Petition for Writ of Certiorari — Sample v. Johnson

CLERK

Supreme Court, J.S.

ms) iL 8D

oo L163 DEC 80 1985

JOSECH F. SPANIOL, JR.

IN THE SUPREME COURT

of the

UNITED STATES

October Term, 1985

WILLIAM SAMPLE and KAREN SAMPLE, husband and

wife, and JAMES SHELTON,

Petitioners,

Vv.

REGINALD JOHNSON, Deputy Commissioner for

the Office of Workers' Compensation Programs

for District 14; and SEATTLE STEVEDORE

COMPANY; and EDWARD LOPIT; and PAUL TOMITA;

and NAHUM LITT, Chief Administrative Law

Judge, Office of Administrative Law Judges;

and RAYMOND DONOVAN, United States Secretary

of Labor,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

pat 0 FOR. THE NINTH CIRCUIT

SCOTT E. STAFNFE

STAFNE & WETZEL

1111 Smith Tower

Seattle, WA 98104

(206) 621-1113

Counsel to Petitioners

An

75

, \F

——

——

QUESTIONS PRESENTED FOR REVIEW

ae Did the Court of Appeals err in

affirming the district court's judgment

that it had no admiraity jurisdiction

under 28 U.S.C. 1333 to consider

longshoremen's allegations that they

were damaged by defendant self-

insurer's bad faith violations of the

Longshoremen's and Harbor Workers' Act

(LHWCA) and breach of duties imposed by

general maritime law?

2. Was the Court of Appeals correct in its

decision that the exclusivity and

penalty provisions of the LHWCA barred

longshoremen's actions against

defendant self-insurer for damages

arising out of injuries not covered by

the LHWCA?

ii

PARTIES

Parties to the appeal sought: to be

reviewed include a.) federal defendants:

Reginald Johnson, Deputy Commissioner for

the Office of Worker Compensation Programs

for District 14, Nahum Litt, Chief

Administrative Law Judge, and Raymond

Donovan, United States Secretary of Labor;

and b.) private defendants: Seattle

Stevedore Company, Edward Lopit, and Paul

Tomita. Only that portion of the Court of

Appeal's judgment relating to the private

defendants is sought to be reviewed.

iii

TABLE OF CONTENTS

Page

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STATEMENT OF CASE ...++:+ se «2 = IQ

REASONS FOR ALLOWING THE WRIT... . 16

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TABLE OF AUTHORITY

Table of Cases

American Export Lines, Inc. v. Alvez,

466 U.S. 274 (3960) . « «© «© © © © © @ 29

Crowell v. Benson, 285 U.S. 22

ok . - sb se &» « = 6s s 6 8 ltl lle EG, BS

Director, OWCP v. Perini North River

Associates, 459 U.S. 297 (1983) is ieee

iv

Detroit Trust Co. v. Steamer

“THOMAS BARLUM", 293 U.S. 21

(1934) . «© «© © s © © © ow 22

Giacona v. Capricorn Shipping Co.,

394 F.Supp. 1189 (1975) ee 20

Herb's Welding Inc. v. Grey, 105

S$.ct. 1421, U.S. (1985) 23,25

Martin v. Travelers Ins. Co., 497

F.2d 329 (ist Cir. 1974) .... . 23,24,28

Mobile Oil Corp. v. Higginbotham,

436 U.S. 618 (1978) cies So % 26,27

Moragne v. States Marine Lines,

398 U.S. 375 (1970) 29

Myhran v. Johns-Manville Corp.,

741 F.2d 1119 (9th Cir. 1984) 20,21

Northeast Marine Terminal Co. v.

Caputo, 432 U.S. 249 (1977) 23

P.C. Pfeiffer Co. v. Ford, 444 U.S.

69 (1979) ; 6 tt se te ee 8 23,25

Romero v. International Term

Operating Co., 358 U.S. 354 (1959) .16,18,23

Sample v. Johnson, 771 F.2d i335

(1985) (Lae ~ete mtn. «©

Seas Shipping Co. v. Sieracki,

328 U.S. 85 (1946)

Stafford v. Westchester Fire Ins. Co.,

526 P.2d 37 (1974)

29

27

Washington v. W.C. Dawson Co.,

264 U. 219 (1924) 16,21

PROVISIONS

u.S. Const., Article III, Section 2,

Sea. i pee re eae 2,20

STATUTES

28 U.S.C. Section 1254(1) 2

28 U.S.C. Section 1331 “3, 10, 18

28 U.S.C. Section 1333 4, 10, 15, 16,17,18,19

28 U.S.C. Section 1361 : 4,10

33 U.S.C. Section 901 . » 4&6

33 U.S.C. Section 902(2) 5,26

33 U.S.C. Section 904 as

33 U.S.C. Section 905(a) 5,24

33 U.S.C. Section 907(a) . =» * 7

33 U.S.C. Section 914(e) and (£). 7,24,26

33 U.S.C. Section 928(a) 9,26

CTHER AUTHORITY

1 Benedict on Admiralty, Section 102,

pp. 7-4 to 7-5 (1985) 18,20

2(a) Larson Workmen's Compensation

Law, Section 65.40, at 12-25 thru

12-32 (1985) 24

YPINIONS BELOW

The judgment of the Ninth Circuit Court

of Appeals is reported at 771 F.2d 1335

(1985). The judgment of the United States

District Court for the Western District of

Washington giving rise to the appeal is not

reported in the Federal Supplements, but is

reported at 16 BRBS 146 (1984). Both

opinions are reproduced in the Appendix to

this Petition.

JURISDICTION

(i) The Ninth Circuit Court of Appeals

filed its judgment in Sample, et al. _v.

Johnson, et al., 771 F.2d 1335 (1985) on

September 20, 1985.

(ii) The order denying the plaintiff's

petition for rehearing was filed on October

25, 1985.

(iii) No cross-petition for writ of

certiorari has been filed.

(iv) Statutory authority conferring

jurisdiction on the United States -Supreme

Court to review the judgment in question by

writ of certiorari is premised upon 28

U.S.C. Section 1254(1).

CONSTITUTIONAL PROVISIONS

The following Constitutie»sl provisions

are involved: The United States

Constitution, Article III, Section 2, cl. 1,

states:

"The judicial Power shall extend

to all Cases, in Law and Equity,

arising under this Constitution,

the Laws of the United States, and

Treaties made, or which shall be

made, under their Authority,--to

all Cases affecting Ambassadors,

other public Ministers and

Consuls;--to all Cases of

admiralty and maritime

Jurisdiction;--to Controversies

between two or more States;--

between a State and Citizens of

another State;--between citizens

of different States ,--between

citizens of the same State

Claiming Lands under Grants of

different States, and between a

State, or the Citizens thereof,

and foreign States, Citizens or

Subjects."

STATUTES

28 U.S.C. Section 1331 - Federal question;

amount in controversy; costs:

(a) The district courts shall have original

jurisdiction of all civil action wherein the

matter in controversy exceeds the sum or

value of $10,000, exclusive of interest and

costs, and arises under the Constitution,

laws, or treaties of the United States,

except that no such sum or value shall te

required in any such action brought against

the United States, any agency thereof, or

any officer or employee thereof in his

official capacity.

28 U.S.C. Section 1333 - Admiralty, maritime

and prize cases:

The district court shall have original

jurisdiction, exclusive of the courts of the

States, of:

(1) Any civil case of admiralty or

maritime jurisdiction, saving to

suitors in all cases all other remedies

to which they are otherwise entitled.

(2) Any prize brought into the United

States and all proceedings for the

condemnation of property taken as

prize.

28 U.S.C. Section 1361 - Action to compel an

officer of the United States to

perform his duty:

The district courts shall have original

jurisdiction of any action in the nature of

mandamus to compel an officer or employee of

the United States or any agency thereof to

perform a duty owed to the plaintiff.

33 U.S.C. Section 902(2) - Definition of

injury:

(2) The term "“injury" mans accidental

injury or death arising out of andin the

course of employment, and such occupational

disease or infection as arises naturally out

of such employment or as naturally or

unavoidably results from such accidental

injury and includes an injury caused by the

willful act of a third person directed

against an employee because of his

employment.

33 U.S.C. Section 905 - Exclusiveness of

liability:

(a) The liability of an employer prescribed

in section 4 [33 U.S.C. Section 904] shall

be exclusive and in place of all other

liability of such employer to the employee,

his legal representative, husband or wife,

parents, dependents, next of kin, and anyone

otherwise entitled to recover damages from

such employer at law or in admiralty on

account of such injury or death, except that

if an employer fails to secure payment of

compensation as required by this Act, an

injured employee, or his legal

representative in case death results from

the injury, may elect to claim compensation

under the Act, cr to maintain an action at

law or in admiralty for damages on account

of such injury or death. In such action

the defendant may not plead as a defense

that the injury was caused by the negligence

of a fellow servant, or that the employee

assumed the risk of his employment, or that

the injury was due to the contributory

negligence of the employee.

33 U.S.C. Section 907(a) - Medical services

and supplies:

(a) General Requirement. The employer

shall furnish such medical, surgical, and

other attendance or treatment, nurse _ and

hospital service, medicine, crutches, and

apparatus, for such period as the nature of

the injury or the process of recovery may

require.

33 U.S.C. Section 914(e) and (f) - Payment

of compensation:

(e) If any installment of compensation

payable without an award is not paid within

fourteen days after it becomes due, as

provided in subdivision (b) of this section,

there shall be added to such unpaid

installment an amount equal to 10 per centum

thereof, which shall be paid at the same

time as, but in addition to, such

installment, unless notice is filed under

subdivision (d) of this section, or unless

eit iiiitaincaiaiaaaiinine

such non-payment is excused by the deputy

commissioner after a showing by the employer

that owing to conditions over which he had

no control such installment could not be

paid within the period prescribed for’ the

payment.

(f) If any compensation, payable under’ the

terms of an award, is not paid within ten

days after it becomes due, there shall be

added to such unpaid compensation an amount

equal to 20 per centum thereof, which shail

be paid at the same time as, but in addition

to, such compensation, unless review of the

compensation order making such award is had

as provided in section 21 and an order

staying payments has been issued by the

Board or court.

33 U.S.C. Section 928(a) - Fees for Services

(a) If the employer or carrier declines to

pay any compensation on or before the

thirteenth day after receiving written

notice of a claim for compensation having

been filed from the deputy commissioner, on

the ground that there is no liability for

compensation within the provisions of this

Act, and the person seeking benefits shall

thereafter have utilized the services of an

attorney at law in the successful

presecution of this claim, there shall be

awarded, in addition to the award of

compensation, in a compensation order, a

reasonable attorney's fee against the

employer or carrier in an amount approved by

the deputy commissioner, Board, or court, as

the case may be, which shall be paid

directly by the employer or carrier to the

attorney for the claimant in a lump sum

after the compensation order becomes final.

10

STATEMENT OF THE CASE

a.} Jurisdiction

This action was brought by two

longshoremen in the District Court of the

Western District of Washington against

federal defendants responsible for

administering the adjudication of claims

filed pursuant to the LHWCA, 33 U.S.C.

Section 901, et seq., and the self-insurer

responsible for handling longshoremen's

claims to benefits under the LHWCA.

Paragraph 1 of the longshoremen's complaint

alleged that:

"1. This action arises under’ the

Longshoremen's and Harbor Workers'

Compensation Act, 33 U.S.C.

Section 901, et seq. .. and under

the admiralty and maritime law, as

hereinafter more fully appears.

This court has jurisdiction under

28 U.S.C. Sections 1331, 1333, and

1362."

The longshoremen asserted in other

allegations of their complaint that the

federal defendants had violated the LHWCA by

11

failing to hold hearings on their claims

within the time periods mandated by the Act.

Against the private self-insurer, the

longshoremen alleged that the bad faith

handling of their compensation claims had

caused them injuries. In this regard, the

longshoremen specifically averred that the

private defendants had knowingly and in bad

faith violated the LHWCA and the general

maritime common law.

b.) Facts

William Sample and James Shelton are

longshoremen. Sample injured his back while

working as a longshoreman on March 28, 1983.

Shortly after his injury, he filed a claim

for medical and compensation benefits

against his employer, Seattle Crescent

Container Corp., under the LHWCA. Seattle

Stevedore Company, the self-insurer arm of

his employer, initially began paying

compensation and medical benefits under’ the

12

LHWCA. When Sampie's back condition did not

improve, his treating physician recommended

that he undergo a type of back surgery

requiring hospitalization. Sample secured

authorization from Seattle Stevedore under

Section 7 of the Act to undergo this

treatment. Thereafter, Sample was

hospitalized and underwent surgery. Shortly

after Sample was released from the hospital,

Seattle Stevedore controverted his LHWCA

claim and refused to pay for his

hospitalization or any follow-up care

relating thereto. When Seattle Stevedore

refused to follow the informal

recommendation of the deputy commissioner to

pay compensation and medical benefits,

Sample sought an expedited hearing before

the Office of Administrative Law Judges to

resolve the issue. While waiting for’ the

hearing, Sample was without income and could

not obtain adequate therapy. A hearing was

13

finally held on his claim on March 17, 1984,

and on April 24, 1984, an administrative law

judge ordered the employer to pay Sample his

medical costs and compensation under the

Act. Sample claimed the failure to provide

him medical benefits and compensation caused

him emotional distress and other injuries.

James Shelton was injured on April 26,

1982, while in the course of his employment

as a longshoreman. Shortly thereafter, he

filed a timely claim for benefits. At

first, Seattle Stevedore paid him full

compensation, but later reduced his

compensation’ payments substantially. When

Seattle Stevedore refused to comply with the

informal recommendation of the deputy

commissioner to raise his benefits to their

previous level, Shelton requested an

expedited hearing before the Office of

Administrative Law Judges. This request was

made on January 28, 1983. On May 20, 1983,

14

Seattle Stevedore controverted the claim and

stopped payment of compensation altogether.

A hearing was finally held by the Office of

Administrative Law Judges on October 27,

1982. Approximately four months later, on

February 15, 1984, the administrative law

judge found that Shelton was permanently

partially disabled and entitled to

compensation. During the time that

Shelton's compensation was reduced and

finally discontinued, his family depleted

its savings, was threatened with eviction,

and lost its real estate holdings. Shelton

complained this caused him emotional

distress and other injuries.

c.) Proceedings Below

Seattle Stevedore moved for dismissal

of the longshoremen's claim pursuant to Rule

12(b)(6) on the grounds that longshoremen's

allegations of injuries stemming from bad

faith violations of the LHWCA and breaches

a

15

of duties imposed by maritime common iaw did

not state a claim upon which relief could be

granted. Thereafter, Seattle Stevedore also

asserted that the district court had no

admiralty jurisdiction over the

longshoremen's claim. The longshoremen

responded to Seattle Stevedore's motion to

dismiss and filed their own motions for

summary judgment to establish that Seattle

Stevedore had violated the LHWCA and

maritime common law. The district court did

not reach the issue of whether Seattle

Stevedore had committed bad faith violations

of the Act, as it held longshoremen had no

cause of action for injuries stemming from

bad faith violations of the LHWCA. The

district court also held there was no

admiralty jurisdiction under 28 U.S.C.

Section 1333 of the longshoremen's claims

against Seattle Stevedore and that the

exclusivity and penalty provisions of the

16

LHWCA barred any action against Seattle

Stevedore.

On appeal, the Ninth Circuit Court of

Appeals affirmed the District Court's

holding that there was no jurisdiction of

longshoremen's claims against Seattle

Stevedore under 28 U.S.C. Section 1333 and

that the exclusivity and penalty clauses

barred these longshoremen's actions.

REASONS FOR ALLOWING THE WRIT

I. THE NINTH CIRCUIT'S HOLDING THAT

ADMIRALTY JURISDICTION DOES NOT

AUTOMATICALLY ATTACH TO A CLAIM FOUNDED

UPON VIOLATIONS OF THE LHWCA (A FEDERAL

MARITIME STATUTE) IS CONTRARY TO THIS

COURT'S DECISIONS IN ROMERO V.

INTERNATIONAL TERM OPERATING CO., 358

U.S. 354 (1959), CROWELL V. BENSON, 285

U.S. 22 (1931), AND WASHINGTON V. _ W.C.

DAWSON CO., 264 U.S. 219 (1924).

This petition raises the question

whether admiralty jurisdiction attaches to a

Claim alleging the violation of a maritime

17

statute. The District Court, pursuant to a

motion by the private defendants, held that

there was no jurisdiction under 28 U.S.C.

Section 1333 of the longshoremen's claims

against Seattle Stevedore for alleged bad

faith violations of the LHWCA. In affirming

the Gistrict court's finding of no

jurisdiction under 28 U.S.C. Section 1333,

the Nintn Circuit Court of Appeals stated:

That Congress created statutory

obligations under the LHWCA,

pursuant to its maritime powers,

does not mean that admiralty

jurisdiction automatically

attaches where a claim is made

under the statute.

These longshoremen believe that the

Court of Appeals is wrong. Admiralty

jurisdiction has always attached to actions

brought to remedy violations of maritime

law.

"Every maritime nation has certain

rules or laws in relation to

ships, shipping, and meritime

matters - rules peculiar to

itself . : : : The admiraity

18

court was the forum through which

and by the aid of wnose process,

when necessary, these local

municipal and administrative laws

were enforced and their violators

condemned in civil damages or

criminally ... . Cases arising

under these laws are cases of

traditional admiralty jurisdic-

tion." 1 Benedict on Admiralty,

Section 102, pp. 7-4 to 7-5

(1985).

In Romero v. International Term. Co.,

358 U.S. 354 (1959), this Court faced the

issue of whether a foreign seaman could

obtain a jury trial by bringing a ciaim

arising pursuant to the maritime common law

under the District Court's general federal

question jurisdiction. After analyzing the

purposes of the jurisdictional grants

enunciated in 28 U.S.C. Section 1333, and

the predecessor of 28 U.S.C. Section 1331,

this Court concluded that the two

jurisdictional grants were mutually

exciusive; i.e., that general federal

question jurisdiction did not provide lower

19

courts with an alternative jurisdictional

basis to decide legal issues which had

previously been resolved pursuant to 28

U.S.C. Section 1333. Although the practical

issue in that case was a plaintiff's right

to a jury trial, the court's lengthy

discussion of the purposes underlying both

jurisdictional statutes makes clear that it

intended to preserve the distinction between

admiralty and general federal question

jurisdiction so as to ensure that federal

district courts sitting in admiralty would

continue to "enforce the comprehensive

federal interest in the law of the _ sea."

Id. at 363.

Prior to this Ninth Circuit decision,

it had always been generally assumed that

unless Congress legislated otherwise,

admiralty had jurisdiction over cases

involving the interpretation and violation

of maritime legislation. Id. at 371 ("in

20

the entire history of maritime legislation

Congress’ had not once let the

availability of trial on the law side to

inference"), and at 367, note 23 ("all

actions based on substantive federal

maritime law are cases arising under the

court's admiralty jurisdiction pursuant to

Art. 3, Section 2, cl. 1."). See, also, 1

Benedict on Admiralty Section 102, p. 7-5,

(1985). Cf. Giacona_v. Capricorn Shipping

Cs. 394 F.Supp. 1189, 1191 (1975)

(indicating that a claim based on o

violation of a maritime statute can be

brought under either Section 1333 or 1331.)

The only authority cited by the Ninth

Circuit for its bald assertion that

admiralty jurisdiction does not

automatically attach to a claim premised on

the violation of a maritime statute is its

own decision in Myhran v. Johns-Manville

Corp., 741 F.2d 1119 (9th Cir. 1984). That

21

case did not involve a maritime statute.

Moreover, in that case, the Ninth Circuit

specifically held that:

“resolution of Myhran's’= [common

law] tort claims does not require

the special expertise of a court

sitting in admiralty .. . nor is

there any federal interest in

uniformity of decision requiring

the application of federal

substantive law." Id. at 1122.

These observations are sufficient to

distinguish Myhran from the instant

situation. This court long ago held that

the creation and operation of a compensation

scheme for longshoremen was of such national

concern that the task of operating such a

system could not be delegated the states.

Washington v. W.C. Dawson Co., supra. And

in Crowell v. Benson, supra, at 49, this

Court indicated that resolution of legal

issues arising under that Act should be by a

federal court sitting in admiralty.

22

Apparently, the Ninth Circuit Was

reluctant to find admiralty jurisdiction

because it thought these longshoremen were

attempting to collect punitive damages,

which are sometimes allowed in admiralty.

Ce., @ 28 wee 21, O@- 328:; This was a

mistaken niin. But even if it were

correct, that would not be an appropriate

reason to withhold jurisdiction. The very

purpose for the constitutional grant of

admiralty jurisdiction is "to place _ the

entire subject, including its substantive as

well as its procedural features, under

national controi." Detroit Trust Co. v.

Steamer "THOMAS BARLUM", 293 U.S. 21, 43

i

The thrust of these longshoremen's

prayer to the district court was for

compensatory damages for injuries not

compensable under the LHWCA. Punitive

damages were sought so as to deter similar

conduct by other potential defendants in the

future.

23

(1934). The fact that admiralty may have

its own peculiar features, like punitive

damages, to ensure compliance with its

mandates is no reason to withhold admiralty

jurisdiction. For certainly the district

courts, sitting without a jury to "enforce

the comprehensive federal interest in the

law of the sea", Romero, 358 U.S., at 363,

will be able to discern the appropriateness

of applying this remedy.

II. THE NINTH CIRCUIT'S JUDGMENT THAT THE

EXCLUSIVITY AND PENALTY PROVISIONS OF

THE LHWCA BAR LONGSHOREMEN'S ACTIONS

FOR DAMAGES CAUSED BY A SELF-INSURER'S

BAD FAITH CONDUCT AFTER EMPLOYMENT HAS

ENDED CONFLICTS WITH THE 1ST CIRCUIT'S

DECISION IN MARTIN v. TRAVELERS INS.

cCO., 497 F.2D 329 (1ST CIR. 1974), AND

IS INCONSISTENT WITH THIS COURT'S

RECENT DECISIONS IN NORTHEAST MARINE

TERMINAL CO. v. CAPUTO, 432 U.S. 249

(1977), P.C. PFEIFFER CO. v. FORD, 444

U.S. 69 (1979), AND HERB'S WELDING INC.

v. GREY, 105 S.CT. 1421, U.S.

(1985).

The instant decision of the Ninth

Circuit conflicts with Martin v. Travelers

24

Ins. Co., 479 F.2d 329 (ist Cir. 1974).

Op., p. 21 and 22. In Martin, the 1st

Circuit held that the action of a

longshoreman seeking to recover damages for

injuries resulting from the bad faith

handling of his compensation claim was not

barred by the exclusivity, 33 U.S.C. Section

905(a), and penalty, 33 U.S.C. Section

914(e) and (f), provisions of .e LHWCA

because the Act did not apply to injuries

occasioned after employment had ended. This

reasoning is consistent with the general

rule that exclusivity provisions bar claims

for injuries covered by the compensation law

only. 2(a) Larson Workmen's Compensation

Law, Section 65.40, at 12-25 thru 12-32

(1985).

Recent decisions of this Court seem _ to

indicate that these longshoremen's injuries,

which stemmed from Seattle Stevedore's land

based actions occurring after maritime

25

employment had terminated, lack the

requisite, situs and status to be covered

under the LHWCA. Herb's Welding, Inc. v.

Gray, 105 S.Ct. 1421, 1427-1428 (1985);

Director, OWCP v. Perini North River

Associates, 459 U.S. 297 (1983); P.C.

Pfeiffer Co. v. Ford, 444 U.S. 69, 74

(1979); Northwest Marine Terminal Co. v.

Caputo, 432 U.S. 249, 265 and 279 (i977).

If this is so, the Ninth Circuit decision

leaves longshoremen without any real remedy

under the LHWCA or the maritime common law

for injuries occasioned as the result of an

insurer's bad faith handling of a

2

compensation claim. Although the Ninth

2

Apparently, the one exception

envisioned by the Ninth Circuit to

exclusivity would be when an employer

specifically intended to injure an employee.

Op. 20 and 21. It is respectfully contended

that this exception is too narrow under the

(Footnote Continued)

Circuit acknowledges that this appears

inconsistent with this Court's prior

beneficent treatment of longshoremen, see

Op. 18, it rationalizes such a result under

Justice Steven's Opinion in Mobile Oil Corp.

v. Higginbotham, 436 U.S. 618 (1978) by

concluding that Congress enacted the Act's

penalty, 33 U.S.C. Section 914(e) and (f),

and attorney fees, 33 U.S.C. Section 928(a),

provisions precisely for use against

defendants like Seattle ‘Stevedore, who act

in bad faith. Op. 18 and 19. This is a

(Footnote Continued)

LHWCA because in many instances it would

leave longshoremen who have been injured by

an insurer's bad faith without a remedy

under the Act because of its situs and

status requirements. The real test should

be whether the insurer's conduct causing

injury was so egregious that it could not

meet the "naturally resulting" test of

section 902(2)'s definition of injury. "The

term ‘injury' means accidental injury . . ;

and such occupational disease or infection

as... -. naturally or unavoidably results

from such injury." Id.

27

clear misreading of both the LHWCA

provisions and Higginbotham. These LHWCA

provisions apply to any employer who

withholds payments, whether the withholding

is in good faith or bad faith, and provide

interest benefits to all claimants whether

or not the withholding results in injury.

Certainly, these provisions alone are not an

indication thet Congress intended

longshoremen to have no remedy for

substantial injuries caused by an insurance

company's bad faith refusal to comply with

the law. See, e.g., Stafford v. Westchester

3

Fire Ins. Co., 526 P.2d 37 (i974).

3

In Stafford, the Alaska Supreme Court

interpreted an identical penalty provision

taken by the Alaska legislature from the

LHWCA. In response to the argument that

these penalty provisions were supposed to be

the exclusive remedy for an insurer's

tortious behavior in the handling of

compensation claims, the Court stated: "We

(Footnote Continued)

28

As it stands now in the Ninth Circuit,

unless the situs and status requirements of

the Act are exempted in cases like these,

longshoremen will be unable to secure any

remedy for injuries, no matter how

substantial, occasioned as the result of an

insurer's bad faith refusal to provide

nedical benefits or pay compensation. This

insulation from liability (no matter how

egregious the bad faith) coupled with the

systemic delays in the LHWCA adjudication

process will allow insurers an unregulated

life or death power over longshoremen, who

when within admiralty's reach have been the

(Footnote Continued)

believe that AS 23.30.155 was envisioned by

Alaska's legislature to cover situations

where the employer negligently, or

willfully, failed to make timely

compensation payments, but that this section

was not intended to operate as the exclusive

remedy for all intentional wrongdoings.

See, aiso, Martin v. Travelers Ins. Co.,

supra.

29

traditional wards of this Court. See, e.g.,

American Export Lines, Inc. v. Alvez, 446

U.S. 274, 284-285 (1980); Moragne v. States

Marine Lines, 398 U.S. 375, 387 (1970); Seas

Shipping Co. v. Sieracki, 338 8.8. G88.

180-182 (1946).

CONCLUSION

For the reasons set forth above, the

Petition for a Writ of Certiorari should be

granted.

Respectfully submitted,

STAFNE & WETZEL

By: Scott E. Stafne

1111 Smith Tower

Seattle, WA 98104

December 23, 1985

ei.

UNITED STATES COURT OF APPEA ,

FOR THE NINTH CIRGER@=2,| M MAIL|

Witciam Sampce and Karen NOV 12 1985

Samp ce, husband and wife, and Al SEATIE

JaMES SHELTON, CLERK U.S. ph.

Plaintiffs-Appeilants/ Sines & Sait “ ~~ DEPUTY

Cross-Appellees, 84. 4240 ;

" D.C. No.

REGINALD JOHNSON, Deputy CV 83-1060R

Commissioner for the Office of ;

Worker Compensation Program for OPINION

District 14, et al.,

Defendants-Appellees/

Cross-Appellants.

Argued and Submitted

August 8, 1985—Seattle, Washington

Filed September 20, 1985

Before: Harry Pregerson and Charles Wiggins, Circuit Judges.

and Robert H. Schnacke,* District Judge.

Opinion by Judge Wiggins

Appeal from the United Staies District Court

for the Western District of Washington

Barbara Rothstein, District Judge, Presiding

*Hon. Robert #. Schnacke, United States District Court for the Northern

District of California. sitting by designation.

SAMPLE, ET AL. V. JOHNSON, ET AL. A-2

‘SUMMARY

Admiraity /Labor

Appeal by two longshoremen of a district court judgment that

the government may take up to six months to conduct Longshore-

men’s and Harbor Workers’ Compensation Act (LHWCA), 33

U.S.C. § 901 et seg., claim hearings and that the government is

not compelled to reject an LHWCA claim or make an award

within 20 days after notice of no hearing is he!d, and that there

is no admiralty jurisdiction for intentionally wrongful controver-

sions of LH WCA claims; and cross-appeal by government of dis-

trict court’s refusal to dismiss the claims against the government

as moot. Affirmed in part and reversed in part.

Both plaintiffs were injured in 1982; plaintiff Sample on April

26 and plaintiff Shelton on March 28. Sample received compen-

sation from his employer from April 8 to June 1, 1983. His claim

was controverted June 15, 1983 and a hearing was held before an

administrative law judge (ALJ) March 14, 1984. He received an

award of LHWCA compensation April 23, 1984, but was with-

out income for more than ten months. Shelton received compen-

sation from the employer from April 27, 1982, but requested a

hearing concerning the level of compensation January 28, 1983.

The employer controverted the claim and stopped payment on

May 20, 1983. A hearing was held on October 27, 1983 and he

was awarded permanent partial disability February 15, 1984,

with nine months having elapsed between controversion and

award during which he was without income. The district court

denied the government’s request for dismissal of the action as

moot on the basis that the plaintiffs are receiving award pay-

ments, ruled that the government has up to six months after con-

troversion to award benefits, that the ALJ must rule on a

LHWCA within 20 days of a hearing, but that the Deputy Com-

missioner of Labor need not reject a claim or make an award

within 20 days of employer notice in cases where no hearing is

held.

[1] An exception to the general rule that a court’s decision will

not apply without a case or controversy exists where an injury is

SAMPLE, ET AL. V. JOHNSON, ET AL. A=-3

“capable of repetition, yet evading review,” [2] but the practices

to which appellants object must be capable of repetition as to

them. Where no class action is instituted, the capable of repeti-

tion doctrine is applied only in exceptional situations where the

plaintiff can reasonably show that he will again be subject to the

same injury. [3] The likelihood of the injury recurring must be

calculable and if there is no basis for predicting that any future

repetition would affect the present plaintiffs, there is no case or

controversy.

[4] Plaintiffs must show a likelihood that they will be affected

again by that which they challenge [5] and this burden cannot be

met by a merely subjective showing. [6] Here, the district court

simply noted that one of the plaintiffs, Sample, had returned to

work in a hazardous occupation, and that level of generality is

insufficient to establish that serious injury will probably recur to

Sample, so the court should have dismissed the claims against the

government as root.

[7] The district court’s conclusion that admiralty jurisdiction

was lacking because the intentional violations did not occur over

water and were unconnected with traditional maritime activities

is reviewed de novo and upheld. [8] The intentional harm claim

here involves little more than the state law tort of intentional

infliction of emotional distress and is not an admiralty claim at

all.

{9} The LHWCA’s exclusivity of remedies provision provides

that the liability of an employer shall be exclusive and in place of

all other liability of such employer. [10] Even if this provision is

not read to bar the putative cause of action for wrongful refusal

to pay sought by the plaintiffs, the LHWCA penalty provision

should serve the same purpose. If the penalty provisions are inad-

equate to fully compensate a worker who has been harmed by an

employer’s refusal to pay when due, the problem requires a politi-

cal solution.

SAMPLE, ET AL. V. JOHNSON, ET AL. A-4

COUNSEL

Scott E. Stafne and Stewart Jay, Seattle, Washington, for the

plaintiffs-appellants.

Richard K. Willard, Assistant Attorney General, Gene S. Ander-

son, United States Attorney, John F. Cordes and Mark W. Pen-

nak, Department of Justice, Washington, D.C. for the

defendants-appellees; Williams, Lanza, Kastner & Gibbs and

Richard M. Slagle, Seattle, Washington, for Seattle Stevedore

Co., etc.

OPINION

WIGGINS, Circuit Judge:

William Sample and James Shelton are longshoremen who

seek to overturn the judgment of the district court that the gov-

ernment may take up to six months to conduct Longshoremen’s

and Harbor Workers’ Compensation Act (LHWCA)! claim

hearings and that § 919(c)* does not compel the government to

reject an LHCWA claim or make an award within 20 days after

notice if no hearing is held. They also seek a reversal of the judg-

133 U.S.C. § 901, ef seq.

That provision reads:

The deputy commissioner shall make or cause to be made such

investigations as he considers necessary in respect of the claim, and

upon application of any interested party shall order a hearing thereon.

If a hearing on such claim is ordered the deputy commissioner shall

give the claimant and other interested parties at least ten days’ notice

of such hearing, served personally upon the claimant and other inter-

ested parties or sent to such claimant and other interested parties by

registered mail or by certified mail. and shall within twenty days after

such hearing is had, by order, reject the claim or make ar-award in

respect of the claim. If no hearing is ordered within twenty days after

notice is given as provided in subdivision (b) of this section, the'deputy

commissioner shall, by order, reject the claim or make an award in

respect of the claim.

SAMPLE, ET AL. V. JOHNSON, ET AL. A- 5

ment below ruling that there is no admiralty jurisdiction for their

claims against their employer and other “private” defendants and

no general maritime law remedy for intentionally wrongful con-

troversions of LHWCA claims. The government argues that

since Sample and Shelton have been compensated, their claims

are moot. We conclude that the district court erred in refusing to

dismiss the claims against the government as moot but we affirm

the dismissal of the claims against the employer.

FACTS

The facts are not disputed. Sample was injured on April 26,

1982: Shelton was injured on March 28, 1982. Sample received

compensation from Seattle Stevedore from April 8 to June 1,

1983. The employer controverted his claim on June 15, 1983 and

a hearing was held before an ALJ on March 14, 1984. On April

23, 1984, Sample received an award of LHWCA compensation

pussuant to an order of the district court. Sample was without

income during the more than ten months between the controver-

sion and the award.

Shelton received compensation from the employer from April

27, 1982, but requested a hearing concerning the level of com-

pensation on January 28, 1983. The employer controverted the

claim and stopped payment on May 20, 1983. A hearing was held

on October 27, 1983 and Shelton was awarded permanent partial

disability on February 15, 1984. Almost nine months elapsed

between controversion and award during which Shelton was

without income.

In its first order, dated April 6, 1984, the district court granted

summary judgment for Sample as to his claim that an ALJ must

rule on a LHWCA claim within twenty days of a hearing (ER

32). In its second order, dated July 27, 1984, the district court

denied the government's request for dismissal of the action as

moot. It ruled that benefits must be awarded to a claimant, if at

all, within six months of controversion. The trial court also held

that since the third sentence of section 919(c) is directory and not

mandatory, the Deputy Commissioner of Labor need not reject

SAMPLE, ET AL. V. JOHNSON, ET AL. A~G_

the claim or make an award within twenty days of employer

notice of the claim in cases where no hearing is held. In its third

order, dated August 13, 1984, the court granted the private

defendants’ motion to dismiss all claims against them because the

claims were not cognizable in admiralty, there is no private cause

of action for violations of the LHWCA and the claims were

barred by 33 U.S.C. § 905(a), the LHWCA exclusivity of reme-

dies provision.*

MOOTNESS

A moot action is one where the issues are no longer live or the

parties lack a legally cognizable interest in the outcome. Lee v.

Schmidt-Wenzel and Harter, No. 84-5945, slip op. at 5 (9th Cir.

July 26, 1985). Federal courts lack jurisdiction to decide moot

cases because their constitutional authority extends only to

actual cases or controversies. Jron Arrow Honor Society v. Heck-

ler, 104 S.Ct. 373, 376 (1983). We apply a de novo standard for

reviewing a district court’s decision on subject matter jurisdic-

tion, see Fort Vancouver Plywood Co. v. United States, 747 F.2d

547, 549 (9th Cir. 1984) and, concomitantly apply that standard

in reviewing questions of mootness.

Since hearings have been held for and awards made to Sample

and Shelton, their declaratory and injunctive claims subsist only

if this case involves claims that are capable of repetition with

respect to those individuals. The government contends that

because appellants have not shown that it is likely they will again

be injured and make claims, the case against it is moot. Appel-

lants retort that since the district court found that Sample had

resumed working in the hazardous occupation of longshoreman,

they continue to present viable claims against the government.

*Section 905(a) states in pertinent part that

The liability of an employer prescribed in section 904 of this iitle

shall be exclusive and in place of all other liability of such employer to

the employee [except] if an employer fails to secure payment of com-

pensation as required by this chapter, an injured employee ... may

elect to claim compensation under the chapter, or to maintain an

action at law or in admiralty for damages on account of such injury or

death.

SAMPLE, ET AL. V. JOHNSON, ET AL. A-~7

{1] The Supreme Court early-on fashioned an exception to the

general rule that where a court’s decision will no longer have an

impact on plaintiff, there is no case or controversy. In Southern

Pacific Terminal Company v. Inierstate Commerce Commis-

sion, 219 U.S. 498 (1911), the Court permitted review of an

administrative order that prohibited for two years the continuing

of a private agreement, even though the two years had expired.

The Court recognized that questions involved in ICC proceedings

are frequently repetitive, but that the agency’s order are often of

short duration. Review could be had where there was injury that

was “capable of repetition, yet evading review.” Jd. at 515.‘

The questions presented by appellants’ claims against the gov-

ernment evade review. They concern twenty-day and six-month

time-limits. There could never be a full adjudication that would

inure to the benefit of a longshoreman who brought a similar

challenge. In Board of Education of Hendrick Hudson Central

School District v. Rowley, 458 U.S. 176, 186 n.9 (1982), where

it was claimed that an individualized educational program (IEP)

for a handicapped child for the school year 1978-79 was inade-

quate, the Supreme Court noted that “Judicial review invariably

takes more than nine months to complete, not to mention the

time consumed during preceding state administrative hearings.”

It held that the IEP’s shortcomings were capable of repetition as

to the parties before it, yet evaded review. See also California

Energy Resources Conservaiion and Development Commission

v. Bonneville Power Administration, 754 F.2d 1470, 1473 (9th

Cir. 1985) (“short-term transactions . .. can evade review in the

sense that they can be completed in a shorter time than that

required by the parties and this court to file, brief, argue, and

decide a case”).

“The oft-cited doctrinal formula is found in Weinstein v. Bradford, 423 U.S.

147, 149 (1975) (per curiam), where it was held that an injury is capable of rep-

etition, yet evades review if: (1) the challenged action was of limited duration,

too short to be fully litigated prior to its cessation or expiration; and (2) there

is a reasonable expectation that the same complaining party will be subjected to

the same action again. This formulation is of relevance only in the absence of a

class-action suit. See Planned Parent. of C. & N. Ariz. v. State of Ariz., 718

F.2d 938, 949 (9th Cir. 1983). Neither this case nor those discussed below

involved class action.

SAMPLE, ET AL. V. JOHNSON, ET AL. A-§

[2] The question then is whether the practices to which appel-

lants object are capable of repetition as to them. Where no class

action has been instituted, the capable of repetition doctrine is

applied only in exceptional situations where the plaintiff can rea-

sonably show that he will again be subject to the same injury. See

City of Los Angeles v. Lyons, 461 U.S. 95, 108 (1983) (unlikely

that plaintiff will again be subject to police chokehold). That

other persons may litigate a similar claim does not save a case

from mootness. Lane v. Williams, 455 U.S. 624, 634 (1982)

(question whether defendant must be informed that guilty plea

yields mandatory parole term is moot where sentence already

served; petitioner now knows consequences of plea).

This rule is but a reflection of the Article III requirements of

direct injury and a “personal stake” in the outcome. See Warth

v. Seldin, 422 U.S. 490, 498 (1975); 13A C. Wright, A. Miller

& E. Cooper, Federal Practice & Procedure § 3531.12 at 60

(1984). Cases construing the “capable of repetition” : ule are thus

similar to standing cases. See United States Parole Commission

v. Geraghty, 455 U.S. 388, 397 (1980) (“The requisite personal

interest that must exist at the commencement of the litigation

(standing) must continue throughout its existence (mootness)”).*

There has been scant analysis of what must be shown to estab-

lish that a plaintiff will likely be injured again. The Supreme

Court has stated that plaintiffs must demonstrate that a “credible

threat” exists that they will again be subject to the specific injury

for which they seek injunctive or declaratory relief. Kolender v.

Lawson, 461 U.S. 352, 355 n.3 (1983). A “reasonable showing”

of a “sufficient likelihood” that plaintiff will be injured again is

necessary. City of Los Angeles v. Lyons, 461 U.S. at 108, 111.

*Examples include Rizzo v. Goode, 423 U.S. 362 (1976) (no mor. than hypo-

thetical possibility that plaintiffs’ individual rights would be violated by uncon-

stitutional police action in future) and O'Shea v. Littleton, 414 U.S. 488 (1974)

(discriminatory bail, sentencing and costs practices challenged: no standing

because possibility that plaintiffs would later violate law too remote). These

cases require that a plaintiff establish his “personal stake” in injunctive relief by

making “an essential showing of the likelihood of similar injury in the future.”

LaDuke v. Neison, 762 F.2d 1318, 1324 (9th Cir. 1985).

SAMPLE, ET AL. V. JOHNSON, ET AL. A-9

The “mere physical or theoretical possibility” of a challenged

action again affecting a plaintiff is not sufficient. Murphy v.

Hunt, 455 U.S. 478, 482 (1982) (not probable that conviction of

one who attacked state's denial of bail for accused sex offenders

will be overturned and he will again seek pre-trial bail). There

must be a “demonstrated probability” that plaintiff will again be

among those injured. Weinstein v. Bradford, 423 U.S. at 149 (not

shown that former prisoner probably would be among those

deprived of parole procedures that he had sought).

{3] The likelihood of the injury recurring must be calculable

and if there is no basis for predicting that any future repetition

would affect the present piaintiffs, there is no case or controversy.

Preiser v. Newkirk, 422 U.S. 395, 402-403 (1975) (prisoner’s

challenge to transfer from medium to maximum security prison

moot because of re-transfer to medium security; any fear of

returning to maximum security “remote and speculative”);

Wiggins v. Rushen, 760 F.2d 1009, 1011 (9th Cir. 1985) (possi-

bility of being sent to maximum security unit “too speculative to

rise to the level of reasonable expectation or demonstrated

probability”); SEC v. Medical Committee for Human Rights,

404 U.S. 403, 406 (1972) (whether shareholders will again sub-

mit proposed corporate charter amendment to ban making of

napalm too speculative to prevent mootness).

In some cases, it is virtually certain that the plaintiff would

never again be affected by the practice that he challenged. See,

for example, DeFunis v. Odegaard, 416 U.S. 312, 318-319

_ (1974) (certain that plaintiff, who challenged admission policies

of law school to which he was ordered admitted and from which

he graduated, would never go through law school again); Hall v.

Beals, 396 U.S. 45, 49 (1969) (almost no chance that franchise

residency statute that affected plaintiffs in 1968 election would

also affect them in 1972); Trustees for Alaska v. E.P.A., 749

F.2d 549, 556 (9th Cir. 1984) (intervening change in legal! stan-

dard moots claim of those challenging expired pollution dis-

charge permits); Wilson v. State of Nev., 666 F.2d 378, 381 (9th

Cir. 1982) (disparate impact challenge to state high school

diploma job requirement mooted by plaintiff's earning diploma);

SAMPLE, ET AL. V. JOHNSON, ET AL. A-/O

Clancey v. Albert, 600 F.2d 237, 238 (9th Cir. 1979) (possibility

too remote that constituent challenging bar against convicted

and defeated Congressman voting until vindicated or reclected

would again live in district with a criminal Congressman), cert.

denied, 444 U.S. 916 (1979); Friends of the Earth, Inc: v. Berg-

land, 576 F.2d 1377, 1379 (9th Cir. 1978) (defendant will not

repeat exploration which plaintiffs sought to enjoin); Chrisman

v. Sisters of St. Joseph of Peace, 506 F.2d 308 (9th Cir. 1974)

(woman who sought hospital sterilization sterilized elsewhere).

Other cases evince a strong probability that plaintiff might be

affected more than once by the questioned practice. See,

Kolender v. Lawson, 461 U.S. at 355 n.3 (plaintiff stopped 15

times in two years pursuant to ordinance requiring identification

by those who wander the streets); Globe Newspaper Co. v. Supe-

rior Court, 457 U.S. 596, 603 (1982) (assume major newspaper

opposing statute banning press from trials involving sex offenses

will again be subject to statute’s strictures); Gannet Co. v.

DePasquale, 443 U.S. 368, 377-78 (1979) (expect major news-

paper publishing company will again be affected by judicial

refusal to open trial to press or provide transcript); Securities and

Exchange Commission v. Sloan, 436 U.S. 103, 109 n.5 (1978)

(action against suspension of trading of stock not moot although

no current suspension because SEC considers company chronic

violator); First National Bank of Boston v. Belloti, 435 U.S. 765,

775 (1978) (challenge to statute prohibiting expenditures by

banks for referenda not moot, despite particular referendum’s

defeat, since it had been on the ballot four times before); United

States v. New York Telephone Co., 434 U.S. 159, 165 n.6 (1977)

(plain that telephone company will be subject to government

orders to install pen registers in future); Nebraska Press Ass'n.

v. Stuart, 427 U.S. 539, 547 (1976) (order prohibiting entire

press from reporting on confessions during “sensational” trial);

In re Grand Jury Proceedings Klayman, 760 F.2d 1490, 1492

(9th Cir. 1985) (government will again call attorney to testify

before new grand jury; attorney will again refuse to answer ques-

tion); United States v. State of Or., 657 F.2d 1009, 1012 (9th

Cir. 1981) (salmon fishing season over but Indians will want to

fish next year and similiar injunction will issue): Thirteenth

SAMPLE, ET AL. V. JOHNSON, ET AL. Anll

Guam Legislature v. Bordallo, 588 F.2d 265, 266 (9th Cir. 1978)

(per curiam) (legislative session over but governor intends to use

item veto in future sessions).

Many cases fall in between these two poles. In some instances,

the action for declaratory or injunctive relief remained viable.

See Carroll v. President & Commissioners of Princess Anne, 393

U.S. 175, 179 (1968) ‘racists whose speeches restricted by

county ordinance may again seek permit for rally); Johansen v.

San Diego County District Council, 745 F.2d 1289, 1293 (9th

Cir. 1984) (unions and contractors will continue to have labor

disputes and NLRB will likely continue to request short-term

picketing injunctions); N.A.A.C.P. Western Region v. City of

Richmond, 743 F.2d 1346, 1353 (9th Cir. 1984) (Richmond

police had killed five black men in three years, NAACP has inter-

est in protest and no reason to believe that Richmond will refrain

from enforcing the parade ordinance in the future); Tyars v. Fin-

ner, 709 F.2d 1274, 1280 (9th Cir. 1983) (“definite likelihood”

that plaintiff would again be involuntarily coiimitted under chal-

lenged procedures because he was committed twice since first

raising challenge); Doe v. Gallinot, 657 F.2d 1017, 1021 n.6 (9th

Cir. 1981) (same; confined six times after complained-of com-

mitment).

In other instances, there was “very little chance, much less a

reasonable expectation” that a plaintiff would again be subjected

to the act of which he complains. Luckie v. E.P.A., 752 F.2d 454,

458 (9th Cir. 1985) (for recurrence, residents would have to relo-

cate atop another asbestos dump and again be subject to EPA

regulatory scheme). See also Lee v. Schmidt-Wenzel and

Harter, slip op. at 7 (because vacancies on board of directors of

bank now filled, “extremely unlikely” that dispute over whether

vacancies must be filled by a majority of full board or could be

filled by majority of quorum present at meeting would arise

again); Walker v. Huston, 689 F.2d 901, 903 (9th Cir. 1982) (re-

lease moots challenge to statute making rape offense nonbailable

on appeal; no reasonable expectation that petitioner would again

be convicted of rape and denied bail); California Hospital Ass'n

v. Obledo, 602 F.2d 1357, 1359 n.2 (9th Cir. 1979) (unlikely that

SAMPLE, ET AL. V. JOHNSON, ET AL. A-/2

state will issue another order freezing interim hospital reim-

bursement payments); United States v. State of Washington,

Department of Fisheries, 573 F.2d 1118, 1120 (9th Cir. 1978)

(unlikely that now-rescinded regulations covering !ndian fishing

rights will be reissued; issuing agency no ionger has jurisdiction

over Indians); Williams v. Alioto, 549 F.2d 136, 144 (9th Cir.

1977) (since murders solved, no cognizable danger or reasonable

expectation that policy of detaining black males in connection

with “Zebra” killings would recur); Wilson v. Webster, 467 F.2d

1282, 1283 (9th Cir. 1972) (improbability of further campus

uprisings moots challenge to related ordinance); Halvonik v.

Reagan, 457 F.2d 311, 313-14 (9th Cir. 1972) (unlikelihood of

future riots moots challenge to California loitering and assembly

regulations).®

[4] There are a few generalizations that might be extracted

from the cases concerning capability of repetition. The principal

tendency to emerge is the necessity for plaintiffs to show a likeli-

hood that they will be affected again by that which they chal-

lenge. A decade ago, when there had as yet been little

development of the case law, commentators could argue with

some authority that judicial economy or the importance of the

"Several cases have simply ignored the necessity of determining whether there

will likely be a repetition of the injury in question. See, for example, Super Tire

Engineering Co. v. McCorkle, 416 U.S. 115, 125-26 (1974) (strike over but

action against strikers receiving welfare not moot because state policy is fixed;

no discussion of probability of another strike against plaintiff-empioyer); Roe v.

Wade, 410 U.S. 113, 125 (1973) (attack on abortion laws not moot despite

plaintiff no longer being pregnant and giving no indication that she will again

become pregnant and seek abortion); Dunn v. Blumstein, 405 U.S. 330, 333 n.2

(1972) (even though plaintiff now eligible to vote, challenge to durational resi-

dency requirement allowed because others still affected); Moore v. Ogilvie, 394

U.S. 814, 816 (1969) (election over but challenge to nominating petition proce-

dure will proceed because of “continuing controversy in the federal-state area”);

Allen v. Monger, 583 F.2d 438, 440 (9th Cir. 1978) (action by now-discharged

sailors who served aboard now moth-balled ship to enjoin regulation prohibiting

petitioning of Congressmen not moot because “serious questions raised”),

vacated, 444 U.S. 1063 (1980); Webster v. Mesa, 521 F.2d 442, 443 (9th Cir.

1975) (action against law prohibiting voter who has signed partisan candidate's

petition from also signing independent's petition for same office not moot despite

end of petitioning period).

EE Se ee oe eS

SAMPLE, ET AL. V. JOHNSON, ET AL. A-—13

question presented may outweigh the need for showing anything

more than the “mere possibility” that piaintiff had a continuing

personal stake in securing injunctive or declaratory relief. See D.

Kates, W. Barker, Mootness in Judicial Proceedings: Toward a

Coherent Theory, 62 Cal. L.Rev. 1385, 1418-1425 (1974); Note,

The Mootness Doctrine in the Supreme Court, 88 Harv. L.Rev.

373, 388 (1974). Cases such as City of Los Angeles v. Lyons, 461

U.S. 95 (1983), and LaDuke v. Nelson, 762 F.2d 1318 (9th Cir.

1985), make it clear that, no matter how important the issue or

how likely that a similar action will be brought, a court is without

jurisdiction if there is not a sufficient likelihood of recurrence

with respect to the party now before it.

[5] Another tendency that emerges is that of placing the burden

for showing a likelihood of recurrence firmly on the plaintiff. For

example, in United States v. W.T. Grant, 345 U.S. 629, 633

(1953), the Court held that an injunction case was not moot sim-

ply because the defendant had ceased the challenged practice

unless the defendant could show that there was “no reasonable

expectation” that the practice would be resumed. Thirty years

later, Lyons is replete with statements emphasizing that it is

plaintiff's burden to show the likelihood of recurrence. 461 U.S.

at 101-102 (“[t]he plaintiff must show that he ‘has sustained or

is immediately in danger of sustaining some direct injury’ as the

result of the challenged official conduct”; 461 U.S. at 109 (“the

named plaintiff [mast] make a reasonable showing that he will

again be subjected to the alleged illegality”). See also Lee v.

Schmidt-Wenzel and Harter, slip op. at 7 (“the plaintiffs have

the burden of showing that there is a reasonable expectation that

they will once again be subjected to the challenged activity”) (ci-

tation omitted). A plaintiff's burden can not be met with a merely

subjective showing. Jd. (“Speculative contingencies afford no

basis for finding the existence of a continuing controversy

between the litigants as required by article III”). An attestation

of plaintiff's fear that the injury might recur will not suffice to

demonstrate the capability of repetition of an injury. See Preiser

v. Newkirk, 422 U.S. at 402-403. Whether the standard is that

of a “credible threat”, a “reasonable showing” of a “sufficient

likelihood”, or a “demonstrated probability”, the “essential

SAMPLE, ET AL. V. JOHNSON, ET AL. A ~j4

showing” is objective, i.e. directly or inferentially statistical. See

D. Barnes, Statistics as Proof: fundamentals of quantitative

analysis 31-35 (1983) (statistical inferences). The subject matter

involved will facilitate precise prognostication in some cases and

hamper it in others, as the categorization of cases ‘illustrates.

However, there are many instances in which prediction, while not

simple, is quite possible. For example, in Johansen v. San Diego

County District Council, 745 F.2d 1289 (9th Cir. 1984), the

union presumably could have offered statistics on the frequency

of its engaging in secondary picketing, in order to show that it

was likely that it would again picket and the NLRB would again

seek a short-term injunction.

The instant matter is the paradigmatic case for a statistical

showing of likely recurrent injury. Here, the predicate to a claim

is a physical injury. There are few occurences that are more

assiduously recorded than physical injuries. Without such

records, of course, no actuarial table could be constructed and

insurance rates could not be fixed. There are many likely sources

for establishing the probability that a longshoreman will be seri-

ously injured, including insurance carriers, the Department of

Labor and both the employers and unions. With such statistics,

a prediction could be made as to whether one with the same

work-life expectancy as Sample is likely to experience another

claimable injury.

The cases have also not indicated what degree of probability is

required where a plaintiff can show a likely recurrence of injury.

Query whether the test should be one of more likely than not, i.e.

‘in instances reducible to percentages, more than fifty-fifty, or

whether the test should be one where probability, in the strict

sense, is not required, but merely some significant possibility. The

language found in the cases discussed above, particularly in

Weinstein (“demonstrated probability”), militates in favor of a

“more likely than not” standard.” However, because the concep-

’ The only federal court to define the term “probable” conceived of it as “more

than 50 percent of actual.” Price v. Nevland, 320 F.2d 674, 678 (D.C. Cir.

1963).

SAMPLE, ET AL. V. JOHNSON, ET AL. A-i5

tions of probability that have arisen in jurisprudence and in other

branches of learning have far from achieved a perfect congru-

ence, see D. Kaye, Statistical Significance and the Burden of

Persuasion, 46 Law & Contemp. Probs. 13 (1983), we prefer to

describe “probability” qualitatively, as requiring a very signifi-

cant possibility, and not quantitatively, as mandating a “greater

than fifty percent” likelihood. See M. Victor, Using Decision

Analysis to Assist Litigation Strategy, 40 Bus. Law. 617, 625-26

(1985) (qualitative v. quantitative descriptions of probability).

[6] The district court here simply noted that Sampie had

returned to work in a hazardous occupation. That level of gener-

ality is insufficient to establish that serious injury will probably

recur to Sample. Plaintiffs failed to meet their burden of demon

strating the probability of recurrence. Acco:dingly, the district .

court should have dismissed the claims against the government as

moot.

ADMIRALTY JURISDICTION

[7] Hoping to recover punitive damages, appellants alleged that

bad faith actions by the private defendants caused them injuries

apart from those covered by the LHWCA. They ciaimed that the

private defendants controverted their claims despite knowledge

that the workers were entitled to compensation. Defendants suc-

cessfully moved to dismiss pursuant to 28 U.S.C. 12(b)(6). The

district court held that admiralty jurisdiction, 28 U.S.C. § 1333,

was wanting because the intentional violations did not occur over

water and were unconnected with traditional maritime activities.

See Executive Jet Aviation, Inc. v. City of Cleveland, 409 U.S.

249, 253, 268 (1972). Questions of jurisdiction are reviewed de

novo. Fort Vancouver Plywood Co., 747 F.2d at 549.

Appellants admit that the failure to pay benefits prior to a

compensation hearing occurred on land and that the wrongful

controversion bore no relationship to a traditional maritime

activity. They nevertheless argue that the Executive Jet test is

inapplicable because it does not restrict admiralty jurisdiction

when the claim is founded upon a maritime statute, the

SAMPLE, ET AL. V. JOHNSON, ET AL. A-~/¢é

LHWCA, citing Director, Office of Workers’ Compensation

Programs v. Perini North River Associates, 459 U.S. 297

(1983).

Neither that case, nor others cited by appellants, involved the

use of admiralty jurisdiction coupled with an LHCWA claim.

Perini decided that a construction worker, injured while perform-

ing his craft for a construction company on a river barge used for

the construction of a sewage treatment plant, was engaged in

maritime employment and could, therefore, make an LHWCA

claim.* The other cases cited do not involve the LHWCA.

That Congress created statutory obligations under the

LHWCA, pursuant to its maritime powers, does not mean that

admiralty jurisdiction automatically attaches where a claim is

made under the statute. Myhran v. Johns-Manville Corp., 741

F.2d 1119, 1122 (9th Cir. 1984) is instructive in that regard.

There, a pipefitter was injured by asbestos while repairing and

renovating vessels on navigable waters. He filed a products liabil-

ity action against the manufacturers of asbestos products. Judge

Hug noted that the Supreme Court’s understanding of the his-

tory of admiralty jurisdiction

suggests that admiralty law is not concerned with tort

claims such as those of Myhran. None of the issues

listed by the Supreme Court in Executive Jet are

involved in Myhran’s suit. Rather, as the Eleventh Cir-

cuit observed in a case factually similar to this case, ‘the

issues that this litigation presents are identical to those

~: presented in countless other asbestos suits; they involve

questions of tort law traditionally committed to local

* Appellants also rely upon Crowell v. Benson. 285 U.S. 22 (1932), for the

notion that a court that treats an LHWCA claim is exercising its admiralty

jurisdiction. In that case, Chief Justice Hughes mentions that claims subject to

the LHWCA are “governed by the maritime law as established by the Congress

and are within the admiralty jurisdiction,” but only in the context of discussing

whether they implicated a right to trial by jury. /d. at 45. Nothing in that case

indicates that an injury giving rise to an LHWCA claim carries the general

admiralty law in its wake.

aS SST

SAMPLE, ET AL. V. JOHNSON, ET AL. A- 17

resolution. Harville v. Johns-Manville Products Corp.,

731 F.2d 775, 786 (11th Cir. 1984). Resolution of

Myhran’s tort claims does not require the special exper-

tise of a court in admiralty as to navigation or

water-based commerce, nor is there any federal interest

in uniformity of decision requiring the application of

federal substantive law (citation omitted).

[8] The district court was thus correct in viewing the inten-

tional harm claim as involving little more than the state iaw tort

of intentional infliction of emotional distress and not an admi-

ralty claim at all.

THE COMMON LAW AND STATUTORY

EXCLUSIVITY OF REMEDY

The district court, citing Cort v. Ash, 422 U.S. 66 (1975), held

that an injured longshoreman had no “private right of action” to

sue for damages in excess of those prescribed by the LHWCA

where the alleged damages were related to section 907 and 908

of the Act.® Appellants assert that in contrast to the claims dealt

with in Cort (a stockholder’s derivative suit against officials who

had violated federal election laws by expending their corpora-

tion’s funds for advertising in the 1973 Presidential elections),

they have sued the private defendants under a body of federal

common law where federal courts are permitted to create reme-

dies, i.e. maritime law.

The private defendants answer that there is no federal common

law. This is, of course, inaccurate. There may be “no federal gen-

eral common law.” Erie R. Co. v. Tompkins, 304 U.S. 64, 78

(1938), but federal common law exists where a federal rule of

decision is “necessary to protect uniquely federal interests”,

Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398, 426 (1964)

or where Congress has given the courts power to develop substan-

*The former provision covers the employer's responsibility for furnishing the

injured worker with medical services and supplies, while the latter provision cov-

ers compensation for disability.

SAMPLE, ET AL. V. JOHNSON, ET AL. A-/2

tive law. Wheeldin v. Wheeler, 373 U.S. 647, 651 (1963). See

also Note, The Federal Common Law, 82 Harv. L. Rev. 1512

(1969). The general maritime law is probably the most ancient

body of federai common law. See Edmonds v. Compagnie Gener-

ale Transatlantique., 443 U.S. 256, 259 (1978). It has been spe-

cifically held that general federal maritime law is a source of

relief for a longshoreman’s personal injury. Pope & Talbot, Inc.

v. Hawn, 346 U.S. 406, 412-414 (1953).

Supreme Court cases provide several examples of the creation

of remedies under general maritime law for nonpecuniary dam-

ages that supplement federal maritime statutory remedies. In

Moragne v. States Marine Lines, Inc., 398 U.S. 375 (1970), a

longshoreman’s widow sued for the wrongful death of her hus-

band. She joined claims of negligence and unseaworthiness under

the general maritime law. The Court held that a common law

cause of action for wrongful death lies, even though federal stat-

utes have sought to create a uniform remedy for negligent-

ly-caused deaths, because additional, nonstatutory federal

remedies would create uniformity by substituting for the

patch-work of state wrongful death laws. 398 U.S. at 400-401. In

Sea-Land Services, Inc. v. Gaudet, 414 U.S. 573, 583 (1974), the

Court, in allowing for suit by the widow of a longshoreman who

had recovered damages for his injuries prior to work-related

death, stated that Moragne created a wrongful-death remedy

independent of any action that the decedent during his lifetime

may have had for his own personal injuries. Finally, in American

Export Lines, Inc. v. Alvez, 446 U.S. 274, 283 (1980), the Court

held that the wife of a harbor worker injured aboard a ship on

state territorial waters could maintain a general maritime action

for damages for the loss of her husband’s society.

.. While all of these cases implicated longshoremen or harbor

workers, none of these cases involved an action under the

LHWCA. Moreover, other cases have not shown a similar readi-

ness to create general maritime nonpecuniary damage remedies.

In Mobil Oil Corp. v. Higginbotham, 436 U.S. 618 (1978), the

Court construed the Death on the High Seas Act (DOHSA), 46

U.S.C. § 762, as forbidding general maritime law supplementa-

SAMPLE, ET AL. V. JOHNSON, ET AL. A-19

tion of the elements of compensation provided for by that Act.

DOHSA expressly limits a decedent’s survivors’ recovery to their

“pecuniary loss’ and hence additional damages for nonpecuniary

losses could not be had. Distinguishing Moragne and Gaudet,

Justice Stevens stated that “There is a basic difference between

filling a gap left by Congress’ silence and rewriting rules that

Congress has affirmatively and specifically enacted.” Jd. at 625;

see also Beltia v. Sidney Torres Marine Transport, Inc., 701

F.2d 491 (Sth Cir. 1983) (suits for loss of society based upon neg-

ligence not maintainable because Jones Act does not permit sup-

plemental recovery for that injury, but such recovery possible

where general maritime claim for unseaworthiness is also

brought).

While Congress did not expressly preclude the creation of a

common law remedy for wrongful contravention, the remedies

that it has made available for use against employers who act in

bad faith bear on the question of whether federal courts ought to

create the general maritime law remedy sought here. As the

Court noted in Moragne, 398 U.S. at 407, the LHWCA’s

principles of recovery are wholly foreign to those of gen-

eral maritime law—like most workmen’s compensation

laws, it deals only with the responsibilities of employers

for death or injury to their employees, and provides

standardized amounts of compensation regardless of

fault on the part of the employer.”

{9] The LHWCA’s exclusivity of remedies provision, 33 U.S.C.

§ 905(a), states that “ “he liability of an employer prescribed in

[this title] shall be exclusive and in place of all other liability of

such employer.” LHWCA liability occurs for “accidental injury

or death arising out of and in the course of employment.” 33

U.S.C. § 902(2). Thus, the employer is not liable under the

2° Moragne was, of course. handed down before the 1972 amendments to the

LHWCA. However, these amendments were chiefly for the purpose of

strengthening the exclusivity of LHWCA remedies. See Northeast Marine Ter-

minal Co. v. Caputo, 432 U.S. 249, 261-262 (1977); S.Rep. No. 1125, 92d

Cong.. 2d Sess. 4 (1972). .

|

SAMPLE, ET AL. V. JOHNSON, ET AL. A-~29

LHWCA for intentional injuries that it causes and section

905(a) is not applicable to claims concerning such injuries. How-

ever, the term “intentional” is construed very strictly where a

workers’ compensation statute exists. As Professor Larson, 2A

Larson Workmen's Compensation Law § 68.13 at 13-8—13-9

(1984), explains

Since the legal justification for the common-iaw

action is the nonaccidental character of the injury from

the defendant employer’s standpoint, the common-law

liability of the empioyer cannot, under the almost unan-

imous rule, be stretched to include accidenta! injuries

caused by the gross, wanton, willful, deliberate, inten-

tional, reckless, culpable, or malicious negligence,

breach of statute, or other misconduct of the employer

short of genuine intentional injury.

A number of district courts have applied this principle in

LHWCA cases. See Houston v. Bechtel Assoc. Professional

Corp., 522 F.Supp. 1094, 1096 (D.D.C. 1981) (“Nothing short

of specific intent to injure the employee falls outside the scope of

§ 905(a). Absent such specific intent, the employee is foreclosed

from maintaining a tort action against his employer”) and cases

cited therein." The employee must, of course claim that the

employer deliberately intended to injure him. Austin v.

Johns-Manville Sales Corp., 508 F.Supp. 313, 317 (D.Me.

1981). The courts have adhered to this rule because they recog-

nize, as did congress when amending the LHWCA in 1972, that

the LHWCA “operates like ordinary workmen’s compensation

and operates on a percentage of the earnings of an individual

rather than reimbursing him for his actual injury, and puts a lid

on his recovery.” 118 Cong. Rec. 36383 (1972) (remarks of Rep.

Eckhardt). However, the courts also recognize that without such

12.4 mong these cases is an LHWCA matter in which Judge Orrick noted that

“Under workers’ compensation statutes, the cxclusive liability protection

afforded to the employer cannot be pierced if the employee's injury is caused by

the employer’ $s negligence, or any other misconduct short of genuine intentional

injury.” Baker v. Pacific Far Easi Lines, Inc., 451 F.Supp. 84, 95 (N.D. Cai.

1978) (footnotes omitted).

peer

SAMPLE, ET AL. V. JOHNSON, ET AL. A- 2i

a rule, punitive damages might be awarded for insufficiently

egregious acts. See Houston, 522 F.Supp. at 1097 (for punitive

damages, tort must be aggravated by evil motive, actual malice,

deliberate violence or oppression). Here, the complaint does not

allege that plaintiffs suffered severe emotional! distress or that it

was inflicted intentionally, let alone with actual malice. See ER

5-7.

Professor Larson has considered the attempts in worker’s com-

pensation cases to create a cause of action for intentional injury

by an employer who has delayed or terminated payment or treat-

ment. See 2A Larson Workmen's Compensation Law § 68.34(c)

(1984). He has concluded that

The temptation to shatter the exclusiveness principle by

reaching for the tort weapon whenever there is a delay

in payments or a termination of treatment is all too

obvious, and awareness of this possibility has undoubt-

edly been one reason for the reluctance of courts to rec-

ognize this tort except in cases of egregious cruelty or

venality.

Id. at 13-76.

One such case, in which the employer’s conduct was

“conspicuously contemptible” was Martin v. Travelers ins. Co.,

497 F.2d 329 (ist Cir. 1974). Plaintiff had received LHWCA

compensation in the form of three drafts, which he deposited and

drew upon. The defendant insurance company, deciding to

appeal, stopped payments on the draft, causing plaintiff financial

hardship and emotional distress. Reversing the district court’s

dismissal, Judge Coffin, in an opinion free of citation to author-

ity, concluded that where a carrier deliberately stops payments

12Punitive damages are awardable, in some circumstances, to a seaman where

payment for maintenance and cure is wrongfully denied. See Tullos v. Resource

Drilling, Inc., 7150 F.2d 380, 388 (Sth Cir. 1985). However, the very existence

of separate acts for seamen and longshoremen—the Jones Act and the

LHWCA, respectively—suggest that the two categories of workers are not to be

assimilated in all respects.

SAMPLE, ET AL. V. JOHNSON, ET AL. 4-22

already made, when it should have known that acute harm might

follow, the exclusivity provision and the fact that the LHWCA -

contains a penalty for late payment do not bar an action.

In any event, cases involving ordinary refusal to pay are contra.

The bulk of authority in cases involving ordinary refusals to pay

is contra. One reason is that most worker’s compensation stat-

utes, like the LHWCA,” have penalty provisions for wrongful

failure to pay. See Annot., 8 ALR 4th902, 904 (1984). In states

where no such penalty provision exists, there are often explicit

provisions stating that nonstatutory remedies are not barred

when there is a refusal to pay. See, for example, Hollman v. Lih-

erty Mut. Ins. Co., 712 F.2d 1259, 1261 (8th Cir. 1983) (South

Dakota).

[10] In this case, Shelton was awarded almost $6,300 in attor-

ney’s fees and prejudgment interest and received compensation

for the “mental health sequelae” that flowed from his physical

injury. Even if the exclusivity provision of the LHWCA is not

read to bar the putative cause of action for wrongful refusal to

pay, the penalty provision should serve the same purpose. While

it may be that the penalty provisions are inadequate to fully com-

pensate a worker who has been harmed by an employer’s refusal

to pay when due, the problem requires a political solution. Goetz

v. Aetna Cas. and Sur. Co., 710 F.2d 561, 564 (9th Cir. 1983).

CONCLUSION

The claims against the government are moot. The district

court correctly dismissed the claims against the private defen-

dants.

Sections 914(e) and (f) increase the amount of compensation due by ten or

twenty percent for overdue installment payments payable without or with an

award respectively: section 928 allows for atiurney’s fees if the employer

declines to pay compensation and an award is subsequently made and section

907(d) allows for recovery for medical expenses when the employer refuses to

furnish them. See also Ann., 49 ALR Fed. 425 (1984).

SAMPLE, ET AL. V. JOHNSON, ET AL. A — 23

AFFIRMED IN PART and REVERSED IN PART.

A-24

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF WASHINGTON

AT SEATTLE

WILLIAM SAMPLE and

KAREN SAMPLE, husband

and wife, and JAMES

NO. C8&3-1060R

SHELTON,

ORDER GRANTING

Plaintiffs, DEFENDANTS' MOTION

FOR DISMISSAL OF

vs. WRONGFUL CONTROVER-

SION CLAIMS AND

STRIKING OTHER

MOTIONS AS MOOT

REGINALD JOHNSON,

et al.,

Defendants.

me ee ee eee ee ee ee eet ee eee See

THIS MATTER comes’ before the court on

cross motions concerning plaintiffs' claims

against defendants Seattle Stevedore

Company, Edward Lopit and Paul Tomita

(hereafter referred to collectively as

defendants). Defendants move to dismiss the

so-called wrongful controversion claims

pursuant to Fed. R. Civ. P. 12(b)(6) or,

dicerativery: pursuant to Fed. R. Civ. P.

56. Plaintiff William Sample moves for

partial summary judgment establishing

A-25

Seattle Stevedore's liability for wrongfully

controverting his claim to medical benefits

and monetary compensation. Having reviewed

the memoranda, PP eb ig and other

materials submitted in support of and in

opposition to these motions, and having

heard oral argument, the court finds that

defendants' motion is well taken.

Accordingly, defendants' motion to dismiss

the wrongful controversion claims must be

granted. The court does not reach plaintiff

1

At oral argument, counsel for

defendants stated that, in ruling on

defendants' motion to dismiss, defendants

would not object to the court's

consideration of the affidavits that are the

subject of plaintiffs' pending Motion for

Leave to file Supplemental Affidavits in

Opposition to Seattle Stevedore's Motion to

Dismiss. The court has considered the

affidavits. The motion for leave to file

the supplemental affidavits is hereby

stricken as moot.

A-26

Sample's motion for partial summary

judgment.

Plaintiffs William Sample and James

Shelton are injured longshoremen who filed

compensation claims under the Longshoremen's

and Harbor Workers' Compensation Act (LHWCA

or Act), 33 U.S.C. Sections 901-950.

Plaintiffs were employed by Seattle

Stevedore Company when they allegedly

sustained the injuries entitling them to

benefits under the Act. As the responsible

employer and a self-insurer under the Act,

Seattle Stevedore has a duty to provide

plaintiffs the LHWCA benefits to which they

are entitled. Defendant Edward Lopit, an

Assistant Claims Manager for Seattle

Stevedore, participated in the processing of

‘plaintiffs' LHWCA claims. Defendant Paul

Tomita is a certified vocational

rehabilitation counselor with whom Seattle

A-27

Stevedore contracted to provide job

placement services to plaintiff Shelton.

Plaintiffs commenced this action

alleging in a conclusory manner that

defendants Seattle Stevedore, Lopit and

Tomita acted in bad faith and fraudulently

by controverting plaintiffs' claims despite

knowledge that plaintiffs were entitled to

benefits under the Act, that no reasonable

grounds existed for controverting the

claims, and that the plaintiffs would be

deprived of LHWCA benefits pending a hearing

on their claims. Plaintiffs assert that

defendants' conduct violated the LHWCA,

admiralty and maritime law and the federal

2

common law, and caused plaintiffs to suffer

2

At oral argument plaintiffs' counsel

was asked whether the complaint stated any

Claims for relief under state law. In

reply, counsel stated that the tort of

(Footnote Continued)

I TT |

A-28

emotional and financial distress. See

Second Amended Complaint "Counts" IV and V.

Jurisdiction over these claims (referred to

by the parties, and by the court, as the

(Footnote Continued)

outrage was the cnly state law claim which

arguably had been alleged. Counsel further

stated that in the event the court dismissed

the claims under federal law, the court

would lack jurisdiction over the outrage

claim and a dismissal of this claim without

prejudice would be appropriate.

3

Plaintiffs have filed a motion for

leave to file a Third Amended Complaint.

According to plaintiffs "[t]he only arguable

new claim against defendants [in the Third

Amended Complaint] is the one which alleges

negligence in Shelton's vocational

rehabilitation process." Memorandum in

Support of Motion for Leave to File Third

Amended Complaint at 2. Adding this claim

to he allegations in the Second Amended

Complaint would not affect the court's

decision to dismiss Amended Complaint would

not affect the court's decision to dismiss

this action, so the court need not decide

whether plaintiffs should be granted leave

to file their Third Amended Complaint. The

motion for leave to file the Third Amended

Complaint is hereby stricken as moot.

A-29

wrongful controversion claims) is invoked

under 28 U.S.C. Sections 1331 and 1333.

Three issues are presented by

defendants’ motion: First, whether

plaintiffs' wrongful controversion claims

are cognizable in admiralty; second, whether

a violation of Section 907(a) or Section

908(c)(21) of the Act gives rise to a

private cause of action for damages; and

finally, whether plaintiffs' wrongful

controversion claims are barred by the

exclusive liability provision contained in

Section 905(a) of the Act. These issues

Ree

will be addressed in turn.

5 TROT

Ze

As an initial matter, it must be

determined whether this case falls within

the states ty jurisdiction of the court.

For a tort action like this to be cognizable

in admiralty, the tort must have "occurred

A-30

on or over navigable waters" (maritime

locality test) and "the tort must also arise

in the course of a traditional maritime

activity" (maritime relationship test).

Owens-Illinois, Inc. Vv. United States

District Court, 698 F.2d 967, 969-70 (9th

Cir. 1983). Plaintiffs' wrongful

controversion claims satisfy neither of

these tests.

The wrongful controversion claims are

based upon the actions taken by defendants

to controvert plaintiffs' LHWCA claims. The

acts complained of occurred solely on land,

so the maritime locality test cannot be met.

In urging the contrary conclusion plaintiff

confuse the locality where their injuries

entitling them to LHWCA benefits occurred

with the locality where the controversion of

their claims occurred. See Supplemental

Brief Re: New Matters Raised in Defendants'

A-31

Reply to Opposition to Motion for Protective

Order.

To determine whether an alleged tort

bears a significant relationship to

traditional maritime activity, this court

must consider four factors:

(1) traditional concepts of the role of

admiralty law; (2) the function and

role of the parties; (3) the types of

vehicles and instrumentalities

involved; and (4) the causation and

nature of the injury suffered.

Owens-Illinois, 698 F.2d at 970. In

Owens-Illinois, the Ninth Circuit held that

claims related to asbestos exposure which

occurred during the construction of ships

that were floating on navigable waters do

not bear a significant relationship to

traditional maritime activity. Id. at 971.

The facts in the instant case are even

weaker. |

No maritime vehicles or

instrumentalities were involved in the tort

EID RL API BES

A-32

which allegedly occurred here.

Traditionally, admiralty law has provided no

special protection to longshoremen. The

relationship between the parties is one of

employer and employee, or insurer and

beneficiary, neither of which has much to do

with admiralty. Lastly, the causation and

nature of the injury is more akin to the

state law tort of infliction of emotional

distress than to anything in admiralty law.

The causation and nature of the injury

suffered by plaintiffs is certainly not

unique to admiralty. The court finds that

the alleged wrongful controversion of

plaintiffs' compensation claims does not

bear A sieetticant relationship to

traditional maritime activity. Plaintiffs'

claims are not within the ambit of the

court's admiralty jurisdiction.

iI.

Plaintiffs assert that defendants

violated Sections 907 and 908 of the LHWCA

by terminating payment of medical and

compensation benefits to plaintiffs

notwithstanding knowledge that plaintiffs

are entitled to those benefits. See 33

U.S.C. Section 907(a) (the employer shall

furnish such medical treatment for such

period as the nature of . the injury

requires); 33 U.S.C. Section 908(c) (21)

(compensation for permanent partial

disability shall be two-thirds of the loss

in wage earning capacity, payable during the

continuance of the partial disability).

Asserting "{[i]Jt is black letter law that

violation of a statutory duty gives rise to

a cause of action under common law,"

plaintiffs contend that defendants' alleged

violation of the Act will support an action

for damages in federal court. Memorandum in

a

icine

A-34

Favor of William Sample's Motion for Summary

Judgment at 4. Plaintiffs are not seeking

recovery of the benefits prescribed by

Sections 907 and 908 of the Act; it is

undisputed that Seattle Stevedore ultimately

provided these benefits to plaintiffs.

Instead, plaintiffs claim damages for

emotional and financial distress allegedly

resulting from the failure of defendants to

timely provide the benefits.

Plaintiffs have apparently overlooked

Cort v. Ash, 422 U.S. 66 (1975) which sets

out four factors that are relevant in

determining whether a private right of

action may § be implied toc enforce the

provisions of a statute which does not

expressly provide such a right. The Cort v.

Ash factors are as follows:

First, is the plaintiff "one of

the class for whose especial

benefit the statute was enacted,"

--that is, does the statute create

a federal right in favor of the

A-35

663 F.2d 861, 864 (9th Cir. 1981), cert.

denied, 459 U.S. 881 (1982). Examination of

the second and third Cort v. Ash factors is

helpful in determining Congress’ intent.

Implying a private right of action for

damages resulting from violation of Sections

907 or 908 would be inconsistent with other

sections of the Act and its legislative

history. When considering what remedy was

appropriate where an employer failed or

refused to pay compensation or provide

medical treatment when due, Congress did not

expressly permit a private right of action.

The Act expressly provides for such actions

in only two situations: first, where the

employer fails to secure payment of

compensation and benefits as required by the

Act, 33 U.S.C. Section 905(a), and second,

where an employer fails to comply with a

final compensation order awarding benefits

to an injured employee, 33 U.S.C. Section

“ENE TRIE

A-36

treatment. But, the fact that rights were

conferred on certain individuals does not

necessarily lead to the conclusion that

Congress intended to create a private cause

of action for damages to remedy a denial of

the rights. Cf. Fisher v. City of Tucson,

663 F.2d 861, 864 {9th Cir. 1981), cert.

denied, 459 U.S. 881 (1982). Examination of

the second and third Cort v. Ash factors is

helpful in determining Congress' intent.

Implying a private right of action for

damages resulting from violation of Sections

907 or 908 would be inconsistent with other

sections of the Act and its legislative

history. When considering whet remedy was

appropriate where an employer failed or

refused to pay compensation or provide

medical treatment when due, Congress did not

expressly permit a private right of action.

The Act expressly provides for such actions

in only two situations: first, where the

A-37

employer fails to secure payment of

compensation and benefits as required by the

Act, 33 U.S.C. Section 905(a), and second,

where an employer fails to comply with a

final compensation order awarding benefits

to an injured employee, 33 U.S.C. Section

921(d). Rather than permitting a private

right of action, Congress provided certain

penalties for the failure to pay

compensation when due and provided for

reimbursement of employees who incur

expenses for medical treatment the employer

neglects or refuses to provide. See 33

U.S.C. Sections 914(e) and (f) (increasing

the amount of compensation due by 10% or

20%), 928(a) (attorney's fees), 907(d)

(reimbursement of medical expenses).

Permitting recovery of damages in addition

to the penalties provided by the Act, as

plaintiffs suggest, would arguable

contravene the exclusive liability

etn SRO ATe capone?

li a il AEA

A-38

provisions of the Act by extending an

employer's liability beyond the statutorily

prescribed liability. 33 U.S.C. Sections

905(a), 933(i). (See Section III for

discussion of the exclusive liability

provisions). The inconsistencies that would

result if a private right of action is

implied strongly suggest that Congress did

not intend to create such a remedy.

Implying a private cause of action for

violation of Sections 907 and 908 would also

be inconsistent with the underlying purpose

of the legislative scheme. The fundamental

purpose of the LHWCA is to assure that

prompt aid reaches the injured employee when

his need is greatest. This purpose is

attained by (1) imposing an absolute but

limited liability on employers for the

payment of medical and compensation benefits

to injured employees, and (2) resolving

disputes between employers and injured

A-39

employees through an administrative process

that emphasizes informal and nonjudicial

means of resolving disagreements. Implying

a private right of action would likely

increase the number of litigated disputes

thereby undercutting the administrative

dispute resolution procedure and increasing

the amount of the employers' limited

Le i GEA St

financial resources which are expended in

the defense of actions rather than in the

payment of benefits. cf. Oman Vv.

Johns-Manville Corp., 482 F. Supp. 1060,

1069 (E.D. Va. 1980), aff'd, 662 F.2d 243

(4th Cir. 1981). Also, holding employers

liable for amounts in excess of those :

prescribed by the Act would deprive

employers of the limited liability which is

the basis of all workmen's compensation

acts.

As to the fourth Cort v. Ash — factor,

providing workmen's compensation for injured

nein iadiaaiioauiel

A-40

longshoremen is clearly an area of federal

concern. On the other hand, to the extent

that the cause of action in question is

really one for emotional distress, it falls

within the bounds of traditional state tort

law. On balance, the court finds this

factor is not of particular influence in its

decision.

The court is convinced that Congress

did not intend to create a private right of

action for damages to remedy violations of

Sections 907 and 908 of the LHWCA. Congress

expressly created a private right of action

for violation of other, more fundamental

sections of the Act, which leads the court

to believe that the failure to provide such

a remedy for violation of Sections 907 and

908 was no mere oversight. The legislative

history contains no evidence that Congress

intended to create such a remedy. Instead,

the legislative history and the statutory

A-41

language suggest that Congress thought that

the way to deter violations of Sections 907

and 908 was to impose penalties that would

be assessed through the administrative

process. In these circumstances the court

will not isply a private cause of action.

The court therefore has no occasion to

decide whether defendants violated Sections

907 or 908 of the Act.

IIt.

The remaining issue before the court is

whether plaintiffs have stated a claim for

relief under the common law which is not

barred by the exclusive liability provision

of the Act. See 33 U.S.C. Section 905(a).

Section 905(a) provides that "[t)jhe

liability of an employer [under the Act]

shall be exclusive andin place of ail

other liability of such employer to the

employee... ." Id.; see, also, 33 U.S.C.

rr |

A-42

Section 933(1) (stating that recovery under

the Act is the exclusive remedy against

co-employees of the injured employee). The

Act imposes liability on an employer for

accidental injury or death arising out of

and in the course of employment. See 33

U.S.C. Sections 902(2), 904, 907-908. Thus,

an employer is generally not liable under

the Act for an intentionally inflicted

injury but, conversely, the employer does

not receive the benefit of the exclusive

liability provision for such injuries. See

Austin v. Johns-Manville Sales Corp., 508 F.

Supp. 313, 316 (D. Me. 1981).

In resolving the issue before the court

it should be remembered that the LHWCA

represents a compromise between the

competing interests of longshoremen and

their employers and that the’ exclusive

liability provision is a central element of

the compromise. "In return for the

A-43

guarantee of compensation, the employees

surrender common-law remedies against their

employers for work-related injuries. For

the employer, {who gives up certain

common-law defenses to liability] the reward

for securing compensation is immunity from

employee tort suits." Washington

Metropolitan Area Transit Authority Vv.

Johnson, 104 S.Ct. 2827, 2831-32 (1984).

Additionally, strengthening the exclusive

liability provision was one of the primary

purposes behind the 1972 amendments to the

Act. See Northeast Marine Terminal Co. _ v.

Caputo, 432 U.S. 249, 261-62 (1977).

The importance of the exclusivity

provision within the LHWCA scheme dictates a

broad interpretation of the phrase "arising

out of andin the course of employment,"

which delimits the accidental injuries

covered under the Act. 33 U.S.C. Section

902(2). Such an interpretation also permits

Det iimes w.

A-44

injured longshoremen to obtain benefits for

the broadest possible range of injuries.

Courts in several cases have viewed

expansively the injuries which are subject

to the exclusive liability provision. See,

e.g., Lindsay Vv. George Washington

University, 279 F.2d 819 (D.C. Cir. 1960);

Austin v. Johns-Manville Sales Corp., 508 F.

Supp. 313, 318 (D. Me. 1981).

The question presented in Lindsay was

whether the exclusive remedy provision of

the Act precludes an action for alleged

malpractice in the treatment of a

compensable injury at the employer's

hospital. | The court answered the question

in the affirmative, finding that the

employer is responsible under the Act for

all legitimate consequences that flow from a

compensable injury, . including the

unskillfulness or error of judgement by the

physicians furnishing the medical treatment

A-45

required by the Act. The court held that

the liability imposed by the Act was the

pliaintiff's exclusive remedy and that the

action was thus barred. Id. at 820-21.

Similarly, in the instant case recovery

under the Act should be the plaintiffs’

exclusive remedy against Seattle Stevedore

for any negligence in processing plaintiffs'

compensation claims.

As previously discussed in Section II,

Congress considered what remedy was

appropriate where an employer fails to pay

compensation or provide medical benefits in

a timely fashion. Congress enacted certain

penalties where are assessed whether’ the

failure is inadvertent or intentional. The

apparent purpose of these penalties is to

discourage the very sort of behavior alleged

here. These penalties are not

insubstantial: for example, on Shelton's

Claim the ALJ assessed almost $6,300 in

hints iai ists

aw tie Becntbs ae

A-46

attorney's fees and prejudgment interest

against Seattle eine.

In the great majority of cases a cause

of action has been held not to lie where it

is alleged that an employer or its insurer

wrongfully delayed or refused to make

compensation or medical payments when due.

2A A. Larson, Workmen's Compensation Law

Section 68.34(c) at 13-72. Larson opines

that "[{t]jhe temptation to shatter the

exclusiveness principle by reaching for’ the

tort weapon whenever there is a delay in

4

Plaintiffs' remedy under the Act for

the failure of Seattle Stevedore to provide

benefits when due is not necessarily limited

to the statutory penalties. Plaintiff

Shelton, for example, was awarded benefits

by the ALJ for his "Mental Health Sequelae"

which flowed from his physical injury. The

emotional distress for which Shelton now

seeks damages may have been a part of the

mental health problems considered by the

ALJ--which raises the possibility of a

double recovery against Seattle Stevedore.

A-47

paymerits or a termination of treatment is

all too obvious, and awareness of this

possibility has undoubtedly been one reason

for the reluctance of courts to recognize [a

cause of action] .. . except in cases of

egregious cruelty or venality." Id. at

13-76 (footnotes omitted). Larson cites

Martin v. Travelers Insurance Co., 497 F.2d

329 (ist Cir. 1974), upon which plaintiffs

rely, as a case where the defendant's

conduct was "conspicuously contemptible."

Id.

In Martin v. Travelers Insurance the

plaintiff, a LHWCA claimant, received three

drafts totalling over $5,700 from his former

employer's insurer in satisfaction of an

award under the Act. Two weeks after the

drafts were deposited and substantially

drawn upon, the insurer stopped payment on

them. This caused the plaintiff to suffer

financial embarrassment, emotional distress

Pe ea I i nie

ey ee ee

A-48

and severe physical impairment. 497 F.2d at

330. The plaintiff's suit, which alleged

tortious infliction of mental and emotional

suffering, was dismissed by the district

court pursuant to Fed. R. Civ. P. 12(b)(6).

The First Circuit reversed, holding that the

exclusive liability provision of the Act did

not preclude the plaintiff from pursuing

whatever independent state law remedy was

recognized for the insurer's conduct. Id.

at 331. Significantly, the court did not

find that violation of the LHWCA gives rise

to a private cause of action or that the bad

faith termination of LHWCA benefits is

itself actionable.

The court in Martin v. Travelers

Insurance had three alternative rationales

for its holding, one of which was that:

{t]he damage which is the basis of

this suit did not arise out of or

in the course of employment nor

was the damage caused by a third

person because of plaintiff's

A-49

employment. Instead the damage

was allegedly incurred in the

course of and arising out £ of

plaintiff's status as a claimant

seeking compensation, after his

status as an employee had

terminated.

Id. at 330-31. No authority was cited by

the court, nor was there any discussion of

the case law and policies reviewed above.

This court declines to follow Martin vv.

Travelers Insurance. Although the court can

understand the tendency to find Section

905(a) inapplicable where’ the defendant

violates the express and unambiguous terms

of the Act and serious injuries result to

the plaintiff, the court finds persuasive

the policies and reasoning discussed above,

in addition to the need for a uniform and

consistent rule. The court concludes that

the injuries alleged by plaintiffs do arise

out of and in the course of their

employment. Defendants are thus entitled to

erste Ueren Sd,

A-50

the protection of the exclusive liability

provision of Section 905(a).

It remains to be decided whether

plaintiffs have stated a claim for relief

under state law which falls within the

exception to Section 905(a) for

intentionally inflicted injuries. At oral

argument, counsel for plaintiffs indicated

that the tort of intentionally inflicted

emotional distress (outrage) was the oniy

state law claim arguably alleged in the

Second Amended Complaint. The complaint

does not allege that the plaintiffs suffered

severe emotional distress, that the

emotional distress was inflicted

5

intentionally or recklessly, or that the

5

Section 905(a) would bar an outrage

claim based on recklessly inflicted

emotional distress. To fall within the

exception to Section 905(a), plaintiffs must

(Footnote Continued)

A-51

conduct of the defendants was outrageous and

extreme. Each of these allegations is an

essential element of a claim for outrage.

Grimsby v. Samson, 85 Wn. 2d 52 (1975).

Accordingly, the court finds that the

complaint does nct allege an outrage claim

or any other state law claim for

intentionally inflicted injury. Cf. Bowe v.

Eaton, 17 Wn. App. 840, 845 (1977). The

court need not decide whether plaintiffs

could allege a state law claim for

intentionally inflicted injury because even

if such a claim was stated, this court would

lack subject matter jurisdiction over it.

(Footnote Continued)

prove that their emotional distress was

intentionally inflicted by defendants.

Austin v. Johns-Manville Sales Corp., 508 F.

Supp. 313, 316 (D. Me. 1981).

IV.

In conclusion, the court has ruled (1)

that plaintiffs' claims are not cognizable

in admiralty, (2) that a private cause of

action does not exist for violation of the

LHWCA, and (3) that Section 905(a) bars’ the

plaintiffs' claims. Finding that no genuine

issues of material fact exist, and that

defendants are entitled to judgement as a

matter of law, defendants' motion for

dismissal is hereby GRANTED.

IT IS SO ORDERED.

The Clerk of the Court is directed to

forward copies of this Order to counsel of

record.

DATED at Seattle, Washington this 13th

day of August, 1984.

BARBARA J. ROTHSTEIN,

UNITED STATES DISTRICT JUDGE

A-53

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

WILLIAM SAMPLE and

KAREN SAMPLE, husband

and wife, and JAMES

SHELTON,

NOS. 84-4134,

84-4240

D.C.No. CV-83-1060R

Plaintiffs-

Appeilants/cross-

appellees,

ORDER

vs.

REGINALD JOHNSON,

et al.,

Defendants-

Appellees/cross-

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

appellants. )

)

Before: PREGERSON, and WIGGINS, Circuit

x

Judges and SCHNACKE,

Plaintiffs' petition for rehearing is

denied.

*

Honorable Robert R. Schnacke, United

States District Judge for the Northern

District of California, sitting by

designation.

A-54

The opinion filed on September 20, 1985

is hereby amended as follows:

On page 2, the first paragraph of the

"FACTS" is amended to read:

"The facts are not disputed. Sample

was injured on March 28, 1983; Shelton was

injured on April 26, 1982. Sample received

compensation from Seattle Stevedore from

April 8 to June 1, 1983. The employer

controverted his claim on June 15, 1983, and

a hearing was held before an ALJ on March

17, 1984. On April 24, 1984, Sample

received an award of LHWCA compensation.

Sample was without income during the more

than ten months between the controversion

and the award."

On page 20, line 24, “contravention" is

amended to read “controversion,."