Harvey's Casino Vs. Beverly Isenhour Vs. Amanda A. Davis ( 2006 )

IN THE SUPREME COURT OF IOWA
No. 68 / 04-1910
Filed December 8, 2006
HARVEY’S CASINO,
Appellant,
vs.
BEVERLY ISENHOUR,
Appellee.
AMERISTAR CASINOS COUNCIL BLUFFS, INC. and GAB ROBINS,
Appellants,
vs.
AMANDA A. DAVIS,
Appellee.
AMERISTAR CASINOS COUNCIL BLUFFS, INC. and GAB ROBINS,
Appellants,
vs.
HELEN FALANGA,
Appellee.
On review from the Iowa Court of Appeals.
Appeal from the Iowa District Court for Pottawattamie County,
Gordon C. Abel, Judge.
Two riverboat casinos appeal from judgment awarding workers’
compensation benefits to three claimants, and court of appeals reversed.
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DECISION OF COURT OF APPEALS AFFIRMED, JUDGMENT OF
DISTRICT COURT REVERSED, CASE REMANDED.
William D. Gilner and Scott A. Lautenbaugh of Nolan, Olson, Hansen
& Lautenbaugh, LLP, Omaha, Nebraska, for appellant Harvey’s Casino.
John B. Morrow and Tiernan T. Siems of Erickson & Sederstrom,
P.C., Omaha, Nebraska, and Michael J. Obradovich, Omaha, Nebraska, for
appellants Ameristar Casinos Council Bluffs, Inc. and Gab Robins.
Jacob J. Peters of Peters Law Firm, P.C., Council Bluffs, for appellees.
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LARSON, Justice.
Three workers’ compensation claimants, Amanda Davis, Helen
Falanga, and Beverly Isenhour, claimed benefits for injuries sustained while
employed on riverboat casinos in Council Bluffs. The Workers’
Compensation Commissioner ruled that the commission had subject matter
jurisdiction to award benefits, and the district court agreed. The court of
appeals reversed, holding that the claimants were “seamen” working on
vessels for which the Federal Jones Act provided exclusive benefits. We
affirm the court of appeals decision, reverse the district court, and remand.
I. Facts and Prior Proceedings.
Amanda Davis and Helen Falanga were injured while employed on the
Ameristar Casino Riverboat in Council Bluffs as a slot machine attendant
and “banker,” respectively. Beverly Isenhour was a floor host on Harvey’s
Casino Riverboat in Council Bluffs. All three claimed injuries sustained in
their employment and filed workers’ compensation claims under Iowa Code
chapter 85 (2001). The three claims were eventually consolidated, and the
district court, on judicial review, affirmed the Workers’ Compensation
Commissioner’s ruling that the commission had jurisdiction to award
benefits because the claims were not preempted by the Jones Act. The
basis for the district court’s ruling was that the claimants were not seamen
and the riverboat casinos were not vessels as required for coverage under
the Jones Act. The court of appeals reversed, ruling that the Workers’
Compensation Commission lacked jurisdiction to award benefits, based
largely on a Supreme Court case decided after the district court’s ruling—
Stewart v. Dutra Construction Co., 543 U.S. 481, 125 S. Ct. 1118, 160
L. Ed. 2d 932 (2005). On this further review, the claimants argue that the
court of appeals erred in relying on Stewart because that case is
distinguishable.
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II. Standard of Review.
Our review of agency action is for correction of errors at law. Gates v.
John Deere Ottumwa Works, 587 N.W.2d 471, 474 (Iowa 1998). Review is
governed by Iowa Code section 17A.19. This court is bound by the factual
findings made by the agency if those findings enjoy substantial support on
the record made before the agency. Id. This court will liberally construe
Iowa’s workers’ compensation statutes for the benefit of the injured
employee. Caterpillar Tractor Co. v. Shook, 313 N.W.2d 503, 505-06 (Iowa
1981).
III. Resolution.
Under Iowa Code section 85.1(6), if an injured worker is covered by a
compensation statute enacted by Congress, the worker is not covered by
Iowa’s workers’ compensation law. In this case, Harvey’s and Ameristar
argue that the injured employees are covered by the Federal Jones Act,
which provides in relevant part:
Any seaman who shall suffer personal injury in the
course of his employment may, at his election, maintain an
action for damages at law, with the right of trial by jury, and in
such action all statutes of the United States modifying or
extending the common-law right or remedy in cases of personal
injury to railway employees shall apply.
46 App. U.S.C. § 688(a).
Harvey’s and Ameristar argue that the employees were “seamen”
under this act, and therefore the Workers’ Compensation Commission
lacked subject matter jurisdiction to award benefits. The term “seaman” is
not defined in the Jones Act, apparently because it was believed to be a
term of art with an established meaning under general maritime law.
Stewart, 543 U.S. at 487, 125 S. Ct. at 1123, 160 L. Ed. 2d at 941.
Congress, however, provided some guidance in 1927 when it enacted the
Longshore and Harbor Workers’ Compensation Act (LHWCA), which
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provides compensation to land-based maritime workers, but excludes from
its coverage “a master or member of a crew of any vessel.” 33 U.S.C.
§ 902(3)(G). This exception has been described as “a refinement of the term
‘seaman’ in the Jones Act . . . .” McDermott Int’l, Inc. v. Wilander, 498 U.S.
337, 347, 111 S. Ct. 807, 813, 112 L. Ed. 2d 866, 877 (1991). The
Supreme Court has articulated two “essential requirements” for seaman
status under the Jones Act:
First, . . . “an employee’s duties must ‘contribut[e] to the
function of the vessel or to the accomplishment of its
mission.’ ”. . .
Second, and most important for our purposes here, a
seaman must have a connection to a vessel in navigation (or to
an identifiable group of such vessels) that is substantial in
terms of both its duration and its nature.
Chandris, Inc. v. Latsis, 515 U.S. 347, 368, 115 S. Ct. 2172, 2190, 132
L. Ed. 2d 314, 337 (1995) (quoting McDermott Int’l, 498 U.S. at 355, 111
S. Ct. at 817, 112 L. Ed. 2d at 882). Therefore, in order to be a “seaman,”
the employee must have a substantial connection to a “vessel,” and the
employee must contribute to the function of the vessel or to the
accomplishment of its mission. The Court further explained:
The fundamental purpose of this substantial connection
requirement is to give full effect to the remedial scheme created
by Congress and to separate the sea-based maritime employees
who are entitled to Jones Act protection from those land-based
workers who have only a transitory or sporadic connection to a
vessel in navigation, and therefore whose employment does not
regularly expose them to the perils of the sea.
Chandris, 515 U.S. at 368, 115 S. Ct. at 2190, 132 L. Ed. 2d at 337.
“If it can be shown that the employee performed a significant
part of his work on board the vessel on which he was injured,
with at least some degree of regularity and continuity, the test
for seaman status will be satisfied.”
Id. at 368-69, 115 S. Ct. at 2190, 132 L. Ed. 2d at 337-38 (quoting 1B
A. Jenner, Benedict on Admiralty § 11a, at 2-10.1 to 2.11 (7th ed. 1994)).
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The following rule of thumb was established:
A worker who spends less than about 30 percent of his time in
the service of a vessel in navigation should not qualify as a
seaman under the Jones Act.
Id. at 371, 115 S. Ct. at 2191, 132 L. Ed. 2d at 339.
Stewart involved a claim by a worker injured while on board a dredge
called the “Super Scoop,”
from which a clamshell bucket is suspended beneath the
water. The bucket removes silt from the ocean floor and
dumps the sediment onto one of two scows that float alongside
the dredge. The Super Scoop has certain characteristics
common to seagoing vessels, such as a captain and crew,
navigational lights, ballast tanks, and a crew dining area. But
it lacks others. Most conspicuously, the Super Scoop has only
limited means of self-propulsion. It is moved long distances by
tugboat. . . . It navigates short distances by manipulating its
anchors and cables. When dredging the Boston Harbor trench,
it typically moved in this way once every couple of hours,
covering a distance of 30-to-50 feet each time.
543 U.S. at 484-85, 125 S. Ct. at 1121-22, 160 L. Ed. 2d at 939-40.
Stewart was working on the barge as a marine engineer when he was
injured. He sued under the Jones Act, and the principal issue discussed by
the Supreme Court was whether the Super Scoop was a “vessel” under
federal statutes. The Court noted that the federal statutory definition of
vessel
requires only that a watercraft be “used, or capable of being
used, as a means of transportation on water” to qualify as a
vessel. It does not require that a watercraft be used primarily
for that purpose.
Id. at 495, 125 S. Ct. at 1128, 160 L. Ed. 2d at 946 (quoting 1 U.S.C. § 3).
The Stewart Court specifically rejected the reasoning of DiGiovanni v. Traylor
Brothers, Inc., 959 F.2d 1119 (1st Cir. 1992), which held that a watercraft
was not a vessel under the Jones Act because its primary purpose was not
navigation or commerce, and it was not in actual transit at the time of the
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claimant’s injury. Stewart, 543 U.S. at 495, 125 S. Ct. at 1127-28, 160
L. Ed. 2d at 946. As explained in Stewart, 1 U.S.C. § 3 requires only that a
watercraft be capable of being used as a means of transportation and does
not require that transportation be the primary purpose for operating the
craft. Also, the Court ruled that the watercraft need not be in motion at the
time of injury because “a watercraft [does not] pass in and out of Jones Act
coverage depending on whether it was moving at the time of the accident.”
Id. at 495-96, 125 S. Ct. at 1128, 160 L. Ed. 2d at 946-47. 1 The Court in
Stewart noted that the Super Scoop dredge was not only “capable of being
used” to travel the water—it was actually being used for that purpose. 543
U.S. at 495, 125 S. Ct. at 1128, 160 L. Ed. 2d at 946.
We held in Hayden v. Ameristar Casino Council Bluffs, Inc., 641
N.W.2d 723 (Iowa 2002), that Jones Act preemption claims must be
evaluated with the aid of a factual record because jurisdictional issues such
as this involve mixed questions of law and fact. Further, claims of “seaman”
status are usually hotly contested. Id. at 724-25. The parties in this case
made a record regarding the nature of the watercraft, and it is not disputed
that the riverboats were capable of, and did, ply the waters of the Missouri
River approximately 200 hours per year as required by Iowa’s gaming laws.
A seaman under the Jones Act must be a member of the crew and
must contribute to the function of the vessel or to the accomplishment of its
mission. Chandris, 515 U.S. at 376, 115 S. Ct. at 2194, 132 L. Ed. 2d at
317. It is undisputed that the mission of these riverboats was to provide
gambling for its patrons and that these claimants contributed to that
function. Applying the rationale of Stewart, we hold these claimants were
1We reject the claimant’s argument that Stewart’s definition of vessel is inapposite in
this case on the ground that Stewart was decided under the LHWCA and not the Jones Act.
The Supreme Court made it clear in Stewart that the term “vessel” was interchangeable
under both statutes. Id. at 491-92, 125 S. Ct. at 1125, 160 L. Ed. 2d at 944.
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“seamen” and the workers’ compensation commission was therefore without
subject matter jurisdiction to award benefits.
We affirm the decision of the court of appeals, reverse the judgment of
the district court, and remand for dismissal of the workers’ compensation
claims.
DECISION OF COURT OF APPEALS AFFIRMED, JUDGMENT OF
DISTRICT COURT REVERSED, CASE REMANDED.
All justices concur except Hecht and Appel, JJ., who take no part.