Opinion ID: 505524
Heading Depth: 3
Heading Rank: 1

Heading: Third Party Actions Under Sec. 33(a) and The Problem of

Text: Double Recovery--The Automatic Lien 18 The existence of a third party action under LHWCA Sec. 33(a) creates the possibility of double recovery: an injured longshoreman, who receives compensation benefits from the employer, proves the negligence of a third party, and receives compensation for his full economic loss, receives compensation in excess of actual damages. He or she is compensated twice, once in the negligence action, and once in strict liability, receiving the full measure of damages under each theory. 13 However, The courts have long recognized a right of subrogation to the extent of payments made. 510 F.2d at 979. This judicially created right to reimbursement has been recognized since The Etna, 138 F.2d 37 (3d Cir.1943). The Supreme Court recently restated this principle, saying: The longshoreman cannot receive a double recovery, because the stevedore, by paying him statutory compensation, acquires a lien in that amount against any recovery the longshoreman may obtain from the vessel. Jones & Laughlin, 462 U.S. at 530 n. 5, 103 S.Ct. at 2547 n. 5. 19 When a settlement is involved, the existence of a double recovery is not as obvious. 14 The employer's lien nevertheless attaches to the settlement fund. Bloomer v. Liberty Mutual Insurance Co., 445 U.S. 74, 100 S.Ct. 925, 63 L.Ed.2d 215 (1980); Peters, 764 F.2d at 312. In this Circuit we have stated that [A] worker may not settle his third-party cause of action independently of the employer's compensation lien. Peters, 764 F.2d at 315. In Peters, we outlined the method for distributing a recovery from a third-party cause of action: 20 (1) the worker retains his litigation expenses and a reasonable attorneys' fee; (2) the employer receives from the recovery a credit for any compensation liability not yet satisfied and reimbursement for compensation already paid; and (3) the worker retains what is left if anything. 21 Id. at 312; see also Hayden v. Kerr-McGee, 787 F.2d 1000 (5th Cir.1986). 22 Thus the LHWCA creates a harmonious scheme, guaranteeing both that the exclusive remedy against the employer is the employee's action for statutory benefits, and that, in the event of a longshoreman's recovery against a third party, the employer's lien prevents double recovery. 23