TOPIC 70

Topic  70.1     Responsible Employer–Generally

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.”

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Topic  70.2     Responsible Employer–Occupational Disease and the Cardillo Rule

New Orleans 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  70.2     Responsible Employer–Occupational Disease and the Cardillo Rule

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.

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Topic  70.7     Responsible Employer--Credit for Prior Awards

Carpenter v. California United Terminals, 38 BRBS 56 (2004), grant'g and partly deny'g recon of 37 BRBS 149 (2003).

            This matter involves whether a second employer is entitled to a credit when a claimant first sustains a permanent partial disability while working for a first employer and then sustains a permanent total disability while working for the second employer. In this case, within the jurisdiction of the Ninth Circuit, the Board cited to Stevedoring Services of Americ v. Price, 366 F.3d 1045, 38 BRBS ___ (CRT)(9th Cir. 2004), rev'g in pert. part 36 BRBS 56 (2002) as being dispositive. In Price, the Ninth Circuit held that when an increase in an employee's average weekly wage between the time of a prior permanent partial disability and subsequent permanent total disability is not caused by a change in his wage-earning capacity, permitting him to retain the full amount of both awards does not result in any "double dipping."

            In the instant case, the ALJ had determined, as recognized by the Board, "that there was no increase, but rather a decrease, in claimant's income between the first and second injuries, and that the combination of the amounts between the first and second injuries, and that the combination of the amounts awarded in permanent partial and total disability benefits did not exceed two-thirds of claimant's average weekly wage at the time of [the second injury]. The Board affirmed the ALJ's finding that the instant case presented no danger of "double dipping," and his consequent determination that the claimant was entitled to receive concurrent awards of permanent partial and total disability benefits for purposes of Section 8(a).

            The Board further noted that the Ninth Circuit additionally held in Price that Section 6(b)(1) delineates the maximum compensation that an employee may receive from each disability award, rather than from all awards combined. In this regard, the Ninth Circuit reversed the Board's holding that the combined amount of the awards could not exceed the maximum compensation rate under Section 6(b)(1) is consistent with the plain language of the LHWCA. The Ninth Circuit's decision in Price thus rejects the Board's interpretation of Section 6(b)(1). The Board concluded that as the present case arises in the Ninth Circuit, the court's opinion was controlling.

            In the Board's first opinion in this matter, the Board reversed the ALJ's finding that the statutory maximum of Section 6(b)(1) is inapplicable and held that claimant's total award of benefits was limited to this applicable maximum. The Board then held, based on the reversal of the ALJ's aforementioned determination, that "[s]ince claimant is limited to the maximum award permissible under Section 6(b)(1), [the second employer] is entitled to a credit for permanent partial disability benefits paid by [the first employer.]" Now the Board finds that, pursuant to Price, "we vacate our prior decision regarding Section 6(b)(1) and reinstate the ALJ's holding that Section 6(b)(1) is inapplicable to the combined concurrent awards, there can be no credit due to [the first employer] for any payments made by [the second employer].

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Topic  70.12   Responsible Employer—Responsible Carrier

Kirkpatrick v. B.B.I, Inc., 38 BRBS 27 (2004).

            The Board affirmed the ALJ's finding that the claimant was covered by the OCSLA although the claimant was not directly involved in the physical construction of an offshore platform. The parties had stipulated that the worker's "primary job function was supervising the ordering and transportation of materials necessary to the construction of the Conoco platform complex, upon which he was injured." As the claimant's purpose for being on the platform was to procure supplies necessary to construct the platform, and his injury occurred during the course of his duties, his work satisfies the OCSLA status test.

            The Board also found that Sections 12 and 13 apply to a claimant's notice of injury and claim for compensation due to his injury; these sections do not apply to a carrier seeking a determination that another carrier is responsible for claimant's benefits. The Board stated, "There is, in fact, no statutory provision requiring a carrier seeking reimbursement from another carrier to do so within a specified period."

            Here INA claimed that it relied on Houston General's 12 year acceptance of this claim and, to its detriment, "is now facing a claim for reimbursement approaching three-quarters of a million dollars, without the opportunity to investigate contemporaneously, manage medical treatment, engage in vocational rehabilitation, monitor disability status, etc." The Board rejected this argument "as there was no representation or action of any detrimental reliance, there can be no application of the doctrine of equitable estoppel."

            Further, the Board noted that the doctrine of laches precludes the prosecution of stale claims if the party bringing the action lacks diligence in pursuing the claim and the party asserting the defense has been prejudiced by the same lack of diligence. Additionally the Board noted that because the LHWCA contains specific statutory periods of limitation, the doctrine of laches is not available to defend against the filing of claims there under. "As the claim for reimbursement is related to claimant's claim under the Act by extension of OCSLA, and as the Supreme Court has stated that the doctrine of laches does not apply under the OCSLA, the doctrine of laches does not apply to this case.

            The Board found that neither judicial estoppel or equitable estoppel applied and noted that "jurisdictional estoppel" is a fictitious doctrine.

            The Board vacated the ALJ's ruling that he did not have jurisdiction to address the issue of reimbursement between the two insurance carriers. "Because INA's liability evolved from claimant's active claim for continuing benefits, and because its responsibility for those benefits is based entirely on the provisions of the Act, as extended by the OCSLA, we vacate the [ALJ's] determination that he does not have jurisdiction to address the reimbursement issue, and we remand the case to him…."

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