1995 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

1-26-1995

Bundens v JE Brenneman Co

Precedential or Non-Precedential:

Docket 94-3163

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Recommended Citation

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 UNITED STATES COURT OF APPEALS 

 FOR THE THIRD CIRCUIT 

 

 Nos. 94-3163 and 94-3175 

 

 

 BARBARA J. BUNDENS, 

 (widow of Howard E. Bundens), 

 Petitioner (No. 94-3163) 

v. 

 J.E. BRENNEMAN COMPANY; 

 TRAVELERS INSURANCE COMPANY; and 

 DIRECTOR, OFFICE OF WORKERS' 

 COMPENSATION PROGRAMS, UNITED STATES 

 DEPARTMENT OF LABOR, 

 Respondents 

 

 J.E. BRENNEMAN COMPANY and 

 TRAVELERS INSURANCE COMPANY, 

 

 Petitioners (No. 94-3175) 

v. 

 BARBARA J. BUNDENS 

 (widow of Howard E. Bundens) and 

 DIRECTOR, OFFICE OF WORKERS' 

 COMPENSATION PROGRAMS, 

 UNITED STATES DEPARTMENT OF LABOR; 

 BENEFITS REVIEW BOARD, 

 Respondents 

 

 Petitions from Benefits Review Board 

 Nos. 0090-1 and 91-1242 

 

 Argued: September 19, 1994 

 BEFORE: Becker and Cowen, Circuit Judges

 and Pollak, District Judge* 

 (Filed: January 26, 1995) 

 

 
*Honorable Louis H. Pollak, United States District Judge for the 

 Eastern District of Pennsylvania, sitting by designation. 

Morris M. Shuster (argued) 

Chimicles, Jacobsen & Tikellis 

361 West Lancaster Avenue 

One Haverford Centre 

Haverford, PA 19041 

 Counsel for Barbara J. Bundens 

 Widow of Howard E. Bundens 

 Petitioner in No. 94-3163 

 Respondent in No. 94-3175 

Gabriel D. Cieri (argued) 

Krusen, Evans & Byrne 

6th & Walnut Streets 

Curtis Center, Suite 1100 

Philadelphia, PA 19106 

 Counsel for J.E. Brenneman Company 

 Petitioner in No. 94-3175 

 Respondent in No. 94-3163 

 Counsel for Travelers Insurance Company 

 Petitioner in No. 94-3175 

 Respondent in No. 94-3163 

Allen H. Feldman 

Deborah Greenfield (argued) 

Joshua T. Gillelan, II 

Nathaniel I. Spiller 

United States Department of Labor 

Office of the Solicitor 

200 Constitution Avenue, N.W. 

Washington, D.C. 20210 

 Counsel for Director, Office of 

 Workers' Compensation Programs, 

 United States Department of Labor 

 Respondent in Nos. 94-3163 and 94-3175 

 

OPINION

 
COWEN, Circuit Judge. 

 Claimants are the widow and son of a deceased diver and 

dockbuilder. They appeal the decision of the United States 

Department of Labor, Benefits Review Board ("Board"), which held 

that the decedent's employer was not required to pay benefits 

under the Longshore Harbor Workers Compensation Act, 33 U.S.C. § 

901, et seq., ("LHWCA") due to statutory exemption and credit 

provisions which applied as a result of a court-approved 

settlement of their previous federal court litigation. The 

employer has filed a protective cross-appeal solely to preserve 

its right to have this court examine the employment status of the 

decedent in the event that we reverse the Board on the release 

and credit issues. 

 We will affirm the order of the Board that the decedent 

was a harbor worker, not a seaman. Although the Board concluded 

that the employer could receive a full credit under either § 

903(e) or § 933(f), we hold that only when these two sections are 

applied together do they provide a credit to the employer where 

the apportionment of funds between prior settled claims is 

unknown. The Board concluded that the "written approval" 

requirement of § 933(g)(1) does not apply. We will affirm the 

order of the Board, however, on other grounds. Next, we will 

affirm its determination that the notice provision of § 933(g)(2) 

was satisfied by virtue of the employer's participation in the 

tort settlement. Finally, we will reverse the order of the Board 

that the claimants are not entitled to any benefits under the 
LHWCA and remand this case for further proceedings consistent 

with this opinion. 

 

I.

 A. Factual History

 Howard Bundens ("decedent") was employed by J.E. 

Brenneman Co. ("Brenneman") as a diver and dockbuilder on a 

variety of marine construction jobs. On August 29, 1978, 

decedent had been assigned with other employees of Brenneman to 

the Monsanto pier on the Delaware River to remove a damaged 

mooring platform, known as a dolphin. A tug boat towed 

Brenneman's heavy-lifting derrick barge, the Conqueror, to the 

Monsanto main pier where it picked up the decedent together with 

the other members of the crew. Before going down-river to the 

area of the broken dolphin, the Conqueror attached an anchor 

cable from its bow to the main pier. The tug then towed the 

barge some distance past the site of the broken dolphin. At that 

location, the Conqueror set an anchor off its stern. The tug 

next brought the Conqueror back near the site of the broken 

dolphin and departed. By pulling itself with its winches along 

the cables at its bow and stern, the Conqueror was able to 

maneuver along the pier to facilitate cutting and removal of the 

damaged dolphin. 

 The decedent and other workers performed this work by 

using torches to cut the steel H-beam supports underneath the 
dolphin, while the Conqueror's 90-ton derrick supported the 

weight of the dolphin. The workers did the cutting work from 

planks fastened to the beams under the dolphin and from float 

stages, which were floating wooden work platforms about forty 

feet long. When the dolphin was cut free, the derrick lifted it 

onto the deck of the barge. 

 After this task was accomplished, the decedent walked 

back to the main pier via the shoreline. Meanwhile, the crew 

made ready to move the Conqueror to a location at Monsanto's main 

pier where it was to be secured for the night. The Conqueror

maneuvered itself down-river to weigh its stern anchor and then 

pulled itself back up-river along its bow cable approximately 300 

feet past the damaged pier to the main pier. Once the Conqueror

arrived at the site at the main pier where Brenneman intended to 

moor her overnight, several lines were heaved to the decedent and 

another worker on the pier, and the anchor cable at the bow was 

unfastened. 

 A strong wind caused the bow of the Conqueror to "hang 

up" behind a piling at the pier and, simultaneously, the stern 

pitched out into the river. Decedent went on board the Conqueror

to help pull the aft end of the barge closer to the pier. 

Several workers, including the decedent, rigged an additional 

mooring line from a point on the pier, around and through various 

points at the stern of the barge, and along the starboard side. 

The line continued through a fair lead block, also known as the 

main snatch block (which was affixed to the deck), and then onto 

a winch drum or spool. Once the line was through this last fair 
lead block, the decedent took the end of the line and wrapped it 

several times around the spool. Due to the tension on the 

mooring line created by the spool, without warning the fair lead 

block broke. The decedent was killed almost instantly when he 

was struck by either a piece of the broken fair lead block or the 

ruptured line.1

 B. Procedural History

 Barbara Bundens ("Bundens"), on behalf of herself, her 

minor son, Gregory Bundens, and her deceased husband's estate, 

filed a tort action in the United States District Court for the 

Eastern District of Pennsylvania on March 13, 1979.2 The next 

day, Bundens filed a claim for death benefits on behalf of 

herself and her son under the LHWCA. Bundens contacted the 

Deputy Commissioner of the Office of Workers' Compensation 

Programs to request that the LHWCA claim be held in abeyance 

pending the termination of the federal court action. In the 

federal court action, Bundens asserted claims against Brenneman 

both under the Jones Act and as the vessel owner for negligence 

under 33 U.S.C. § 905(b) of the LHWCA.3 When Brenneman joined 

 

1. When the decedent was struck, his right arm was amputated and 

he received lacerations of the liver, diaphragm, and one of his 

lungs. App. at 25. 

2. All references to "Bundens" will be understood to include her 

son, Gregory, unless it becomes necessary to make a distinction, 

in which case we will refer to Barbara Bundens as "Barbara" and 

to Gregory Bundens as "Gregory." 

3. The complaint stated as follows: "Plaintiff brings this 

action pursuant to the general maritime law of the United States 
(..continued) 

and/or the Jones Act, 46 U.S.C. § 688 . . . ." App. at 26. 

Brenneman argues in its answering brief (and at oral argument) 

that a § 905(b) claim was never asserted in the complaint and 

that they have been unable to determine if an amended complaint 

was filed which set forth such a claim. Brenneman's answering 

brief at 14 n.3. Bundens argues that although § 905(b) was never 

asserted as such in the complaint, throughout the federal court 

litigation, she maintained that Brenneman was liable for 

negligence pursuant to § 905(b). In fact, the district court 

judge who signed the order, App. at 84a, settling the federal 

tort suit referenced and approved Bundens' Motion for Approval of 

Settlement which stated: 

 Plaintiff's alternative claims against 

Brenneman were that the decedent was a seaman 

and that Brenneman, as vessel owner, had 

breached its warranty of seaworthiness or if 

the decedent was not a seaman, Brenneman as 

vessel owner, was liable because of its 

negligence pursuant to 33 U.S.C. § 905(b). 

App. at 87a (emphasis added). 

 We are unable to find anywhere in the district court 

record an objection by Brenneman that the complaint did not set 

forth a § 905(b) claim. Additionally, there is no indication 

that Brenneman, at the time the settlement was approved, objected 

to Bundens' characterization of the federal court litigation as 

including a § 905(b) claim. Furthermore, as stated above, this 

characterization of the federal court litigation was accepted by 

the district judge. 

 Section 905(b) of the LHWCA states in relevant part: 

 Negligence of Vessel. In the event of injury 

to a person covered under this chapter caused 

by the negligence of a vessel, then such 

person, or anyone otherwise entitled to 

recover damages by reason thereof, may bring 

an action against such vessel as a third 

party in accordance with the provisions of 

section 933 of this title, and the employer 

shall not be liable to the vessel for such 

damages directly or indirectly and any 

agreements or warranties to the contrary 

shall be void. 

33 U.S.C. § 905(b) (1988). 

 The 1972 amendments to the LHWCA added § 905(b) which 

provided that a longshore worker employed directly by the vessel 

owner could file suit against his or her employer with certain 
additional parties as third-party defendants, Bundens filed suits 

against these parties as direct defendants.4

 Brenneman filed a motion for summary judgment on 

December 9, 1981, claiming that as a matter of law the decedent 

was not a seaman under the Jones Act. Bundens by cross-motion 

for summary judgment claimed that the decedent was either a 

seaman under the Jones Act or a harbor worker under the LHWCA. 

The district court denied both motions. 

(..continued) 

limited exceptions. The Supreme Court affirmed this dual 

capacity doctrine in Jones & Laughlin Steel Corp. v. Pfeifer, 462 

U.S. 523, 528-32, 103 S. Ct. 2541, 2546-48 (1983), thus 

confirming that an employee can sue his employer as vessel owner. 

 In 1984, § 905(b) was amended to prohibit recovery by 

an employee against an employer for negligence if the employer is 

the owner of the vessel and the employee is engaged in 

shipbuilding, repairing, or breaking services. The amended 

provision, however, only applies to injuries sustained after 

September 28, 1984, approximately five years after the filing of 

the federal tort suit. Therefore, when the suit was initiated, 

Bundens, regardless of her husband's duties, was able to maintain 

a negligence action in federal court against Brenneman, who was 

owner of the barge. 

4. Specifically, Bundens filed suit against the following 

companies: (1) Independent Lighterage Company ("Independent") -- 

the company that sold the barge, Conqueror, to Brenneman; (2) A. 

Moe & Company, Inc. ("A. Moe") -- the company that performed 

repair and testing services on the vessel; (3) Universal 

Technical Testing Laboratories, Inc. ("Universal") -- the company 

that performed tests and inspections of the blocks and associated 

gear of the vessel; (4) Merritt-Chapman & Scott Corporation 

("Merritt") -- the builder of the barge; and (5) Raymond 

International Builders, Inc. and its parent company, Raymond 

International, Inc. (collectively "Raymond") -- the companies 

that later took control of the assets of the builder and sold the 

barge to Independent. She sued all five parties alleging 

negligence. Additionally, she sued Merritt and Raymond alleging 

strict products liability. 
 Extensive settlement negotiations ensued, after which 

Bundens and all defendants entered into a comprehensive 

settlement of the federal litigation. The settlement provided 

for: (1) a Release Agreement ("Release") between Bundens and 

Brenneman; (2) an Indemnity Agreement ("Indemnity") between the 

same parties; and (3) a Settlement Agreement and Mutual Release 

("Settlement") among all of the co-defendants. 

 The Release provided that in exchange for one million 

dollars, Bundens released Brenneman (but not any compensation 

insurance carrier) from all tort claims arising out of and 

related to the death of the decedent. The Release was structured 

in such a way as to preserve Bundens' right to pursue the LHWCA 

claim for death benefits that had been filed earlier. The 

Release also preserved any factual or legal contentions that 

could be raised in the LHWCA proceedings, including a defense by 

the compensation carrier that its liability had been discharged 

by virtue of the federal court settlement.5

 

5. The Release stated in relevant part: 

 It is specifically understood that the 

Releasor [Bundens] may pursue and prosecute a 

claim for compensation benefits under the 

[LHWCA] on behalf of herself and Gregory 

Bundens, a minor, which claim Releasor 

represents has previously been filed. The 

parties hereto intend that this release shall 

be without prejudice to the factual and legal 

contentions which may be raised in any future 

compensation proceedings by Releasor and by 

Brenneman's compensation insurer or 

underwriter. Neither the execution and 

acceptance of this release, nor the payment 

and acceptance, nor the payment and 

acceptance of the consideration recited 
 The Indemnity was designed to ensure that Brenneman 

would not have to pay in excess of one million dollars as a 

consequence of decedent's death. Thus, in the event that 

Travelers Insurance Company ("Travelers"),6 made a claim against 

Brenneman for reimbursement for any monies paid to Bundens as 

compensation benefits under the LHWCA, Bundens agreed to 

indemnify and hold Brenneman harmless from any liability, 

including counsel fees. The Indemnity anticipated that, if 

Travelers were to succeed in an action against Brenneman, the 

amount of benefits already paid to Bundens, combined with 

Brenneman's costs and counsel fees incurred in defending 

Travelers' indemnity claim, would not exceed $400,000. 

Accordingly, the Indemnity specified the sum of $400,000 to be 

(..continued) 

herein, shall estop or be deemed to estop the 

Releasor, Brenneman, its insurers or 

underwriters or any entities or persons 

appearing on its behalf, from raising or 

proving any factual or legal contentions in 

such compensation proceedings, which they 

would otherwise be entitled to raise and 

prove. Nothing herein shall be construed as 

preventing the compensation carrier from 

defending the compensation claim on the basis 

that its liability is discharged because this 

Agreement constitutes settlement of a "third 

party claim", or as preventing the Releasor 

from contending that such defense is 

inapplicable. 

App. at 93a-94a (emphasis added). 

6. Travelers was Brenneman's compensation carrier under the 

LHWCA. However, as an owner and operator of vessels, Brenneman 

was insured by Continental Insurance Co. ("Continental"). The 

policy that Brenneman had with Continental insured Brenneman 

against claims by its employees under the Jones Act and general 

maritime law. 
set aside out of the $1,000,000 paid to Bundens under the 

Release. 

 The Settlement executed among all of the defendants in 

the district court litigation dismissed with prejudice all of the 

Bundens' claims.7 It also fixed the respective amount that each 

defendant would contribute to the $1,000,000 settlement 

established in the Release.8 

 

7. Bundens was not a party to and did not sign this settlement 

agreement and mutual release, but she is referenced in the 

document as follows: 

 WHEREAS, in consideration of the payment of 

One Million Dollars ($1,000,000.00) by 

negotiable instrument(s), in United States 

currency, receipt of which shall be 

acknowledged by Bundens for all those 

entitled to recover for the wrongful death of 

Howard E. Bundens, deceased, Bundens has 

agreed to dismiss with prejudice all of the 

aforementioned lawsuits against Defendants

and has agreed to release and indemnify 

Brenneman as specifically set forth in the 

Release Agreement and Indemnity Agreement 

attached hereto as Exhibits "A" and "B", 

respectively, and incorporated herein by 

reference . . . . 

App. at 63 (emphasis added). 

 As we understand the terms of the settlement, Bundens' 

approval of the settlement was conditioned on her receiving a 

total of $1,000,000 from any or all of the defendants. Likewise, 

Brenneman's approval of the settlement was conditioned on its 

paying no more than $861,600. Thus, as we will later explain, 

although Bundens signed a settlement agreement only with 

Brenneman, she necessarily settled the lawsuits with all of the 

other defendants at the same time. (NOTE: All monetary amounts 

in this opinion will be rounded to the nearest dollar.) 

8. The $1,000,000 was to be funded by the defendants as follows: 

 a.) Brenneman $861,600 

 b.) Independent $ 41,700 

 c.) A. Moe $ 20,000 
 Although Travelers was invited to participate in the 

settlement negotiations, it declined. After the settlement was 

reached on June 8, 1983, Travelers filed a motion to intervene in 

the federal court litigation with the intention of opposing the 

settlement as an attempt by Bundens to receive a double recovery. 

The motion to intervene was denied on the grounds that Travelers 

was not prejudiced by the settlement. 

 The district court approved the Settlement Agreement 

and the dismissal of the federal court tort litigation in July of 

1983.9 Because the lawsuit was dismissed when the parties agreed 

upon a settlement, the district court never adjudicated whether 

the decedent was a seaman or a harbor worker. 

 After the case was settled, Bundens pursued her claim 

for compensation benefits under the LHWCA. An evidentiary 

hearing was held before an Administrative Law Judge ("ALJ"), and 

in January of 1986, the ALJ issued a decision and order 

(..continued) 

 d.) Universal $ 5,000 

 e.) Raymond $ 41,700 

 f.) Merritt $ 30,000 

 Pursuant to the Release, Brenneman was to pay the 

$1,000,000 to Bundens. It was the responsibility of Brenneman to 

collect contribution from the other defendants. 

9. In a later order, the district judge approved Bundens' 

attorneys' fees request for one-third of the recovery, and 

reimbursement for costs in the amount of $20,589. The balance of 

the settlement funds ($646,078) was apportioned 70% to Barbara 

and 30% to the guardian of Gregory. Thus, the net recoveries 

from the settlement were: 

 Barbara Bundens $452,255 

 Gregory Bundens $193,823 
concluding that the decedent satisfied all three prongs of the 

Griffith test for crew member status and was therefore a seaman. 

Griffith requires that: (1) a worker have a more or less 

permanent connection with a vessel; (2) the vessel be in 

navigation; and (3) the worker must be on board primarily to aid 

in navigation. Griffith v. Wheeling Pittsburgh Steel Corp., 521 

F.2d 31, 36 (3d Cir. 1975), cert. denied, 423 U.S. 1054, 96 S. 

Ct. 785 (1976). The ALJ dismissed Bundens' claim for benefits 

after concluding that the decedent was expressly excluded from 

coverage under § 902(3) of the LHWCA because he was a seaman, not 

a harbor worker.10

 On appeal to the Board, Bundens challenged the ALJ's 

determination that her husband was on board the barge Conqueror

primarily to aid in navigation. The Board concluded that the 

ALJ's finding was neither supported by the record evidence nor 

applicable law. Accordingly, it reversed the ALJ's finding that 

the decedent was a seaman excluded from coverage under the LHWCA. 

The Board additionally noted that it did not need to reach 

Bundens' challenge to the ALJ's finding that the decedent had a 

 

10. Section 902 of the LHWCA states in relevant part: 

 When used in this chapter -- (3) The term 

"employee" means any person engaged in 

maritime employment, including any 

longshoreman or other person engaged in 

longshoring operations, and any harbor-worker 

including a ship repairman, shipbuilder, and 

ship-breaker, but such term does not include 

-- (G) a master or member of a crew of any 

vessel. 

33 U.S.C. § 902(3)(G) (1988). 
permanent connection to a vessel, because the Board's holding 

nullified the ALJ's determination of seaman status on other 

grounds. It remanded the case for the ALJ to determine if 

Bundens was entitled to LHWCA benefits, and whether Brenneman was 

entitled to statutory credit under § 903(e) for its payment under 

the tort settlement agreement.11

 On remand another ALJ found that Bundens was entitled 

to benefits under the LHWCA, and rejected Brenneman's argument 

that it was entitled to a credit under § 903(e). The ALJ 

reasoned that Brenneman would be entitled to § 903(e) credit only 

if the tort settlement disposed of the claims under the Jones 

Act, but not if it disposed of Bundens' § 905(b) claim under the 

LHWCA. The ALJ further noted that this issue was not decided in 

the federal litigation.12 According to the ALJ, the settling 

 

11. Section 903(e) of the LHWCA states: 

 Notwithstanding any other provision of law, 

any amounts paid to an employee for the same 

injury, disability, or death for which 

benefits are claimed under this chapter 

pursuant to any other workers' compensation 

law or section 688 of title 46, Appendix [the 

Jones Act] (relating to recovery for injury 

to or death of seamen) shall be credited

against any liability imposed by this 

chapter. 

33 U.S.C. § 903(e) (1988) (emphasis added). 

12. Had there been a judicial determination of the decedent's 

employment status, the case before us would be quite different. 

If there had been an adjudication that the decedent was a seaman, 

then Bundens would be legally precluded from recovering 

compensation benefits under the LHWCA because only harbor workers 

can recover under the LHWCA. Conversely, if there had been a 

judicial determination that the decedent was a harbor worker, he 

would not have been entitled to recover under the Jones Act and 
parties intended the nature of the settlement to depend on the 

decedent's status as a seaman under the Jones Act or as a harbor 

worker under the LHWCA, as later determined in the LHWCA 

proceeding. The ALJ concluded that Bundens was a harbor 

worker,13 and that the tort settlement disposed of the claims 

under § 905(b) of the LHWCA, rather than under the Jones Act. He 

therefore concluded that Brenneman was not entitled to a credit 

under § 903(e). 

 In a supplemental petition for further consideration 

following denial upon reconsideration, Brenneman argued that the 

ALJ must revisit the issue of the decedent's employment status in 

light of recent Supreme Court precedent which eliminated the "aid 

in navigation" element of the seaman status test. McDermott 

Int'l v. Wilander, 498 U.S. 337, 353, 111 S. Ct. 807, 816 (1991). 

Since Wilander was decided after the decisions of the Board and 

ALJ, the Board could not have considered it when remanding the 

case. The order of the Board was erroneously premised on the 

view that because the evidence had not supported the finding of 

the first ALJ that the decedent did not aid in navigation, he 

could not be a seaman. On remand, the ALJ acknowledged that the 

"aid in navigation" element is no longer applicable, but that the 

(..continued) 

all of the money obtained from the federal tort settlement would 

be attributable to the § 905(b) negligence claim. 

13. The ALJ made the following findings: (1) the decedent's 

duties included diving and dockbuilding; (2) the decedent's job 

on the date of his death was that of a wharf and dockbuilder; and 

(3) during the last three years of his employment, the decedent 

spent approximately one-third of his employment as a diver and 

two-thirds as a dockbuilder. 
decedent was still a harbor worker because: (1) he engaged in 

traditional longshore (harbor worker) activities; and (2) the 

barge was not a "vessel in navigation" since at the time of 

decedent's death, it was simply being secured at the dock for the 

night. All parties concede that this latter finding by the ALJ 

was clearly error since Brenneman and Bundens had stipulated to 

the fact that the barge was a "vessel in navigation." 

 Brenneman appealed the decisions of the ALJ and also 

argued that Bundens' compensation claim was barred under § 

933(g), because she had failed to obtain Travelers' written 

consent to the settlement.14 After reviewing the factual 

 

14. Section 933(g) of the LHWCA states in relevant part: 

 Compromise obtained by person entitled to compensation. 

 (1) If the person entitled to compensation 

(or the person's representative) enters into 

a settlement with a third person referred to 

in subsection (a) of this section for an 

amount less than the compensation to which 

the person (or the person's representative) 

would be entitled under this chapter, the 

employer shall be liable for compensation as 

determined under subsection (f) of this 

section only if written approval of the 

settlement is obtained from the employer and 

the employer's carrier, before the settlement 

is executed, and by the person entitled to 

compensation (or the person's 

representative). 

 (2) If no written approval of the settlement 

is obtained and filed as required by 

paragraph (1), or if the employee fails to 

notify the employer of any settlement 

obtained from or judgment rendered against a 

third person, all rights to compensation and 

medical benefits under this chapter shall be 

terminated, regardless of whether the 
findings of the ALJ, the Board affirmed the determination of the 

ALJ that the decedent was a harbor worker and not a seaman, thus 

entitling Bundens to $335,75415 in LHWCA benefits. The Board 

reasoned that the determination by the ALJ that the decedent was 

primarily a dockbuilder who performed construction, salvage, and 

repair work, was reasonable and supported by evidence in the 

record. The Board did not address the fact that the ALJ had 

erred by finding that the vessel was not "in navigation." 

 With respect to the § 903(e) credit issue, the Board 

agreed with Brenneman that the company was entitled to a credit 

for its net payment in settlement of the federal court 

litigation.16 It reasoned that the settlement did not delineate 

how the settlement money was apportioned between the two claims. 

Therefore, the Board concluded that it was error for the ALJ to 

rely on the subsequent LHWCA proceedings to determine that 

(..continued) 

employer or the employer's insurer has made 

payments or acknowledged entitlement to 

benefits under this chapter. 

33 U.S.C. § 933(g) (1988) (emphasis added). 

15. The $335,754 was allocated as follows: 

 Barbara Bundens $100,628 

 Gregory Bundens $232,205 

We note that the above figures total $332,833 and not $335,754. 

We are uncertain why there is a difference of $2,921. However, 

because of our final disposition of this case, the discrepancy is 

irrelevant. 

16. As mentioned previously, although the gross settlement was 

$1,000,000, after attorneys' fees and costs, the net settlement 

was $646,078. 
Bundens was a harbor worker and then to attribute the settlement 

exclusively to Bundens' § 905(b) claim. The Board concluded that 

since the record was unclear as to how the settlement amount was 

to be apportioned between the Jones Act and the LHWCA claim, 

Brenneman was entitled to offset the net amount of the settlement 

against its liability under the LHWCA. 

 The Board held in the alternative that even if 

Brenneman could not claim a credit under § 903(e), it would still 

be entitled to a credit under § 933(f) which provides a credit 

for an employer where a claimant recovers an amount in a suit 

against a third party for which compensation is payable under the 

LHWCA.17 The Board concluded that because Bundens had filed suit 

and recovered against third parties, Brenneman was entitled to 

offset the net amount of the third party recovery against its 

 

17. Section 933(f) states: 

 Institution of proceedings by person entitled 

to compensation. 

 If the person entitled to compensation 

institutes proceedings within the period 

prescribed in subsection (b) of this section 

the employer shall be required to pay as 

compensation under this chapter a sum equal 

to the excess of the amount which the 

Secretary determines is payable on account of 

such injury or death over the net amount 

recovered against such third person. Such 

net amount shall be equal to the actual 

amount recovered less the expenses reasonably 

incurred by such person in respect to such 

proceedings (including reasonable attorneys' 

fees). 

33 U.S.C. § 933(f) (1988). 
LHWCA liability.18 Thus, the Board modified the ALJ's decision 

to allow Brenneman a full credit for the net amount of the 

settlement. 

 The Board rejected Brenneman's defense under § 

933(g)(1), concluding that this subsection only applies where the 

amount recovered from a settlement is less than the amount of 

compensation due. It reasoned that Bundens received a net 

recovery of $646,078 from the federal court tort settlement, and 

would only be entitled to $335,754 under the LHWCA, an amount 

less than the net recovery from the one million dollar 

settlement. Under these circumstances, the Board ruled that § 

933(g)(2) applied, which required Bundens to provide Brenneman 

with notice of the settlement. It found that this requirement 

was fulfilled here since Brenneman had been a party to the 

settlement agreement. 

 We have before us the appeal by Bundens of the decision 

of the Board which held that Brenneman was entitled to a credit 

pursuant to § 903(e) or § 933(f) of the LHWCA as a result of the 

court-approved settlement of Bundens' federal court litigation. 

Additionally, we have the cross-appeal by Brenneman challenging: 

(1) the Board's decision to affirm the ALJ's finding that the 

 

18. In its discussion, the Board never specified whether 

Brenneman, the employer, was to be considered a "third person" 

for the purposes of § 933(f). However, the Board did imply that 

the employer was a third person because the Board treated the 

entire net settlement recovery ($646,078) as a third party 

settlement, instead of looking only to money that was contributed 

by the defendants other than Brenneman. 
decedent was a harbor worker; and (2) the Board's rejection of 

Brenneman's § 933(g) defense. 

II.

 On review of an award of benefits under the LHWCA, the 

factual findings of an Administrative Law Judge are binding on 

the Benefits Review Board if they are rational, supported by 

substantial evidence on the record as a whole, and consistent 

with applicable law. 33 U.S.C. § 921(b)(3) (1988); Elliot Coal 

Mining Co. v. Director, Office of Workers' Compensation Programs, 

17 F.3d 616, 625-26 (3d Cir. 1994). We review the Board's 

decision for the limited purpose of determining whether it 

committed an error of law. A Board decision that sets aside 

findings of an ALJ that are supported by substantial evidence is 

legally erroneous. Elliot Coal, 17 F.3d at 626. 

 A. Employment Status of the Decedent

 Initially, we note that the test for ascertaining 

whether an employee is a member of a crew under the LHWCA is the 

same as that for determining seaman status under the Jones Act. 

See Senko v. La Crosse Dredging Corp., 352 U.S. 370, 371, 77 S. 

Ct. 415, 416 (1957). Thus, a conclusion that a worker is a 

seaman necessarily precludes recovery under the LHWCA. 

Conversely, a determination that a worker is not a member of a 

crew permits recovery under the LHWCA. See Wilander, 498 U.S. at 

353, 111 S. Ct. at 817 ("We now recognize that the LHWCA is one 

of a pair of mutually exclusive remedial statutes that 
distinguish between land-based and sea-based maritime 

employees."). The test to determine seaman status was identified 

in Griffith: (1) the vessel must be in navigation; (2) the worker 

must have a more or less permanent connection with the vessel; 

and (3) the worker must be aboard primarily to aid in navigation. 

521 F.2d at 36. The Supreme Court later modified this test in 

Wilander, holding that, "the time has come to jettison the aid in 

navigation language." 498 U.S. at 353, 111 S. Ct. at 816. The 

Court reasoned that there was no indication in either the Jones 

Act or the LHWCA that Congress intended to exclude traditional 

seamen who do not aid in navigation. 498 U.S. at 354, 111 S. Ct 

at 817. Thus, the Court held in order to qualify for coverage 

under the Jones Act, the employee must: (1) have an "employmentrelated connection to a vessel in navigation"; and (2) 

"`contribut[e] to the function of the vessel or to the 

accomplishment of its mission.'" 498 U.S. at 355, 111 S. Ct. 817 

(citing Offshore Co. v. Robison, 266 F.2d 769, 779 (5th Cir. 

1959). Stated differently, the second element does not require 

that "a seaman aid in navigation . . . of the vessel, but a 

seaman must be doing the ship's work." Id.

 Because Wilander was not decided until 1991, that 

opinion was not considered by the second ALJ until raised by 

Brenneman in its supplemental petition following denial upon 

reconsideration. Brenneman argues that even after considering 

Wilander, the ALJ again erred by assuming that the barge 

Conqueror was not a vessel in navigation despite a stipulation by 

the parties to the contrary. We are called upon to determine 
whether the Board properly affirmed the decision of the second 

ALJ regarding the status of the decedent as a harbor worker 

despite these factual and legal errors. 

 In the decision rendered on remand, the ALJ made 

findings of fact and concluded that the decedent was a harbor 

worker for the following reasons: (1) the decedent's duties 

included diving and dockbuilding; (2) the decedent's job on the 

date of his death was that of a wharf and dockbuilder; and (3) 

during the last three years of his employment, the decedent spent 

approximately one-third of his employment as a diver and twothirds as a dockbuilder. In his Decision and Order Denying 

Supplemental Petition following reconsideration, the ALJ rejected 

Brenneman's argument that the decedent was a seaman by virtue of 

his performing the work of the barge Conqueror at the time of his 

death. The ALJ found that the decedent was engaged in the 

traditional longshore activity of repairing a dock or a pier at 

the time of his death, and that he was on the barge to accomplish 

a longshore function. The ALJ further concluded that although 

the decedent maintained some connection with vessels, and with 

the Conqueror in particular, his primary duties were related to 

construction work as a dockbuilder, and his diving activities did 

not constitute his predominant employment activities. 

 Although the ALJ erroneously concluded that the vessel 

was not in navigation, the ALJ's determination that the decedent 

was not a seaman was reasonable, supported by evidence in the 

record, and in accordance with controlling precedent. Prior to 

finding seaman status, Wilander mandates that the employee must 
have an employment-related connection to a vessel in navigation 

and the employee's duties must contribute to the function of the 

vessel or the accomplishment of its mission. The factual finding 

of the ALJ that the decedent was engaged in traditional longshore 

activity may well have persuaded him that the decedent did not 

have an employment-related connection with a vessel sufficient to 

satisfy the first prong of the Wilander test.19 Because at least 

one of the elements of the Wilander test was not satisfied, it 

was not improper for the ALJ to conclude that the decedent was a 

harbor worker, despite his erroneous conclusion that the vessel 

was not in navigation. 

 Additionally, despite the fact that the barge was in 

navigation, the Board found support for the ALJ's determination 

in its findings that: (1) he kept his diving equipment at home; 

(2) he commuted to work and received his diving assignments on 

 

19. We in no way mean to suggest that a worker who engages in 

longshore activity may never be considered a seaman. Had we been 

sitting as the finder of fact in this matter, we may not 

necessarily have reached the same conclusion as the ALJ. As 

noted by the Supreme Court in Wilander: 

 The inquiry into seaman status is of 

necessity fact-specific; it will depend on 

the nature of the vessel, and the employee's 

precise relation to it . . . . "[W]hether an 

individual was a `seaman' . . . depends 

largely on the facts of the particular case 

and the activity in which he was engaged at 

the time of injury." 

498 U.S. at 356, 111 S. Ct. at 818 (citation omitted). However, 

due to our deferential standard of review, we hold that the 

conclusions of the ALJ as affirmed by the Board are rational, 

supported by substantial evidence, and consistent with applicable 

law. 
shore; (3) he never ate or slept on the vessel; (4) his duties 

included diving and dockbuilding; (5) his job title on the date 

of his death was "wharf and dockbuilder;" (6) he was a member of 

the Wharf and Dockbuilders and Pile Drivers Union; (7) his 

dockbuilding duties remained the same whether he was working on 

land or on the barges; and (8) he spent approximately two-thirds 

of his time as a dockbuilder and only one-third as a diver during 

the last three years of his employment.20 In reviewing the 

decision of the Board, we conclude that it did not err in 

upholding the finding of the ALJ that the decedent was a harbor 

worker by virtue of his primary duties which related to 

construction work as a dockbuilder. 

 B. Applicability of § 903(e) and § 933(f)

 The ALJ reasoned that the only way to ascertain if the 

§ 903(e) exemption applied was to first determine if the 

settlement funds were paid to settle a Jones Act claim or a § 

905(b) negligence claim under the LHWCA. He determined that if 

the monies were paid to settle a Jones Act claim, then Brenneman 

would be entitled to statutory credit under § 903(e). He further 

 

20. In reaching its decision, the Board recited from the record 

several additional facts not found in the ALJ's prior decision. 

Admittedly, the Board conducted some "fact-gathering" of its own. 

We hesitate to refer to the Board's action as fact-finding, 

because the facts averred to in its opinion were stipulated to 

and, hence, undisputed. However, without commenting on the 

propriety of the Board's action in "gathering" such facts, we 

simply note that the ALJ's findings of fact that the Board did 

refer to would be sufficient, by themselves, to uphold a 

determination that the decedent was a harbor worker. 
concluded that if the monies were paid to settle a LHWCA 

negligence claim under § 905(b), then Brenneman would not be 

entitled to a credit under § 903(e). The ALJ assumed that since 

it was the intention of all the parties in the settlement 

agreement to allow Bundens to pursue her LHWCA claim, it was 

clear that the payment was not a settlement of the Jones Act 

claim. On appeal, the Board held that when the record is unclear 

as to how the settlement fund is apportioned among the various 

claims being settled, the employer is entitled to offset the net 

amount against its liability under the LHWCA. Bundens argues 

that the wording of the Release clearly indicated that no one 

intended to foreclose her rights to collect benefits under the 

LHWCA.21 

 Additionally, Bundens argues that since the § 903(e) 

credit is an affirmative defense, the burden of proof is not on 

her to prove that the settlement fund was allocated to the LHWCA 

claim, but rather it is the burden of Brenneman to show that the 

settlement monies were allocated to the Jones Act claim.22

 

21. See supra note 5. 

22. Because of our discussion below, we need not address 

Bundens' argument concerning the allocation of the burden of 

proof in the context of § 903(e). However, we note that this 

issue has been addressed by other Courts of Appeals in analogous 

cases. For example, in Force v. Director, Office of Workers' 

Compensation Programs, 938 F.2d 981, 985 (9th Cir. 1991), the 

Court of Appeals for the Ninth Circuit held: 

 LHWCA's "overall humanitarian policy" of 

compensating employees for their injuries 

requires that "all doubtful questions of fact 

be resolved in favor of the injured 

employee." Placing the burden of proof on 
 We believe the correct approach in addressing the 

credit issue is the view espoused by the Director of the Office 

of Workers' Compensation Programs ("Director"). The Director 

argues that it is unnecessary to determine how the settlement 

funds were apportioned between the Jones Act claim and the § 

905(b) claim under the LHWCA because the combination of the 

credit and offset provisions of § 903(e) and § 933(f) would 

provide a full credit to the employer for amounts it actually 

paid.23

 Before explaining how the combined application of § 

903(e) and § 933(f) works to provide the employer with a credit 

for funds already paid in the tort settlement, we must first 

address Bundens' contention that § 933(f) does not apply in these 

proceedings. Bundens argues that § 933(f) was never properly 

(..continued) 

employers is particularly appropriate in the 

context of [a credit provision] because the 

employer remains liable for the full amount 

of the statutory compensation absent a 

showing that the claimant has [already] been 

compensated by a third party. 

(citation omitted). See also I.T.O. Corp. of Baltimore v. 

Sellman, 967 F.2d 971, 973 (4th Cir. 1992) ("We therefore 

conclude that it is both logical and consistent with the Act to 

impose the burden of proof [of apportionment] upon the 

employer."), cert. denied, __ U.S. __, 113 S. Ct. 1579 (1993). 

These cases, however, deal with the burden of proving the 

apportionment of funds between multiple parties, whereas here we 

are dealing with the apportionment of funds between multiple 

claims. 

23. The Director argues that it is not only unnecessary to 

determine the apportionment of the settlement funds between the 

two claims asserted in the federal tort litigation, but that it 

is impossible to ever know how the settlement funds were 

apportioned. 
raised by Brenneman in the proceedings before the ALJ or the 

Board and thus Brenneman has waived its right to assert § 933(f). 

Bundens thus contends it was error for the Board to raise this 

offset provision, sua sponte. We conclude that a § 933(f) 

defense was raised. 

 Initially, we observe that Brenneman explicitly raised 

a § 933(g) defense. Since § 933(f) governs the offset of thirdparty settlements in the event that the requirements of § 933(g) 

have been met, the Board's consideration of Brenneman's § 

933(g)(1) defense fairly included consideration of § 933(f). 

Next, even Bundens concedes that "§ 933(g)(1) refers to the 

employer's compensation liability under 33 U.S.C. § 933(f)." 

Bundens' answering brief at 19. Additionally, we observe that in 

the settlement agreement signed by Bundens, the following 

language was present: 

 Nothing herein shall be construed as 

preventing the compensation carrier from 

defending the compensation claim on the basis 

that its liability is discharged because this 

Agreement constitutes settlement of a "third 

party claim", or as preventing the Releasor 

from contending that such defense is 

inapplicable. 

App. at 94a. While this language has no bearing on the credit 

issues that were actually raised by Brenneman in the LHWCA 

proceedings, we observe that the "third party claim" language 

explicitly refers to § 933(f). The combination of the fact that 

Brenneman actually raised § 933(g) with the explicit reservation 

of its right to raise the § 933(f) defense suffice to put Bundens 
on notice. We also note that the failure of Brenneman to exhaust 

its administrative remedies is not so troubling here because all 

of the findings necessary to apply § 933(f) are included in the 

findings for either § 903(e) or § 933(g). 

 Next, Bundens argues that even if § 933(f) has not been 

waived by Brenneman, this provision does not apply here because 

an employer cannot be a "third person" within the meaning of § 

933(f). The question before the Court is whether an employer who 

settles a negligence suit under § 905(b), when it is acting in 

its capacity as a vessel owner, is considered a third person 

under § 933(f). We believe that the only meaningful 

interpretation of § 933(f) is to treat the employer as a third 

party whenever the employee recovers funds from the employer in 

other legal proceedings. Section 933(f), as set forth above, 

indicates that an employer only has to pay compensation benefits 

to the "person entitled to compensation" ("PETC") when the amount 

of the benefits to which the PETC is entitled under the LHWCA 

exceeds the net amount of money that the PETC has recovered from 

a third party. If the employer/vessel owner is a third party, 

then any monies paid by the employer in the negligence suit can 

be used to offset the monies owed the PETC under the LHWCA. If 

the employer/vessel owner is not considered to be a third party 

under § 933(f), then the employer is prohibited from deducting 

monies already paid. 

 It seems clear that if an employer is able to offset 

his liability under the LHWCA with monies previously paid by 

others under a tort settlement, then there is even stronger 
reason to allow the employer to offset monies paid in a tort 

settlement when the employer is the one who previously paid the 

monies. Under § 933(f), an employer who settles a tort suit as a 

vessel owner must be construed as a third party. To hold 

otherwise would create a perverse result: an employer would have 

to pay a double recovery simply because he is the owner of the 

vessel, whereas if another party is the owner of the vessel and 

the employee settles with that third party for a net sum which 

exceeds the amount to which he is entitled under the LHWCA, the 

employer would pay nothing. Thus, the net amount of $646,078 

that the Bundens received for settling the suit can be said to be 

an amount recovered against a third person and can be used by 

Brenneman to offset its liability under the LHWCA. 

 After concluding that § 933(f) was properly raised and 

that its third person setoff provision applies to Brenneman as 

the employer/vessel owner, we now turn to the discussion of how 

§§ 903(e) and 933(f), taken together, allow Brenneman a credit 

for the net amount of its tort settlement. Section § 903(e) 

provides an employer with a credit for payments made under the 

Jones Act.24 Section § 933(f) states that an employer is 

required to pay under the LHWCA only the difference between its 

 

24. Although § 903(e) provides for an offset for "any amounts 

paid," presumably we should consider the net, and not the gross, 

funds recovered from a Jones Act suit. Otherwise, for example, a 

person entitled to $300,000 in compensation benefits under the 

LHWCA who receives a $301,000 gross recovery pursuant to the 

Jones Act would not be entitled to additional compensation 

despite a net recovery of only $200,667 (assuming a one-third 

deduction for attorneys' fees). 
LHWCA liability and the net amount recovered by the employee in 

suits against third parties for damages. Whatever amount of the 

settlement is attributable to settlement of the Jones Act claim 

will be credited against Brenneman's LHWCA liability under § 

903(e). Whatever amount of the settlement is attributable to 

settlement of the § 905(b) claim offsets Brenneman's liability in 

accordance with § 933(f). Thus, no matter how the parties could 

have apportioned the settlement between the claims under the 

Jones Act and under § 905(b), and no matter who bears the burden 

of proving apportionment,25 Brenneman is entitled to a credit for 

the net settlement amount by virtue of the combined application 

of §§ 903(e) and 933(f).26 

 Notwithstanding the applicability of §§ 903(e) and 

933(f), these provisions must be applied to Barbara and Gregory, 

 

25. See supra note 22. 

26. Remembering that the net settlement funds for the Bundens 

totalled $646,078 and assuming arguendo that the settlement funds 

were apportioned so that 50% of the money settled the Jones Act 

claim and 50% settled the § 905(b) claim, Brenneman would be 

entitled to a $323,039 credit under § 903(e) and a $323,039 

credit under § 933(f). This would suffice to eliminate its 

$335,754 liability under the LHWCA. Assuming arguendo that the 

settlement was apportioned 90% and 10% with regard to the Jones 

Act and § 905(b) claim, respectively, Brenneman would be entitled 

to a $581,470 credit under § 903(e) and a $64,608 credit under § 

933(f). This also would suffice to eliminate its $335,754 

liability under the LHWCA. Conversely, if it was a 10% and 90% 

apportionment, the result would be the same. Finally, even 

assuming arguendo that the settlement was apportioned 100% and 0% 

with regard to the Jones Act and § 905(b) claim, respectively, 

Brenneman would be entitled to a $646,078 credit under § 903(e) 

and a $0 credit under § 933(f). Again, this would suffice to 

extinguish its $335,754 liability under the LHWCA. And, of 

course, if it was a 0% and 100% apportionment, the outcome would 

be identical. 
separately, since Barbara and Gregory are both "PETC" under § 

905(a) which lists separately "wife" and "dependents." In 

analyzing the tort award, we note that $1,000,000 was recovered 

and was to be divided 70% to Barbara and 30% to Gregory. After 

costs and attorneys' fees, the net amount awarded to Barbara and 

Gregory, respectively, was $452,255 and $193,823. 

 Under § 933(f), the employer is to pay a sum "equal to 

the excess of the amount which the Secretary determines is 

payable on account of such injury or death over the net amount

recovered against such third person." 33 U.S.C. § 933(f) 

(emphasis added). Likewise, to the extent that the employer does 

not receive a credit under § 903(e), it is required to make up 

the deficiency. Under the LHWCA, Barbara and Gregory are 

entitled to $335,754 -- Barbara's share was $100,628 and 

Gregory's share was $232,205. 

 Thus, applying §§ 903(e) and 933(f) together to each 

of these separate claims, we note that Barbara received $452,255 

from her tort settlement and would be entitled to $100,628 from 

the LHWCA. Since her recovery under the LHWCA does not exceed 

her net recovery from the third party suit, she is entitled to no 

additional funds under the LHWCA. Gregory, on the other hand, 

received $193,823 from the tort settlement and is entitled to 

$232,205 from the LHWCA. Since his recovery under the LHWCA 

exceeds his net recovery from the third party suit, he is 
entitled to an additional $38,382 from Brenneman under the LHWCA, 

barring any termination of benefits under § 933(g)(2).27

 C. Applicability of § 933(g) 

 Section 933(g)(1) applies to settlements with third 

persons where the settlement is for an amount less than the 

compensation to which the claimant would be entitled under the 

LHWCA. It requires that the employee receive the written 

approval of the employer and the employer's carrier whenever the 

employee enters into a settlement for an amount less than the 

compensation that he or she is entitled to under the LHWCA. 

 The Board rejected Brenneman's defense under § 

933(g)(1), concluding that this subsection only applies where the 

amount recovered from a settlement is less than the amount of 

compensation due. It reasoned that Barbara and Gregory Bundens 

received a net recovery of $646,078 from the federal court tort 

settlement, and would only be entitled to $335,754 under the 

LHWCA, an amount less than the net recovery from the one million 

dollar settlement. 

 

27. The fact that Gregory is still entitled to $38,382 from 

Brenneman does not contradict our earlier conclusion that 

Brenneman was entitled to claim a credit for the full amounts it 

paid to Barbara and Gregory irrespective of the apportionment of 

the settlement between the Jones Act and LHWCA claims. Instead, 

the remaining liability to Gregory stems from the allocation of 

the settlement between Barbara and Gregory and the operation of 

that allocation in § 933(f). 

 
 The Director argues that the Board made two errors in 

applying § 933(g). First, the Board looked to the net settlement 

amount instead of the gross settlement amount when deciding 

whether Bundens had to obtain written approval of the settlement. 

Second, the Board treated the tort recovery of Barbara and 

Gregory as one settlement. Instead, it should have considered 

Barbara and Gregory separately since both are "persons entitled 

to compensation" under the LHWCA. 

 Comparing the language of § 933(f) to § 933(g), we observe 

that whereas § 933(f) specifically refers to the "net amount 

recovered against such third person" (and even defines it), § 

933(g) refers simply to "a settlement . . . for an amount less 

than the compensation to which the person . . . would be 

entitled." Thus, although Congress demonstrated its ability to 

specify "net amount" when it wanted to, it failed to do so in 

subsection (g). "[W]here Congress includes particular language 

in one section of a statute but omits it in another section of 

the same Act, it is generally presumed that Congress acts 

intentionally and purposely in the disparate inclusion or 

exclusion." Immigration and Naturalization Service v. Cardoza 

Fonseca, 480 U.S. 421, 432, 107 S. Ct. 1207, 1213 (1987) 

(citations omitted). Moreover, as the Supreme Court has stated, 

where "the plain meaning of th[e] statute appears to settle the 

question," a court should look to other sources "to determine 

only whether there is `clearly expressed legislative intention' 

contrary to the language, which would require [the court] to 

question the strong presumption that Congress expresses its 
intent through the language it chooses." Id. at 432 n.12, 107 S. 

Ct. at 1213, n.12. 

 Additionally, the inclusion of "net" and its definition 

in § 933(f) was part of a comprehensive 1984 overhaul of § 933. 

During this revision, Congress rewrote four subsections, 

including § 933(g). Although § 933(g) was elaborately recast, 

Congress did not elect to include the "net" language that it 

carefully placed in § 933(f). 

 Given the opportunity to redraft the statute, we might 

well have included the "net" language in § 933(g).28 However, 

 

28. There are several compelling arguments for reading § 933(g) 

to mean "net." 

 First, as even the Director concedes, interpreting the 

term "settlement" as "gross settlement" will result in some cases 

where the employer owes a deficiency under § 933(f) without being 

given the opportunity to disapprove the settlement under § 

933(g)(1). This could occur, for example, where the claimant is 

entitled to $500,000 in compensation benefits under the LHWCA and 

receives a $501,000 gross recovery ($334,000 net recovery, 

assuming a one-third deduction for attorneys' fees) from a third 

party settlement. Under the Director's approach, the claimant 

would not be required to obtain the employer's and the carrier's 

written approval pursuant to § 933(g)(1), but the employer would 

be liable under § 933(f) for the shortfall between the $500,000 

and the $334,000. Thus, the employer would be required to pay 

$166,000 without first having had the option of disapproving the 

settlement. 

 Second, no one subsection of a statute should be read 

in isolation. Thus, there can be no meaningful interpretation of 

§ 933(g) without also considering other sections and subsections 

in the statute. Although § 933(f) and § 933(g) are two separate 

subsections, they are meant to work in conjunction with one 

another. In fact, the very language of § 933(g) directs the 

reader back to § 933(f). Section 933(g) cannot be invoked and 

applied without also applying § 933(f). That is to say, every 

time § 933(g) is implicated, you must necessarily apply § 933(f). 

 Third, this interpretation of § 933(g) comports with 

the overall scheme of § 933(f) and § 933(g) of ensuring that: (1) 

a claimant who recovers under a third party action never receives 

less than the claimant would be entitled to under the LHWCA 
because our task is to interpret, and not to create law, we are 

compelled to conclude that in applying § 933(g) the Board should 

consider the gross, and not the net, settlement funds.29 

 Applying § 933(g)(2) separately to Barbara and 

Gregory, we reach the following. Because the $700,00030 gross 

settlement that Barbara received in the settlement exceeds the 

$100,628 that she would be entitled to under the LHWCA, she was 

not required under § 933(g)(1) to obtain the written approval of 

either the employer or the employer's carrier prior to the 

settlement. And since the $300,000 that Gregory received was 

more than the $232,205 that he would be entitled to under the 

LHWCA, he too was not required to obtain the written approval of 

the employer or the employer's compensation carrier. 

 Although written approval was not required under § 

933(g)(1), the Board ruled that the § 933(g)(2) notice provision 

applied. The Board found that this requirement was fulfilled 

(..continued) 

simply because the gross settlement exceeds the LHWCA benefits; 

and (2) an employer's written approval be required in a 

settlement proceeding, so that the employer is not required to 

pay additional benefits under the LHWCA where the claimant was 

not aggressive in pursuing his or her third party claim. 

29. In addition to the compelling statutory construction 

argument which prevails here, practical realities also militate 

against the "net" approach. As the Director points out, a 

claimant may not be able to calculate the net settlement before 

accepting it, and thus may not know whether he needs to obtain 

the employer's consent. 

30. In supra notes 8-9 we stated that Barbara and Gregory 

recovered $1,000,000 in the settlement and it was apportioned 70% 

to Barbara and 30% to Gregory. Thus, Barbara's gross recovery 

was $700,000 and Gregory's gross recovery was $300,000. 
here since Brenneman had been a party to the settlement 

agreement. We agree. Section 933(g)(2) requires that the 

employer receive notification of the third party settlement. 

Because Brenneman itself was a party to the third party 

settlement, the § 933(g)(2) notification requirement was clearly 

satisfied in this case.31 See also Bethlehem Steel Corp. v. 

Mobley, 920 F.2d 558, 561 (9th Cir. 1990) ("So long as the 

employer has notice of the settlement before it has made any 

payments and before the Agency orders it to make any payments, 

the purposes of [§ 933(g)(2)] are satisfied."). 

 Although the Board erred in interpreting § 933(g)(1), 

it reached the correct result in deciding that § 933(g)(1) did 

not apply. Additionally, the Board did not err in holding that 

the notice provision of § 933(g)(2) was satisfied. Thus, we will 

affirm the order of the Board on this issue. 

 

 CONCLUSION

 We will affirm the decision of the Board that: (1) the 

decedent was a harbor worker, not a seaman; (2) the "written 

approval" requirement of § 933(g)(1) does not apply, though we 

affirm on other grounds; and (3) the notice provision of § 

933(g)(2) was satisfied by virtue of the employer's participation 

in the tort settlement. We will reverse the order of the Board 

 

31. Additionally, as mentioned previously, Travelers was invited 

and declined to participate in the settlement negotiations. 

However, Travelers received notice of the settlement when copies 

of the Settlement and Release were sent to counsel for Travelers 

prior to the execution of these documents. 
that § 903(e) alone, or alternatively § 933(f) alone, provides a 

credit for the employer. We hold that only when § 903(e) and § 

933(f) are combined does an employer receive a credit when the 

apportionment of funds between prior settled claims is unknown. 

In sum, because the Board erred in applying and interpreting 

various provisions of the LHWCA, we will remand this matter to 

the Board to re-calculate the compensation benefits owed to 

Gregory.