Exclusivity and Intentional Torts Under the Longshore and Harbor Workers’ Compensation Act and the Extension Acts

By Monica F. Markovich and Jonathan A. Tweedy, Brown Sims, P.C., Houston, Texas[fn1]

Section 905(a) limits the liability of an employer and its insurance carrier for benefits under the Longshore and Harbor Workers’ Compensation Act (“LHWCA,” 33 U.S.C.S. § 901 et seq.) by stating that the liability of the employer “shall be exclusive and in place of all other liability of such employer to the employee” and anyone else entitled to recover damages from the employer on account of the employee’s injury or death.[fn2] Extension acts such as the Defense Base Act (“DBA,” 42 U.S.C.S. § 1651), the Outer Continental Shelf Land Act (“OCSLA,” 43 U.S.C.S. § 1331 et seq.), and the Nonappropriated Fund Instrumentalities Act (“NAFIA,” 5 U.S.C.S. § 8171) incorporate the provisions of the LHWCA. Several of these extension acts contain their own exclusivity provisions. For example, the DBA’s exclusivity provision states the liability of the employer “under this Act shall be exclusive and in place of all other liability” to any individual “coming within the purview of this Act, under the workman’s compensation law of any State, Territory, or other jurisdiction, irrespective of the place where the contract of hire of any such employee may have been made or entered into.”[fn3] The statutes take away rights of injured employees to file certain civil actions against their employers in exchange for benefits that the employers provide regardless of fault. Exclusivity allows for uniformity under the LHWCA and its extensions. This is especially important under the DBA to prevent the need to assess or interpret foreign-based laws and their application to work-related injuries.

In order for the exclusivity provisions to be in effect, a covered worker must suffer an “accidental” injury made subject to his or her claim.[fn4] A few courts have suggested that an employee may sue his employer if the employer deliberately intended to injure the employee.[fn5] However, courts have been hesitant to provide for an actual exception based on intentional torts.[fn6] Such exceptions have been framed merely as “possibilities” based on the circumstances of each case.

Courts have found that willful, wanton, and reckless misconduct is not the equivalent of an intentional tort. For example, in Johnson v. Odeco Oil & Gas Company, a plaintiff brought suit for personal injury damages resulting from the collapse of an offshore oil platform following a hurricane.[fn7] The plaintiff alleged that the willful and wanton misconduct of the employer in not evacuating the platform before the hurricane hit constituted an intentional tort, thus taking his claim outside the scope of the OCSLA, an extension to the LHWCA.[fn8] The District Court disagreed, noting that federal courts have consistently held that “willful, wanton and reckless misconduct of an employer is not the equivalent of an intentional tort.”[fn9] The District Court held that the LHWCA and OCSLA constituted the plaintiff’s exclusive remedy as he did not claim that his employer intentionally injured him. On appeal, the Fifth Circuit affirmed, noting that the plaintiff‘s assertions amounted to negligence, not any intentional tort.[fn10] However, the Fifth Circuit did not reach whether the LHWCA is so exclusive as to preclude intentional torts.

Without specific intent by the employer to injure the employee, the employee cannot meet his burden to maintain a potential intentional tort action against the employer. Courts have been wary of finding that actions of an employer amount to specific intent to allow a tort suit by a covered employee.[fn11]

Courts have also found that the exclusivity provisions of the LHWCA and its extensions preempt civil actions for alleged bad faith on the part of insurance carriers.

In Atkinson v. Gates, McDonald & Company, the Fifth Circuit considered whether the LHWCA preempts “bad faith intentional infliction of emotional distress” claims.[fn12] Atkinson involved a case under the NAFIA, an extension act to the LHWCA. The carrier terminated benefits following several years of payments. The carrier did not file the required forms or otherwise notify the Department of Labor that it had suspended the claimant’s benefits. Subsequently, the Department of Labor ordered the reinstatement of benefits and the payment of a penalty under Section 14(f) (33 U.S.C.S. § 914(f)). Claimant brought suit against the carrier alleging bad faith and intentional infliction of emotional distress. The district court granted the Carrier’s motion to dismiss based on the LHWCA’s preemption of actions under state law and the LHWCA’s exclusivity provisions. The Fifth Circuit affirmed the LHWCA preemption in an extension act case, noting:

“Since the Act itself provides not only for payment of benefits, but also for redress in the event of nonpayment of benefits, and further does not distinguish between good faith and bad faith nonpayment of benefits, the apparent intent of the Act is that the penalty provisions provide the exclusive remedy for late payment or nonpayment of benefits.”[fn13]

The Fifth Circuit further noted that the LHWCA’s pervasive compensation and penalty scheme demonstrates Congress’s intent to supersede state law claims for bad faith against a carrier.[fn14]

The First Circuit has also held that the LHWCA preempts state law claims for a carrier’s intentional or willful refusal to pay benefits.[fn15] In Barnard v. Zapata Haynie Corporation, the claimant was entitled to benefits pursuant to an order of an Administrative Law Judge. The employer and carrier stopped making payments to the claimant after a compensation check was returned to the carrier when the forwarding period for the claimant’s mail had expired. Subsequently, the claimant filed suit asserting various state tort claims based on the carrier’s failure to make compensation payments. The employer and carrier moved for a judgment on the pleadings, asserting that the LHWCA preempted the claimant’s tort causes of action. The district court denied the motion to dismiss, relying on prior precedent that a claimant’s state law claims resulting from the stop-payment order on his claims checks were not preempted by the LHWCA. On appeal, the First Circuit distinguished the facts of prior precedent, noting that the Barnard case did not involve a refusal to pay benefits.[fn16] The First Circuit noted that a claimant’s recourse against the carrier for its failure to pay benefits timely is provided for by the penalty scheme of the LHWCA.[fn17] The court concluded that the exclusivity and late payment provisions of the LHWCA preempted the claimant’s cause of action against the carrier for any failure to make compensation payments.[fn18]

Sample v. Johnson is another example of the application of the LHWCA’s preemption of additional remedies.[fn19] In Sample, LHWCA claimants asserted that they had a right to damages for the carrier’s controversion of their claims. The claimants contended that they had the right to sue the carrier pursuant to federal common law that permits courts to create remedies in areas pertaining to federal substantive law, such as maritime law. While the Ninth Circuit agreed with the claimant’s argument that federal courts have the authority to supplement federal maritime statutory remedies, the court stressed that federal courts are not permitted to supplant the statutes enacted by Congress.[fn20] The court went on to hold that the LHWCA expressly delineates a penalty scheme for employers and carriers that violate the statute and concluded that it would be improper for the court to provide for common law maritime remedies in addition to the statute.

Despite the history of attempts to create an intentional tort exception under the LHWCA and it extensions, a clear standard for defining such an exception does not exist. For intentional torts against employers, it remains unclear as to what acts, if any, would constitute a specific intent to injure the employee to allow for an exception to the exclusivity provisions. For bad faith and tort claims against insurance carriers, several courts have noted that a claimant does not have an additional remedy for actions in connection with the payment or controversion of benefits.

Footnotes:

1. This article is intended to provide a quick snapshot of the topic; it is not a comprehensive discussion.

2. 33 U.S.C.S. § 905(a).

3. 42 U.S.C.S. § 1651(c).

4. See P.I. v. Blackwater Security Consulting, LLC, 42 Ben. Rev. Bd. Serv. (MB) 1039 (ALJ) (Feb. 2, 2009), aff’d on reconsideration 2006-LDA-00015 (ALJ (March 12, 2009) (unpub.), vacated in part and aff’d in part 44 Ben. Rev. Bd. Serv. (MB) 17 (2010); Z.S. v. Science Application Int’l Corp., 41 Ben. Rev. Bd. Serv. (MB) 216 (ALJ) (Apr. 6, 2007), aff’d 42 Ben. Rev. Bd. Serv. (MB) 87 (2008); Robin v. Sun Oil Co., 548 F.2d 554 (5th Cir. 1977); West v. Kerr-McGee Corp., 765 F.2d 526 (5th Cir. 1985).

5. See Johnson v. Odeco Oil & Gas Co., 679 F. Supp. 604, 606 (E.D. La. 1987), aff’d, 864 F.2d 40, 44 (5th Cir. 1989); Sample v. Johnson, 771 F.2d 1335, 1346-1347, 18 BRBS 1(CRT) (9th Cir. 1985), cert. denied, 475 U.S. 1019, 89 L. Ed. 2d 319, 106 S. Ct. 1206 (1986); Austin v. Johns-Manville Sales Corp., 508 F. Supp. 313, 316 (D. Me. 1981); Houston v. Bechtel Associates Professional Corp., D.C., 522 F. Supp. 1094, 1096 (D.D.C. 1981); Roy ex rel. Charlot v. Bethlehem Steel Corp., 838 F. Supp. 312, 316 (E.D. Tex. 1993); Taylor v. Transocean Terminal Operators, Inc., 785 So. 2d 860, 862 (La. Ct. App.), cert. denied sub nom. Transocean Terminal Operators, Inc. v. Taylor, 534 U.S. 1020, 151 L. Ed. 2d 424, 122 S. Ct. 547 (2001). But see Bordelon v. Avondale Indus., 846 So. 2d 993, 996 (La. Ct. App. 2003), writ denied, 857 So. 2d 497 (La. 2003).

6. See Taylor, 785 So. 2d at 862.

7. 679 F. Supp. 604, 605 (E.D. La. 1987), aff’d, 864 F.2d 40 (5th Cir. 1989).

8. Id. at 606; 43 U.S.C.S. § 1333.

9. Johnson, 679 F. Supp. at 607.

10. 864 F.2d at 44.

11. See Roy ex rel. Charlot v. Bethlehem Steel Corp., supra (An employer’s knowledge and subsequent permitting of a hazardous work condition does not reach the level of specific intent); Johnson v. Kerr-McGee Oil Indus., 129 Ariz. 393, 397-398, 631 P.2d 538, 552-553, appeal dismissed, 454 U.S. 1025, 70 L. Ed. 2d 469, 102 S. Ct. 560 (1981) (An employer’s intentional failure to warn employees of dangers and health hazards or potential exposure to such conditions does not reach the level of specific intent); Cunningham v. Aluminum Co. of America, Inc., 417 N.E.2d 1186, 1190 (Ind. Ct. App. 1981) (An employer’s willful or unlawful violation of a safety statute does not reach the level of specific intent).

12. 838 F.2d 808 (5th Cir. 1988), rehearing denied en banc, 844 F.2d 788 (5th Cir. 1988).

13. Id. at 812 (quoting Atkinson v. Gates, McDonald & Company, 665 F. Supp. 516, 521 (S.D. Miss. 1987)).

14. Id.

15. Barnard v. Zapata Haynie Corp., 975 F.2d 919, 28 BRBS 4(CRT) (1st Cir. 1992).

16. Id. at 920-921.

17. Id. at 920.

18. Id. at 921.

19. 771 F.2d 1335, supra.

20. Id. at 1345-1346.

© Copyright 2012 Brown Sims, P.C. All rights reserved. This article, which appeared in a recent issue of Benefits Review Board Service—Longshore Reporter (LexisNexis), is reprinted here with permission.

For more information about LexisNexis products and solutions connect with us through our corporate site.