CREIGHTON LAW REVIEW

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1 769 SERVICE EMPLOYEES INTERNATIONAL V. DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS: INCREASING THE UNCERTAINTY REGARDING THE PROPER COURTS FOR JUDICIAL REVIEW OF CLAIMS UNDER THE DEFENSE BASE ACT I. INTRODUCTION Congress enacted the Defense Base Act' ("DBA") in 1941 to provide workers' compensation benefits to employees who sustained injuries or died while working on government projects overseas. 2 Congress enacted the DBA as an extension of the already existing Longshore and Harbor Workers' Compensation Act 3 ("LHWCA"), and intended that the DBA follow the LHWCA's provisions except where specific DBA language deviated from that of the LHWCA. 4 Initially, under both acts, the United States District Courts reviewed benefits determinations. 5 However, this parallel system changed when Congress amended the LHWCA in 1972 to provide for United States Courts of Appeals review of benefits determinations. 6 Congress left the DBA's parallel judicial review provisions unchanged. 7 Since the LHWCA amendments, the courts of appeals have not agreed on whether the DBA language or the LHWCA language directs which courts have jurisdiction to review DBA benefits determinations U.S.C (2006). See Serv. Emps. Int'l, Inc. v. Director, Office of Workers' Compensation Programs, 595 F.3d 447, 452, 453 (2d Cir. 2010) U.S.C. 1651(a). See Serv. Emps., 595 F.3d 447, 452, 453 (2d Cir. 2010) U.S.C. 901 (2006). 4. See 42 U.S.C. at 1651(a). 5. Longshore and Harbor Workers' Compensation Act, ch. 509, 21, 44 Stat (1927) (current version at 33 U.S.C. 921 (2006)); 42 U.S.C. 1653(b) (2006) U.S.C. 921(a)(1), (a)(3), (a)(5)(c). 7. Compare 33 U.S.C. 921 (2006) (providing for court of appeals review of compensation orders), with 41 U.S.C. 1653(b) (providing for district court review of compensation orders). 8. Compare Serv. Emps., 595 F.3d 447, 452 (2nd Cir. 2010) (stating that judicial review of DBA compensation orders lies in the Courts of Appeals), and Pearce v. Director, Office of Workers' Compensation Programs, 603 F.2d 763, (9th Cir. 1979) (holding that judicial review of DBA compensation orders should be conducted in the Courts of Appeals), with Home Indem. Co. v. Stillwell 597 F.2d 87, 89 (6th Cir. 1979) (noting that judicial review of DBA compensation orders should be in the district courts), AFIA/CIGNA Worldwide v. Felkner, 930 F.2d 1111, 1116 (5th Cir. 1991) (finding that district courts are the proper courts to conduct review of compensation orders under the DBA), Lee v. Boeing Co., 123 F.3d 801, 805 (4th Cir. 1997) (determining that judicial review of DBA claims should take place in the district courts), and ITT Base Servs. v. Hickson, 155 F.3d 1272, 1275 (11th Cir. 1998) (determining that judicial re-

2 770 CREIGHTON LAW REVIEW [Vol. 44 In 2010, the United States Court of Appeals for the Second Circuit in Service Employees International, Inc. v. Director, Office of Workers' Compensation Programs 9 addressed which courts have jurisdiction to hear DBA appeals.' 0 The Second Circuit determined that United States Courts of Appeals have jurisdiction to hear appeals of Benefits Review Board decisions under the DBA." The Second Circuit stated also that the language of the DBA was ambiguous because it provided for review in both the United States District Courts and the United States Courts of Appeals.1 2 The Second Circuit also looked to the context and purpose of the DBA and the LHWCA, and determined that Congress intended the DBA's judicial review provision to parallel the LHWCA's judicial review provision.' 3 Congress only intended that the DBA modify the LWHCA's process for determining which particular court had jurisdiction, since following the LHWCA's procedure with regard to DBA claims would leave no court with jurisdiction.' 4 The Second Circuit reasoned that Congress intended the DBA language to mirror that of the LHWCA, and, thus, intended to amend that language at the same time it amended the LHWCA.' 5 This Note will first discuss the Service Employees decision and the reasoning that led the Second Circuit to conclude that the United States Courts of Appeals are the proper courts to hear DBA appeals.16 Second, this Note will review the LHWCA and the DBA, as well as other circuit court decisions that have analyzed the issue of which courts have jurisdiction over DBA appeals.' 7 Third, this Note will argue that the Second Circuit's decision was incorrect when it found ambiguity in the DBA's judicial review provision and when it considered legislative history and intent when interpreting the DBA's language.' 8 Finally, this Note will discuss the possible consequences of the Second Circuit's decision and the action Congress should take to definitively say which courts have jurisdiction over DBA appeals.1 9 view of DBA compensation order should take place in the United States District Courts) F.3d 447 (2d Cir. 2010). 10. Serv. Emps. Intl, Inc. v. Dir., Office of Workers' Comp. Programs, 595 F.3d 447, 447, 452 (2d Cir. 2010). 11. Serv. Emps., 595 F.3d at 447, Id. at Id. at Id. (noting that jurisdiction rests in the Courts of Appeals). Id. 15. Id. at See infra notes and accompanying text. 17. See infra notes and accompanying text. 18. See infra notes and accompanying text. 19. See infra notes and accompanying text.

3 2011] CLAIMS UNDER THE DEFENSE BASE ACT 771 II. FACTS AND HOLDING In Service Employees International, Inc. v. Director, Office of Workers' Compensation Programs, 20 the United States Court of Appeals for the Second Circuit confronted for the first time the issue, under the Defense Base Act 21 ("DBA"), of the proper court to hear appeals from decisions of the Benefits Review Board and found that the courts of appeals had jurisdiction to hear these appeals. 22 Jesse Barrios ("Barrios"), an employee of Service Employees International ("Service Employees"), worked in Iraq delivering fuel and gasoline throughout the country. 23 While working in Iraq, Barrios experienced eye symptoms including burning, itching, and dryness that caused him to seek medical attention. 24 Barrios had experienced these eye symptoms prior to his employment in Iraq and had disclosed the symptoms during a medical exam, but his symptoms worsened while in Iraq. 25 After conducting an eye exam, Dr. Abdussammad Abdullah ("Dr. Abdullah"), a consultant in ophthalmology, concluded that Barrios had dry eye and Pterygium (a tissue mass on the eye that causes vision problems). 26 Dr. Abdullah noted that both of Barrios' conditions were more likely to occur in dry climates and in sunlight. 27 Barrios continued to work after his examination, but his symptoms persisted even after Dr. Abdullah prescribed eye drops and protective sunglasses. 28 Eventually, Service Employees returned Barrios to the United States to obtain treatment for his condition, although it characterized the condition as non-work-related. 29 In the United States, Barrios met with another ophthalmologist, Dr. Charles D. McMahon, who confirmed Dr. Abdullah's diagnosis and stated that he believed a combination of genetic predisposition for the growths and the dry, dusty environment and sunlight in Iraq caused Barrios' condition. 30 Service Employees requested that an outside ophthalmologist, Dr. Charles A. Garcia ("Dr. Garcia") review Barrios's medical records. 3 ' Dr. Garcia, without examining Barrios, concluded F.3d 447 (2d Cir. 2010) U.S.C (2006). 22. Serv. Emps. Int'l, Inc. v. Dir., Office of Workers' Comp. Programs, 595 F.3d 447, 449, (2d Cir. 2010). 23. Serv. Emps., 595 F.3d at Id. 25. Id. 26. Id. at Id. at Id. 29. Id. 30. Id. 31. Id. Service Employees consulted with Dr. McMahon for a review of Barrios' medical records and to give his opinion regarding the cause of Barrios' eye symptoms. Id.

4 772 CREIGHTON LAW REVIEW [Vol. 44 that environmental factors in Iraq probably did not cause Barrios' condition. 32 Rather, he concluded that years of exposure to dry conditions and extreme sunlight generally were required to bring on symptoms. 33 Yet, Dr. Garcia did note that the dry and irritating environment in Iraq possibly made the condition worse. 3 4 Barrios first applied for disability benefits from Service Employees, both for the time when he was completely disabled and unable to work, and for his reduced earnings thereafter since he was unable to obtain similar compensation. 35 Service Employees denied his claim on the ground that his condition was not associated with his employment in Iraq. 36 Following Service Employees' denial, Barrios filed a claim with the United States Department of Labor under the Longshore and Harbor Workers' Compensation Act 3 7 ("LHWCA"), as extended by the DBA. 3 8 After an administrative hearing, an Administrative Law Judge ("ALJ"), acting on behalf of the Department of Labor, granted Barrios's claim for compensation and ordered Service Employees to pay Barrios for the time during which he was totally disabled and for his medical bills and decreased earnings. 39 Service Employees appealed the ALJ's decision to the Benefits Review Board, which affirmed the ALJ's issuance of the order. 40 Service Employees again appealed, this time to the Second Circuit. 4 1 The Second Circuit first addressed whether the court had jurisdiction to hear Service Employees' appeal of the Benefits Review Board decision. 42 The Second Circuit discussed the history of the DBA and the LHWCA, noting that Congress enacted the DBA to extend the LHWCA. 43 The LHWCA's purpose, the Second Circuit stated, was to provide workers' compensation to maritime employees, and the DBA extended that coverage to employees working either on military bases or on defense projects outside the United States." Id. at Id. 34. Id. 35. Id. at Id. After leaving the employment of Service Employees, Barrios found work with Groendyke Transport, but was not able to earn a salary comparable to his pay at Service Employees. Id U.S.C. 901 (2006). 38. Serv. Emps., 595 F.3d at Id. 40. Id. 41. Id. at 447, Id Id. at Id.

5 2011] CLAIMS UNDER THE DEFENSE BASE ACT 773 The Second Circuit noted that the DBA required the provisions of the LHWCA apply to the DBA except where the DBA's language explicitly deviated from the LHWCA. 45 One of those modifications in the DBA was the provision outlining which court had jurisdiction to review administrative decisions. 46 The original LHWCA, as enacted in 1927, provided for review in the United States District Court where the injury occurred. 47 Since injuries under the DBA only occur outside of the United States, the DBA provided for review in the district court where the office of the commissioner issuing the compensation order was located. 48 In 1972, Congress amended the LHWCA by creating a new Benefits Review Board to initially review decisions on an employee's claim, and by providing for appeals of Benefits Review Board decisions directly to the Court of Appeals where the injury occurred. 49 Congress did not, however, amend the DBA, and, thus, the DBA retained the language providing for judicial review in the United States District Courts. 50 After discussing the histories of the LHWCA and the DBA and the context in which the jurisdictional issue arose, the Second Circuit concluded that jurisdiction was proper in the United States Courts of Appeals. 51 The Second Circuit reasoned that Section 3(b) of the DBA was ambiguous. 52 The DBA provision, the Second Circuit pointed out, if read literally, allowed jurisdiction for initial review in both the United States District Courts and the United States Courts of Appeals. 53 Since judicial review could not exist simultaneously in both courts, the Second Circuit concluded that the statute was ambigu- 45. Id. at Compare Longshore and Harbor Workers' Compensation Act, ch. 509, 21, 44 Stat (1927) (current version at 33 U.S.C. 921 (2006)) (providing for judicial review of compensation orders in the district court where the injury occurred), with 42 U.S.C. 1653(b) (providing for review of compensation orders in the district court where the commissioner's office is located.). 47. Longshore and Harbor Workers' Compensation Act, ch. 509, 21, 44 Stat (1927) (current version at 33 U.S.C. 921 (2006)). 48. Serv. Emps., 595 F.3d at Id.; 33 U.S.C. 921(b)(3) (2006). 50. Serv. Emps., 595 F.3d at 452; 42 U.S.C. 1653(b) (still providing for district court review of benefits decisions). 51. See Serv. Emps., 595 F.3d at 452 (discussing the DBA's enactment as an extension of the LHWCA meant to provide workers' compensation to overseas employees and discussing the amendments made to the LHWCA in 1972 that were not also made to the DBA). 52. Id. at 453 (citing three cases from other circuits concluding that the DBA was unambiguous). 53. Id. (stating "read literally, 3(b) of the DBA states: 'Judicial proceedings provided under section[] of the Longshore and Harbor Workers' Compensation Act [which provides for initial review in the courts of appeals] shall be instituted in the United States [D]istrict [Clourt.' Initial review obviously cannot lie in both courts.") Id.

6 774 CREIGHTON LAW REVIEW [Vol. 44 ous. 5 4 The Second Circuit opined that the difference in opinions among circuits spoke to the ambiguity of the statute because it would be difficult to argue the statute was not ambiguous in the face of such different opinions. 55 After identifying the DBA provision as ambiguous, the Second Circuit interpreted the provision. 56 The Second Circuit began its analysis by looking to the context and purpose of the DBA. 57 This purpose, the Second Circuit stated, was to extend workers' compensation benefits under the LHWCA to employees working overseas on United States military bases or defense projects. 58 Based on the language in Section 1(a), the Second Circuit opined that Congress intended the DBA to track the LHWCA except where DBA provisions modified those of the LHWCA. 59 When Congress enacted the DBA, the Second Circuit explained, both the LHWCA and the DBA required United States District Courts review administrative decisions, the only modification being that the DBA designated judicial review be in the district where the applicable commissioner was located rather than in the district where the injury occurred. 60 Since Section 21 of the LHWCA already provided for United States District Court review, the DBA language designating jurisdiction in the district court was superfluous. 6 1 The purpose of the LHWCA amendments, the Second Circuit stated, was to provide for faster processing of compensation claims. 62 The amendments accomplished this purpose by creating the Benefits Review Board to review administrative decisions and by allowing parties to appeal the decisions of the Benefits Review Board directly to the court of appeals, eliminating the need for district court review Id. at Id. 56. Id. 57. Id. 58. Id. at Id. 60. See 42 U.S.C. 1653(b) (providing for judicial review in the district court where the office of the commissioner is located); Longshore and Harbor Workers' Compensation Act, ch. 509, 21, 44 Stat (1927) (current version at 33 U.S.C. 921 (2006)) (providing for judicial review in the district court where the injury occurred); see also Serv. Emps., 595 F.3d 447 at (noting that when DBA was enacted no reference to the district courts was needed since the DBA adopted the provisions of the LHWCA and the LHWCA already provided for district court review, and noting that the only reason the language was included was to identify the district court where proceedings could be brought). 61. Serv. Emps., 595 F.3d at 454. The court reasoned that the district court was mentioned in the DBA only to provide a means for determining which district court would have jurisdiction. Id. 62. Id. 63. Id.

7 2011] CLAIMS UNDER THE DEFENSE BASE ACT 775 The Second Circuit explained that based on the language of Section 1(a), which provided that the LHWCA's provisions as amended applied to covered injuries under the DBA, the 1972 amendments to the LHWCA applied to the DBA. 6 4 Since jurisdiction in the circuit where the injury occurred was not applicable under the DBA, Court of Appeals review under the DBA would lay in the circuit where the office of the Deputy Commissioner was located. 65 Judge Jos6 A. Cabranes dissented from the majority opinion, asserting that the DBA provisions unambiguously required United States District Courts to initially review Benefits Review Board compensation decisions. 66 Judge Cabranes opined that the DBA provision stated that jurisdiction lay in the United States District Courts, and that consideration of the DBA's purpose was inappropriate given the fact that the words of the DBA were unambiguous. 67 Judge Cabranes also pointed out that the only circuit to have supported jurisdiction in the United States Courts of Appeals was the United States Court of Appeals for the Ninth Circuit, and that other circuits that had considered the question had decided in favor of jurisdiction in the United States District Courts. 68 Although Judge Cabranes noted that the difference in judicial review provisions was possibly a mistake on the part of Congress, he pointed out that courts were not entitled to make that determination when the language of the statute is unambiguous. 6 9 Only if the mistake produced an absurd result, Judge Cabranes noted, would that sort of speculation be proper. 70 Judge Cabranes stated that it was not an absurd result to continue to apply the DBA as it existed before the 1972 amendments. 7 ' Thus, Judge Cabranes concluded that the Second Circuit should have followed the plain language of the DBA Id. 65. Id. The court implied that because the DBA applied to overseas workers, jurisdiction could not exist in the circuit where the injury occurred, since DBA injuries necessarily occurred outside of any United States judicial district. Id. at 453, Id. at (Cabranes, J., dissenting). 67. Id. at Id. 69. Id. at Id. 71. Id. 72. Id.

8 776 CREIGHTON LAW REVIEW [Vol. 44 III. BACKGROUND A. THE LONGSHORE AND HARBOR WORKERS' COMPENSATION ACT AND THE DEFENSE BASE ACT 1. The Longshore and Harbor Workers' Compensation Act The Longshore and Harbor Workers' Compensation Act 7 3 ("LHWCA") provides workers' compensation to employees injured or killed while working on navigable waters in the United States. 74 Under the LHWCA, an employee injured while working on United States waters may file a claim for benefits with the deputy commissioner of the United States Department of Labor, who initially determines whether someone should receive workers' compensation benefits. 75 As originally enacted, an interested party could bring proceedings to set aside the deputy commissioner's decisions in the United States District Court where the injury occurred. 76 However, Congress amended the LHWCA in 1972 such that an interested party had to first appeal to a Benefits Review Board. 77 Thereafter, a party could bring judicial review proceedings of the Benefits Review Board decision only in the United States Court of Appeals for the circuit in which the injury occurred The Defense Base Act Congress enacted the Defense Base Act 79 ("DBA") in 1941 to extend workers' compensation coverage under the Longshore and Harbor Workers' Compensation Act 80 ("LHWCA") to employees working outside the United States on military bases or on government contracts. 8 ' The DBA provides that the provisions of the LHWCA apply, except as modified by the DBA. 8 2 Section 1653(b) provides that claimants can bring judicial proceedings in the United States District Court where the office of the commissioner issuing the compensation order is located U.S.C. 901 (2006). 74. Id. at 903(a). 75. See id. at 919(a) (providing that compensation claims may be filed with the deputy commissioner who makes a determination on that claim). 76. Longshore and Harbor Workers' Compensation Act, ch. 509, 21,44 Stat (1927) (current version at 33 U.S.C. 921 (2006)) U.S.C. 921(a), (c). 78. Home Indem. Co. v. Stillwell, 597 F.2d 87, 90 (6th Cir. 1979); 33 U.S.C. 921(a)(1), (a)(3), (a)(5)(c) (2006) U.S.C (2006) U.S.C. 901 (2006). 81. Serv. Emps. Int'l, Inc. v. Dir., Office of Workers' Comp. Programs, 595 F.3d 447, 452, 453 (2d Cir. 2010); 42 U.S.C. 1651(a) (2006) U.S.C. 1651(a). 83. Id. at 1653(b).

9 2011] CLAIMS UNDER THE DEFENSE BASE ACT 777 B. UNITED STATES COURT OF APPEALS DECISIONS FINDING THAT THE UNITED STATES DISTRICT COURTS HAD JURISDICTION TO REVIEW BENEFITS REVIEW BOARD DECISIONS UNDER THE DEFENSE BASE ACT 1. Home Indemnity Co. v. Stillwell: The Sixth Circuit was the First Court of Appeals to Determine Jurisdiction Proper in the District Courts In Home Indemnity Co. v. Stillwell, 84 the United States Court of Appeals for the Sixth Circuit decided judicial review for compensation orders under the Defense Base Act 85 ("DBA") was proper in the United States District Courts, rather than in the United States Courts of Appeals. 8 6 In Home Indemnity, Jackie Stillwell ("Stillwell"), an employee of Robert E. Lee Electric Company ("Lee"), died after sustaining an electric shock while working at Guantanamo Bay. 8 7 Stillwell's widow applied for benefits under the DBA, and Home Indemnity, the company that provided workers' compensation coverage for Lee, denied that its coverage extended to work performed at Guantanamo Bay. 88 After an administrative hearing, an Administrative Law Judge ("ALJ") found that Home Indemnity did provide coverage and that Home Indemnity was liable for Stillwell's benefits. 8 9 Home Indemnity appealed to the Benefits Review Board, which affirmed that Home Indemnity was liable. 9 0 Home Indemnity appealed the Benefits Review Board decision to the United States Court of Appeals for the Sixth Circuit. 9 1 The Sixth Circuit determined that it did not have jurisdiction to hear Home Indemnity's appeal. 92 The Sixth Circuit noted that Congress intended the DBA to adopt the Longshore and Harbor Workers' Compensation Act's 9 3 ("LHWCA") provisions, except for certain modifications. 9 4 The Sixth Circuit pointed out that one of these modifications related to judicial review of compensation orders and provided that this review should commence in the United States District Court F.2d 87 (6th Cir. 1979) U.S.C (2006). 86. Home Indem. Co. v. Stillwell, 597 F.2d 87, 88, 89 (6th Cir. 1979). 87. Home Indem., 597 F.2d at 88. Heyl & Patterson International had a contract with the United States Navy to perform electrical work at Guantanamo Bay and subcontracted with Lee to perform a portion of that work. Id. 88. Id. 89. Id. The ALJ found that Home Indemnity had agreed to provide coverage based on statements made by an authorized agent. Id. 90. Id. 91. Id. at 87, Id. at U.S.C. 901 (2006). 94. Home Indem., 597 F.2d at

10 778 CREIGHTON LAW REVIEW [Vol. 44 where the office of the commissioner who issued the compensation order was located. 95 This language, the Sixth Circuit pointed out, was on its face unambiguous. 96 Prior to 1972, the Sixth Circuit noted, both the DBA and the LHWCA provided for judicial review in the United States District Courts. 97 In 1972, however, Congress amended the LHWCA's judicial review provision to provide for review in the United States Courts of Appeals, but did not amend the DBA's judicial review provision. 98 Since Congress had not amended the DBA provision, the Sixth Circuit reasoned, it must continue to follow the provision as written, which provided the United States District Courts with jurisdiction for judicial review. 99 Thus, the Sixth Circuit dismissed Home Indemnity's petition on the ground that the district court was the proper court to hear its appeal AFIA/CIGNA Worldwide v. Felkner: The Fifth Circuit Adopted the Sixth Circuit's Position that the United States District Courts Had Jurisdiction Over Defense Base Act Appeals In AFIAICIGNA Worldwide v. Felkner,' 0 the United States Court of Appeals for the Fifth Circuit confronted the issue of whether the 1972 amendments to the Longshore and Harbor Workers' Compensation Act' 0 2 ("LHWCA") applied to Defense Base Act' 03 ("DBA") claims.' 04 The Fifth Circuit stated that LHWCA procedures governed DBA claims, except where the DBA specifically modified LHWCA provisions.10 5 Thus, the Fifth Circuit determined that the DBA's judicial review provision modified the LHWCA's provision, and, therefore, review proceedings should commence in the United States District Courts.06 In Felkner, Wanda Frazier ("Frazier") sustained injuries and became permanently disabled while working for American Express on an Air Force base in West Germany.' 07 A deputy commissioner awarded Frazier workers' compensation benefits under the DBA Id. at Id. 97. Id. 98. Id. at Id Id F.2d 1111 (5th Cir. 1991) U.S.C. 901 (2006) U.S.C (2006) AFIA/CIGNA Worldwide v. Felkner, 930 F.2d 1111, 1114 (5th Cir. 1991) Felkner, 930 F.2d at Id. at Id. at Id.

11 20111 CLAIMS UNDER THE DEFENSE BASE ACT 779 American Express and its insurer, AFIA/CIGNA Worldwide ("AFIA/ CIGNA"), sought review of the decision both in the United States District Court for the Southern District of Texas, and from the Benefits Review Board as required under the LHWCA.10 9 The district court dismissed AFIA/CIGNA's claim, stating that the district court did not have subject matter jurisdiction, and that jurisdiction lay with the Benefits Review Board.1 0 AFIA/CIGNA appealed the district court's decision to the United States Court of Appeals for the Fifth Circuit."' When deciding whether the district court had jurisdiction to hear AFIA/CIGNA's appeal, the Fifth Circuit initially noted that the first section of the DBA stated that the LHWCA's provisions applied to the DBA except where the DBA's provisions modified those of the LHWCA.11 2 The Fifth Circuit reasoned that legislative history did not suggest Congress intended the DBA to follow only the provisions of the LHWCA as in effect when Congress enacted the DBA.11 3 Thus, the Fifth Circuit found that the LHWCA amendments applied to the DBA except where DBA provisions modified those of the LHWCA.114 The Fifth Circuit concluded that the DBA adopted the LHWCA amendments and then turned specifically to Section 21 of the LWHCA, as amended in These amendments changed the procedures for reviewing compensation orders by creating a Benefits Review Board to initially review compensation orders and by providing for judicial review of Benefit Review Board decisions in the Courts of Appeals." 6 Congress did not, however, concurrently amend the DBA's judicial review provision, which provided for review of compensation orders in the United States District Courts." 7 The Fifth Circuit concluded that the LHWCA amendment providing for initial review of decisions in the Benefits Review Board applied to DBA claims.11 8 Following Benefits Review Board review of compensation orders, the Fifth Circuit concluded, judicial review of compensation orders under the DBA should begin in the district courts.1 9 The Fifth Circuit pointed out that the DBA provision was unambiguous in requiring judicial review of DBA compensation orders in the United States District Courts and that modifying this unambiguous 109. Id Id Id. at 1111, Id. at 1112, Id. at Id Id. at Id Id. at Id Id.

12 780 CREIGHTON LAW REVIEW [Vol. 44 language was equivalent to judicial legislation.1 20 The Fifth Circuit noted that to interpret the statute differently would require some express showing that the legislature intended a different interpretation Lee v. Boeing Co., Inc.: The Fourth Circuit Followed the Majority of Circuits and Found United States District Courts Had Jurisdiction to Hear Appeals Under the Defense Base Act In Lee v. Boeing Co., Inc., 122 the United States Court of Appeals for the Fourth Circuit considered Boeing's argument that jurisdiction for Defense Base Act' 2 3 ("DBA") claims rested in the United States District Courts rather than in the United States Courts of Appeals, and concluded that judicial review of DBA claims was proper in the district courts.1 24 In Lee, Raymond Lee ("Lee") was an employee of United Support and Services Company ("USAS"), a subcontractor of Boeing, who worked on a United States Department of Defense project in Saudi Arabia.1 25 Lee sustained injuries while working in Saudi Arabia, and, as a result, became paralyzed from the neck down.1 26 Lee received benefits under the DBA, but also received benefits from Saudi Arabia under its social insurance laws.1 27 Since Lee was receiving benefits from both Saudi Arabia and from Boeing, Boeing requested a credit for the benefits Lee received from Saudi Arabia.1 28 The district director of the Office of Workers' Compensation Programs vacated Boeing's compensation order, and Lee requested a hearing before an Administrative Law Judge ("ALJ").1 29 The ALJ, after a hearing, granted Boeing's motion for summary decision on the ground that Boeing was entitled to the credit because Lee was receiving other workers' compensation under Saudi Arabian law Lee appealed to the Benefits Review Board, which affirmed the ALJ's decision.' 3 ' Lee 120. Id. at 1116 (citing Maine v. Thiboutot, 448 U.S. 1, 4 (1980)) See id. (noting that the court would interpret the DBA according to its clear wording) F.3d 801 (4th Cir. 1997) U.S.C (2006) Lee v. Boeing Co., 123 F.3d 801, 803 (4th Cir. 1997) Lee, 123 F.3d at Id Id. at 802, See Id. at 803 & n.3 (providing that under LHWCA 3(e) an employer may receive a credit for any amounts paid to the employee under any other workers' compensation law for the same injury) Id. at Id Id. The Benefits Review Board affirmed based on a requirement that all appeals pending for more than one year be automatically affirmed. Id. at 803 n.4.

13 2011] CLAIMS UNDER THE DEFENSE BASE ACT 781 appealed the Benefits Review Board decision to the Fourth Circuit.132 Boeing then challenged the Fourth Circuit's jurisdiction to hear Lee's appeal, arguing that only the United States District Court for the District of Maryland had jurisdiction On the jurisdictional question, the Fourth Circuit noted that the DBA adopted all provisions of the Longshore and Harbor Workers' Compensation Actl 34 ("LHWCA") except where the DBA modified those provisions.' 3 5 The Fourth Circuit pointed out that prior to 1972, both the DBA and the LHWCA provided for review of compensation orders in the United States District Courts, but each contained a different provision for determining which district court had jurisdiction In 1972, Congress amended the LHWCA's judicial review provision to provide for review in the United States Courts of Appeals and to create a new Benefits Review Board as an initial administrative review.' 37 Since no provision of the DBA modified the new Benefits Review Board provision, the Fourth Circuit explained that the 1972 amendment applied to DBA claims as well as LHWCA claims.1 38 The Fourth Circuit noted, however, that Congress had not amended the DBA judicial review provision, so that judicial review remained in the United States District Courts rather than the United States Courts of Appeals, as the LHWCA provided.' 39 Although it noted that the difference in judicial review procedures between DBA and LHWCA claims might have been an accident, the Fourth Circuit reasoned that it was bound to follow the unambiguous language of the statute.1 40 This requirement, the Fourth Circuit noted, was based on the rule articulated by the United States Supreme Court that courts must follow the unambiguous language of a statute, and must presume when interpreting statutes that the legislature said what it intended to say.14' The Fourth Circuit concluded, based on the unambiguous language in the DBA, that judicial review must lie in the United States District Courts.1 42 In support of its conclusion, the Fourth Circuit referenced the decisions of the United States Court of Appeals for the Fifth and Sixth Circuits, both of which also had held that United States District Courts had jurisdiction to 132. Id. at Id U.S.C. 901 (2006) Lee, 123 F.3d at Id. at Id Id Id. at Id. at Id. (quoting Connecticut Nat'1 Bank v. Germain, 503 U.S. 249, (1992)) Id.

14 782 CREIGHTON LAW REVIEW [Vol. 44 hear appeals of Benefits Review Board decisions.1 43 The Fourth Circuit in Lee also noted that the United States Court of Appeals for the Ninth Circuit had reached the opposite result, but refused to follow the Ninth Circuit's decision on the ground that it was based on speculation and was not in line with the plain language of the statute.1 44 Thus, the Fourth Circuit in Lee concluded that jurisdiction for review of DBA cases lies in the United States District Courts, and transferred Lee's case to the district court ITT Base Services v. Hickson: The Eleventh Circuit Solidifies the Majority Position by Following the Fourth, Fifth, and Sixth Circuit Holdings In ITT Base Services v. Hickson,1 46 the United States Court of Appeals for the Eleventh Circuit considered the issue of whether United States District Courts or United States Courts of Appeals had jurisdiction to hear appeals under the Defense Base Actl 47 ("DBA") and held that only district courts could review these claims.1 48 In Hickson, Whit Hickson ("Hickson"), an employee of ITT Base Services ("ITT"), sustained physical and psychological injuries as a result of a boating accident while Hickson was working near a naval base on Midway Island.1 49 Hickson applied for disability benefits under the DBA, but ITT challenged Hickson's claim on the grounds that the boating accident was not the cause of Hickson's injuries and that Hickson's injuries were not as severe as Hickson claimed.' 50 After a hearing, an Administrative Law Judge ("ALJ") found that Hickson suffered from post-traumatic stress disorder as a result of his accident and was permanently and totally disabled as a result of his psychological injuries.' 5 ' As a result, the ALJ awarded Hickson disability benefits ITT appealed, again arguing the boat accident did not cause Hickson's injuries.1 53 The Benefits Review Board affirmed the ALJ's decision based on a provision that required the Benefits Review Board to automatically affirm all appeals that had been pending for more 143. Lee, 123 F.3d 801 at (citing Home Indem. Co. v. Stillwell, 597 F.2d 87 (6th Cir. 1979); AFIA/CIGNA Worldwide v. Felkner, 930 F.2d 1111 (5th Cir. 1991)) Lee, 123 F.3d 801 at 806 (citing Pearce v. Dir., Office of Workers' Comp. Programs, 603 F.2d 763 (9th Cir. 1979)) Id. at 805, F.3d 1272 (11th Cir. 1998) U.S.C (2006) ITT Base Servs. v. Hickson, 155 F.3d 1272, 1274, 1275 (11th Cir. 1998) Hickson, 155 F.3d at Id Id. at 1273, n Id. at Id.

15 2011] CLAIMS UNDER THE DEFENSE BASE ACT 783 than one year.154 ITT again appealed, this time to the United States Court of Appeals for the Eleventh Circuit. 155 On appeal, Hickson argued that the Eleventh Circuit lacked jurisdiction, and that ITT should have brought its appeal in the district court.1 56 The Eleventh Circuit noted that the DBA adopted all provisions of the Longshore and Harbor Workers' Compensation Act' 5 7 ("LHWCA") except where modified by any DBA provision. 158 While the LHWCA provided for review in the United States Courts of Appeals, the DBA provided for review of benefits decisions in the United States District Courts.' 59 The Eleventh Circuit noted that although the provisions had initially both provided for district court review of compensation orders, Congress had not amended the DBA at the same time it amended the LHWCA to provide for United States Court of Appeals review. 160 This fact, along with the DBA's incorporation of all LHWCA provisions that the DBA did not modify, led the Eleventh Circuit to hold that appeals of DBA decisions should commence in the district courts Although the Director of the Office of Workers' Compensation Programs argued that by deciding that the court's holding would create a difference in procedures that Congress did not intend, the Eleventh Circuit maintained that Congress would have to correct any unintended disparity, not the courts.1 62 The Eleventh Circuit concluded that it lacked jurisdiction to hear ITT's appeal, and transferred the case to the district court. 63 C. PEARCE v. DIRECTOR, OFFICE OF WoRKERS' COMPENSATION PROGRAMS: THE NINTH CIRCUIT FOUND JURISDICTION PROPER IN THE UNITED STATES COURTS OF APPEALS In Pearce v. Director, Office of Workers' Compensation Programs,1 6 4 the United States Court of Appeals for the Ninth Circuit decided the issue of whether appeals of Benefits Review Board decisions under the Defense Base Act' 65 ("DBA") must be brought in the 154. Id. at 1273, n.2 (citing PL , Title I, 101(d), 110 Stat 1321, (April 26, 1996)) Id. at Id. 33 U.S.C. 901 (2006) Id. at 1274, n Id. at Id Id. at Id Id. at F.2d 763 (9th Cir. 1979) U.S.C (2006).

16 784 CREIGHTON LAW REVIEW [Vol. 44 district court, as the language of the DBA provided, or in the United States Courts of Appeals, as the language of the amended Longshore and Harbor Workers' Compensation Act 1 66 ("LHWCA") provided.1 67 The Ninth Circuit concluded that the United States Courts of Appeals were the proper courts to hear DBA appeals.' 6 8 In Pearce, Gerry Pearce ("Pearce") became permanently disabled as a result of injuries sustained while he was working near an air force base in Thailand.1 69 A deputy commissioner ("commissioner") in Chicago, where the Department of Labor transferred Pearce's claim after he moved from Hawaii to Illinois, found Pearce permanently disabled and increased Pearce's benefits.' 70 Pearce later applied to receive his benefits as a lump sum rather than in biweekly installments, but the commissioner denied Pearce's request. Pearce appealed the commissioner's decision to the Benefits Review Board, which affirmed.171 Pearce then appealed to the United States Court of Appeals for the Ninth Circuit.1 72 The Director of the Office of Workers' Compensation Programs ("Director") argued that jurisdiction was proper in the United States Court of Appeals for the Seventh Circuit, while Pearce argued that jurisdiction was proper in the Ninth Circuit. 73 The Ninth Circuit noted that three possible courts could have jurisdiction over Pearce's petition: under the Director's argument, the Seventh Circuit should have jurisdiction; under Pearce's argument, jurisdiction would be proper in the Ninth Circuit; and under a recent Sixth Circuit decision, jurisdiction would lay in the United States District Court for the Northern District of Illinois.1 74 The Ninth Circuit noted that to determine in which court jurisdiction was proper, it would first need to determine the applicability of LHWCA amendments to provisions of the DBA.1 75 In deciding that jurisdiction for DBA claims was proper in the United States Courts of Appeals, the Ninth Circuit noted that Congress enacted the DBA as an extension of the LHWCA and intended the DBA to track the LHWCA's provisions except where provisions of U.S.C. 901 (2006) Pearce v. Dir., Office of Workers' Comp. Programs, 603 F.2d 763, 764 (9th Cir. 1979) See Pearce, 603 F.2d at 770 (discussing that the proper court to review compensation orders is the court of appeals where the commissioner's office is located) Id. at Id Id Id Id. Both Pearce and the Director argued that jurisdiction was proper in the Courts of Appeals based on Section 1 of the DBA, which incorporates LHWCA provisions. Id. at Id. (citing Home Indem. Co. v. Stillwell, 597 F.2d 87 (6th Cir. 1979)) Pearce, 603 F.3d at 765.

17 20111 CLAIMS UNDER THE DEFENSE BASE ACT 785 the DBA expressly differed.17 6 As originally enacted, both the DBA and the LHWCA provided for review of the commissioner's decision in the United States District Courts.' 77 One difference between the statutes was that under the DBA, the district where the commissioner was located was the proper district for the claim, while under the LHWCA, the district where the injury occurred was the proper district for the claim.' 78 Congress amended the LHWCA in 1972 to allow a party to appeal to a Benefits Review Board and to provide for appeals of Benefits Review Board decisions directly to the United States Courts of Appeals.1 79 Congress did not amend the DBA, however, and the LHWCA amendments did not specifically state that they also applied to the DBA.' 80 This resulted, the Ninth Circuit pointed out, in the issue of whether the United States District Courts or the United States Courts of Appeals had jurisdiction to hear DBA appeals.181 To decide this issue, the Ninth Circuit first concluded that the DBA was a statute of general reference.1 82 The Ninth Circuit reached this conclusion based on the language of the DBA itself, which stated that provisions of the LHWCA should apply except where modified by the DBA. 83 The Ninth Circuit reviewed the legislative committee reports that referred to the DBA as an extension of the LHWCA.' 84 As an extension of the LHWCA, the Ninth Circuit opined, Congress intended the DBA to incorporate both the LHWCA as it existed when Congress enacted the DBA, and any subsequent amendments to the LHWCA.1 85 The Ninth Circuit also noted that the Supreme Court of the United States and other courts had already applied many of the other LHWCA amendments to DBA cases, and that this further supported the finding that Congress intended the DBA to generally incorporate the LWHCA.' 86 The Ninth Circuit explained that, generally, the language of the statute is the starting point to interpreting the statute and its pur Id See generally LHWCA c. 509, 21, 44 Stat (1927) (current version at 33 U.S.C. 921(b) (2006)) (providing for review in the district court where the injury occurred) Pearce, 603 F.2d at Id Id. at See Id. (noting the fact that the amendments to the LHWCA did not specifically amend the provisions of the DBA, which would leave the DBA's judicial review procedures unchanged unless the DBA incorporates LHWCA amendments) See Id. at (noting that a statute is of general reference if it is meant to adopt a law as it exists at any time, including amendments, whereas a statute is of specific reference if it is meant to adopt only certain provisions of another statute) Id Id. at Id Id.

18 786 CREIGHTON LAW REVIEW [Vol. 44 pose.1 87 The Ninth Circuit reasoned that Congress intended the DBA's judicial review provision as a specific reference to the LHWCA. 88 As such, the Ninth Circuit reasoned, the DBA provision's purpose was to introduce the language that provided guidance for determining which district court had jurisdiction. 8 9 Thus, the Ninth Circuit reasoned that the DBA provision should follow the LHWCA provision regarding judicial review with a modification in the language for determining which court of appeals would have jurisdiction. 190 Under this interpretation, the Ninth Circuit opined, the LHWCA amendments applied to the DBA, and would now provide for judicial review in United States Courts of Appeals.191 After deciding that the circuit courts were the proper courts to hear the appeal, the Ninth Circuit concluded that the Seventh Circuit was the proper court to hear Pearce's appeal, and transferred the case to that court.1 92 IV. ANALYSIS In Service Employees International v. Director, Office of Workers' Compensation Programs, 9 s the United States Court of Appeals for the Second Circuit examined the issue of whether the United States Courts of Appeals or the United States District Courts had jurisdiction under the Defense Base Act' 94 ("DBA") to review Benefits Review Board decisions regarding benefits claims and determined that the Courts of Appeals had jurisdiction over these claims. 19 The DBA provided for district court review of Benefits Review Board decisions.' 96 However the DBA, enacted as an extension of the Longshore and Harbor Workers' Compensation Act' 97 ("LHWCA"), adopted nearly all the provisions of the LHWCA.s 98 The LHWCA, as amended in 1972, provided for United States Court of Appeals review of Benefits Review Board decisions.' Id. at Id. at Id. at 770 (noting that the LHWCA provided for judicial review in the district court where the injury occurred, but since DBA injuries occurred outside any judicial district the DBA provided for review in the district where the commissioner's office was located) Id Id Id. at F.3d 447 (2d Cir. 2010). 42 U.S.C (2006) Serv. Emps. Int'l v. Dir., Office of Workers' Comp. Programs, 595 F.3d 447, (2d Cir. 2010) Serv. Emps., 595 F.3d at U.S.C. 901 (2006) Serv. Emps., 595 F.3d at 452. Id.

19 20111 CLAIMS UNDER THE DEFENSE BASE ACT 787 The Second Circuit concluded that the United States Courts of Appeals were the proper courts to hear appeals from Benefits Review Board decisions and engaged in a two part analysis to reach its conclusion. 200 First, the Second Circuit determined that the language of the judicial review provision of the DBA was ambiguous, and thus had to interpret the statute's correct meaning. 201 Next, the Second Circuit analyzed the broader context and purpose of the DBA and determined that the United States Courts of Appeals were the proper courts to review Benefits Review Board decisions. 202 This Analysis will argue that the Second Circuit's decision in Service Employees was incorrect for two reasons. 203 First, the Analysis will argue that the Second Circuit in Service Employees erred in finding that the language of the DBA's judicial review provision was ambiguous. 204 Particularly, the Analysis will show that the Second Circuit failed to follow the plain meaning rule when interpreting the language of the DBA and failed to consider the DBA's other provisions, both of which supported a finding that the DBA was unambiguous Second, this Analysis will argue that, in light of the unambiguous nature of the DBA provisions, the Second Circuit in Service Employees incorrectly considered the DBA's purpose and intent in making its determination regarding the proper court to hear Benefits Review Board appeals. 206 A. THE SECOND CIRCUIT ERRED IN FINDING THAT THE DEFENSE BASE ACT'S JUDICIAL REVIEW PROVISION WAS AMBIGUOUS The United States Court of Appeals for the Second Circuit in Service Employees International v. Director, Office of Workers' Compensation Programs, 207 considered the meaning of the Defense Base Act'S 208 ("DBA") jurisdictional provision and determined that the provision was ambiguous because, when considered in conjunction with Section 21 of the Longshore and Harbor Workers' Compensation Act 209 ("LHWCA"), the provision conferred jurisdiction on both the United States Courts of Appeals and the United States District 200. Id. (stating that they would first look to whether the DBA was ambiguous and then address the jurisdictional issue) Id. at Id. at 452, See infra notes and accompanying text See infra notes and accompanying text See infra notes and accompanying text See infra notes and accompanying text F.3d 447 (2d Cir. 2010) U.S.C (2006) U.S.C. 901 (2006).

20 788 CREIGHTON LAW REVIEW [Vol. 44 Courts This finding was incorrect for two reasons. 211 First, the Second Circuit failed to interpret the language of the statute according to its plain meaning. 212 Second, the Second Circuit did not consider the broader context and language of the DBA, which would have removed any ambiguity regarding the statute's application The Second Circuit Failed to Interpret the Language of the Defense Base Act's Judicial Review Provision According to its Plain Meaning In Service Employees International v. Director, Office of Workers' Compensation Programs, 2 14 the United States Court of Appeals for the Second Circuit failed to interpret the language of the Defense Base Act'S215 ("DBA") judicial review provision according to its plain meaning, because it looked to the Longshore and Harbor Workers' Compensation Act 216 ("LHWCA") to interpret the meaning of the DBA, rather than relying on the relevant language of the DBA provision. 217 That DBA provision stated that jurisdiction for appeals of compensation orders was proper in the United States District Courts where the office of the commissioner who issued the compensation order was located. 218 In Lee v. Boeing Co.,219 the Fourth Circuit found that, under the DBA, the United States District Courts were the proper courts to review benefits determinations. 220 The court in Lee relied on the rule, articulated by the United States Supreme Court, that a court must begin its analysis of a statute by considering the statute's plain language, and that courts must assume that the legislature said in the statute what it intended to say The Fourth Circuit further clarified that a court determines the plain language of a statute by inter Serv. Emps. Int'l v. Dir., Office of Workers' Comp. Programs, 595 F.3d 447, 453 (2d Cir. 2010) See infra notes and accompanying text See infra notes and accompanying text See infra notes and accompanying text F.3d 447 (2d Cir. 2010) USC 1651 (2006) U.S.C. 901 (2006) Compare Serv. Emps. Int'l. v. Dir., Office of Workers' Comp. Programs, 595 F.3d 447, 453 (2d Cir. 2010) (considering both DBA Section 3(b) and LHWCA Section 21 when interpreting the language of DBA Section 3(b) and finding that the DBA provision was ambiguous), with 42 U.S.C. 1653(b) (2006) (providing that claims brought under LHWCA Section 21 should be instituted in the district court where the commissioner's office is located) USC 1653(b) (2006) F.3d 801 (4th Cir. 1997) Lee v. Boeing Co., 123 F.3d 801, 803 (4th Cir. 1997) Lee, 123 F.3d at 805 (citing Connecticut Nat'l Bank v. Germain, 503 U.S. 249 (1992)).