D.C. Circuit Finds Contractual Claims May Not be Preempted

​The Defense Base Act and the Longshore Act preempt claims for retaliatory discharge, but not contractual claims arising from the discharge, according to the U.S. District of Columbia Court of Appeals.
 
In Sickle v. Torres Advanced Enterprise Solutions, LLC, 884 F.3d 338 (D.C. Cir. 2018), 52 BRBS 7(CRT), Matthew Elliot and David Sickle worked in Iraq for Torres Advanced Enterprise Solutions.  Elliot sustained an injury to his back, and Sickle, a medic, documented and treated the injury, and recommended that Elliot return to the U.S. for further treatment.  Torres learned that Elliot was seeking workers’ compensation and terminated Elliot, alleging that his position in Iraq was no longer needed.  Thereafter, according to Sickle, Torres began to “‘threaten and intimidate’ him, insisting that he recant his support for Elliot’s workers’ compensation claim.”  Soon after these threats, Sickle was fired.  Elliot was awarded benefits, but both men filed suit in federal district court, alleging retaliatory discharge, breach of contract, and other common law claims.
 
Torres moved to dismiss the complaint, alleging preemption under the Defense Base Act and the Longshore Act.  The district court agreed and dismissed the complaint, determining that Sickle and Elliot failed to exhaust their administrative remedies and that their common law claims were preempted.  On appeal, the D.C. Circuit ruled that Elliot’s tort claims were preempted because they arose out of his application for workers’ compensation benefits.  However, the D.C. Circuit found that his contract claims, arising out of Torres’ failure to adhere to the employment contract when it fired Elliot, were viable.  As to Sickle, the D.C. Circuit determined that none of his claim were preempted, because his claims were “divorced from any claim for benefits.”
 
As a predicate to its determination, the D.C. Circuit determined that preemption is not a jurisdictional issue, but instead is a merits-based defense.  The court found that preemption “does not implicate the power of the forum to adjudicate the dispute,” but instead is an affirmative defense.  “Preemption under the Base Act and Longshore Act speaks to the legal viability of a plaintiff’s claim, not the power of the court to act.”
 
Examining the preemption issue the court determined that neither the Defense Base Act nor the Longshore Act expressly preempt state tort or contract claims.  However, the court believed that the two acts impliedly preempt state common law claims arising from workplace injuries, as part of the “legislated compromise” of surrendering tort claims in exchange for “an expeditious statutory remedy.”  However, the court stated that implied preemption does “‘not preclude [individuals] from pursuing claims that arise independently of a statutory entitlement to benefits, such as a common-law assault claim,’ or a ‘breach of contract’ claim ‘based on a separate agreement to make payments … to provide care.’”
 
Summarizing its decision, the D.C. Circuit observed that the “touchstone for implied preemption under the Base Act is a claim’s nexus to the statutory benefits scheme. Because Elliott sought and obtained workers’ compensation under the Base Act, his tort claims arising from that benefits process are preempted, but his independent claim of contractual injury is not. Sickle, for his part, never set foot into the Base Act’s regulatory arena, so both his tort and contract claims can proceed.”