Article Summary

• In Marcus Schulmeister v. Blackwater USA, the Benefits Review Board (“BRB”) recently addressed the enforceability and conclusiveness of settlements approved under the Longshore and Harbor Workers’ Compensation Act (“LHWCA”), as extended by the Defense Base Act (“DBA”).
• The Board examined whether a previously approved settlement could later be challenged or revisited after approval by an Administrative Law Judge (“ALJ”).
• The decision reinforces that settlements approved pursuant to 33 U.S.C. § 908(i) are intended to provide conclusiveness and will not be disturbed absent extraordinary circumstances, such as fraud or similar equitable concerns.

Marcus Schulmeister v. Blackwater USA – Background

In Marcus Schulmeister v. Blackwater USA, the claimant sought benefits pursuant to the Defense Base Act, 42 U.S.C. § 1651 et seq., which extends the Longshore and Harbor Workers’ Compensation Act, 33 U.S.C. § 901 et seq., to certain civilian employees working overseas in support of United States government contracts. The DBA applies the provisions of the Longshore Act to certain civilian employees working overseas in support of United States government contracts.

The dispute in Schulmeister v. Blackwater USA arose from a claim filed under the Defense Base Act, which extends coverage of the Longshore and Harbor Workers’ Compensation Act to certain overseas government contractors. The claimant initially filed a claim alleging post-traumatic stress disorder (“PTSD”) stemming from his employment while working for Blackwater overseas. In connection with that claim, the claimant referenced various physical injuries and symptoms that allegedly occurred during the same period of employment.

As the claim progressed through the administrative process, the parties ultimately agreed to resolve the dispute through a negotiated settlement pursuant to Section 8(i) of the Act. Section 8(i) permits parties to compromise claims for compensation and medical benefits through a lump-sum settlement, provided the agreement is reviewed and approved by either a district director or an ALJ. Before approving a settlement, the adjudicator must determine that the agreement is adequate and that it was not procured by fraud or duress. Once approved, the settlement operates to discharge the liability of the employer and carrier for the claims resolved by the agreement.

After the settlement was finalized, however, the claimant later filed a new claim seeking compensation for physical injuries that he alleged were distinct from the psychological condition resolved in the prior settlement. The employer and carrier disputed the new claim, arguing that the physical conditions were not new injuries, but rather conditions that had already been identified during the earlier PTSD claim and therefore fell within the scope of the previously approved settlement agreement.

The resulting dispute required the Benefits Review Board to determine whether the claimant could pursue compensation for the alleged physical injuries, or whether those conditions were already encompassed within the earlier settlement resolving the PTSD claim, thereby barring further recovery.

Legal Analysis

In Schulmeister, the Board considered whether circumstances existed that would justify revisiting or disturbing the previously approved settlement. In analyzing this issue, the BRB reiterated that the Act strongly favors the conclusiveness of approved settlements. The approval process ensures that the agreement is adequate and that it was not procured through fraud, duress, or other improper means. After this review occurs, the settlement represents a binding resolution of the parties’ dispute.

This conclusiveness is particularly significant in the context of the Defense Base Act, where claims frequently arise from overseas employment and may involve complex factual and medical disputes.

The BRB noted that allowing claimants to revisit approved settlements absent extraordinary circumstances would undermine the statutory purpose of Section 8(i), which is to provide certainty and closure to both parties. Accordingly, absent extraordinary circumstances such as fraud, mutual mistake, or similar equitable considerations, an approved settlement will remain binding on the parties and will bar further litigation concerning the claims resolved by the agreement.

In reaffirming this principle, the BRB underscored that Section 8(i) settlements are intended to provide a reliable mechanism for resolving Longshore and DBA claims without prolonged litigation.

Conclusion

The BRB’s decision in Schulmeister reinforces the important role that Section 8(i) settlements play in resolving disputes under the Longshore Act and the Defense Base Act. By reaffirming the conclusiveness of approved settlements, the Board provides employers and carriers with a reliable mechanism to resolve contested claims and limit ongoing litigation exposure. Once a settlement is reviewed and approved pursuant to 33 U.S.C. § 908(i), the agreement generally extinguishes the underlying claim and bars subsequent attempts to revisit issues that were previously resolved.

For employers and carriers, the decision highlights the strategic value of settlement as a tool for bringing closure to complex claims, particularly in the DBA context where claims often arise from overseas employment and may involve prolonged factual and medical disputes. At the same time, the ruling underscores the importance of carefully negotiating and drafting settlement agreements before submission for approval, as the opportunity to challenge or modify an approved settlement is extremely limited.

Ultimately, Schulmeister confirms that once the statutory approval process is satisfied, Section 8(i) settlements provide the certainty and enforceability that Congress intended when creating the settlement framework under the DBA Act.