Court Opinion

ID: 9427813
Source: CourtListenerOpinion
Date Created: 2023-08-02 23:21:58.542187+00
Date Added: 2024-06-11T17:23:09.880727
License: Public Domain

Mr. Justice Blackmun,
dissenting.
The Court’s approach in this case strikes me as somewhat crabbed. By tilting with the specter of “double recovery,” the Court adopts a construction of the Longshoremen’s and Harbor Workers’ Compensation Act, 33 U. S. C. § 901 et seq., that relegates the injured longshoreman’s welfare to secondary *89status, well behind the interest of his stevedore-employer in conserving resources.
Under the Court’s rule, the stevedore has everything to gain and nothing to lose. The longshoreman takes the risk and the worry of the litigation and, if he gains enough, the stevedore is home free. This result does not seem to me to square with the Court’s recent recognition that the Act should be construed with the beneficent purpose of worker protection foremost in mind. Northeast Marine Termintil Co. v. Caputo, 432 U. S. 249, 268 (1977). Nor does it entirely square with the modern concept that the costs of industrial accidents are expenses to be borne by the industrial enterprise and not by the injured workman.1 It also fails to do equity where equity is due. Since I cannot agree that Congress has required us so to deviate from the principles of equity and the governing purposes of the Act, I respectfully dissent.
The Court recognizes, ante, at 79, that although Congress has provided a detailed scheme for the distribution of the amount recovered in a third-party action initiated by the stevedore, it has never fixed by statute the details of distribution when it is the longshoreman who brings suit. The Court, nonetheless, discovers and espouses a settled judicial rule for division of the recovery in an action by the longshoreman, and it transforms that rule into a statutory mandate by pronouncing that we should not presume to change what the Court thinks Congress, by inaction, apparently has left in force. Ante, at 85-86. I feel the Court has oversimplified the variegated history of the judicial “rule,” has overdrawn the clarity of congressional approval of it, and has failed to estimate the degree to which the rationale for exonerating the stevedore from bearing a portion of the attorney’s fees was undermined by the 1972 Amendments to the Act.
The earliest cases mentioned by the Court, The Etna, 138 *90F. 2d 37 (CA3 1943), and Fontana v. Pennsylvania R. Co., 106 F. Supp. 461 (SDNY 1952), aff’d mem. sub nom. Fontana v. Grace Line, Inc., 205 F. 2d 151 (CA2), cert. denied, 346 U. S. 886 (1953), chiefly concerned the broad question, not at issue here, whether the stevedore is entitled to any recoupment from the longshoreman’s recovery against the shipowner. These cases established that the stevedore is entitled to recoupment, and thus that the longshoreman is not to receive the “double recovery” of full statutory compensation plus full damages in an action at law. No one, at this juncture, doubts the validity of this holding or its approval by Congress. See 33 U. S. C. § 933 (f); S. Rep. No. 428, 86th Cong., 1st Sess., 2 (1959). The question we presently face is a much narrower one that a general dislike for any double recovery does not at all resolve.
To be sure, Fontana, supra, and Davis v. United States Lines Co., 253 F. 2d 262 (CA3 1958), held, as the Court does today, that attorney’s fees for a third-party action must be borne in their entirety by the longshoreman. These cases drew support for this conclusion from both the statutory division of recovery when the stevedore brings suit and the view that the “expense of securing the recovery is, as in equity it should be, a first charge against the fund itself.” Fontana v. Pennsylvania R. Co., 106 F. Supp., at 464. As a review of subsequent case law demonstrates, however, this reasoning never has achieved the broad acceptance that the Court’s opinion implies. In the Fourth and the Fifth Circuits, and perhaps even in the Second Circuit, alternative approaches to the problem have been advocated and applied.
In Ballwanz v. Jarka Corp., 382 F. 2d 433 (1967), the Fourth Circuit adopted an entirely different rationale. The court recognized that Ryan Stevedoring Co. v. Pan-Atlantic S. S. Corp., 350 U. S. 124 (1956), which permitted shipowners to bring indemnity actions against stevedores, produced a “rotary situation” in which the stevedore was effectively aligned *91with the shipowner against the third-party suit. 382 F. 2d, at 434. As a result, recoupment of the stevedore’s compensation lien from the longshoreman’s recovery involved “no more than a transfer of the charge in that amount from its [insurer’s] loss as compensation carrier to its loss as liability carrier.” Id., at 435. It was the contrariety of interests and lack of true benefit to the stevedore, and not the arguments advanced in Fontana and Davis, that led the court to refuse proration of fees.
In the Fifth Circuit, the proper distribution of recoveries in third-party actions initiated by longshoremen has been the subject of continuing debate. Strachan Skipping Co. v. Melvin, 327 F. 2d 83 (1964), applied Fontana’s conclusion that attorney’s fees are a “first charge” against the recovery in a case where the recovery was so small that nothing was left for the longshoreman. The decision provoked a vigorous dissent, which proposed a different reading of Fontana and Davis that would give the compensation lien priority over the fees. Id., at 87-89. This alternative appears to have been applied in Haynes v. Rederi A/S Aladdin, 362 F. 2d 345, 351 (1966), cert. denied, 385 U. S. 1020 (1967), albeit on the ground that the stevedore was represented in the action by its own counsel. Eventually, however, both readings of the Fontana-Davis “rule” were displaced in the Fifth Circuit by an approach that, in certain circumstances, required the longshoreman and the stevedore to “pay attorney’s fees and litigation expenses in proportion to their recoveries.” Chouest v. A & P Boat Rentals, Inc., 472 F. 2d 1026, 1035-1036, cert. denied sub nom. Travelers Ins. Co. v. Chouest, 412 U. S. 949 (1973).
In the Second Circuit, Fontana’s approach has not been uniformly followed. Landon v. Lief Hoegh & Co., 521 F. 2d 756, 761 (1975), cert. denied sub nom. A/S Arcadia v. Gulf Ins. Co., 423 U. S. 1053 (1976), treated the compensation lien as an “express trust for the benefit of the employer” with the *92longshoreman as statutory trustee. In the District Courts, moreover, both the “conflict” theory developed in Ballwanz and the approach advocated by the Strachan dissent gained some currency. See, e. g., Spano v. N. V. Stoomvaart Maatschappij “Nederland” 340 F. Supp. 1194 (SDNY 1971); Russo v. Flota Mercante Grancolombiana, 303 F. Supp. 1404, 1407 (SDNY 1969). These cases were subsequently disapproved in Valentino v. Rickners Rhederei, G. M. B. H., SS Etha, 552 F. 2d 466 (CA2 1977), which reinstated the Fon-tana rationale.
I mention these variations and counterpoints to the Fon-tana-Davis theme not to challenge the Court’s assertion that, prior to the 1959 and 1972 amendments to the Act, stevedores generally were exonerated from bearing a portion of attorney’s fees incurred in longshoreman-initiated actions, but rather to suggest that the Court errs when it implies that the case law presented a settled judicial construction of the Act for Congress to approve. Indeed, the situation was even more complicated than this brief exposition illustrates, since the various rationales employed by the courts led them into disarray over the handling of attorney’s fees in cases where the third-party recovery was insufficient to satisfy both the fees and the stevedore’s compensation lien in their entirety. See Valentino v. Rickners Rhederei, G. m. B. H., SS Etha, 417 F. Supp. 176, 177-179 (EDNY 1976), aff’d on other grounds, 552 F. 2d 466 (CA2 1977). The legislative history relied upon by the Court, ante, at 80-81, 84, fails to show that Congress delved into the intricacies of this judicial debate, or indeed that it did more than barely scratch the surface in consideration of fee allocations in actions brought by longshoremen. The most that can be gleaned from this history is that Congress intended not to interfere with judicial developments in this sphere.
As a result, I think that the Court informs congressional inaction with the wrong meaning, and that it draws an analogy to the statutory allocation of stevedore-initiated recoveries where none, in fact, exists. Had Congress intended rote ap*93plication of the allocation scheme in 33 U. S. C. § 933 (e) to recovery in a longshoreman-initiated action, specification of this result would have been a simple task, and one would have expected Congress to say so. Instead, despite the obvious prevalence of such suits,2 Congress left the matter to the judicial process. Although it is somewhat precarious to find significance in a congressional omission, I view the absence of action in this case as a clear signal that Congress regarded the allocation of a recovery in a suit by a longshoreman as a more fluid and complicated matter than allocation in a suit by a stevedore, and that it left the courts free to balance the equities instead of commanding adherence to a strict “arithmetic ranking” of liens. See Mitchell v. Scheepvaart Maatschappij Trans-Ocean, 579 F. 2d 1274, 1279 (CA5 1978).
Adaptation of the statutory framework, of course, might be desirable if it achieved an equitable result. But it does not. Indeed, the analogy to the division of a recovery under § 933 (e) itself is flawed. When the stevedore brings the lawsuit, its own recovery comes first after expenses and costs of litigation have been paid; the longshoreman, as nonparticipating beneficiary, receives only a portion of the remainder. In contrast, under the Court’s ruling, the longshoreman who brings suit must wait in line until the nonparticipating stevedore’s interests have been satisfied in full. Under the statute, then, the party who takes the risk of loss receives priority of treátment. Under the Court’s ruling, he does not. The apparent symmetry of a strict analogy to the statutory formula thus produces, for the longshoreman, an asymmetrical result. Considerations of equity surely do not require that approach.
As I weigh the equities, the most persuasive reason heretofore for exonerating the stevedore from bearing a proportion*94ate share of attorney’s fees has been the stevedore’s contingent liability for indemnity of the shipowner under Ryan Stevedoring Co. v. Pan-Atlantic S. S. Corp., 350 U. S. 124 (1956). That liability, of course, was eliminated by the 1972 Amendments to the Act. See Edmonds v. Compagnie Generate Transatlantique, 443 U. S. 256, 262 (1979); Northeast Marine Terminal Co. v. Caputo, 432 U. S., at 261-262. Thus, it is now clear from the outset of each longshoreman’s suit that the attorney’s efforts serve the interests of the stevedore as well as those of the longshoreman. If the action is successful, the stevedore obtains recoupment of the compensation benefits it has paid, without risk, without the jeopardy to customer relations that might arise if the stevedore or its insurer brought the suit, and without adjustment for the possibility that the stevedore itself is partly responsible for the injury. The amount of the stevedore’s recoupment ordinarily depends directly on the lawyer’s skill in proving both the shipowner’s negligence and damages. This direct pecuniary interest in the outcome of the litigation justifies, in my view, an equitable allocation of the costs of bringing suit in proportion to recovery from the common fund. See Sprague v. Ticonic National Bank, 307 U. S. 161, 166-167 (1939). Without that allocation, the longshoreman must bear all the risk for only a limited part of the benefit.
In addition to eliminating the only sound reason for refusing an allocation on equitable grounds, the 1972 Amendments also show clearly that congressional concern was primarily for the workman and not for the stevedore-employer or for the shipowner. The chief purpose of the Amendments was to benefit the longshoreman. Congress’ desire to reduce excessive litigation and thus to conserve stevedore resources, of which the Court makes so much, was incidental and secondary to this purpose. When, for example, Congress eliminated the litigation merry-go-round produced by the indemnity and unseaworthiness actions created in Ryan Stevedoring Co. v. *95Pan-Atlantic S. S. Corp., supra, and Seas Shipping Co. v. Sieracki, 328 U. S. 85 (1946), see ante, at 82-83, it did so not out of naked solicitude for shipowners and stevedores, but because this layering of recoveries failed to produce “a real increase in .actual benefits for injured workers.” S. Rep. No. 92-1125, p. 4 (1972), quoted ante, at 84. Yet the Court now advances this secondary purposé .to justify a reduction of the longshoreman’s recovery in the jbhird-party negligence action that Congress retained primarily for his benefit; and it does so because proration of attorney’s fees would result in a “real increase” in the longshoreman’s, total compensation. I cannot avoid the suspicion that congressional intent has been stood on its head.
The Court also makes much of the putative “windfall” a longshoreman would receive if petitioner prevailed. Ante, at 87. The longshoreman would receive no windfall. Any costs or fees he must pay reduce his net. recovery below the amount of his adjudicated injuries. This deficit would be alleviated, but never exceeded, if the stevedore were charged with a proportionate share of the attorney’s fees. The longshoreman, of course, would be better off than if he had to depend either on the statutory compensation or on the negligence suit alone. But Congress long ago eliminated the necessity of electing a remedy, and an increase in total recovery accomplished by resort to both methods of redress is fully consistent with the statutory scheme. So long as the longshoreman’s total compensation remains less than his actual damages, there is no true “double recovery.”
To use the Court’s own adjective, ante, at 85, it is “ironic” that from this litigation petitioner will receive, by today’s ruling, only $2,779.57 more than the attorney’s fees of $19,932.40. The Court thus acts to ensure that third-party actions will remain, as they were before the 1972 Amendments, a litigation playground for others instead of a method by which the injured longshoreman realistically may hope to *96recover for losses that are not covered by the statutory compensation scheme. I shall be interested to see whether the Court adheres to its present logic when presented with a case where the third-party recovery is so small that virtually nothing is left for the longshoreman. Where the recovery against the shipowner is less than the stevedore’s lien and the expenses of the suit, see ante, at 86-87, n. 13, it is to be hoped that the injured longshoreman will not be required to disgorge part of his compensation payments. Yet such disgorgement would not be inconsistent with the gloss on congressional priorities that the Court imposes today.

 See J. Boyd, The Law of Compensation for Injuries to Workmen 10 (1913); H. Somers & A. Somers, Workmen’s Compensation 26 (1954).

 See Valentino v. Richners Rhederei, G. M. B. H., SS Etha, 552 F. 2d 466, 469 (CA2 1977), where the court took notice that “stevedores do not, as a practical matter, pursue these lawsuits — presumably for fear of antagonizing their customers.”