5th Circuit: tank farm operator 1,200 feet from navigable water covered by LHWCA

by Matthew H. Ammerman on October 16th, 2020

Petroleum tank farms that dot the banks of the Mississippi River and Houston Ship Channel have long been a LHWCA situs question mark. Workers often perform tank-to-tank transfers on tanks distant from navigable water and the original shipment that brought the petroleum product to the facility in the first place.

The Fifth Circuit holds in International-Matex Tank Terminals v. Director, OWCP [Victorian],[1] that a worker’s injury at the International-Matex Tank Terminals’ (IMTT) facility on the Mississippi River during a tank-to-tank transfer is covered by the LHWCA. Dwayne Victorian was a shift foreman at IMTT’s oil-and-gas storage facility in Gretna, Louisiana, with 60 storage tanks. All product stored at the facility arrives by vessel, and most of it leaves by vessel.[2] Victorian, who often worked in the yard, injured his neck pulling an air hose up a tank platform to blow out a line to facilitate a tank-to-tank transfer. He was approximately 1,200 feet from the dock.[3]

LHWCA situs comprises two components in the Fifth Circuit — a geographic and functional requirement. An area must adjoin navigable waters and have “some maritime purpose.”[4] On the geographic component, the court clarified that what must adjoin navigable waters is the “parcel of land” underlying the employer’s facility, not the particular part of the parcel on which the accident occurs.[5] IMTT’s terminal facility adjoined the river.[6] The geographic requirement was satisfied.

The functional requirement was also satisfied because IMTT has sixty storage tanks for liquid bulk product that is unloaded directly from vessels to those tanks and stored there, including the tanks Victorian used for the tank-to-tank transfer.[7] It was a terminal, a site enumerated in Section 3(a) of the LHWCA that includes “any adjoining pier, wharf, dry dock, terminal, building way, [or] marine railway….”[8] Thus, Victorian needed only to show that the facility served “some maritime purpose” (rather than the more rigorous standard for an “other adjoining area” under the LHWCA).[9]

The court rejected IMTT’s argument that it was not a terminal but a “mixed use” facility with a manufacturing component. IMTT occasionally heated oil to make it easier to transport and also mixed diesel fuel and oil for the vessels that docked at its facility.[10] IMTT argued that it was analogous to facilities that serve mixed maritime and manufacturing uses, and, consequently, the Benefits Review Board erred in not evaluating its function under the “other adjoining area” standard. The court rejects that argument because IMTT’s heating and mixing activities do not transform it into a manufacturing facility.[11] And the court also clarifies that the functional requirement is not used to determine whether an area qualifies as an enumerated site. Instead, all is that is required for an enumerated site is that it serve “some maritime purpose.”[12] The geographic and functional requirements for LHWCA situs were satisfied.

Victorian met the status requirement because he was tasked with monitoring the flow of oil products, opening and closing manifolds to direct flow, and facilitating the loading and unloading process.[13] A worker can meet the LHWCA’s status requirement by either: (1) being engaged in maritime employment at the time of injury for more than an episodic period; or, (2) based on his employment as a whole involving loading, unloading, building, or repairing vessels. The Fifth Circuit affirms based on the trial judge’s finding that Victorian’s employment as a whole was integral to vessel loading and unloading operations.[14]

The Fifth Circuit also addressed the fact-intensive issue of whether Victorian had reached maximum medical improvement. IMTT argued that he reached MMI a little over one year after his injury because its defense medical examiner concluded he was MMI if he did not elect to have cervical surgery. But his treating surgeon eventually recommended cervical surgery two years after the injury. The panel suggests that there may be a point when a worker’s unreasonable delay in pursuing surgery could lead to de facto MMI but affirms the trial judge’s finding that Victorian had not reached MMI.[15]

   [1] 943 F.3d 278 (5th Cir. 2019).
   [2] Id. at 281.
   [3] Victorian v. International-Matex Tank Terminals, 2015-LHC-1290, Slip. Op. at 14 (June 5, 2017) (ALJ’s decision and order), aff’d, 52 BRBS 35 (2018), pet. denied, 943 F.3d 278 (5th Cir. 2019).
   [4] Wood Group Production Services v. Director, OWCP [Malta], 930 F.3d 733, 737-738 (5th Cir. 2019).
   [5] Id. at 284-285 (citing New Orleans Depot Services, Inc. v. Director, OWCP [Zepeda], 718 F.3d 384, 392 (5th Cir. 2013) (en banc), BPU Sherwin Alumina v. Director, OWCP [Martin], 732 F.3d 457, 461 (5th Cir. 2013)).
   [6] Id. at 284.
   [7] Id. at 287.
   [8] 33 U.S.C. § 903(a).
   [9] Id. The LHWCA at Section 3(a) requires that an “other adjoining area” be “customarily used by an employer in loading, unloading, repairing, dismantling, or building a vessel.”
   [10] Id. at 281, 287.
   [11] There was also no functional line of demarcation between IMTT’s storage tanks used to hold product unloaded from vessels and its mixing of petroleum products. The Fifth Circuit has looked to that functional divide in mixed-use-facility cases to hold that bauxite unloaded from vessels is no longer part of the vessel unloading process when it is transferred to an underground cross-tunnel for manufacturing into alumina. BPU Management, 732 F.3d 457, 464-65 (5th Cir. 2013).
   [12] International-Matex Tank Terminals, 943 F.3d at 286 (The “functional approach” requires that putative situs also “serve a maritime purpose.”) (citations omitted).
   [13] Id. at 288.
   [14] Id. at 289.
   [15] Id. at 289-90.

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