1994 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

12-7-1994

Sea-Land Svc. v. Barry

Precedential or Non-Precedential:

Docket 94-3026

Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_1994

This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova

University School of Law Digital Repository. It has been accepted for inclusion in 1994 Decisions by an authorized administrator of Villanova

University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu.

Recommended Citation

"Sea-Land Svc. v. Barry" (1994). 1994 Decisions. Paper 212.

http://digitalcommons.law.villanova.edu/thirdcircuit_1994/212
 UNITED STATES COURT OF APPEALS 

 FOR THE THIRD CIRCUIT 

 

 No. 94-3026 

 

 SEA-LAND SERVICE, INC. 

 Petitioner 

v. 

 JAMES BARRY AND DIRECTOR, OFFICE OF WORKERS' 

 COMPENSATION PROGRAMS, UNITED STATES DEPARTMENT OF LABOR 

 

 PETITION FOR REVIEW OF THE DECISION AND ORDER OF 

 THE BENEFITS REVIEW BOARD 

 BRB Docket No. 92-1238 

 

 Argued: August 9, 1994 

 Before: MANSMANN, COWEN and McKEE, Circuit Judges. 

 (Filed: December 7, 1994) 

 

 KEITH L. FLICKER, ESQ. (ARGUED) 

 RICHARD L. GARELICK, ESQ. 

 Flicker, Garelick & Associates 

 641 Lexington Avenue 

 New York, New York 10022 

 

 Counsel for Petitioner

 JAMES R. CAMPBELL, ESQ. 

 EILEEN K. CAMPBELL, ESQ. 

 109 Lafayette Street 

 Suite 807 

 New York, New York 10013 

 

 Counsel for James Barry

 THOMAS S. WILLIAMSON, JR. 

 Solicitor of Labor 

 CAROL A. DE DEO 
 Associate Solicitor 

 JOSHUA T. GILLELAN II (ARGUED) 

 Senior Attorney 

 Office of the Solicitor 

 U.S. Department of Labor 

 S-4325 Frances Perkins Building 

 200 Constitution Avenue, N.W. 

 Washington, D.C. 20210 

 Counsel for the Director, OWCP

 

 OPINION OF THE COURT 

 

McKEE, Circuit Judge. 

 Sea-Land Service, Inc. seeks review of an order of the 

United States Department of Labor Benefits Review Board which 

affirmed the adverse decision of an Administrative Law Judge. The 

ALJ held that Sea-Land was liable for a twenty percent penalty on 

an overdue compensation award under § 14(f) of the Longshore and 

Harbor Workers' Compensation Act, 33 U.S.C. § 901, et seq. (1988) 

(the "Act" or the "LHWCA"). For the reasons that follow, we will 

deny the petition for review and affirm the decision of the 

Board. 

I. 

 James Barry filed an occupational disease claim for 

$4,090.51 against Sea-Land under the LHWCA. On January 2, 1991, 

Sea-Land's counsel submitted a stipulation memorializing the 

parties' settlement of Barry's claim to Administrative Law Judge 

Ralph A. Romano who was then presiding over the matter. The ALJ 
approved the terms of this settlement in an Order Approving 

Settlement which was filed in the office of the district director 

on Tuesday, January 15, 1991. On that same date the order was 

sent to the parties by certified mail. 

 On Friday, January 25, 1991, a copy of the ALJ's Order 

Approving Settlement was received in the office of Crawford & 

Company, Sea-Land's adjuster for workers' compensation claims. 

Crawford and Company made payment on Sea-Land's behalf in 

accordance with the terms of settlement by a check dated January 

30, 1991. The check was probably mailed to Barry the same day.1

 Barry subsequently asserted that Sea-Land's payment had 

been untimely and petitioned the district director to assess a 

twenty percent penalty against Sea-Land under 33 U.S.C. § 914(f) 

("§ 14(f)" of the Act).2 The district director granted the 

request and ordered Sea-Land to pay the additional twenty percent 

penalty, which amounted to $818.10. Sea-Land disputed Barry's 

entitlement to the penalty, and the matter was ultimately 

 

 1 The ALJ made no finding on whether the check was mailed 

the same day it was drawn; the evidence showed only that it was 

Crawford & Company's usual business practice to mail such checks 

on the same day the order is received in Crawford's offices. 

 

2 Section 14(f) of the LHWCA provides in relevant part: 

 If any compensation, payable under the 

terms of an award, is not paid within ten 

days after it becomes due, there shall be 

added to such unpaid compensation an amount 

equal to 20 per centum thereof, . . . unless 

review of the compensation order making such 

award is had as provided in section 921 of 

this title and an order staying payment has 

been issued by the Board or the court. 
referred to the Office of Administrative Law Judges for a 

hearing. After conducting a formal hearing, ALJ Paul H. Teitler 

issued a decision and order on March 2, 1992, in which he ruled 

against Sea-Land and imposed the twenty percent penalty. 

 Sea-Land paid the penalty but appealed the ALJ's 

decision to the Board. On December 30, 1993, the Board affirmed 

the decision and order of ALJ Teitler and modified the award to 

reflect Barry's entitlement to interest on the late penalty 

payment. This appeal followed. We have jurisdiction under 33 

U.S.C. § 921(c). 

II. 

 We first address the Director's challenge to the 

Board's jurisdiction, and thus to our jurisdiction to review the 

Board's order. Section 921(b)(3) of the Act provides that “[t]he 

Board shall be authorized to hear and determine appeals raising a 

substantial question of law or fact taken by any party in 

interest from decisions with respect to claims of employees under 

this chapter . . . .” Once the Board has rendered a decision, 

“[a]ny person adversely affected or aggrieved by a final order of 

the Board may obtain a review of that order in the United States 

court of appeals for the circuit in which the injury occurred . . 

. .” 33 U.S.C. § 921(c). 

 The Director contends that the order imposing a penalty 

under § 14(f) is a "supplementary order declaring the amount of 

the default" under § 18(a). Section 18(a) provides in part as 

follows: 
 In case of default by the employer in 

the payment of compensation due under any 

award of compensation . . . the person to 

whom such compensation is payable may . . . 

make application to the deputy commissioner 

making the compensation order [f]or a 

supplementary order declaring the amount of 

the default. . . . The applicant may file a 

certified copy of such supplementary order 

with the clerk of the Federal district court 

. . . . Such supplementary order of the 

deputy commissioner shall be final, and the 

court shall upon the filing of the copy enter 

judgment for the amount declared in default 

by the supplementary order . . . . Review of 

the judgment so entered may be had as in 

civil suits for damages at common law. 

33 U.S.C. § 918(a) (1988). The Director argues that such an 

order is enforceable in district court proceedings but that such 

enforcement is outside the review jurisdiction of the Board. 

 In essence, the Director maintains that payment under a 

§ 18(a) order without initiating enforcement proceedings in the 

district court constitutes a waiver of any objection to the 

validity of the § 18(a) award. Thus, the Director urges that, 

rather than paying the § 14(f) penalty, Sea-Land should have 

refused to pay and thereby compelled the Director to enforce the 

order in a district court enforcement proceeding. We disagree. 

 The Director's logic would require an employer to 

deliberately withhold payment to a claimant in order to force 

litigation in a district court. The claimant would then have to 

await the outcome of that litigation before receiving his or her 

payment. This result is inconsistent with the underlying 

compensatory philosophy of the Act. The LHWCA seeks to protect 

claimants and provide effective and expeditious compensation to 
those who are entitled to it. See Strachan Shipping Co. v. 

Hollis, 460 F.2d 1108, 1114 & n.9 (1972). 

 It would be counterproductive for us to conclude that 

an employer who disagrees with a compensation order must withhold 

payment thereby forcing the claimant to initiate enforcement 

proceedings in order to have the validity of the award reviewed. 

The purpose of the Act is to place the compensation award in the 

hands of the entitled claimant as soon as possible. See id.; 

Arrow Stevedore Co. v. Pillsbury, 12 F. Supp. 920, 922 (N.D. Cal. 

1935); aff'd, 88 F.2d 446 (9th Cir. 1937). The Act's provision 

regarding enforcement proceedings applies only "[i]f an[] 

employer . . . fails to comply with a compensation order." 33 

U.S.C. § 921(d). The Act provides in relevant part as follows: 

 If any employer or his [or her] officers 

or agents fails to comply with a compensation 

order making an award, that has become final, 

any beneficiary of such award or the 

[district director]3 making the order, may 

apply for the enforcement of the order to the 

Federal district court for the judicial 

district in which the injury occurred. 

Id. (emphasis added). The decision of the district court can 

then be appealed to the appropriate court of appeals, thereby 

giving two levels of appeal. However, when an employer pays the 

§ 14(f) penalty in accordance with the objectives of the statute, 

but disputes the validity of that award, there is no need for an 

 

3 Pursuant to 20 C.F.R. § 702.105, the term "district director" 

has been substituted for the term "deputy commissioner" which is 

used in the statute. 
enforcement action in a district court, and the language of the 

statute does not provide for one in that instance. 

 Once the award has been paid, review is not available 

(and is not warranted) in a district court enforcement 

proceeding. Thus, we must conclude that Congress intended to 

provide that an aggrieved party could pay a penalty under § 14(f) 

and then challenge the propriety of the assessment of that 

penalty in a proceeding brought before the Benefits Review Board. 

Section 921(c) then allows the aggrieved party to appeal the 

Board's decision to the appropriate court of appeals. 

Accordingly, the Board properly held that it had jurisdiction to 

decide this appeal from the decision of the ALJ. 

 III. 

 The central issues in this case involve the application 

of the Federal Rules of Civil Procedure to the LHWCA. Rule 

81(a)(6) provides that the Rules apply to "proceedings for 

enforcement or review of compensation orders" under the LHWCA (§§ 

18 and 21 of the Act).4 Fed. R. Civ. P. 81(a)(6). That Rule is 

not, however, intended to extend the scope of the Rules beyond 

their intended application to "procedure in the United States 

district courts in all suits of a civil nature." Fed. R. Civ. P. 

 

 

4 "Although § 914 is not mentioned specifically in Rule 

81(a)(6) . . . [an order based upon] `a "Section 14(f) 

assessment" . . . [is] a "supplementary order declaring the 

amount of the default" within the meaning of Section 18(a) of the 

LHWCA.'" Quave v. Progress Marine, 912 F.2d 798, 800 (5th Cir. 

1990), cert. denied, U.S. , 111 S. Ct. 2012 (1991) 

(quoting Lauzon v. Strachan Shipping Co., 782 F.2d 1217, 1219 

(5th Cir. 1985)). 
1. Payment of the award at issue here did not involve a 

"procedure in the United States district courts" and the Director 

therefore argues that the Rules do not apply to the computation 

of timeliness for such payment. However, we need not decide the 

issue of the general applicability of the Rules to the instant 

penalty assessment because, assuming arguendo that the Rules do 

apply, Sea-Land still cannot prevail. 

A. 

 Federal Rule of Civil Procedure 6(a) provides in 

pertinent part: 

 In computing any period of time 

prescribed . . . by these rules . . . the day 

of the act . . . from which the designated 

period of time begins to run shall not be 

included. The last day of the period so 

computed shall be included, unless it is a 

Saturday, Sunday, or a legal holiday . . . in 

which event the period runs until the end of 

the next day which is not one of the 

aforementioned days. When the period of time 

prescribed or allowed is less than 11 days, 

intermediate Saturdays, Sundays and legal 

holidays shall be excluded in the 

computation. 

Rule 6(a) would require that five days be excluded from the 

computation of timeliness.5 Accordingly, if Rule 6(a) applies, 

Sea-Land would have mailed payment on the tenth day. Sea-Land 

further asserts that it should be afforded an additional 3 days 

 

 

5 There were five days falling either on a weekend or on a 

holiday (Martin Luther King's Birthday) between Tuesday, January 

15, 1991 (the date the Order Approving Settlement was filed in 

the office of the district director) and Wednesday, January 30, 

1991 (the date Crawford & Company issued the compensation check). 
to pay Barry under Rule 6(e) and that its payment was, therefore, 

timely. 

 Rule 6(e) provides: 

 Whenever a party has the right or is required 

to do some act or take some proceedings 

within a prescribed period after the service 

of a notice or other paper upon the party and 

the notice or paper is served upon the party 

by mail, 3 days shall be added to the 

prescribed period. 

Fed. R. Civ. P. 6(e) (emphasis added). Thus, if Rule 6(e) 

applies, Sea-Land would be allowed an additional 3 days for 

delivery of the check to Barry. We conclude, however, that Rule 

6(e) does not apply. 

B. 

 Rule 6(e) is triggered by the requirement of "service 

of a notice or other paper." There is no such condition in the 

LHWCA. Section 14(f) of the Act requires that a 20 percent 

penalty be added if compensation is not paid within "ten days 

after it becomes due" (emphasis added). A compensation order 

becomes "due" or "effective when filed in the office of the 

deputy commissioner." 33 U.S.C. § 921(a). See also Lauzon v. 

Strachan Shipping Co. 782 F.2d 1217, 1220 (5th Cir. 1985) ("`The 

term `effective' in § 921(a) is equivalent to the terms `due' and 

`due and payable' in §§ 914(f) and 918(a), respectively.' 

Consequently the time for payment started running when the award 

was filed, and not when [the employer] was served.") (citation 

omitted). The Board correctly surmised the relevant distinction 

between the language in Rule 6(e) and the requirements of § 
14(f). Citing the Fifth Circuit's ruling in Lauzon, the Board 

stated that "Rule 6(e) is inapplicable in cases involving Section 

14(f) as it requires an action to occur within 10 days of filing

and not 10 days of service as contemplated by Rule 6(e)." Barry 

v. Sea-Land Servs., Inc., 27 BRBS at 263. 

 Sea-Land claims that the Board erred in not considering 

that the compensation order must be served on the claimant and 

the employer before it is "filed" under § 19(e) of the LHWCA. In 

essence, Sea-Land argues that the filing, and the service of a 

compensation order, are inseparable. This interpretation is 

strained as it is contrary to the plain meaning of § 19(e). See

Bethlehem Steel v. OSHA, 573 F.2d 157, 161 (3d Cir. 1978) (a 

statute cannot be interpreted in a manner that strains "the plain 

and natural meaning of words"). The Act does not define "filing" 

but it is clear that filing and mailing are two distinct 

procedures, and that service is not necessary to trigger the ten 

day payment period. 

 Our analysis is further illuminated by the language of 

the regulation implementing § 19(e). That regulation provides 

that upon receipt of a compensation order from an administrative 

law judge, 

 the district director . . . shall formally date and 

file the transcript, pleadings, and compensation order 

(original) in his [or her] office. Such filing shall 

be accomplished by the close of business on the next 

succeeding working day, and the district director 

shall, on the same day as the filing was accomplished, 

send by certified mail a copy of the compensation order 

to the parties and to representatives of the parties, 

if any. 
20 C.F.R. § 702.349 (1994) (emphasis added). Thus, although the 

order must be mailed on the same day that it is filed, the act of 

filing the order is what triggers the employer's duty to make 

payment in accordance with the order. 

 This interpretation is consistent with that of the 

Court of Appeals for the Seventh Circuit in Jeffboat, Inc. v. 

Mann, 875 F.2d 660 (7th Cir. 1989). In a similar situation, the 

court in Jeffboat ruled that the thirty-day period for filing an 

appeal under § 21(a) began to run on the date the judge's order 

was filed in the office of the deputy commissioner; not on the 

date copies of the order were mailed to the parties. Id. at 664. 

Specifically, the court stated "we hold that the Deputy 

Commissioner’s failure to mail a copy of the ALJ’s order to 

Jeffboat’s counsel did not prevent the order from being ‘filed’ 

and becoming effective, and thus [the employer’s] notice of 

appeal from that order was untimely.” Id. The court noted that 

"the language of [20 C.F.R. § 702.349] does not make proper 

mailing part of filing: the regulation mandates that the copies 

be sent `on the same day as the filing was accomplished'; if 

filing is not complete until copies are mailed to the parties' 

representatives, the distinction would make no sense." Id. at 

663. We agree. 

 Rule 6(e) does not apply and Sea-Land’s payment, 

(though arguably mailed on the tenth day under Rule 6 (a)) was 

nevertheless not timely unless Sea-Land “paid” Barry when the 

check was mailed, and not when it was received by Barry. 

IV. 
 Sea-Land argues that compensation under the Act is 

"paid" when the check is mailed not when it is received by the 

claimant, and that we must reject the Board's ruling to the 

contrary. We have previously stated that "`[p]ayment on a check 

that is not post-dated is effective as of the date the check is 

delivered," Staff Builders, Inc. v. Koschitzki, 989 F.2d 692, 

695 (3d Cir. 1993). 

 Although we have not previously addressed this issue 

directly, our determination that the “receipt rule” determines 

when a claimant is “paid” under § 14(f) is consistent with prior 

rulings of the Board. “[W]e note that the Board has previously 

considered and rejected employer’s argument that payment should 

be considered to have been made on the date the check was placed 

in the mail instead of the date claimant received the check.” 

Matthews v. Newport News Shipbuilding and Dry Dock Co., 22 BRBS 

440, 442 (1989) (citing McKamie v. Transworld Drilling Co., 7 

BRBS 315 (1978)). Although we are not bound by decisions of the 

Board, they are nevertheless helpful to our present analysis. 

 Our analysis is also consistent with the general common 

law principle that "[p]ayment is not effectuated by sending the 

amount due to the creditor by mail or other public carrier until 

the remittance gets into the hands of the creditor." 70 C.J.S. 

Payment § 9 (1987) (footnotes omitted). As previously noted, 

Sea-Land did not mail Barry's check until January 30, 1991, which 

was the last possible date for payment if Rule 6(a) applies. We 

assume (as did the Board) that the payment was not received on 
the same day it was mailed. Accordingly, it was received beyond 

the tenth day and was therefore not timely.6

 We are not unsympathetic to Sea-Land’s assertion of the 

unfair and often impractical results of penalizing an employer 

for circumstances which may be well beyond the employer's 

control. We agree that the "receipt rule" could "be impractical 

and inequitable by very often placing employers in positions 

where they would be exposed to the Section 14(f) penalty through 

absolutely no fault of their own." Petitioner's Brief at 13. 

Indeed, this case is just such an example as Barry's check was 

apparently mailed on the same day that Crawford received the 

order for payment. 

 Such equitable complaints are not new, and although we 

are sympathetic, we are bound by the statute before us. 

Moreover, similar complaints about the inequities of the "receipt 

rule" have been rejected by other courts of appeals. In Lauzon, 

the Court of Appeals for the Fifth Circuit responded to such 

complaints by stating "that section 914(f) does not admit to an 

exception for late payment for equitable reasons." Lauzon, 782 

 

6 Our definition of “payment” is also informed by the New York 

decisions construing that term because the compensation award was 

mailed to Barry at his New York address. See South American 

Petrol. Corp. v. Columbian Petrol. Co., 31 N.Y.S.2d 771, 773-74 

(N.Y. Sup. Ct. 1941). Under New York law, a check is not 

considered absolute payment until it is honored by the drawee 

bank. Demerritt v. Levitt, 419 N.Y.S.2d 319, 320 (N.Y. App. 

Div.) appeal denied 423 N.Y.S.2d 1025 (1979). 

 Once a check has been paid by the drawee bank, the date of 

payment for purposes of timeliness relates back to the date the 

check was received by the payee, not the date of mailing. Duke 

v. Sun Oil Co., 320 F.2d 853, 861 (5th Cir. 1963). 
F.2d at 12227 . The court held that the twenty-percent penalty 

of § 914(f) is "self-executing" and automatically becomes due 

upon the expiration of the ten-day period. In essence, it is a 

non-discretionary penalty that applies in every instance in which 

payment is overdue. See id. See also Providence Washington Ins. 

Co. v. Director, OWCP, 765 F.2d 1381, 1385 (9th Cir. 1985). 

 It is by now axiomatic that "the judiciary may not sit 

as a superlegislature to judge the wisdom or desirability of 

legislative policy determinations made in areas that neither 

affect fundamental rights nor proceed along suspect lines." City 

of New Orleans v. Dukes, 427 U.S. 297, 303 (1976). Absent 

ambiguity in the statute, we cannot allow policy to guide our 

analysis. See Chevron, U.S.A., Inc. v. Natural Resources Defense 

Council, Inc., 467 U.S. 837, 842-43 (1984) (the first step in 

judicial statutory construction is always to look at the text of 

the statute and to stop there if the text reveals the 

"unambiguously expressed intent of Congress"). We are not at 

liberty to ignore the unambiguous mandate of this statute, nor 

are we free to re-evaluate the relative burdens and benefits of a 

balance that Congress has struck. See Long Island Oil Products 

Co. v. Local 553 Pension Fund, 775 F.2d 24, 29 (2d Cir. 1985). 

 

 

7 In Lauzon, the employer prepared the claimant’s check on 

time and held the check at the employer’s office as an 

accommodation to the claimant. When claimant failed to pick up 

the check the employer called the claimant and left a message 

with claimant’s wife. However, she forgot to tell claimant that 

the check was ready. When the employer called back, yet again, 

and offered to hand deliver the check the ten day period had 

expired, and the claimant instructed his wife not to accept the 

payment. 
Sea-Land has justifiable complaints and fairly expresses the 

inequities and problems built into this statute, but those 

complaints must be addressed to Congress and not the courts. 

 More than ten days lapsed between the date payment 

became due on January 15, 1991 and the date payment was received 

by Barry. Thus, the Board's decision affirming the imposition of 

the penalty was proper. 

V. 

 Finally, Sea-Land contests the Board's decision to 

award Barry post-judgment interest. Sea-Land argues that there 

is no express statutory authority for an award of interest on 

overdue compensation. The Director counters that the Act should 

be construed to allow interest awards on overdue compensation and 

urges us to affirm the Board's decision which relied upon the 

ruling of the Court of Appeals for the Ninth Circuit in 

Foundation Constructors, Inc. v. Director, OWCP, 950 F.2d 621 

(9th Cir. 1991). There, the court held that where substantial 

evidence exists to support a finding that a claimant was injured 

and was entitled to disability compensation under the LHWCA, and 

the employer did not timely pay the disability compensation, 

interest accrued on the overdue compensation. Id. at 625. We 

are in agreement with the following reasoning of the court in 

Foundation Constructors: 

 It is a truism that a dollar tomorrow is not 

worth as much as a dollar today. Allowing an 

employer to delay compensation payments 

interest-free would reduce the worth of such 

payments to the claimant, undermining the 

remedial intent of the Act. We believe that 

the Director's construction that interest may 
be required on past-due compensation is 

reasonable and consistent with the ends of 

the Act. 

Id. See also Quave v. Progress Marine, 912 F.2d 798, 801 (5th 

Cir. 1990), cert. denied, U.S. , 111 S. Ct. 2012 (1991); 

Newport News Shipbuilding & Dry Dock v. Director, OWCP, 594 F.2d 

986, 987 (4th Cir. 1979). Accordingly, we uphold the Board's 

award of interest to Barry. 

VI. 

 For the reasons stated above, we will deny the petition 

for review of the Board's decision. In doing so, however, we can 

only hope that Congress will address the problems built into this 

statute. AFFIRMED.