Maritime Jurisdictional Analysis: Basic Principles
The legal system provides a remedy for every worker injured in the United States or in its waters through the appropriate state workers' compensation act, the Longshore & Harbor Workers' Compensation Act (LHWCA), or maritime law (including the Jones Act). These remedies are mutually exclusive, but determining the status of an injured worker is often time-consuming and complicated.

Some jurisdictional lines are clear. In Southern Pacific Co. v. Jensen (1917), the Supreme Court held that state workers' compensation laws cannot apply to maritime workers' injuries on navigable waters. The Supreme Court, following the Fifth Circuit's lead, has concluded that fixed offshore platforms are “artificial islands” and thus the law of the adjacent state applies to injuries on those platforms located within state waters.

Lawyers and judges often find jurisdictional lines difficult to discern in many maritime personal injury cases -- injured workers can hardly be faulted for not knowing what their legal status is or where their injury claim properly belongs. Unfortunately, many attorneys are likewise unfamiliar with the nuances of such claims, and they tend to file Jones Act suits, since contingent fees are allowed in seamen's litigation but precluded in claims under the LHWCA. Fitzhugh, Elliott & Ammerman, P.C. specializes in this murky area of the law and strives to bring clarity to its clients. Whether it is determining the jurisdiction for an injury, providing analysis of insurance issues related to maritime injuries, or navigating the treacherous waters of offshore indemnity, our firm can help you.

The situation is not often easy for the employer, who likely has different insurance carriers for maritime employer's liability (or P&I coverage) than for workers' compensation. The insurers usually appoint counsel to handle defense of claims, and in the worst case scenario there can be three different proceedings – a state workers' compensation claim, a longshore compensation claim, and a Jones Act suit – all arising out of one injury. The employer may find itself with two or more attorneys defending these claims, and the injured worker may find a tort attorney who does not wish to appear in the workers' compensation claims.

Another complication, particularly in offshore injuries, is the involvement of third-parties, prompting a third-party tort suit in addition to the workers' compensation claims. A short article cannot possibly deal with the myriad options such claims present; however, for attorneys not familiar with the overlap of these claims a few major points can help avoid liability for the attorneys and shortchanging of their clients.

1. Maritime personal injury laws are designed to prevent double recoveries.

Through statutory provision or case law development, a system of offsets and credits exists to prevent overcompensation of injured workers. Compensation carriers receive a credit against their liability for any settlement or recovery in a Jones Act suit by the same worker for a single injury. The credit consists only of the money actually received by the injured worker. Attorneys' fees and expenses must be deducted from the gross settlement. Likewise, the Jones Act will credit an employer for any payments made under the LHWCA or a state workers' compensation act as well. Since those payments generally are made directly to the injured worker (as attorneys fees are handled separately), the credit is the full amount paid for compensation and medical benefits.

2. Although the remedies are exclusive, an injured worker may pursue simultaneous recoveries under all three systems until a final decision in one claim occurs.

A Jones Act settlement, whether done prior to trial or by consent after a suit is filed, does not constitute a binding determination of seaman's status. That can occur only with a factfinder's decision following a trial on the merits. Anything else – including a settlement read into the record in federal court and approved by a federal judge – is just a settlement that leaves status legally unresolved. However, a lump sum settlement under the LHWCA is a binding jurisdictional document, since it results in a final order decreeing the worker covered by the LHWCA, thereby excluding possible recovery under the Jones Act or state compensation law. Acceptance of state compensation benefits does not bar a subsequent claim for LHWCA or seamen's remedies. And payment of state or longshore compensation by an insurance company does not estop that company from later claiming the injured worker is a seaman.

3. A third-party settlement of a longshoreman's tort suit can terminate his lifetime compensation & medical benefits

The LHWCA provides than an unapproved settlement of a third-party case in writing by both the employer and its compensation carrier within 30 days of a tort settlement permanently terminates an injured longshore workers' claim for compensation or medical benefits, even if the employer has never paid them and denied liability for them. If an injured longshore worker settles his third-party claim without informing his employer and its compensation carrier, the same result occurs.

4. In a third-party suit, the longshore lien enjoys a high priority.

Only the attorneys' claim for his fees trumps the longshore lien (which is the total amount of medical and compensation benefits provided to the injured worker by his employer or its compensation carrier). The compensation carrier stands in line directly behind the attorney, and if the third-party recovery is insufficient repay the carrier, then the injured worker takes nothing home from his tort “victory.” A compensation carrier may waive or reduce its fee to allow some recovery by the worker, but normally this is in conjunction with an express agreement that the settlement will not be approved by the carrier, which means the third-party settlement will terminate all claims and litigation arising out of a maritime injury.

THE ABOVE IS NOT INTENDED AS LEGAL ADVICE. PLEASE CONSULT A LAWYER FOR ADVICE ON YOUR INDIVIDUAL SITUATION.