Oh, Canada: US court rules country will have to defend itself in an American court for worker's comp claim against its Boston consulate

A federal appeals court ruled yesterday that an American who worked as an administrative assistant in the Canadian consulate in Boston can try to convince a judge that the consulate should pay her for injuries she suffered in a fall there, in a case in which both the Canadian government and the US State Department were forced to consider the intricacies of Massachusetts workers compensation law.

The 2-1 decision reverses earlier rulings by Massachusetts workers compensation officials and a judge in US District Court in Boston that Cynthia Merlini had no case because Canada, despite our best efforts in the War of 1812, is a sovereign nation and so exempt from any such legal actions, under the federal Foreign Sovereign Immunities Act.

The Canadian government did pay Merlini under its worker's compensation law, just not as much as Merlini thought she was owed here - and one of the components of her suit is the consulate's failure to obtain Massachusetts workers compensation insurance.

In its ruling, the US Court of Appeals for the First Circuit in Boston sided with Merlini on the question of whether she can bring such a suit and, if so, whether Massachusetts workers compensation law applies.

The court said the federal law only applies to people who have official government duties for their home countries or are doing something that could affect their employer's sovereignty and that Merini could proceed with her suit under an exemption for people simply engaged in "commercial activity."

Legally, the court explained, this extends beyond just selling or buying things to doing the sorts of things regular employees of a commercial enterprise might do - such as answering phones, typing correspondence and, in Merlini's case, setting up a tea and coffee service for a meeting, which is how she came to trip over a loose speakerphone cable and crash into a credenza in 2009, causing what she said were permanent injuries.

Merlini, the appeals court noted, is an American citizen and was simply employed as an administrative assistant, rather than as a Canadian diplomat. And she enjoyed none of the protections Canadian civil servants have, such as job tenure. After her fall, Canada did pay her salary for several months, under Canadian worker's compensation laws, but then terminated her when officials determined she was ready to come back to work and she refused, saying she was still injured.

The "commercial activity" exemption and the fact that Merlini is an American living in Massachusetts means she has the same protections under state law as any other Massachusetts resident, the court said.

The US State Department filed an amicus brief on Canada's behalf, saying that the case was really no different than a case in which the Supreme Court ruled a man who worked for a hospital in Saudi Arabia had no case against the Saudi government for allegedly being imprisoned and tortured by that government because his arrest and torture had nothing to do with his employment.

The appeals court, however, said, nope, different case, in part because the Massachusetts worker's compensation law:

[R]equires that Merlini prove only that she was injured in the workplace in the course of her employment with Canada. Consequently, Merlini is not required to prove -- as the plaintiff in Nelson was required to prove as to his claims for battery, unlawful detainment, wrongful arrest and imprisonment, false imprisonment, inhuman torture, disruption of normal family life, and infliction of mental anguish -- any action by any person that caused the underlying injury. She has to prove, instead, that she suffered a workplace injury in the course of her employment and that the defendant, Canada, was her employer.

The court continued that it did not find Merlini to be some conniver trying to best Canada through some sneaky legal maneuvering:

Merlini's [Massachusetts worker's comp] claim was not part of some shrewd litigation strategy aimed at navigating around Canada's sovereign immunity. It was, instead, the only claim that Merlini could bring against her employer for the workplace injury that she suffered under the statutory framework established by the Massachusetts legislature for permitting employees to seek redress for such injuries from their employers. That framework has, as one of its express aims, the goal of incentivizing employers to comply with the law's worker's compensation requirement so that employees are ensured adequate coverage in situations where they are injured during the course of their employment.

The court then turned to the question of whether Canada's continuing to pay Merlini her salary for several months after her fall showed that she was, in fact, getting worker's comp from "another jurisdiction." The Massachusetts Appeals Court had ruled against Merlini on this basis, separate from the issue of whether Canada has immunity to lawsuits in US courts.

The State Department argued that "Canada opted out of the Massachusetts workers' compensation system in a manner available exclusively to sovereigns - by enacting a statute creating an alternate and uniform compensation regime for all Canadian employees, wherever in the world they might be." Also, applying the Massachusetts law would give the state detailed access to Canadian government finances, because the law lets the state determine whether employers are telling the truth about their ability to pay claims.

But having ruled that Massachusetts law applies to this Massachusetts resident, the court then said those arguments didn't hold, because the Massachusetts worker's compensation law doesn't address "sovereign nations," but only whether a concern employing somebody here has proven they are somehow covered for worker's comps claims as defined by Massachusetts law. Also, the court noted that several consulates in Boston - and a Quebec government office here - have obtained coverage for workers comp claims by their American employees.

And so, the court said, Merlini has the right to make her case:

In fact, if Canada and the dissent's views prevailed, we struggle to understand what recovery for workplace harm -- whether concerning wages, benefits, or discriminatory treatment -- an employee of a foreign government, who, like Merlini, is a United States citizen employed as a clerical worker, could seek from the employer under the "commercial activity" exception recognized in the [Foreign Sovereign Immunities Act]. Yet, it is quite clear that Congress, in enacting the "commercial activity" exception to foreign state immunity in the FSIA, contemplated that some employees of foreign governments would be entitled to recover for workplace harm against their foreign state employer -- namely, those employees that, like Merlini, are United States citizens employed in clerical positions.

In a dissent, Judge Sandra Lynch warned the ruling could wreak havoc on American government offices in other countries:

What is sauce for the Canadian goose under the majority's holding will prove to be a bitter sauce for the American gander. The majority view will, I believe, operate to the detriment of the United States. Compelling Canada to abide by Massachusetts state law, at the expense of maintaining its own workers' compensation scheme, will redound to the harm of the U.S. government's functions abroad.