(Reuters) - The D.C. Circuit Court of Appeals on Tuesday dismissed a proposed class action suit brought by military contractors seriously injured in Iraq and Afghanistan, but left the door open for individual claims against insurers and employers like KBR and DynCorp International.
The appeal covered an estimated 10,000 workers seeking $2 billion in damages for contractors who lost limbs in massive explosions, suffered traumatic brain injuries from rocket blasts and bombs and developed post-traumatic stress disorder.
A three-judge panel of the D.C. Circuit upheld a lower court’s dismissal of the suit, but said the contractors could still file lawsuits on their own against the companies and insurers.
“The extensive factual allegations in the complaint include some assertions that could be predicates for independent legal claims, falling outside this class action,” said the opinion, written by Senior Circuit Judge David Sentelle and joined by Chief Judge Merrick Garland and Judge Janice Brown.
For example, one employee of a military contractor alleged she was sexually assaulted in Iraq. Another, an owner of a nursing care company, said an insurer approved numerous medical treatments but then refused to pay for them, causing her losses of $200,000.
The companies being sued, which included military contracting firms as well as insurers like American International Group and Continental Insurance Company, moved to dismiss the case on the grounds the claims fell under the 1941 Defense Base Act.
The act provides relief to government contractors whose death or injuries occurred while working alongside military forces overseas. The employees claimed the companies failed to provide adequate medical benefits owed to them under the Base Act.
But the act stipulates that in return for compensation guarantees, the employees give up the possibility of seeking common-law remedies against their employers for work-related injuries.
The district court found - and the D.C. Circuit agreed - that “appellants’ class-wide tort claims, originally filed in 2011, are barred by the exclusive statutory scheme set forth in the Base Act,” according to the opinion.
But, the appeals court said, that does not bar the plaintiffs “bringing independent claims outside of the Base Act’s statutory scheme.”
Defendants were pleased with the decision, according to one of the attorneys who represented them, Richard Doren from Gibson Dunn & Crutcher’s office in Los Angeles.
“The compensation system created by the Act provides a means for government contractor employees who are injured in war zones to receive prompt compensation,” Doren said in an email.
But Scott Bloch, an attorney for the plaintiffs said they would continue to explore their appeal options.
“The law is not and cannot be that military contracting companies and insurance companies have carte blanche,” Bloch said.
Separately, three individuals in the case alleged the companies violated the Americans with Disabilities Act. They claimed that despite severe injuries, they were denied “reasonable accommodations” under the ADA.
The appeals court ruled the plaintiffs should be allowed to amend their complaint to include those claims for the U.S. District Court for the District of Columbia to reconsider.
The case is Daniel Brink et al v. Continental Insurance Company et al, at the United States Court of Appeals for District of Columbia Circuit, No. 13-7165.
For the plaintiff-appellant: Scott Bloch of the Law Offices of Scott J. Bloch
For the defendant-appellee: Richard Doren of Gibson Dunn & Crutcher