topic  2.2.13  Occupational Disease: General Concepts

Norfolk & Western Railway Co. v. Ayers, 538 U.S. 135, 123 S.Ct. 1210 (2003).

            The Court held that former employees can recover damages for mental anguish caused by the “genuine and serious” fear of developing cancer where they had already been diagnosed with asbestosis caused by work-related exposure to asbestos.  This adheres to the line of cases previously set in motion by the Court.  See Metro-North Commuter R. Co. v. Buckley, 521 U.S. 424 (1997)(When the fear of cancer “accompanies a physical injury,” pain and suffering damages may include compensation for that fear.)  The Court noted that the railroad’s expert acknowledged that asbestosis puts a worker in a heightened risk category for asbestos-related lung cancer, as well as the undisputed testimony of the claimants’ expert that some ten percent of asbestosis suffers have died of mesothelioma. Thus, the Court found that claimants such as these would have good cause for increased apprehension about their vulnerability.  The Court further noted that the claimants must still prove that their asserted cancer fears are genuine and serious.

[ED. NOTE: Mesothelioma is not necessarily preceded by asbestosis.]

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Topic  2.2.15  Occupational Disease vs. Traumatic Injury

Metropolitan Stevedore Co. v. Cresent Wharf and Warehouse Co., [Price], 339 F.3d 1102 (9th Cir. 2003), cert. denied, ___ U.S. ___, ___ S.Ct. ___ (Oct. 12, 2004).

            The Ninth Circuit found that under the “two-injury variant” of the “last responsible employer” rule, where the disability is a result of cumulative traumas, the responsible employer depends upon the cause of the worker’s ultimate disability. If the worker’s ultimate disability is the result of the natural progression of the initial injury and would have occurred notwithstanding a subsequent injury, the employer of the worker on the date of the initial injury is the responsible employer. However, if the disability is at least partially the result of a subsequent injury aggravating, accelerating or combining with a prior injury to create the ultimate disability, the employer of the worker at the time of the most recent injury is the responsible, liable party.

            In the instant case, the Ninth Circuit turned its attention to just how minuscule the aggravation, acceleration or combination can be. Here the claimant worked as an industrial mechanic and fork lift driver for several companies for varying periods. After experiencing pain in his knees that increased significantly over time, he sought medical care and his doctor told him that x-rays revealed medial joint line “collapse” requiring total bilateral knee replacement surgery. His last employer before this visit to his doctor was Cresent City Marine Ways. In the months following, the claimant received injections and other prescribed pain medications to avoid or delay the need for surgery. X-rays showed degeneration of the knee condition with no cartilage remaining. His knees were described as “bone on bone.” The claimant asked his doctor to schedule the knee replacement surgery. His last employer before this visit to his doctor was Cresent Wharf and Warehouse. On his last day of employment before the scheduled surgery, the claimant worked a forklift for Metropolitan Stevedore. Claimant testified that his condition “got progressively worse” over the course of the day. After surgery he filed a claim against Metropolitan Stevedore.

            The ALJ determined that injuries suffered on that last day caused some minor but permanent increase in the extent of his disability and increased his need for knee surgery, even though the surgery had already been scheduled. Since the claimant had still been able to do his job to some extent the day before the surgery, he had not progressed to the point of maximum disability, i.e., total inability to use his legs. There was gradual wearing away of the bone even on the last day before surgery, so his employment with Metropolitan caused a marginal increase in the need for surgery. Thus the aggravation was a “disability,” as defined by the LHWCA.

            The Ninth Circuit found that the ALJ had correctly concluded that Metropolitan was the last responsible employer. In making its holding, the circuit court refused to use “diminished earning capacity” as the identifying feature of “disability” in two injury cases. In upholding the ALJ, the court agreed that in traumatic, two injury cases, disability is more appropriately defined as a physical harm. In explaining the difference in approach taken in this two traumatic injury case, as opposed to an occupational disease claim, the Ninth Circuit stated, “In occupational disease claims, it is necessary to define disability in terms of loss of earning capacity, because the lack of medical certainty with respect to these diseases makes it difficult to connect the progression on the disease with particular points in time or specific work experiences. However, cumulative traumatic injuries are not necessarily fraught with the same inherent ambiguity and can be correlated more directly with identifiable work activities at particular times.”

            The Director, like Metropolitan Stevedore, had urged the court to use diminished earning capacity as a benchmark, and had also argued for a rule that assigned liability to the claimant’s last employer before the need for surgery arose. The Ninth Circuit declined to make this departure from its prior approach finding that such a departure would introduce new uncertainty into the process of determining liability under the last employer rule.

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Topic  2.2.16  Occupational Diseases and the Responsible Employer

Metropolitan Stevedore Co. v. Cresent Wharf and Warehouse Co., [Price], 339 F.3d 1102 (9th Cir. 2003), cert. denied, ___ U.S. ___, ___ S.Ct. ___ (Oct. 12, 2004).

            The Ninth Circuit found that under the “two-injury variant” of the “last responsible employer” rule, where the disability is a result of cumulative traumas, the responsible employer depends upon the cause of the worker’s ultimate disability. If the worker’s ultimate disability is the result of the natural progression of the initial injury and would have occurred notwithstanding a subsequent injury, the employer of the worker on the date of the initial injury is the responsible employer. However, if the disability is at least partially the result of a subsequent injury aggravating, accelerating or combining with a prior injury to create the ultimate disability, the employer of the worker at the time of the most resent injury is the responsible, liable party.

            In the instant case, the Ninth Circuit turned its attention to just how minuscule the aggravation, acceleration or combination can be. Here the claimant worked as an industrial mechanic and fork lift driver for several companies for varying periods. After experiencing pain in his knees that increased significantly over time, he sought medical care and his doctor told him that x-rays revealed medial joint line “collapse” requiring total bilateral knee replacement surgery. His last employer before this visit to his doctor was Cresent city Marine Ways. In the months following, the claimant received injections and other prescribed pain medications to avoid or delay the need for surgery. X-rays showed degeneration of the knee condition with no cartilage remaining. His knees were described as “bone on bone.” The claimant asked his doctor to schedule the knee replacement surgery. His last employer before this visit to his doctor was Cresent Wharf and Warehouse. On his last day of employment before the scheduled surgery, the claimant worked a forklift for Metropolitan Stevedore. Claimant testified that his condition “got progressively worse” over the course of the day. After surgery he filed a claim against Metropolitan Stevedore.

            The ALJ determined that injuries suffered on that last day caused some minor but permanent increase in the extent of his disability and increased his need for knee surgery, even though the surgery had already been scheduled. Since the claimant had still been able to do his job to some extent the day before the surgery, he had not progressed to the point of maximum disability, i.e., total inability to use his legs. There was gradual wearing away of the bone even on the last day before surgery, so his employment with Metropolitan caused a marginal increase in the need for surgery. Thus the aggravation was a “disability,” as defined by the LHWCA.

            The Ninth Circuit found that the ALJ had correctly concluded that Metropolitan was the last responsible employer. In making its holding, the circuit court refused to use “diminished earning capacity” as the identifying feature of “disability” in two injury cases. In upholding the ALJ, the court agreed that in traumatic, two injury cases, disability is more appropriately defined as a physical harm. In explaining the difference in approach taken in this two traumatic injury case, as opposed to an occupational disease claim, the Ninth Circuit stated, “In occupational disease claims, it is necessary to define disability in terms of loss of earning capacity, because the lack of medical certainty with respect to these diseases makes it difficult to connect the progression on the disease with particular points in time or specific work experiences. However, cumulative traumatic injuries are not necessarily fraught with the same inherent ambiguity and can be correlated more directly with identifiable work activities at particular times.”

            The Director, like Metropolitan Stevedore, had urged the court to use diminished earning capacity as a benchmark, and had also argued for a rule that assigned liability to the claimant’s last employer before the need for surgery arose. The Ninth Circuit declined to make this departure from its prior approach finding that such a departure would introduce new uncertainty into the process of determining liability under the last employer rule.

Topics  2.2.16 Definitions--Occupational Diseases and the Responsible Employer/Carrier—Borrowed Employee Doctrine

Hebert v. Pride International, (Unpublished) (Civ. No. 03-0804)(E. D. La. March 5, 2004); 2004 U.S. Dist. LEXIS 3436.

            This OCS summary judgment matter dealt with whether a worker was a borrowed employee making his exclusive remedy workers' compensation benefits under the LHWCA. Noting Fifth Circuit case law, the federal district court listed the nine factors a court must consider in making a borrowed employee determination.

Topic  2.2.16  Occupational diseases and the Responsible Employer/Carrier

New Orleans Stevedores v. Ibos, ___ U.S. ___, 124 S.Ct. 1038 (Mem.)(Cert. denied  January 12, 2004). [See next entry.]

            Here the U.S. Supreme Court declined to consider this Cardillo rule related case.  The Fifth Circuit had previously held that the amounts that a widow received from LHWCA settlements with longshore employers who were not the last responsible employer were not relevant to the amount owed by the last responsible maritime employer and should not have reduced liability for the last responsible maritime employer.  Thus, the Fifth Circuit’s opinion stands.

Topic  2.2.16  Occupational Diseases and the Responsible Employer/Carrier

New Orleans Stevedores v. Ibos, 317 F.3d 480 (5th Cir. 2003). [See Above.]

            In this matter, where the worker had mesothelioma, the Fifth Circuit followed the Second Circuit's rule annunciated in Travelers Ins. Co. v. Cardillo, 225 F.2d 137 (2d Cir. 1955) that liability under Section 2(2) of the LHWCA rests with the last maritime employer regardless of the absence of actual causal contribution by the final exposure. Employer in the instant case had argued that it could not be liable because of the worker's mesothelioma and that disease's latency period. However, in following Cardillo, the Fifth Circuit found that a link between exposure while working for the last employer and the development of the disabling condition was not necessary.

            The Fifth Circuit has previously held that, after it is determined that an employee has made a prima facie case of entitlement to benefits under the LHWCA, the burden shifts to the employer to prove either (1) that exposure to injurious stimuli did not cause the employee's occupational disease, or (2) that the employee was performing work covered under the LHWCA for a subsequent employer when he was exposed to injurious stimuli. Avondale Indus., Inc. v. Director, OWCP [Cuevas], 977 F.2d 186, 190 (5th Cir. 1992).

            The Fifth Circuit also ruled that the employer was not entitled to a credit for the claimant's settlement receipts from prior maritime employers. Judge Edith Jones issued a vigorous dissent on this issue.

Topic  2.2.16  Responsible Employer

New Haven Terminal Corp. v. Lake, 337 F.3d 135 (2d Cir. 2003).

            The Second Circuit reversed an ALJ’s termination of permanent partial disability benefits for a 1993 injury and remanded to determine whether a settlement for a 1997 injury overcompensated the worker in order to bypass the last employer rule. The court noted that it was concerned that a last employer, such as the one here, may offer an inflated award that overcompensates a claimant for the damages due proportionately to the last injury, so that the claimant will not take advantage of the last employer rule for the earlier injury and instead seek the rest of the compensation from an earlier employer. The court explained that “Because the aggravation rule must be defended against such manipulation an ALJ should inquire whether the claimant’s explanation for the settlement is credible, and if not, should reject the claim against the earlier employer.” Additionally, the court noted that on remand, the ALJ should address specifically whether, and estimate to what extend, the first injury contributed to the second. “When a claimant cannot recover from the last employer because of a settlement, we will permit recovery from an earlier employer where the claimant has acted in good faith and has not manipulated the aggravation rule.” The court further noted that there is no statutory authority for a previous employer to use the aggravation rule as a shield from liability. “Permitting the prior employer to use the aggravation rule as a defense to limit full recovery would frustrate the statute’s goal of complete recovery for injuries.”

Topic  2.2.16  Definitions–Occupational Diseases and the Responsible Employer/Carrier

Stevedoring Services of America v. Director, OWCP, 297 F.3d 797 (9th Cir. 2002).

            The "last employer doctrine" does not contemplate merging two separate hearing loss claims into one. Here the claimant had filed two separate hearing loss claims based on two separate reliable audiograms. There was no dispute that the claimant's jobs at both employers were both injurious. The Ninth Circuit, in overruling both the ALJ and the Board, noted that, "[n]o case holds that two entirely separate injuries are to be treated as one when the first one causes, or is at least partially responsible for, a recognized disability."

            The Ninth Circuit explained that, "[I]t is clear that had the first claim been dealt with expeditiously, the second claim would have been considered a separate injury....It was only fortuitous that the case was delayed to the point that the second claim became part of the same dispute. It is true that the ‘‘last employer doctrine' is a rule of convenience and involves a certain amount of arbitrariness. However, the arbitrariness does not extend to an employer being liable for a claim supported by a determinative audiogram filed previously against a separate employer that simply has not been resolved."

            The court opined that, "[T]reating the two claims separately is supported by sound public policy principles. n hearing loss cases, a claimant is likely to continue working even after the onset of disability. If a later audiogram is conducted--something the claimant will undoubtedly undergo in the hope of getting compensated for any additional injury--the first employer can simply point to the later audiogram as ‘‘determinative' and hand off the burden of primary liability."

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Topic  2.5       "Carrier"

Weber v. S.C. Loveland Co. (Weber III), 35 BRBS 190 (2002).

            Previously in Weber I, 28 BRBS 321 (1994), and Weber II, 35 BRBS 75 (2001), the Board held that a worker (with status) injured in the Port of Kingston, Jamaica, had situs and therefore, was covered by the LHWCA. The now-insolvent employer had two insurance policies with different carriers. One policy insured the employer for LHWCA coverage within the U.S. and the other policy insured the employer in foreign territories, but did not include an LHWCA endorsement. Besides the issue of jurisdiction, at issue previously had been which of the two, if any, insurers was on the risk for longshore benefits at the time of the claimant's injury and is therefore liable for benefits.

            Of significance in Weber III are: (1) the issues of scope of authority to decide carrier issues and (2) whether the employer is entitled to Section 8(f) relief.

            In finding that it had authority to decide the matter, the Board distinguished Weber III from Temporary Employment Services, Inc. v. Trinity Marine Group, Inc. (TESI), 261 F.3d 456, 35 BRBS 92 (CRT) (5th Cir. 2001) (Contractual disputes between and among insurance carriers and employers which do not involve the claimant's entitlement to benefits or which party is responsible for paying those benefits, are beyond the scope of authority of the ALJ and the Board.). The Board noted that Weber III does not involve indemnification agreements among employers and carriers, but presents a traditional issue of which of the employer's carriers is liable.

            The Board also found that the employer was not in violation of Section 32 (failure to secure LHWCA insurance coverage) and thus could assert a Section 8(f) claim. The Director had argued that the employer was not entitled to Section 8(f) relief because the employer did not have longshore coverage in Jamaica. The Director cited the Board's decision in Lewis v. Sunnen Crane Services, Inc., 34 BRBS 57, 61 (2000), in which the Section 8(f)(2)(A) bar was applied to prevent an employer from obtaining Section 8(f) relief due to its non-compliance with Section 32, and argued that Lewis is dispositive of this issue. 

            Employer disagreed and countered that it had sufficient coverage for all work-related injuries as of the date of the claimant's injury, because, as of that date, injuries which occurred in foreign territorial waters had not been held covered under the LHWCA. Accordingly, the employer argued that it complied with Section 32. The Board found that Lewis was distinguishable from Weber III and therefore, does not control. The Board found that in Weber III, the employer purchased insurance appropriate for covering the claimant's injuries under the statute and case law existing at that time. It was not until the Board's decision in Weber I that an injury in the Port of Kingston was explicitly held to be compensable under the LHWCA. In Weber I, the Board's holding rested on cases holding that "navigable waters of the United States" could include the "high seas." Thus, the Board held that Section 8(f)(2)(A) is not applicable to the facts of this case and does not bar the employer's entitlement to Section 8(f) relief.

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Topic  2.8  Section 2(8)--State

Hines v. Georgia Ports Authority, ___ S.E. 2d ___, 2004 WL 2282948, (Ga. S.Ct. Oct. 12, 2004).

            An injured longshoreman working on a vessel docked at the Georgia Ports Authority terminal can sue the Ports Authority under maritime law.  The Ports Authority is not entitled to immunity under the Eleventh Amendment.  The state court distinguished this holding from state court jurisprudence which held that an organization is an agency of the state for purposes of state-conferred immunity.  The state supreme court held that the Ports Authority was immune under the state constitution but that admiralty law preempted that finding since the Authority was self-sufficient and did not rely on the state treasury. [ED. Note:  The Board previously dodged the issue of sovereign immunity in Fitzgerald v. Stevedoring Services of America, 34 BRBS 202 (2001).  See also Vierling v. Celebrity Cruises, Inc., 339 F.3d 1309 (11^th Cir. 2003), denied rehearing, 87 Fed. Appx 717 (table) (Oct. 27, 2003)(Everglades Port Authority lacked immunity since it had an anticipated and actual history of financial and operational independence.) citing Hess v. Port Authority Trans-Hudson Corp, 513 U.S. 30 (1994).]

Topic  2.8       Definitions–“State”

Vierling v. Celebrity Cruises. Inc., 339 F.3d 1309 (11^th Cir. 2003), denied rehearing, 87 Fed. Appx 717 (table) (Oct. 27, 2003).

            While the focus of this case is primarily directed to contractual indemnity and warranty of workmanlike performance issues between a cruise line and a port authority, it does address the issue as to when a port authority is a separate entity from a state, and therefore amenable to suit. Citing to Hess v. Port Authority. Trans-Hudson Corp., 513 U.S. 30 (1994), the Eleventh Circuit found that Everglades Port Authority lacked immunity. The court noted that the port authority had an anticipated and actual history of financial and operational independence; that it was financially self-sufficient, generated its own revenues, and paid its own debts.

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Topic   2.13    Definitions—“Wages”

Tahara v. Matson Terminals, Inc., (Unpublished)(BRB No. 03-0860)(September 28, 2004).

            The Board affirmed, albeit on other grounds, the ALJ’s compensation award during the period the claimant was in the state and federal witness protection programs.  The Board found that the employer did not establish that the claimant was able to perform suitable alternate employment while the claimant was enrolled in the witness protection program.  The claimant’s testimony was uncontradicted that he was not allowed to work by the state and federal authorities during his time in the programs.  Further, it was uncontested that his enrollment in the programs was related to the circumstances surrounding his work injury.  Under these circumstances, the claimant was found to be entitled to compensation for total disability as the employer could not meet its renewed burden of proof after claimant was forced to leave suitable alternate employment through no fault of his own.  The Board found that the facts in this case were analogous to those cases where a claimant is entitled to total disability compensation while participating in a Department of Labor-sponsored vocational rehabilitation program that precludes him from working.  See, e.g. Newport News Shipbuilding & Dry Dock Co. v. Director, OWCP [Brickhouse], 315 F3d 286, 36 BRBS 85(CRT) (4^th Cir. 2002); Louisiana Ins. Guar. Ass’n v. Abbott, 40 F.3d 122, 29 BRBS 22(CRT) (5^th Cir. 1994); Castro v. General Constr. Co., 37 BRBS 65 (2003).

            Citing Hairston v. Todd Shipyards Corp., 849 F.2d 1194 (9^th Cir. 1988), 21 BRBS 122(CRT), the Board found that this holding, that the claimant was entitled to total disability benefits due to his inability to work while he was in the witness protection programs, is consistent with Ninth Circuit case law.   In Hairston, the court held that suitable alternate employment was not established by a position at a bank that the claimant physically could perform, as the job was not realistically available because the claimant had a criminal record.  “In this case, no jobs were realistically available to claimant while he was in the witness protection programs.”

            The Board also affirmed the ALJ’s finding that the state stipend the claimant received during his participation in the state witness protection program does not establish that he had a post-injury wage-earning capacity.  The ALJ correctly rejected the employer’s contention that the $1,200 to $1,400 per month stipend was a wage.  “The [ALJ] correctly reasoned that the stipend was paid by the state and not an employer and that the stipend was not received pursuant to a contract for hire; these conditions are required for sums to constitute wages under the plain language of Section 2(13). The [ALJ] found that the stipend is analogous to unemployment compensation, which also is not a wage under Section 2(13).  Moreover, there is no evidence that the state stipend was subject to tax withholding.” (Citations omitted.) 

Topic  2.13     Wages

Custom Ship Interiors v. Roberts, 300 F.3d 510 (4th Cir. 2002), cert. denied, ___ U.S. ___, 123 S.Ct. 1255 (Mem.) (2003).

            Regular per diem payments to employees, made with the employer's knowledge that the employee was incurring no food or lodging expenses requiring reimbursement, were includable as "wages" under the LHWCA.

            The claimant was injured while remodeling a Carnival Cruise Line Ship for Custom Ship Interiors. Custom Ship's employment contract entitled the claimant to per diem payments without any restrictions. Carnival provided free room and board to its remodelers and Custom Ship knew this. Custom Ship argued that the per diem was a non-taxable advantage.

            The court noted Custom Ship's argument that payments must be subject to withholding to be viewed as wages, but did not accept it: "However Custom Ship misconstrues the Act's definition of a ‘wage.' Whether or not a payment is subject to withholding is not the exclusive test of a ‘wage.’" Monetary compensation paid pursuant to an employment contract is most often subject to tax withholding, but the LHWCA does not make tax withholding an absolute prerequisite of wage treatment.

            The court explained that because the payments were included as wages under the first clause of  Section 2(13), Custom Ship's invocation of the second clause of Section 2(13) is unavailing. "This second clause enlarges the definition of ‘‘wages' to include meals and lodging provided in kind by the employer, but only when the in kind compensation is subject to employment tax withholding. The second clause, however, does not purport to speak to the basic money rate of compensation for service rendered by an employee under which the case payments in this case fall." Finally, the two member plurality summed up, "The so-called per diem in this case was nothing more than a disguised wage."

            The Dissent noted that the definition of "wages" found at Section 2(13) requires that a wage be compensation for "service," not a reimbursement for expenses. See Universal Maritime Service Corp. v. Wright, 155 F.3d 311, 319 (4th Cir. 1998).

Topic 2.13      Wages

Custom Ship Interiors v. Roberts, 300 F.3d 510 (4th Cir. 2002), cert. denied, ___ U.S. ___, 123 S.Ct. 1255 (Mem.) (2003).

            Regular per diem payments to employees, made with the employer's knowledge that the employee was incurring no food or lodging expenses requiring reimbursement, were includable as "wages" under the LHWCA.

            The claimant was injured while remodeling a Carnival Cruise Line Ship for Custom Ship Interiors. Custom Ship's employment contract entitled the claimant to per diem payments without any restrictions. Carnival provided free room and board to its remodelers and Custom Ship knew this. Custom Ship argued that the per diem was a non-taxable advantage.

            The court noted Custom Ship's argument that payments must be subject to withholding to be viewed as wages, but did not accept it: "However Custom Ship misconstrues the Act's definition of a ‘wage.' Whether or not a payment is subject to withholding is not the exclusive test of a ‘wage.’" Monetary compensation paid pursuant to an employment contract is most often subject to tax withholding, but the LHWCA does not make tax withholding an absolute prerequisite of wage treatment.

            The court explained that because the payments were included as wages under the first clause of Section 2(13), Custom Ship's invocation of the second clause of Section  2(13) is unavailing. "This second clause enlarges the definition of ‘‘wages' to include meals and lodging provided in kind by the employer, but only when the in kind compensation is subject to employment tax withholding. The second clause, however, does not purport to speak to the basic money rate of compensation for service rendered by an employee under which the case payments in this case fall." Finally, the two member plurality summed up, "The so-called per diem in this case was nothing more than a disguised wage."

            The Dissent noted that the definition of "wages" found at Section 2(13) requires that a wage be compensation for "service," not a reimbursement for expenses. See Universal Maritime Service Corp. v. Wright, 155 F.3d 311, 319 (4th Cir. 1998).

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Topic  2.14     "Child"

Duck v. Fluid Crane & Construction, 36 BRBS 120(2002).

            Here the Board upheld the ALJ's finding that Sections 2(14) and 9 of the LHWCA provide that a legitimate or adopted child is eligible for benefits without requiring proof of dependency but that an illegitimate child is eligible for death benefits only if she is acknowledged and dependent on the decedent.

            The Board first noted that it has held that it possesses sufficient statutory authority to decide substantive questions of law including the constitutional validity of statutes and regulations within its jurisdiction. Herrington v. Savannah Machine & Shipyard Co., 17 BRBS 194 (1985); see also Gibas v. Saginaw Mining Co., 748 F.2d 1112 (6th Cir. 1984).

            The Board found that the instant case was akin to Mathews v. Lucas, 427 U.S. 495 (1976). In Lucas, the Supreme Court sustained provisions of the Social Security Act governing the eligibility for surviving children's insurance benefits, observing that one of the statutory conditions of eligibility was dependency upon the deceased wage earner. Although the Social Security Act presumed dependency for a number of categories of children, including some categories of illegitimate children, it required that the remaining illegitimate children prove actual dependency. The Court held that the "statute does not broadly discriminate between legitimates and illegitimates without more, but is carefully tuned to alternative considerations." Lucas, 427 U.S. at 513. The presumption of dependency, observed the Court, is withheld only in the absence of any significant indication of the likelihood of actual dependency and where the factors that give rise to a presumption of dependency lack any substantial relation to the likelihood of actual dependency. In identifying these factors, the Court relied predominantly on the Congressional purpose in adopting the statutory presumptions of dependency, i.e., to serve administrative convenience.

            Applying the court's holding in Lucas, Section 2(14) does not "broadly discriminate between legitimates and illegitimates, without more," but rather is "carefully tuned to alternative considerations" by withholding a presumption of dependency to illegitimate children "only in the absence of any significant indication of the likelihood of actual dependency." Lucas, 427 U.S. at 513. The Board found that the LHWCA's distinction between legitimate and illegitimate children is reasonable, for as the Court stated in Lucas, "[i]t is clearly rational to presume [that] the overwhelming number of legitimate children are actually dependent upon their parents for support, " Lucas, 427 U.S. at 513, while, in contrast, illegitimate children are not generally expected to be actually dependent on their fathers for support.

Topic  2.14     "Child"

Duck v. Fluid Crane & Construction, 36 BRBS 120 (2002).

            Here the Board upheld the ALJ's finding that Sections 2(14) and 9 of the LHWCA provide that a legitimate or adopted child is eligible for benefits without requiring proof of dependency but that an illegitimate child is eligible for death benefits only if she is acknowledged and dependent on the decedent.

            The Board first noted that it has held that it possesses sufficient statutory authority to decide substantive questions of law including the constitutional validity of statutes and regulations within its jurisdiction. Herrington v. Savannah Machine & Shipyard Co., 17 BRBS 194 (1985); see also Gibas v. Saginaw Mining Co., 748 F.2d 1112 (6th Cir. 1984).

            The Board found that the instant case was akin to Mathews v. Lucas, 427 U.S. 495 (1976). In Lucas, the Supreme Court sustained provisions of the Social Security Act governing the eligibility for surviving children's insurance benefits, observing that one of the statutory conditions of eligibility was dependency upon the deceased wage earner. Although the Social Security Act presumed dependency for a number of categories of children, including some categories of illegitimate children, it required that the remaining illegitimate children prove actual dependency. The Court held that the "statute does not broadly discriminate between legitimates and illegitimates without more, but is carefully tuned to alternative considerations." Lucas, 427 U.S. at 513. The presumption of dependency, observed the Court, is withheld only in the absence of any significant indication of the likelihood of actual dependency and where the factors that give rise to a presumption of dependency lack any substantial relation to the likelihood of actual dependency. In identifying these factors, the Court relied predominantly on the Congressional purpose in adopting the statutory presumptions of dependency, i.e., to serve administrative convenience.

            Applying the Court's holding in Lucas, Section 2(14) does not "broadly discriminate between legitimates and illegitimates, without more," but rather is "carefully tuned to alternative considerations" by withholding a presumption of dependency to illegitimate children "only in the absence of any significant indication of the likelihood of actual dependency." Lucas, 427 U.S. at 513. The Board found that the LHWCA's distinction between legitimate and illegitimate children is reasonable, for as the Court stated in Lucas, "[i]t is clearly rational to presume [that] the overwhelming number of legitimate children are actually dependent upon their parents for support, " Lucas, 427 U.S. at 513, while, in contrast, illegitimate children are not generally expected to be actually dependent on their fathers for support.

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Topic  2.21     “Vessel”

[ED. NOTE: The following federal district court cases are included for informational purposes only.]

Ayers v. C&D General Contractors, 2002 WL 31761235, 237 F. Supp. 2d 764 (W.D. Ky. Dec. 6, 2002).

            Here the widow of a worker killed while removing supports from a dock settled the LHWCA claim but subsequently filed third party actions under the general maritime law and the Admiralty Extension Act. At issue in the third party action was whether "water craft exclusion" excluded this claim since the worker had been working underneath a barge. The court concluded that the claim should not be excluded since the barge was not used for transportation but merely aided the work under the dock.

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