Longshore Insider

Subrogation and a Glossary Update

Written by The American Equity Underwriters, Inc. | Jun 7, 2016 5:00:00 AM
Subrogation
Here is another contribution from Royce Ray, AEU’s Director of Subrogation.

NOTE: Royce is a Certified Subrogation Recovery Professional (CSRP).  The CSRP designation is conferred by the National Association of Subrogation Professionals (NASP) on individuals who possess substantial industry experience and pass a comprehensive examination on subrogation investigation, management and recovery.  Royce has been a CSRP since 2009, and he is an experienced personal injury attorney, having practiced law for approximately seventeen years prior to joining AEU in 2007 as Director of Subrogation.

Here’s Royce:

“Over the years I have been asked, “What is the number one thing that you would want an ALMA (American Longshore Mutual Association) member to know about subrogation?” It’s a great question, and my answer may surprise you.

I would say to actively look for third party involvement immediately after any incident. The most widespread problem that hampers identification of viable subrogation is the failure to search for third party involvement.  Often I review incident reports that do not address this.  If third party involvement is not actively explored during an investigation, viable subrogation will not be uncovered and indeed may be forever lost.  The result:  a lost opportunity to save money on your workers’ compensation insurance.

There is a fascinating psychology experiment known as The Invisible Gorilla (see www.theinvisiblegorilla.com).  When you get a moment I encourage you to visit The Invisible Gorilla website.  In the now famous experiment subjects view players passing a basketball and are asked to count the number of times that the ball is passed.  A man dressed in a gorilla suit walks through the circle of players as they are passing the ball.  On average approximately fifty percent of the subjects report not seeing the gorilla, despite the fact that he appeared right before their eyes.

Several years ago I attended a national conference of subrogation professionals where one of the speakers compared identifying subrogation to not seeing the man in the gorilla suit. His observation is so true – if you do not deliberately look for subrogation, rest assured that much like the “invisible gorilla”, you will probably not find it.”

Thanks Royce.


Glossary Update
Several years ago I posted a discussion which began like this:
Have you noticed that conversations among lawyers who specialize in the Longshore Act frequently seem to consist of cryptic, single word references? The code word is usually a reference to a court case that stands for a principle of law that the lawyers are familiar with.  It is usually the name of the plaintiff in the case, but not always.
Here is a lengthy, but even so, incomplete, list of “Longshore” cases along with the shorthand version of the principle involved. Most of these are U.S. Supreme Court cases, but there are also a few cases from the federal Circuit Courts of Appeals.

There has been sufficient jurisprudence since this discussion to justify an update to include recent cases affecting the Longshore Act and extensions.

O’Leary – Not a new case, but it belongs on the list.  It established the Zone of Special Danger doctrine in cases arising under the Defense Base Act. ( O’Leary v. Brown-Pacific-Maxon, Inc., 340 U.S. 504 (1951))

Valladolid – There is no situs of injury requirement in the Outer Continental Shelf Lands Act.  The test for coverage is that there must be “substantial nexus” between the injury and the employer’s extractive operations on the outer continental shelf. (132 S.Ct. 680 (2012))

Lozman – The current test for vessel status.  In the eyes of a reasonable observer the contrivance must be practically capable of serving as a means of transportation of people or things over water.  (133 S.Ct. 735 (2013))

Roberts – The maximum weekly compensation rate is applicable in a case when the claimant is “newly awarded compensation” as the phrase appears in section 6(c).  This is when he first becomes statutorily entitled to benefits no matter when, or whether, a compensation order is issued in his case.  ( Dana Roberts v. Sealand Services, Inc.; Kemper Insurance Company; and Director, Office of Workers’ Compensation Programs, U.S. Department of Labor, 132 S.Ct. 1350 (2012)).

The Osceola – summarized the rights of seamen in the U.S. under the general maritime law (unseaworthiness and maintenance and cure, transportation and wages).  The confirmation of the absence of a negligence remedy against the seaman’s employer contributed to the passage of the “Jones Act” in 1920.  ( The Osceola, 189 U.S. 158 (1903))

Jensen – the “Jensen Line” established the boundary of state workers’ compensation law jurisdiction at the edge of the navigable waters of the United States.  The gap in protection that it created for land based maritime workers led to the eventual passage of the Longshore Act in 1927. ( Southern Pacific RR Company v. Jensen, 244 U.S. 205 (1917))

Davis – recognized the existence of a coverage “twilight zone” between the Longshore Act and state act workers’ compensation laws.  ( Davis v. Department of Labor, 317 U.S. 249 (1942))

Cardillo – established the “last responsible employer” rule in occupational disease cases.  ( Travelers Insurance Co. v. Cardillo, 225 F.2nd 137 (2nd Cir. 1955))

Caputo – repudiated the “moment of injury” test in Longshore cases.  If any part of a worker’s duties is maritime in nature then he is a full time Longshore worker.  ( Northeast Marine Terminals v. Caputo, 432 U.S. 249 (1977))

Herron – Situs test for Longshore Act coverage in the Ninth Circuit (Washington, Oregon, Montana, Idaho, California, Nevada, Arizona, Alaska, and Hawaii).  ( Brady-Hamilton Stevedore Co. v. Herron, 568 F.2nd 87 (9th Cir. 1978))

Ford – First landward stop for cargo is not the final step in unloading.  All intermediate steps are covered. P.C. Pfeiffer Co. v. Ford, 444 U.S. 69 (1979))

Winchester – Former situs test in the Fifth Circuit (Louisiana, Texas, and Mississippi).  ( Textports Stevedore Co. v. Winchester, 632 F. 2nd 504 (5th Cir. 1980)) overruled by New Orleans Depot Services, Inc. v. Director, Office of Workers’ Compensation Programs (Zepeda), 718 F.3rd 384 (5th Cir. 2013)).  The Fifth Circuit now agrees with the Fourth Circuit that to be an “other adjoining area” for situs under the Longshore Act the situs must be contiguous with, or touching, navigable waters.

Sun Ship – The Longshore and Harbor Workers’ Compensation Act supplements state workers’ compensation laws, it does not supplant them.  This confirmed the principle of concurrent state and federal jurisdiction.  ( Sun Ship, Inc. v. Commonwealth of Pennsylvania, 447 U.S. 715 (1980))

PEPCO – The Section 908(c) schedule is mandatory for injuries that fall within the schedule.  ( Potomac Electric Power Co. v. Director, Office of Workers’ Compensation Programs, 449 U.S. 268 (1980))

Scindia – Established the vessel owner’s duties to longshore workers, one of reasonable care subject to the limitations as contained in the turnover duty, active control duty, and duty to intervene..  ( Scindia Steam Navigation Co. Ltd. v. De Los Santos, 451 U.S. 156 (1981))

Perini – Situs over navigable waters confers status.  ( Director, Office of Workers’ Compensation Programs v. Perini North River Associates (Churchill), 459 U.S. 297 (1983))

Herb’s Welding – Status case, work on fixed oil and gas platforms in state territorial waters is not maritime employment.  ( Herb’s Welding v. Gray, 470 U.S. 414 (1985))

Schwalb – Status test, work must be “integral” or essential to the employer’s loading, unloading, shipbuilding, or ship repair activities.  ( Chesapeake & Ohio Ry. Co. v. Schwalb, 493 U.S. 40 (1989))

Cowart – a claimant becomes a “person entitled to compensation” at the moment that the right to recovery vests whether or not he or she is actually receiving compensation.  ( Estate of Cowart v. Nicklos Drilling Co., 505 U.S. 469 (1992))

Abbott – Claimant entitled to permanent total disability benefits during participation in DOL approved vocational rehabilitation plan.  ( Louisiana Insurance Guaranty Association v. Abbott, 40 F. 3rd 122 (5th Cir. 1994))  Also see Castro in the Ninth Circuit.

Greenwich Collieries – There is no “true doubt rule” in Longshore cases.  The claimant is not entitled to judgment if the evidence is evenly balanced.  The proponent of a position bears the burden of proof by a preponderance of the evidence.  ( Director, OWCP v. Greenwich Collieries, 512 U.S. 267 (1994)).  (See also Santoro v. Maher Terminals, Inc.)

Sidwell – Situs test in Fourth Circuit (Maryland, Virginia, West Virginia, North Carolina, and South Carolina).  ( Sidwell v. Express Container Services, Inc. 71 F. 3rd 1134 (4th Cir. 1995))

Harcum – The Director, Office of Workers’ Compensation Programs, cannot initiate appeals to the federal Circuits (except for section 908(f) (second injury) issues).  The Director is not the designated champion of the claimant.  ( Director, Office of Workers’ Compensation Programs v. Newport News Shipbuilding and Dry Dock Co. (Harcum), 514 U.S. 122 (1995))

Chandris – Test for seaman status.  ( Chandris, Inc. v. Latsis, 515 U.S. 347 (1995))

Rambo – Even if there is no present loss of wage earning capacity a claimant may be awarded a de minimus award but there must be a significant possibility of future loss of earnings.  ( Metropolitan Stevedores v. Director, Office of Workers’ Compensation Programs (Rambo II), 521 U.S. 121 (1997))

Price – Aggravation rule in traumatic injury cases.  ( Metropolitan Stevedore Co. v. Crescent Wharf & Warehouse Co. (Price), 339 F. 3rd 1102 (9th Cir. 2002))

Stewart – Broad definition of a vessel includes “every description of watercraft or other contrivance used, or capable of being used, as a means of transportation on water” ( Stewart v. Dutra Construction Co., 543 U.S. 481 (2005)).  This case has been superseded by Lozman’s new “reasonable observer” test for vessel status (see above).

ABOUT THE AUTHOR

John A. (Jack) Martone served for 27 years in the U.S. Department of Labor, Office of Workers’ Compensation Programs, as the Chief, Branch of Insurance, Financial Management, and Assessments and Acting Director, Division of Longshore and Harbor Workers’ Compensation. Jack joined The American Equity Underwriters, Inc. (AEU) in 2006, where he serves as Senior Vice President, AEU Advisory Services and is the moderator of AEU's Longshore Insider.