Sketoe v. Dolphin Titan Intl.
| Decision Date | 30 January 1998 |
| Docket Number | 97-623A,BRB 97-623 |
| Parties | DONALD SKETOE, Claimant-Petitioner v. DOLPHIN TITAN INTERNATIONAL, Employer-Respondent EXXON COMPANY, U.S.A., Self-Insured Employer-Respondent DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, UNITED STATES DEPARTMENT OF LABOR, Petitioner |
| Court | Longshore Complaints Court of Appeals |
Appeal of the Decision and Order of David W. Di Nardi Administrative Law Judge, United States Department of Labor.
Chris J. Roy, Sr., Alexandria, Louisiana, and Michael H Schwartzberg, (McHale Schwartzberg), Lake Charles, Louisiana, for claimant.
Patrick E. O'Keefe (Montgomery, Barnett, Brown, Read, Hammond & Mintz), New Orleans, Louisiana, for self-insured employer.
Joshua T. Gillelan II (Marvin Krislov, Deputy Solicitor for National Operations; Carol A. DeDeo, Associate Solicitor); Washington, D.C., for the Director, Office of Workers' Compensation Programs, United States Department of Labor).
Before: SMITH, BROWN and McGRANERY, Administrative Appeals Judges.
DECISION and ORDER
Claimant and the Director, Office of Workers' Compensation Programs (the Director), appeal the Decision and Order (89-LHC-3195) of Administrative Law Judge David W. Di Nardi rendered on a claim filed pursuant to the provisions of the Longshore and Harbor Workers' Compensation Act, as amended, 33 U.S.C. §901 et seq., as extended by the Outer Continental Shelf Lands Act, 43 U.S.C. §1331 et. seq. (the Act). We must affirm the administrative law judge's findings of fact and conclusions of law if they are supported by substantial evidence, are rational, and are in accordance with law. 33 U.S.C. §921(b)(3); O'Keeffe v. Smith, Hinchman & Grylls Associates, Inc., 380 U.S. 359 (1965).
This is the second time this case has come before the Board. The facts are undisputed, and the case is presently before the Board on the sole issue of whether Exxon Company, U.S.A. (Exxon) is a general contractor under Section 4(a) of the Act, 33 U.S.C. §904(a).[1] To recount briefly, claimant injured his right hand on July 15, 1984, while working as a derrick man for Dolphin Titan.[2] Dolphin Titan, which obtained workers' compensation coverage with a carrier not authorized by the district director, assumed liability for workers' compensation benefits after its carrier went bankrupt. Just over one year later, Dolphin Titan also became insolvent. Thereafter, claimant filed a claim against Exxon seeking to hold it liable as the general contractor. Sketoe v. Dolphin Titan International, 28 BRBS 212 (1994) (Smith, J., concurring and dissenting). Administrative Law Judge A.A. Simpson, Jr. found that Exxon is a contractor under the Act because the business of both Exxon and Dolphin is "energy related" and "[b]oth companies were part of a larger project as defined by National Van Lines." See Director, OWCP v. National Van Lines, 613 F.2d 972, 11 BRBS 298 (D.C. Cir. 1979), cert. denied, 448 U.S. 907 (1980); Decision and Order at 4. Hence, Exxon was held liable for claimant's disability and medical benefits. Decision and Order at 8. Exxon appealed this decision to the Board.
In its initial decision, the Board held that the administrative law judge erred in holding Exxon liable. Specifically, the Board stated it would utilize the test developed by the United States Court of Appeals for the Fifth Circuit in Chavers v. Exxon Corp., 716 F.2d 315 (5th Cir. 1983), rather than that stated by the United States Court of Appeals for the District of Columbia Circuit in National Van Lines, because the rule in Chavers has more specific application to the oil industry yet is "entirely consistent" with the thrust of National Van Lines.[3] Sketoe, 28 BRBS at 218. Therefore, the majority held that the administrative law judge erred in holding Exxon liable for compensation based on his finding that Exxon and Dolphin Titan are both in the petrochemical business. The Board vacated the administrative law judge's finding that Exxon is liable under Section 4(a) and remanded the case for consideration of evidence which had not been discussed previously and for resolution of the issue using the Chavers test.[4] Sketoe, 28 BRBS at 219-221. Specifically, the Board stated:
In order to hold Exxon liable for compensation in this case, consistent with the approach of the Fifth Circuit in Chavers, the administrative law judge must make a finding of whether Exxon customarily and regularly engages in offshore drilling on its own as part of its regular trade, business or occupation, or, if not, whether the oil and gas industry as a whole operates in this manner.
Sketoe, 28 BRBS at 220. Judge Smith dissented on this issue, stating that he would have affirmed the application of National Van Lines as well as the administrative law judge's finding that Exxon is liable for benefits. Sketoe, 28 BRBS at 226-227.
On remand, Administrative Law Judge Di Nardi determined that the only issue before him was whether Exxon is a general contractor under Section 4(a) of the Act.[5] Under the Board's remand order, the administrative law judge considered the previously undiscussed evidence and found that it was uncontroverted and conclusively established that Exxon does not regularly and customarily engage in offshore drilling on its own. Decision and Order on Remand at 9. Moreover, citing numerous oil industry cases, he found that Exxon's practice of hiring another company to perform the actual drilling is representative of the industry practice. Id. at 9, 11. The administrative law judge concluded that Exxon did not control Dolphin Titan by virtue of their contract, as it did not have the right to supervise performance of the contract, nor did it in fact supervise Dolphin Titan's performance. Id. at 12-13. After discussing the law set forth by the courts of appeals in Chavers and National Van Lines, Judge Di Nardi found that Exxon is not responsible for claimant's benefits under Section 4(a). Applying the principles of National Van Lines, the administrative law judge held that Exxon could not be a "contractor" because it was not contractually obligated to any other party and, therefore, Exxon was not contractually obligated to perform the duties claimant was performing at the time of his injury. Decision and Order on Remand at 16-17. Consequently, he denied, with prejudice, the claim filed by claimant against Exxon.[6] Id. at 19. Both the Director and claimant appeal the administrative law judge's decision. Exxon responds, urging affirmance.
Section 4(a) of the Act states:
Every employer shall be liable for and shall secure the payment to his employees of the compensation payable under sections 907, 908, and 909 of this title. In the case of an employer who is a subcontractor, only if such subcontractor fails to secure the payment of compensation shall the contractor be liable for and be required to secure the payment of compensation. A subcontractor shall not be deemed to have failed to secure the payment of compensation if the contractor has provided insurance for such compensation for the benefit of the subcontractor.
33 U.S.C. §904(a) (1994).[7] Its purpose is threefold: to protect injured employees from the irresponsible failure of their immediate employers to insure; to deter those unscrupulous employers from dividing their work among a number of smaller uninsured entities; and to create an incentive for the general employer to require its subcontractors to be adequately insured. See National Van Lines, 613 F.2d at 986, 11 BRBS at 316.
Both claimant and the Director first aver that under National Van Lines, which they contend is the correct law to apply, Exxon is liable for benefits as the contractor pursuant to Section 4(a) of the Act. Specifically, the Director and claimant contend the majority erred in substituting the Fifth Circuit's opinion in Chavers for the D.C. Circuit's opinion in National Van Lines, because at issue in Chavers was whether the employer was immune from suit in tort as a statutory employer, and the issue in National Van Lines was whether employer was secondarily liable for compensation as a statutory employer. This contention is without merit since the issue in both cases was what constitutes a statutory employer and the statutes construed, Section 4(a) of the Act and LSA-R.S. 23:1061, are both intended to assure complete compensation coverage. Chavers, 716 F.2d at 318; National Van Lines, 613 F.2d at 986, 11 BRBS at 316. Moreover, the Fifth Circuit declared in Chavers that the fact this statutory provision "affects tort liability is incidental." Chavers, 716 F.2d at 318. Employer argues that the Board should apply the law of the case rule, as the issue of the applicable law has been decided.
Initially, we reiterate that Chavers is not inconsistent with National Van Lines. We held in our initial decision, however, that Chavers better addresses the statutory employer issue as it is presented in the petroleum industry, and that the case at bar should be decided by using the Chavers test. Sketoe, 28 BRBS at 217, 220. As employer maintains, this holding is the law of the case, and we need not revisit it.[8] See Doe v. Jarka Corp. of New England, 21 BRBS 142 (1988).
Next, claimant contends the administrative law judge erred in failing to find Exxon liable under the Chavers test because the Board's order of remand was too confining. That is, claimant believes the administrative law judge erred in failing to address and apply the "integral relationship" test set forth in Chavers, as it is self-evident that extracting oil and gas by drilling into the Outer Continental Shelf is integral to Exxon's business. Contrary to claimant's argument, we believe the administrative law judge properly applied the facts to the Chavers test as required by the Board's first Sketoe decision.
The...
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