Longshore and Defense Base Act Developments of 2015

It’s time to look back at some of the Longshore and Defense Base Act developments of 2015.

Zone of Special Danger:

My favorite case this year was the First Circuit’s Battelle Memorial Institute v. DiCecca. In DiCecca, retired Supreme Court Associate Justice David Souter explored the broad scope of the zone of special danger doctrine. Essentially, in Defense Base Act cases, the zone of special danger doctrine can be used by injured workers to secure coverage for injuries that occur outside of the course and scope of typical work duties. Like the Supreme Court said in O’Leary v. Brown-Pacific-Maxon, 430 U.S. 504, 507 (1951):

Workmen’s compensation is not confined by common-law conceptions of scope of employment. The test of recovery is not a causal relation between the nature of employment of the injured person and the accident. Nor is it necessary that the employee be engaged at the time of the injury in activity of benefit to his employer. All that is required is that the obligations or conditions of employment create a zone of special danger out of which the injury arose.

The facts in DiCecca were tragic. The employee was killed in Tbilisi, Georgia, when his company-provided taxi was hit head-on by a drunk driver. The employer challenged the award of death benefits to the employee’s widow, arguing that the employee was outside of the scope of his employment when he used the taxi to travel to a local grocery store.

Justice Souter didn’t buy the employer’s argument. He distilled multiple Supreme Court cases (and a few appellate court cases) to

“some general principles creating a legal texture, though not a precise rule.” The general principles include the following:

• The zone of special danger doctrine covers injuries caused by “foreseeable risks occasioned by or associated with the employment abroad,” no matter whether the injury has a “direct causal connection to an employee’s particular job or to any immediate service for the employer.”
• A “special danger” includes risks peculiar to a foreign location; risks of greater magnitude than those encountered domestically; and risks that might occur anywhere but in fact occur where the employee is injured.
• The “special” in “zone of special danger” means “particular” but not necessarily “enhanced.”
• Whether a risk is foreseeable runs on the totality of the circumstances.
• The determining agency is given deference with respect to the application of the zone of special danger. Rational determinations to apply the zone will be upheld. Whether the zone of special danger applies is a finding of fact.

As for case specific facts, Justice Souter noted that the following would “suffice for liability:”

• The employer assigned decedent to a foreign workplace.
• The decedent was always subject to call.
• The employer provided transportation there by taxi service “limited as to geography but for any purpose.”
• Food buying was foreseeable travel with risks that were realized in this fatal accident.

Finally, Justice Souter dispelled with the employer’s argument that the zone of special danger only applies to recreation. The employee’s food buying trip was not a “simple pursuit of necessity” because, as the record demonstrated, he had to buy groceries from the particular store he was traveling to at the time of his injury. And, in any event, “a categorical distinction between pursuit of necessity and optional engagement in recreation would be irrational.” Or, to put it another way: “The short of it is that it is very hard, perhaps impossible, to distill a rule that injuries arising out of a night on the town are covered but not those incurred shopping for food.”

DiCecca is not the only 2015 zone of special danger case worth mentioning. There’s also Jetnil v. Chugach Management Services, a published Decision and Order from the Benefits Review Board. In Jetnil, the employer argued that the zone of special danger did not apply because the employee was a local national–meaning he was from the country where he was injured. The Benefits Review Board disagreed.

In upholding the award of benefits and the application of the zone of special danger, the Board drew attention to the following circumstances:

• The employee’s injury occurred on a “small, uninhabited, restricted access island, to which [employee] was sent by employer.”
• After arriving on Gagan Island, neither the employee nor his co-workers could leave for at least four days.
• The only reason the employee was on Gagan Island–a restricted access island–was because of the obligations and conditions of his employment.
• The food supplied by the employer was not suitable for the employee’s diabetes; thus, fishing was a “foreseeable activity during claimant’s off-duty hours on Gagan Island.”
• It doesn’t matter that fishing (i.e., the activity in which the employee was engaged at the time of his injury) was a normal, every day activity on the Marshall Islands.

Keep in mind that the Employer and Carrier appealed the Board’s decision. Jetnil is now before the Ninth Circuit: Chugach Management Services v. Jetnil, No. 15-72873. As of today’s date, only Employer and Carrier have filed a brief. The brief’s “Summary of the Argument” section reads:

The BRB erred by affirming the ALJ’s award of DBA disability compensation and medical benefits in this case. As a matter of law, the “zone of special danger” doctrine, which broadens the concept of work-relatedness to include coverage to certain off-duty injuries, is inapplicable to local nationals working within their home countries. In a common sense, every day, and realistic view of the realities of employment within one’s home country, off-duty activities are entirely personal in nature and thoroughly disconnected from the obligations and conditions of employment. The Supreme Court, in announcing the “zone of special danger” doctrine’s applicability to workers employed overseas (far away from their family, friends, and normal past-times), did not envision the “zone of special danger” doctrine’s application to the local national worker. In so holding that the “zone of special danger” doctrine could be utilized to expand the concept of work-relatedness to local nationals, the BRB has created the most expansive workers’ compensation scheme under the law, as compared to any other Federal or State scheme. Effectively, the BRB’s holding provides 24 hours a day, 7 days a week coverage for local nationals engaged in off-duty activities simply by virtue of their DBA employment.”

Alternatively, the BRB erred by affirming the ALJ’s finding that Claimant’s presence on an island within his home country was a sufficient “obligation and condition of employment” to create a “zone of special danger” from which his injury during off-duty fishing activities arose. In ignoring all countervailing evidence establishing that Claimant resided within an island chain his entire life, that he would fish no matter what island he was on, that he would share his harvest with family and friends, and that it was against Employer’s policy to fish during work hours, the BRB affirmed the imposition of strict liability upon the Employer and Carrier for off-duty injuries suffered by local nationals. Moreover, the BRB erred by affirming a finding by the ALJ that the employer-provided food was inadequate for Claimant’s diabetic diet. This finding is unsupported by substantial evidence in the record.

Although 2015 wasn’t necessarily groundbreaking for zone of special danger cases, it nonetheless limited some of the more “irrational” arguments made by employers and carriers.

(One last thing: I disagree with the arguments made in the Employer and Carrier’s Ninth Circuit Jetnil brief. The proposed rule–thou shalt not apply the zone of special danger to local nationals–is too rigid. More about this in a future post.)

New OALJ Rules and Subpoenas:

In 2015, the Office of Administrative Law Judges published new Rules of Practice and Procedure. The changes in the Rules are substantial. Here are some of the more substantial changes:

• There are more sanctions to protect the integrity of the court and the administrative law process. The new Rules “have teeth.”
• The discovery process will take a different course than before. Now, litigants may not begin discovery until after they receive the Notice of Hearing and Prehearing Order. Of course, litigants should continue building their own case in the time period between referral to the OALJ and the issuance of the assigned judge’s Notice.
• Testifying experts must provide a wealth of information in addition to their expert report. Experts should start rounding out their CV now because, in the Federal Register, the OALJ puts the onus on experts.
• The rules of professional conduct governing each lawyer is the set of rules in place in the lawyer’s state of practice. This is nothing new. The Benefits Review Board has applied the law of the state of practice for over 25 years. See Baroumes v. Eagle Marine Servs., 23 BRBS 80 (1989).
• Sorry, no electronic filing yet for OALJ cases. Maybe if Congress would do the right thing and give the OALJ more funding…
• Privacy protection is important to the OALJ. Practitioners need to redact sensitive information (like Social Security Numbers) unless the parties waive that requirement.
• There is a 30-day notice period for physical and mental examinations unless the parties agree to a shorter notice period. When coupled with the shorter time period for discovery–i.e., beginning discovery upon receipt of the judge’s Notice instead of the district director’s referral letter–parties will likely begin the examination process very early in the litigation.
• Parties must file a Prehearing statement at least 21 days prior to the date set for hearing.
• There is now a rule pertaining to motions for reconsideration of a judge’s Decision and Order.

The OALJ also has new subpoena forms which must be used starting today.  The Acting Chief ALJ issued an Administrative Notice about the implementation of the new subpoena forms on May 29, 2015. The new forms include the:

• Subpoena to Appear and Testify at a Hearing
• Subpoena to Appear and Testify at a Deposition
• Subpoena to Produce Documents, Information or Objects, or to Permit Inspection of Premises

I suggest perusing the OALJ’s subpoena webpage because it includes detailed instructions for obtaining judge-signed subpoenas.

Attorney’s Fees:

The Benefits Review Board issued a pair of unpublished attorney fee decisions that I found interesting. When read in tandem, there seems to be a rule regarding ALJ review of attorney fee petitions in settlement agreements.

The first unpublished Benefits Review Board decision was DeCruise-Williams v. Army and Air Force Exchange Serv., BRB No. 15-0109 (Aug. 31, 2015). In DeCruise-Williams, the parties settled the underlying Nonappropriated Fund Instrumentalities Act claim for $30,000 plus $8,000 in attorneys fees. The ALJ approved the settlement but unilaterally reduced fees and costs from $8,000 to $3,149.90 because inter alia he “found the evidence submitted with the fee petition did not support the requested hourly rate . . . .” The Benefits Review Board reversed, finding that the ALJ exceeded his authority in denying the fee petition as written and as agreed upon by the parties. The Board specifically noted that the settlement application identified a specific dollar amount for attorney’s fees as apposed to a dollar amount “not to exceed $8,000.” The reduction in the agreed-upon attorney fee amount exceeded the four available options available to adjudicators and, as such, the reduction in the fees was a reversible error.

The second unpublished Benefits Review Board decision was Santiago v. Global Integrated Security USA, Inc., BRB No. 15-0108 (Sept. 21, 2015). In Santiago, the parties submitted a Defense Base Act settlement for $460,000 plus attorney’s fees “up to $20,000.” The ALJ awarded a total fee of $14,357.13. The “up to” language provided the ALJ with the opportunity to review the claimant’s attorney’s fee petition and scrutinize the fee petition and attorney’s hourly rate. The Benefits Review Board approved the ALJ’s approach, saying:

The facts in this case are materially distinct from those in Loscano. Whereas in Loscanothe parties stipulated to a precise fee amount, here, employer agreed to pay “up to $20,000 for attorney’s fees and costs.” Contrary to counsel’s assertion, this language did not reflect employer’s agreement to pay a fee of $20,000; rather, it is an agreement to pay an attorney’s fee of $20,000 or less. Thus, the administrative law judge did not err in reviewing the fee petition in order to ascertain the amount of employer’s liability.

My initial take on these decisions is that if the employer/carrier and claimant’s attorney agree on a sum certain for attorney’s fees, then ALJ review of the fee portion of a settlement is limited; but if the employer and claimant’s attorney agree on an uncertain sum–a sum that requires review for an ALJ to make a determination about the amount of fees–then the ALJ may investigate all aspects of a fee petition.

Life Expectancy for Foreign Nationals:

Finally, the Department of Labor’s Division of Longshore and Harbor Workers’ Compensation stated that, for commutations, it will use the life expectancy of a claimant’s home country as opposed to using a U.S. life expectancy. This is actually a pretty big deal. For years, the DLHWC used the U.S. life table no matter whether the claimant was from the United Kingdom (which his a longer life expectancy) or Afghanistan (which has a much, much lower life expectancy). I detailed the effect of the DLHWC’s new approach in my post entitled, “Life Expectancy, Commutation, and the Defense Base Act.” As I mentioned in that article, the approach could cause problems:

• Sometimes life tables use both race and gender to calculate a particular individual’s life expectancy. Just look at the CDC’s United States Life Tables for 2010, which provides separate life expectancy calculations for black, hispanic, and white populations in the United States. The World Health Organization tables referenced by DLHWC in Transmittal No. 15-01 provide separate life expectancies for men and women, with women typically living longer than men. So, we know that DLHWC calculates different life expectancies based on gender. But will it also calculate a different life expectancy for a foreign national based on race? What about countries like South Africa where it is a true and unfortunate fact that there is a tremendous disparity in the life expectancy of black and white South Africans?
• The World Health Organization’s life tables may not be calculated with the most up-to-date information. Instead of the WHO tables, give claimants an opportunity to provide newer life expectancy tables created by the government of their country of residence. Again, I will use South Africa as an example. According to this information, the life expectancy of the total population at birth for 2014 is 59.1 years for males and 63.1 years for females. This is higher than the WHO’s estimates. Plus, use of a country-specific life table developed by the government for the country in which the beneficiary resides will promote the same goals identified in Transmittal No. 15-01: transparency, accuracy, and a credible assessment of the conditions affecting longevity in the country of residence.
• DLHWC used to require stipulations signed by both the employer/carrier and the claimant before it would process a commutation. If this is still a requirement, then the change in life expectancy tables will cause some claimants to refuse to sign stipulations, thus delaying the resolution of their claim.
• DLHWC has announced that it will use the World Health Organization life expectancy tables, but should there also be an affirmative duty to identify the claimant’s life expectancy in the stipulations that the employer/carrier wants the claimant to sign? DLHWC’s Transmittal Notice lauds the easy online accessibility of the WHO life tables, but the ease with which a Washington, D.C.-based government agency or a multinational insurance carrier accesses the Internet may not be shared by the claimants who will be hit hardest by the change in life tables. This problem could be cured by including the life expectancy in the stipulation.
• Life expectancy tables are also used in Defense Base Act settlements–for all claims, no matter the claimant’s country of residence. Does this new change in life tables apply to other resolution options, like settlements? Unlike commutations, there are very specific statutory and regulatory requirements for settlements. Above all else, settlements must be adequate. But will DLHWC measure the adequacy of a foreign national’s settlement against CDC life tables or WHO life tables?

Conclusion:

It’s time to turn the page to 2016. If you are in need of assistance with your Longshore or Defense Base Act claim, then feel free to contact me. My telephone number is 985-246-3194 or 844-DBA-COMP. Or, feel free to e-mail at [email protected].