Defense Base Act Class Action Lawsuit Dismissed

A friend of the blog mentioned that I should have included one additional case, Brink v. XE Holding, LLC, in the Top 5 list.  I think he was right.

Thirty-one contractor employees  brought a purported class action against their employers and their employer’s insurers, alleging inter alia violations of the Longshore and Harbor Workers’ Compensation Act (“LHWCA”), the Racketeer Influenced and Corrupt Organizations Act (“RICO”),  and the Americans with Disabilities Act (“ADA”) because of the employers’ and carriers’ handling of the contractor employees’ claims for Defense Base Act (“DBA”) benefits.  The United States District Court for the District of Columbia reviewed a collection of Motions to Dismiss and, upon consideration of the Motions, the court dismissed all of the employees’ claims.

Here, the Plaintiffs purported to bring their class action lawsuit “on behalf of more than 10,000 similarly situated individuals who were denied benefits under the DBA.”  The two hundred page Complaint alleged everything from failing or refusing to provide medical benefits to delaying compensation payments to making false statements about the payment of benefits to even threatening workers for making DBA claims.

In its Order dismissing the claims, the court began by discussing the exclusivity of the DBA and the LHWCA.  The D.C. Circuit (like other federal circuits) has long held that the LHWCA is an exclusive scheme for compensating employees.  It has refused to recognize a cause of action “when the employer refuses to make timely compensation payments with an intent to injure” because that cause of action falls within the LHWCA’s exclusivity provision.  Hall v. C & P Tel. Co., 809 F.2d 924, 926 (D.C. Cir. 1987).  Further, the LHWCA precludes state tort claims alleging false statements or false representations for the purpose of reducing, denying or terminating a claimant’s benefits.  Section 31(c) of the LHWCA establishes an employer’s exclusive liability for such alleged conduct.

The Plaintiffs could not escape the exclusivity provisions of the LHWCA and DBA.  Their complaints focused on the employers and carriers alleged failure to make DBA indemnity and medical benefits payments, and thus they were barred:

As Plaintiffs reaffirm in their own Opposition briefs, the crux of their Complaint is that “Defendants’ failure to make the proper compensation payment resulted in the infliction of harm on Plaintiffs, which Defendants could have reasonably anticipated….  Defendants’ delay, termination and/or minimization of compensation have aggravated Plaintiffs’ injuries.”  …  Plaintiffs claims that Defendants, in conspiracy with each other, refused to pay for Plaintiffs’ medical benefits, terminated their medical benefits, repeatedly lied and made misrepresentations to DOL regarding payments for medical treatments, wrongfully terminated certain Plaintiffs, and provided inadequate care.  …  Although Plaintiffs allege that these actions exacerbated their underlying employment-related injuries and/or that the claims process itself caused them undue stress and financial hardship, it is clear that Plaintiffs’ state law causes of action all arise out of their underlying claims to DBA benefits and thus are barred by the exclusive scheme set forth in the DBA and LHWCA.

The Plaintiffs likewise stumbled over their RICO and ADA hurdles.  When a federal enabling statute provides an exclusive remedy (like the LHWCA and DBA), RICO actions are barred.  Here, the Plaintiffs claim that the Defendants conspired to “[make] misrepresent[ations] to injured parties and the DOL and commit crimes under the DBA by denying claims using fraud….”  But Section 31(c) of the LHWCA already provides criminal penalties for the same conduct.  The same is true for the Plaintiffs’ mail and wire fraud claims: Section 14 of the LHWCA has a comprehensive system of financial penalties.   Therefore, because the LHWCA and DBA already provide remedies for the alleged wrong, the Plaintiffs could not maintain their RICO claims.

Finally, Plaintiffs did not state the essential elements of either a failure to accommodate or a disability discrimination under the ADA.  To establish a prima facie case of unlawful discrimination based on a failure to accommodate under the ADA, a plaintiff must show that: (1) he is a qualified individual with a disability within the meaning of the ADA; (2) that the employer had notice of his disability; (3) there was some reasonable accommodation denied to him; and (4) such accommodation would have enabled him to perform the essential functions of this job.  Here, the Plaintiffs made “only conclusory allegations” regarding their status as qualified individuals, and they failed to allege that they requested job accommodations which their employer denied.

Brink v.  XE Holding, LLC, — F.Supp.2d —-, No. 11-1733, slip op. (D.D.C. Dec. 21, 2012).