Prejean was injured during the course and scope of his employment with Industrial Cleanup, Inc. while working aboard a 16' aluminum boat which was owned and operated by his employer. The injury occurred while the vessel was located on navigable waters. After conduction an investigation, the employer began payments of workers' compensation benefits. Four years later, Prejean filed suit under the Jones Act and General Maritime Law. He also alleged, in the alternative, a claim of legal malpractice against the initial attorneys representing him for not having filed the maritime claims within three years from the date of the accident.
The employer filed an exception of prescription. Prejean argued that the voluntary payment of compensation benefits interrupted prescription of both the Jones Act and General Maritime Law claims. The trial court granted the employer's exception and the Court of Appeal affirmed. The Louisiana Supreme Court granted writs on the sole issue of whether the employer's voluntary payment of state workers' compensation benefits interrupted the prescriptive periods applicable to Prejean's maritime claims against his employer.
Under the Jones Act, no action can be maintained unless commenced within three years from the day the cause of action accrued. (See 45 U.S.C. § 56.) Likewise, unless otherwise specified by law, a suit for recovery of damages for personal injury or death, or both, arising out of a maritime tort, shall not be maintained unless commenced within three years from the date the cause of action accrued. (46 U.S.C. app. § 763a.)
The plaintiff suggested that La. R.S. 23:1209, La. Civ. Code Art. 3464 and the interpretive jurisprudence regarding these provisions supported his position that the maritime claims were timely files. The Supreme Court noted at the onset that this question was not governed by Louisiana law. The Court observed that whether a federal statute of limitation has been interrupted by a defendant's conduct is inherently a question of federal law. By analogy, the Supreme Court noted that when a claim is made in state court regarding a federal cause of action, and there is an applicable federal statutes of limitations, state courts uniformly apply the federal time period and also apply the federal rules on tolling and related matters.
The Louisiana Supreme Court cited Burness v New York Central R.R. Co., 380 U.S. 424, 85 S.Ct. 1050, 13 L.Ed. 2d 941 (1965) which specifically addressed the issue of whether state law can be used to extend the three year period of limitations set forth in the F.E.L.A. which is also applicable to the Jones Act. In Burnett, the court rejected the argument that the matter was governed by state law and explained that to allow the application of state law would produce nonuniform limitation periods in various states. The Supreme Court recognized that the F.E.L.A. is designed to have uniform operation and should not be deflected by local statute. Using state law, according to the court, would defeat the aim of a federal limitation provision designed to produce national uniformity.
The Louisiana Supreme Court, following the Burnett case, concluded that state statutes which suspend, reduce, or extend the time for bringing suit, have no application in determining the timeliness of a suit brought under the Jones Act. They went on to note that similarly, under maritime law, the question of the timeliness of a suit is determined by the standards of maritime law inasmuch as the right to bar an action under these circumstances is a substantive right. The Supreme Court also noted that the three year statute of limitations for general maritime torts is not interrupted by operation of the Louisiana law rule that judgment against one solidary obligor tolls the statute of limitations against other solidary obligors. Another Louisiana rule which is inapplicable to maritime law is the rule which makes the timely filing of a suit against one solidary obligor interrupt prescription against all other solidary obligors. The court explained that where Congress has manifested an intent to establish a uniform period of limitations for maritime claims, it would defeat the uniformity intended to allow the various laws of each state to determine when a limitation period regarding a federal cause of action commences to run and/or when those periods have either been tolled, interrupted or suspended.
Having concluded that federal law would determine the issue before the court, the court noted that there were several circumstances where the three-year limitation period applicable to maritime torts could be extended. A court may toll the time limit for filing suit based upon estoppel or equitable circumstances. The party asserting estoppel has the burden of proof which includes establishing that (1) the party to be estopped must know the facts, (2) must intend that his conduct shall be acted on or must so act that the party asserting the estoppel has a right to believe it is so intended, and (3) the latter must be ignorant of the true facts and he must rely on the formers' conduct to his injury. Essentially, estoppel will only save the plaintiff's claim where the facts show that he has been induced and/or tricked by the defendant into letting the deadline pass.
Citing Benson v. Milwaukee Road, 353 F.Supp. 889 (E.D.Wis. 1973), the Louisiana Supreme Court held that under F.E.L.A., the voluntary payment of state compensation benefits does not toll the statue of limitations. The Court also cited with approval Hamacher v. Canonie Offshore Co., 1990 AMC 2849 (E.D.Mich. 1990) which held that the payment of compensation benefits to a seaman did not interrupt the applicable prescriptive period regarding Jones Act and unseaworthiness claims.
The Louisiana Supreme Court concluded that in the case at bar, the plaintiff had made no allegations of fraud, misrepresentation, concealment or other conduct sufficient to support the estoppel exception on the three-year limitation.
Prejean also argued that instead of being paid state compensation benefits, he should have been paid LHWCA benefits. Prejean maintained that had he been paid LHWCA benefits, that would have interrupted prescription on his Jones Act and general maritime law claims. The plaintiff asked the Supreme Court to treat the state payments as if they were LHWCA payments and cited Cormier v. Clemco Se. Corp., 48 F.3d 179 (5th Cir. 1995) and Billizon v. Connoco. Inc., 864 F.Supp. 571 (E.D.La. 1994) in support of his argument. The Supreme Court concluded that neither of these cases stood for the proposition argued by the plaintiff. Instead, these cases dealt with accident which occurred on fixed platforms on the outer continental shelf. As such, the Outer Continental Shelf Lands Act provided the applicable tort remedies. (43 U.S.C. § 1311, et. Seq.) Under the OSCLA, adjacent state law is applied as surrogate federal law. This distinguishes OCSLA from the Jones Act and general maritime law. Under OCSLA, Congress has specifically provided for the application of state tort remedies.
Since Prejean was not injured on an offshore platform, there was no dispute that his Jones Act and unseaworthiness claims were necessarily governed by federal three year statues of limitations and not by state law. The court concluded that Louisiana law regarding interruption of prescription was not applicable to the maritime claims. The court noted the plaintiff cited no cases under federal maritime law to support his argument that the voluntary payment of LHWCA benefits would interrupt prescription on a Jones Act or general maritime law claim. Accordingly, the court concluded that there was no merit to the plaintiff's argument that he should have been paid pursuant to the LHWCA instead of under state law and that this would have interrupted the statute of limitations under the Jones Act and general maritime law.
While lower courts had maintained the employer's exception of prescription, they did so based on applying Louisiana law. The Supreme Court noted that there was no consideration given to introducing evidence that could have established an estoppel under federal law. Since the Supreme Court was not deciding that federal law governed the issue at bar as opposed to state law, they remanded the case to give the plaintiff an opportunity to produce evidence on the question of whether his employer could be estopped from asserting the statue of limitations under federal law. To this extent, the judgment of the Court of Appeal was vacated, set aside and remanded to the district court for the taking of further evidence.