New Jersey Court Says Fifth “Larson” Factor (Residential Status) Not Sufficient to Establish Jurisdiction
Quoting and adopting the discussion found in Larson’s Workers’ Compensation Law, § 142.01, et seq., a New Jersey appellate court held that the fifth “Larson factor”—residency—is insufficient, in and of itself, to invoke the jurisdiction of New Jersey's Division of Workers' Compensation (“the Division’) in extraterritorial occupational injury claims [Marconi v. United Airlines, 2019 N.J. Super. LEXIS 119 (July 22, 2019)]. Moreover, the court added the employer airline's "localized" interest [the Larson fifth factor] in New Jersey was insufficient to confer jurisdiction under the facts of the case. Accordingly, the Division had no jurisdiction over two workers' compensation claims alleging occupational injury at the Philadelphia International Airport filed in New Jersey by the claimant, a long-time New Jersey resident.
Background
Claimant filed two claim petitions with the Division, one alleging a specific work-related injury to his left hip that occurred on January 31, 2015, and the other alleging an occupational injury to his hip while performing repetitive duties between 1986 and the present. The airline acknowledged the specific injury and stated that it had made full payment of benefits under the Pennsylvania Act. It sought to dismiss both petitions on jurisdictional grounds.
Claimant has enjoyed a long career with the airline, Originally hired as an aircraft mechanic by the employer in San Francisco in 1986, he began working in Philadelphia for the employer in 1988. Ecept for a three-year period from 2009 to 2012, during which claimant worked for the employer at Dulles International Airport, near Washington, DC., he has worked in Philadelphia. While the airline has a presence at the Newark, New Jersey airport, claimant has never worked there.
Workers’ Compensation Judge’s Decision
A workers’ compensation judge conducted a hearing limited to the jurisdictional issue and concluded, based upon the so-called Larson factors, that the Division had established jurisdiction under the fifth criteria—residential status. The judge listed the Larson factors:
- Place where the injury occurred;
- Place of making the contract;
- Place where the employment relation exists or is carried out;
- Place where the industry is localized;
- Place where the employee resides; or
- Place whose statute the parties expressly adopted by contract [Larson, § 142.01].
The judge found, however, that no New Jersey case had ever held that jurisdiction could be invoked based upon residence alone. Accordingly, the judge dismissed both petitions and the claimant appealed.
Appellate Court Won’t Follow Dicta
The appellate court noted that claimant had relied upon dicta in Bunk v. Port Authority of N.Y. & N.J., 144 N.J. 176, 180-81, 676 A.2d 118 (1996), in which the court had allowed that residency alone could be sufficient to confer jurisdiction in New Jersey. Alternatively, claimant contended that the employer’s business was “localized” in New Jersey [the fourth Larson factor], and that combined with his residency, New Jersey should exercise jurisdiction over his petitions. The court found such dicta not to be controlling. It concluded that residence alone was insufficient to confer jurisdiction on the Division for extraterritorial workplace injuries.
Localization of the Employer’s Business
As to the localization of the employer’s business, the court said the issue was whether claimant’s residence, coupled with the airline’s localized presence in New Jersey, conferred jurisdiction. Turning to Larson, the court noted that the state in which the employer’s business is localized has a relevant interest in a compensation injury, since “the the obligation side of the compensation relation is as much a part of that relation as the benefit side, and since the burden of payment would ordinarily fall most directly on the employer and community where the industry is centered [Larson, § 143.05].
The court examined cases from other jurisdictions and additional references to Larson, the court queried: Did the claimant’s “duties to a substantial extent . . . implement the localized business" of the employer in New Jersey? The court answered its question in the negative.
For one thing, the airline was hardly a localized business. Its reach was not only national, but international. Moreover, the claimant’s contacts with the employer’s Newark hub were, in large part, to advance the claimant’s ability to perform his work in Philadelphia. Even when the claimant used the employer’s facilities at Liberty International Airport, in Newark, it was to serve the employer’s interests elsewhere around the country. Essentially, nothing in the course of the claimant’s two-decade employment with the employer airline advanced the airline’s localized interests in New Jersey. The court concluded, therefore, that although the airline maintained a localized business interest in Newark, the state of New Jersey had no substantial interest in exercising its jurisdiction over the petitions.