Longshore & Harbor Workers' Compensation Act
Supplement - January 2005
Topic 33 - Compensation for Injuries Where Third Persons are Liable
DISCLAIMER: The Longshore Benchbook was created solely to assist the Office of Administrative Law Judges as a first reference in researching cases arising under the Longshore and Harbor Workers' Compensation Act, and extension acts, as amended. This Benchbook does not constitute the official opinion of the Department of Labor, the Office of Administrative Law Judges, or any individual judge on any subject. This Benchbook does not necessarily contain an exhaustive or current treatment of case holdings, and should, under no circumstances, substitute for a party's own research into the statutory, regulatory, and case law authorities on any given subject referred to therein. It is intended to be used as a research tool, not as final legal authority and should not be cited or relied upon as such.
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[ED. NOTE: The following federal district court cases are included for informational purposes only. ]
Ayers v. C&D General Contractors , 2002 WL 31761235, 237 F. Supp 2d 764 (W.D. Ky. Dec. 6, 2002).
Here the widow of a worker killed while removing supports from a dock settled the LHWCA claim but subsequently filed third party actions under the general maritime law and the Admiralty Extension Act. At issue in the third party action was whether "water craft exclusion" excluded this claim since the worker had been working underneath a barge. The court concluded that the claim should not be excluded since the barge was not used for transportation but merely aided the work under the dock.
Topic 33.2 Compensation for Injuries Where Third Persons Are Liable--Assignment of Rights
Mabile v. Swiftships, Inc ., 38 BRBS 19 (2004).
The Board affirmed the ALJ's finding that Section 33(g) does not bar a widow's claim for death benefits although she entered into a third-party settlement after the death of her husband where she was only settling the decedent's tort action for his pain and suffering and economic loss, which remained pending at the time of his death. The Louisiana court had dismissed all of the claims that the widow filed in her own right, specifically holding that only the claims for the decedent's lost wages and pain and suffering could go forward. Thus, the widow obtained the proceeds of the third-party settlement with the employer's officers only because she was substituted for her husband as a representative of his estate and not because she surrendered any of her own rights. Therefore she was not a "person entitled to compensation" for the decedent's pain and economic loss.
The Board explained that in this case, although the decedent's disability claim and the widow's death benefits are based on the same occupational exposure, they are separate claims for distinct types of benefits. As the widow's claim is for death benefits under the LHWCA, and the settlement is solely based on the decedent's lost wages and pain and suffering during his life, the third party was not liable for the same disability or death for which the widow sought benefits under the LHWCA. "Where, as here, the claimant does not have the right to seek damages from the third party for her own benefits, then employer does not have the right, under Section 33(b), to seek damages on the death claim from that third party."
Topic 33.6 Employer Credit For Net Recovery By "Person Entitled To Compensation"
New Orleans v. Ibos , ___ U.S. ___, 124 S.Ct. 1038 (Mem.)( Cert. denied January 12, 2004). [ See next entry.]
Here the U.S. Supreme Court declined to consider this Cardillo rule related case. The Fifth Circuit had previously held that the amounts that a widow received from LHWCA settlements with longshore employers who were not the last responsible employer were not relevant to the amount owed by the last responsible maritime employer and should not have reduced liability for the last responsible maritime employer. Thus, the Fifth Circuit's opinion stands.
Topic 33.6 Employer Credit For Net Recovery By "Person Entitled To Compensation"
New Orleans Stevedores v. Ibos , 317 F.3d 480 ( 5th Cir. 2003). [ See Above.]
In this matter, where the worker had mesothelioma, the Fifth Circuit followed the Second Circuit's rule annunciated in Travelers Ins. Co. v. Cardillo , 225 F.2d 137 ( 2d Cir. 1955) that liability under Section 2(2) of the LHWCA rests with the last maritime employer regardless of the absence of actual causal contribution by the final exposure. Employer in the instant case had argued that it could not be liable because of the worker's mesothelioma and that disease's latency period. However, in following Cardillo , the Fifth Circuit found that a link between exposure while working for the last employer and the development of the disabling condition was not necessary.
The Fifth Circuit has previously held that, after it is determined that an employee has made a prima facie case of entitlement to benefits under the LHWCA, the burden shifts to the employer to prove either (1) that exposure to injurious stimuli did not cause the employee's occupational disease, or (2) that the employee was performing work covered under the LHWCA for a subsequent employer when he was exposed to injurious stimuli. Avondale Indus., Inc. v. Director, OWCP [Cuevas] , 977 F.2d 186, 190 ( 5th Cir. 1992).
The Fifth Circuit also ruled that the employer was not entitled to a credit for the claimant's settlement receipts from prior maritime employers. Judge Edith Jones issued a vigorous dissent on this issue.
Topic 33.6.1 Compensation For Injuries Where Third Persons Are Liable--�Person Entitled to Compensation� Pursuant to Section 33(f)
Richardson v. Newport News Shipbuilding & Dry Dock Co ., 38 BRBS 6(2004).
There are two significant issues in this matter, both involving Section 33. First, at issue is whether Section 33(g) can bar a claim for COPD disability when a claimant suffers from both a non-asbestos related COPD condition, plus an asbestos related condition and the claimant accepted third party settlements in relation to his asbestos related lung disease. Second, at issue is the classification of a claimant who is only undergoing medical monitoring (as opposed to receiving benefits/compensation) when it comes to whether that person is a �person entitled to compensation.� While this case was ultimately remanded, it is nevertheless significant for its illustration of the Board's views.
The claimant originally alleged that he contacted an asbestos-related lung disease as a result of exposure to asbestos dust and fibers, and chronic obstructive pulmonary disease (COPD) from exposure to welding smoke and paint fumes, during the course of his approximately 30 years of work for the employer. The claimant had filed a claim for asbestosis in 1995 and for COPD in 1999, which were eventually consolidated. At the OALJ hearing, the claimant averred that he did not presently have asbestosis and thus he sought to amend his asbestos claim to seek only an award for medical monitoring under Section 7 of the LHWCA. While his longshore claims were pending, the claimant became involved in third party litigation and entered into two third party settlements. The employer argued that Section 33(g) should apply and bar the claimant's recovery since he had entered into the settlements without the employer's prior written approval.
The Board first addressed the issue of whether a claimant recovering only medical monitoring for an asbestos-related condition is a �person entitled to compensation.� In resolving this issue, the Board found that the ALJ rationally looked to the evidence in existence as of the date of the settlements in order to determine if the claimant satisfied the prerequisites to the right to recover. The evidence at that point in time supported the ALJ's finding that as of the date the claimant stopped working, the claimant was aware of the relationship between his work-related asbestosis and his inability to work. At that point in time, there was medical evidence noting the existence of a condition �consistent with asbestos.�
The claimant withdrew his claim for disability benefits for asbestosis, ostensibly on the ground that the later medical evidence could not support a finding of either asbestosis or disability due to asbestosis. Nonetheless, the Board noted that the ALJ addressed the medical evidence as a whole and concluded that the claimant had asbestosis, asbestos-related pleural plaques, and both a restrictive and an obstructive lung impairment due to simultaneous work exposure to asbestos, smoke, dust, and welding fumes, and which combined with the claimant's pre-existing asthma to render him totally disabled. Further more, the Board noted that the ALJ concluded that the claimant's disability due to his lung condition was the same disability for which he settled his third party claims and therefore fond the disability claim under the LHWCA barred, because of the third party settlements.
The Board explained that it could not affirm this finding. The Board remanded with instructions to make findings consistent with Chavez v. Director, OWCP , 961 F.2d 1409, 25 BRBS 134 (CRT) ( 9 th Cir. 1992) (Claimant developed asbestosis and hypertension. Ninth Circuit: An employee who is totally disabled based on either injury alone could recover from the employer under either injury. Therefore to allow an employer set-off for third party proceeds received under one injury would result in a windfall for the employer because the employee could have sought recovery under the other injury for which no third party proceeds are awardable. Such an interpretation in effect would reward the employer for causing two work-related disabilities instead of one.); on remand , Charvez v. Todd Shipyards Corp ., 27 BRBS 80 (1993) (McGranery, J., dissenting), aff�d on recon . En banc , 28 BRBS 185 (1994) (Brown and McGranery, J.J. dissenting), aff�d sub nom . Todd Shipyards Corp. v. Director, OWCP , 139 F. 3d 1309, 32 BRBS 67 (CRT) ( 9 th Cir. 1998).
The Board further instructed the ALJ to then determine the applicability of Section 33(g) based on these findings. �Only if asbestosis is claimant's only work-related disability can Section 33(g) be invoked to bar claimant's claim.� The Board further noted that, �Although claimant withdrew his claim for disability benefits due to asbestosis, employer nevertheless may attempt to establish, in support of its claim, that Section 33(g) applies, that claimant's disability is due to asbestosis alone.�
The Board went on to state, �If after reviewing the medical evidence in light of Chavez , the [ALJ] again finds that claimant is disabled by both asbestosis and COPD, Section 33(g) cannot bar the claim because, under the aggravation rule, COPD is considered to be the disabling, compensable condition and therefore not the same disability for which claimant settled his third party claims.� Thus, the Board vacated the ALJ's finding that Section 33(g) bars the claimant's COPD and remanded the case for consideration of the entire record to discern the cause of the claimant's disability.
The Board also found that, under the circumstances, the claimant's claim for medical monitoring for any asbestos-related condition cannot be barred by Section 33(g) because, ultimately, the claimant is not entitled to disability compensation for asbestosis; a person entitled only to medical benefits is not a �person entitled to compensation� for purposes of Section 33(g).
Topic 33.7 Compensation for Injuries Where Third Persons are Liable--Ensuring Employer's Rights�Written Approval of Settlement
Marmillion v. A,M.E. Temporary Services , (Unpublished)(BRB No. 04-0272)(Dec. 13, 2004).
This is a Section 33(g) case wherein the claimant alleges on appeal that the strict guidelines of Section 33(g) should not bar his claim. Claimant worked for a temporary service company who had contracted his services to a company that loaded and unloaded grain barges. Following an injury, claimant's immediate employer paid some benefits and a LHWCA claim was filed. Subsequently benefits ceased and employer's counsel informed claimant's counsel that the carrier had gone out of business and that the employer did not have reserves in place to make further payments to the claimant: �I wish I could be of more help, but I am afraid that your clients have little recourse of recovery, particularly if they are asserting maritime claims which are not covered by the Louisiana Insurance Guaranty Association statute.�
Subsequently claimant filed a Jones Act, general maritime law action and 905(b) action. Included as a defendant was the owner of a tug who had chartered the tug to the employer and barge loading company for use in maneuvering grain barges. The tug company settled for $1,500. The maritime suit resulted in a dismissal of claimant's case. Prior to the settlement against the tug company, claimant's attorney and employer's attorney had discussed settling the LHWCA matter. Claimant contends that at some point he was notified that there was still LHWCA insurance coverage for this claim.
The ALJ dismissed the claim on Section 33(g) grounds. The Board has now remanded the matter stating that the ALJ must first explicitly determine whether the tug company was potentially liable to both the claimant and the employer for the injury in accordance with Section 33(a). The Board noted that the employer bears the burden of producing evidence on this issue as Section 33(g) is an affirmative defense.
The Board rejected the claimant's specific contention that the employer's alleged �bad faith� in advising him that the carrier was out of business and that the employer could not pay compensation due to a lack of reserves should preclude the employer's reliance on Section 33(g). Additionally the Board noted that the doctrine of equitable estoppel did not apply. This doctrine prevents one party from taking a position inconsistent with that which it took in an earlier action such that the other party would be at a disadvantage. It typically holds a person to a representation made, or a position assumed, where it would be inequitable to another, who has in good faith relied upon that representation or position. To apply this doctrine to claims under the LHWCA, the Board noted that four elements are necessary: (1) the party to be estopped must know the facts; (2) he must intend that his conduct shall be acted on or must act so that the party asserting the estoppel has a right to believe it is so intended: (3) the latter must be ignorant of the facts; and (4) he must rely on the former's conduct to his injury. Rambo v. Director, OWCP , 81 F.3d 840, 843, 30 BRBS 27, 29(CRT) (9 th Cir. 1996), vacated and remanded on other grounds sub nom. Metropolitan Stevedore Co. v. Rambo , 521 U.S. 121, 31 BRBS 54(CRT) (1997).
The Board found that although the claimant contended that he filed his lawsuits in response to his inability to obtain compensation from his employer and/or carrier, the employer's correspondence with the claimant was insufficient to establish that the employer intended that the claimant take this action.
The Board also did not accept the claimant's contention that it would have been pointless to attempt to obtain the carrier's written approval of the settlement with the tug company because he had been advised that the company was out of business. The Board noted that when an carrier is out of business, the employer stands responsible. The Board further noted that even though the employer's attorney had stated that the employer did not have the reserves to pay benefits, at some point after the claimant filed suit against the tug company, it appears that the claimant was informed that there was insurance coverage for his claim and the parties discussed a settlement of the LHWCA claim.
Finally, the Board rejected the claimant's contention that Section 7(h) preserves his entitlement to medical benefits that accrued prior to the settlement with the tug company. See Esposito v. Sea-Land Services, Inc ., 36 BRBS 10 (2002) (� 7(h) does not preclude the applicability of the � 33(g)(1) bar to both compensation and medical benefits.); Wyknenko v. Todd Pacific Shipyards Corp ., 32 BRBS 16 (1998)(Smith, J., dissenting.)(� 7(h) does not support a conclusion that this holding is inapplicable to medical benefits.).
Topic 33.7 Compensation For Injuries Where Third-Persons Are Liable--Ensuring Employer's Rights�Written Approval of Settlement
Dilts v. Todd Shipyards Corp ., (Unpublished)(No. 03-71622)( 9 th Cir. 7, 2004).
In this case, the shipbuilder's widow argued that the statutory requirement of approval contained in Section 33(g) is unconstitutional because it permits an employer to withhold approval of settlements which forces a claimant to obtain the benefits of a settlement at the cost of forfeiting the right to compensation. In its summary affirmation of the widow's denial, the court noted that her position was not consistent with the U.S. Supreme Court's holding in Estate of Cowart v. Nicklos Drilling Co ., 505 U.S. 469, 112 S.Ct. 2589 (1992).
Topic 33.7 Compensation for Injuries Where Third Persons Are Liable�Ensuring Employer's Rights�Written Approval of Settlement
Mapp v. Transocean Offshore USA, Inc ., 38 BRBS 43 (2004).
Here the Board held that when obtaining prior written approval of a third-party settlement under Section 33(g), employer and carrier are separate and distinct entities and that the separate approval of each is required. In the instant case, the claimant sued the employer in state court under the Jones Act, as well as under the general maritime law as a third-party defendant. The claimant then turned around and sued the employer under the LHWCA. The employer had different insurance carriers for each claim. The employer, by virtue of its active participation in the negotiation of the settlement and the fact that it was an actual signatory to that agreement, received adequate notice and provided satisfactory approval of the agreement in compliance with Section 33(g)(1). However, the Claimant's claim is barred pursuant to Section 33(g) because he did not obtain the prior written approval of the carrier.
Additionally, the Board noted that in this particular case, the claimant was aware that the employer had contracted with separate carriers and that the claimant was fully aware of his obligations under Section 33(g)(1) and its accompanying regulations as to the need to obtain approval before executing the third-party settlement.
Topic 33.7 Ensuring Employer's Rights�Written Approval of Settlement�Qualifying for Benefits (Person Entitled to Compensation)
Mabile v. Swiftships, Inc ., 38 BRBS 19 (2004).
The Board affirmed the ALJ's finding that Section 33(g) does not bar a widow's claim for death benefits although she entered into a third-party settlement after the death of her husband where she was only settling the decedent's tort action for his pain and suffering and economic loss, which remained pending at the time of his death. The Louisiana court had dismissed all of the claims that the widow filed in her own right, specifically holding that only the claims for the decedent's lost wages and pain and suffering could go forward. Thus, the widow obtained the proceeds of the third-party settlement with the employer's officers only because she was substituted for her husband as a representative of his estate and not because she surrendered any of her own rights. Therefore she was not a "person entitled to compensation" for the decedent's pain and economic loss.
The Board explained that in this case, although the decedent's disability claim and the widow's death benefits are based on the same occupational exposure, they are separate claims for distinct types of benefits. As the widow's claim is for death benefits under the LHWCA, and the settlement is solely based on the decedent's lost wages and pain and suffering during his life, the third party was not liable for the same disability or death for which the widow sought benefits under the LHWCA. "Where, as here, the claimant does not have the right to seek damages from the third party for her own benefits, then employer does not have the right, under Section 33(b), to seek damages on the death claim from that third party."
Topic 33.7 Insuring Employer's Rights-Written Approval of Settlement
Richardson v. Newport News Shipbuilding & Dry Dock Co ., 38 BRBS 6 (2004).
There are two significant issues in this matter, both involving Section 33. First, at issue is whether Section 33(g) can bar a claim for COPD disability when a claimant suffers from both a non-asbestos related COPD condition, plus an asbestos related condition and the claimant accepted third party settlements in relation to his asbestos related lung disease. Second, at issue is the classification of a claimant who is only undergoing medical monitoring (as opposed to receiving benefits/compensation) when it comes to whether that person is a �person entitled to compensation.� While this case was ultimately remanded, it is nevertheless significant for its illustration of the Board's views.
The claimant originally alleged that he contacted an asbestos-related lung disease as a result of exposure to asbestos dust and fibers, and chronic obstructive pulmonary disease (COPD) from exposure to welding smoke and paint fumes, during the course of his approximately 30 years of work for the employer. The claimant had filed a claim for asbestosis in 1995 and for COPD in 1999, which were eventually consolidated. At the OALJ hearing, the claimant averred that he did not presently have asbestosis and thus he sought to amend his asbestos claim to seek only an award for medical monitoring under Section 7 of the LHWCA. While his longshore claims were pending, the claimant became involved in third party litigation and entered into two third party settlements. The employer argued that Section 33(g) should apply and bar the claimant's recovery since he had entered into the settlements without the employer's prior written approval.
The Board first addressed the issue of whether a claimant recovering only medical monitoring for an asbestos-related condition is a �person entitled to compensation.� In resolving this issue, the Board found that the ALJ rationally looked to the evidence in existence as of the date of the settlements in order to determine if the claimant satisfied the prerequisites to the right to recover. The evidence at that point in time supported the ALJ's finding that as of the date the claimant stopped working, the claimant was aware of the relationship between his work-related asbestosis and his inability to work. At that point in time, there was medical evidence noting the existence of a condition �consistent with asbestos.�
The claimant withdrew his claim for disability benefits for asbestosis, ostensibly on the ground that the later medical evidence could not support a finding of either asbestosis or disability due to asbestosis. Nonetheless, the Board noted that the ALJ addressed the medical evidence as a whole and concluded that the claimant had asbestosis, asbestos-related pleural plaques, and both a restrictive and an obstructive lung impairment due to simultaneous work exposure to asbestos, smoke, dust, and welding fumes, and which combined with the claimant's pre-existing asthma to render him totally disabled. Further more, the Board noted that the ALJ concluded that the claimant's disability due to his lung condition was the same disability for which he settled his third party claims and therefore fond the disability claim under the LHWCA barred, because of the third party settlements.
The Board explained that it could not affirm this finding. The Board remanded with instructions to make findings consistent with Chavez v. Director, OWCP , 961 F.2d 1409, 25 BRBS 134 (CRT) ( 9 th Cir. 1992) (Claimant developed asbestosis and hypertension. Ninth Circuit: An employee who is totally disabled based on either injury alone could recover from the employer under either injury. Therefore to allow an employer set-off for third party proceeds received under one injury would result in a windfall for the employer because the employee could have sought recovery under the other injury for which no third party proceeds are awardable. Such an interpretation in effect would reward the employer for causing two work-related disabilities instead of one.); on remand , Charvez v. Todd Shipyards Corp ., 27 BRBS 80 (1993) (McGranery, J., dissenting), aff�d on recon . En banc , 28 BRBS 185 (1994) (Brown and McGranery, J.J. dissenting), aff�d sub nom . Todd Shipyards Corp. v. Director, OWCP , 139 F. 3d 1309, 32 BRBS 67 (CRT) ( 9 th Cir. 1998).
The Board further instructed the ALJ to then determine the applicability of Section 33(g) based on these findings. �Only if asbestosis is claimant's only work-related disability can Section 33(g) be invoked to bar claimant's claim.� The Board further noted that, �Although claimant withdrew his claim for disability benefits due to asbestosis, employer nevertheless may attempt to establish, in support of its claim, that Section 33(g) applies, that claimant's disability is due to asbestosis alone.�
The Board went on to state, �If after reviewing the medical evidence in light of Chavez , the [ALJ] again finds that claimant is disabled by both asbestosis and COPD, Section 33(g) cannot bar the claim because, under the aggravation rule, COPD is considered to be the disabling, compensable condition and therefore not the same disability for which claimant settled his third party claims.� Thus, the Board vacated the ALJ's finding that Section 33(g) bars the claimant's COPD and remanded the case for consideration of the entire record to discern the cause of the claimant's disability.
The Board also found that, under the circumstances, the claimant's claim for medical monitoring for any asbestos-related condition cannot be barred by Section 33(g)
because, ultimately, the claimant is not entitled to disability compensation for asbestosis; a person entitled only to medical benefits is not a �person entitled to compensation for purposes of Section 33(g).
Topic 33.7 Ensuring Employer's Rights�Written Approval of Settlement
Cheramie v. Superior Shipyard and Fabrication, Inc., (Unpublished) (Civ. A 02-3099)(E.D. La. July 7, 2003).
Here the claimant was injured while working in a ship repair facility. He settled with the owner of the boat on which he was working and filed a 905 action against his employer. His employer filed a motion for summary judgment noting that the claimant had not sought the employer's written permission prior to entering into the settlement with the boat owner. The claimant alleges that he was entitled to file the 905 action because his employer failed to secure LHWCA insurance. In denying the motion for summary judgment, the federal district judge found that �Section 933(g) is inapplicable because [claimant] is suing [his employer] for damages, not compensation or benefits under the LHWCA.� The judge went on to state, �[T]he Court does not consider whether Plaintiff's action is permissible under Section 905(a), or whether [the employer] has failed to secure payment of compensation because the record is devoid of any reference as to whether [the claimant] has either sought or received compensation from [the employer].�
Topic 33.7 Third-Party Settlements Ensuring Employer's Rights Written Approval of Settlement
Esposito v. Sea-Land Service, Inc ., 36 BRBS 10 (2002).
Here the Board rejected the claimant's assertions that the employer's actions amounted to a constructive approval of a third-party settlement. The Board found that the employer's involvement in the third-party litigation and settlement was insufficient to render Section 33(g)(1) inapplicable. The Board noted the very limited participation of the employer and found that it was less than in some other cases where the Board had previously held that Section 33(g)(1) applied. Employer here was a named defendant in the tort suit; thus, it did not appear in the case on the claimant's side. Second, the employer was dismissed from the case nearly one and one-half years before the trial and settlement, and the employer's attorney remained active only for discovery purposes. The Board further noted that "While there is conflicting evidence as to whether [employer's attorney] was aware of the settlement process and the final negotiations, and as to whether he made a congratulatory comment when informed of the ...settlement, the [ALJ] found that [employer's attorney] was not involved in the negotiations themselves, and he did not sign or consent to the general release." The Board found that employer's participation in the third-party litigation did not rise to the level which would constitute constructive approval of the settlement and render Section 33(g)(1) inapplicable.
Next the Board addressed an issue of first impression, namely whether Section 33(g)(2) provides claimants with a means for retaining their entitlement to medical benefits despite having lost their entitlement to compensation. Referencing Estate of Cowart v. Nicklos Drilling Co. , 505 U.S. 469 , 26 BRBS 49 (CRT) (1992); the language of Section 33(g) itself; and the implementing regulation, 20 C.F.R. § 702.281, the Board concluded that a claimant must obtain the prior written approval of a settlement for an amount less than his entitlement under the LHWCA.
Topic 33.7 Ensuring Employer's Rights�Written Approval of Settlements
Dilts v. Todd Shipyard Corp. , (Unpublished)(BRB No. 02-0434)(March 12, 2003).
The Board found that a claimant can not dodge the Section 33(g) requirement of written approval from the employer by alleging that the third-party settlements were de minimis and therefore could not prejudice the employer.
Topic 33.7.3 Involvement of the Employer in Third-Party Settlements
Marmillion v. A,M.E. Temporary Services , (Unpublished)(BRB No. 04-0272)(Dec. 13, 2004).
This is a Section 33(g) case wherein the claimant alleges on appeal that the strict guidelines of 33(g) should not bar his claim. Claimant worked for a temporary service company who had contracted his services to a company that loaded and unloaded grain barges. Following an injury, claimant's immediate employer paid some benefits and a LHWCA claim was filed. Subsequently benefits ceased and employer's counsel informed claimant's counsel that the carrier had gone out of business and that the employer did not have reserves in place to make further payments to the claimant: �I wish I could be of more help, but I am afraid that your clients have little recourse of recovery, particularly if they are asserting maritime claims which are not covered by the Louisiana Insurance Guaranty Association statute.�
Subsequently claimant filed a Jones Act, general maritime law action and 905(b) action. Included as a defendant was the owner of a tug who had chartered the tug to the employer and barge loading company for use in maneuvering grain barges. The tug company settled for $1,500. The maritime suit resulted in a dismissal of claimant's case. Prior to the settlement against the tug company, claimant's attorney and employer's attorney had discussed settling the LHWCA matter. Claimant contends that at some point he was notified that there was still LHWCA insurance coverage for this claim.
The ALJ dismissed the claim on Section 33(g) grounds. The Board has now remanded the matter stating that the ALJ must first explicitly determine whether the tug company was potentially liable to both the claimant and the employer for the injury in accordance with Section 33(a). The Board noted that the employer bears the burden of producing evidence on this issue as Section 33(g) is an affirmative defense.
The Board rejected the claimant's specific contention that the employer's alleged �bad faith� in advising him that the carrier was out of business and that the employer could not pay compensation due to a lack of reserves should preclude the employer's reliance on Section 33(g). Additionally the Board noted that the doctrine of equitable estoppel did not apply. This doctrine prevents one party from taking a position inconsistent with that which it took in an earlier action such that the other party would be at a disadvantage. It typically holds a person to a representation made, or a position assumed, where it would be inequitable to another, who has in good faith relied upon that representation or position. To apply this doctrine to claims under the LHWCA, the Board noted that four elements are necessary: (1) the party to be estopped must know the facts; (2) he must intend that his conduct shall be acted on or must act so that the party asserting the estoppel has a right to believe it is so intended: (3) the latter must be ignorant of the facts; and (4) he must rely on the former's conduct to his injury. Rambo v. Director, OWCP , 81 F.3d 840, 843, 30 BRBS 27, 29(CRT) (9 th Cir. 1996), vacated and remanded on other grounds sub nom. Metropolitan Stevedore Co. v. Rambo , 521 U.S. 121, 31 BRBS 54(CRT) (1997).
The Board found that although the claimant contended that he filed his lawsuits in response to his inability to obtain compensation from his employer and/or carrier, the employer's correspondence with the claimant was insufficient to establish that the employer intended that the claimant take this action.
The Board also did not accept the claimant's contention that it would have been pointless to attempt to obtain the carrier's written approval of the settlement with the tug company because he had been advised that the company was out of business. The Board noted that when an carrier is out of business, the employer stands responsible. The Board further noted that even though the employer's attorney had stated that the employer did not have the reserves to pay benefits, at some point after the claimant filed suit against the tug company, it appears that the claimant was informed that there was insurance coverage for his claim and the parties discussed a settlement of the LHWCA claim.
Finally, the Board rejected the claimant's contention that Section 7(h) preserves his entitlement to medical benefits that accrued prior to the settlement with the tug company. See Esposito v. Sea-Land Services, Inc ., 36 BRBS 10 (2002) (� 7(h) does not preclude the applicability of the � 33(g)(1) bar to both compensation and medical benefits.); Wyknenko v. Todd Pacific Shipyards Corp ., 32 BRBS 16 (1998)(Smith, J., dissenting.)(� 7(h) does not support a conclusion that this holding is inapplicable to medical benefits.).
Topic 33.7.3 Involvement of the Employer in Third-Party Settlements
Mapp v. Transocean Offshore USA, Inc ., 38 BRBS 43 (2004).
Here the Board held that when obtaining prior written approval of a third-party settlement under Section 33(g), employer and carrier are separate and distinct entities and that the separate approval of each is required. In the instant case, the claimant sued the employer in state court under the Jones Act, as well as under the general maritime law as a third-party defendant. The claimant then turned around and sued the employer under the LHWCA. The employer had different insurance carriers for each claim. The employer, by virtue of its active participation in the negotiation of the settlement and the fact that it was an actual signatory to that agreement, received adequate notice and provided satisfactory approval of the agreement in compliance with Section 33(g)(1). However, the Claimant's claim is barred pursuant to Section 33(g) because he did not obtain the prior written approval of the carrier.
Additionally, the Board noted that in this particular case, the claimant was aware that the employer had contracted with separate carriers and that the claimant was fully aware of his obligations under Section 33(g)(1) and its accompanying regulations as to the need to obtain approval before executing the third-party settlement.
Marmillion v. A,M.E. Temporary Services , (Unpublished)(BRB No. 04-0272)(Dec. 13, 2004).
This is a Section 33(g) case wherein the claimant alleges on appeal that the strict guidelines of Section 33(g) should not bar his claim. Claimant worked for a temporary service company who had contracted his services to a company that loaded and unloaded grain barges. Following an injury, claimant's immediate employer paid some benefits and a LHWCA claim was filed. Subsequently benefits ceased and employer's counsel informed claimant's counsel that the carrier had gone out of business and that the employer did not have reserves in place to make further payments to the claimant: �I wish I could be of more help, but I am afraid that your clients have little recourse of recovery, particularly if they are asserting maritime claims which are not covered by the Louisiana Insurance Guaranty Association statute.�
Subsequently claimant filed a Jones Act, general maritime law action and 905(b) action. Included as a defendant was the owner of a tug who had chartered the tug to the employer and barge loading company for use in maneuvering grain barges. The tug company settled for $1,500. The maritime suit resulted in a dismissal of claimant's case. Prior to the settlement against the tug company, claimant's attorney and employer's attorney had discussed settling the LHWCA matter. Claimant contends that at some point he was notified that there was still LHWCA insurance coverage for this claim.
The ALJ dismissed the claim on Section 33(g) grounds. The Board has now remanded the matter stating that the ALJ must first explicitly determine whether the tug company was potentially liable to both the claimant and the employer for the injury in accordance with Section 33(a). The Board noted that the employer bears the burden of producing evidence on this issue as Section 33(g) is an affirmative defense.
The Board rejected the claimant's specific contention that the employer's alleged �bad faith� in advising him that the carrier was out of business and that the employer could not pay compensation due to a lack of reserves should preclude the employer's reliance on Section 33(g). Additionally the Board noted that the doctrine of equitable estoppel did not apply. This doctrine prevents one party from taking a position inconsistent with that which it took in an earlier action such that the other party would be at a disadvantage. It typically holds a person to a representation made, or a position assumed, where it would be inequitable to another, who has in good faith relied upon that representation or position. To apply this doctrine to claims under the LHWCA, the Board noted that four elements are necessary: (1) the party to be estopped must know the facts; (2) he must intend that his conduct shall be acted on or must act so that the party asserting the estoppel has a right to believe it is so intended: (3) the latter must be ignorant of the facts; and (4) he must rely on the former's conduct to his injury. Rambo v. Director, OWCP , 81 F.3d 840, 843, 30 BRBS 27, 29(CRT) (9 th Cir. 1996), vacated and remanded on other grounds sub nom. Metropolitan Stevedore Co. v. Rambo , 521 U.S. 121, 31 BRBS 54(CRT) (1997).
The Board found that although the claimant contended that he filed his lawsuits in response to his inability to obtain compensation from his employer and/or carrier, the employer's correspondence with the claimant was insufficient to establish that the employer intended that the claimant take this action.
The Board also did not accept the claimant's contention that it would have been pointless to attempt to obtain the carrier's written approval of the settlement with the tug company because he had been advised that the company was out of business. The Board noted that when an carrier is out of business, the employer stands responsible. The Board further noted that even though the employer's attorney had stated that the employer did not have the reserves to pay benefits, at some point after the claimant filed suit against the tug company, it appears that the claimant was informed that there was insurance coverage for his claim and the parties discussed a settlement of the LHWCA claim.
Finally, the Board rejected the claimant's contention that Section 7(h) preserves his entitlement to medical benefits that accrued prior to the settlement with the tug company. See Esposito v. Sea-Land Services, Inc ., 36 BRBS 10 (2002) (� 7(h) does not preclude the applicability of the � 33(g)(1) bar to both compensation and medical benefits.); Wyknenko v. Todd Pacific Shipyards Corp ., 32 BRBS 16 (1998)(Smith, J., dissenting.)(� 7(h) does not support a conclusion that this holding is inapplicable to medical benefits.).
Topic 33.7.4 Third-Party Settlements--Medical Benefits
Esposito v. Sea-Land Service, Inc ., 36 BRBS 10 (2002).
Here the Board rejected the claimant's assertions that the employer's actions amounted to a constructive approval of a third-party settlement. The Board found that the employer's involvement in the third-party litigation and settlement was insufficient to render Section 33(g)(1) inapplicable. The Board noted the very limited participation of the employer and found that it was less than in some other cases where the Board had previously held that Section 33(g)(1) applied. Employer here was a named defendant in the tort suit; thus, it did not appear in the case on the claimant's side. Second, the employer was dismissed from the case nearly one and one-half years before the trial and settlement, and the employer's attorney remained active only for discovery purposes. The Board further noted that "While there is conflicting evidence as to whether [employer's attorney] was aware of the settlement process and the final negotiations, and as to whether he made a congratulatory comment when informed of the ...settlement, the [ALJ] found that [employer's attorney] was not involved in the negotiations themselves, and he did not sign or consent to the general release." The Board found that employer's participation in the third-party litigation did not rise to the level which would constitute constructive approval of the settlement and render Section 33(g)(1) inapplicable.
Next the Board addressed an issue of first impression, namely whether Section 33(g)(2) provides claimants with a means for retaining their entitlement to medical benefits despite having lost their entitlement to compensation. Referencing Estate of Cowart v. Nicklos Drilling Co. , 505 U.S. 469 , 26 BRBS 49 (CRT) (1992); the language of Section 33(g) itself; and the implementing regulation, 20 C.F.R. § 702.281, the Board concluded that a claimant must obtain the prior written approval of a settlement for an amount less than his entitlement under the LHWCA.
Topic 33.9 Exclusive Remedy Against Officers Or Fellow Servants Of Employers
Hymel v. McDermott, Inc ., 37 BRBS 160 (2003).
Here the claimant sued his employer under the LHWCA as well as in state court against his employer and others, for negligence and intentional exposure to toxic substances in the work place. Executive officers of the employer during the claimant's employment (who were named as defendants in the state court suit) moved to intervene in the LHWCA claim. The ALJ denied the motion to intervene, finding that the issue raised by the interveners was not "in respect of " a compensation claim pursuant to Section 19(a) of the LHWCA. In a subsequent Decision and Order, the ALJ granted the claimant's motion to dismiss the claimant's claim with prejudice, pursuant to Section 33(g), as he settled a part of his state tort claim for less than his compensation entitlement without employer's prior written approval. The interveners filed an appeal with the Board. The Board dismissed the appeal, on the ground that as claimant's claim was no longer pending, the interveners were not adversely or aggrieved by the denial of their motion to intervene. Interveners then filed a motion for reconsideration of the Board's dismissal.
The Board granted the motion for reconsideration, finding that the interveners are adversely affected or aggrieved by the ALJ's denial of their petition. The Board noted that Section 21(b)(3) of the LHWCA states that the Board is authorized to hear and determine appeals that raise a "substantial question of law or fact taken by a party in interest from decisions with respect to claims of employees" under the LHWCA. However, turning to the merits of the appeal, the Board found that the ALJ's decision was legally correct. The Board noted Fifth Circuit case law to support the ALJ's determination that he was without jurisdiction to rule on interveners' entitlement to tort immunity in a state court suit, as that issue was not essential to resolving issues related to the claimant's claim for compensation under the LHWCA. The Board went on to note that even if the claimant's claim had still been pending, the interveners' claim, while based on Section 33(i) of the LHWCA, is independent of any issue concerning the claimant's entitlement to compensation and/or medical benefits and the party liable for such. Section 33(i) does not provide the right of intervention.
Topic 33.10 Miscellaneous Areas Within Section 33
[ED. NOTE: While not a LHWCA case, the following may be noteworthy in a Section 33 context for its discussion of "prevailing parties" and "consent decree." ]
American Disability Association, Inc. v. Chmielarz , 289 F.3d 1315 ( 11th Cir. 2002).
In this ADA case, prior to trial, the parties entered into a settlement which was "approved, adopted and ratified" by the district court in a final order of dismissal, and over which the district court expressly retained jurisdiction to enforce its terms. Subsequently, the Association sought attorneys' fees and costs but the district court found that it was not a "prevailing party" as that term was defined in Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep't of Health & Human Res ., 523 U.S. 598, 121 S.Ct. 1835 (2001) (Court specifically invalidated the "catalyst theory."). However, the circuit court found that the Association plainly was a "prevailing party" because the district court's approval of the terms of the settlement coupled with its explicit retention of jurisdiction are the functional equivalent of a consent decree.
The circuit court noted that in Buckhannon , the Supreme Court had invalidated the catalyst theory because "[i]t allows an award where there is no judicially sanctioned change in the legal relationship of the parties." The Court said that a plaintiff could be a "prevailing party" only if it was "awarded some relief" by the court and achieved an "alteration in the legal relationship of the parties." Buckhannon , 523 U.S. at 603-605. While the Court had stated specifically that a plaintiff achieved such prevailing party status if it (1) received at least some relief--including nominal damages--on the merits, or (2) signed a settlement agreement "enforced through a consent decree," the circuit court found that this did not mean that these were the only two resolutions to form a sufficient basis upon which a plaintiff could be found to be a prevailing party.
The circuit court stated: "Thus, it is clear that, even absent the entry of a formal consent decree, if the district court either incorporates the terms of a settlement into its final order of dismissal or expressly retains jurisdiction to enforce a settlement, it may thereafter enforce the terms of the parties" agreement. Its authority to do so clearly establishes a 'judicially sanctioned change in the legal relationship of the parties,' as required by Buckhannon , because the plaintiff thereafter may return to court to have the settlement enforced. A formal consent decree is unnecessary in these circumstances because the explicit retention of jurisdiction or the court's order specifically approving the terms of the settlement are, for these purposes, the functional equivalent of the entry of a consent decree."