B-162408, AUG 26, 1971, 51 COMP GEN 125

B-162408: Aug 26, 1971

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CONTRACTORS - EMPLOYEES - OVERSEAS - DEATH OR INJURY - COMPENSATION AN AWARD TO THE ELIGIBLE SURVIVORS OF A GOVERNMENT CONTRACTOR EMPLOYEE KILLED IN VIETNAM BY A MILITARY AIRCRAFT WHICH WAS MADE PURSUANT TO THE DEFENSE BASE ACT (DBA) THAT INCORPORATED THE PROVISIONS OF THE LONGSHOREMEN'S AND HARBOR WORKERS' COMPENSATION ACT TO THE OVERSEAS EMPLOYMENT OF THE DECEDENT DOES NOT PRECLUDE THIRD PARTY LIABILITY ON THE PART OF THE GOVERNMENT UNDER THE MILITARY CLAIMS ACT SINCE THE CONCEPT OF EXCLUSIVE LIABILITY UNDER THE FIRST TWO ACTS IS LIMITED TO THE CONTRACTOR. INJURED PERSONS ARE CONSIDERED CIVILIAN EMPLOYEES OF THE GOVERNMENT AND. ARE PRECLUDED BY THE FEDERAL EMPLOYEES' COMPENSATION ACT FROM ASSERTING A DAMAGE CLAIM AGAINST THE UNITED STATES.

B-162408, AUG 26, 1971, 51 COMP GEN 125

CONTRACTORS - EMPLOYEES - OVERSEAS - DEATH OR INJURY - COMPENSATION AN AWARD TO THE ELIGIBLE SURVIVORS OF A GOVERNMENT CONTRACTOR EMPLOYEE KILLED IN VIETNAM BY A MILITARY AIRCRAFT WHICH WAS MADE PURSUANT TO THE DEFENSE BASE ACT (DBA) THAT INCORPORATED THE PROVISIONS OF THE LONGSHOREMEN'S AND HARBOR WORKERS' COMPENSATION ACT TO THE OVERSEAS EMPLOYMENT OF THE DECEDENT DOES NOT PRECLUDE THIRD PARTY LIABILITY ON THE PART OF THE GOVERNMENT UNDER THE MILITARY CLAIMS ACT SINCE THE CONCEPT OF EXCLUSIVE LIABILITY UNDER THE FIRST TWO ACTS IS LIMITED TO THE CONTRACTOR, AND THE RIGHT TO THE COMPENSATION BENEFITS STEMMED FROM THE DBA AND NOT THE WAR HAZARD COMPENSATION ACT (WHCA), WHICH SUPPLEMENTED THE WAR-RISK HAZARD BENEFITS OF DBA. ALTHOUGH FOR THE PURPOSES OF WHCA, INJURED PERSONS ARE CONSIDERED CIVILIAN EMPLOYEES OF THE GOVERNMENT AND, THEREFORE, ARE PRECLUDED BY THE FEDERAL EMPLOYEES' COMPENSATION ACT FROM ASSERTING A DAMAGE CLAIM AGAINST THE UNITED STATES, THIS ACT DOES NOT CHANGE THE STATUS OF CONTRACTOR EMPLOYEES FOR THE PURPOSES OF THE DEFENSE BASE ACT.

TO THE SECRETARY OF THE ARMY, AUGUST 26, 1971:

THIS IS IN RESPONSE TO A REQUEST DATED FEBRUARY 26, 1971, OF THE FORMER SECRETARY OF THE ARMY FOR OUR OPINION ON WHETHER THE WAR HAZARDS COMPENSATION ACT (42 U.S.C. 1701-1717), IN ITS APPLICATION TO CASES SUCH AS THAT RELATED BELOW, HAS THE EFFECT OF MAKING WORKMEN'S COMPENSATION AWARDS UNDER THE DEFENSE BASE ACT (42 U.S.C. 1651-1654) EXCLUSIVE REMEDIES SO AS TO PRECLUDE CONSIDERATION OF CLAIMS UNDER THE MILITARY CLAIMS ACT (10 U.S.C. 2733). THE LATTER ACT PROVIDES FOR ADMINISTRATIVE SETTLEMENT OF MERITORIOUS CLAIMS INVOLVING PROPERTY LOSS OR PERSONAL INJURY OR DEATH AND PAYMENT TO THE EXTENT OF $15,000, AND ANY AMOUNT IN EXCESS OF $15,000 MAY BE REPORTED TO THE CONGRESS FOR ITS CONSIDERATION.

MR. BRUCE ROBERTSON, AN EMPLOYEE OF A UNITED STATES CONTRACTOR, DIED JUNE 22, 1967, IN THE REPUBLIC OF VIETNAM. HIS DEATH RESULTED FROM A MIDAIR COLLISION OF A UNITED STATES MILITARY AIRCRAFT WITH THE TRANSPORT AIRCRAFT OF THE CONTRACTOR IN WHICH THE DECEASED WAS THE NAVIGATOR. ON AUGUST 12, 1968, THE BUREAU OF EMPLOYEES' COMPENSATION, U.S. DEPARTMENT OF LABOR, WHICH ADMINISTERS THE DEFENSE BASE ACT AND THE WAR HAZARDS COMPENSATION ACT, HAVING FOUND THAT "INJURY AND DEATH AROSE OUT OF AND IN THE COURSE OF THE DECEDENT'S EMPLOYMENT *** AND COMES WITHIN THE PURVIEW OF THE DEFENSE BASE ACT *** ," AWARDED BENEFITS TO THE WIDOW AND MINOR CHILDREN OF THE DECEASED. THE BENEFITS WERE GRANTED IN ACCORDANCE WITH THE LONGSHOREMEN'S AND HARBOR WORKERS' COMPENSATION ACT, AS AMENDED (33 U.S.C. 901 ET SEQ.), THE PROVISIONS OF WHICH WERE BY THE DEFENSE BASE ACT MADE APPLICABLE TO THE OVERSEAS EMPLOYMENT OF MR. ROBERTSON (42 U.S.C. 1651(A)(4)).

SUBSEQUENTLY, ON FEBRUARY 11, 1969, MRS. ROBERTSON FILED A CLAIM UNDER THE MILITARY CLAIMS ACT ON BEHALF OF HERSELF AND THE MINOR CHILDREN TO RECOVER DAMAGES IN THE AMOUNT OF $340,246 FOR THE DEATH OF MR. ROBERTSON. THE CLAIM IS BEING CONSIDERED BY THE UNITED STATES ARMY CLAIMS SERVICE AS THE DEPARTMENT OF THE ARMY HAS BEEN ASSIGNED RESPONSIBILITY FOR THE DISPOSITION OF ALL CLAIMS UNDER THE MILITARY CLAIMS ACT ARISING IN THE REPUBLIC OF VIETNAM (DEPARTMENT OF DEFENSE DIRECTIVE NUMBER 5515.8, JULY 28, 1967).

THE QUESTION WHETHER THIS CASE MAY BE CONSIDERED UNDER THE MILITARY CLAIMS ACT ARISES BY VIRTURE OF PROVISIONS OF THE WAR HAZARDS COMPENSATION ACT PURSUANT TO WHICH, AS MR. ROBERTSON'S DEATH WAS THE RESULT OF A WAR- RISK AS DEFINED IN THAT ACT (42 U.S.C. 1711(B)(5)), THE BUREAU OF EMPLOYEES' COMPENSATION REIMBURSED THE EMPLOYER'S WORKMEN'S COMPENSATION INSURANCE CARRIER FOR ALL BENEFITS PAID TO THE WIDOW AND MINOR CHILDREN PRIOR TO JULY 31, 1969, RELIEVED THE INSURANCE CARRIER OF FURTHER RESPONSIBILITY AND ASSUMED THE OBLIGATION OF PAYING THE BENEFITS DIRECTLY TO THE WIDOW AND MINOR CHILDREN (42 U.S.C. 1704). MOREOVER, UNDER SECTION 1704 THE FUNDS FOR THE REIMBURSEMENT OF THE INSURANCE CARRIER AND THE DIRECT PAYMENT OF BENEFITS ARE DRAWN FROM THE EMPLOYEES' COMPENSATION FUND ESTABLISHED BY CONGRESS FOR THE PAYMENT OF WORKMEN'S COMPENSATION BENEFITS UNDER THE FEDERAL EMPLOYEES' COMPENSATION ACT (5 U.S.C. 8147). THE EFFECT OF THE LEGISLATIVE SCHEME OF THE WAR HAZARDS COMPENSATION ACT, LATER DISCUSSED IN GREATER DETAIL, IS VIEWED BY THE UNITED STATES ARMY CLAIMS SERVICE AS ESTABLISHING AN EXCLUSIVE REMEDY SO AS TO PRECLUDE CONSIDERATION OF MRS. ROBERTSON'S CLAIM UNDER THE MILITARY CLAIMS ACT. CONTRARY VIEW IS ENTERTAINED BY THE SOLICITOR'S OFFICE OF THE DEPARTMENT OF LABOR. THAT OFFICE IS OF THE OPINION THE WAR HAZARDS COMPENSATION ACT DOES NOT PRECLUDE CONSIDERATION OF THIRD PARTY LIABILITY ON THE PART OF THE GOVERNMENT WHEN THE RIGHT TO COMPENSATION BENEFITS STEMS FROM THE DEFENSE BASE ACT. WE FIND OURSELVES IN AGREEMENT WITH THE LATTER VIEW.

THE DEFENSE BASE ACT WAS ENACTED AUGUST 16, 1941, "TO PROVIDE SUBSTANTIALLY THE SAME RELIEF FOR INJURIES OR DEATH OF EMPLOYEES AT BASES LEASED BY THE UNITED STATES FROM GREAT BRITAIN OR ANY OTHER COUNTRY AS EXISTING LAW AFFORDS SIMILAR EMPLOYEES IN THE UNITED STATES, AND TO ASSIST CONTRACTORS EMPLOYING LABOR AT SUCH BASES IN OBTAINING COMPENSATION INSURANCE AT REASONABLE RATES." S. REPT. NO. 540, 77TH CONG., 1ST SESS. 1, ACCOMPANYING S. 1642 WHICH BECAME THE DEFENSE BASE ACT. TO ACHIEVE THE INDICATED OBJECTIVES THE ACT, AS STATED IN THE SENATE REPORT, " *** EXTENDS THE PROVISIONS OF THE LONGSHOREMEN'S AND HARBOR WORKERS' COMPENSATION ACT TO PRIVATE EMPLOYMENT AT ALL BASES ACQUIRED AFTER JANUARY 1, 1940, BY THE UNITED STATES FROM ANY FOREIGN GOVERNMENT IN MUCH THE SAME MANNER THAT THE LAW WAS MADE APPLICABLE TO EMPLOYEES OF PRIVATE ENTERPRISES IN THE DISTRICT OF COLUMBIA." THE DEFENSE BASE ACT HAS BEEN AMENDED TO EXPAND THE AREA OF COVERAGE OUTSIDE THE CONTINENTAL UNITED STATES BUT THE BASIC COMPENSATION ACT REMAINS THE LONGSHOREMEN'S AND HARBOR WORKERS' COMPENSATION ACT.

THE LONGSHOREMEN'S AND HARBOR WORKMENS' COMPENSATION ACT PROVIDES WORKMEN'S COMPENSATION BENEFITS FOR THE DISABILITY OR DEATH OF EMPLOYEES RESULTING FROM "ACCIDENTAL INJURY OR DEATH ARISING OUT OF AND IN THE COURSE OF EMPLOYMENT *** AND *** THE WILLFUL ACT OF THIRD PERSON DIRECTED AGAINST AN EMPLOYEE BECAUSE OF HIS EMPLOYMENT." 33 U.S.C. 902(2). THE LIABILITY OF AN EMPLOYER UNDER THE LONGSHOREMEN'S ACT IS "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 OR IN ADMIRALTY ON ACCOUNT OF SUCH INJURY OR DEATH *** ." 33 U.S.C. 905. SEE, ALSO, 42 U.S.C. 1651(C) AS TO EXCLUSIVENESS OF THE LIABILITY OF AN EMPLOYER OR CONTRACTOR UNDER THE DEFENSE BASE ACT. BUT THE CONCEPT OF EXCLUSIVE LIABILITY, OR STATED OBVERSELY, THAT OF EXCLUSIVE REMEDY, SET FORTH IN THE LONGSHOREMEN'S AND THE DEFENSE BASE ACTS IS LIMITED TO THE EMPLOYER OR CONTRACTOR. MOREOVER, THE LONGSHOREMEN'S ACT RECOGNIZES THE RIGHT OF AN EMPLOYEE TO RECOVER DAMAGES WHERE A THIRD PERSON IS LIABLE FOR THE INJURY OR DEATH AND "HE NEED NOT ELECT WHETHER TO RECEIVE SUCH COMPENSATION OR TO RECOVER DAMAGES AGAINST SUCH THIRD PERSON." 33 U.S.C. 933. THE RIGHT TO RECOVER DAMAGES FROM THE UNITED STATES BY A CONTRACTOR'S EMPLOYEE HAS BEEN UPHELD EVEN THOUGH THE GOVERNMENT BEARS THE ECONOMIC BURDEN OF THE COST OF THE COMPENSATION INSURANCE. FIDELITY & GUARANTY CO. V UNITED STATES, 152 F2 46 (1945).

THE WAR HAZARDS COMPENSATION ACT WAS ENACTED DECEMBER 2, 1942, TO SUPPLEMENT THE DEFENSE BASE ACT. IT PROVIDES FOR THE COMPENSATION OF SEVERAL CATEGORIES OF PERSONS EMPLOYED OUTSIDE THE CONTINENTAL UNITED STATES IN THE EVENT OF INJURY RESULTING FROM A WAR-RISK HAZARDS, "WHETHER OR NOT SUCH PERSON THEN ACTUALLY WAS ENGAGED IN THE COURSE OF HIS EMPLOYMENT *** ." 42 U.S.C. 1701(A). IT FURTHER PROVIDES THAT AS TO SUCH PERSONS "THE PROVISIONS OF THE ACT ENTITLED 'AN ACT TO PROVIDE COMPENSATION FOR EMPLOYEES OF THE UNITED STATES SUFFERING INJURIES WHILE IN THE PERFORMANCE OF THEIR DUTIES, AND FOR OTHER PURPOSES,' APPROVED SEPTEMBER 7, 1916, AS AMENDED AND AS MODIFIED BY THIS CHAPTER, SHALL APPLY WITH RESPECT THERETO IN THE SAME MANNER AND TO THE SAME EXTENT AS IF THE PERSON SO EMPLOYED WERE A CIVIL EMPLOYEE OF THE UNITED STATES AND WERE INJURED WHILE IN THE PERFORMANCE OF HIS DUTY, AND ANY COMPENSATION FOUND TO BE DUE SHALL BE PAID FROM THE COMPENSATION FUND ESTABLISHED PURSUANT TO SECTION 35 OF SAID ACT OF SEPTEMBER 7, 1916, AS AMENDED *** ." 42 U.S.C. 1701(A). CLEARLY PERSONS WHOSE RIGHT TO COMPENSATION STEMS FROM THE WAR HAZARDS COMPENSATION ACT, SINCE THEY ARE TO BE CONSIDERED FOR THE PURPOSES OF THAT ACT AS CIVIL EMPLOYEES OF THE UNITED STATES, WOULD BE PRECLUDED BY THE EXCLUSIVE PROVISION OF THE FEDERAL EMPLOYEES' COMPENSATION ACT FROM ASSERTING A DAMAGE CLAIM AGAINST THE UNITED STATES, 5 U.S.C. 8116(C). HOWEVER, THE RIGHT TO COMPENSATION IN THE ROBERTSON CASE DID NOT ARISE UNDER THE WAR HAZARDS ACT BUT THE DEFENSE BASE ACT. THE FORMER ACT INCLUDES GOVERNMENT CONTRACTOR'S EMPLOYEES WITHIN THE PURVIEW OF THE DEFENSE BASE ACT ONLY IF NO COMPENSATION IS PAYABLE WITH RESPECT TO THE INJURY OR DEATH UNDER THE LATTER ACT. THAT THE DEFENSE BASE ACT MAY PROVIDE COMPENSATION FOR AN INJURY RESULTING FROM A WAR-RISK HAZARD WAS RECOGNIZED IN A HOUSE REPORT ON S. 2412 WHICH BECAME THE WAR HAZARDS COMPENSATION ACT -

IT WILL BE NOTED THAT THE COVERAGE EXTENDED BY THIS SUBSECTION SUPPLEMENTS COVERAGE FOR INJURY OR DEATH ARISING OUT OF AN IN THE COURSE OF A PERSON'S EMPLOYMENT UNDER THE DEFENSE BASE ACT. INJURIES OR DEATHS SUSTAINED BY EMPLOYEES OF A CONTRACTOR WITH THE UNITED STATES AT THE OFFSHORE BASES IF ARISING OUT OF AND IN THE COURSE OF EMPLOYMENT ARE COMPENSABLE UNDER THE PROVISIONS OF THE DEFENSE BASE ACT. THIS INCLUDES INJURIES OR DEATHS PROXIMATELY RESULTING FROM WAR-RISK HAZARDS. THIS SUBSECTION EXTENDS SIMILAR BENEFITS TO SUCH EMPLOYEES FOR SUCH INJURIES OR DEATHS WHEN THEY ARE NOT COMPENSABLE UNDER SUCH ACT (I.E., NOT ARISING OUT OF AND IN THE COURSE OF EMPLOYMENT). IN OTHER WORDS, THE COVERAGE OF THIS SUBSECTION DOVETAILS WITH THE COVERAGE OF THE DEFENSE BASE ACT AND 24-HOUR PROTECTION IS THEREFORE PROVIDED FOR SUCH EMPLOYEES. H. REPT. NO. 2581, 77TH CONG., 2D SESS. 12.

BY THE WAR HAZARDS COMPENSATION ACT THE GOVERNMENT UNDERTOOK TO ASSUME RESPONSIBILITY FOR AND TO SELF-INSURE THE PAYMENT OF COMPENSATION FOR INJURIES RESULTING FROM WAR-RISK HAZARDS TO EMPLOYEES WITHIN THE PURVIEW OF THE DEFENSE BASE ACT AS WELL AS THOSE WITHIN THE PURVIEW OF THE WAR HAZARDS COMPENSATION ACT. IT DID SO BECAUSE OF THE DIFFICULTY OF GOVERNMENT CONTRACTORS IN OBTAINING SUCH COVERAGE FOR THEIR EMPLOYEES AND THE PROBLEM OF DETERMINING A FAIR PREMIUM RATE. SEE S. REPT. NO. 1448, 77TH CONG., 2D SESS. 5. IN CASES UNDER THE DEFENSE BASE ACT INVOLVING AN INJURY OR DEATH RESULTING FROM A WAR-RISK HAZARD THE WAR HAZARDS ACT PROVIDES FOR THE REIMBURSEMENT OF AN EMPLOYER OR HIS INSURANCE CARRIER OR COMPENSATION FUND FOR THE BENEFITS PAID, EXCEPT WHERE "A PREMIUM (WHICH INCLUDED AN ADDITIONAL CHARGE OR LOADING FOR SUCH HAZARD) WAS CHARGED." 42 U.S.C. 1704. THE SECTION FURTHER PROVIDES THAT "THE SECRETARY MAY *** PAY SUCH BENEFITS, AS THEY ACCRUE AND IN LIEU OF REIMBURSEMENT, DIRECTLY TO ANY PERSON ENTITLED THERETO, AND THE INSOLVENCY OF SUCH EMPLOYER, INSURANCE CARRIER, OR COMPENSATION FUND SHALL NOT AFFECT THE RIGHT OF THE BENEFICIARIES OF SUCH BENEFITS TO RECEIVE THE COMPENSATION DIRECTLY FROM THE SAID COMPENSATION FUND ESTABLISHED UNDER SECTION 35 OF ACT OF SEPTEMBER 7, 1916, AS AMENDED *** ."

WHILE THE ULTIMATE SOURCE FOR THE PAYMENT OF BENEFITS FOR INJURY OR DEATH RESULTING FROM A WAR-RISK HAZARD IS THE EMPLOYEES' COMPENSATION FUND, ESTABLISHED BY THE ACT OF SEPTEMBER 7, 1916, THE FEDERAL EMPLOYEES' COMPENSATION ACT, IT DOES NOT FOLLOW THAT ALL PAYMENTS THEREFROM SHOULD BE SUBJECT TO THE EXCLUSIVE REMEDY RESTRICTION OF THE FEDERAL EMPLOYEES' COMPENSATION ACT. THE STATUTORY DIFFERENCE BETWEEN THE DEFENSE BASE ACT AND THE WAR HAZARDS COMPENSATION ACT AS TO THE LEGAL BASIS ON WHICH PERSONS DERIVED THEIR RIGHT TO COMPENSATION CANNOT BE IGNORED. ONLY PERSONS WHOSE ENTITLEMENT ARISES UNDER THE WAR HAZARDS COMPENSATION ACT ARE FOR THE PURPOSES OF COMPENSATION TO BE CONSIDERED AS IF THEY WERE CIVIL EMPLOYEES OF THE UNITED STATES. ON THE OTHER HAND PERSONS WHO DERIVE THEIR ENTITLEMENT TO BENEFITS UNDER THE DEFENSE BASE ACT REMAIN FOR THE PURPOSES OF COMPENSATION EMPLOYEES OF GOVERNMENT CONTRACTORS.

THE DEFENSE BASE ACT AS SUPPLEMENTED BY THE WAR HAZARDS COMPENSATION ACT MAY BE VIEWED AS A COMPREHENSIVE SYSTEM FOR THE PAYMENT OF BENEFITS INCIDENT TO WAR-RISK INJURIES OR DEATH. BUT WE ARE CONCERNED HERE WITH THE COLLATERAL ASPECT OF THIRD-PARTY LIABILITY, PARTICULARLY THAT OF THE UNITED STATES WHICH HAS BEEN LEGISLATIVELY DEALT WITH IN THE WAR HAZARDS COMPENSATION ACT BY THE TREATMENT OF PERSONS ENTITLED TO BENEFITS UNDER THAT ACT AS CIVIL EMPLOYEES OF THE UNITED STATES. CF. JOHANSEN V UNITED STATES, 343 U.S. 427 (1952). SUCH LEGISLATIVE CONSIDERATION TENDS TO INHIBIT THE INFERENCE THAT SIMILAR TREATMENT WAS INTENDED FOR PERSONS WHO ARE BENEFICIARIES UNDER THE DEFENSE BASE ACT. MOREOVER, WE FIND NOTHING OF SUBSTANCE IN THE LEGISLATIVE HISTORY OF THE WAR HAZARDS COMPENSATION ACT GIVING SUPPORT TO SUCH AN INFERENCE.

WE CONCLUDE THAT THE WAR HAZARDS COMPENSATION ACT DOES NOT, PER SE, HAVE THE EFFECT OF MAKING AN AWARD UNDER THE DEFENSE BASE ACT FOR AN INJURY OR DEATH RESULTING FROM A WAR-RISK HAZARD AN EXCLUSIVE REMEDY SO AS TO NECESSARILY PRECLUDE RELIEF UNDER THE MILITARY CLAIMS ACT.