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

 
DiamondDefenseBaseActAttorney
 

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. 

 



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

 
DBALongshoreAttorney
 

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