Space: The Final Defense Base Act Frontier

From SpaceX’s multi-billion dollar NASA contracts, to the newly created United States Space Force, will the Defense Base Act be applied to this new world of defense spending? Controlling law suggests that the Defense Base Act will indeed apply, with such contracts representing a viable growth industry for Defense Base Act insurance companies, underwriters and defense contracting companies.

            The Defense Base Act (“DBA”) is a federal workers’ compensation program providing benefits to those injured while working on U.S. governmental agency contracts in furtherance of any military purpose or public work.  The DBA, 42 U.S.C.S. § 1651-1654, was enacted by Congress on August 16, 1941 to provide disability compensation benefits to a previously neglected subset of the American workforce, namely, overseas governmental contractors.

            At the time of the creation of the DBA, the concept of space exploration was but a dream, and the United States would not walk on the moon for another twenty-eight years. Seventeen years after the enactment of the DBA, president Dwight D. Eisenhower created The National Aeronautics and Space Administration (“NASA”) under the National Aeronautics and Space Act of 1958. NASA was created as an independent agency of the United States Federal Government responsible for the Nation’s space program, as well as aeronautic and aerospace defense applications.

            Although NASA’s public-facing perception is primarily a “civilian” agency, in practice NASA has acted as the United States military’s arm in space since its inception. According to Smithsonian Magazine:

“NASA and the military also maintain a strong relationship. Over the decades, the vast majority of NASA astronauts have been military service members. During the heyday of the space shuttle, NASA would routinely ferry classified payloads into orbit for the Department of Defense among other projects the agencies have collaborated on.”

            In reviewing NASA’s publicly awarded contracts, it becomes clear that they are more redacted and classified than most Defense Department and Department of State Contracts awarded to the same or similar companies. The gross majority of the redactions cite “(b)(2)” and “(b)(4)” as justifications for censoring the topic. This alludes to the U.S. redactions codes, with “(b)(4)” withholding on the basis that it would “reveal information that would impair the application of state-of-the-art technology within a U.S. weapon system.” This fact obviously highlights the overall military leaning nature of NASA as a federal agency.

            In fiscal year 2017, National Aeronautics and Space Administration (NASA) awarded approximately $18.3 billion in contracts, the majority of which ($16.4 billion) was for “services” including research and development, engineering and technical services, operation and maintenance of laboratories and facilities, and housekeeping. Under the existing contracts for commercial resupply services, NASA plans to award more than $20 billion for commercial cargo and crew transportation services to the ISS through 2024. Further, congress has provided $22.75 billion for NASA in fiscal year 2020 alone, and increase of $1.2 billion since fiscal year 2019. Current NASA contracts can be found here.

            Current NASA contractors include many large established defense contractors, namely, The Boeing Company, Paragon Space Development Corporation, Sierra Nevada Corporation, Anadarko Industries, Wyle Laboratories, MRI Technologies, Science Application International Corporation (“SAIC”), Chenega Security, DynCorp International, Lockheed Martin Corporation, Al-Razaq Computing Services, Tecolote Research, Inc., KBR/Service Employees International, L & M Technologies, CSC Applied Technologies, LLC, Pacific Architects and Engineers (“PAE”), and Elon Musk’s Space Exploration Technologies (“SpaceX”).

            According to the United States Department of Labor’s annual Industry Report Card, from the period of 09/01/2001 - 06/30/2019 these very NASA contractors have had countless DBA claims: KBR/Service Employees International – 34,939; DynCorp International – 10,248; Wyle – 3; Chenega –21+; MRI Technologies – 5; SAIC – 427; Lockheed – 700+; CSC – 8; and PAE –1500+ claims. 

            With so much money at stake, the question arises: will workers injured while working on contracts entered into with NASA and similar agencies be provided the protections of the DBA. The answer is a resounding yes. 

            In examining the nature and location of all reported DBA claims, it becomes clear that the DBA is liberally applied to most contractors operating in the United States, in the United States in preparation for overseas work, in U.S. territories, and in foreign countries. According to the Department of Labor’s annual Industry Report Card, Defense Base Act claims stem from over 194 different countries, on all 7 continents. Additionally, claims occurring on U.S. soil are the fourth highest reported location, comprising of over 2,829 claims.

            Of importance, “in-flight” injuries are the tenth highest reported location and noted as a separate location of incident, with 643 occurring during the time period of 09/01/2001 - 06/30/2019. Due to the vast territorial scope of the DBA, there is no reason to doubt that a court would apply the DBA to contractors of a space agency injured en route to outer space, near earth orbit, or killed during a failed launch attempt.

            The Defense Base Act sets forth six categories of contracts that come within the purview of the Act. The DBA covers any contract that is:

(1) at any military, air, or naval base acquired after January 1, 1940, by the United States from any foreign government; or

(2) upon any lands occupied or used by the United States for military or naval purposes in any Territory or possession outside the continental United States (including the United States Naval Operating Base, Guantanamo Bay, Cuba; and the Canal Zone); or

(3) upon any public work in any Territory or possession outside the continental United States (including the United States Naval Operating Base, Guantanamo Bay, Cuba; and the Canal Zone), if such employee is engaged in employment at such place under the contract of a contractor …

(4) under a contract entered into with the United States or any executive department, independent establishment, or agency thereof (including any corporate instrumentality of the United States), or any subcontract, or subordinate contract with respect to such contract, where such contract is to be performed outside the continental United States and at places not within the areas described in subparagraphs (1)–(3) of this subdivision, for the purpose of engaging in public work, …

(5) under a contract approved and financed by the United States or any executive department, independent establishment, or agency thereof (including any corporate instrumentality of the United States), or any subcontract or subordinate contract with respect to such contract, where such contract is to be performed outside the continental United States, under the Mutual Security Act of 1954, …

(6) outside the continental United States by an American employer providing welfare or similar services for the benefit of the Armed Forces pursuant to appropriate authorization by the Secretary of Defense, irrespective of the place where the injury or death occurs, and shall include any injury or death occurring to any such employee during transportation to or from his place of employment, where the employer or the United States provides the transportation or the cost thereof.

            It may be argued that NASA contracts are not “military” in nature, thus falling outside DBA coverage. As noted previously, this argument would most likely fail due to the widely understood military nature of their agency and the redactions found within their publicized contracts. However, it cannot be refuted that NASA contracts are surely considered “public work”, thus bringing them under the purview of the DBA. The black letter law, and our Court’s interpretation of the same, make this conclusion all but inevitable. Under the DBA, the definition of “public work” is set forth in Section 1651(b)(1), 42 U.S.C. § 1651(b)(1), as follows:

(1) the term “public work” means any fixed improvement or any project, whether or not fixed, involving construction, alteration, removal or repair for the United States or its allies, including but not limited to projects or operations under service contracts and projects in connection with the national defense or war activities, dredging, harbor improvements, dams, roadways, and housing, as well as preparatory and ancillary work in connection therewith at the cite or on the project;

            The salient legislative history explaining the 1958 revision to the definition of “public work” may be found in the Senate Committee Report;

To redefine the term “public work” so as to clarify its meaning and make it construe consistently with federal court decisions. It was the intention of Congress that this term would cover both fixed and moveable projects, including service projects. Some State court decisions have disregarded this Congressional intent, presumably because the purpose is not explicitly spelled out in the Act, and have imposed further state liability [222(BRB)] upon employers in a manner inconsistent with the underlying purposes of the Act. By redefining the term “public work” to include the words “whether or not fixed,” the original intention to have it apply to projects of all kinds otherwise in the definition, including service contract projects, is reaffirmed.

S.Rep. No. 1886, 85th Cong., 2d Sess. 5, 1958 U.S. Code Cong. and Administrative News 3324. 

            Even if the primary basis for establishing coverage under “any military purposes” is rebutted, clearly coverage for such NASA contracts is established under the “public work” clause of the DBA. Therefore, it would be strongly advised that any contractor of NASA or similar governmental agency procure DBA coverage to limit their tort liability and protect their officers from criminal liability for failure to obtain coverage.

            In 1980, The United States Court of Appeals for the Second Circuit made an important distinction between NASA contracts and NASA grants, ruling that the latter falls outside of DBA coverage. The court held in University of Rochester v. Hartman, 618 F. 2d. (2nd Cir. 1980), that a scientist injured in Antarctica while working on a scholarly research project funded by a grant from NASA and the National Science Foundation fell outside of DBA coverage. The Court reasoned that work done under a mere federal grant is not covered by the DBA because a grant is not a “contract” within the meaning of 42 U.S.C. § 1651(a)(4)- even if an injured worker is engaged in “public work”, as defined by Section 1651(b)(1). Applying the criteria established by Congress, NASA, and NSF, the Court rightly held that the project was a “grant instrument” as (1) the initial proposal was not solicited by the Government, (2) the Government did not retain close control over the objectives, methods, or timetable of the project, (3) the purpose of the project was to supplement a Professor’s long-term research, (4) it did not require a service ordered by the Government to solve a specific problem, (5) the direction of the project was entirely controlled by the grantee, and (6) the grantee was not required to submit a final report to the Government until he had completed his research. It should be noted that the Benefits Review Board’s finding that a defense or military purpose is not a pre-requisite to DBA coverage remains undisturbed and controlling today.

            A key distinction found in all of the publicly available NASA contracts today is that they are clearly not grants. Rather, they are (1) subject to FAR regulations, (2) are actually called “contracts”, (3) NASA retains close control over the objectives and time tables of each contract, (4) they involved services ordered by the government, (5) the contractor does not have total control of the services, and (6) the contractors have strict regular reporting requirements. Furthermore, they satisfy all of the common law requirements of a valid contract in that there is a formal offer, bidding, formal acceptance, valid legal purposes, and consideration exchanged.

            In that line, NASA’s Federal Acquisition Regulations require a contractor to obtain adequate workers’ compensation insurance prior to the awarding of a contact. FAR 1852.228-75 controls, and states in pertinent part:

1852.228-75 Minimum Insurance Coverage. As prescribed in 1828.372, insert the following clause: MINIMUM INSURANCE COVERAGE (OCT 1988) The Contractor shall obtain and maintain insurance coverage as follows for the performance of this contract: (a) Worker's compensation and employer's liability insurance as required by applicable Federal and state workers' compensation and occupational disease statutes. If occupational diseases are not compensable under those statutes, they shall be covered under the employer's liability section of the insurance policy, except when contract operations are so commingled with the Contractor's commercial operations that it would not be practical. The employer's liability coverage shall be at least $100,000, except in States with exclusive or monopolistic funds that do not permit workers' compensation to be written by private carriers.

            With the creation of our nation’s sixth military branch, The United States Space Force, the United States expands our reaches into near earth orbit and the expanse of outer space. The intended purpose of this newly created branch of the military is primarily to “maximize warfighting capability” and “organize, train and equip our space warfighters with next-generation capabilities”. This surreal fact, coupled with the significant increase in the use of NASA contractors to provide needed extra-planetary mission support, contractors such as KBR, DynCorp, PAE, SpaceX, Virgin Galactic and Blue Origin need to be aware of their Defense Base Act insurance and reporting obligations to provide injured workers with proper remedies when injured or killed. Furthermore, these companies need to be aware that procurement of DBA coverage will be necessary in order to avoid (1) inevitable tort law suits where they are precluded from raising any defenses to liability, (2) personal criminal liability for their president, secretary, and treasurer, (3) personal criminal sentencing of up to 1 year for their president, secretary, and treasurer, and (4) joint corporate criminal liability.

Contact Diamond Law Practice today at (212) 220-7134, or JDiamond@DiamondLawPractice.com for a free claim consultation.

U.S. Department of Labor Announces Increase in Maximum Benefit Rate for Defense Base Act Claimants

The United States Department of Labor, Office of Workers’ Compensation Programs has confirmed the increase in cost of living adjustments for all beneficiaries receiving death benefits and permanent total disability compensation benefits under the federal Defense Base Act. As of October 1, 2019, the maximum benefit rate increases by 3.26% to $1,560.08. This 3.26% increase is the largest percentage increase in benefits since fiscal year 2009.

 Section 10(f) of the Longshore and Harbor Workers’ Compensation Act, as extended by the Defense Base Act controls this issue. This section states in pertinent part:

(f) Effective October 1 of each year, the compensation or death benefits payable for permanent total disability or death arising out of injuries subject to this Act shall be increased by the lesser of —

(1) a percentage equal to the percentage (if any) by which the applicable national weekly wage for the period beginning on such October 1, as determined under section 6(b) [33 USC § 906(b)], exceeds the applicable national average weekly wage, as so determined, for the period beginning with the preceding October 1; or

 (2) 5 per centum.

The Department of Labor’s updated maximum compensation rate can be found here, and here.

If you have a pending Defense Base Act claim for death compensation benefits or permanent total disability compensation benefits and do not receive an increase in your benefit rate, contact us for a free claim assessment.

USCENTCOM Reports 55,135 Deployed Contractors Supporting DoD's Overseas Effort

The United States Department of Defense (“DoD”) has reported deployed private contractor numbers for the second quarter of 2019. The report includes data on DoD contractors deployed overseas in Iraq, Afghanistan, Syria. In short, the DoD reports 55,135 deployed contractor personnel, which represents an increase of approximately 2,073 from the previous reported figures. The full report can be found here. Below, I touch on some of the highlights of the report.

As noted above, the April 2019 DOD report breaks down deployed contractors by country. Afghanistan has about 30,500 deployed contractors, while Iraq and Syria have a combined 6,900. Additionally, the DOD breaks down the compilation of contractors by citizenship. The majority of contractors in Iraq and Syria are U.S. citizens, while the number of Third Country Nationals and Local National Contractors outnumber U.S. citizen contractors deployed in Afghanistan.

Concerning Iraq and Syria, the majority of contractors deployed are in Logistics and Maintenance (35.2%), Base Support (17.8%) and Translator/Interpreting (12.8%). Medical/Dental (.3%) and Training (.5%) represent the smallest faction. This report unfortunately highlights the little emphasis placed upon the health and well being of our contractors deployed overseas in war zones. When injured, contractors are provided little to no remedies except those afforded under the Defense Base Act.

As applicable in Afghanistan, the majority of contractors deployed are in Logistics and Maintenance (31.6%), Security (19.2%) and Base Support (13.7%). Unfortunately, Medical/Dental (.3%) and IT/Communication (3.2%) represent the smallest faction of deployed contractors. Again, this report highlights how little emphasis is placed upon the health and well being of contractors deployed overseas in Afghanistan.

Of importance, all injured contractors working under the above contracts are covered under the Defense Base Act, regardless of citizenship. The Defense Base Act is a federal workers’ compensation framework that provides medical benefits and compensation benefits to injured contractors, and funeral expenses and death compensation benefits to deceased contractors. The Defense Base Act is an injured workers’ sole remedy for injury, so retaining an experienced attorney to handle your claim at the outset is absolutely critical. Please contact us here should you have any questions about your entitlement to Defense Base Act compensation benefits.

Why the Defense Industry Must Partner with Blockchain to Win the War on Terror

It was just after dawn in Kabul, Afghanistan, when the first bomb exploded sending a massive shock wave through space-time. Close your eyes, and picture the stereotypical face of a G.I. Joe action figure. That’s Jim. Six months before the bomb attack, Jim was offered a lucrative contract to provide security for Justin Bieber. He respectfully declined, and returned to Afghanistan to start his eighth tour. The threat needed to be real, and the goal was to help his country. Jim first tasted it all ten years prior in the United States Marine Corps. He served six honorable years with distinction, before going into private security contracting to provide for his two kids and beautiful wife. They bought a home in the rural heartland of America with rolling green hills, and were manifesting their dreams into a beautiful reality.

It was the third Christmas that Jim had been away from his children. His youngest had never had him home to open presents under the tree. Far from the snow-covered hills of home, Kabul Afghanistan was a hell hole. The air was extremely polluted and smell of death lingered. Jim swapped his Santa Claus costume for 80 pounds of protective gear, a Kevlar helmet, 15 magazines of ammunition, an M-4 and a smartphone to call home if something happened. He spent Christmas day escorting high-ranking government officials through Taliban strongholds in the dead of night. He was so exhausted when he returned to base that he didn’t even have the strength to call his wife and children. New Year’s Day was spent in twelve briefings with the Department of State discussing imminent attacks in the area and the need to revamp their outdated identification and biometric systems. 

The ball didn’t drop until three days later. He and his twelve mobile team members had just worked a 48-hour shift, and returned to the dining hall for some food and laughs before they slept. These twelve men, like he, were all elite ex-military members who jumped to the private sector to support their families, and help pay their mortgages. These men are the .1% of the population blessed with a genetic predisposition to help people, the mental fortitude to operate under immeasurable stress, and the physical capabilities of an Olympic athlete.

As Jim and his 12 comrades ate, Mr. Taliban finished loading the last of the 3,000 pounds of explosives into his late model white Toyota Corolla. The suspension of the vehicle could hardly support the weight of the explosives causing his tires to rub up against the wheel wells as he drove over the rugged roads of Kabul. Adrenaline coursed through his veins as he approached the security checkpoint, flashed his fake ID, and accelerated his pale white horse through the security gate. A moment of calm came over him before he tripped the detonator using his mobile phone.

A massive fire ball erupted, visible for miles, causing the ground to quake. Thick black smoke followed. The bomb had been detonated just 150 meters from Jim’s table, knocking him unconscious, and throwing his lifeless body across the room. He awoke seconds later to hell on earth. Blood, body parts, screaming, burning bodies, the smell of gasoline and recently detonated explosives. He reached down to ensure his legs were intact, grabbed his gun, and ran towards the explosion while others fled the opposite way. It was just his nature.

After the dust settled, Jim knew something was wrong and that he would never be the same. The percussive blast wave had obliterated thick concrete walls, metal barriers, and blown out every window within a one mile radius. The delicate structures of his brain and frontal cortex were of no match for that kind of power.

He continued working, as he had done when he fractured his thumb and tore his ACL three weeks prior evacuating an American diplomat out of an IED attack. He was a special breed of selfless human being. Eventually, his mind and body began to fail him. His thoughts were racing. He began to suffer crippling introspective nightmares, panic attacks, and was unable to control his emotions or body. And the headaches. Each headache felt like a new bomb detonating in his brain. He would do anything to stop it all. Control was key in his line of work, and he now lost control of everything, even himself. Eventually, his co-workers forced him to surrender his weapon and return home for medical treatment.

His body came home, but his essence remained in Kabul in some alternate lost reality wherein the bomb didn’t detonate. His life would now be completely different as if he was born into a new world. His personality changed due to a traumatic brain injury. His wife could only take so much of the crying, drinking, anger, rage, depression, abuse and change. Divorce begot the loss of his house and children. Bankruptcy begot a denial in his disability claim, which led to homelessness.

Once Jim took the last pill from his orange pill bottle, he knew what was down the road. The goddamn headaches became so bad, he thought of either ending it all, or taking street drugs to stop the war in his head. Alcohol led to meth, and meth bled into heroin. Heroin was technically what his doctor had prescribed him, he just couldn’t afford to refill his oxycodone prescription. He was now the furthest thing from his manifest destiny of rolling green hills. Not only was his health stolen from him by the bomb but his wife, his kids, his house, his dreams, his destiny and his identity was lost.

For the last decade, I have had the opportunity to help those who have lost everything by virtue of terrorist attacks. Unfortunately, Jim’s story is all too common. The majority of the insurgent attacks I deal with have four universal characteristics. First, they involve the use of a mobile phone as either a detonator, or a communication tool to coordinate the attack. Second, they involve the use of fake, stolen or falsified identification documents allowing access to vulnerable military or civilian targets. Third, they are perpetrated by uneducated people who do not have access to the internet. Finally, they are funded by an untraceable transfer of cash from an organized terrorist network. These four problems have plagued U.S. forces in Afghanistan and Iraq, and pose an almost impossible hurdle to surpass on the road to victory. As a result, the conflicts in Afghanistan and Iraq have become the two longest in America’s history. There is a new simple solution to this problem.

In order to win America’s longest war, the U.S. Department of Defense, U.S. Department of State and other governmental agencies must partner with blockchain companies to become early adopters of this revolutionary tool. Blockchain is a technology that creates an incorruptible digital ledger of data distributed in small pieces across a vast network of users. It is the holy grail of technologies as it is cheap and purges many uncertainties in the world of online business, data storage and distribution. It will eliminate the possibility of the darker side of our human nature to disrupt the digital world by establishing an incorruptible decentralized distributed system. It will phase out hacking, manipulation, data breach, corruption and distrust from the entire digital world.

The partnership between blockchain and the defense industry appears to be inevitable as the United States military has historically been an early adopter of technologies that change the course of human history. The internet itself resulted from the Department of Defense awarding a small private contract to Robert Taylor, Leonard Kleinrock and Paul Baran under the Advanced Research Projects Agency Network (“ARPNET”). Under this DOD contract, ARPNET workers developed the internet protocol suite (“TCP/IP”) which advanced humanity beyond the DOD’s wildest predictions in helping create the world wide web. Many now say that blockchain will be as revolutionary as the internet itself.

Recently, the U.S. Department of Defense has demonstrated willingness to adopt blockchain technology to aid in the creation of a more secure battlefield messaging system by seeking bids from blockchain startups. The Defense Advanced Research Projects Agency (“DARPA”) recently stated in an open bid proposal: "Significant portions of the DoD back office infrastructure can be decentralized, 'smart documents and contracts' can be instantly and securely sent and received thereby reducing exposure to hackers and reducing needless delays in DoD back office correspondence. As an example, Military Interdepartmental Purchase Requests (MIPR) could be implemented using the secure ledger.” To date, no blockchain company has been able to fulfill DARPA’s objective, leaving a world of opportunity for emerging startups.

Within the last six months, American defense contractors also first began testing the blockchain waters. In May 2017, defense giant Lockheed Martin announced plans to partner with a small blockchain start up in Virginia to integrate blockchain technology into its already established supply chain and risk management sectors. In a recent statement, Lockheed said, “With this effort, Lockheed Martin becomes the first US defense contractor to incorporate blockchain technology into its developmental processes, enabling more efficient and assured offerings to the federal government." This early move into blockchain technology will undoubtable bolster Lockheed’s receipt of more than $40 billion in defense revenue they receive annually. The sky will be the limit for Lockheed, as it has been, due to their foresight and early entry into this emerging arena. This is even more apparent in Lockheed’s stock price (symbol, LMT), which increased from 267 to 311 in the six months since their announcement.

Within the last 30 days, the U.S. Senate passed a $700 Billion-dollar defense bill which mandates that the military investigate future applications of blockchain technology. Specifically, Section 1630(C) of the bill states, “Not later than 180 days after the date of the enactment of this Act, the Secretary of Defense, in consultation with the heads of such other agencies and departments as the Secretary considers appropriate, shall submit to the appropriate committees of Congress a report on the potential offensive and defensive cyber applications of blockchain technology and other distributed database technologies and an assessment of efforts by foreign powers, extremist organizations, and criminal networks to utilize these technologies. Such report shall also include an assessment of the use or planned use of blockchain technologies by the United States Government or critical infrastructure networks and the vulnerabilities of such networks to cyber-attacks.” The implications of this governmental mandate will undoubtedly cause a mad rush of established defense contractors to seek partnership with blockchain startups capable of meeting growing government demand.

Blockchain is a match made in heaven with the defense industry. First, it creates a system that is immune from attacks (physical or cyber) which would traditionally annihilate a centralized controlled data network. This is of upmost importance to operational security in a military setting. In the current traditional system, if one data center is disabled by an enemy, the whole network is vulnerable. However, in a decentralized blockchain system, if one data center is attacked, the entire network remains unfazed as it operates on a distributed network relying on millions of users.  Essentially, a terrorist would have to attack or destroy each one of the million users’ computers to decrease the viability of the blockchain network. Second, it creates an immutable data chain protected from alteration or unauthorized access. As data in the blockchain is built and recalled sequentially, the possibility of altering data without a footprint would be inherently impossible. The implication of this characteristic of blockchain will revolutionize cybersecurity. Third, it is efficient and has the potential to be widely distributed. In a world where bloated military budgets are headline news, future military logisticians will need to find room in their budgets to optimize their bottom-line. By having the ability to build on existing systems, blockchain will be the obvious choice for the military in the future. Fourth, as the technology is in its infancy stage, it could allow early partners to form the very future of the technology itself.

There is now a clear consensus that blockchain will be the next big tool to bring humanity into a new age. There is no doubt that blockchain technology will change the world. The question is whether the change will be for the betterment of humanity.  I want to revert to the massive terror attack in Kabul that destroyed my friend Jim’s life. I am not exaggerating when I say, blockchain could have prevented that very attack from happening. Unfortunately, the technology that could have prevented the attack was not adopted and deployed in time. Fortunately, early implementation of this technology in New York City can now help Jim and other homeless vets get a helping hand.

One company showing the most promise in this arena is Blockchain for Change. Blockchain for Change is a New York City based startup aimed at tackling the immeasurable task of creating a digital identity coupled with security of personal information and financial inclusion through the use of a smartphone app. Their mobile app, Fummi, makes use of the Ethereum blockchain, optimizing functionality within the ecosystem resulting in a reliable platform to help the end user and service providers. They have created a cutting-edge pilot program in New York City to distribute its android application on mobile phones to empower the homeless community through a usable sovereign ID, digital wallet, and an app that simplifies government assistance benefit access, reservations at homeless shelters, emergency information, suicide prevention, security, and internet access. The implications of their efforts could mean a real eradication of homelessness for the first time in the city’s history. Homeless vets like Jim will now have a real chance at change.

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Blockchain for Change  demonstrates the power of the Fummi platform on the streets of New York City. 

The underlying premise of Blockchain for Change is that verified immutable identity is required to facilitate inclusion in the modern economy. Without verified identity, the economic systems driven by governmental agencies ultimately remain inefficient. By building its blockchain based Smart ID and making it accessible to those who need it most, they are paving the way for societal enfranchisement, and opening space to expand into the defense realm. The technology being developed by companies like Blockchain for Change has the exciting capability of building a future without terrorism.

The Department of Defense, Department of State, and United States Agency for International Development (“USAID”) have existing programs that can be utilized in partnership with blockchain companies to eradicate terror today in Afghanistan. Individually, each program has resulted in either mediocre success or outright failure. Integrating these existing programs under a coordinated blockchain platform will change the face of modern warfare itself. By way of example, prior contracts issued by the Department of Defense and USAID distributed free cell phones to the citizens of Afghanistan, and developed massive data systems under the Afghan Automated Biometric Information System (“AABIS”). AABIS lead to the issuance of ID cards to Afghani citizens for the first time in history. The ID’s ultimately helped American forces track terrorists, yet led to inevitable failure as the ID’s are unfortunately fallible, and are routinely altered to facilitate insurgent attacks. Likewise, the USAID distributed cellphones gave primitive internet access to the citizens, but ultimately were used as weapons and detonator systems due to infallibilities with the existing technology.

Blockchain has the ability to unify these two prior government programs, and create something greater than the sum of its parts. Instead of issuing ID’s capable of forgery, the DOD could adopt Blockchain for Change’s model of digital identification presented on a mobile platform which would result in (1) an immutable form of identification easily accessible by the user and beneficial to the issuing government body, (2) a fast data network impervious to cyber-attack, (3) verifiable digital wallets which would inevitably phase out untraceable physical transfers of cash, and (4) would create an enfranchised traceable user empowered with real access to the internet via a smartphone. Blockchain for Change’s Advisor, Josh Thompson highlights the potential role of blockchain in the defense arena: “As the majority of the developing world accesses the internet via a mobile device, the solution to combating global terrorism will emerge from the mobile arena. Aside from the benefits to the end user, the U.S. government as the service provider would be able to streamline corollary processes, cut costs, protect against data leaks, and gain efficiency while increasing overall mission security. It will surely be the future of United States’ defense and defense contracting, and we stand by to help that become a reality.”

In addition to revolutionizing the Defense industry, other governmental agencies could bring about radical change and better bottom lines through integration of blockchain technology with existing systems. Passports, voting records, birth certificates, visas, permanent resident cards, social security cards, and TSA global entry could be ushered into the modern age by phasing in a secure smartphone based identification application built on immutable blockchain technology. Blockchain for Change and New York City’s early success with their smart ID pilot program proves this dream will soon be a reality in the very near future. 

The Last Responsible Employer/Carrier Rule Under the Defense Base Act: The Art of Corporate Finger Pointing, Denial & Passing the Buck.

In the old days of Defense Base Act insurance sales, there were only three major players with very limited competition. The big three insurance companies, namely AIG, CNA, and ACE, paved the way into the Defense Base Act realm, and set early case law concerning emerging issues in Defense Base Act litigation. Since then, the market for Defense Base Act insurance has expanded, resulting in new Carriers and third party administrators boosting quarterly profits. These include Zurich American, Allied World National Assurance Company, Broadspire Services, Liberty Mutual Insurance Company, STARR Indemnity, and Gallagher Bassett.

With the emergence of new Defense Base Act carriers, came new challenges in underwriting risks inclusive of “old” liability through judicial expansion of the doctrine known as the last responsible employer and carrier rule. New carriers such as STARR Indemnity and Allied World National Assurance Company must now underwrite coverage for both new risks, and old risks inherited under newly issued policies to Employers who have changed insurance companies seeking lower premiums.

The classic fact pattern regarding the last responsible carrier goes as follows. Mr. Jones is a Protective Security Specialist in Iraq with Employer X, who purchased Defense Base Act insurance coverage through Original Insurance Company. In January 2015, Mr. Jones injures his shoulder, and is sent home to for further medical treatment by on base medics. Upon repatriation, the Original Insurance Carrier baselessly denies his claim knowing that the insured Employer X intends to change insurance carriers. After experiencing the financial hardships of a denied claim, and baseless denial of simple medical treatment, Mr. Jones is forced to return to overseas work in order to support his family in June 2015. In May 2015, Employer X changed Defense Base Act insurance companies to New Insurance Company. After returning to heavy duty work overseas, Mr. Jones’ condition worsens, and his pain becomes significantly worse causing him to again return stateside to treat. New Insurance Company says the Original Insurance Company is liable, and denies his claim. The Original Insurance Company says the New Insurance Company is liable, and denies his claim. Mr. Jones finds himself the middle of two multi-billion-dollar insurance carriers who both profited off the sale of multimillion dollar Defense Base Act insurance policies, and pitched their comprehensive and responsive adjuster services to obtain the sale. However, when it really matters, neither insurance carrier wants to make good on their promises. Who is liable?

The short answer is that the New Insurance Company is liable for the entire disability no matter how zealously they defend against the claim.

The law governing the last responsible employer/carrier under the Defense Base Act is as follows: 

[I]f the disability resulted from the natural progression of a prior injury and would have occurred notwithstanding the subsequent injury, then the prior injury is compensable and accordingly, the prior employer is responsible.  If, on the other hand,  the subsequent injury aggravated, accelerated or combined with claimant’s prior injury, thus resulting in claimant’s disability, then the subsequent injury is the compensable injury, and the subsequent employer is responsible.

Constructors, Inc. v. Dir., Office of Workers’ Comp. Programs, 950 F.2d 621, 624 (9th Cir. 1991) (emphasis added; quoting Kelaita v. Dir., Office of Workers’ Comp. Programs, 799 F.2d 1308, 1311 (9th Cir. 1986)).  The last employer rule dictates that "the employer during the last employment in which the claimant was exposed to injurious stimuli . . . should be liable for the full amount of the award." Travelers Ins. Co. v. Cardillo, 225 F.2d 137, 145 (2d Cir. 1955).

This rule has been reiterated time and time again by the courts in numerous other decisions, See Cordero, 580 F.2d at 1336; Ronne, 932 F.2d at 840; Picinich, 914 F.2d at 1319; Lustig v. U.S. Dep't of Labor, 881 F.2d 593, 596 (9th Cir. 1989); Todd Shipyards Corp. v. Black, 717 F.2d 1280, 1284 (9th Cir. 1983); Lopez v. Stevedoring Servs. of Am., 39 BRBS 85 (2005) (later employer may be held liable even when the aggravating injury is not the primary factor in claimant’s resulting disability); Reposky v. International Transp. Services, 40 BRBS 65 (2006). Nonetheless, insurance defense attorneys routinely attempt to pervert the law to justify baseless claim denials. The rationale behind enacting the last responsible carrier rule is twofold. First, the courts have justified this rule due to the "administrative convenience" in avoiding lengthy liability apportionment. Second, courts have justified this rule based upon the fairness inherent in the likelihood that "all employers will be the last employer a proportionate share of the time." Cordero, 580 F.2d at 1336.

An issue oftentimes raised by overly zealous defense attorneys attempting to avoid liability is whether the injury was the “natural progression” of the original injury, or whether the injury was worsened by continued employment. The legal standard developed over the past few decades has created an extremely low hurdle for a new carrier to be assigned full liability. This is particularly true in Defense Base Act claims whereby the nature of contractor’s overseas employment is almost always extremely physically and mentally demanding, and performed in harsh war zone conditions. 

An important distinction under this rule, is that it does not require that a later injury fundamentally alter a prior condition. Rather, “it is enough that it produces or contributes to a worsening of symptoms.”  Marinette Marine Corp. v. Office of Workers’ Comp. Programs, 431 F.3d 1032, 1035 (7th Cir. 2005).  In other words, it is not necessary to compare MRI’s or X-rays of a condition pre and post-coverage dates. Aside from the logistical nightmare of attempting to do so, it would be both medically and legally irrelevant. See, Avant v. Nat. Steel and Shipbuilding Co., et al., BRB No. 03-0414 (Mar. 8, 2004, unpub) (holding a doctor’s opinion that surgery would be required, regardless of the impact upon claimant’s condition of his later employer, is not dispositive.)

Simply put, all that is required to shift liability to the new insurance carrier is a mere worsening of symptoms. Daniel L. Oberts v. Alsalam Aircraft Company, BRB No. 05-0445, at 3, (holding that an ‘aggravation’ occurs when an increase in symptoms is linked to a claimant’s continued employment). The length of time an injured employee works under a new coverage period is irrelevant. Even where a claimant works for a subsequent employer for only one day, he can suffer a compensable aggravation.  Metro. Stevedore Co. v. Crescent Wharf & Warehouse Co., 339 F.3d 1102, 1106 (9th Cir. 2003) (noting that aggravations can be caused where work performed for an employer is “harmful” to the claimant’s condition and where such work causes “flare-ups” of pain), cert. denied, 543 U.S. 940 (2004); J.H. v. Dimensions Int’l, BRB No. 08-0689 (Apr. 16, 2009) (unpublished); Obert v. John T. Clark & Son of Maryland, 23 BRBS 157 (1990); Cairns v. Matson Terminals, Inc., 21 BRBS 252 (1988). (holding that the fact that symptoms could have developed anywhere fails to negate the fact that the employee’s symptoms developed while he was working for his employer). Finally, the occurrence of a specific injurious event is absolutely unnecessary to shift liability to a new insurance carrier, if it is demonstrated that conditions of employment caused the employee to become symptomatic. Delaware River Stevedores, Inc. v. Director, OWCP, 279 F.3d 233, 241, 35 BRBS 154, 160(CRT) (3d Cir. 2002); Director, OWCP v. Vessel Repair, Inc., 168 F.3d 190, 33 BRBS 65(CRT) (5th Cir. 1999);5 Wheatley v. Adler, 407 F.2d 307 (D.C. Cir. 1968); Darnell v. Bell Helicopter International, Inc., 16 BRBS 98 (1984), aff’d sub nom.; and Bell Helicopter International, Inc. v. Jacobs, 746 F.2d 1342, 17 BRBS 13(CRT) (8th Cir. 1984).

Claims involving multiple employers, and multiple Defense Base Act insurance carriers are oftentimes heavily litigated. Therefore, should you find yourself in the middle of a last responsible carrier claim, I recommend retaining competent counsel to help fight for what you’re entitled to under the Defense Base Act. To best determined whether your injuries fall within Defense Base Act coverage, contact Diamond Law Practice, PLLC today. We offer free claim consultation to help you recover all available benefits under the Defense Base Act. Please call (212) 220-7134, or email us at JDiamond@DiamondLawPractice.com today.

Pre-deployment Injuries Covered Under the Defense Base Act

One question military contractors frequently ask me is whether injuries occurring during stateside preparation for overseas deployment are covered under the Defense Base Act. The typical fact pattern goes as follows. A defense contractor accepts a lucrative contract as a Protective Security Specialist (“PSS”) to escort high profile diplomats through enemy territory in Afghanistan. As part of their pre-deployment training, the PSS travels to a stateside United States military base and sustains a serious injury immediately prior to their deployment. Would this injury be covered under the Defense Base Act? The short answer is yes.

Section 1(a)(4) of the Defense Base Act, 42 USC § 1651 et seq., states that coverage extends to:

Except as herein modified the provisions of the Longshoremen's and Harbor Workers' Compensation Act as amended, shall apply in respect to the injury or death of any employee engaged in any employment...Under a contract entered into with the United States or any executive department, independent establishment, or agency thereof (including any corporate instrumentality of the United States), or any subcontract, or subordinate contract with respect to such contract, where such contract is to be performed outside the continental United States and at places not within the areas described in subparagraphs (1), (2), and (3) of this subdivision. . .

The above provision infers that Defense Base Act coverage extends over a claim when the claimant's employment under the contract is to be performed outside the continental United States. Accordingly, if an employee sustains an injury while engaged in activities related to their employment duties while in the United States under a contract that is to be performed outside of the United, then that injury should fall within Defense Base Act coverage.  Examples of such stateside activities include stateside job training, conditioning, orientation, travel and employee processing.

One case which extends Defense Base Act coverage to certain stateside injuries is Phoenix Indemnity Co. v Willard, 130 F.Supp. 657 (D.C.N.Y. 1955).  In Phoenix, the injured employee applied for employment under contract to perform construction work for the United States Government in Libya. On December 15, 1951, after a pre-employment examination, a written contract of employment was signed engaging the employee as Chief Inspector-Driller in Tripoli, Libya. Under his contract, the employee was obligated to submit to 'physical examinations, vaccinations and inoculations as may be required by the contractor' and other processing such as obtaining a passport and security clearance.  

Though the employee’s duties were to be performed in Tripoli, Libya, his compensation began on the day he signed his employment contract. On December 18, 1951, the employee went to the Passport Division of the Department of State in New York City to get a typhoid vacination, obtain clearance, and to secure his necessary passport. The employee remained in New York City for dinner, and boarded a bus home to Hoboken, New Jersey.  After leaving the bus terminal in Hoboken, the employee slipped on a piece of ice and fell, fracturing his left leg.  

The court ultimately ruled that his injury fell within Defense Base Act coverage. The court held that even though during his preparatory period the employee had no specific work assignment, his processing was “an integral and indispensable part of his employment.” Specifically, the court held:

The Defense Base Act, 42 U.S.C.A. § 1651, prescribes compensation for an injury during transportation to or from the place of employment when the employer, as here, provides the transportation at its cost. In a sense Peretti's waiting in preparation for his trip overseas was so clearly bound up with it as to be reasonably considered as part of his transportation, just as a stopover en route might be. In any event, it was sufficiently related to his employment and so incidental to the necessary preparation for his overseas assignment as to make the injury sustained, under all the circumstances here disclosed, one arising out of and in the course of his employment. Id.

An additional case extending Defense Base Act coverage to stateside injuries is Employers' Mutual Liability Insurance Co. v McLellan, 304 F.Supp. 321 (D.C.N.Y. 1969). In McLellan, a flight engineer was killed on his employer's plane that crashed in Alaska en route to Okinawa. The flight was performed under contract with the government for services in the transportation of cargo to the United States defense establishment in Okinawa. The court held that the statutory definition of public work was sufficiently broad to have encompassed the contracted activities, and that Defense Base Act coverage extended even though the injury occurred in the United States:

The flight originated at Travis Air Force Base, California, and was destined for Kadena Air Force Base, Okinawa. However, death occurred in the United States when the plane crashed in Alaska. It is apparent that the contract was to be performed outside the continental United States within the meaning of the statute. While it may be that performance was to take place partially within the United States in that loading of the aircraft would necessarily take place here, the purpose of the contract was to transport supplies outside of the continental United States. The performance within the United States, while necessary, was incidental in contrast to the performance without the United States. In any event, the statute does not say that all aspects of performance under the contract have to occur outside of the continental United States. Plaintiffs have advanced no reason why Congress would have sought to exclude an accident occurring under the circumstances of the case at bar from the coverage of the Act. The statute should be read liberally in order to carry out its remedial purposes.

Id. See also, Alaska Airlines, Inc. v. O'Leary, 216 F. Supp. 540 (W.D.Wash.1963),

In conclusion, coverage under the Defense Base Act begins once a worker executes their employment contract, and commences preparation for deployment, training, travel, and transportation that relates to their job.

To best determined whether your injuries fall within Defense Base Act coverage, contact Diamond Law Practice, PLLC today. We can offer you a free claim consultation, and help you recover all available benefits under the Defense Base Act. Please call (212) 220-7134, or email us at JDiamond@DiamondLawPractice.com today. 

Private Patriots: America's Most Misunderstood Freedom Fighters

As a practicing Defense Base Act attorney, I have been granted invaluable insight into the wars in Iraq and Afghanistan. During my practice, I have read thousands of pages of incidents reports detailing countless terrorists attacks perpetrated against American forces, and viewed numerous photos memorializing the aftermath of the same. I have met those wounded in the war, heard their stories, and spoken with the families of those who have lost their loved ones. It is an honor and a privilege to fight on their behalf every morning I wake up. 

It goes without saying that I am disheartened when I encounter people who know little about the wars in Iraq and Afghanistan. The three main glaring omissions from America's current consciousness I have observed are: (1) people fail to realize that the current war in Afghanistan is America's longest war by a large margin, (2) few are aware that there are more contractors than actual soldiers fighting the war, (3) even fewer people truly understand the sacrifices undertaken by the men and women who make up America's defense contractor community. 

In his new book entitled Zero Footprint, author Simon Chase highlights the men and women who make up America's defense contractor community:

If you haven't found yourself in the middle of shit in places like Iraq, Afghanistan, Somalia, Pakistan or Syria recently, you probably have little understanding of what we do. Or that we're sometimes called upon to perform missions too sensitive and top secret for even Delta Force or SEAL Team 6. We're mostly guys, and some women, who live in your neighborhoods, drive fast cars, work out a lot, and spend long periods of time away from home...There are hundreds of thousands of us living in the United States working for companies like G4S, DynCorp, Unity Resources Group, Erinys, Triple Canopy, and AEGIS Defense Services. They hire us to do the dirty and dangerous jobs the military and intelligence services can't or don't want to do.

In a real sense, America's defense contractors are our elite super heroes. Unfortunately, respect for these men and women has been lost through media manipulation centered around the misconduct of one notorious defense corporation during the early part of the war. In my experience, this portrayal is unfair, and inaccurate. 

Our contractors fight overseas alongside their military counterparts, yet oftentimes fail to receive the adoration deserved for their valuable service. They do not get to wear the regalia, their families are not afforded military funerals, they do not receive metals for untold acts of bravery, they don't have their own federal holiday, and they are oftentimes ignored by the establishment in times of need. Defense contractors compromise the "tip of the spear" fighting the war on terror in hostile territory, and deserve the respect they have earned by risking their lives for America's freedom. 

In many ways, members of the defense contracting community are victims of circumstance. The President, and our politicians, know that continuing the war on terror is an absolute necessity. However, they also realize that continuing to send servicemen into battle and instituting a nation-wide draft is political suicide. Even more politically unpopular are newspaper headlines featuring American soldier casualties. Our politicians have tactfully avoided the political downside of the war effort by turning to private contractors to continue America's dirty work, while simultaneously withdrawing troops to garner political accolade. 

Oftentimes, defense contractors are former elite veterans seeking the higher income needed to provide a better life for their families. They transfer the valuable skills developed in the military to the private sector in order to put their children through college, or pay their mortgages. With high risk, comes high reward. It is unfortunate, but our politicians and bureaucrats at the U.S. Agency for Veterans Affairs simply do not provide adequate compensation to our soldiers who risk their lives overseas in Iraq and Afghanistan. This continued policy of underfunding military personnel has prompted many servicemen to go into the private sector.   

Below, you will find my commentary on a few pieces which highlight the harrowing environments our defense contractors face each and everyday. Hopefully, this raises awareness of the sacrifice America's defense contractors make fighting the war on terror in furtherance of our contiued freedom stateside:

Inside Blackwater: Iraq's Most Controversial Private Military Contractor

This short documentary features the operation of Blackwater and Armor Group in Iraq & Afghanistan. This video contains interesting footage of company compounds, training techniques, protocol for protecting clientele, training and insurgent ambushes. In addition, the filmmakers follow Nepalese contractors training local national troops who work for far less wages than their British counterparts. This documentary also contains an interview with Armor Group executives and recruiters which highlights the stringent qualifications needed to be a defense contractor. 

Finally, this documentary is concluded with a piece concerning the tragic death of Blackwater employee Stephen Scott Helvenston who made the ultimate sacrifice. Overall, this piece did a decent job at showing (1) the dangers faced by defense contractors in combating terrorism, and (2) the magnitude of the sacrifice of America's defense contractors. 

VICE: Superpower for Hire: Rise of the Private Military

This documentary examines the rise of international Private Military Companies ("PMC"). It follows Security Contractors in Venezuela as they escort high profile client. Additionally, the filmmakers interview Erik Prince, founder of Blackwater (Xe/Academi), who provides insight on the increased use of defense contractors in the theater of war. Furthermore, this video gives an inside look at the Anti-terror Training Academy locate in Czech Republic, which is Europe's leading PMC training facility.

The Defense Base Act : A Brief History and Explanation of the Administration of Benefits

The Defense Base Act is a federal workers' compensation program, which provides medical and wage-replacement benefits to military contractors injured while working on a wide variety of U.S. defense projects worldwide. Defense Base Act Attorney John-Austin Diamond explains the history and administration of the Defense Base Act below.

Background and History of the DBA

The 77th Congress of the United States enacted the Defense Base Act, 42 U.S.C.S. § 1651-1654, on August 16, 1941 to provide disability benefits to a previously neglected portion of the American workforce, namely, overseas military contractors. For years, defense contractors working alongside US military forces risked their lives with no guarantee of traditional military benefits provided to their counterparts by the United States Department of Veterans Affairs.

Prior to the enactment of the Defense Base Act, military contractors who sustained serious injuries while contributing to the American war effort found themselves in a “no mans land” when it came to obtaining disability benefits. Although vital to the strength and operation of the American military, these contractors were not entitled to traditional benefits available to active military members.   Likewise, as their employment was performed overseas, many of these injured contractors were unable to file for workers’ compensation benefits in their home state. To remedy this frustrating conundrum, Congress enacted the Defense Base Act, which provides lifelong medical benefits and compensation benefits to those injured in the course and scope of their employment at US military bases abroad.

In order to fully understand Congress’ intent in passing the Defense Base Act, one must examine the history of the United States during the later half of 1941. During this historic time period, the country was gearing up for World War II. On July 2, 1941, the Empire of Japan enacted measures to mobilize a standing army of over one million men. On August 9, 1941, President Franklin D. Roosevelt met with British Prime Minister Winston Churchill onboard a navy ship to formulate the Atlantic Charter which established united military goals for the Allied powers. On December 7, 1941, The Imperial Japanese Navy attacked US military forces at Pearl Harbor. The United States then officially entered the war on December 8, 1941, and the rest is history.

Remobilizing America’s military following the carnage of World War I required a uniquely capitalistic approach to achieve victory in World War II. To maximize America’s war efforts, President Roosevelt deployed both military and non-military personnel throughout Europe and the South Pacific with the aid of the newly enacted Defense Base Act. As President Roosevelt’s then Secretary of War Henry L. Stimson famously proclaimed, “If you are going to try to go to war, or to prepare for war, in a capitalistic country, you have got to let business make money out of the process or business won’t work.” Thus, the widespread use of military contractors in war zones was born, and America prevailed in the Second World War.

The use of military contractors has grown exponentially since the inception of the Defense Base Act. According to a Congressional Research Study from May 2013, defense contractors accounted for 50% or more of the total military force in Afghanistan and Iraq during America’s longest war, The War on Terror.

Governance and Administration of Benefits Under the DBA

The Defense Base Act is a federal workers' compensation program administered by the United States Department of Labor's Office of Workers' Compensation Programs, Division of Longshore & Harbor Workers’ Compensation Act. All new injuries reported under the DBA are processed through the Department of Labor's Second Compensation District office in New York, New York.

Upon receiving notice of an injured defense contractor, all employers must report the injury to the New York office of the Department of Labor through the filing of Longshore Form LS-202 First Report of Injury or Occupational Illness. This report is to be filed in duplicate with the District Director of the Second Compensation District, and is required to be filed within 10 days of a work-related injury. 33 U.S.C. 930(a). Any employer or insurance carrier who fails to submit this report within 10 days will be subject to a civil penalty up to $11,000 for each such failure. 33 U.S.C.930(e).

Once a claim is created, the responsible insurance carrier will either approve the claim and file a Form LS-206 Payment of Compensation Without Award, or deny the claim by filing a Form LS-207 Notice of Controversion of Right to Compensation. In the event the insurance carrier controverts your claim, the Department of Labor will schedule an Informal Conference wherein the insurance company's trained attorneys will argue why your claim should be denied. If no resolution is achieved during the Informal Conference, the matter is referred to the Office of Administrative Law Judges for a formal hearing. Appeals are then taken to the Benefits Review Board, Federal District Courts, and ultimately to the Supreme Court of the United States.

In the event that your injury is controverted or denied by your insurance carrier, immediately contact an attorney who is knowledgeable in the field of Defense Base Act law. Contact Diamond Law Practice today at (212) 220-7134, or JDiamond@DiamondLawPractice.com for a free claim consultation.

Form Frenzy: Common Defense Base Act, and Longshore & Harbor Workers' Compensation Act Forms Explained

One question I receive frequently from my clients is, "why are there so many different forms to fill out?" The short answer is that the Department of Labor requires the filing of such forms to ensure that their files comply with federal regulations. The long answer is that the Longshore & Harbor Workers' Compensation Act, as extended by the Defense Base Act, incorporated many provisions of the New York Workers' Compensation Law ("NYWCL"), a notorious formulaic workers' compensation framework. One can easily trace the Longshore forms' roots in the NYWCL, as almost all are similar in appearance, name and intent. For example, the NYWCL C-7 denial form, became the LS-207; the NYWCL C-3 claim form, became the LS-203; the NYWCL C-2 notice form, became the LS-202; and so on. 

Below, I address some of the more common forms used during a claim for benefits under the Defense Base Act, and Longshore & Harbor Workers' Compensation Act. In addition, I provide links to the PDF version of each form for ease of reference. 

LS-18

Pre-Hearing Statement. This form is filed by either the Claimant or insurance company to request a formal hearing before the Department of Labor's Office of Administrative Law Judges following the issuance of a Memorandum of Informal Conference. Once the OALJ receives this form from the OWCP's District Director, they will issue a Notice of Hearing and Pre-hearing Order formally placing a claim on the trial calendar. 

LS-200

Report of Earnings. This form is usually served upon a Claimant by an insurance company in order to obtain a record of the Claimant's earnings to justify the payment of ongoing disability compensation benefits. Failure to respond to the same in a timely manner may result in the forfeiture of compensation payments.

LS-202

Employer's First Report of Injury or Occupational Illness. This form must be completed by an Employer following an employee's work-related injury. Failure to properly file the same with the Office of Workers' Compensation Programs will result in harsh penalties, and will toll the statute of limitations for both traumatic and occupational injuries.

LS-203

Employee's Claim for Compensation. This form is filed by an injured employee with the US Department of Labor to formally request the payment of medical and/or compensation benefits following a work-related injury. The DBA and LHWCA provide strict timelines for the filing of a claim, so it is best to retain a knowledgeable attorney immediately following a work-related injury to preserve the right to seek disability compensation benefits.

LS-206

Payment of Compensation Without Award. This form is completed by the insurance adjuster assigned to a claim, and notifies the Department of Labor that the responsible insurance company is making voluntary payment of indemnity benefits to the injured employee.

LS-207

Notice of Controversion of Right to Compensation. This form is filed by an insurance company to deny a claim for benefits brought by an injured employee. Oftentimes, some insurance companies will automatically file this form out of an abundance of caution on all claims that require further investigation. Receipt of this notice should not deter you from pursuing a valid claim for disability benefits. Should you receive this form from your insurance company, immediately retain an attorney. 

LS-208

Notice of Final Payment or Suspension of Compensation Payments. This form is filed by an insurance company following the payment of all compensation benefits they believe are due to an injured employee. Failure to file the same in a timely manor results in a small fine charged against the responsible insurance company.

LS-262

Claim for Death Benefits. This form is filed with the Department of Labor by a statutorily defined dependent in order to obtain death benefits under the Defense Base Act, and Longshore and Harbor Workers' Compensation Act. This form must be filed within one year if the work-related death resulted from a traumatic incident, or two years if the death was an occupational death. More information about filing a claim for death benefits under the Defense Base Act can be found HERE.

LS-265

Certification of Funeral Expenses. An LS-265 is completed by a funeral director, or a deceased worker's estate, and is accepted as evidence supporting the payment of funeral expenses. This form is generally required to receive reimbursement of funeral expenses up to the statutory maximum amount of $3,000.00.

LS-266

Application for Continuation of Death Benefit for Student. Under the DBA and LHWCA, a deceased employee's children, who are over the age of 18, must be enrolled in school to continue receiving death benefits through the age of 23. Form LS-266 is completed by the relevant school's registrar, and is accepted as evidence supporting the payment of ongoing death benefits during enrollment. Generally speaking, the responsible insurance company will request this form to be completed biannually to rule out a possible overpayment of compensation benefits.

LS-801

Waiver of Service by Registered or Certified Mail for Employers and/or Insurance Carriers. This form allows all compensation orders to be served upon an insurance carrier via email, to ensure prompt payment of benefits. 

LS-802

Waiver of Service by Registered or Certified Mail for Claimants and Authorized Representatives. This form allows all compensation orders to be served upon a Claimant via email, to ensure prompt payment of benefits. 

OWCP-5a

Work Capacity Evaluation. Oftentimes, a treating physician will have no knowledge of the legal requirements of the Defense Base Act, or Longshore and Harbor Workers' Compensation Act. Accordingly, their written reports may fall short of what the Department of Labor requires to substantiate a disability claim. Accordingly, oftentimes the DOL will ask a physician to complete this form, along with a narrative report, to clarify their findings.

Located at 1 World Trade Center in New York, New York, Diamond Law Practice, PLLC was established to help injured workers recover under the Defense Base Act, Longshore & Harbor Workers' Compensation Act, and New York Workers' Compensation Law. 

If you have a question about a potential claim, please do not hesitate to drop me a line at JDiamond@DiamondLawPractice.com. I am here to help. 

www.DiamondLawPractice.com

The Increased Compensability of Claims Brought Under the Federal Defense Base Act Through Judicial Expansion of the Zone of Special Danger Doctrine.

Nearly every workers’ compensation law across the globe operates on one core concept, namely, that injuries caused by virtue of a worker’s employment are compensable, and injuries unrelated to employment are not. Although appearing straightforward, this dichotomous rule has been the subject of countless lawsuits stemming back to the very beginning of workers’ compensation law. With the advent of time and the natural laws of probability, it seems that every conceivable injury has been addressed in relation to this rule. Lighting strikes, heart attacks, car accidents, choking on fish heads, autoerotic asphyxiation, grocery shopping deaths, and faulty face creams have all been addressed at one time or another in relation to the Zone of Special Danger Doctrine. This article examines the increased compensability of claims brought by injured workers under the Defense Base Act through application of the Zone of Special Danger Doctrine.

The Zone of Special Danger Doctrine is a workers’ compensation concept rooted in early English law, and adopted into the Defense Base Act framework by the United States Supreme Court in the early 1950’s. The central English case cited by the United States Supreme Court, Thom v. Sinclair, involved the injuries sustained by a fish-worker in Aberdeen, Scotland. At the time of injury, the worker was boxing herring in a shed belonging to her employer, located adjacent to a twenty foot high brick wall. The brick wall collapsed, permanently disabling the fish-worker, and killing many others. The issue presented by this fact pattern was whether the fish-worker’s injury arose out of, and in the course of her employment. Through decision dated March 8, 1917, The House of Lords held that the injuries sustained by the fish-worker were “caused by accident arising out of her employment within the meaning of the Workmen’s Compensation Act of 1906.” Thom v. Sinclair, House of Lords, A. C. 127 [1917]. The reasoning behind this holding was that the worker’s obligations of employment placed her in a “zone of special danger”, from which her injury arose.

The House of Lords cited to older English case law, which formed the basis of the newly formed Zone of Special Danger Doctrine. These matters included a compensable case of sunstroke whereby a worker was placed on a hot steel deck for hours by virtue of his employment (Davies v. Gillespie, 105 L. T. N. S. 494, 5 B. W. C. C. 64), and an insurance collector who was injured on a staircase that he was required to climb by virtue of the location of his employment (Millar v. Refuge Assur. Co. [1912] Sc. Ct. Sess. 37). The House of Lords specifically reasoned:

If the conditions of his employment oblige a workman to work in a particular building or position which exposes him at the time and on the occasion of the accident to the injury for which compensation is claimed, then, although the accident is not consequent on and has no causal relation to the work on which the workman is employed, such accident arises out of his employment, as incident, not to the character of the work, but to the dangers and risks of the particular building or position in which by the conditions of his employment he is obliged to work. 

Thom v. Sinclair, House of Lords, A. C. 127 [1917], at pg. 145 (emphasis added).

Thirty-four years later, the Supreme Court of the United States imported the application of the Zone of Special Danger Doctrine into the framework of the Defense Base Act via Justice Felix Frankfurter’s ruling in O’Leary v. Brown-Pacific-Maxon, Inc., 340 U.S. 504 (1951). Justice Frankfurter was nominated to fill the late Justice Benjamin Cardozo’s Supreme Court seat by his close friend and advisee, President Franklin D. Roosevelt. Tens years prior to the Court’s ruling, Roosevelt himself signed the Defense Base Act into law in August 1941 under the original title of “An Act to Provide Compensation for Disability or Death to Persons Employed at Military, Air, and Naval Bases Outside the United States”.

A key provision of the federal Defense Base Act is that it requires an injury arise out of and in the course of employment in order to be held compensable. In O’leary, a worker stationed at a military base on the remote island of Guam died after swimming in treacherous waters adjacent to a recreational facility during a voluntary attempt to save another swimmer’s life. A claim for Defense Base Act death benefits was filed by his dependent mother, and the Department of Labor’s OWCP found that the worker was using the recreational facilities sponsored by the employer incident to his employment. Thus, it was reasoned that the worker’s death arose out of, and in the course of his employment. On appeal, the United States Court of Appeals for the Ninth Circuit reversed the holding, and the matter was brought before the Supreme Court.  

In short, the Supreme Court ruled that in order for an injury to be held compensable under the Defense Base Act, it must be demonstrated that a worker’s obligation or condition of employment created "a zone of special danger" out of which his or her injury arose. O’Leary v. Brown-Pacific-Maxon, Inc., 340 U.S. 504 (1951). Specifically, Justice Frankfurter held:

The test of recovery is not a causal relationship 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 the employer. No more is required than that the obligations or conditions of employment create the ‘zone of special danger’ out of which the injury or death arose.

O’Leary v. Brown-Pacific-Mason, Inc., 340 U.S. 504, 506-07 (1951). This ruling greatly expanded the work-relatedness of potential claims under the Defense Base Act by broadening the scope of compensable injuries.

The Supreme Court of the United States revisited the Zone of Special Danger Doctrine in O'Keefe v. Pan American World Airways, Inc., 338 F. 2d 319, 322 (5th Cir. 1964), cert. denied, 380 U.S. 951 (1965) in the context of “reasonable recreation”. Generally speaking, most claims brought under the Defense Base Act concern injuries occurring while the worker is “on duty”. The issue presented in the O’keefe matter, was whether an injury occurring while the worker was off duty and performing personal recreational activity is compensable under the Defense Base Act. In O’keefe, the deceased worker in question was stationed in South Korea and planned to visit a lake over thirty miles away on the weekend with some friends. While at the lake, the worker wished to create a sandy beach in front of the house he was staying at for the weekend. To accomplish this, he boarded a small boat, loaded it with sand from a location across the lake, and in the process of returning, the boat sank. As a result, the worker died, and his widow brought a claim for death benefits under the Defense Base Act.

In a per curium decision, the Supreme Court ultimately upheld an award for death benefits reasoning:

It cannot be said that his holding that the decedent's death, in a zone of danger, arose out of and in the course of his employment is irrational or without substantial evidence on the record as a whole. The decedent was hired to work in the exacting and unconventional conditions of Korea. His transportation over and back was to be at the employer's expense, and, while there, he was considered to be working on a 365-day per year basis…Finally, the employer provided neither housing nor recreational activities for its employees, but expected them to live, while necessarily in the country to perform its work, under the exacting and dangerous conditions of Korea…In the words of the District Court, "It was reasonable to conclude that recreational activities contributed to a higher efficiency of the employer's work, and that, when conducted in the restricted area of employment, on a work day, so to speak, and in a manner not prohibited by the employer, such activity was an incident of the employment.” 

O'Keefe v. Pan American World Airways, Inc., 338 F. 2d 319, 322 (5th Cir. 1964), cert. denied, 380 U.S. 951 (1965), at 363-364.

Thus, the Supreme Court rightfully acknowledged that employees working under the Defense Base Act in remote places, where recreational and social activities are severely limited, are in different set of circumstances from employees working within the safety and standard of living provided for in the United States. Therefore, the Supreme Court expressly acknowledged that “off-duty” injuries caused by purely personal acts, social activities, and recreation are incident to the overseas employment relationship, and are compensable under the Defense Base Act.  

In addition to the Supreme Court’s ruling in O’leary and O’Keefe, the following cases have been held compensable under the Defense Base Act via application of the Zone of Special Danger Doctrine:

1962 - Defense Base Act compensation benefits and medical expenses were awarded to a worker who sustained a spinal injury resulting from a car accident. The car accident occurred off-duty, during a purely personal romantic rendezvous on the island of Guam. The Ninth Circuit reasoned that as the worker had no life “but the company’s life”, the injury arose out of and in the course of his employment. Self v. Hanson, 305 F. 2d 699 (9th Cir. 1962); 

1965 - Defense Base Act death benefits were awarded in a matter where a worker was killed in a car accident while returning from a bar in San Salvador.  Gondeck v. Pan-American World Airways, Inc., 382 U.S. 25 (1965);

1966 –In this matter, a Navy vehicle struck a worker while he was hitchhiking back to his living quarters on the small island of Guam. The Ninth Circuit held that the injured worker’s claim for Defense Base Act benefits was compensable. Takara v. Hanson, 369 F. 2d 392 (9th Cir. 1966);

1978 - The Benefits Review Board upheld an award for death benefits brought a worker who suffered a fatal abdominal aortic aneurysm following a round of golf played in Nepal. The Board reasoned that the worker’s death fell within the protections of the Zone of Special Danger Doctrine. Smith v. Board of Trustees, Southern Illinois University, 8 BRBS 197 (1978);

1982 - Defense Base Act death benefits were awarded in a matter wherein a worker sustained a heart attack while off-duty in employer-provided housing in Greenland. During the worker’s heart attack, co-workers called an ambulance, but the stretcher could not fit into the dwelling due to its narrow hallways. The ALJ and Ninth Circuit Court of Appeals held that application of the Zone of Special Danger Doctrine was warranted as the construction of the worker’s barracks prevented him from receiving adequate medical treatment in a timely fashion. Ford Aerospace & Communications Corp. v. Boling, 684 F.2d 640 (9th Cir. 1982);

2004 - The Ninth Circuit held that a worker’s injuries suffered as a result of “foreseeable horseplay” during a bar fight arose out of a "zone of special danger". The Court reasoned that the worker’s employment on the Johnston Atoll was isolated, and provided very limited recreational opportunities such that the worker’s injuries were both foreseeable and compensable under the Zone of Special Danger Doctrine. Kalama Services, Inc. v. Director, Office of Workers’ Compensation Programs, 354 F.3d 1085, (9th Cir. 2004); and

2015 - The First Circuit upheld an award of Defense Base Act death benefits resulting from the death of a worker stationed in the country of Georgia. In this matter, the worker was killed by a drunk driver while he traveling in a taxicab to purchase groceries. The taxicab was a modern Mercedes-Benz vehicle, and the employer provided transportation vouchers to the worker to buy groceries. The First Circuit held that the employer failed to provide a legal conclusion that decedent's activity was not rooted in the conditions of his employment, or was “thoroughly disconnected” from the service of employer. Further, the Court clarified that the requisite “special danger” covers risks peculiar to the foreign location and risks that might occur anywhere, but in fact occur where the employee is injured. Battelle Mem. Inst. v. Dicecca, U.S. App. LEXIS 11587 (1st Cir. 2015).

Although the courts have extended Defense Base Act compensability via the Zone of Special Danger Doctrine to cover the vast majority of injuries occurring overseas, there is a judicial limit to its applicability. In circumstances where a worker’s injury was the result of activity “so thoroughly disconnected” from the worker’s employment, the injury will not fall within the Zone of Special Danger Doctrine. For example, auto-erotic asphyxiation, voluntary participation in murder, and injuries due to cosmetic face creams have all been held to fall outside the scope of the Zone of Special Danger Doctrine. Gillespie v. General Electric Co., 21 BRBS 56 (1988), aff'd mem., 873 F.2d 1433 (1st Cir. 1989). See also Truczinskas v. Director, OWCP, 699 F.3d 672, 46 BRBS 85(CRT) (1st Cir. 2012); Kirkland v. Air America, Inc., 23 BRBS 348 (1990), aff'd mem. sub nom. Kirkland v. Director, OWCP, 925 F.2d 489 (D.C. Cir. 1991); R.F. v. CSA, Ltd., 43 BRBS 139 (2009).

To best determine whether your injuries fall within the protection of the Zone of Special Danger Doctrine, contact Diamond Law Practice, PLLC today. We can offer you a free claim consultation, and help you recover all available benefits available to you under the Defense Base Act. Please call (212) 220-7134, or email JDiamond@DiamondLawPractice.com today. 

Experienced Defense Base Act, Longshore & Harbor Workers' Compensation Act, and New York Workers' Compensation Law Attorney.

Located on the 85th Floor of One World Trade Center, Diamond Law Practice is dedicated to helping injured workers recover all benefits available to them under the Defense Base Act, Longshore & Harbor Workers’ Compensation Act, and New York Workers’ Compensation Law. Please visit www.DiamondLawPractice.com or call (212) 220–7134 for a free claim consultation.

Proving Your Claim for Death Benefits Under the Federal Defense Base Act.

It has been a little over a year since I gave the eulogy I wished I would never have to give. I still have memories of that day, which will linger on for years to come. Losing someone very near and dear to your heart can leave you with many unanswered questions, anger, and resentment. These feelings are magnified if your loved one’s death resulted from unsafe working conditions overseas.

In general, the Defense Base Act provides death compensation benefits, medical expenses and funeral expenses to workers perishing overseas on United States’ military bases. The majority of Defense Base Act death claims filed today stem from heart attacks, insurgent attacks, and aircraft crashes occurring in Afghanistan. Under Section 20 of the LHWCA, as extended by the Defense Base Act, a claim for death benefits is presumed to be work-related in the absence of substantial evidence to the contrary. In this respect, the law is on your side. Additionally, it is important to note that the Defense Base Act is your exclusive remedy for recovery of monetary compensation resulting from the death of your loved one. Therefore, it is imperative that you retain an attorney who is specifically experience in the niche field of Defense Base Act litigation. 

The governmental agency responsible for the administration and oversight of all new Defense Base Act claims is the United States Department of Labor’s Office of Workers’ Compensation Programs located at 201 Varick Street, New York, New York. As all new claims originate in the New York office, having a Defense Base Act attorney headquartered in New York City makes the most sense.

The first step in the claim process involves the decedent’s employer filing an LS-202 First Report of Injury or Illness. This form must be filed within 10 days of the workers' injury, and must include the date of injury, location of injury, and a brief description of the incident. Thereafter, you should immediately retain an experienced attorney who can help prepare and file a fully documented claim for death benefits (Form LS-262), even if you are receiving benefits from your insurance company. Take my word for it, having an attorney at the beginning of your claim will (1) give you piece of mind, (2) ensure that you and your family are receiving all due and owing benefits, and (3) cost you nothing.

Section 9 of the LHWCA, as extended in part by the DBA, lists potential beneficiaries for deceased American and Canadian workers. These potential beneficiaries include the following:

• A widow or widower, married or separated at the time of death;
• A child, which includes posthumous children, adopted children, en loco parentis, step-children, and acknowledged illegitimate children;
• Dependent parents;
• Dependent grandparents;
• Dependent grandchildren;
• Dependent brothers and sisters; and
• Any other individual who qualifies as a dependent under the US Tax Code.

If the decedent's dependents are non-resident aliens of the United States or Canada, then potential beneficiaries include a surviving spouse and children. If there is no surviving spouse or child, then beneficiaries are strictly limited to surviving dependent parents. 

As a result of your loved ones’ overseas death, the insurance company should pay for all funeral expenses up to the statutory maximum amount of $3,000.00. In addition, they should pay for any and all costs associated with performing autopsies, DNA testing required for identification purposes, and the costs of repatriating your loved one's remains back home. If they deny any of the above, call an attorney immediately. It will be important to retain a copy of your loved one’s death certificate, marriage certificate, birth certificate, and all receipts documenting your funeral expenses to expedite the processing of your claim.

Additionally, you may be entitled to Defense Base Act compensation benefits due to the death of your loved one to help support your family. A surviving widow or widower is entitled to 50% of the decedent’s average weekly wage, subject to the statutory maximum compensation rate, for life (or until remarriage). If a surviving spouse has children, then the children share an additional 16 2/3% of the decedent’s average weekly wage until (1) the age of 18, (2) the age of 23 if enrolled in full-time course of study at an accredited educational or training institution, or (3) for life, if wholly dependent upon the decedent by virtue of mental or physical disability.  33 U.S.C.S. §902(14)-(18).

If there is no surviving spouse and only one surviving child, he or she receives 50% of the decedent’s average weekly wage. If there is no surviving spouse and more than one surviving child, the children share 66 2/3% of the decedent’s average weekly wage in equal portions. Grandchildren, sibilings, and other dependents receive 20% of the deceased worker’s average weekly wage, while dependent parents and grandparents each receive 25% of the decedent’s average weekly wage.

Non-resident claimants of the U.S. or Canada are subject to the commutation process established under Section 2(b) of the Defense Base Act. In short, a commutation is essentially a forced settlement amounting to 50% of the future value of all death benefits. If you are a non-United States resident and currently receiving death benefits, your benefits are subject to the commutation provisions established in Section 2(b) of the Defense Base Act. (For more information about commutations, please read this.) If this is the case, you will want to retain an attorney based in New York City, as the New York office of the US Department of Labor’s Office of Workers’ Compensation Programs handles all commutation applications in conjunction with the National Office. 

During my time as a DBA defense attorney, I was assigned the majority of new death claims that came into our office. It was a somber task, but I gained more experience in this subject area than any of my peers. For a long time, I succeeded at denying claims, decreasing benefit payments, and passing the buck to the government under the War Hazards Compensation Act. Everything changed once I started Diamond Law Practice, PLLC. Now I fight for workers who were injured or killed due to workplace accidents on overseas military bases. I haven’t slept better in years, as I know I am fighting the good fight.

I know the tactics that defense attorneys use to deny, or decrease the value of your claim for death benefits under the Defense Base Act. I will use my knowledge and very specific skill set to your advantage.

John-Austin Diamond of Diamond Law Practice, PLLC is an experienced attorney who has handled countless death claims brought under the Defense Base Act. Call (212) 220-7134, or email me at JDiamond@DiamondLawPractice.com for a free claim consultation at no cost to you and your family. Our office is located on the 85th Floor of One World Trade Center, and is fully handicapped accessible. 

Calculating Your Average Weekly Wage Under the Defense Base Act, and Longshore & Harbor Workers’ Compensation Act.

The most critical factor influencing the prospective value of your claim for compensation benefits under the DBA/LHWCA is the manner in which you calculate your Average Weekly Wage (“AWW”). Establishing a fair and accurate AWW at the outset of your claim will ensure that you maximize your entitlement to all available compensation under the law.

By way of example, below you will see a chart showing the value of a claim for death benefits brought by a widow under the DBA/LHWCA based upon four different AWW calculations. As you can see, even a small difference in the AWW calculation will result in a very significant change in the claim’s overall value. Hence, it is critical to retain an attorney early in your claim to ensure that you are receiving all available benefits by establishing a fair AWW.

A Sample Death Claim's Un-discounted Present Value By AWW Amount

Example includes a death claim brought by a 26 year American old widow, and is un-discounted.

Section 10 of the LHWCA, as extended by the DBA, establishes three methods for determining your average annual earnings, which are then divided by 52 to arrive at an AWW. This section states in pertinent part:

Except as otherwise provided in this Act, the average weekly wage of the injured employee at the time of the injury shall be taken as the basis upon which to compute compensation and shall be determined as follows:  (a) If the injured employee shall have worked in the employment in which he was working at the time of the injury, whether for the same or another employer, during substantially the whole of the year immediately preceding the injury, his average annual earnings shall consist of three hundred times the average daily wage or salary for a six-day worker and two hundred and sixty times the average daily wage or salary for a five-day worker, which he shall have earned in such employment during the days when so employed. (b) If the injured employee shall not have worked in such employment during substantially the whole of such year, his average annual earnings, if a six-day worker, shall consist of three hundred times the average daily wage or salary, and, if a five-day worker, two hundred and sixty times the average daily wage or salary, which an employee of the same class working substantially the whole of such immediately preceding year in the same or similar employment in the same or neighboring place shall have earned in such employment during the days when so employed. (c) If either of the foregoing methods of arriving at the average annual earnings of the injured employee cannot reasonably and fairly be applied, such average annual earnings shall be such sum as, having regard to the previous earnings of the injured employee in the employment in which he was working at the time of the injury, and of other employees of the same or most similar class working in the same or most similar employment in the same or neighboring locality, or other employment of such employee, including the reasonable value of the services of the employee if engaged in self-employment, shall reasonably represent the annual earning capacity of the injured employee.

33 U.S.C. §910(a)-(c). 

To summarize, Section 10(a) examines your actual wages to determine your AWW. This provision applies only if you worked substantially the whole year leading up to the date of your injury at the same job. By way of example, if you earned $68,000.00 in the year preceding your injury, your average weekly wage will be approximately $1,307.69 ($68,000.00 / 52 weeks). Your resultant weekly compensation rate is then calculated by taking 2/3'rds of your AWW. In the above example, your compensation rate would be $871.79 per week.

In the event that Section 10(a) cannot be applied because you did not work in the same or similar employment during substantially the whole of the year preceding your injury, then an analysis must be performed under Section 10(b).  As a practical matter, the application of Section 10(b) usually involves examining the wages of your co-workers and colleagues who perform the same or similar job as you. Section 10(b) does not take into account individual performance or accolades that may affect your rate of compensation. Therefore, Section 10(b) is only useful in determining a worker's wages when their salary is rigidly set by a government or union mandated pay scale. 

Under circumstances where there is insufficient evidence in the record to make a determination of your average daily wage under Section 10(a) or Section 10(b), the courts will look at Section 10(c) as a potential method of calculating your AWW.  Insurance companies oftentimes utilize Section 10(c) as a tactic to depreciate your earning potential, reduce your AWW, and maximize their profits. Don’t fall into this trap. Retain an attorney now who will advocate on your behalf to obtain the highest AWW afforded by law.

DBA workers challenge the classic framework established in the LHWCA, as they are compensated at a much higher rate due to the dangers inherent in their employment. With great risk, comes great reward. Factored into the high profits of selling DBA insurance policies to employers operating in a warzone is a fundamental understanding that overall claim costs will be higher. Attempting to argue that Section 10(c) of the LHWCA should apply in any DBA matter is an attempt to pervert the intent of the law, and discount the sacrifice and risks taken by the average defense contractor. Nonetheless, the courts have been more open to the application of Section 10(c) since the issuance of the Hamidzada decision, and the United States District Court for the Southern District of Texas' holding that the Benefits Review Board abused their discretion in vacated Judge Kennington's ruling in K.S. v. Service Employees International, Inc. 43 BRBS 18 (2009).

Please feel free to contact Diamond Law Practice, PLLC now to discuss the calculation of your AWW under the Defense Base Act, or Longshore & Harbor Workers’ Compensation Act.

New October 1, 2015 Section 10(f) Cost of Living Adjustment ("COLA") for Longshore and Defense Base Act Claimants

If you are receiving Permanent Total Disability ("PTD") compensation benefits, or death benefits under the federal Longshore and Harbor Workers' Compensation Act or Defense Base Act, you are entitled to annual increases in your benefit rate each October 1st. Starting Thursday, October 1, 2015, the applicable Section 10(f) COLA will increase your compensation rate by 2.1%. For example, if you are receiving compensation benefits at the rate of $980.00 per week, your new benefit rate will increase to $1,000.00, and will payable through September 30, 2016. Thereafter, you will be entitled to annual increases in your benefit rate every October 1st for the remainder of your claim. 

If you have not received an increase in your compensation rate, call us immediately and we will recover these unpaid benefits retroactive to the date of injury inclusive of all potential penalties and interest. This occurence is all too common as some inexperienced insurance adjusters simply forget to apply the statutorily mandated rate increases, or cannot adjust each claim in their enormous case list in a timely fashion.  

Section 10(f) COLA by Year

Maximum Comp Rate Per Year DBA/LHWCA

In addition, effective October 1, 2015, the maximum benefit rate increases to an all time high of $1,406.00 per week. In order to improve your chances of obtaining benefits at the maximum rate, please consult with an attorney now.

As a former defense attorney, I know the tactics insurance companies use to decrease your benefit rate, deny you benefits, and cut costs in the long run. Some basic tactics include:

1. Perverting your average weekly wage by factoring in earnings from previous jobs,
2. Forcing alternative calculations to compute the rate of permanent disability payments, and
3. Arguing suitable alternative employment that does not exist. 

Diamond Law Practice, PLLC can offer you and your family a free consultation regarding all Section 10(f) COLA questions under the Defense Bast Act, and Longshore & Harbor Workers' Compensation Act. 

Diamond Law Practice, PLLC, One World Trade Center, Suite 8500, 85th Floor, New York, New York 10007

Office: (212) 220-7134

Cell: (518) 269-9233

Fax: (646) 304-6009

Email: JDiamond@DiamondLawPractice.com