Defense Digest, Vol. 25, No. 4, December 2019

States of Confusion

Key Points:    

  • Extraterritorial jurisdiction in the context of workers’ compensation is the legal ability of a state’s government to exercise authority over work-related injuries beyond its normal boundaries. It is an extension of any individual state’s workers’ compensation laws and how they apply when an employee hired in the primary state is injured while working in another state.
  • An employee is entitled to file a claim in the state where their services are principally localized. An employee’s services are said to be localized in a state if they are performed entirely within that state, or if services are performed both within and outside the state, but those services performed outside the state are incidental to the individual’s services performed within the state.
  • The state in which the employer’s business is localized has a special interest in exercising jurisdiction over compensable injuries as the burdens and costs of compensation fall most directly upon employers and consumers in the area where the industry is centered.

 

The New Jersey Appellate Division revisited Connolly v. Port Authority of New York & New Jersey, 722 A.2d 110 (N.J. Super. Ct. App. Div. 1998) in determining which state has jurisdiction in the context of extraterritorial work-related injuries. The Appellate Division recently held in Marconi v. United Airlines, 2019 N.J. Super. LEXIS 119 (N.J. Super. Ct. App. Div., July 22, 2019) that claim petitions filed in the New Jersey Division of Workers’ Compensation by an employee of United Airlines’ Philadelphia International Airport facility were properly dismissed because nothing in the worker’s 20 years of employment with United Airlines advanced the company’s localized interest in New Jersey. As such, New Jersey had no substantial interest in exercising jurisdiction over the claims.

Richard Marconi was employed as an aircraft technician for United Airlines. Marconi filed two claim petitions in the Camden vicinage of the New Jersey Division of Workers’ Compensation. The first alleged a work-related injury to his left hip while working for United Airlines in Philadelphia, Pennsylvania. The second alleged occupational exposure to repetitive motion while while employed with United Airlines in Philadelphia from 1986 through the present. United Airlines, the respondent, subsequently moved to dismiss both claims for lack of jurisdiction. The judge of compensation conducted a trial limited to the jurisdictional issue with Marconi, the petitioner, as the sole witness.

In her certifications, the respondent’s counsel indicated that the petitioner was hired in San Francisco in 1986. It was additionally certified that he began working at Philadelphia International Airport in 1988 and, despite a brief transfer to Dulles Airport in Washington, DC, had worked at Philadelphia International Airport ever since.

The petitioner testified that he was born and raised in New Jersey where, absent a brief period, he had lived continuously since 1988. The petitioner’s supervisor in Philadelphia reported to Newark’s Liberty International Airport, which was a hub for the respondent, for about ten years. Although the petitioner was never stationed in Newark, he frequently depended on the technical advice of the respondent’s staff at that airport and would call every couple of months for assistance. The petitioner testified that he received training all over the world, including in Newark, and would fly from Newark whenever his assistance was needed in the servicing of the respondent’s planes at other airports due to a shortage of technicians. The petitioner indicated that he requisitioned parts from the respondent’s Chicago and San Francisco operations and that these parts would routinely be delivered first to Newark before being rerouted to him in Philadelphia. At times, the petitioner’s supervisor would drive to Newark to retrieve the parts delivered there.

At the conclusion of trial, the judge of compensation applied the six grounds for asserting jurisdiction as set forth in Larson’s Workers’ Compensation, Section 142.01 (Matthew Bender, Rev. Ed. 2019) – i.e., [1] the place where the injury occurred; [2] the place of making of the employment contract; [3] the place where the employment relation exists or is carried out; [4] the place where the industry is localized; [5] the place where the employee resides; or [6] the place whose statute the parties expressly adopt by contract. The judge of compensation determined that the petitioner was a resident of New Jersey at the time of his work-related accident and exposure and that the respondent had a substantial “localized” presence in the state. However, the judge erroneously believed that under the Appellate Division’s holding in Connolly, he was required to “decline to exercise jurisdiction even if the injured worker is a New Jersey resident and there is substantial localization of the employer’s operations in New Jersey.” Accordingly, the judge held that the petitioner failed to establish jurisdiction as to his work-related accident and exposure, and he dismissed both claims. This appeal ensued.

In affirming the judge of compensation’s ruling, the Appellate Division revisited Connolly. As a preliminary matter, the Appellate Division noted that the judge of compensation had misinterpreted its holding when he stated that residency and substantial localization of the respondent’s operations in New Jersey were insufficient to confer jurisdiction upon the New Jersey Division of Workers’ Compensation. In Connolly, a New York resident-employee of the Port Authority filed for benefits in New Jersey, claiming an occupational hearing loss. Although the petitioner never lived in New Jersey and worked entirely in New York, the judge of compensation concluded that “localization” was determinative, and because the Port Authority was localized in both New Jersey and New York, jurisdiction was present in either state. The Appellate Division rejected the judge of compensation’s conclusion and indicated that, despite the Port Authority’s localized presence in New Jersey, “there was no . . . employment relationship between the Port Authority and Connolly in New Jersey.” As the Appellate Division explained, it’s not simply the localization of the employer but, rather, “the nature and frequency of the employee’s relationship with the localized presence of the employer that lends weight” to the inquiry. Accordingly, the Appellate Division in Connolly found that the Division lacked jurisdiction.

After clarifying its holding in Connolly, the Appellate Division reframed the issue in the instant case as follows: “Did Marconi’s duties to a substantial extent implement the localized business of United in New Jersey?” Based upon its reading of the record, the Appellate Division concluded that it did not. As the Appellate Division stated: "Marconi’s contacts with United’s Newark hub were, in large part, to advance Marconi’s ability to perform his work in Philadelphia. Even when Marconi used United’s facilities at [Newark] Liberty International Airport, it was to serve United’s interests elsewhere around the country. Essentially, nothing in the course of Marconi’s two-decade employment with United advanced the company’s localized interests in New Jersey."

Accordingly, the Appellate Division held that, although the respondent maintained a localized business interest in Newark, the state of New Jersey had no substantial interest in exercising jurisdiction over the petitioner’s claims.

*Dario is a shareholder in our Roseland, New Jersey office. He can be reached at 973.618.4122 or djbadalamenti@mdwcg.com.

 

 

Defense Digest, Vol. 25, No. 4, December 2019 is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. ATTORNEY ADVERTISING pursuant to New York RPC 7.1. © 2019 Marshall Dennehey Warner Coleman & Goggin. All Rights Reserved. This article may not be reprinted without the express written permission of our firm. For reprints, contact tamontemuro@mdwcg.com.