Source: https://supreme.justia.com/cases/federal/us/461/529/case.html
Timestamp: 2016-10-22 17:52:55
Document Index: 38164823

Matched Legal Cases: ['§ 33', '§ 33', '§ 919', '§ 702', '§ 919', '§ 919', '§ 921', '§ 921', '§ 914', '§ 919', '§ 914', '§ 914', '§ 33', '§ 33', '§ 33', '§ 33', '§ 19', '§ 33', '§ 702', '§ 19', '§ 919']

Pallas Shipping Agcy., Ltd. v. Duris (full text) :: 461 U.S. 529 (1983) :: Justia U.S. Supreme Court Center Log In
U.S. Supreme CourtPallas Shipping Agcy., Ltd. v. Duris, 461 U.S. 529 (1983)Pallas Shipping Agency, Ltd. v. DurisNo. 82-502Argued April 25, 1983Decided May 23, 1983461 U.S. 529CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
Under § 33(b) of the Longshoremen's and Harbor Workers' Compensation Act, an injured longshoreman who accepts Page 461 U. S. 531 "compensation under an award in a compensation order" has six months in which to file a negligence action against a third party, after which time the longshoreman's cause of action is irrevocably assigned to his employer. This case presents the question whether a longshoreman's acceptance of voluntary compensation payments gives rise to an assignment under § 33(b)
On February 19, 1980, Duris commenced this action in the District Court for the Northern District of Ohio to recover for injuries suffered as a result of the accident aboard the M/V Regent Botan. An amended complaint named petitioner Pallas Shipping Agency, Ltd., as a defendant. Petitioner is a successor of Erato Shipping, Inc., the company which chartered the M/V Regent Botan. Duris alleged that the bareboat charterer had been negligent in maintaining the ladder from which he fell. The District Court dismissed respondent's claim for failure to establish in personam jurisdiction. Page 461 U. S. 532
When an employer controverts a compensation claim or the injured longshoreman contests actions taken by the employer with respect to his claim, the dispute may be resolved in administrative proceedings. 33 U.S.C. § 919 (1976 ed. and Supp. V). If the dispute cannot be resolved informally under procedures developed by the Department of Labor, 20 Page 461 U. S. 533 CFR §§ 702.301-702.319 (1982), the contested claim will proceed to a formal hearing, which culminates in the entry of an order by the Deputy Commissioner "reject[ing] the claim or mak[ing] an award in respect of the claim." 33 U.S.C. §§ 919(c), 919(e). [Footnote 1] An order making an award, referred to as "a compensation order," 33 U.S.C. § 919(e), is reviewable by the Benefits Review Board, 33 U.S.C. § 921(b) (1976 ed. and Supp. V), and enforceable in federal court. 33 U.S.C. § 921(d). An employer's failure to make timely payments under a compensation order results in a substantial penalty. 33 U.S.C. § 914(f).
"Acceptance of such compensation under an award in a compensation order filed by the deputy commissioner or [Benefits Review] Board shall operate as an assignment to the employer of all right of the person entitled to compensation to recover damages against such third person unless such person shall commence an action against Page 461 U. S. 534 such third person within six months after such award."
We disagree. Section 33(b) triggers an assignment of an injured longshoreman's cause of action against a third party only after he has accepted compensation "under an award in a compensation order filed by the deputy commissioner or Board." (Emphasis added.) The term "compensation order" in the LHWCA refers specifically to an administrative award of compensation following proceedings with respect to the claim. 33 U.S.C. § 919(e). [Footnote 2] In this case, no administrative proceedings ever took place, and no award was ever ordered by the Deputy Commissioner.
Petitioner correctly points out that Duris' employer filed Forms LS-206 and LS-208, as required by 33 U.S.C. § 914(c), to "notify the deputy commissioner . . . that payment of compensation has begun or has been suspended." But such filings are distinguishable from compensation orders in form, function, and legal effect: they are not issued by the Deputy Commissioner; they are neither administratively reviewable nor judicially enforceable; and the failure to make timely payments pursuant to the agreement embodied in Form LS-206 results in a less substantial penalty than a failure to comply with the terms of a compensation order. Page 461 U. S. 535 33 U.S.C. §§ 914(e), (f). [Footnote 3] Nothing in the Act suggests that the filing of these forms is equivalent to "an award in a compensation order."
The history of the LHWCA confirms that "a compensation order" was not intended to include a document testifying to an employer's voluntary payment of compensation under the Act. This statutory language was first incorporated into § 33(b) when the LHWCA was amended in 1938. [Footnote 4] As we described in Bloomer v. Liberty Mutual Ins. Co., 445 U. S. 74, 445 U. S. 79 (1980): Page 461 U. S. 536
H.R.Rep. No.1945, 75th Cong., 3d Sess., 9 (1938). Thus, as this Court recognized in American Stevedores, Inc. v. Porello, 330 U. S. 446, 330 U. S. 454-456 (1947), Congress clearly did not contemplate that the mere acceptance of compensation Page 461 U. S. 537 benefits, in the absence of an award by the Deputy Commissioner, would trigger an immediate assignment of the longshoreman's claim against third persons, for such voluntary payments would not adequately apprise the longshoreman of the election of remedies.
In 1959, Congress eliminated the harsh election of remedies requirement. [Footnote 5] As amended, § 33(b) allows a longshoreman to bring a suit against a third party within six months after accepting payments under "an award in a compensation order." There is no indication, however, that Congress intended to alter this statutory language governing the prerequisites for an assignment of the longshoreman's right of action. To the contrary, Congress indicated that its aim in amending § 33 was "to continue the current judicial construction" of the retained portions of the provision. 105 Cong.Rec. 9226 (1959). As noted above, this Court had previously concluded in American Stevedores, Inc. v. Poello, supra, that an assignment occurred under § 33(b) only after a longshoreman accepted an award by the Deputy Commissioner.
Moreover, the Act continues to equate a "compensation order" with the formal document filed by the Deputy Commissioner at the conclusion of administrative proceedings, as it has since the LHWCA was enacted. See §§ 19, 21-22, 44 Stat. 1435-1437. Finally, limiting § 33(b) to formal compensation orders continues to serve the underlying congressional Page 461 U. S. 538 purposes even though the statute no longer requires an immediate election of remedies. Service of the compensation order puts the longshoreman on notice that his acceptance of future compensation payments will result in the irrevocable assignment of his claims, albeit not immediately, but six months later. Of equal importance, the requirement of a formal compensation order enhances an injured longshoreman's opportunity to make a well-considered decision whether to bring an action against a third party by allowing him to delay his decision until the amount of compensation to which he is entitled under the Act is clearly established in a judicially enforceable order.
Petitioner contends that the requirement of a formal compensation order prior to the assignment of an injured longshoreman's claims will frustrate the Act's aims of ensuring prompt payment to injured workers and of relieving claimants and their employers of the undue expense and administrative burden of litigating compensation claims. It is said that employers who desire to seek indemnification from the negligent third party will be encouraged to contest their liability in order to obtain a compensation order instead of making voluntary payments. We do not find this contention persuasive. Employers are not required to contest their liability in order to obtain a formal compensation award. Department of Labor regulations permit an employer who makes voluntary payments to obtain a compensation order upon request if there is no disagreement among the parties. 20 CFR § 702.315(a) (1982). Moreover, even without a statutory assignment of the longshoreman's claims, an employer can seek indemnification from negligent third parties for payments it has made to the longshoreman. See Federal Marine Terminals, Inc. v. Burnside Shipping Co., 394 U. S. 404 (1969); Crescent Wharf & Warehouse Co. v. Barracuda Tanker Corp., 696 F.2d 703 (CA9 1983). For these reasons, the employer who seeks to bring an action against a shipowner, Page 461 U. S. 539 charterer, or other third person has little to gain from contesting his liability to the longshoreman under the LHWCA.
Even if § 19(c) of the Act, 33 U.S.C. § 919(c), requires the Deputy Commissioner to issue an order with respect to any uncontested compensation claim, as petitioner argues, cf. Czaplicki v. The Hoegh Silvercloud, 351 U. S. 525, 351 U. S. 528, n. 9 (1956), it is not disputed that, in this case, no compensation order was filed by the Deputy Commissioner prior to Duris' commencement of the instant lawsuit.
As we explained in Bloomer v. Liberty Mutual Ins. Co., 445 U. S. 74, 445 U. S. 80 (1980):