Friday, August 22, 2014

Without Comp

I'll admit that I don't know much about the federal Jones Act that regulates injuries to maritime workers, except that negligence is an issue in such cases, as opposed to regular workers' compensation which is considered "no fault."

But a case pending in the U.S. 5th Circuit Court of Appeals gives us a glimpse into what the rest of the workers' compensation world would look like if there really were no workers' compensation - at least relative to causation and liability.

James Johnson had contacted PPI Technology Services in early 2010 to inquire about a position as a drilling supervisor. Ultimately, Johnson landed a $300,000-per-year job aboard the Transocean rig, High Island VII off the shore of Nigeria.

Johnson started his work in Nigeria in March 2010. PPI allegedly arranged and paid for his travel.

Johnson claimed that he was under the constant supervision and control of PPI employees while aboard the rig. He also had an intra-company email address and frequent conversations with Ron Thomas, PPI's president, about the drilling plans for the rig.

In November 2010, a group of Nigerian gunmen paddled out to the platform from the nearby coastline and gained access to the rig via stairs that had been left in the lowered position.
High Island VII rig.

During the assault, Johnson was shot in the knee and another colleague was wounded in the foot. The gunmen then took a group of workers and held them hostage for 10 days.

Nigeria had been, and still is, a volatile region where disputes over the country's oil wealth are violently contested and during Johnson's tenure the High Island VII rig had been the target of several assaults by militants. Worker kidnappings remain a danger there.

Transocean sold High Island VII and 37 other shallow water rigs to Shelf Drilling Holdings in 2012 for a total purchase price of $1.05 billion.

As a result of his gun-shot injury, Johnson spent five months in a London hospital. He has since undergone more than a dozen surgeries including two knee replacements, and he now has permanent limited mobility.

Johnson filed suit against PPI in 2011, asserting that the company was his employer for purposes of the Jones Act and is liable for damages to him based on its failure to provide him with a safe place to work. He further sought maintenance and cure benefits from PPI under maritime law.

PPI sought summary judgment dismissing his claims, asserting it was not Johnson's employer as a matter of law.

U.S. District Judge Sarah Vance disagreed, finding "myriad factual issues concerning Johnson’s relationship with PPI that make summary judgment on this record unwarranted."

The case was later transferred from Vance to Judge Carl Barbier. PPI renewed its summary judgment motion, and Barbier granted it.

Barbier also presided over Johnson's claims against Global Santa Fe Offshore Services.

Johnson had alleged GSF was vicariously liable to him under the Jones Act and general maritime law for the negligence of its employees in failing to properly secure the rig against an attack.

According to Johnson, Tim Ashley, the rig offshore installation manager, and Danny Ball, the barge master, were the individuals responsible for security aboard the rig.

GSF allegedly issued paychecks and W-2s to both Ashley and Ball. Johnson argued that this made GSF their employer. Since Ashley and Ball had allowed the rig hands to leave the rig's stairs in a lowered position, thereby giving the kidnappers a means of access, Johnson argued that GSF was liable for their negligence under the doctrine of respondent superior.

GSF countered that it was not the employer of Ashley and Ball, but simply a "paymaster" of the rig hands.

Barbier was persuaded and granted summary judgment dismissing GSF as a defendant.

Johnson appealed both of Barbier's rulings and the case is pending in the 5th Circuit.

Regular workers' compensation cases sometimes involve disputes about who is the employer, so this case isn't really all that different in that regard.

But I think it's interesting to us in the regular work comp field to see what life would be like if there were no "no fault" provision in our laws - an additional element of dispute to be resolved adds one more very big layer to the liability picture.

And that disputes go before a jury is what life was like before the administrative proceedings of nearly all work comp litigation now.

Perhaps to a maritime/Jones Act regular, this set of facts and this case isn't all that interesting or important, but those of us in the traditional work comp field should remind employers and workers that this is what life is like without comp's attempt to deliver quick and expedient benefits: four years just to find out who the correct employer is, and still there is the need to prove negligence before any benefit liability is due...

To read Johnson's petition in the PPI case, click here.

To read Johnson's petition in the GSF case, click here.


  1. So is there talk about doing away with comp all together? Now that we have the ACA? Just cover all care no matter where it happens. No matter who is a fault. And tax the Corps heavily in return for not having comp premiums to pay.. Just asking, for I really am interested to know. This would take care of the medical side. Not sure how the time loos part would be covered? Maybe have a scaled down version of comp to just handle the time loss payments part, and have the ACA cover the rest? It sure seem like that is a road folks are headed towards. I know in my State of WA right now, WC has agreed to cover my mental health treatment cost, but are having my ACA insurance cover the cost of the treatments. So it is all ready happening, in part. Just asking as always. Peace and thanks as always.

  2. David, this is an interesting case - I have not had a chance to read all the documents (There appears to be a stray document in the record relating to another claimant). Two quick points, however.
    1. The Federal Employers Liability Act (FELA) covers workers in interstate employment, and that too is a liability statute, with which many of your readers may be familiar. The maritime "Jones Act" simply adopts the FELA remedy.
    2. The maritime employment remedy works for "seamen" or "Crewmembers" who have to be on a "vessel". There are frequent threshold questions as to "what is a vessel". Not all rigs or platforms are vessels. This case lacked that delectable dispute.