Defense Base Act case - the exclusive remedy upheld

On January 12, 2012, in Fisher v. Halliburton, a three-judge panel of the Fifth Circuit Court of Appeals, unanimously reversed the District Court’s decision that the Defense Base Act did not provide the exclusive remedy for the Plaintiff-Appellees.   Judge Owen authored the opinion.

Fisher worked for KBR, a Halliburton subsidiary, in Iraq.  He was killed driving in convoy between Camp Anaconda and Baghdad International Airport on April 9, 2004.  This was the anniversary of the invasion by American forces.  The road was never safe but even more attacks were anticipated than usual from insurgents.  Fisher’s widow commenced proceedings in federal court on various liability theories.  The defendants pleaded that this was an employment accident, and the Defense Base Act provided the sole remedy.

The Defense Base Act extends to covered workers the benefits under the Longshore and Harbor Workers' Compensation Act, 33 U.S.C. §901 et seq.

If the plaintiff succeeded in court, she would be entitled to damages.  If the Defense Base Act applied, she would be limited to compensation of “reasonable funeral expenses up to $3,000”, and to one half of her husband’s average weekly wage during widowhood.  If there were children, they would share 16 2/3 % of the average weekly until they reached majority at age 18, or, if in full time education, until age 23.  The compensation is limited to 200% of the National Average Weekly Wage.  The weekly rate in effect for the fiscal year of the accident was $1030.78.  The wage is adjusted each year on October 1^st by the percentage increase in the NAWW.

If the plaintiff succeeded, the defendant would be insured under a variety of insurances.  If the Defense Base Act applied, the compensation insurer would pay the widow’s benefits, and, since the accident is a war hazard, recover from the US government under the War Hazards Compensation Act.

The plaintiff advanced three reasons for her position. 

First, the injury was not caused by “the willful act of a third person directed against an employee because of his employment”, 33 U.S.C. §902(2).

Secondly, because KBR knew the attacks were substantially certain to occur and failed to protect the drivers, the DBA does not apply, under the intentional tort theory.

Thirdly, even if the DBA provides a remedy her fraud claims, base survived.  The fraud claims are basically an allegation that inducements, including promises of proper protection, were made at the time the contract was formed; promises which were not fulfilled.

In support of the first argument the plaintiff suggested that the drivers were attacked, not because they were drivers, but because they were Americans.  She pointed out that many other people were attacked including those who had nothing to do with KBR.  The court held that that view was too narrow a view of employment.  The drivers were not simply employed as truck drivers, but as truck drivers in support of the American coalition’s rebuilding and security efforts in Iraq.  The evidence pointed to by the plaintiff established that insurgents were attacking targets related to those efforts.  A clear connection existed between the employment and the attacks, so the attacks occurred “because of” the employment.

In support of the intentional tort claim, the plaintiff urged that KBR were substantially certain that attacks would occur, and failed to cancel the convoys.   The court held that there was no evidence that KBR desired any of the drivers to be killed or injury.  There was no deliberate attack on the drivers by KBR nor did KBR conspire with third parties to attack them.  Therefore there was no need to determine whether the DBA covered such events.  In this case, the argument that KBR were “substantially certain” that attacks would occur did not overcome the plain language of the Act, that the act is “exclusive and in place of all other liability of the employer.”  The court noted that the Restatement of Tort observes that negligence, recklessness, and intent premised on substantial certainty are all points on a continuum of probability.  The court noted that a probabilistic approach would undermine the predictability of recovery under a compensation system.

In dealing with the fraud claims, the court noted that although they were based on the employment contract and the plaintiff argued therefore accrued before the injury, the remedy requested was not rescission but damages for injuries compensable under the DBA.  In these circumstances under normal workers’ compensation law, since the fraud merges into the injury for which a compensation remedy is provided, there is no separate remedy.’’

This is a very high profile case.  The roads to and from the camp and airport were, in effect, battlefields.  There is no doubt that these were combat deaths.   There is little doubt that this is what Congress had in mind when contractors went overseas in support of US troops.  For this reason the contractors and their carriers can recover under the War Hazards Act.