Omar NADHEER, Plaintiff-Appellant v. The INSURANCE COMPANY OF the State of PENNSYLVANIA; American International Group, Inc.; L-3 Communications Corporation, Defendants-Appellees.
No. 12-50164.
United States Court of Appeals, Fifth Circuit.
Jan. 7, 2013.
297
Before HIGGINBOTHAM, CLEMENT, and HAYNES, Circuit Judges.
PER CURIAM:*
Omar Nadheer appeals the district сourt‘s dismissal of this action against his former employer, his workers’ compensation insurance carrier, and his insurance adjuster for breach of contract, breach of fiduciary duty, fraud, and conspiracy to defraud. We AFFIRM.
FACTS AND PROCEEDINGS
Defense cоntractor L-3 Communications Corporation (“L-3“) hired Nadheer as an interpreter in Iraq in April 2006. With respect to his employment with L-3, Nadheer was subject to the Defense Base Act (“DBA“),
On December 17, 2007, Nadheer was seriously injured in a roadside bomb attack that struck a vehicle in which he was riding in the course of his employment. Nadheer was treated initially at a combat support hospital in Baghdad before being transferred to a hospital in Erbil in Iraqi Kurdistan. Pursuant to the requirements of the LHWCA, Nadheer‘s medical care was covered by L-3‘s workers’ compensation insurance, and he was also provided with disability benefits. After being discharged from the hospital in Erbil, Nadheer eventually emigrated to the United States and was admitted as a refugee.
In addition to claims for health and disability benefits he had brought pursuant to the LHWCA with the Department of Labor‘s Office of Workers’ Compensation Programs, Nadheer brought this action in the United States District Court for the Western District of Texas in March 2011. His amended complaint asserted common law claims for breach of contract, breach of fiduciary duty, fraud, and conspiracy to defraud against various combinations of three defendants: L-3; the Insurance Company of the State of Pennsylvania (“ICSOP“), his insurer; and ICSOP‘s parent corporation American International Group, Inc. (“AIG“), whose employees Nadheer alleged were the claims adjusters for his treatment. His amended complaint also requested that the district court enjoin the defendants from contesting his claims before the Department of Labor on timeliness grounds.
Nadheer alleged that, before his transfer to Erbil, he had requested transfer to a hospital in Jordan and that his insurance рrovider had denied this request. He claimed that this violated a provision in the LHWCA that allows patients to select their own physicians and that he was never informed of this and various other rights of his under the LHWCA. He further asserted that, as a result of deficiеnt medical treatment he received in Erbil, he had suffered horrific pain and a degree of potentially permanent disability to his right arm.
STANDARD OF REVIEW
We review a district court‘s grant of a motion to dismiss de novo. Jebaco Inc. v. Harrah‘s Operating Co., 587 F.3d 314, 318 (5th Cir.2009). However, “the applicability of the DBA‘s exclusivity provision, like the applicability of the LHWCA‘s exclusivity provision, presents an issue of preemption, not jurisdiction.” Fisher v. Halliburton, 667 F.3d 602, 609 (5th Cir.2012). Since preemption is an affirmative defense аnd does not create a jurisdictional bar, we consider the defendants’
DISCUSSION
1. Statutory framework
The DBA provides that
the provisions of the [LHWCA] shall apply in respect to the injury or death of any employee engaged in any employment ... outside the continentаl United States by an American employer providing welfare or similar services for the benefit of the Armed Forces pursuant to appropriate authorization by the Secretary of Defense.
2. Scope of LHWCA exclusivity
Nadheer advances three arguments on appeal for why his claims are not preempted by the DBA and LHWCA. First, he argues that the exclusivity provisions of the DBA and LHWCA do not apply in this case because they do not immunize insurers from damages caused by intentional
A. Intentional misrepresentation
Nadhеer alleges that he suffered damages as a result of the defendants’ intentional misrepresentation that his only option for further medical care was to go to the hospital in Erbil, despite his request to go instead to Jordan. He asserts that, because these damages are non-compensable under the DBA and LHWCA and arise from a breach of an insurer‘s general duty not to deceive its insured, and not from a statutorily created duty, his tort claims should not be preempted.
However, we have previously held that state law claims for bad faith withholding or termination of compensation benefits are preempted by the LHWCA. See Atkinson v. Gates, McDonald & Co., 838 F.2d 808, 811 (5th Cir.1988) (holding tort claims for bad faith termination of LHWCA benefits to be preempted); Texas Emp‘rs’ Ins. Ass‘n v. Jackson, 820 F.2d 1406, 1411-14 (5th Cir.1987), vacated and rev‘d on other grounds, 862 F.2d 491, 494 (5th Cir.1988) (en banc).1 We see no meaningful distinction between torts arising from the bad faith withholding of benefits and those arising from the alleged bad faith mis-administration of benefits at issue here; both are preempted by the LHWCA‘s comprehensive statutory scheme.
Furthermore, we note thаt the LHWCA sets out criminal penalties for the fraudulent denial, diminution, or termination of benefits, or the making of a false statement for the purpose of denying, reducing, or terminating benefits.
B. Breach of contract
Nadheer argues that his breach of cоntract claims should not be preempted because language in his contract provided that his insurer would “pay promptly when due all compensation and other benefits required by the workers’ compensation law.” In his view, this language imposes a contractual obligation on his employer to provide LHWCA benefits separate from its statutory obligations under the LHWCA. An action for breach of this contractual obligation, he contends, should not be deemed preemрted by the
We disagree with this logic. Under Nadheer‘s theory, contracting to provide benefits under a comprehensive scheme—specifically designed to preclude civil liability in excess of that provided for by the scheme—would itself create civil liability in excess of that provided for by the scheme. “In a nutshell, it is difficult to imagine a more comprehensive scheme of federal regulation—one that leaves no room for state involvement—than that contained in the LHWCA.” Jackson, 820 F.2d at 1412. “[T]he whole theory of the [LHWCA], and of similar compensation legislation, is to provide the injured workman with certain and absolute benefits in lieu of all common law damages.” Haynes v. Rederi A/S Aladdin, 362 F.2d 345, 350 (5th Cir.1966). Allowing рlaintiffs to recover separately for breach of contractual provisions invoking the LHWCA would subvert the very purpose of LHWCA. Therefore, Nadheer‘s breach of contract claims are preempted by the LHWCA.
C. Insurers
We have long held that claims against insurers, in addition to claims against employers, are implicitly preempted by the LHWCA‘s exclusivity provision. See, e.g., Atkinson, 838 F.2d at 811 (“[T]he LHWCA impliedly grants the employer‘s insurance carrier ... the same immunity which it grants the employer.“); Johnson v. Am. Mut. Liab. Ins. Co., 559 F.2d 382, 388 (5th Cir.1977) (“A reading of the Act shows that while the Congress did not specifically grant immunity to a compensation insurer from liability as a third person tort feasor, numerous provisions of the Act and the spirit of the Act as a whole, equating the insurer with the employer, negate any intent to hold the insurer liable to suit for damages as a third person.“).
Nadheer argues that this longstanding rule is invalid in the wake of the Supreme Court‘s decision in Valladolid, a case involving the Outer Continental Shelf Lands Act (“OCSLA“), which, like the DBA, incorporates the LHWCA. At issue in Valladolid was a wоrkplace death of an offshore drilling platform employee that occurred in an onshore facility. The employee‘s widow sought LHWCA benefits because her husband had been a covered employee under OCSLA, but his former employer argued that OCSLA was inapplicable because the death occurred onshore. While Pacific Operators had urged the Supreme Court to adopt a “situs-of-injury” test from this court‘s decision in Mills v. Director, Office of Workers’ Compensаtion Programs, U.S. Department of Labor, 877 F.2d 356 (5th Cir.1989) (en banc), it instead held that an injury was compensable under OCSLA so long as it had a mere “substantial nexus” with the offshore operations covered under the Act. See Valladolid, 132 S.Ct. at 684-90.
Nadheer argues that, since the Suprеme Court‘s rejection of the Mills situs-of-injury test was premised on that test‘s lack of fidelity to the plain text of the LHWCA, it also calls into question this court‘s longstanding rule that claims against insurers are implicitly preempted by the LHWCA‘s exclusivity provision, becausе insurers are not named alongside employers in that provision. See
However, the provision at issue in Valladolid was wholly different than the one at issue here, and Valladolid did not involve preemption. That the Supreme Court
CONCLUSION
For the foregoing reasons, we AFFIRM the judgment of the district court.