Defense Base Act and War Hazards Compensation Act Roger A. Levy Laughlin Falbo Levy & Moresi LLP 255 California Street, Suite 600 San Francisco, CA 94111-4912 (415) 781-6676 (415) 781-6823 [fax] [email protected] Return to course materials table of contents Roger A. Levy joined Laughlin, Falbo, Levy & Moresi, LLP as partner in 1985, and became Of Counsel in 1999. His practice focuses on the defense of work- ers’ compensation matters before both state and federal administrative agen- cies. Mr. Levy’s primary area of specialization is the defense of cases brought under the United States Longshore and Harbor Workers’ Compensation Act, including its extensions, the Defense Base Act, the Non-Appropriated Fund Instrumentalities Act, and the Outer Continental Shelf Lands Act, as well as related maritime civil cases such as those brought under the Jones Act and Suits in Admiralty Act. Since 2004, Mr. Levy has served as Mediator in cases related to these areas of practice. Mr. Levy has presented at numerous conferences, seminars and conventions locally and nationally for agency, industry and pro- fessional groups including the American Bar Association. His memberships include: the California State Bar Association, American Bar Association, Indus- trial Claims Association, Longshore Claims Association, and Northwest Claims Association. This material was excerpted from Defense Base Act and War Hazards Compen- sation Act Handbook 2010 Edition (LexisNexis). Copyright 2010 by LexisNexis. All rights reserved. Reprinted with permission. Defense Base Act and War Hazards Compensation Act Table of Contents Presentation .............................................................................................................................................................835 Defense Base Act and War Hazards Compensation Act v Levy v 833 Presentation Chapter 1 Introduction to Defense Base Act INTRODUCTION TO DEFENSE BASE ACT DBA&WHCAHANDBOOK Introduction By David M. LinkerFreedman & Lorry, PC Synopsis § 1.01 History and Purpose of Defense Base Act § 1.02 Adoption of Substantive LHWCA Law § 1.03 Increase of Defense Base Act Claims § 1.04 Topics Covered in This Handbook § 1.05 Common Terms and Acronyms § 1.06 Helpful Websites and Blogs § 1.07 Resources for Defense Base Act Cases § 1.08 LexisNexis Related Publications § 1.01 History and Purpose of Defense Base Act The Defense Bases Act of August 16, 1941, which is set forth in 42 U.S.C.S. §§ 1651– 1654, provides that except as modified by the Act, the provisions of the Longshoreman and Harbor Workers Compensation Act, approved March 4, 1927, shall apply in respect to an injury or death of any employee engaged in any employment at any military, air, or naval base acquired after January 1, 1940 by the United States from any foreign government or any lands occupied or used by the United States for military or naval purposes in any territory or possession outside the continental United States, irrespective of the place where the injury or death occurs. By January 1, 1940, the Second World War had started and the United States had contracted with foreign governments to build military bases in foreign lands. The employees of many American contractors were engaged in work at these bases, and the Defense Base Act extended the coverage of the Longshoreman and Harbor Workers’ Compensation Act to include them [see S. Rep. No. 540, 77th Congress, 1st Session (1941)]. The overseas work noted above dramatically increased after the United States entered the war following the Japanese government’s attack on Pearl Harbor on December 7, 1941. As World War II escalated, the contractors’ employees working on projects related to national defense but not located at military bases were not covered under the Defense Base Act, with the result that the persons employed did not have a single workers’ compensation remedy [seeUniversity of Rochester v. Hartman, 618 F.2d 170, 172 (2nd Cir. 1980)]. Congress responded by amending the DBA in December of 1942 to include all employees engaged in public works outside the continental United States so as to remedy a patchwork of uneconomic and discriminatory compensation schemes and to assist contractors in attracting qualified workers by providing a uniform compensation system at reasonable rates [see generally S. Rep. No.1886, 85th Congress, 2nd Session, reprinted in (1958) U.S. Code Cong. & Admin. News, pp. 3321, 3324]. Defense Base Act and War Hazards Compensation Act v Levy v 835 In 1953, Congress amended the Defense Base Act to change the frame of reference from World War II to one of national defense in order to extend coverage to overseas government construction projects conducted during periods when there was no declared state of war [HR. Rep. No. 490, 83rd Congress, 1st Sess., reprinted in (1953) U.S. Code & Admin.News, pp. 1783- 1784]. In 1958, Congress converted the Defense Base Act from temporary to permanent legislation after determining that the United States’ overseas commitments would not diminish substantially in the foreseeable future [see S. Rep. No. 1886, 85th Congress, 2nd Session, reprinted in (1958) U.S. Code & Admin.News pp. 3321, 3324]. As stated in Rochester, the Defense Base Act “was intended and designed for the protection of the civilian work force engaged in defense related employments outside the continental United States” [University of Rochester v. Hartman, 618 F.2d 170, 173 (2nd Cir. 1980);see alsoRoyal Indemnity Co. v. Puerto Rico Cement Corp., 142 F.2d 237, 239 (1st Cir.), cert. denied,323 U.S. 756 (1944) (purpose of DBA was to provide substantially the same relief to outlying territories as existing law afforded employees in United States)]. The Rochester court further explained [University of Rochester v. Hartman, 618 F.2d 170, 173–174 (2nd Cir. 1980)]: The legislative history of the DBA reveals it has grown from a limited response to the overseas military demands of World War II to an Act covering all overseas United States government- related construction projects, national defense activities, and service contracts thereto. The Act was originally intended to cover civilians employed at overseas military bases, was later extended to cover civilians working on overseas construction projects for the United States government or its allied, and was finally extended to protect employees fulfilling service contracts tied to such a construction project or to a national defense activity. The sine qua non of the Act’s applicability has always been a military or a United States government construction connection. § 1.02 Adoption of Substantive LHWCA Law The Defense Base is an extension of the Longshoreman and Harbor Workers’ Compensation Act, 33 U.S.C.S. § 901 et seq. Congress’ power to extend the substantive provisions of the Longshoreman and Harbor Workers’ Compensation Act to the Defense Base Act was affirmed by the United States Court of Appeals for the First Circuit in Royal Indemnity Co. v. Puerto Rico Cement Corporation [142 F.2d 237 (1st Cir.),cert. denied,323 U.S. 756 (1944) ( noting that Congress had the power and intended to provide injured workers with substantially the same relief in outlying territories as the existing law afforded employees in United States)]. The Defense Base Act itself contains no substantive provisions; the entirety of the Act contains some procedural and definitional provisions specifically tailored to Defense Base Act claims. All of the Defense Base Act’s “substantive” provisions are found in the Longshore Act [seeAFIA/CIGNA Worldwide v. Felkner, 24 BRBS 154 (CRT) (5th Cir. 1991)]. The Defense 836 v DRI Annual Meeting v October 2010 Base Act is a general reference statute that incorporates not only the version of the Longshoreman and Harbor Worker’s Compensation Act in force at the time the Defense Base Act was enacted, but all subsequent Longshoreman and Harbor Workers Compensation Act amendments as well [seeOWCP v. Peabody Coal Co., 554 F.2d 310, 322 (7th Cir. 1977);see also “The Defense Base Act—A Growth Industry?” by Kerry J. Anzalone, reprinted with permission from the Benefits Review Board Service—Longshore Reporter (LexisNexis Matthew Bender) at http://www.oalj.dol.gov/public/longshore/references/reference_works/the_defense_base_act(2004 ).htm]. § 1.03 Increase of Defense Base Act Claims Defense Base Act cases (and to an even lesser extent, War Hazards Compensation Act cases) have historically made up a small minority of “longshore claims” [“The Defense Base Act—A Growth Industry?” by Kerry J. Anzalone, reprinted with permission from the Benefits Review Board Service—Longshore Reporter (LexisNexis Matthew Bender) at http://www.oalj.dol.gov/public/longshore/references/reference_works/the_defense_base_act(2004 ).htm]. However, as the number of Defense Base Act employees has increased exponentially, so have the number of Defense Base Act claims. According to the Department of Labor, from 2001 to March 31, 2008, nearly 1,300 deaths and over 9,600 time loss injuries from Iraq and Afghanistan have been reported under the Defense Base Act. As reported by the Los Angeles Times in July 2007, the number of U.S.-paid private contractors in Iraq exceeds that of American combat troops. More than 180,000 civilians (21,000 Americans, 43,000 foreigners and 118,000 Iraqis) are working in Iraq under U.S. contracts compared to 160,000 soldiers and a few thousand civilian government employees currently stationed in Iraq [“Private Contractors Outnumber U.S. Troops in Iraq”, by T. Christian Miller, Los Angeles Times, July 4, 2007]. • For further information on Iraq contractors and data from CENTCOM (Central Command) see http://www.epluribusmedia.org/features/2007/20070708_contracting_numbers.html • For a list of top contractors in Iraq and Afghanistan covering the period 2002 to 2004, see http://www.publicintegrity.org/wow/resources.aspx?act=total • To view the Congressional Research Service “Report for Congress on Private Security Contractors in Iraq: Background, Legal Status, and Other Issues” (Updated July 11, 2007) see http://fas.org/sgp/crs/natsec/RL32419.pdf • To view the United States House of Representatives report on “Private Military Contractors in Iraq: An Examination of Blackwater’s Actions in Fallujah” (September 2007), see http://fas.org/sgp/crs/natsec/RL32419.pdf • For Committee on Oversight and Government Reform hearings on DBA insurance, see http://oversight.house.gov/story.asp?ID=1944 Defense Base Act and War Hazards Compensation Act v Levy v 837 These non-Americans may have been employed by foreign companies who themselves have contracts with agencies of the U.S. government or may be subcontractors or sub- subcontractors of such companies. Many have even been directly employed by U.S. companies for one reason or another. In many cases they are simply willing to work for lower wages than Americans, and in others they may possess a skill that cannot be readily found in Americans. In the case of the Iraq War what most obviously comes to mind for the latter are Arabic to English translators. However, these workers are not entitled to all that American workers or their dependents might be entitled to for the same injuries or deaths. COMMENTARY: Due to recent world events, the number of Defense Base Act cases has sharply increased. It is important to note that the Defense Base Act, with or without the continuation of the Iraq war, is here to stay for the foreseeable future. The United States will maintain its involvement in “extraterritorial activity” for many years. War is not a necessary “ingredient” for the Defense Base Act to apply to a workforce. § 1.04 Topics Covered in This Handbook This handbook is organized as follows: • Ch. 1 provides the reader with a basic introduction to the Defense Base Act, its history and purpose, current events, and a list of common acronyms and terminology • Ch. 2 discusses coverage, i.e., the categories of work within the Defense Base Act • Ch. 3 addresses challenges and issues for Defense Base Act underwriting • Ch. 4 explains waivers under the Defense Base Act • Ch. 5 covers exclusivity under the Defense Base Act • Ch. 6 discusses the types of benefits under the Defense Base Act • Ch. 7 explains the claims process, i.e., adjudication and appeals under the Defense Base Act • Ch. 8 covers the discovery quagmire related to foreign workers under the Defense Base Act • Ch. 9 discusses the calculation of average weekly wage under the Defense Base Act • Ch. 10 explains the zone of special danger doctrine, which was created by the U.S. Supreme Court, and how the circuit courts and administrative bodies have expanded the doctrine 838 v DRI Annual Meeting v October 2010 • Ch. 11 covers commutations, settlements and death benefits • Ch. 12 discusses the War Hazards Compensation Act, its history and purpose, the meaning of war risk hazard, and the process for detention claims, among other things • Ch. 13 discusses post-traumatic stress disorder and stress-related psychiatric injuries • Appendix—DBA and WHCA Statutes • Index § 1.05 Common Terms and Acronyms The following list contains acronyms and terminology commonly involved in Defense Base Act cases. For more acronyms related to the military, see the Department of Defense dictionary at http://www.dtic.mil/doctrine/jel/doddict/acronym_index.html. AIF—Anti Iraqi Forces “Aisle or window, chicken or pasta”—Supervisors often tell contractors to pack up their bags and leave if they can’t stand the harsh conditions overseas (aka “Get on the next plane out of here”) ALJ—Administrative Law Judge Allies—Any nation with which the U.S. is engaged in a common military effort or with which the U.S. has entered into a common defensive military alliance AMAGuides—Guides to the Evaluation of Permanent Impairment (American Medical Association) AMCIT—American citizen ASR—Alternate supply route AWW—Average Weekly Wage Blanket waivers—Blanket waivers are those issued to a government agency (U. S. Agency for International Development, Department of State, etc) and apply to all Insureds working for those agencies. They are usually issued based on the location of the contract. Cf. “Specific waivers”, below. BOLO—Be on the look-out BRB—Benefits Review Board BRBS—Benefits Review Board Service—Longshore Reporter (LexisNexis Matthew Bender) Defense Base Act and War Hazards Compensation Act v Levy v 839 BSC—Blackwater Security Consulting BW—Biological weapons CAS—Close air support CASEVAC—Casualty evacuation CCOs—Contingency Contracting Officers CENTCOM—United States Central Command C.F.R.—Code of Federal Regulations CNB—Chemical, nuclear, biological weapons of mass destruction CNBR—Chemical, nuclear, biological, and radiation weapons of mass destruction COE—U S. Army Corps of Engineers Commutation—A method of reducing money to present value when there are no entitlement issues and benefits are payable based upon the maximum allowed by statute. In comparison, settlements may be structured, i.e. paid out over time, whereas a commuted award must be paid in one lump sum. Medical benefits may be settled, but they may not be commuted. In the case of commutations, compensation entitlement is reduced by 50% under Section 2(b) [see42 U.S.C.S. § 1652(b)]. Continental United States—The States and District of Columbia Contingency—An emergency involving military forces caused by natural disasters, terrorists, subversions, or by required military operations. See MTW, SSC, MOOTW, and DD/ER, below. Contingency contracting—Direct contracting support to tactical and operational forces engaged in the full spectrum of armed conflict and military operations, both domestic and overseas, including the four types of contingencies. See Contingency, above. Contingency operations—A military operation designated by the Secretary of Defense as an operation in which members of the armed forces are or may become involved in military actions, operations or hostilities against an enemy of the U.S. or against an opposing military force, or results in the call or order to, or retention on, active duty of members of the uniformed services, or any other provision of law during a war or during a national emergency declared by the President or Congress Contractor—Any individual, partnership, corporation, or association, and any trustee, receiver, assignee, successor, or personal representative thereof. The rights, obligations, liability, and duties of the employer under the Longshore Act apply to such contractors. CONUS—Continental United States Coverage—The statutory “coverage” of the DBA is defined generally by § 1(a) of the Act [42 840 v DRI Annual Meeting v October 2010