Brink v. XE Holding, LLC

910 F.Supp.2d 242

Daniel BRINK, et al., Plaintiffs,

v.XE HOLDING, LLC, et al., Defendants.

Civil Action No. 11–1733 (EGS).

United States District Court, District of Columbia.

Dec. 21, 2012.

Scott J. Bloch, Law Offices of Scott J. Bloch, PA, Washington, DC, for Plaintiffs.

Benito Delfin, Richard J. Doren, Los Angeles, CA, Sandra D. Hauser, New York, NY, Kenneth John Pfaehler, David I. Ackerman, Geoffrey M. Sigler, Thomas M. Johnson, Christopher E. Appel, Randolph D. Moss, Kathleen Hall Warin, Kevin Patrick Farrell, Robert Bruce Wallace, Sara Z. Moghadam, DLA Piper, LLP, Raymond B. Biagini, Alejandro Luis Sarria, Tami Lynn Azorsky, McKenna, Long & Aldridge LLP, Washington DC, Matthew Wesley Carlson, Roderick L. Thomas, Mark Bradley Sweet, Ari Shlomo Zymelman, David Randall J. Riskin, Frank Gregory Bowman, Timothy William Bergin, Winstead, PC, Leslie Paul Machado, LeClairRyan, Washington, DC, Holly P. Smith, Kansas City, MO, Charles C. Platt, New York, NY, Tara M. Lee, DLA Piper, LLP, Jennifer A. Harper, Reston, VA, Michelle J. Dickinson, Baltimore, MD, Andrew L. Fono, Brannon C. Dillard, Winstead, PC Houston, TX, for Defendants.

MEMORANDUM OPINION

EMMET G. SULLIVAN, District Judge.

Plaintiffs, thirty-one civilian government contractor employees (and/or their surviving relatives), bring this purported class action against twenty-three defendants, which include United States government contractors (the “Contractor Defendants”) and their insurance carriers (the “Insurer Defendants”)(collectively, “Defendants”).¹ Plaintiffs allege violations of the Longshore and Harbor Workers' Compensation Act, 33 U.S.C. § 948a, the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1861 et seq., the Americans with Disabilities Act (“ADA”), 42 U.S.C. § 12101 et seq., and several common law tort claims, based upon Defendants' handling of Plaintiffs' claims for medical benefits under the Defense Base Act. Pending before the Court are fourteen motions to dismiss pursuant to Rules 12(b)(1), 12(b)(2), 12(b)(3), and 12(b)(6) of the Federal Rules of Civil Procedure.²Upon consideration of the motions, the responses and replies thereto, the relevant law, and the entire record in this case, the Court will GRANT the motions and DISMISS Plaintiffs' claims.

I. BACKGROUNDA. Statutory Background

The Defense Base Act (“DBA”), 42 U.S.C. § 1651 et seq., establishes a uniform, federal compensation scheme for civilian contractors and their employees for injuries sustained while providing functions under contracts with the United States outside its borders. The DBA applies “the provisions of the Longshore and Harbor Workers' Compensation Act [33 U.S.C. § 901 et seq. (the “LHWCA” or the “Longshore Act”) ] ... in respect to the injury or death of any employee engaged in any employment ... under a contract entered into with the United States ... where such contract is to be performed outside the continental United States....” 42 U.S.C. § 1651(a)(4). As Plaintiffs note at the outset of their Complaint, “[the] DBA system is administered according to statute by the United States Department of Labor (DOL), in the administrative Office of Workers' Compensation Programs (OWCP), subject to hearing and decision in contested cases by the Office of Administrative Law Judges (OALJ) of the DOL, and administrative appeal to the Benefits Review Board. If a matter works its way through the OWCP, OALJ, and Board, only then can a party appeal into the federal courts.” Second Am. Compl. (“SAC”) ¶ 2 (citing 33 U.S.C. §§ 919, 921(b)(3)).

The DBA includes a provision that makes an employer's liability under the statutory scheme exclusive:

The liability of an employer, contractor (or any subcontractor or subordinate subcontractor with respect to the contract of such contractor) under this chapter shall be exclusive and in place of all other liability of such employer, contractor, subcontractor, or subordinate contractor to his employees (and their dependents) coming within the purview of this chapter, under the workmen's compensation law of any State, Territory, or other jurisdiction, irrespective of the place where the contract of hire of any such employee may have been made or entered into.

42 U.S.C. § 1651(c); see also33 U.S.C. § 905(a) (“The liability of an employer prescribed in section 4 [of the LHWCA, 33 U.S.C. § 904] shall be exclusive and in place of all other liability of such employer to the employee, his legal representative, husband or wife, parents, dependents, next of kin, and anyone otherwise entitled to recover damages from such employer at law ... on account of [an employee's] injury or death.”). Like the LHWCA and other workers' compensation statutes, the DBA represents a compromise between employees and their employers: “[e]mployers relinquish[ ] their defenses to tort actions in exchange for limited and predictable liability,” and “[e]mployees accept the limited recovery because they receive prompt relief without the expense, uncertainty, and delay that tort actions entail.” Morrison–Knudsen Constr. Co. v. Dir., Office of Workers' Comp. Programs, 461 U.S. 624, 636, 103 S.Ct. 2045, 76 L.Ed.2d 194 (1983).

The DBA incorporates the LHWCA's detailed administrative procedures for the filing, adjudication, and payment of workers' compensation claims. An injured employee or decedent is required to give written notice of injury or death within thirty days after either the date of the injury or death, or the date the employee or beneficiary becomes aware or should have been aware of the injury or death. See33 U.S.C. § 912; 20 C.F.R. § 702.212. A claimant then has one year within which to file a claim for compensation on account of that injury or death. See33 U.S.C. § 913(a). Within ten days of learning that an employee has been injured, an employer must send a report to the Department of Labor “District Director.” See33 U.S.C. § 930(a); 20 C.F.R. § 702.201. Unless the employer is self-insured, the employer's DBA insurance carrier is responsible for processing and payment of an injured employee's claim. See33 U.S.C. § 935; 20 C.F.R. § 703.115. The District Director must be notified when payments commence and if payment is suspended for any reason. See20 C.F.R. § 702.234. If the right to compensation is controverted by the employer, 33 U.S.C. § 914(d); 20 C.F.R. § 702.251, no benefits are due until a compensation award is made by the District Director. Upon receiving a notice of controversion or an employee's challenge to reduction, suspension, or termination of benefits, the District Director commences adjudication proceedings. See20 C.F.R. §§ 702.252, 702.261–262. There is a mandatory three-tier process for adjudicating claims: (1) informal mediation before the District Director; (2) formal hearings and fact-finding proceedings before an Administrative Law Judge; and (3) appellate review by the Department of Labor Benefits Review Board, which is subject to further appellate review by a court of competent jurisdiction. See33 U.S.C. § 921; 20 C.F.R. §§ 702.311–319 (“Action by District Directors”); 702.331–351 (“Formal Hearings”); 702.371–373 (“Interlocutory Matters”); 702.391–394 (“Appeals”); see also42 U.S.C. § 1653(b). An employee who successfully prosecutes a controverted claim is entitled to attorneys' fees. See33 U.S.C. § 928; 20 C.F.R. § 702.134.

The LHWCA's administrative scheme also provides for a number of penalties, which include, inter alia:

• penalties for failure to timely report employee injuries, see33 U.S.C. § 930(e); 20 C.F.R. § 702.204;

• penalties paid directly to the employee for failure to timely pay pre-award or post-award compensation, see33 U.S.C. §§ 914(e)-(f); 20 C.F.R. §§ 702.233, 702.350;

• penalties for making false statements or misrepresentations in reporting employee injuries, see33 U.S.C. § 930(e); 20 C.F.R. § 702.204;

• criminal penalties and imprisonment for false statements or misrepresentations made to reduce, deny, or terminate benefits, 33 U.S.C. § 931(c); 20 C.F.R. § 702.217(b);

• criminal penalties, imprisonment, and other remedies for failure to pay compensation, see33 U.S.C. § 938; • judicial enforcement of a final compensation order, see33 U.S.C. § 921(d); and

• penalties and the payment of lost wages for retaliation, wrongful discharge or discrimination with regard to employees who claim or attempt to claim benefits, see33 U.S.C. § 948a; 20 C.F.R. § 702.271.

B. Factual and Procedural Background

This action arises out of Defense Base Act claims filed by civilian government contractor employees who suffered injuries while working in Afghanistan and Iraq. Plaintiffs, the contractor employees and/or their surviving relatives, ³ purport to bring this action on behalf of more than 10,000 similarly situated individuals who were denied benefits under the DBA.

According to the SAC, Defendants, in conspiracy with others, have sought to defeat the rights of American citizens and foreign nationals to receive their lawful compensation under the DBA. SAC ¶ 2. Throughout the two hundred page Complaint, Plaintiffs allege that Defendants:

• failed or refused to provide medical benefits owed to Plaintiffs under the DBA, see, e.g., SAC ¶¶ 41, 57, 59, 62, 83, 103, 123, 133, 158, 178, 186, 210, 225, 260, 282, 315, 343, 366, 375, 382, 401, 422–24, 450, 495, 533, 546–47;

• cut off medical benefits owed under the DBA, see, e.g., SAC ¶¶ 59, 61, 62, 75, 81, 106, 175, 200, 205, 214, 227, 240, 273, 276, 351, 377, 394;

• delayed the provision of medical benefits or compensation owed under the DBA, see, e.g., SAC ¶¶ 59, 61, 87, 145, 262, 361, 376, 408, 423, 434, 540, 545;

• made false statements and misrepresentations to the DOL and Plaintiffs regarding the payment of their DBA benefits while actually reducing, denying or ignoring Plaintiffs' medical needs, see, e.g., SAC ¶¶ 6, 59, 103, 109–10, 122, 135, 146, 150, 154, 163, 179, 202, 214, 273–74, 277, 283, 351, 357, 378, 461–62;

• failed to comply with DOL...