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Warner v. Contract Claims Services, Inc.

United States District Court, E.D. North Carolina, Southern Division

November 3, 2017




         The matter is before the court on defendant Contract Claims Service, Inc.'s (“CCSI”) second motion pursuant to Rule 12(b)(6), Fed.R.Civ.Pro., to dismiss for failure to state a claim upon which relief may be granted or, in the alternative, pursuant to Rule 56, Fed.R.Civ.Pro., for summary judgment in its favor on all claims. (DE 14). The matter also comes before the court upon defendant United States of America's (“United States”) motion pursuant to Rule 12(b)(1), Fed.R.Civ.Pro., to dismiss for lack of jurisdiction, and for failure to state a claim upon which relief may be granted, pursuant to Rule 12(b)(6), Fed.R.Civ.Pro. (DE 20). The issues raised are ripe for adjudication. For the following reasons, the court grants defendants' motions to the extent the challenges they mount are jurisdictional. The court does not address on either motion the merits of the case.


         On February 1, 2017, plaintiff filed this action pursuant to the Longshore and Harbor Workers' Compensation Act, 33 U.S.C. §§ 901, et. seq., (“LHWCA”) as extended by the Non- appropriated Fund Instrumentalities Act, 5 U.S.C. §§ 8171, et. seq., (“NAFI”), seeking 1) enforcement of an order by an administrative law judge (“ALJ”) granting plaintiff compensation for an injury plaintiff sustained at her workplace on March 11, 2001; 2) seeking compensation for pain management, attorney's fees, and late payment penalties; and 3) alleging claims of negligence and misrepresentation against defendants.[1] On April 18, 2017 defendant CCSI filed its second motion to dismiss for failure to state a claim or, in the alternative, motion for summary judgment arguing in part that this court does not have jurisdiction over plaintiff's claims.[2] In support of the motion, defendant CCSI filed a memorandum of law, statement of material facts, and appendix of exhibits comprising the following: 1) plaintiff's claims form; 2) excerpts of transcripts from hearings before the ALJ; 3) decisions and orders from the ALJ and the Department of Labor Benefits Review Board (“BRB”); 4) defendant CCSI's appeal to the BRB dated April 17, 2017; 5) memorandum of information conference; 6) notice of conversion; 7) declarations of CCSI employees; and 8) correspondence to plaintiff's counsel requesting information to process bills. Plaintiff responded to defendant's motion in opposition, and in support of her motion, filed two exhibits submitted previously to the ALJ concerning her medical expenses. On June 6, 2017, defendant United States filed its motion to dismiss for failure to state a claim and for lack of jurisdiction, also arguing in part that this court lacks jurisdiction over plaintiff's claims. In support of the motion, defendant United States filed defendant CCSI's appeal to the BRB dated April 17, 2017, and plaintiff's appeal to the BRB dated April 25, 2017, along with the BRB's letters of acknowledgment of both appeals.


         The undisputed facts may be summarized as follows. Plaintiff is an employee of the Marine Corps Community Service (“MCCS”), an entity of the United States Department of Defense. (Am. Compl. (DE 11) ¶ 1; CCSI's Memo (DE 15) at 2; US's Memo (DE 21) at 1).[3] Plaintiff was injured at work on March 11, 2001. (Am. Compl. (DE 11) ¶ 2). Following an evidentiary hearing on plaintiff's claim for compensation, the ALJ issued a decision and order on May 23, 2014, ordering MCCS to pay plaintiff temporary disability compensation, to reimburse plaintiff for listed reasonable and necessary medical expenses incurred, and to provide plaintiff with reasonable, appropriate, and necessary medical treatment for her work-related injury. (See ALJ May 23, 2014 order (DE 11-3)). Following MCCS's appeal of the ALJ decision to the BRB, the BRB affirmed the ALJ's decision except for the finding that plaintiff has a continuing loss of wage-earning capacity, remanding that claim to the ALJ for reconsideration. (Am. Compl. (DE 11) ¶ 2; ALJ May 27, 2015 order (DE 15-5)). Following the BRB's decision, on September 29, 2015, MCCS filed a request for modification of the order at issue. (See ALJ March 31, 2017 order (DE 17-4) at 2). On March 31, 2017, the ALJ issued a consolidated decision and order on remand and request for modification, modifying and expanding the dates and amount of coverage required to be provided to plaintiff for temporary disability compensation. (Id.).

         In April 2017, both MCCS, regarding the ALJ's orders issued on May 23, 2014 and March 31, 2017, and plaintiff, regarding the ALJ's order issued on March 31, 2017, filed appeals to the BRB. (Notices of appeal and BRB Ltrs. (DE 17-6; DE 21-1; DE 21-2); see also Pl's Resp. (DE 23) at 1 (“Cross Appeals on economic issues - Pending”))). On May 8, 2017, the BRB sent MCCS and plaintiff each an acknowledgment of their appeals and assigned appeals docket numbers 2017-0397 and 2017-0397A, respectively. (Notices of appeal and BRB Ltrs. (DE 21-1; DE 21-2)).


         A. Standard of Review

         The thrust of defendants' motions is that this court does not have subject matter jurisdiction and on this basis the amended complaint must be dismissed. A motion to dismiss under Rule 12(b)(1) challenges the court's subject matter jurisdiction. Under Rule 12(b)(1), the plaintiff bears the burden of showing that subject matter jurisdiction is appropriate. See McNutt v. Gen. Motors Acceptance Corp., 298 U.S. 178 (1936); Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir. 1982). Such motion may either 1) assert the complaint fails to state facts upon which subject matter jurisdiction may be based, or 2) attack the existence of subject matter jurisdiction in fact, apart from the complaint. Adams, 697 F.2d at 1219.

         When the defendant challenges the factual predicate of subject matter jurisdiction, a court “is to regard the pleadings' allegations as mere evidence on the issue, and may consider evidence outside the pleadings without converting the proceeding to one for summary judgment.” Richmond, Fredericksburg & Potomac R. Co. v. United States, 945 F.2d 765, 768 (4th Cir. 1991).[4] The nonmoving party “must set forth specific facts beyond the pleadings to show that a genuine issue of material fact exists.” Id.

         Plaintiff's primary claim against defendants is brought pursuant to 33 U.S.C. § 921(d) under the LHWCA, requesting enforcement of the ALJ's May 23, 2014, order granting plaintiff compensation related to work injuries sustained at plaintiff's place of employment. Because both defendants, inter alia, argue the court lacks jurisdiction to hear plaintiff's claims, the court's analysis addresses this issue first.

         Defendants argue that the ALJ order at issue is not final and therefore this court lacks subject matter jurisdiction to grant the relief sought. “The existence of subject matter jurisdiction is a threshold issue” that should be addressed before the court reaches the merits of a case. Jones v. Am. Postal Workers Union, 192 F.3d 417, 422 (4th Cir.1999).

         The LHWCA provides for a comprehensive system governing the administration and litigation of claims by injured maritime employees.[5]S e e Dir., Office of Workers' Comp. Programs, Dep't of Labor v. Newport News Shipbuilding & Dry Dock Co., 514 U.S. 122, 125-26 (1995). According to the LHWCA, after a claim has been filed, a hearing presided over by an ALJ must be held “upon application of any interested party.” 33 U.S.C. § 919(c)-(d). After the ALJ issues an order, “any party of interest” may appeal the decision to the BRB. Id. § 921(b)(3). After the BRB issues a “final order, ” the LHWCA allows for judicial review “in the United States court of appeals for the circuit in which the injury occurred.” Id. § 921(c). The LHWCA provides that an order shall become “effective” when filed in the office of the deputy commissioner and becomes “final” 30 days thereafter unless a party petitions the BRB for reconsideration. I d . ยง 921(a)-(b). Therefore, the path of a claim begins before an ALJ and can be appealed up to the BRB; once the order at issue becomes final, the court of appeals has jurisdiction to ...

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