5th Circuit: Oil Platform Worker’s Longshore Act Claim Barred by Exclusive Remedy

Exclusive remedy bars a lawsuit filed by a mechanic against the owner of an offshore oil platform where he worked, even though he was employed by different company, a federal appellate court ruled.

The 5th Circuit Court of Appeals rejected an argument that a tort claim is allowed because there was no evidence that the injured mechanic had been paid benefits specifically under the federal Longshore and Harbor Workers’ Compensation Act, and not a state workers’ compensation plan. The appellate panel said it was enough that benefits were paid, and that plaintiff Milorad Raicevic was clearly a “borrowed employee” under a nine-point test established by previous case law.

Raicevic was employed by Waukesha Pearce Industries in Houston, but was assigned to work on an oil platform owned by Fieldwood Energy Services on the outer continental shelf in the Gulf of Mexico.

Raicevic injured his back when he slipped and fell on an oil-soaked floor while responding to an alarm that had gone off because of a mechanical malfunction. He was paid benefits, but no evidence was submitted at trial that showed whether the benefits were paid under a state workers’ compensation plan or the federal program for longshore and harbor workers. The act states that there is no tort liability for employers who “secure payment of compensation” for workers who are injured.

Raicevic filed a lawsuit alleging negligence by Fieldwood and two contractors that had also stationed employees on the platform. The U.S. District Court in Galveston held off on answering the question of whether exclusive remedy barred the claim and allowed a jury to rule on whose negligence had caused the accident and apportion liability.

The jury found that Raicevic was 50% responsible and Fieldwood was 50% responsible, assigning none of the blame to the other two contractors. That left open the question of whether Raicevic was a borrowed employee of Fieldwood, in which case his claim would be barred by exclusive remedy.

The district court submitted to the jury nine questions that previous case law has established as critical in determining whether a worker is a borrowed employee. For example, who controlled the worker? Who paid the worker? Who provided tools?

The jury’s findings did not point uniformly in one direction, but District Court Judge George C. Hanks, Jr. found that Raicevic was a borrowed employee and his claim was barred.

The 5th Circuit panel affirmed that decision in a ruling released on Tuesday.

“Here, the evidence showed that both Fieldwood and Waukesha Pearce had LHWCA insurance at the time of Raicevic’s injury,” the opinion states. “That is enough for Fieldwood to invoke the LHWCA’s exclusive-recovery provision.”

The appellate panel explained that it doesn’t matter which insurance plan pays benefits under the Longshore and Harbor Workers’ Compensation act as long as benefits are paid.

“We have never directly addressed Raicevic’s first argument—that to invoke the LHWCA as a defense, an employer must prove not just that it had LHWCA insurance, but that it paid benefits under that insurance to the employee,” the panel said in its opinion. “As the language of the LHWCA and our cases show, that standard is too demanding.”

But the court corrected the district court’s findings even as it affirmed the ruling finding Raicevic’s claim was barred. The court said the district court incorrectly analyzed only four of the nine factors that are used to determine if a worker is a borrowed employee and disregarded the other five factors as irrelevant. The 5th Circuit said that was an error because all of the factors should be analyzed.