Sickle v. Torres Advanced Enterprise Solutions, LLC

Citations: 17 F. Supp. 3d 10; 37 I.E.R. Cas. (BNA) 908; 2013 U.S. Dist. LEXIS 180045; 2013 WL 7231238Docket: Civil Action No. 2011-2224

Court: District Court, District of Columbia; December 24, 2013; Federal District Court

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Plaintiffs David Sickle and Matthew Elliot, former military subcontractors for Torres Advanced Enterprise Solutions, LLC (Torres AES), allege retaliatory discharge against the company and its principal, Scott Torres. The claim arises after Elliot filed for workers' compensation under the Defense Base Act (DBA) following a back injury sustained while working in Iraq. The plaintiffs assert that Elliot was terminated in retaliation for his claim, violating 33 U.S.C. § 948a, and they also allege tort and contract breaches under common law.

Currently before the court is the defendants' motion to dismiss the complaint under Rule 12(b)(6), arguing that the DBA and the Longshore and Harbor Workers’ Compensation Act (LHWCA) provide the exclusive remedy for the plaintiffs' injuries. The court agrees with this argument, granting the motion to dismiss the amended complaint.

Background details include that Torres AES provides security services for the Department of Defense and other agencies abroad. Sickle worked as a medic, and Elliot was a kennel master at Forward Operating Base Shield in Iraq. After Elliot injured his back while lifting sandbags, he received medical treatment from Sickle. Following a failed attempt to secure DBA benefits, Elliot eventually received medical coverage and temporary total disability benefits. However, he was terminated by Scott Torres shortly after filing the workers' compensation claim, with allegations that the defendants misrepresented the claim to insurance representatives as false.

Plaintiffs allege that Torres AES and Scott Torres were aware of Mr. Sickle’s report confirming Mr. Elliot's workplace injury before Sickle returned home and that they sent agents to Iraq in June 2010 to intimidate Sickle into retracting his report. The amended complaint states that Elliot's contract required a 28-day notice for termination by certified mail, with the necessity of written notice being a disputed fact irrelevant to the case's resolution. After Sickle refused to retract his statement, Defendants expressed anger and sent him back to the U.S. for thirty days to reconsider. When Sickle again refused, Scott Torres allegedly terminated him without the required notice and in retaliation for assisting Elliot with his DBA claim.

The procedural history indicates that Plaintiffs filed a complaint on December 14, 2011, and an amended complaint on April 9, 2012, alleging wrongful discharge in retaliation for filing a valid workers’ compensation claim, which Scott Torres deemed fraudulent. The amended complaint includes four counts: 1) discrimination and retaliatory discharge under 33 U.S.C. § 948a (Count I), 2) breach of contract and good faith (Count II), 3) common law retaliatory discharge (Count III), and 4) conspiracy and prima facie tort related to actions taken with their workers’ compensation insurer (Count IV). Defendants filed a motion to dismiss on April 27, 2012, arguing failure to state a claim and lack of personal jurisdiction concerning Scott Torres. They assert that the DBA provides the exclusive remedy for the alleged injuries, raising issues of exhaustion and preemption, and argue that Plaintiffs failed to present sufficient facts for retaliatory termination claims. Defendants also contend that common law claims for breach of contract and prima facie tort are not recognized. The motion became ripe for decision on June 1, 2012, and the case was reassigned on April 5, 2013, with a hearing held on June 6, 2013. The legal standards for dismissal focus on the argument that retaliatory discharge claims should be processed through the DBA's administrative framework and that the DBA preempts several of the Plaintiffs' claims.

Defendants in this District face uncertainty regarding whether to assert exhaustion and preemption defenses as jurisdictional defects under Rule 12(b)(1) or as failures to state a claim under Rule 12(b)(6). A Rule 12(b)(1) motion tests subject matter jurisdiction, placing the burden on the plaintiff to prove jurisdiction by a preponderance of the evidence. In such cases, the court must accept all factual allegations in the complaint as true and draw favorable inferences for the plaintiff. However, the court can also consider evidence outside the complaint without disregarding the truth of the allegations.

Conversely, a Rule 12(b)(6) motion evaluates the legal sufficiency of the complaint, requiring enough factual content to state a plausible claim for relief. The court must accept factual allegations as true and grant the plaintiff reasonable inferences, but it is not obligated to accept unsupported inferences or legal conclusions disguised as factual allegations. If the facts fail to establish a valid claim, the motion must be granted.

In this instance, the Court finds that plaintiffs cannot pursue a Defense Base Act (DBA) retaliation claim without first utilizing the DBA’s administrative process, which neither has done. Furthermore, the DBA preempts the claims in Counts II-IV of their amended complaint. Therefore, the Court will not resolve the debate between the applicability of Rule 12(b)(1) and Rule 12(b)(6). The DBA, enacted in 1941, provides a federal workers' compensation system for civilian employees stationed at military installations outside the continental United States.

Congress expanded the Defense Base Act (DBA) to include contractors at military bases, integrating provisions from the Longshore and Harbor Workers’ Compensation Act (LHWCA) rather than creating a new compensation system. The DBA/LHWCA framework provides a compromise: employers give up tort defenses in exchange for limited liability, while employees accept restricted recovery for prompt relief without the costs associated with tort actions. Claims are processed through a six-step administrative procedure by the Department of Labor (DOL), which includes hearings before an Administrative Law Judge (ALJ) and appeals to the Benefits Review Board (BRB), with further review possible in federal court.

The LHWCA and DBA prohibit employer discrimination against employees who claim benefits or assist others in claims. Violations lead to penalties between $1,000 and $5,000, and employees must be reinstated with back pay if eligible. The DOL's Office of Workers’ Compensation Programs (OWCP) manages discrimination claims, requiring a district director to investigate complaints within five days. If retaliation is found, the director recommends penalties and reinstatement. Disagreements with the director’s findings can be escalated to a formal hearing before the Chief Administrative Law Judge, with subsequent appeals to the BRB and potential judicial review in federal court. Non-compliance with final compensation orders can lead to enforcement actions in federal district court.

The Defense Base Act (DBA) includes an exclusivity clause that limits the liability of employers, contractors, and subcontractors to their employees regarding workers' compensation claims, overriding any other legal liabilities under state law. This exclusivity has been affirmed in case law, which indicates that claims related to torts are barred under the DBA. There is a split among circuits over whether appellate review of final Benefits Review Board (BRB) orders under the DBA falls under circuit or district court jurisdiction, with some circuits arguing that the jurisdiction established by the Longshore and Harbor Workers' Compensation Act (LHWCA) amendments does not pertain to the DBA.

Defendants in a current case assert that plaintiffs cannot initiate a lawsuit for a retaliation claim under the DBA/LHWCA without first exhausting administrative remedies through the Department of Labor (DOL). They argue that all claims related to workers' compensation, including common law claims, are preempted by the DBA/LHWCA's exclusive remedy provisions. The court notes uncertainty regarding whether the plaintiffs are indeed pursuing a retaliation claim under the DBA, as the plaintiffs' amended complaint suggests intent to assert such a claim but their response to the motion to dismiss implies a potential withdrawal from this assertion. Confusion arises from the defendants' failure to clearly delineate their arguments regarding exhaustion of remedies and preemption, leading to a misinterpretation that the plaintiffs' common law claims are barred solely due to the assertion of a statutory DBA retaliation claim.

Plaintiffs bringing a First-Amended Complaint under the DBA/LHWCA are constrained to the exclusive remedies provided by these statutes and cannot bypass the required administrative processes to pursue claims against Defendants. The Defendants argue that the DBA/LHWCA framework preempts any common law claims, including tort or breach of contract claims, related to injuries sustained under government contracts performed outside the U.S. The Court must determine the nature of the claims and cannot create new claims or assume opposition to specific claims unless clearly indicated by Plaintiffs.

The Court presumes that Plaintiffs intend to assert a claim under 33 U.S.C. § 948a and considers whether they can pursue this claim in federal court without exhausting the DBA/LHWCA’s administrative procedures. The Court finds that Plaintiffs cannot bring an original action under § 948a without first exhausting these remedies, as established by the doctrine of exhaustion of administrative remedies, which mandates that judicial relief is not available until all administrative processes have been completed. Consequently, the Court concludes that Plaintiffs' amended complaint must be dismissed due to their failure to follow the required administrative procedures.

Exhaustion of administrative remedies promotes judicial efficiency by ensuring that cases presented for judicial review are based on a well-developed factual record and benefit from the agency's expertise. The administrative process may resolve issues without the need for judicial intervention. The Department of Labor (DOL) has established comprehensive procedures for handling discrimination and retaliation claims under the DBA/LHWCA, which include investigations and recommendations by a DOL district director, potential employer penalties, and employee remedies. If parties disagree with the district director’s recommendations, they can request a formal hearing and appeal decisions through various levels, culminating in federal court review.

Plaintiffs are expected to utilize these DOL processes, especially since the regulations grant the DOL significant authority to provide relief, including reinstatement and back pay. The court sees no justification for allowing Plaintiffs to bypass these established procedures, which align with the relief they seek. There is no precedent for federal courts to entertain original claims under the DBA without prior exhaustion of DOL remedies. Previous cases have consistently dismissed claims under the DBA when plaintiffs have not utilized the administrative processes required by the LHWCA. Thus, claims for retaliation and discrimination must be exhausted through the DOL’s exclusive process before seeking federal court intervention.

Plaintiffs have not exhausted their administrative remedies, arguing against the necessity of utilizing the Department of Labor (DOL) process. They claim the remedy under 948a is "nominal" and "inadequate," which is contradictory since they have filed a federal claim under the same statute seeking remedies. The cited "inadequate remedy" cases primarily concern state or common law claims unrelated to a federal retaliation claim under 948a. Therefore, the court determines that the retaliation claim must be dismissed for failure to exhaust administrative remedies.

Additionally, the court examines whether the Defense Base Act (DBA) and Longshore and Harbor Workers' Compensation Act (LHWCA) preempt Plaintiffs' state common law claims, which include breach of contract, retaliatory discharge, conspiracy, and prima facie tort. Under the supremacy clause of the U.S. Constitution, federal law takes precedence, which is enforced through federal preemption doctrines: express, field, and conflict preemption. The DBA's exclusivity clause is significant, stating that an employer's liability under the act replaces all other liabilities, indicating Congressional intent to preempt state law claims within its scope. Courts have interpreted this language to mean that the DBA serves as the sole remedy for injuries or deaths occurring within its applicability.

The court concluded that the exclusivity provisions of the Defense Base Act (DBA) preempt state law claims related to benefits under the DBA, including common law claims alleging retaliation for filing workers' compensation claims. This determination aligns with several precedents, including Brink, Nauert, and Martin, which collectively establish that claims related to bad faith handling of Longshore and Harbor Workers' Compensation Act (LHWCA) claims are also preempted. Specifically, the court emphasized that the DBA incorporates the LHWCA, which prohibits retaliation against employees for claiming benefits or assisting others in such claims. The argument presented by the plaintiffs, suggesting that the DBA lacks a retaliation provision, is unsupported by statutory language. The court clarified that the DBA's anti-retaliation provisions apply to employers, including those hiring civilians for military installations, and the Department of Labor has authority to enforce penalties for violations. Furthermore, the court rejected the plaintiffs' reliance on Martin v. Travelers Insurance Co. to assert that retaliation claims fall outside the DBA's exclusivity, citing a D.C. Circuit ruling that preempted all claims related to LHWCA benefits. Other state court cases cited by the plaintiffs were deemed unpersuasive or irrelevant, particularly since one acknowledged its ruling conflicted with established federal authority on the matter.

The court in Moss determined that the wrongful discharge remedy under the Longshore and Harbor Workers' Compensation Act (LHWCA) does not preempt similar state law remedies, particularly in areas of overlapping jurisdiction. However, due to the distinct histories of the LHWCA and the Defense Base Act (DBA), concurrent jurisdiction does not apply under the DBA. The doctrine of field preemption bars plaintiffs' common law claims, as there is a clear express preemption clause and an inferred congressional intent to preempt state law in favor of federal regulation. The LHWCA allows for dual remedies under state and federal law in certain maritime zones, whereas the DBA provides an exclusive remedy for overseas workers without state alternatives. The DBA’s provisions indicate that it is intended to be the sole remedy for relevant injuries. Additionally, the comprehensive nature of the workers’ compensation schemes under both acts supports the inference that Congress aimed to prevent state law claims for injuries covered by the DBA. Finally, the doctrine of conflict preemption applies, as state laws that obstruct federal objectives are preempted.

In Arizona v. U.S., the evaluation of conflict preemption does not require impossibility of compliance with both state and federal law; rather, it focuses on whether a state law cause of action would undermine the federal statutory scheme. The D.C. Circuit has recognized that the Longshore and Harbor Workers' Compensation Act (LHWCA) and the Defense Base Act (DBA) were designed to provide employers with immunity from tort suits for injuries covered by workers' compensation while ensuring employees have a specific remedy. Allowing state law claims would disrupt this balance by offering remedies not intended by Congress. 

The LHWCA’s provisions suggest that penalties should not differ, and permitting separate recovery for contractual breaches related to the LHWCA would contradict its purpose. Additionally, allowing common law retaliation claims raises the risk of conflicting judgments regarding an employee's injury, particularly where the employer may assert defenses such as fraud against a previously approved workers' compensation claim. Courts have generally found that the DBA preempts other state law remedies for plaintiffs, with exceptions only when the injuries fall outside the scope of the DBA/LHWCA.

DBA's exclusive remedies do not bar civil litigation for a contractor’s sexual assault in her barracks in Iraq, as the injuries were unrelated to her employment and thus not covered under the DBA. The court addressed conflict preemption, indicating that administrative remedies must be exhausted to avoid contradictory rulings and that the DBA preempts common law claims. Specifically, it allowed a claim for intentional infliction of emotional distress related to misrepresentations about a father’s death but rejected Sickle’s argument that his retaliation claim fell outside the DBA scope. The court interpreted § 948a broadly, asserting it prohibits discrimination against employees assisting others with workers’ compensation claims, consistent with the DBA's comprehensive nature. Ultimately, the court concluded that the plaintiffs failed to exhaust administrative remedies regarding their § 948a claim, and the DBA preempted their common law claims, leading to the dismissal of the entire complaint.