HIGH COURT CLARIFIES MARINE INJURY CLAIMS

WASHINGTON-A U.S. Supreme Court ruling narrows the field of maritime workers who may seek tort as well as workers compensation damages if the workers are injured aboard navigable vessels.

The Supreme Court on May 12 found that injured workers must have been performing seaman's duties when injured to recover the additional damages. The court also ruled that a worker must have had a "substantial connection" with the owner of the vessel on which he or she was injured.

"The significance of the Supreme Court's decision is it takes away the broad expansive review of employees' employment history and makes courts focus on their current job status," said attorney Eric Danoff, a partner with Graham & James L.L.P. of San Francisco, who represented the injured worker's employer in the case.

Attorneys agree the ruling could help owners of floating casinos avoid costly negligence lawsuits by dealers, waitresses and other workers who are injured while working aboard docked vessels.

The decision also may prompt some owners of riverboat casinos that cruise during gaming sessions to lease their workers, fostering an already growing trend to lease maritime workers, said attorney Josh Kantrow, head of the maritime practice at Blatt, Hammesfahr & Eaton in Chicago. "This is a very good decision for employers,' said Mr. Kantrow, who was not involved in the case.

The high court's 6-3 decision, written by Justice Anthony M. Kennedy, overturned a federal appellate court ruling and clarified the Supreme Court's own 1995 decision on this issue.

In the case, John Papai suffered a permanently disabling knee injury during a one-day maintenance project in March 1989 aboard a tugboat docked in Alameda, Calif. The project, painting the tug's housing structure, would not have required Mr. Papai to sail with the tug.

The tug was owned by Harbor Tug & Barge Co., a subsidiary of Crowley Marine Services Inc. of Oakland, Calif. Harbor Tug hired Mr. Papai through the Inland Boatman's Union's hiring hall.

Through the hall, Mr. Papai over the previous couple of years had obtained mostly deckhand jobs on various vessels operated by unrelated owners. He had performed a dozen jobs for Harbor Tug over the previous few months just before he injured his knee.

After his injury, Mr. Papai collected the workers compensation benefits-two-thirds of wages-provided under the Longshore Harbor Workers' Compensation Act. That federal act covers land-based maritime employees.

But, he also sued to obtain seaman's status under the Jones Act. That act allows seamen to sue their employers for damages due to ordinary negligence and the unseaworthiness of vessels. Successful litigants can recover 100% of their lost wages as well as damages for pain and suffering.

In its 1995 decision in Chandris Inc. vs. Latsis, the Supreme Court outlined a two-pronged standard that injured employees must meet to earn seaman's status. At the time of their injuries, the court said, employees must have:

Been performing duties that contribute to the function of the vessel or to the accomplishment of the vessel's mission.

A substantial connection to a vessel in navigation or to an identifiable group of vessels under common ownership or control.

Harbor Tug argued that Mr. Papai did not have a substantial connection to its vessel, because he performed work for other vessel owners.

Harbor Tug prevailed in federal district court, but the 9th U.S. Circuit Court of Appeals reversed that decision in December 1995.

The appellate court ruled 2-1 that the "substantial connection" requirement the Supreme Court established does not mean a permanent connection.

The 9th Circuit said Mr. Papai's employment history with Harbor Tug "may in itself" establish the connection to a vessel or group of vessels that Mr. Papai needs to earn seaman's status.

The appellate court did not refer to the common ownership provision the Supreme Court spelled out in Chandris, the high court noted in its latest decision overturning the 9th Circuit's ruling.

"The only connection a reasonable jury could identify among the vessels Papai worked aboard is that each hired some of its employees from the same union hall where it hired him. That is not sufficient to establish seaman status under the group of vessels concept," Justice Kennedy wrote.

The appellate court also had ruled that "if the type of work a maritime worker customarily performs would entitle him to seaman status if performed for a single employer, the worker should not be deprived of that status simply because the industry operates under a daily assignment rather than a permanent employment system."

The appellate court reached its conclusion by misinterpreting a phrase in Chandris, the high court said. In that case, the high court said, "We see no reason to limit the seaman status inquiry. . .exclusively to an examination of the overall course of a worker's service with a particular employer."

The appellate court interpreted that phrase to mean that courts could examine an employee's work history with different employers "during a relevant time period" to determine whether an employee mostly performed a seaman's duties.

But the Supreme Court said in its latest ruling that the phrase means courts should limit their examination to the employee's current duties with his or her employer and not consider the employee's past duties with that same employer.

If the employee's duties when injured did not include the "regular exposure to the perils of the sea" that seamen face, the injured worker is not entitled to seaman's status, the Supreme Court ruled.

Under the 9th Circuit's decision, an injured worker who had not been out to sea for years could have collected LHWCA benefits and then argued he was entitled to seaman's status under the Jones Act, said Mr. Danoff, Harbor Tug's attorney. "This decision will make it harder to do."

Some workers still may fall into a "gray area" that would allow them to take that course. An example would be land-based workers who perform a couple of hours of work on a vessel that has left the dock, Mr. Danoff said.

Employees of floating casinos still could be considered seamen because they contribute to the vessel's mission, attorneys said.

But, many of those casinos do not leave the dock, so their employees would not be exposed to perils of the sea. Under the Supreme Court's latest decision, employers could argue those workers do not enjoy seaman's status, Mr. Danoff said.

Courts still likely will consider casino employees as seamen if the riverboats on which they work sail during gaming sessions, Mr. Danoff noted.

But, if casino owners employ their workers though independent contractors and the employees work on various vessels that are not owned or operated by the same organization, the employees would not meet the Supreme Court's standard for seaman's status under the Jones Act, Mr. Kantrow said.

Harbor Tug & Barge Co. vs. Papai et ux., U.S. Supreme Court; No. 95-1621.