Petition for Writ of Certiorari — SSA Gulf, Inc. v. Magee

—_ i ae il a: a ee —_" 6

Supreme Court, U.S.

(1) FILED

04-74 ONOV 29 2004

No. 04-

i TALLER SALE BERLE ES Stee

In the

Supreme Court of the Anited States

SSA GULF, INC.,

PETITIONER,

v.

ROOSEVELT MAGEE,

RESPONDENT.

On Petition For a Writ Of Certiorari To

The U.S. Court of Appeals for 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

WILSON-EPES PRINTING CO., INC. — (202) 789-0096 — WASHINGTON, P.C. 20001

QUESTION PRESENTED

Whether the Longshore and Harbor Workers’ Compensation

Act, 33 U.S.C. § 901, et seg., wholly displaces and preempts

state tort damages claims by longshore employees against their

stevedore employers, so as to trigger federal question jurisdiction

pursuant to 28 U.S.C. § 1331.

made OM TE OE Be RP IA ere ae Peas

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 Kurt D.

Engelhardt, Judge, United States District Court for the Eastern

District of Louisiana.

The following parties filed responses to the petition for

~ mandamus in the court of appeals: James J. Flanagan Shipping

Corporation; Cooper/T. Smith Stevedoring Company, Inc.;

Asbestos Corporation Limited.

The following parties were defendants in the district court but

did not enter an appearance in the court of appeals: Eagle, Inc.;

Boland Machine & Manufacturing Co.; Dixie Machine, Welding

& Metal Works, Inc.; Sank, Inc. f/k/a Buck Kreihs Co.;

American Sugar Refining, Inc.; BCI Acquisitions, Inc.; P&O

Port Gulfport, Inc. f/k/a Atlantic & Gulf Stevedores, Inc.

re ie ee a ee ee er er a Pa WENT VS

ill

RULE 29.6 STATEMENT

Petitioner SSA Gulf, Inc., formerly known as SSA Gulf

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.

ae

Se See Se Pe | UNE..!. 3” SS Be Cee:

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TABLE OF CONTENTS

QUESTION PRESENTED ooo ccc ccccsccccccncssceuc,

1. Statutory Background .........................

2. Proceedings in this Case ................0ceeees

A. The Decisions Below Conflict With A Holding

COR Fine Pee Cae os ks oe

B. The Decisions Below Conflict With Governing

Precedent of this Court Regarding the

“Complete Preemption” Doctrine...............

1. The Courts Below Applied An Obsolete

Legal Standard Regarding The Complete

Ponnmnptian THOME ow... so dc eda wes cces

ee Oe erste

~

vi

2. This Court Should Grant Review To

Continue To Clarify The Complete

Preemption. SND 5 cnc cnnccessticuasees 15

C. Under the Proper Legal Test, The LHWCA

Triggers Complete Preemption ................. 16

1. The Text and Structure of the LHWCA ....... 16

2. The Legislative History of the LHWCA....... 18

D. The Decision Below Threatens a Substantial

Disruption of the LHWCA Statutory Scheme ..... 22

E. Section 1447(d) Does Not Preclude Review ...... 25

CURVLRAMINS ic ccccccssasestcuauceess seuernene :. 28

Appendix A: Order of the U.S. Court of Appeals for the

PURGES 660060 0hendeeeacedueeen eee la

Appendix B: Order of the U.S. District Court

for the Eastern District of Louisiana................ 2a

LLL RAL AO CRA ey Ba me

vii

TABLE OF AUTHORITIES

Cases Page

Aaron v National Union Fire Ins. C 0., 876 F.2d 1157

(Sth Cir. 1989), cert denied, 493 U.S. 1074 (1990) .... 14

Aetna Health Ins. v. Davila,

124 S. Ct. 2488 (2004) ............... 5, 11-13, 15, 28

Aliota v. Graham, 984 F.2d 1350 (3d Cir.),

cert. denied, 510 U.S. 817 Potkeavepueuauceucs 25

Artis v. Norfolk & Western Ry., 204 F.3d 141

(4th Cir. 2000) ............., Pree ee CTT TET Te Pere 9

Atlantic Transportation Co. v. Imbrovek,

BPO ae MRCP 6b ow bh cbr bicdeussukkcckns cont 18

Avco Corp. v. Aero Lodge No. 735,390 U.S. $57 (1968) .. 10

Ben & Jerry's Homemade, Inc. v. KLLM. Inc.,

58 F. Supp. 2d 315 (D. Vt. Muh eiecstaseGeees) 16

182 F.3d 851 (11th Cir. 1999) ......00.. 15

Borneman v. United States, 213 F.3d 819 (4th Cir. 2000),

cert. denied, 531 U.S. 1070 (2001)................. 24

Briarpatch Ltd., L.P. v. Phoenix Pictures, Inc.,

373 F.3d 296 (2d Cir. 2004) ...................... 15

Caterpillar, Inc. v. Williams, 482 U.S. 386 (1987) ..~... 10

Chandris, Inc. v. Latsis, 515 U.S. 347 Bree 17

Circle Redmont, Inc. v. Mercer Transp. Co.,

78 F. Supp. 2d 1316 (M.D. Fla. 1999) .............. 16

Darcangelo v. Verizon Communs., Inc.,

292 F.3d 181 (4th Cir. 2002) ..................... 16

Ervast v. Flexible Prods. Co., 346 F.3d 1007

See Ge 60hs cp auaeor cu Coe 15

Falkowski v. Imation Corp., 309 F.3d 1123

i Rr ee ee 16

Vili

Cases (continued) Page

Franchise Tax Bd. of Cal. v. Construction Laborers

Vacation Trust for Southern Cal.,

gE ey ree 10-11

Gallea v. United States, 779 F.2d 1403 (9th Cir. 1986) ... 25

Garcia v. Amfels, Inc., 254 F.3d 585 (Sth Cir. 2001) ...... 4

Gravatt v. City of New York, 226 F.3d 108 (2d Cir. 2000),

CE GUE, Bae Gis PE GE a wh oc csc csccenncess 9

Hurt v. Dow Chem. Co., 963 F.2d 1142 (8th Cir. 1992) ... 16

In re Adams, 809 F.2d 1187 (Sth Cir. 1987) ............ 25

In re CSX Transportation, Inc. v. Shives, 151 F.3d 164

SE, SE catch cnet ak esneda dad eeeusn shes 8, 26

In re TMI Litigation Cases Consolidated II, 940 F.2d 832

(3d Cir. 1991), cert. denied, 503 U.S. 906 (1992) ..... 27

Ingalls Shipbuilding v. Director, Office of Workers’

Compensation Programs, DOL, 519 U.S. 248 (1997) ... 3

International Stevedoring Co. v. Haverty,

PE es PENNE ose ca secnersctvsosericaee 18-19

Kircher v. Putnam Funds Trust,

ee ee CP OD vec ebacecdsencecsacds 26

Knickerbocker Ice Co. v. Stewart, 253 U.S. 149 (1920) ... 19

Lippitt v. Raymond James Fin. Servs.,

340 F.3d 1033 th Cir. 2003) .................... 15

Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58 (1987) .. 10

Metropolitan Stevedore Co. v. Rambo,

eT RR rr nn aria 2

Mitchell v. Carlson, 896 F.2d 128 (Sth Cir. 1990) ....... 25

Morrison-Knudsen Constr. Co. v. Director, Office of

Workers’ Compensation Programs, United States Dep't

ee BP PRUNE bide cc isdtncesecsae.c 23

Nasuti v. Scannell, 906 F.2d 802 (1st Cir. 1990) ......... 27

——Northeast Marine Terminal Co. v. Caputo,

Es I ee ete se ae 20

Norton v. Warner Co., 321 U.S. 565 (1944) ............ 17

Ree Ul Ue Lene ete

ix

Cases (continued) Page

Poore v. American-Amicable Life Ins. Co.,

218 F.3d 1287 (11th Cir. 2000) ................... 25

Potomac Electric Power Co. v. Director, Office of Workers’

Compensation Programs, 449 U.S. 268 | ee 23

Powers v. Southland Corp., 4 F.3d 223 (3d Cir. i)

Rivet v. Regions Bank of La., 522 U.S. 470 Fe 1]

Robinson v. Michigan Consol. Gas Co.,

FES F.20 S79 (Gta Cle. 1990) ooo occ cc eeececcce 16

Rosciszewski v. Arete Assocs., 1 F.3d 225 (4th Cir. 1993) . 16

Ryan Stevedoring Co. v. Pan Atlantic SS. Corp.,

MP is MOURNE oi ob bs hw xe ek kk vk 19-20

Sample v. Johnson, 771 F.2d 1335 (9th Cir.1985),

cert. denied, 475 U.S. 1019 (1986).................. 9

Seas Shipping Co. v. Sieracki, 328 U.S. 85 (1946) ....... 19

Sonoco Prods. Co. v. Physicians Health Plan, Inc.,

ee ee) 15

South Chicago Coal & Dock Co. v. Bassett,

Pe ee OE Sos bbe dvs vac ihn ecewen. 17

Southern Pacific Co. v. Jensen, 244 U.S. 205 ‘i. os oe 18

Spielman v. Merrill Lynch, Pierce, Fenner & Smith, Inc.,

332 F.3G 116 (2d Cig: 2003) 0... ccc cece cee 15

Stewart v. Dutra Constr. Co., 343 F.3d 10 (1st Cir. 2003),

cert. granted, 124S. Ct. 1414 (2004) ................. 9

Stowers v. Consolidated Rail Corp., 985 F.2d 292

(6th Cir.), cert. denied, 510 U.S. 813 (1993) ...... vere

Strong v. Telectronics Pacing Sys., 78 F.3d 256

Se Er er ubca ce ey oes kes eet 12s 15

Swanson v. Marra Brothers, Inc., 328 U.S. 1 (1946) ..... 19

Thermtron Products, Inc. v. Hermansdorfer,

I ne NE il gs a

Trans World Airlines v. Mattox, 897 F.2d 773 (Sth Cir.),

cert. denied, 498 U.S. 926 (1990) ..................

Waco v. United States Fidelity & Guar. Co.,

Pe PO as oe co ee

Cases (continued) Page

Washington v. W. C. Dawson & Co., 264 U.S. 219 (1924) . 19

Xiong v. Minnesota, 185 F.3d 424 (8th Cir. 1999) ....... 25

Statutory Materials Page

Poth | oe gL) PEPE PEEL ERT Tre eee Ere rrr er l

po gk eB errr rrr err rr errs eer rr 4

Ag ee ee err ry oe regina -4

rR Ee, eee ee er yey re 24-27

Longshore and Harbor Workers’ Compensation Act, 44

Stat. 1424, as amended, 33 U.S.C. § 901 et seq ... passim

Be es Es oe Adee sda eee ea eee eee 2

RT | i rr er reo rye 2

Be ee Ee 5 aire he be eee eee eae ae 2

De ers EE ark 5 4545 os Lee dn hae ee nee Re

Se EP 6 0 kw 8 0 oo RE oe hee ee 2, 22

Pe a EE 6 ohn daw kek da Sh essa eee 2, 22

PP aA EE his oo os deca ee eka owt wea aaa os 22

el Ss EE oe he ie a aka ce eure eee 2

Se as ee ae a ee ee eee 2, 16

Pe EE oo ooo eee ee eid es eee 2

ee oe es oaks eee eae eee 2

ee ek RS ER a eee 2, 10

eR ea hs ok a ew eee Cede kes 3

De ooo oa so ee eee ce 3

Pe at Sa od a San aa eee ea ces o5 2

PN EE So ie ce yee ae ee eee dk Ae eee 18

Fe MEE OO ro oad 6 Lea RO OR aU 2

reas I eee oe ee a ee 18

H.R. Rep. No. 92-1441, 92d Cong., 2 Sess. (1972) .... 19-21

S. Rep. No. 92-1125, 92d Cong., 2d Sess. (1972) ..... 19-2]

DE GUE, TOG, DP CEPR) bce dc ke sido dstucsenses 23

XI

Miscellaneous Page

BO CER. $5 TON-TOG oon nice cae nnccee,. 3, 18

American Tort Reform Association, BRINGING JUSTICE

TO JUDICIAL HELLHOLES (2002) ................... 27

American Tort Reform Association, BRINGING JUSTICE

TO JUDICIAL HELLHOLES (2003) ................... 22

Richard H. Fallon, Jr. et al., THE FEDERAL COURTS AND

THE FEDERAL SYSTEM (Sth ed. Supp. 2003).......... 15

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. la) denying the petition

for writ of mandamus is unreported. The opinion of the district

court (id. 2a) is also unreported.

JURISDICTION

The order of the court of appeals was entered on October 5,

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 ef

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

EAMES ASS Et thle ORL ALT HOB CA LIL A OIC AIE EET FL seo wate Di it RPS

3

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.” § 90S(a).

2. Proceedings in this case.

Respondent filed the instant lawsuit in Louisiana state court,

Orleans Parish. The Petition for Damages alleged that, while

4

Roosevelt Magee was employed as a longshoreman with SSA

Gulf and other stevedoring companies, he loaded and unloaded

asbestos cargo at the Port of New Orleans. According to the

lawsuit, exposure between 1965 and 1997 contributed to certain

asbestos-related diseases, including lung cancer. The lawsuit

seeks special, general, and exemplary damages.

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.

Plaintiff moved to remand, arguing that the LHWCA “cannot

be fairly understood as preempting state remedies.” “The

availability of a federal remedy does not necessarily foreclose an

injured worker’s claim for relief under state law.” According to

the plaintiff, the LHWCA “contains no express declaration of

Congressional intent to prohibit states from providing

compensation to injured workers in lieu of, or in addition to the

benefits provided under the LHWCA.” Plaintiff concluded by

contending that, “[w]ith concurrent jurisdiction, an injured

worker has the option of pursuing a claim for remedies under

either state law or federal law. In this case, plaintiff chose to

pursue a state remedy for his injuries, which include actions in

tort.”

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. Pet. App. 2a.

ee —

A a A haem ae NA a Nw Ad PO

5

Instead, the district court entered a remand order adopting the

reasoning of Hernandez v. Todd Shipyards, 2004 WL 1543184

(E.D. La. 2004). The district court in Hernandez held that the

LHWCA does not provide a basis for removal of purely state-law

claims. “[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 *4.

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 attaching its district court motion to remand. By

order of October 5, 2004, the Fifth Circuit denied the petition.

Pet. App. la.

REASONS FOR GRANTING THE WRIT

This case presents the question whether the Longshore and

Harbor Workers’ Compensation Act, 33 U.S.C. § 901, ef seq.

(“LHWCA”), wholly displaces and preempts state tort damages

claims by longshore employees against their stevedore

employers, so as to trigger federal question jurisdiction pursuant

to 28 U.S.C. § 1331. The decision below squarely conflicts with

a holding of the Fourth Circuit, as well as with governing

precedent from this Court regarding the “complete preemption”

doctrine.

Further, the decision below threatens a substantial disruption

of the LHWCA scheme by enabling state courts — including

State-court judges and juries — to decide questions of LHWCA

benefits and coverage in inconsistent and non-uniform ways.

The decision below cannot be reconciled with the holdings of

this Court and at least eight other circuits recognizing that

Congress intended for the LHWCA to serve as the exclusive

remedy for longshore employees against their stevedore

employees.

6

The disruption of the statutory scheme is real rather than

hypothetical. The impact is illustrated by a recent petition for

certiorari presenting the same question as this case. See No. 04-

327, petition for cert. denied (Nov. 15, 2004) (“Hernandez”). In

Hernandez, SSA Gulf warned that “[a]bsent 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.”

Petition for Writ of Certiorari in No. 04-327, at 20.

The instant case shows that the flood of new cases is already

underway. Unless the Fifth Circuit’s error is corrected, plaintiffs

will continue filing state-court tort suits against stevedore

employers in Louisiana state court and other notorious anti-

defendant venues, with the intent of circumventing the

LHWCA’s exclusive remedy provisions.

Accordingly, the denial of certiorari in No. 04-327 does not

militate in favor of denial of certiorari here. “The denial of a

writ of certiorari imports no expression of opinion upon the

merits of the case, as the bar has been told many times.”

Missouri v. Jenkins, 515 U.S. 70, 85 (1995) (quoting United

- States v. Carver, 260 U.S. 482, 490 (1923)). “We have

repeatedly indicated that a denial of certiorari means only that,

for one reason or another which is seldom disclosed, -and not

infrequently for conflicting reasons which may have nothing to

do with the merits and certainly may have nothing to do with any

view of the merits taken by a majority of the Court, there were

not four members of the Court who thought the case should be

heard.” Daniels v. Allen, 344 U.S. 443, 491 (1953) (Frankfurter,

J.).

The cases are legion in which this Court has granted certiorari

after initially denying the writ in a previous case presenting the

same legal question.’ Such a process is inevitable in a system in

' E.g., United States v. Lara, 124 S. Ct. 1628, 1632 (2004); Illinois v.

i eee te ee eee ee ae eer are mat _ td bons « “

Sn Ph AICO AD eae ba in OR ae AS OL AaB io

7

which this Court encourages percolation of issues in the lower

courts. Here, the Fifth Circuit has demonstrated that its

Hernandez decision was not aberrational. The Fifth Circuit has

made clear that it will adhere to its erroneous legal position and

will continue to allow state-court plaintiffs to frustrate the

exclusivity provision of the LHWCA.

Hence, the Fifth Circuit’s decision in this case confirms the

palpable threat to the LHWCA’s statutory scheme. Because the

rule in this case conflicts with decisions of this Court and of

numerous other circuits, 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.’

Lidster, 540 U.S. 419 (2004); United States v. Knights, 534 U.S. 112, 116

(2001); Ashcroft v. Free Speech Coalition, 535 U.S. 234, 244 (2004); Shalala

v. Illinois Council on Long Term Care, 529 U.S. 1, 9 (2000); Farragher v.

City of Boca Raton, 524 U.S. 775, 785 (1998); Monge v. California, 524 U.S.

721,729 (1998); Phillips v. Washington Legal Foundation, 524 U.S. 156, 163

(1998); Capitol Square Review & Advisory Bd. v. Pinette, 515 U.S. 753, 759

(1995); Allied-Bruce Terminix Cos. v. Dobson, 513 U.S. 265, 269 (1995);

J.E.B. v. Alabama ex rel. T.B., 511 U.S. 127, 130 n. 1 (1994).

? 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

A. The Decision Below Conflicts With A Holding Of The

Fourth Circuit.

The rule followed 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 Inre 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.” /d. 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

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.” /d.

The decision below is 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

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)).

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9

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 be 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 compensation will be frustrated. }

The decision below is not only in conflict with the holding of

the Fourth Circuit; it is also in tension with the rulings of at least

eight other circuits holding that Congress intended for the

LHWCA to serve as the exclusive remedy for longshore

employees against their stevedore employees. See, e.g., Stewart

v. Dutra Constr. Co., 343 F.3d 10, 14 (1st Cir. 2003), cert.

eranted, 124 S. Ct. 1414 (2004); Gravatt v. City of New York,

‘6 F.3d 108, 111 (2d Cir. 2000), cert. denied, 532 U.S. 957

(<001); Peter v. Hess Oil Virgin Islands Corp., 903 F.2d 935,

938-39 (3d Cir. 1990), cert. denied, 498 U.S. 1067 (1991); Artis

v. Norfolk & Western Ry., 204 F.3d 141, 144 (4th Cir. 2000);

Stowers v. Consolidated Rail Corp., 985 F.2d 292, 293 (6th

Cir.), cert. denied, 510 U.S. 813 (1993); Johnson v. Continental

Grain Co., 58 F.3d 1232, 1235 (8th Cir. 1995); Sample v.

Johnson, 771 F.2d 1335, 1346-47 (9th Cir.1985), cert. denied,

475 U.S. 1019 (1986); Brockington v. Certified Electric, Inc.,

903 F.2d 1523, 1527 (11th Cir. 1990), cert. denied, 498 U.S.

10

1026 (1991).

This Court’s review is therefore amply warranted.

B. The Decision Below Conflicts 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

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.

eit ein ALN ot sigs Mags Be Nia tia hs ih itll Etat abe Nts Pye, om

11

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,

124 S. 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

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.

1. The Courts Below Applied An Obsolete Legal

Standard Regarding The Complete Preemption

Doctrine.

The district court in this case adopted the reasoning in

Hernandez 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.” 2004 WL 1543184, *4. The

12

district court’s description of the LHWCA was inaccurate

because the LHWCA does in fact contain 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).

Moreover, 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

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

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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 “[u]niform 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.” Jd.

Precisely the same reasoning is applicable in the context of

the LHWCA, which creates acomprehensive 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” (Hernandez,

2004 WL 1543184, *4) 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

—

14

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.” Jd. 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 in Hernandez erroneously asserted. 2004 WL 1543184, *4.

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 various dated Fifth Circuit decisions 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 in Hernandez relied extensively on

Aaron v National Union Fire Ins. Co., 876 F.2d 1157 (Sth Cir.

1989), cert. denied, 493 U.S. 1074 (1990), 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 US.

at 9n.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.

15

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 (Sth 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

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 v.

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.S (2d Cir. 2003) (holding that

Securities Litigation Uniform Standards Act of 1998 triggers

16

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 janguage and history do not manifest an intent to

make state law claims removable as Carmack claims, the

complete preemption doctrine does not apply to give this Court

- jurisdiction.”); Ben & Jerry's Homemade, Inc. v. KLLM, Inc., 58

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

17

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 !ong 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.

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

18

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

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

19

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 Jnternational

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.

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.

20

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

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. 92-1125, 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

21

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

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 judicial 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.

22

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, will threaten substantial disruption of

the statutory scheme enacted by Congress in the LHWCA. In

fact, this case demonstrates that the disruption is already

beginning. This case is undoubtedly merely the beginning of the

cascade of state-court tort suits against stevedore employers,

following the Fifth Circuit’s decision opening the floodgates in

Hernandez. State-court judges and potentially state-court juries

will be able to decide questions of LHWCA benefits and

coverage for themselves. Different state courts will arrive at

different results, subject only to review by this Court via its

discretionary certiorari jurisdiction. 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

United States by the American Tort Reform Association.’

Recognition of state-law claims will inject numerous

potentially conflicting standards into an otherwise uniform

national system. For example, in this case, respondent's state-

court lawsuit seeks special, general, and exemplary damages.

These forms of damages are inconsistent with the LHWCA,

which provides compensation 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

3 See American Tort Reform Association, BRINGING JUSTICE TO JUDICIAL

HELLHOLES 2 (2002); American Tort Reform Association, BRINGING JUSTICE

TO JUDICIAL HELLHOLES 8 (2003).

23

reimbursing him for his actual injury, and puts a lid on his

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

Eckhardt).

Allowing state courts into the administration of the LHWCA

will 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.

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 will upset the balance struck by

Congress and will 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

24

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 decisioris below will

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 “[aJn order

remanding a case to the State court from which it was removed

is not reviewable on appeal or otherwise... .” 28 U.S.C.

§ 1447(d). Neither the Fifth Circuit’s order nor respondent’s

opposition to the petition for writ of mandamus cited § 1447(d).

Nonetheless, even if the Fifth Circuit had expressly relied upon

§ 1447(d), it would not bar review in this case.

The issue of the proper construction of the LHWCA — and

whether it displaces respondent’s state-law tort remedy — is

antecedent to the question of subject-matter jurisdiction. Indeed,

it is separate from the issue of remand: under SSA Gulf’s view,

the LHWCA required that the district court enforce the

exclusivity provisions of the LHWCA by dismissing the

plaintiff's petition for damages, not by remanding it to the state

court. The issue is not simply the jurisdictional question of

whether respondent’s state-law tort claims should proceed in

federal court or in state court; the issue is whether the tort claims

may proceed at all in any court in light of the LHWCA’s

exclusivity provisions mandating their dismissal. See Waco v.

United States Fidelity & Guar. Co., 293 U.S. 140, 143 (1934)

(appellate court had power to review issue which “preceded that

of remand”); Borneman v. United States, 213 F.3d 819, 825 (4th

Cir. 2000), cert. denied, 531 U.S. 1070 (2001) (fact that district

court’s decision cited § 1447(c) is not sufficient to trigger §

25

1447(d) because “[t]he district court’s conclusion that it did not

have subject matter jurisdiction was premised on two antecedent

decisions that are both judicially reviewable and appealable”’);

Aliota v. Graham, 984 F.2d 1350, 1353 (3d Cir.) (review not

barred where a statutory issue under 28 U.S.C. § 2679(d) was the

impetus behind the remand, but was also “separate from and

logically preceded the question of remand”), cert. denied, 510

U.S. 817 (1993); Mitchell v. Carlson, 896 F.2d 128, 132-33 (Sth

Cir. 1990) (finding issue separable and reviewable under City of

Waco); In re Adams, 809 F.2d 1187, 1188-89 (Sth Cir. 1987)

(same regarding the dismissal of bankruptcy appeal); Gallea v.

United States, 779 F.2d 1403, 1404 (9th Cir. 1986) (same

regarding dismissal of United States in tort suit).

Section 1447(d) is not automatically triggered merely because

the district court’s remand order cited § 1447(c) and was

purportedly based on lack of subject-matter jurisdiction. See

Poore v. American-Amicable Life Ins. Co., 218 F.3d 1287, 1291

(11th Cir. 2000) (remand order based on lack of subject-matter

jurisdiction reviewable where “the district court exceeded its

authority under § 1447(c)”); Xiong v. Minnesota, 185 F.3d 424,

427 (8th Cir. 1999) (where district court held that it lacked

subject matter jurisdiction but “case law dictated that jurisdiction_

was proper at the time of removal,” § 1447(d) was no bar to

review: “Because the district court remanded a properly removed

cause on grounds the court lacked authority to consider, the

remand order is reviewable on appeal.”).

Accordingly, § 1447(d) does not preclude review of the

LHWCA question presented by this case. Otherwise, federal

appellate courts would lack authority to protect comprehensive

congressional schemes from interference by state courts. See

Powers v. Southland Corp., 4 F.3d 223, 229-30 (3d Cir. 1993)

(holding that § 1447(d) was no bar to review because, “if there

is independent appellate jurisdiction over an issue under the

governing federal statutes, the fact that the district court may

have remanded the case cannot deprive the court of appeals of

26

39, 6

the jurisdiction granted to it by Congress”; “the essence of the

defendant federal employee’s complaint was that she would be

subjected to suit in state court although she had a statutory right

to be immune from suit”).

The Fourth Circuit recognized the same principle in Shives,

151 F.3d at 167. 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

the district court’s remand order, it would appear that we

are not prohibited by § 1447(d) from reviewing that order.

Id. at 167. “If we have any doubt about the correctness of this

analysis, we are authorized in these circumstances to issue a writ

of mandamus. To avoid forfeiting the federal courts’ role of

reviewing LHWCA coverage issues is one of those

extraordinary situations envisioned in [ Thermtron Products, Inc.

v. Hermansdorfer, 423 U.S. 336 (1976)] for exercise of the writ.”

Id. at 167-68.

Precisely the same reasoning is applicable here. 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

27

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 (1st 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).

Hence, § 1447(d) does not provide a reason to deny review.

If anything, any conflict between the Fifth Circuit and the other

courts of appeals regarding the interpretation of § 1447(d) would

proviue a further reason to grant review.

28

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., formerly known as

Ryan- Walsh Stevedoring, Inc.

Petitioner,

Petition for Writ of Mandamus to the United States

District Court for

the Eastern District of Louisiana, New Orleans

Before WIENER, BENAVIDES, and STEWART, Circuit

Judges.

PER CURIAM:

IT IS ORDERED that the petition for writ of mandamus is

DENIED.

IT IS FURTHER ORDERED that petitioner’s motion for

leave to file petition for writ of certiorari filed in related case 04-

30679 into this case is DENIED.

/s/

DATED: October 5, 2004

2a

Appendix B

MINUTE ENTRY

J. ENGELHARDT

AUGUST 5, 2004

UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF LOUISIANA

ROOSEVELT MAGEE CIVIL ACTION

VERSUS No. 04-1471

AMERICAN SUGAR SECTION “N” (5)

REFINING, INC., ET AL.

Before the Court is a Motion to Remand filed by plaintiff

Roosevelt Magee on June 23, 2004. (Rec. Doc. 25).

Having reviewed the parties’ submissions, the record and the

applicable law, IT IS ORDERED that plaintiff's motion to

remand is GRANTED for the reasons set forth in Judge Africk’s

July 8, 2004 Order and Reasons in Hernandez v. Todd Shipyards,

2004 WL 1543184 (E.D. La.). Accordingly, pursuant to 28

U.S.C. § 1447(c), this action is REMANDED to the Civil

District Court for the Parish of Orleans for lack of subject matter

jurisdiction.

IT IS FURTHER ORDERED that plaintiff's motion for costs,

expenses, and sanctions is DENIED. See id.

/s/

Date of Entry: August 6, 2004