Fifth Circuit Focuses on “Functional Component” of Situs Test For Longshore Jurisdiction

In a recent case, the Fifth Circuit analyzed the “functional component” prong of its situs test for jurisdiction over Longshoremen and similar workers, concluding that the area where claimant was injured was not used in the vessel unloading process and therefore was not a covered situs under the Act.

The employer in BPU Management, Inc./Sherwin Alumina Co. v Director, OWCP, operates an alumina processing facility on the Texas Gulf Coast.  The facility receives bauxite that is unloaded from ships and moved directly into the alumina production process via conveyor system.  From the dock, an overhead conveyor system carries the bauxite over a street and fence and deposits it into one of several dozen bins located in a covered storage area.  The bauxite remains in the storage area until it is needed, at which time a small gate located in the floor beneath the bin is opened to drain the bauxite into Sherwin’s reclaim system.  Once in the reclaim system, the bauxite is mechanically sifted through a screw feeder which breaks down the bauxite into smaller pieces and deposits it on the “reclaim conveyor belt.”  From there, the reclaim conveyor belt transports and drops the bauxite onto the “cross-tunnel conveyor.”  The cross-tunnel conveyor then moves the bauxite into an area where it is further pulverized as part of the manufacturing process.

In the course of conveyor belt transport, bauxite often spills off the cross-tunnel conveyor onto the floor and must be shoveled back onto the conveyor.  Claimant Martin injured his back while shoveling the cross-tunnel debris.

Both the ALJ and the Benefits Review Board concluded that Claimant was injured on a covered situs since the cross-tunnel where he was injured is used in the unloading process and therefore has a functional relationship with navigable waters.  The BRB noted that the surface storage buildings above the cross-tunnel are connected to the docks by conveyor belts and are therefore a part of Sherwin’s unloading process.  The Board further reasoned that because the storage buildings are used in unloading bauxite, the cross-tunnels beneath them are necessarily involved in the unloading process.

The Fifth Circuit reversed the BRB.  The Court, citing its recent decision in New Orleans Depot Servs., Inc. v. Director, OWCP, 718 F.3d 384 (5th Cir. 2013) (en banc), stated that to qualify as an other-adjoining area, two distinct situs components must be satisfied: (1) the area must adjoin navigable waters (geographic component) and (2) the area must be customarily used by an employer in the loading or unloading process (functional component).

The Court first observed that the geographic component of the situs test was satisfied since Sherwin’s entire facility, including the location where Claimant was injured, adjoins navigable waters.  Turning to the functional component, however, the Court held that once the raw bauxite was received for manufacturing, the maritime operations at the facility ceased.  The Fifth Circuit determined that the raw bauxite was received once it was placed in the storage bins.  The Court analogized this case to the U.S. Supreme Court’s decision in P.C. Pfeiffer Co. v Ford, 444 US 69 (1979), which held that the vessel unloading process includes the transfer of cargo from ship-to-shore only until the cargo is received for land transport.  The Fifth Circuit reasoned that goods unloaded and then received for ground transport were the legal equivalent to raw goods received for manufacturing purposes.  Thus, maritime operations cease when the goods are received for their intended purpose and as a result any cases being tried are no longer the domain of Jones Act lawyers.

This decision represents a refinement of earlier Fifth Circuit precedent concerning situs and will likely result in more cases being dismissed on jurisdictional grounds.

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