9th Time is the Charm for Temporary Surface Transportation Funding

President Obama signed a 90 day extension for surface transportation funding, representing the 9th temporary extension of such funding since 2009. This latest move preserves on-going projects and continues the government's authority to levy the gasoline tax. Here is media report from the Washington Post.

Needless to say, this latest stop-gap measure pushes the legislative work even furhter into the election year.

See my earlier post about a prior House version of the legislation.

Supreme Court Resolves LHWCA Circuit Split

Yesterday, the U.S. Supreme Court ruled that under the Longshore and Harbor Worker's Compensation Act (LHWCA, 33 U.S.C. Sec. 901), an employee is "newly awarded compensation" when he first becomes disabled, and therefore entitled to benefits calculated in that fiscal year, not a later year when a compensation order is issued. This decision by Justice Sotomayor resolves a split among U.S. Courts of Appeals that had calculated benefits based either on date of disability, or, the date of an award Order.

The LHWCA generally functions like a workers compensation program, where an employer is obligated to pay benefits to an employee injured on the job. The Act caps disability benefits at "twice the applicable national average weekly wage" for the fiscal year where an employee is "newly awarded compensation." 33 U.S.C. 906(b)(1). In most cases employers pay benefits without contesting liability, but if an employer does contest the claim, the Dept. of Labor will adjudicate the claim, which if decided in the employee's favor, results in a compensation award.

In the case before the Court, the issue was whether the employee was due the wage rate for the year he was injured, or the year in which the an Order requiring payment under the Act was issued. The rate for the year in which the Order was issued was higher than the rate for the year the injury occurred. Justice Sotomayor, and seven other members of the Court, held that the date of disability controls the benefit amount, not the date of a potential order issued in the future. The Court cited the possibility of unequal treatment of similarly situated claimants, where one claimant could potentially garner a higher rate by delaying or contesting a LHWCA benefit being voluntarily paid by an employer. Also the Court recognized the potential for "gamesmanship in the claims process" if the benefit rate were based on an adjudication date as opposed to the date of disability onset.

Fourth Circuit Requires Foreign Seaman to Arbitrate Claims in Home Country

The U.S. Court of Appeals for the Fourth Circuit (based in Richmond, VA), ruled on March 16, 2012, that a Filipino seaman injured in the U.S., was required by his employment contract to arbitrate his injury claims in the Philippines. The Court's decision rested largely on the application of the "Convention Act" 9 U.S.C. sec. 201, which recognizes and enforces commercial arbitration agreements in international contracts. The Fourth Circuit, in line with prior rulings by the 9th and 11th Circuit Courts, ruled that the Convention Act, and hence the arbitration agreement in the employment contract, supplanted the Seaman's Wage Act (46 U.S.C. 10313), and required arbitration of the wage and other claims.

Addressing the injured seaman's Jones Act claim, and specifically his argument that requiring arbitration would contravene U.S. public policy by denying him access to U.S. law under the Jones Act, the Court did not entirely foreclose a public policy argument. What the Court did was to find that a public-policy argument (i.e. a non-U.S. arbitration could deprive the injured seaman of a Jones Act remedy), could be made only after an arbitration award was made, in what it termed the "award-enforcement stage."

Ultimately the Court also found the lower court (U.S. District Court/Maryland), erred in its dismissal of the case even though it agreed with the lower court's enforcement of the arbitration requirement. The Fourth Circuit held that the District Court could retain jurisdiction over the case after the arbitration award stage to later consider the policy arguments made by the seaman.

The Court also found the District Court could retain jurisdiction over the seaman's request for injunctive relief regarding maintenance and cure benefits, which the District Court had denied as moot when it ordered arbitration.

Happy St. Patrick's Day From TLT

Here's an interesting and topical shipping story as St. Patrick's Day approaches. According to this Journal of Commerce article, U.S. imports of Guinness products are up nearly 250% early this year.

For the statistically-minded, this Census Bureau data shows a trade imbalance with the U.S. and Ireland (in Ireland's favor) of approximately $2.3 billion.

St. Patrick's day falling on a Saturday will no doubt impact retail sales as well. Just remember, green beer may seem like a good idea at first, but you'll probably fare better with an authentic Guinness should you develop the Irish flu on Sunday. Also remember the Rx for the Irish flu is another Guinness.

Finally, here is a link to the mother-ship at St. James Gate, Dublin.

NTSB Issues Rail Safety Recommendations Following 2009 Ethanol Derailment

On March 2, 2012, the National Transportation Safety Board (NTSB), issued 15 Rail Safety recommendations related to the June 19, 2009 CN derailment in Cherry Valley, Illinois. In the accident,13 of the 19 derailed ethanol tank cars were breached and caught fire, causing one fatality and several injuries.

The Board had previously determined the probable cause of the derailment was a washout of the track structure discovered before the arrival of the train which derailed. The Board's recommendations range from advising railroads and public entities to assess trackside stormwater drainage, to tank car integrity and crashworthiness improvements.

Among the recommendations related to rail tank cars, are the Board's recommendations that existing DOT-111 tank cars carrying ethanol be retrofitted to improve shell puncture resistance and prevent exposed valve fittings from opening in an accident. (R12-6 - R12-8).

The call to retrofit some 40,000 in service tank cars carrying ethanol is likely to be controversial, given the conservative estimate of the Railway Supply Institute of the retrofitting to be $1 billion dollars.

The Recommendations, which are not mandatory, are attached here:

R-12-1 & 2

R-12-3 and 4, reiteration of R-07-2

R-12-5 through 8, reiteration of R-07-4

R-12-9

R-12-10

R-12-11

R-12-12 through 15

Supreme Court Rules States Do Not Own Non-Navigable Portions of Rivers

In a decision issued February 22, 2012, the United States Supreme Court reversed a decision by the Supreme Court of Montana, which assessed $41 million in "rent" due to the State for river beds used by hydroelectric power plants. Under the "Equal Footing Doctrine," which provides that upon statehood, a State gains title to beds of waters "then navigable." However, any land beneath waters which were not navigable at the time of statehood are retained by the federal government.

The Court rejected the Montana Supreme Court's finding that the various rivers in question, and particularly the portions where the power company made use, were navigable for title purposes, and thus property of the State. The Court applied a segment by segment approach, which the lower Court had deemed inapplicable for "short interruptions" of navigability, and found non-navigable sections of river, including portages, do defeat navigability for title purposes. In other words, the U.S. Supreme Court essentially concluded that a state can't claim title, and charge rent for, sections of its rivers which were not navigable upon statehood, and that no exception for "short interruptions" applies.

The Court distinguished navigability determinations under the equal footing doctrine from navigable waters determinations for admiralty jurisdiction, noting a much more expansive definition of navigable waters for jurisdiction purposes.