National Metal & Steel Corp. v. Reich

858 F. Supp. 62, 1994 U.S. Dist. LEXIS 10553, 1994 WL 391427
CourtDistrict Court, D. Maryland
DecidedMay 24, 1994
DocketCiv. A. No. HAR 90-2267
StatusPublished
Cited by2 cases

This text of 858 F. Supp. 62 (National Metal & Steel Corp. v. Reich) is published on Counsel Stack Legal Research, covering District Court, D. Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
National Metal & Steel Corp. v. Reich, 858 F. Supp. 62, 1994 U.S. Dist. LEXIS 10553, 1994 WL 391427 (D. Md. 1994).

Opinion

MEMORANDUM OPINION

HARGROVE, Senior District Judge.

The Longshore and Harbor Workers’ Compensation Act, 33 U.S.C. §§ 901, et seq., (the “LHWCA” or “Act”) establishes a detailed and comprehensive workers’ compensation scheme for maritime employees. The Act places liability on maritime employers for compensating injuries that occur on the navigable waters of the United States regardless of fault as a cause of the injury. 33 U.S.C. §§ 903 and 904. Maritime employers must secure the payment of compensation by contracting with an insurance company or by seeking authorization to self-insure. 33 U.S.C. §§ 904 and 932.

[63]*63A subset of these compensable injuries is assumed by a Special Fund, which relieves employers of liability for a portion of compensation payments when employees with preexisting disabilities suffer “second injuries.” 33 U.S.C. § 908(f). The Special Fund is intended to encourage employers to hire employees with preexisting disabilities. Funding for the Special Fund depends principally on assessments that the United States Secretary of Labor (the “Secretary”) imposes on “each carrier and self-insurer” covered by the Act. 33 U.S.C. § 944(c)(2). Plaintiff National Metal & Steel Corporation (“National Metal”) filed this declaratory judgment suit against the Secretary pursuant to 28 U.S.C. §§ 2201 and 2202 seeking a declaration of its obligations under the LHWCA after it terminated employment of its maritime employees and authorization to self-insure. 33 U.S.C. § 944(c)(2).

Presently before the Court are cross-motions for summary judgment. The Court has reviewed the parties’ memoranda and exhibits and will resolve the pending motions without convening a hearing. Local Rule 105.6 (D.Md.). For the reasons set forth in this memorandum opinion, the Court will grant summary judgment in favor of the Secretary.

Facts

National Metal operated a ship dismantling and scrap metal export stevedoring business in Los Angeles, California until January 1, 1986. National Metal lost the lease on its Los Angeles harbor facility as of that date, and thereafter ceased its ship dismantling and stevedoring activities and discharged its maritime workers.

While in business, National Metal received authorization to self-insure its compensatory obligations under the LHWCA. Subsequent to terminating its employment of maritime workers, National Metal informed the United States Department of Labor (“DOL”) that it no longer required authorization to self-insure. By letter dated March 17, 1986, the DOL terminated National Metal’s self-insurance authorization, effective that date.

As a self-insurer under the LHWCA, National Metal contributed to the Special Fund. After National Metal’s authorization to self-insure terminated, the DOL continued to impose assessments on it to support the Special Fund. National Metal continued to pay all contributions assessed against it up to and including payment on August 29, 1989. National Metal made that last payment, however, “under protest.”

According to the Affidavit of John Mar-tone, Branch Chief, Branch of Insurance, at the DOL, from February 28, 1986 through August 11, 1989, National Metal paid assessments totalling $142,282.00. The amount of the 1989 final assessment is $57,483.77, and the amount of the preliminary assessment for 1990 is $27,770.41, neither of which National Metal has paid. National Metal does not dispute these amounts.

Discussion

The LHWCA requires every employer to secure the payment of compensation to its employees for injuries arising during the course of employment. 33 U.S.C. § 904. The Act applies to “an employer any of whose employees are employed in maritime employment, in whole or in part, upon the navigable waters of the United States.” 33 U.S.C. § 902(4). The liability of the employer to secure compensation is exclusive and supplants the right of an injured employee to recover damages from it at law or in admiralty for such injury or death. 33 U.S.C. § 905. Every employer must secure the payment of compensation by insuring such payment with a company that is authorized by law to insure workers’ compensation, also known as a “carrier,” or by receiving authorization from the Secretary to pay such compensation directly, thereby becoming a “self-insurer.” 33 U.S.C. §§ 932(a)(1) and 932(a)(2).2

Compensation for a subset of workers’ injuries stems from a Special Fund. To encourage employers to hire individuals with preexisting disabilities, the LHWCA limits the direct compensation that employers must provide to employees who suffer “second injuries” that exacerbate their preexisting disabilities. In these “second injury” cases, employers must provide direct compensation benefits to injured employees or their surviv[64]*64ors for a maximum of one hundred and four weeks. 33 U.S.C. § 908(f)(1). After this mandatory period of direct employer compensation has ended, the Act directs that a Special Fund compensate the employee or his survivor for the remainder of his benefits. 33 U.S.C. § 908(f)(2); 33 U.S.C. § 944. The Special Fund shall not assume responsibility, however, for compensating an injured employee whose employer fails to secure the payment of compensation. 33 U.S.C. § 908(f)(2).

In 1984, Congress amended the assessment formula used to finance the Special Fund to more accurately correlate the benefit that each employer derived from the Special Fund’s assumption of compensation in second injury cases to its cost.3 The bulk of funding for the Special Fund currently derives.

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Bluebook (online)
858 F. Supp. 62, 1994 U.S. Dist. LEXIS 10553, 1994 WL 391427, Counsel Stack Legal Research, https://law.counselstack.com/opinion/national-metal-steel-corp-v-reich-mdd-1994.