Petition for Writ of Certiorari — SSA Gulf, Inc. v. United States District Court for the Eastern District of Louisiana
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| Supreme Court, U.S
() FILED —
O04 327 SEP3 - 2004
No. 04-
In the
Supreme Court of the Gnited States
SSA GULF, INC.,
PETITIONER,
EUNICE HERNANDEZ, INDIVIDUALLY AND
ON BEHALF OF DECEDENT, JOSEPH HERNANDEZ,
RESPONDENT.
On Petition For a Writ Of Certiorari To
The U.S. Court of Appeals tor the Fifth Circuit
PETITION FOR WRIT OF CERTIORARI
RICHARD P. SALLOUM JONATHAN S. MASSEY
FRANKE, RAINEY & SALLOUM Counsel of Record
Post Office Drawer 460 JONATHAN S. MASSEY, P.C.
Gulfport, MS 39502 3920 Northampton St. N.W.
(228) 868-7070 Washington, D.C. 20015
(202) 686-0457
IRA J. ROSENZWEIG
ADAMS, HOEFER, HOLWADEL
& ELDRIDGE, LLC
Pan American Life Center
601 Poydras St., Suite 2490
New Orleans, LA 70130 ~
(504) 581-2606
TERE TELAT "IE AAO ERNIE. BIN ESO NCHA RRR ABER RABIN IPE ERE I
WILSON-EPES PRINTING CO., INC. — (202) 789-0096 - WASHINGTON, D.C. 20001
QUESTION PRESENTED
Whether the Longshore and Harbor Workers’ Compensation
Act, 33 U.S.C. § 901, et seq., wholly displaces and preempts
ii
PARTIES TO THE PROCEEDINGS
In addition to the parties listed in the caption, the nominal
respondent in the court of appeals was the Honorable Lance
Africk, Judge, United States District Court for the Eastern
District of Louisiana.
The following parties were defendants in the district court but
did not enter an appearance in the court of appeals: Todd
Shipyards Corporation; Fidelity & Casualty Company; Garlock
Sealing Technologies, LLC (formerly known as Garlock, Inc.);
Eagle, Inc.; Cooper/T. Smith Stevedoring Company, Inc.; P&O
Ports Gulfport, Inc. (formerly known as Atlantic & Gulf
Stevedores, Inc.); Strachan Shipping Company; Biehl & Co., Inc.
(formerly known as Young & Co., Inc.); James J. Flanagan
Shipping Corporation; Mid-Gulf Stevedores, Inc.; Argonaut
Insurance Company.
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iii
RULE 29.6 STATEMENT
Petitioner SSA Gulf, Inc.. formerly
Terminals, Inc. and Ryan-Walsh Stevedoring, states that its
parent company is SSA Marine, Inc. No publicly held company
Owns more than 10% of SSA Gulf’s stock.
known as SSA Gulf
aay
Vv
TABLE OF CONTENTS
QUESTION PRESENTED .......................... i
PARTIES TO THE PROCEEDINGS .................. li
RULE 29.6 STATEMENT ......................... ili
TABLE OF CONTENTS............................ Vv
TABLE OF AUTHORITIES ........................ Vii
re = l
FREES TOON 6 i shox 4s enaddeeriiee ee ]
RELEVANT STATUTORY PROVISION .............. l
STATEMENT OF THE CASE ....................... 2
1. Statutory Background......................... 2
2. Proceedings in thisCase....................... 3
REASONS FOR GRANTING THE WRIT .............. 5
A. The Decisions Below Conflict With A Holding
Of The Fourth Circuit ......................... 6
B. The Decisions Below Conflict With Governing
Precedent of this Court Regarding the
“Complete Preemption” Doctrine................ 8
1. The Courts Below Applied An Obsolete
Legal Standard Regarding The Complete
Preemption Doctrine ...................... 10
vi
2. This Court Should Grant Review To
Continue To Clarify The Complete
PoCOMBIOR DOCMIRG . 0.2 c ccc ccccccesccsesec 13
C. Under the Proper Legal Test, The LHWCA
Triggers Complete Preemption ................. 15
1. The Text and Structure of the LHWCA ....... 15
2. The Legislative History of the LHWCA....... 16
D. The Decision Below Threatens a Substantial
Disruption of the LHWCA Statutory Scheme ..... 20
E. Section 1447(d) Does Not Preclude Review ...... 22
CONNCLIIIO oc ccciscdssccsweencunnereaneee 25
Appendix A: Order of the U.S. Court of Appeals for the
ye Pee ee la
Appendix B: Order and Reasons of the U.S. District Court
for the Eastern District of Louisiana................ 2a
a
TABLE OF AUTHORITIES
Cases Page
Aaron v National Union Fire Ins. Co.. 876 F.2d 1157
(Sth Cir. 1989), cert denied, 493 U.S. 1074 (1990) .. 4,13
Aetna Health Ins. v. Davila.
124 S. Ct. 2488 (2004) ................... 5, 9-11, 25
Artis v. Norfolk & Western Ry., 204 F.3d 141
etceaie ce cece. COE nn er hes 8
Atlantic Transportation Co. v. imbrovek.
SE as PORNO ob oo ok oa ddbd Ko wasksn el, 17
Avco Corp. v. Aero Lodge No. 735, 390 U.S. $57 (1968) . 8-9
Ben & Jerry's Homemade, Inc. v. KLLM. Ince..
58 F. Supp. 2d 315 (D. Vt. 1999) ............... 14-15
Beneficial Nat'l Bank v. Anderson, 539 US. | (2003) .. 9-13
Blab T.V., Inc. v. Comcast Cable Communs.. Inc.,
182 F.3d 851 (11th Cir. 1999) ............. 14
Briarpatch Ltd, L.P. v. Phoenix Pictures, Inc..
373 F.3d 296 (2d Cir. 2004) ...................... 13
Caterpillar, Inc. v. Williams, 482 U.S. 386 Ses ecccaus 8
Chandris, Inc. v. Latsis, 515 U.S. 347 SOE wes oad bee 15
Circle Redmont, Inc. v. Mercer Transp. Co.,
78 F. Supp. 2d 1316 (M.D. Fla. 1999) .............. 14
Darcangelo v. Verizon Communs., Inc..
292 F.3d 181 (4th Cir. 2002) ..................... 14
Ervast v. Flexible Prods. Co., 346 F.3d 1007
EM MOE 6a coh baueuceds siu auc tee 14
Falkowski v. Imation Corp., 309 F.3d 1123
NEE scobeccavneet oe 14
Franchise Tax Bd. of Cal. v. Construction Laborers
Vacation Trust for Southern Cal., 463 U.S. | (1983)....9
Garcia v. Amfels, Inc., 254 F.3d 585 (5th Cir. ED oc awass 4
Gravatt v. C.iy of New York, 226 F.3d 108 (2d Cir. 2000),
cert. denied, 532 U.S. 957 (2001) ................... 8
Hurt v. Dow Chem. Co., 963 F.2d 1142 (8th Cir. 1992) ... 14
In re CSX Transportation, Inc. v. Shives, 151 F.3d 164
Se EE eG eukdcend beuscuuecelcee 6-7, 23-24
Vill
Cases (continued) Page
In re TMI Litigation Cases Consolidated I1, 940 F.2d 832
(3d Cir. 1991), cert. denied, 503 U.S. 906 (1992) ..... 24
Ingalls Shipbuilding v. Director, Office of Workers’
Compensation Programs, DOL, 519 U.S. 248 (1997) ... 3
International Stevedoring Co. v. Haverty,
ee as eal eh bw wkd dk 17
Kircher v. Putnam Funds Trust,
DEe Pee CHORE, BOD ncn ccetccentencsvees 24
Knickerbocker Ice Co. v. Stewart, 253 U.S. 149 (1920) ... 17
Lippitt v. Raymond James Fin. Servs.,
De ee PPPOE, BMD 5k Sade he wdoncepeness ,
Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58 (1987) .
Metropolitan Stevedore Co. v. Rambo,
3 Bk Rye OP ee eee 2
Morrison-Knudsen Constr. Co. v. Director, Office of
Workers’ Compensation Programs, United States Dep't
of Labor, 461 U.S. 624 (1983) ................00.. 22
Nasuti v. Scannell, 906 F.2d 802 (1st Cir. 1990) ......... 24
Northeast Marine Terminal Co. v. Caputo,
Mn PE aot eee g cea nek ed cee) ws 18
Norton v. Warner Co., 321 U.S. 565 (1944) ............ 15
Potomac Electric Power Co. v. Director, Office of Workers’
Compensation Programs, 449 U.S. 268 (1980) ....... 22
Rivet v. Regions Bank of La., 522 U.S. 470 (1998) ........ 9
Robinson v. Michigan Consol. Gas Co.,
oe Pe ee | er er yee 14
Rosciszewski v. Arete Assocs., 1 F.3d 225 (4th Cir. 1993) . 14
Ryan Stevedoring Co. v. Pan Atlantic S.S. Corp.,
ne eo eo a gn es a le ee 18
Sample v. Johnson, 771 F.2d 1335 (9th Cir.1985),
cart. Gaia, S75 UD. WORD CISGG) occ a ec scsewnciess 8
Seas Shipping Co. v. Sieracki, 328 U.S. 85 (1946) ....... 17
Sonoco Prods. Co. v. Physicians Health Plan, Inc.,
po Se er er rrr 14
tannic ba RA te ROL Fk 6 en RRA Mls “Piles
ix
Cases (continued) Page
South Chicago Coal & Dock Co. v. Bassett,
A Re Re a 15
Southern Pacific Co. v. Jensen, 244 U.S. 205 (1917) ..... 17
Spielman v. Merrill Lynch, Pierce, Fenner & Smith, Inc.,
ee ee 0 ee Do hk hs x bit kn bac oondces 14
Stewart v. Dutra Constr. Co., 343 F.3d 10 (1st Cir. 2003),
cert. granted, 124 S. Ct. 1414 (2004) ................. 8
Stowers v. Consolidated Rail Corp., 985 F.2d 292
(6th Cir.), cert. denied, 510 U.S. 813 (1993) .......... 8
Strong v. Telectronics Pacing Sys., 78 F.3d 256
NG I re oc a a a eta oa ka x ow oR Os 14
Swanson v. Marra Brothers, Inc., 328 U.S. 1 (1946) ..... 17
Thermtron Products, Inc. v. Hermansdorfer,
ee I ns ba 5 6 as Os awa eee 23
Trans World Airlines v. Mattox, 897 F.2d 773 (5th Cir.),
cert. denied, 498 U.S. 926 (1990).................. 14
Washington v. W. C. Dawson & Co., 264 U.S. 219 (1924) . 17
Statutory Materials Page
a Gs ig aah ne aus pause ska ene l
ee ots ys bo ad ceo 40 a oa kee 4
ae SD bik acdc es an ose ow Lene eee 4
En OE 5s nd vs ptinaaes endowed ewicncs 22-24
Longshore and Harbor Workers’ Compensation Act, 44
Stat. 1424, as amended, 33 U.S.C. § 901 et seg ... passim.
PETE OO oi ovccctdnssdcthiviskciessen 2
I OE otis ois ee 2
Be I ec eee 2
ME ok oo sk eck cece 1,2, 3,15
SR Be ks ee 2,21
ee eee ee 2,21
ett BOE SG a eee 21
tr Tide | |: ie Ween watt nnn ey hs. 2
X
Statutory Materials (continued) Page |
DEINE body cdeesdnceaeses are acs to aCe 2, 16
I sah a a na Wag Go ee eee Se a ee ee 2
a alas ese eh baad Ae ee eek 2
NN dol lng esp pain Sa as a hw 2,10
cna aig baa eek eee ea-a 6 eee one ee 3
EE iki aha ahd i oat yo ck MRA ws a oo 3
ET ie cd cack kc dha need eae wee es oN es 2
I he ee Ee a kd adie s hea 16
I adi sg ka 64,5 vane oe oe oe ee eee 2
I I es rN ed Lc OS alaiats dota tn ait 17
H.R. Rep. No. 92-1441, 92d Cong., 2 Sess. (1972) .... 17-19
S. Rep. No. 92-1125, 92d Cong., 2d Sess. (1972) ..... 18-19
SE Res Os SU ERPFED 6nd ncastsdkewwescnavawas 21
Miscellaneous : Page
et ee ee er 3, 16
American Tort Reform Association, BRINGING JUSTICE
TO JUDICIAL HELLHOLES (2002) ................... 21
American Tort Reform Association, BRINGING JUSTICE
TE) PRCHAL POPE LIOOL ES CIS) ook cect ccasanccaes 21
Richard H. Fallon, Jr. et al., THE FEDERAL COURTS AND
THE FEDERAL SYSTEM (Sth ed. Supp. 2003) .......... 13
PETITION FOR WRIT OF CERTIORARI
Petitioner SSA Gulf, Inc. (“SSA Gulf”) respectfully petitions
for a writ of certiorari to review the judgment of the United
States Court of Appeals for the Fifth Circuit in this case.
OPINIONS BELOW
The Fifth Circuit’s order (Pet. App. 1a) denying the petition
for writ of mandamus is unreported. The opinion of the district
court (id. 2a-11a)is reported at 2004 WL 1543184 and 2004 U.S.
Dist. LEXIS 12777.
JURISDICTION
The order of the court of appeals was entered on July 22,
2004. Pet. App. la. The jurisdiction of this Court is invoked
pursuant to 28 U.S.C. § 1254(1).
RELEVANT STATUTORY PROVISION
Section 5 of the Longshore and Harbor Workers’
Compensation Act (“LHWCA”) provides in relevant part:
The liability of an employer prescribed in section 4 [33
U.S.C. § 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, or to maintain an action at
law or in admiralty for damages on account of such injury
or death.
33 U.S.C. § 905(a).
;
2
STATEMENT OF THE CASE
1. Statutory background.
The Longshore and Harbor Workers’ Compensation Act
(“LHWCA”), 44 Stat. 1424, as amended, 33 U.S.C. § 901 et
seq., is a comprehensive scheme to provide compensation ‘in
respect of disability or death of an employee . . . if the disability
or death results from an injury occurring upon the navigable
waters of the United States,’” including any adjoining pier,
wharf, dry dock, terminal, building way, marine railway, or other
area customarily used by an employer in loading, unloading,
repairing, dismantling. or building a vessel. Metropolitan
Stevedore Co. v. Rambo, 515 U.S. 291, 294 (1995) (quoting 33
U.S.C. § 903(a)). The Act focuses primarily on such occupations
as longshore and harbor workers, ship repair personnel,
shipbuilders, and shipbreakers. Under the LHWCA, nonseaman
maritime workers, as defined in § 902(3), are afforded no-fault
workers’ compensation claims against their employers, see
§ 904(b) and negligence claims against vessels, see § 905(b), for
injury and death.
The LHWCA creates a comprehensive scheme for claims by
eligible workers. The program is administered by the Secretary
of Labor through the Director of Office of Workers’
Compensation Programs. 33 U.S.C. § 939. The Act prescribes
detailed procedures for the filing and processing of claims.
§§ 913-14, 919-20. Any claim for benefits must proceed
exclusively before an administrative law judge (“ALJ”), and any
challenge to the ALJ’s ruling must first be reviewed by the
Benefits Review Board (“Board”). §§ 919(a), 921(b). Any
appeal from the Board’s decision must be filed in a United States
Court of Appeals. § 921(c).
The LHWCA provides formulae for the computation of
benefits for disability or death based on the employee’s weekly
wages. §§ 908-09, 910. The Act contains rules for the payment
of compensation where third parties may be liable, § 933; for the
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modification of awards, § 922; and for the regulation of
attorneys’ fees. § 928.
Under the authority of the LHWCA, the Secretary of Labor
has promulgated a detailed set of regulations implementing all
portions of the Act. See 20 C.F.R. §§ 701-704. The regulations
provide rules for claims relating to occupational diseases.
§ 702.602-604. This Court has recognized that a shipfitter
suffering from employment-related asbestos disease is entitled to
administrative compensation from his employer under the
LHWCA. See Ingalls Shipbuilding v. Director, Office of
Workers’ Compensation Programs, DOL, 519 U.S. 248, 251
(1997).
The regulations also address the procedures for the payment
of uncontested claims, 20 C.F.R. § 702.231; the entry of
settlement agreements, §§ 702.242-243: and the processing of
controverted claims, §§ 702.251-274, 301-349. The rules
governing the conduct of formal hearings include provisions
regarding depositions, interrogatories, evidence, witnesses, oral
arguments, and written submissions. The regulations also
provide for the modification of compensation awards and
payment of supplemental compensation. § 702.372-373.
The comprehensive statutory framework does not permit a
longshore worker to sue a stevedore employer for tort damages
in state court. Indeed, central to the LHWCA is the exclusivity
provision of Section 5, which provides that the liability of an
employer under the LHWCA “shall be exclusive and in place of
all other liability” 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.” § 905(a).
2. Proceedings in this case.
Respondent filed the instant lawsuit in Louisiana state court,
Orleans Parish. The suit alleged that, while Joseph Hernandez
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was employed with SSA Gulf and other stevedoring companies,
he loaded, unloaded, and handled raw asbestos fibers and
asbestos cargo at the Port of New Orleans. According to the
lawsuit, the exposure between 1964 and 1985 contributed to his
mesothelioma from which he died on July 18,2003. The lawsuit
seeks a host of damages inconsistent with the LHWCA,
including damages for physical and mental pain and suffering,
fear of dying, loss of enjoyment of life, loss of consortium, loss
of spousal affection, and “anguish and grief.”
SSA Gulf timely removed this case under 28 U.S.C.
§ 1441(b), on the grounds that the LHWCA wholly displaces and
preempts state-law tort claims against stevedore employers so as
to come within federal question jurisdiction pursuant to 28
U.S.C. § 1331. The removal was joined by all defendants who
had been served at the time of removal. By separate pleadings,
petitioner and other stevedore defendants filed a Rule 12(b)(6)
motion to-dismiss on the ground that the LHWCA, as
respondent’s sole and exclusive remedy, completely preempts
any state-law claims against stevedore employers.
The district court entered an order of remand without
deciding whether the LHWCA completely preempts-state-law
claims against stevedore employers and without reaching
petitioner’s Rule 12(b)(6) motion to dismiss based upon the
exclusive remedy provisions of the LHWCA. Instead, the
district court opined that the LHWCA does not provide a basis
a for removal of purely state-law claims. Pet. App. 9a. “[T]he
LHWCA contains no civil enforcement provision that creates a ;
federal cause of action that could be litigated in either federal or
state court.” Jd. at 8a. “[T]he LHWCA does not contain a :
specific jurisdictional grant to the federal courts for the
enforcement of a right created by the LHWCA.” Jd. Citing
Garcia v. Amfels, Inc., 254 F.3d 585, 588 (Sth Cir. 2001), and
Aaron v National Union Fire Ins. Co., 876 F.2d 1157 (Sth Cir.
1989), cert denied, 493 U.S. 1074 (1990), the district court held
that there was no federal question jurisdiction in this case. Pet.
App. 9a.
SSA Gulf filed a petition for writ of mandamus presenting the
question whether the LHWCA creates federal question
jurisdiction for removal purposes because it completely preempts
state-law tort claims against stevedore employers. Respondent
filed a response. By order of July 22, 2004, the Fifth Circuit
denied the petition. Pet. App. la.
REASONS FOR GRANTING THE WRIT
This case presents the question whether the LHWCA triggers
federal question jurisdiction under the “complete preemption”
doctrine. The district court below held that the LHWCA does
not create such jurisdiction, and the Fifth Circuit refused to
disturb its judgment. However, the rule in this case, if left
uncorrected, would cause substantial disruption of the statutory
scheme enacted by Congress. The LHWCA represents a
comprehensive scheme for the compensation of longshore
workers and strikes a careful balance among numerous
competing interests. The decisions in this case would upset that
balance. There is no room in the LHWCA for state-law tort
claims, and no room for state courts to make benefit or coverage
determinations.
Further, the rule in this case conflicts with decisions of this
Court and of the U.S. Court of Appeals for the Fourth Circuit.
The Fifth Circuit decisions on which the district court relied are
obsolete and rest on a view of the “complete preemption”
doctrine that has been changed by this Court. Accordingly, this
Court’s plenary review is urgently needed.
In the alternative, this Court should grant the petition, vacate
the judgment below, and remand for reconsideration in light of
Aetna Health Ins. v. Davila, 124 S. Ct. 2488 (2004). Although
this Court’s decision in Davila was issued prior to the Fifth
Circuit order in this case, and although SSA Gulf’s petition for
mandamus cited Davila, the Fifth Circuit’s order is inconsistent
with Davila:'
A. The Decisions Below Conflict With A Holding Of The
Fourth Circuit.
The rule followed by the courts below is inconsistent with the
decision of the U.S. Court of Appeals for the Fourth Circuit in an
indistinguishable case. Certiorari is therefore amply warranted.
In In re CSX Transportation, Inc. v. Shives, 151 F.3d 164 (4th
- Cir. 1998), the Fourth Circuit held that a federal district court
erred in remanding to state court a lawsuit by a harbor worker
against his employer. The Fourth Circuit held that “[t}he
question of whether the LHWCA applies to a work-related injury
is exclusively a federal question which Congress never intended
for state courts to resolve.” Jd. at 167. “An LHWCA claim must
be filed with the Department of Labor where it is assigned to an
administrative law judge whose decision is reviewed by the
Benefits Review Board. Review by the courts is authorized
through a petition for review, which may be filed only in the
[federal] courts of appeals... .” /d. at 171. State courts “do not
have jurisdiction over LHWCA cases.” /d. The Fourth Circuit
' This Court has frequently GVR’ed cases even whether the lower court
decision was issued after the governing Supreme Court opinion. See, e.g., No.
97-8284, Schweninger v. Minnesota, 525 U.S. 802 (1998) (remanded in light
of Kansas v. Hendricks, 521 U.S. 346 (1997)); No. 97-7931, Coleman v.
Minnesota, 524 U.S. 924 (1998) (same); No. 97-5901, Hodgkiss v. United
States, 522 U.S. 1012 (1997) (remanded in light of Bailey v. United States,
516 U.S. 137 (1995)); No. 90-1936, Parker Solvents v. Royal Ins. Cos. of
Am., 502 U.S. 801 (1991) (remanded in light of Salve Regina College v.
Russell, 499 U.S. 225 (1991), decided a few days before lower court’s
decision); No. 90-524, Connecticut v. Geisler, 498 U.S. 1019 (1991)
(remanded in light of New York v. Harris, 495 U.S. 14 (1990), decided three
weeks before lower court’s opinion); No. 89-5991, Patterson v. South
Carolina, 493 U.S. 1013 (1990) (remanded in light of Griffith v. Kentucky,
479 U.S. 314 (1987)); No. 89-401, Wecht v. Inmates of Allegheny County,
493 U.S. 948 (1989) (remanded in light of University of Texas v. Camenisch,
451 U.S. 390 (1981)).
en, P
LNT, ee a Ea SS ee SS eee ae Ow
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explained that, “if we were to [remand this case to state court],
we would be committing the federal question of LHWCA
coverage to the state court when Congress intended that it be
decided exclusively in federal court.” Jd. The court of appeals
opined that, because the LHWCA administrative remedy is
exclusive, the only proper course was dismissal of the case: “the
district court should not have remanded the case to state court,
but should have dismissed it.” Jd
The decisions of the courts below are utterly irreconcilable
with the holding of the Fourth Circuit in Shives. The Fourth
Circuit held that, when a state-court action against a stevedore
employer is removed to federal district court, the proper remedy
is dismissal, not remand. The courts below followed the
opposite rule. In the Fourth Circuit, longshore and harbor
workers who attempt to file state-court actions against their
employers will properly be remitted to their administrative
remedies. Under the rule followed in the case at bar, longshore
and harbor workers will instead he allowed to pursue their tort
actions in the state courts, subject only to this Court’s
discretionary review via its certiorari jurisdiction. State-court
judges and potentially state-court juries will decide issues of
LHWCA benefits and coverage.
Circuit-to-circuit variation in the administration of the
LHWCA would be intolerable. Shipping is inherently an
interstate and indeed international form of commerce.
Operations cannot be confined to the boundaries of a particular
state or judicial circuit. If stevedore activities in New Orleans
and South Carolina are subject to different rules, then commerce
will be hampered, and Congress’ goal of a uniform national
system of compensaticn will be frustrated.
The decisions below are not only in conflict with the holding
of the Fourth Circuit; they are also in tension with the rulings of
other circuits that have given proper weight to the exclusive
remedy provision of Section 5(a) and have recognized its
8
preemptive effect on state law. See, e.g., Stewart v. Dutra
Constr. Co., 343 F.3d 10, 14 (1st Cir. 2003), cert. granted, 124
S. Ct. 1414 (2004) (“employees covered by the LHWCA are
statutorily barred from suing their employers for injuries incurred
in the course of their employment”); Gravatt v. City of New
York, 226 F.3d 108, 111 (2d Cir. 2000), cert. denied, 532 U.S.
957 (2001) (longshore worker “has no tort remedy against S&B
in its capacity as his employer’); Artis v. Norfolk & Western Ry.,
204 F.3d 141, 144 (4th Cir. 2000) (LHWCA “‘is the exclusive
remedy against employers for injuries suffered by maritime
workers”); Stowers v. Consolidated Rail Corp., 985 F.2d 292,
293 (6th Cir.), cert. denied, 510 U.S. 813 (1993) (“The LHWCA
provides the exclusive remedy for an employee who is subject
to the Act’s provisions and who is injured on the job.”); Sample
v. Johnson, 771 F.2d 1335, 1346-47 (9th Cir.1985), cert. denied,
475 U.S. 1019 (1986) (§ 5(a)’s preemptive effect should be
construed broadly).
This Court’s review is therefore amply warranted.
B. The Decisions Below Conflict With Governing
- Precedent of this Court Regarding the “Complete
Preemption” Doctrine.
Certiorari is necessary for a further reason: The rule in this
case conflicts with decisions of this Court regarding the
“complete preemption” doctrine. This doctrine reflects the
recognition that, “[o]nce an area of state law has been completely
pre-empted, any claim purportedly based on that pre-empted
state law is considered, from its inception, a federal claim, and
therefore arises under federal law.” Caterpillar, Inc. v. Williams,
482 U.S. 386, 393 (1987). “Congress may so completely
preempt a particular area that any civil complaint raising this
select group of claims is necessarily federal in character.”
Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 63 (1987).
This Court first recognized the complete preemption doctrine
in Avco Corp. v. Aero Lodge No. 735, 390 U.S. 557 (1968). In
aa AS ltl sana Lela
9
Avco, an employer sought an injunction in state court to bar the
defendant labor union from striking. The union removed the suit
to federal court, and this Court upheld the removal, opining that
Section 301 of the Labor Management Relations Act (“LMRA”)
so completely preempts state law that the employer’s complaint
should be considered as arising under Section 301. 390 U.S. at
560. The necessary ground of decision in Avco was that “the
preemptive force of § 301 is so powerful as to displace entirely
any state cause of action for violations of contracts between an
employer and a labor organization. . .. Any such suit is purely a
creature of federal law, notwithstanding the fact that state law
would provide a cause of action in the absence of § 301....
Avco stands for the proposition that if a federal cause of action
completely preempts a state cause of action, any complaint that
comes within the scope of the federal cause of action necessarily
‘arises under’ federal law.” Franchise Tax Bd. of Cal. v.
Construction Laborers Vacation Trust for Southern Cal., 463
U.S. 1, 23-24 (1983). See also Rivet v. Regions Bank of La., 522
U.S. 470, 476 (1998) (“Once an area of state law has been
completely pre-empted, any claim purportedly based on that
pre-empted state-law claim is considered, from its inception, a
federal claim, and therefore arises under federal law”) (internal
quotation marks omitted).
In recent years, this Court has issued two important decisions
revising and clarifying the complete preemption doctrine. In
Beneficial Nat'l Bank v. Anderson, 539 U.S. 1 (2003), this Court
held that causes of action for usury filed in state courts against
national banks are removable to district court under § 1441(b) as
“arising under” federal law — even when federal law is not
mentioned in the complaint. Most recently, this Court invoked
the complete preemption doctrine in Aetna Health Inc. v. Davila,
1248S. Ct. 2488 (2004), which held that when a federal statute (in
that case, ERISA) completely preempts a state-law cause of
action, the state case may be removed to federal court.
In both Beneficial Nat’l Bank and Davila, this Court
10
instructed that the principal focus of complete preemption should
be on whether the federal statutory scheme comprehensively
displaces the state law at issue. The rulings of the courts below
cannot be reconciled with this Court’s decisions, particularly its
recent holdings. The Fifth Circuit authority cited by the district
court is obsolete and represents a view of the complete
precmption doctrine that has been rejected by this Court.
1. The Courts Below Applied An Obsolete Legal
Standard Regarding The Complete Preemption
Doctrine.
The district court held that the LHWCA does not create
federal question jurisdiction because it “contains no civil
enforcement provision that creates a federal cause of action that
could be litigated in either federal or state court” and “does not
contain a specific jurisdictional grant to the federal courts for the
enforcement of a right created by the LHWCA.” Pet. App. 8a.
In fact, the LHWCA contains provisions for federal court review
and for the enforcement of federal rights. The Act provides that
“[a]ny person adversely affected or aggrieved by a final order of
the [Benefits Review] Board may obtain a review of that order
in the United States court of appeals.” § 921(c). The LHWCA
also provides that district courts may enforce federal rights under
the Act by issuing injunctions against employers not in
compliance with compensation orders. See § 921(d). The
_ district court’s description of the LHWCA was inaccurate.
Moreover, the district court’s opinion demonstrates why the
legal standard followed by the courts below conflicts with this
Court’s precedent — particularly the recent decisions of
Beneficial National Bank and Davila. These recent decisions
have refined and clarified the complete preemption doctrine by
making clear that the relevant issue is Congress’ intent to
completely displace state law through the enactment of a
comprehensive statutory scheme. In Beneficial National Bank,
for example, this Court made clear that the existence of a
A —— see ee ee ee ei ee |
1]
comprehensively preemptive federal statute means that any
assertion of a state-law cause of action necessarily raises a
federal question: “When the federal statute completely pre-empts
the state-law cause of action, a claim which comes within the
scope of that cause of action, even if pleaded in terms of state
law, is in reality based on federal law. This claim is then
removable under 28 U.S.C. § 1441(b)....” 539 US. at 8.
This Court reaffirmed the same principle in Davila: “When
a federal statute wholly displaces the state-law cause of action
through complete pre-emption, the state claim can be removed.”
124 S. Ct. at 2495 (internal quotation marks omitted). Thus, by
creating acomprehensive federal scheme providing the exclusive
remedy against stevedore employers, and by eliminating all
related state-created rights, the LHWCA gives rise to federal
question jurisdiction under the complete preemption doctrine.
Tellingly, in both Beneficial National Bank and Davila, this
Court focused on the federal interest in preserving the uniformity
of a comprehensive statutory scheme — the same federal interest
that lies at the heart of the LHWCA. In Beneficial National
Bank, this Court observed that “[uJniform rules limiting the
liability of national banks and prescribing exclusive remedies for
their overcharges are an integral part of a banking system that
needed protection from possible unfriendly State legislation.”
539 U.S. at 10 (internal quotation marks omitted). “The same
federal interest . . . supports the established interpretation of [the
National Bank Act] that gives those provisions the requisite
pre-emptive force to provide removal jurisdiction.” Jd. at 11.
In Davila, this Court pointed to “Congress’ purpose [in
ERISA] of creating a comprehensive statute for the regulation of
employee benefit plans.” 124 S. Ct. at 2495. “Therefore, any
State-law cause of action that duplicates, supplements, or
supplants the ERISA civil enforcement remedy conflicts with the
clear congressional intent to make the ERISA remedy exclusive
and is therefore pre-empted.” /d.
12
Precisely the same reasoning is applicable in the context of
the LH WCA, which creates a comprehensive federal scheme that
(as discussed further in Part D, infra) would be disrupted by
state-court causes of action. Congress plainly intended the
LHWCA administrative remedy to be exclusive.
Although the statutes at issue in Beneficial National Bank and
Davila contained federal private rights of action, nothing in this
Court’s reasoning indicated that the presence of a federal “civil
enforcement provision that creates a federal cause of action that
could be litigated in either federal or state court” (Pet. App. 8a)
was a sine qua non of the complete preemption doctrine. This
Court should grant review in this case to make clear that the
existence of a civil enforcement section that confers a private
cause of action is merely an indicator of Congress intent, not an
independent requirement of complete preemption. Indeed, in the
case of a workers’ compensation statute like the LHWCA, it
makes little sense to examine the federal statute for evidence of
“a federal cause of action that could be litigated in either federal
or state court.” Pet. App. 8a. The entire thrust of an
administrative compensation scheme like the LWHCA is not to
create a judicially enforceable damages action but rather to keep
claims out of the courts. Instead of trying to identify
congressional intent, the courts below affirmatively frustrated it.
The LHWCA’s creation of an exclusive federal remedy in the
form of a right to administrative compensation should have been
enough to satisfy the complete preemption doctrine.
Nor does the complete preemption doctrine require a
“specific jurisdictional grant to the federal courts,” as the district
court erroneously asserted. Pet. App. 8a. In fact, in Beneficial
Nat'l Bank, this Court instructed that “the proper inquiry focuses
on whether Congress intended the federal cause of action to be
exclusive rather than on whether Congress intended that the
cause of action be removable.” 539 U.S. at 9 n.5.
To the extent that Fifth Circuit decisions cited by the district
Bene SY eT er —oe
13
court say otherwise, they are contrary to the recent decisions of
this Court and further underscore the need for this Court’s
review. For example, the district court relied extensively on
Aaron v National Union Fire Ins. Co., 876 F.2d 1157 (Sth Cir.
1989), cert denied, 493 U.S. 1074 (1990) (cited at Pet. App. 6a,
8a, 9a), which opined that “the preemptive force necessary to
create removal jurisdiction should only be held to exist when
‘Congress has clearly manifested an intent to make causes of
action . . . removable to federal court.’” Jd. at 1163 (quoting
Taylor, 481 U.S. at 68 (Brennan, J., concurring)). The
concurring opinion cited by Aaron is plainly not the law after
Beneficial Nat’l Bank, 539 U.S. at 9 n.5, if indeed it ever
represented the law. Because the courts below applied an
improper legal test that conflicts with governing precedent of this
Court, certiorari is amply warranted.
2. This Court Should Grant Review To Continue To
Clarify The Complete Preemption Doctrine.
This case presents an ideal opportunity to continue the
clarification of the complete preemption doctrine — an effort
already begun in Beneficial National Bank and Davila. Certain
lower courts have perceptively recognized that “[t]h[e] analytical
framework has been changed by” Beneficial Nat'l Bank. See
Briarpatch Ltd., L.P. v. Phoenix Pictures, Inc., 373 F.3d 296,
304 (2d Cir. 2004). “Given the Supreme Court’s approach in
[Beneficial Nat'l Bank], we conclude that it means to extend the
complete preemption doctrine to any federal statute that both
preempts state law and substitutes a federal remedy for that law,
thereby creating an exclusive federal cause of action.” Jd. at 305.
See also Richard H. Fallon, Jr. et al., THE FEDERAL COURTS AND
THE FEDERAL SYSTEM 22 (5th ed. Supp. 2003) (reaching the
same conclusion).
However, other lower courts have expressed confusion over
the complete preemption doctrine, describing it as a “doctrinal
minefield.” Lippitt v. Raymond James Fin. Servs., 340 F.3d
14
1033, 1041 (9th Cir. 2003). See also Ervast v. Flexible Prods.
Co., 346 F.3d 1007, 1014 (11th Cir. 2003) (complete preemption
doctrine is “often confused”); Sonoco Prods. Co. v. Physicians
Health Plan, Inc., 338 F.3d 366, 371 (4th Cir. 2003) (“the
doctrines of conflict preemption and complete preemption are
important, and they are often confused’’); Blab T.V., Inc. v.
Comcast Cable Communs., Inc., 182 F.3d 851, 854 (11th Cir.
1999) (noting “a substantial amount of confusion” regarding
complete preemption doctrine).
“Courts of appeals differ in their willingness to extend the
scope of the complete preemption doctrine.” Strong vy.
Telectronics Pacing Sys., 78 F.3d 256, 259 n.1 (6th Cir. 1996).
Compare Spielman v. Merrill Lynch, Pierce, Fenner & Smith,
Inc., 332 F.3d 116, 123 n.5 (2d Cir. 2003) (holding that
Securities Litigation Uniform Standards Act of 1998 triggers
complete preemption); Falkowski v. Imation Corp., 309 F.3d
1123, 1128 (9th Cir. 2002) (same); Darcangelo v. Verizon
Communs., Inc., 292 F.3d 181, 187 (4th Cir. 2002) (ERISA
completely preempts some state-law claims but not others);
Rosciszewski v. Arete Assocs., 1 F.3d 225 (4th Cir 1993)
(holding complete preemption applies to § 301 of the Copyright
Act); Trans World Airlines v. Mattox, 897 F.2d 773 (Sth Cir.)
(holding complete preemption applies to § 105(a)(1) of the
Airline Deregulation Act), cert. denied, 498 U.S. 926 (1990);
with Hurt v. Dow Chem. Co., 963 F.2d 1142 (8th Cir. 1992)
(refusing to extend complete preemption to the Federal
Insecticide, Fungicide, and Rodenticide Act); Robinson v.
Michigan Consol. Gas Co., 918 F.2d 579 (6th Cir. 1990)
(refusing to extend complete preemption to suits against trustees
in bankruptcy); Circle Redmont, Inc. v. Mercer Transp. Co., 78
F. Supp. 2d 1316, 1319 (M.D. Fla. 1999) (“Because the Carmack
Amendment’s language and history do not manifest an intent to
make state law claims removable as Carmack claims,- the
complete preemption doctrine does not app! / to give this Court
jurisdiction.”); Ben & Jerry’s Homemade, Inc. v. KLLM, Inc., 58
15
F. Supp. 2d 315, 318 (D. Vt. 1999) (“Congress has not clearly
manifested an intent to make any action involving carrier liability
removable to federal court.”).
The complete preemption doctrine presents important and
recurring questions of federal law. This case presents an ideal
vehicle for further clarification of the doctrine.
C. Under the Proper Legal Test, The LHWCA Triggers
Complete Preemption.
1. The Text and Structure of the LHWCA
This Court’s review is necessary to make clear that the
LHWCA creates federal question jurisdiction under the proper
conception of the complete preemption doctrine. The text of the
LHWCA demonstrates that Congress created a comprehensive
statutory scheme and did not intend to permit state-court suits for
damages against stevedore employers. Indeed, the LHWCA is,
if anything, broader and more comprehensive than other statutes
to which this Court has applied the complete preemption
doctrine. Section 301 of the LMRA, for example, merely places
jurisdiction of labor disputes in the federal district courts. The
LHWCA, on the other hand, contains an exclusive remedy
section, which provides that the liability of an employer under
the Act “shall be exclusive and in place of all other liability” to
the employee and “anyone otherwise entitled to recover damages
from such employer at law or in admiralty on account of such
injury or death.” § 905(a). This Court has long recognized that
“(t]he liability of an employer under the Act is exclusive.”
Norton v. Warner Co., 321 U.S. 565, 571 (1944). The LHWCA
“provides scheduled compensation (and the exclusive remedy)
for injury to a broad range of land-based maritime workers.”
Chandris, Inc. v. Latsis, 515 U.S. 347, 355 (1995) (emphasis
added); see also South Chicago Coal & Dock Co. v. Bassett, 309
U.S. 251, 256 (1940) (“For those employees who are entitled to
compensation, the remedy under the Act is exclusive.”),
overruled on other grounds by McDermott Int'l, Inc. v.
16
Wilander, 498 U.S. 337 (1991).
In addition to Section 5, the structure of the LHWCA itself
confirms that it completely displaces state law. The LHWCA
was established as a uniform national program of workers
compensation benefits for longshore and harbor workers. The
Act utterly controls the sum total of rights and obligations of
insurers, employers and employees. The sheer
comprehensiveness of the federal regulatory scheme confirms
congressional intent to preempt state-law tort remedies and to
prevent state courts from adjudicating LHWCA benefits and
coverage issues in potentially inconsistent fashion. Accordingly,
under this Court’s precedents, the LHWCA plainly creates
federal question jurisdiction under the complete preemption
doctrine.
The self-executing nature of the LHWCA provides further
evidence that Congress did not intend for state courts to make
determinations of LHWCA benefits and coverage. Unlike some
workers compensation statutes that require repeated court
enforcement, the LHWCA is almost self-policing. The LHWCA
provides for automatic payment of benefits and imposes
penalties for an employer’s failure to pay benefits. 33 U.S.C.
§§ 914, 938. The Secretary of Labor has promulgated detailed
regulations governing every portion of the Act. See 20 C.F.R.
§§ 701-704 Disputes as to compensation awards are to be
resolved by the Benefits Review Board, with appeals exclusively
to the United States Courts of Appeals. It is difficult to imagine
a more comprehensive scheme of federal regulation than the
LHWCA. The Act leaves no room for state-court involvement.
2. The Legislative History of the LHWCA
The legislative history of the LHWCA confirms that state
courts have no role in the statutory scheme. The legislative
history repeatedly makes plain congressional intent that
longshore workers should be covered by an exclusive workers’
compensation scheme and not be permitted to file state-court tort
17
suits against stevedore employers.
Initially, judicial decisions extended protection to longshore
workers by allowing them to sue in admiralty. See Atlantic
Transportation Co. v. Imbrovek, 234 U.S. 52 (1914). This
development opened the door for inclusion of longshore workers
under the remedies of the Jones Act, 46 U.S.C. § 688. See
International Stevedoring Co. v. Haverty, 272 U.S. 50 (1926).
As a result, courts excluded longshore workers from state
workers’ compensation systems. Southern Pacific Co. v. Jensen,
244 U.S. 205 (1917).
Congress reacted by making clear that longshore workers
should be limited to administrative compensation remedies and
should not be permitted to pursue tort claims under admiralty
law. Congress twice tried unsuccessfully to bring longshore
workers within state workers’ compensation plans, but the courts
held these attempts to be unconstitutional. See Knickerbocker
Ice Co. v. Stewart, 253 U.S. 149 (1920); Washington v. W. C.
Dawson & Co., 264 U.S. 219 (1924). Determined to provide
administrative rather than tort remedies for longshore workers,
Congress enacted the original Longshoremen’s and Harbor
Workers’ Compensation Act. Act of March 4, 1927, Pub.L. No.
69-803, codified at 33 U.S.C. § 901 et seg. Congress provided
that the Act was the sole remedy of the longshore worker against
an employer and abolished the Jones Act recovery granted to the
longshore worker against the employer by International
Stevedoring Co. v. Haverty, supra. See Swanson v. Marra
Brothers, Inc., 328 U.S. 1 (1946).
At first, the Act allowed a longshore worker to retain an
admiralty action against the vessel (rather than employer). Act
of March 4, 1927, Pub.L. No. 69-803, § 33, 44 Stat. 1440. See
Seas Shipping Co. v. Sieracki, 328 U.S. 85 (1946) (holding that
longshore workers were entitled to the protection of the judicially
created warranty of “seaworthiness”). | Gradually, the
“seaworthiness” doctrine approached strict liability. See H.R.
18
Rep. No. 92-1441, 92d Cong., 2 Sess. 4-5 (1972); S. Rep. No.
92-1125, 92d Cong., 2d Sess. 8-9 (1972), 1972 U.S. Code Cong.
& Admin. News, p. 4698.
However, the availability of an employee’s admiralty action
against the vessel began to threaten the exclusiveness of the
Act’s remedy against the employer because the vessel could
pursue a third-party claim against the employer alleging that any
injury by the employee was due to the negligence of the
stevedoring company and that the stevedoring company had
therefore breached its implied warranty of workmanlike
performance. In Ryan Stevedoring Co. v. Pan Atlantic S.S.
Corp., 350 U.S. 124 (1956), this Court held that such a triangular
suit did not violate the exclusive liability provision of Section 5,
even though it allowed the longshore worker to recover indirectly
from the employer more than could be recovered directly through
a workers’ compensation claim.
In response, in 1972 Congress enacted important reforms to
the LHWCA, in order to reaffirm the exclusiveness nature of the
employee’s administrative remedy against the employer. See
See Northeast Marine Terminal Co. v. Caputo, 432 U.S. 249,
261-62 (1977) (amendments were chiefly for the purpose of
strengthening the exclusivity of LHWCA remedies). Congress
specifically abolished the seaworthiness standard and eliminated
indemnity suits brought against stevedore employers by vessels
under Ryan and Sieracki. Act of October 27, 1972, Pub.L. No.
92-576, § 18, 86 Stat. 1263, amending 33 U.S.C. § 901 et seq.
Congress’ stated purpose was to remove litigation against
employers from the courts. The House Committee Report, for
example, expressed concern that judicial interpretations of the
Act had led to third-party suits against employers:
The Committee heard testimony that the number of
third-party actions brought under the Sieracki and Ryan
line of decisions has increased substantially in recent
years and that much of the financial resources which
19
could better be utilized to pay improved compensation
benefits were now being spent to defray litigation costs.
H.R.Rep. No. 92-1441 92d Cong., 2d Sess. 5 (1972), U.S.Code
Cong. & Admin. News, p. 4702.
The Senate Report concurred. See S. Rep. No. 92-1 125, 92d
Cong., 2d Sess. 9 (1972) (“The end result is that, despite the
provision in the Act which limits an employer’s liability to the
compensation and medical benefits provided in the Act, a
stevedore-employer is indirectly liable for damages to an injured
longshoreman who utilizes the technique of suing the vessel
under the unseaworthiness doctrine.”). The Senate Report
added:
The social costs of these law suits, the delays, crowding
of court calendars and the need to pay for lawyers’
services have seldom resulted in a real increase in actual
benefits for injured workers.
Id. at 4. Congress therefore prohibited longshore workers from
bringing claims against vessels under the warranty of
seaworthiness allowed by Sieracki and relieved stevedoring
companies of liability from Ryan-type indemnity suits brought by
vessels. A vessel’s liability to longshore workers was limited to
cases where its negligence could be proved.
Further, Congress made clear that the negligence remedy
against vessels would not disrupt the uniformity of the statutory
scheme. The House Report explained that “the Committee does
not intend that the negligence remedy authorized in the bill shall
be applied differently in different ports depending on the law of
the State in which the port may be located.” H.R. Rep. No.
92-1441, 92d Cong., 2d Sess. 8 (1972); see also S. Rep. No.
92-1125, 92d Cong., 2d Sess. 12 (1972), U.S. Code Cong. &
Admin. News, p. 4705. Congress thus quite deliberately opted
to create a uniform national system — one that would be
substantially disrupted if individual state courts and juries were
20
free to determine issues of coverage and to interpret for
themselves the LHWCA’s exclusive remedies provision.
In short, in 1972 Congress went to considerable lengths to
prevent the circumvention of the LHWCA’s exclusive remedy by
means of indirect, third-party suits against stevedore employers.
Congress enacted amendments to override ‘udicial decisions that
created the spectre of unwarranted litigation against employers.
It is simply unthinkable that Congress meant to permit direct
state-law tort lawsuits by employees against stevedore employers
in state court, for such direct actions would blatantly obliterate
the exclusive remedy provision of the LHWCA, in a manner
much more threatening than the seaworthiness and third-party
indemnity suits that Congress barred in 1972.
D. The Decision Below Threatens a Substantial
Disruption of the LHWCA Statutory Scheme.
This Court’s review is urgently needed because this case
presents an important question of federal law that should be
settled by this Court. See Rule 10(c). The rule followed in this
case, if left undisturbed, would threaten substantial disruption of
the statutory scheme enacted by Congress in the LHWCA. If
state-court tort suits against stevedore employers were permitted,
then state-court judges and potentially state-court juries would
be able to decide questions of LHWCA benefits and coverage.
Different state courts could arrive at different results, subject
only to review by this Court via its discretionary certiorari
jurisdiction. Absent corrective action by this Court, it is clear
that stevedore employers will face a flood of state-court tort
lawsuits seeking enormous damage awards in plain violation of
the statutory command of the LHWCA. As this case illustrates,
employees will forum shop and will file suit in state courts
notorious for their anti-defendant biases and large damages
awards. It is no accident that this case was filed in state court in
Orleans Parish, Louisiana. That forum has been repeatedly
identified as one of the top fourteen “judicial hellholes” in the
21
United States by the American Tort Reform Association.’
Recognition of state-law claims would inject numerous
potentially conflicting standards into an otherwise uniform
national system. For example, in this case, respondent's state-
court lawsuit seeks numerous forms of damages inconsistent
with the LHWCA, including damages for physical and mental
pain and suffering, fear of dying, loss of enjoyment of life, loss
of consortium, loss of spousal affection, and “anguish and grief.”
By contrast, the compensation available under the LHWCA is
computed according to the employee’s weekly wages. See 33
U.S.C. §§ 908-09, 910. 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).
Injecting state courts into the LHWCA would be utterly
foreign to the congressional design of the statute. Congress
created a centralized scheme administered by the Secretary of
Labor through the Director of Office of Workers’ Compensation
Programs, with review by the Benefits Review Board, and
appeals to the United States Courts of Appeals. The clear
purpose of this administrative scheme is to provide uniformity
and predictability to employers and employees alike. The rule
followed in this case will destroy the uniformity and
predictability at the heart of the LHWCA.
The exclusivity provision of Section 5 is a vital part of the
LHWCA. “{T]he Act was not a simple remedial statute intended
for the benefit of the workers. Rather, it was designed to strike
a balance between the concerns of the longshoremen and harbor
workers on the one hand, and their employers on the other.
2 See American Tort Reform Association, BRINGING JUSTICE TO JUDICIAL
HELLHOLES 2 (2002); American Tort Reform Association, BRINGING JUSTICE
TO JUDICIAL HELLHOLES 8 (2003).
22
Employers relinquished their defenses to tort actions in exchange
for limited and predictable liability. Employees accept the
limited recovery because they receive prompt relief without the
expense, uncertainty, and delay that tort actions entail.”
Morrison-Knudsen Constr. Co. v. Director, Office of Workers’
Compensation Programs, United States Dep’t of Labor, 461 U.S.
624, 635 (1983) (citing H. R. Rep. No. 1767, 69" Cong., 2d
Sess., 19-20 (1927)).
The rule followed in this case would upset the balance struck
by Congress and would render the broad preemptive effect of
Section 5 a virtual nullity. An important purpose of the LHWCA
is to “provide employers with definite and lower limits on
potential liability than would have been applicable in
common-law tort actions for damages.” Potomac Electric Power
Co. v. Director, Office of Workers’ Compensation Programs,
449 U.S. 268, 281 (1980). “The use of a schedule of fixed
benefits as an exclusive remedy in certain cases is consistent
with the employees’ interest in receiving a prompt and certain
recovery for their industrial injuries as well as with the
employers’ interest in having their contingent liabilities
identified as precisely and as early as possible.” /d. at 282.
Accordingly, the rule followed by the decisions below would
substantially disrupt the LHWCA’s statutory scheme. This
Court’s review is urgently needed on this important question of
federal law.
E. Section 1447(d) Does Not Preclude Review.
Section 1447(d) of Title 28 provides that “[a]n order
remanding a case to the State court from which it was removed
is not reviewable or: appeal or otherwise ... .” 28 U.S.C.
§ 1447(d). Respondent’s opposition to the petition for writ of
mandamus in the Fifth Circuit cited § 1447(d) only in passing,
and the Fifth Circuit’s order did not mention that statutory
provision at all. Pet. App. la. Nonetheless, even if the Fifth
Circuit had expressly relied upon § 1447(d), it would not bar
23
review, for the reasons stated by this Court in Thermtron
Products, Inc. v. Hermansdorfer, 423 U.S. 336 (1976):
[W]e are not convinced that Congress ever intended to
extend carte blanche authority to the district courts to
revise the federal statutes governing removal by
remanding cases on grounds that seem justifiable to them
but which are not recognized by the controlling statute. .
_ . Because the District Judge remanded a properly
removed case on grounds that he had no authority to
consider, he exceeded his statutorily defined power; and
issuance of the writ of mandamus was not barred by
§ 1447(d).
Id. at 351. The district court’s remand ordér in this case was
contrary to the LHWCA and therefore is not immunized from
review under Thermtron.
Thus, in Jn re CSX Transportation, Inc. v. Shives, 151 F.3d
164 (4th Cir. 1998), the Fourth Circuit held that § 1447(d) did
not bar review of the LHWCA issue in the context of a district
court remand order. The Fourth Circuit recognized that the
LHWCA coverage question was an antecedent issue within the
power of the court of appeals to resolve, because leaving the case
in the state courts was precisely the harm that Congress was
trying to avoid in the statutory scheme:
If we were to dismiss this appeal as unreviewable under
28 U.S.C. § 1447(d), then we would be leaving in place a
remand order which would commit to the state courts the
decision of whether the LHWCA provided coverage to the
employee. To follow that course would thus deprive the
federal courts of their proper role in resolving this
important issue and would circumvent Congress’ intent
that LHWCA coverage issues be resolved in the first
instance by the Department of Labor and ultimately in the
federal courts of appeals. Thus, because the coverage
question of the LHWCA is a conceptual antecedent for
24
the district court’s remand order, it would appear that we
are not prohibited by § 1447(d) from reviewing that order.
Id. at 167. “To avoid forfeiting the federal courts’ role of
reviewing LHWCA coverage issues is one of those extraordinary
situations envisioned in Thermtron for exercise of the writ.” /d.
at 167-68. See also Kircher v. Putnam Funds Trust, 373 F.3d
847, 850 (7th Cir. 2004) (finding Section 1447(d) no bar to
appellate review because the “specific substantive decision in
securities litigation must be made by the federal rather than the
state judiciary”, and “if the remand is deemed non-appealable,
then a major substantive issue in the case will escape review”);
In re TMI Litigation Cases Consolidated II, 940 F.2d 832, 844
(3d Cir. 1991), cert. denied, 503 U.S. 906 (1992) (district court
remand order based on constitutionality of statute was not the
kind of remand order meant to be insulated by § 1447(d)); Nasuti
v. Scannell, 906 F.2d 802, 808 (Ist Cir. 1990) (“the instant
remand order is reviewable by mandamus, since issuance of a
remand order at this point in the proceedings was entirely outside
the district court’s statutory authority” as expressed in the
Westfall Act). If anything, any conflict between the Fifth Circuit
and other courts of appeals on the issue of Section 1447(d)
would provide a further reason to grant certiorari in this case.
a
25
CONCLUSION
The petition for writ of certiorari should be granted. In the
alternative, this Court should grant the petition, vacate the
judgment below, and remand for reconsideration in light of
Aetna Health Ins. v. Davila, 124 S. Ct. 2488 (2004).
Respectfully submitted.
RICHARD P. SALLOUM JONATHAN S. MASSEY
FRANKE, RAINEY & SALLOUM Counsel of Record
Post Office Drawer 460 JONATHAN S. MASSEY, P.C.
Gulfport, MS 39502 3920 Northampton St. N.W.
(228) 868-7070 Washington, D.C. 20015
(202) 686-0457
IRA J. ROSENZWEIG
ADAMS, HOEFER, HOLWADEL
& ELDRIDGE, LLC
Pan American Life Center
601 Poydras St., Suite 2490
New Orleans, LA 70130
(504) 581-2606
APPENDICES
Appendix A
UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 04-30679
IN RE SSA GULF TERMINALS, INC.
Petitioners,
Petition for Writ of Mandamus to the United States
District Court for
the Eastern District of Louisiana, New Orleans
Before DAVIS, SMITH, and DENNIS, Circuit Judges.
PER CURIAM:
IT IS ORDERED that the petition for writ of mandamus is
DENIED.
/s/
DATED: July 22, 2004
2a
Appendix B
UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF LOUISIANA
EUNICE HERNANDEZ
V.
TODD SHIPYARDS CORPORATION, ET AL.
Civil Action No. 04-1629 Section: I/1
ORDER AND REASONS
Before the Court is a motion, filed on behalf of plaintiff,
Eunice Hernandez, to remand this action to the Orleans Parish
Civil District Court on the ground that federal question
jurisdiction does not exist.’ Additionally, plaintiff moves the
Court to award costs and expenses incurred as a result of the
removal. Defendants, SSA Gulf Terminals, Inc. and P&O Ports
Gulfport, Inc., oppose the motions. For the following reasons,
plaintiff's motion to remand is GRANTED. Plaintiff's motion for
costs and expenses is DENIED.
BACKGROUND
On May 18, 2004, plaintiff filed this action in the Orleans
Parish Civil District Court, individually and on behalf of her
deceased husband, alleging only state law claims against her
husband's former employers and other defendants arising from
her husband's on-the-job exposure to asbestos and his death from
malignant mesothelioma.? Defendants removed the action
' Rec. Doc. No. 12.
2 See Rec. Doc. No. 1, Pl. Petition.
asserting that plaintiff's state law claims were preempted by the
Longshore Harbor Workers Compensation Act, 33 U.S.C. § 901,
et seq. ("LHWCA").? Defendants assert that because the
LHWCA is plaintiff's sole and exclusive remedy, this Court has
original federal question jurisdiction pursuant to 28 U.S.C. §
1331 and, therefore, this action is removable pursuant to 28
3a
U.S.C. § 1441.4
The sole question raised by plaintiff's motion is whether the
LHWCA completely preempts plaintiff's state law causes of
action such that this Court has federal question jurisdiction over
this action.
I.
LAW AND ANALYSIS
The Well-Pleaded Complaint Rule
As the United States Supreme Court has explained:
A civil action filed in a state court may be removed to
federal court if the claim is one "arising under" federal
law. § 1441(b). To determine whether the claim arises
under federal law, we examine the "well pleaded"
allegations of the complaint and ignore potential defenses:
"a suit arises under the Constitution and laws of the
United States only when the plaintiff's statement of his
own cause of action shows that it is based upon those
laws or that Constitution. It is not enough that the plaintiff
alleges some anticipated defense to his cause of action
and asserts that the defense is invalidated by some
provision of the Constitution of the United States."
Louisville & Nashville R. Co. v. Mottley, 211 U.S. 149,
152, 29 S. Ct. 42, 53 L. Ed. 126 (1908); see Taylor v.
Anderson, 234 U.S. 74, 34 S. Ct. 724, 58 L. Ed. 1218
(1914). Thus, a defense that relies on the preclusive effect
3 Id, Notice of Removal, at ¥ 3.
‘Id. at ¥ 4.
4a
of a prior federal judgment, Rivet v. Regions Bank of La.,
522 U.S. 470, 118 S. Ct. 921, 139 L. Ed. 2d 912 (1998),
or the pre-emptive effect of a federal statute, Franchise
Tax Bd. of Cal. v. Construction Laborers Vacation Trust
for Southern Cal., 463 U.S. 1, 103 S. Ct. 2841, 77 L. Ed.
2d 420 (1983), will not provide a basis for removal. As a
general rule, absent diversity jurisdiction, a case will not
be removable if the complaint does not affirmatively
allege a federal claim.
Beneficial Nat Bank v. Anderson, 539 U.S. 1, 6, 123 S. Ct.
2058,2062, 156 L. Ed. 2d 1 (2003).°
A defendant may not remove a case on the basis of an
anticipated or even inevitable federal defense, but instead must
show that a federal right is "an element, and an essential one, of
the plaintiff's cause of action." Gully v. First Nat’l Bank, 299
U.S. 109, 111, 57 S. Ct. 96, 97, 81 L. Ed. 70(1936).° The
well-pleaded complaint rule precludes federal question
jurisdiction even when "both parties admit that the only question
for decision is raised by a federal preemption defense."
Franchise Tax Bd. fo State of Cal. v. Construction Laborers
Vacation Trust for Southern California, 463 U.S. 1, 12, 103 S.
Ct. 2841,2848,77 L. Ed. 2d 420(1983).
* Neither party contends that diversity jurisdiction exists in this case.
* The well-pleaded complaint rule applies with equal force to the original
jurisdiction of the district courts pursuant to 28 U.S.C. § 1331 and cases
removed from federal court pursuant to 28 U.S.C. § 1441(b). See Chuska
Energy Co. v. Mobil Exploration & Producing North America, Inc., 854 F.2d
727, 730 (5" Cir. 1988)(citing Franchise Tax Board, 463 U.S. at 12, n. 9, 103
S. Ct. at 2847 n. 9). "Section 1441 of the Judicial Code keys the propriety of
removal to the original jurisdiction of the federal district courts. Removal
under section 1441(b), the basis of removal here, is appropriate only for those
claims within the federal question jurisdiction of the district courts, that is, for
those actions ‘arising under the Constitution, laws, or treaties of the United
States."" Carpenter v Wichita Falls Independent School Dist., 44 F.3d 362,
366 (Sth Cir. 1995)(quoting 28 U.S.C. § 1331).
Sa
“A corollary to the well-pleaded complaint doctrine ‘is that
Congress may so completely preempt a particular area that any
civil complaint raising this select group of claims is necessarily
federal in character.’” Johnson v. Baylor Univ., 214 F.3d 630,
632 (Sth Cir. 2000) (quoting Metro. Life Ins. Co. v. Taylor, 481
U.S. 58, 63, 107 S. Ct. 1542, 95 L. Ed. 2d 55 (1987)).
"Complete preemption,’ which creates federal removal
jurisdiction, differs from more common 'ordinary preemption ...
which does not." Jd. Complete preemption is a narrow exception
to the well-pleaded complaint rule and exists only where, the
federal statute "so forcibly and completely displaces state law
that the plaintiff's cause of action is either wholly federal or
nothing at all." Hoskins v. Bekins Van Lines, 343 F.3d 769, 773
(Sth Cir. 2003)(citing Carpenter v. Wichita Falls Indep. Sch.
Dist., 44 F.3d 362, 366 (Sth Cir. 1995))(alteration in original);
see also Avco Corp. v. Aero Lodge No. 735, Int’l Assn. of
Machinists, 390 U.S. 557, 559, 88 S. Ct. 1235, 1237, 20 L. Ed.
2d 126 (1968).’ “In sum, to establish federal question jurisdiction
through the invocation of a federal preemption defense, the
defendant must demonstrate that Congress intended not just to
‘preempt a state law to some degree,’ but to altogether substitute
‘a federal cause of action for a state cause of action.’” Hart v.
Bayer Corp., 199 F.3d 239, 244 (Sth Cir. 2000)(quoting
Schmeling v. NORDAM, 97 F.3d 1336, 1341 (10th Cir.1996)).
In order to demonstrate complete preemption over a plaintiff's
otherwise purely state law claims, a defendant must show (1) the
statute contains a civil enforcement provision that creates a cause
of action that both replaces and protects the analogous area of
state law; (2) there is a specific jurisdictional grant to the federal
” Another exception to the well-pleaded complaint rule, not relevant here,
exists where Congress has expressly provided for removal of actions governed
by the federal statute in question. See Beneficial, 539 U.S. at 7, 123 S. Ct. at
2062 (describing the unusual preemption provision of the Price-Anderson Act
that provides for removal of tort actions arising out of nuclear accidents even
when the state court complaint asserts only state law claims).
6a
courts for enforcement of the right; and (3) there is a clear
Congressional intent that the federal cause of action be exclusive.
Hoskins, 343 F.3d at 775-76 (modifying the third prong of the
complete preemption analysis set forth in Baylor Univ., 214 F.3d
at 632). In undertaking this analysis, "it is the cause of action,
and not a remedy, that must be preempted." Carpenter, 44 F.3d
at 367 n.2.
Notwithstanding circuit precedent holding that the LHWCA
"does not create federal subject matter jurisdiction supporting
removal," Garcia v. Amfels, Inc., 254 F.3d 585, 588 (Sth Cir.
2001); see also Aaron v. Nat'l Union Fire Ins. Co of Pittsburgh,
Pa., 876 F.2d 1157 (Sth Cir. 1989), defendants argue that the
analysis used in those cases was "expressly overruled" by the
United States Supreme Court in Beneficial Nat’l Bank v
Anderson, 539 U.S. 1, 156 L. Ed. 2d 1, 123 S. Ct. 2058 (2003),
and "abandoned" by the Fifth Circuit in Hoskins v. Bekins Van
Lines., 343 F.3d 769 (Sth Cir. 2003).
In Hoskins, the Fifth Circuit explained the effect of the
Beneficial decision as follows:
Under this Court's precedent, in order to demonstrate
complete preemption over a plaintiff's otherwise purely
state law claims, the defendant must show the following:
(1) the statute contains a civil enforcement
provision that creates a cause of action that both
replaces and protects the analogous area of state
law; (2) there is a specific jurisdictional grant to
the federal courts for enforcement of the right; and
(3) there is a clear Congressional intent that _
claims brought under the federal law be
removable.
Johnson v. Baylor Univ., 214 F.3d 630, 632 (Sth
Cir.2000) (quoting Heimann v. Nat. Elevator Ind. Pension
Fund, 187 F.3d 493, 500 (Sth Cir. 1999)) (emphasis
7a
added). In Beers, we found no clearly manifested
Congressional intent that state law claims for loss or
damage to goods during an interstate shipment by a
common carrier be removable — in other words, the third
element of the complete preemption analysis was lacking.
Similarly, in Beneficial the respondents argued before the
Supreme Court that the requisite Congressional intent to
make state usury claims against national banks removable
was lacking in the National Bank Act ... The Supreme
Court explained that:
Because the proper inquiry focuses on whether
Congress intended the federal cause of action to
be exclusive rather than on whether Congress
intended thai the cause of action be removable,
the fact that these sections of the National Bank
Act were passed in 1864, 11 years prior to the
passage of the statute authorizing removal, is
irrelevant...
Id. at 2064 n. 5. We view Beneficial as evidencing a shift
in focus from Congress's intent that the claim be
removable, to Congress's intent that the federal action be
exclusive.
This Court's holding in Beers rested on its finding that "no
manifest congressional intent, of the type contemplated in
[Metropolitan Life v.] Taylor, to make this state claim
removable to federal court" existed. Beers v. North
American Van Lines, Inc., 836 F.2d at 913 n. 3. Prior to
Beneficial, this finding would have ended our inquiry.
Now, however, we must instead determine whether
Congress intended the Carmack Amendment to provide
the exclusive cause of action for claims arising out of the
interstate transportation of goods by a common carrier.
See Beneficial, 123 S. Ct. at 2067 ("The analysis in
today's opinion implicitly contradicts (by rendering
8a
inexplicable) Taylor's discussion of pre-emption and
removal.") (Scalia, J., dissenting).
Hoskins, 343 F.3d at 775-776. Accordingly, although the Court
agrees with defendants that the Beneficial decision, as applied by
the Fifth Circuit in Hoskins, modified the third prong of the Fifth
Circuit's test for analyzing complete preemption, i.e., the prong
focused on congressional intent, the Hoskins Court did not
explicitly or implicitly hold that Beneficial effected any change
to the first two prongs of the analysis.
The defendants focus their argument on whether the third
prong of the Fifth Circuit's complete preemption test is satisfied,
i.e., whether the LHWCA evinces a congressional intent to
provide the exclusive cause of action for claims by a stevedore
against his employers. However, the Court need not and does not
reach that issue because defendants cannot satisfy the first two
prongs of the compete preemption analysis. In Aaron, the Fifth
Circuit applied the well-pleaded complaint rule and held that the
LHWCA did not provide a basis for removal of a plaintiff's
purely state law claims. 876 F.2d at 1166. The Court noted that
when the exclusive remedial provisions of the LHWCA are
raised by a defendant in response to a plaintiff's purely state law
claims, the LHWCA "is nothing more than a statutory defense to
a state-court cause of action - the classic circumstance of
non-removability." /d.
Relevant to the first two prongs of the Fifth Circuit's
complete preemption analysis, the Aaron court specifically found
that (1) the LHWCA contains no civil enforcement provision that
creates a federal cause of action that could be litigated in either
federal or state court; and (2) the LHWCA does not contain a
specific jurisdictional grant to the federal courts for the
enforcement of a right created by the LHWCA. See id. at
1164-65. Contrary to defendants’ assertion, the Aaron court did
not rest its decision solely on an analysis of congressional intent
to make claims pursuant to the LHWCA removable to federal
9a
court. Therefore, even if some portion of the Aaron decision
pertaining to congressional intent to make LHWCA claims
removable is arguably undermined by Hoskins, a question on
which this Court expresses no opinion, the Aaron court's
statements bearing on the first two prongs of the complete
preemption analysis remain binding on this Court and preclude
removal of this action.
The other Fifth Circuit cases cited by defendants do not
support its claim that the LHWCA provides a basis for federal
question jurisdiction. Citing the panel decision in Texas
Employers' Insurance Assoc. v. Jackson, 820 F.2d 1406 (Sth Cir.
1987), defendants contend that the Fifth Circuit has held that the
preemptive force of the LHWCA creates federal question
jurisdiction. However, as the Aaron court noted, the en banc
court subsequently vacated the Texas Employers’ panel decision
and then pretermitted the jurisdictional question. Aaron, 876
F.2d at 1166 n.16. Therefore, the Texas Employers' decision is
no longer binding circuit precedent. Jd. The defendants’ reliance
on Atkinson v. Gates, McDonald & Co., 838 F.2d 808 (Sth Cir.
1988), is also misplaced. In Garcia, the Fifth Circuit
unequivocally stated that Atkinson did not undermine Aaron
because it did not address the same issue, i.e., whether the
LHWCA provided a basis for federal jurisdiction when raised as
a defense. 254 F.3d at 587.
Accordingly, because the LHWCA has been raised as a
defense to plaintiff's state law causes of action and because
defendants cannot demonstrate that the LHWCA satisfies the
Fifth Circuit's three-prong complete preemption analysis as
modified in Hoskins, this Court does not have subject matter
jurisdiction over this action. "The LHWCA is a preemption
defense that needs to be raised in state court." Garcia, 254 F.3d
at 588.
II. Motion for Costs and Expenses
28 U.S.C. § 1447(c) authorizes the Court to "require payment
10a
of just costs and any actual expenses, including attorney fees
incurred as a result of removal." In applying § 1447(c), "the
matter is left to the court's discretion, to be exercised based on
the nature of the removal and the nature of the remand." Garcia,
254 F.3d at 587 n.2 (citing David D. Siegel, Commentary on
1988 Revision to 28 U.S.C. § 1447 (West Supp. 1993)).
In Garcia, the Fifth Circuit affirmed an award of costs and
fees imposed by the district court on the ground that removal
based upon the LHWCA was frivolous. 254 F.3d at 587. The
Fifth Circuit noted that the defendant was "unable to city any
Fifth Circuit case, nor any persuasive authority from another
circuit, supporting removal." Id. at 588. Accordingly, the Fifth
Circuit found that the district court did not abuse its discretion by
imposing costs and fees upon the defendant because, in 2001,
there was "no question that the LHWCA does not create federal
subject matter jurisdiction supporting removal.” Jd.
Although the Court ultimately disagrees with defendants’
broad reading of the Beneficial and Hoskins decisions and their
effect on existing Fifth Circuit precedent, the Court concludes
that defendants removal of this action was neither frivolous or
without legal support. The defendants removed this action based
upon a bona fide change in the Fifth Circuit's preemption
analysis. Relying on their understanding of the change in the law,
defendants supported their argument with numerous citations to
caselaw discussing the exclusivity of the remedial scheme set
forth in the LHWCA. Additionally, plaintiff concedes that the
effect of Beneficial and Hoskins on Fifth Circuit cases involving
the removal of cases based upon the preemptive force of the
LHWCA has not heretofore been addressed by any published
decision. Considering all of these factors, the Court finds that
this is not an appropriate case in which to exercise its discretion
to award costs and fees incurred as a result of defendant's
decision to remove this action.
Accordingly, for the above and foregoing reasons,
lla
IT IS ORDERED that the motion of plaintiff, Eunice
Hernandez, to remand this action to the Orleans Parish Civil
District Court is GRANTED and, pursuant to 28 U.S.C. §
1447(c), this action is REMANDED to the Orleans Parish Civil
District Court for lack of subject matter jurisdiction.
IT IS FURTHER ORDERED that plaintiff's motion for costs
and expenses pursuant to 28 U.S.C. § 1447(c) is DENIED.
New Orleans, Louisiana, July 7, 2004.
LANCE M. AFRICK
UNITED STATES DISTRICT JUDGE
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.