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Exclusive Remedy Means No Remedy for Defense Contractor Employees

A $2 billion class action brought by injured defense contractor employees against military contractors and insurance companies was dismissed by the D.C. Circuit on Thursday. The defense contractor employees suffered a range of injuries while working for the U.S. in Iraq and Afghanistan, from lost limbs, to traumatic brain injuries.

Their suit argued that they were repeatedly denied medical care, given false information and had benefits impermissibly withheld. However, the D.C. Circuit found that, since the workers were covered by the Defense Base Act, that Act's exclusivity provision prevented any common-law or state remedies for their claims.

All About That Base

The class sought to cover more than 10,000 injured defense contractor employees. The suit alleged that, while the employees were covered under the Base Act, defense contractor companies and their insurers repeatedly committed intentional torts in denying or misadminstering their claims.

The Base Act provides relief to employees of government contractors who are injured working overseas. The Base Act, like the Longshore Act, requires defense contracting companies to relinquish certain tort defenses, but also operates as the exclusive remedy for employee tort claims. The Act attempts to balance employer and employee interests, offering limited but prompt recovery to employees in exchange for "limited and predictable liability" for employers.

All Claims Fall Before the Exclusive Remedy Provision

That exclusive remedy provision proved fatal for the injured employees. Under D.C. Circuit precedent, such exclusive remedy provisions prevent all tort claims outside the relevant Acts, whether it's the D.C. Workers' Compensation Act, the Longshore Act, or the Base Act. Such a specifically "legislated compromise" cannot be ignored by the court.

The court also refused to read any exceptions into the Act. Appellants had argued that a First Circuit case which allowed a tort suit to go forward despite the Longshore Act's exclusivity provision created an opening for intentional torts. In that case, an insurer had stopped payment without warning knowing that "acute harm might follow." But, the D.C. Circuit found, its own precedent rejected that case and it could not reevaluate it without an en banc hearing.

The court further declined to act on the injured employees claims that the Base Act's compensation was pitiful and that the program was bureaucratic and slow. Those, the Circuit said, were concerns for the political process, not the courts.

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