Court Opinion

ID: 30685
Source: CourtListenerOpinion
Date Created: 2010-04-25 09:57:45+00
Date Added: 2024-06-11T08:04:00.251833
License: Public Domain

IN THE UNITED STATES COURT OF APPEALS

                             FOR THE FIFTH CIRCUIT

                                 No. 02-40323

ERNEST ETIENNE,

                                                                  Plaintiff,

EAGLE PACIFIC INSURANCE COMPANY,

                                         Intervenor Plaintiff-Appellant,

versus

SHELL OIL COMPANY, ET AL.,

                                                                  Defendants,

SCHECHTER, MCELWEE & SHAFFER, L.L.P.,

                                                      Intervenor-Appellee.

                         --------------------
             Appeal from the United States District Court
                  for the Southern District of Texas
                             (G-00-CV-196)
                         --------------------
                            March 17, 2003

Before WIENER, BENAVIDES, and DENNIS, Circuit Judges.

PER CURIAM:*

     Intervenor-Appellant Eagle Pacific Insurance Co. (“Eagle”)

appeals from the district court’s order enforcing its previous

order requiring Eagle to pay the proceeds of a Longshore and Harbor

Worker’s Compensation Act (“LHWCA”) settlement to the claimant’s

attorney’s     law   firm,   Intervenor-Appellee     Schechter,    McElwee   &

     *
       Pursuant to 5TH CIR. R. 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
Shaffer (“Shaffer”). After the district court’s original order was

entered and the Department of Labor approved the LHWCA settlement,

Eagle paid the funds directly to the injured worker, Plaintiff

Ernest Etienne, rather than to Shaffer.   Returning to the district

court, Shaffer obtained an order directing Eagle to pay counsel

irrespective of the payment to Etienne.   Eagle now claims that the

district court lacked subject matter jurisdiction to order the

payment to Shaffer.    Agreeing with Eagle, we vacate the order of

the district court.

                                  I

                        Facts and Proceedings

     Etienne was injured while working as a galleyhand aboard an

offshore oil rig owned by Shell Oil Co. and staffed by Philip/Seco

Industries Inc.    He sued Shell and Philip/Seco under § 5(b) of the

LHWCA.1     Eagle, as worker’s compensation carrier for Etienne’s

employer, intervened to assert a lien for compensation payments

that it had made to Etienne.    The tort suit settled for a total of

$140,000:    Philip/Seco agreed to contribute $125,000 to settle the

tort claim; Eagle agreed to contribute $15,000 to settle the

longshore claim in exchange for a waiver of its lien; and Defendant

Shell Oil Co. was dismissed from the suit with prejudice.

     After the parties agreed to be bound by the settlement,

Etienne had second thoughts and refused to sign the settlement

papers.   Philip/Seco filed a motion to enforce the settlement, and

    1
       See 33 U.S.C. § 905(b)(allowing suits in negligence against
third parties by workers covered by the LHWCA).

                                  2
Shaffer intervened to assert an attorney’s fees claim.      At the

hearing, the court enforced the settlement agreement by ordering

Etienne to sign all the necessary documents. To expedite Etienne’s

receipt of settlement funds, the court ordered Shaffer to pay

Etienne his total recovery for both the tort and longshore claims

from the tort settlement.        And, to ensure that Shaffer would

receive the attorney’s fees, the court ordered Eagle to pay the

longshore settlement directly to Shaffer.

     After the Department of Labor approved the LHWCA settlement,

which prohibited payment of attorney’s fees from the proceeds of

the settlement, Eagle paid the funds directly to Etienne.     That

prompted Shaffer to file a motion to enforce the court’s order for

Eagle to pay Shaffer, and the court granted this motion.     Eagle

responded with a motion to reconsider, which the court denied. The

district court then certified its order pursuant to Rule 54(b) of

the Federal Rules of Civil Procedure, thereby conferring appellate

jurisdiction.2

                                   II

                                Analysis

     A district court’s exercise of subject-matter jurisdiction is

subject to plenary review at any time.3      Parties cannot confer

subject-matter jurisdiction on a federal court by agreement or by

     2
         See 28 U.S.C. §1291.
    3
       See Local 1351 Int’l Longshoremen’s Ass’n v. Sea-Land Serv.
Inc., 214 F.3d 566, 569 (5th Cir. 2000), cert. denied sub nom., SL
Serv., Inc. v. Office & Prof’l Employees Int’l Union, 531 U.S. 1076
(2001)(“We exercise plenary, de novo review of a district court’s
assumption of subject matter jurisdiction.”).

                                   3
failure to object to continued proceedings.4        There must be a

statutory basis for a district court’s exercise of subject-matter

jurisdiction; the parties’ willingness or desire to come before the

court will not suffice.

     The LHWCA was designed to minimize the need for litigation as

a means of providing compensation for injured workers.5    In pursuit

of this aim, Congress granted the Department of Labor exclusive

jurisdiction to adjudicate claims under the LHWCA.6         The 1972

amendments to the LHWCA reduced the role of the district courts to

two functions:       (1) determining whether a compensation order was

made and served in accordance with law; and (2) determining whether

an employer has failed to comply with a compensation order.7

     Under this statutory scheme, federal district courts have

jurisdiction over the enforcement of LHWCA awards, but do not have

jurisdiction to grant or deny awards (including attorney’s fees) or

to modify such awards in any way.8          Here, the district court

ordered Etienne to sign the tort settlement release and the 8(i)

     4
        “[T]he subject-matter jurisdiction of a federal court can
be challenged at any stage of the litigation (including for the
first time on appeal), even by a party who first invoked it.” In
re Canion, 196 F.3d 579, 585 (5th Cir. 1999).
     5
        See Rodriguez v. Compass Shipping Co., Ltd., 451 U.S.596
(1981), rehearing denied, 453 U.S. 923.
         6
          See 33 U.S.C. § 905(a)(providing that LHWCA employer
liability is exclusive); 33 U.S.C. § 919(a)(“[T]he deputy
commissioner shall have full power and authority to hear and
determine all question in respect of [a LHWCA] claim.”).
     7
             See 33 U.S.C. §§ 918(a), 921(d).
     8
        Thompson v. Potashnick Const. Co., 812 F.2d 574, 576 (9th
Cir. 1987); see 33 U.S.C. § 921(e).

                                     4
application, and ordered Eagle to make the LHWCA check payable to

Shaffer. Requiring the LHWCA check be made payable to a particular

payee might have enforced the contingency fee agreement between

Etienne and Shaffer, but it could not enforce the LHWCA settlement:

The district court’s order was filed before the settlement was

approved by the Department of Labor.                  Until a settlement is

approved, the employer (through its insurer) is not obligated to

pay the claimant.9       A court cannot enforce an obligation that does

not exist.

     Given the limited role of federal district courts in the LHWCA

statutory    scheme,     the   court     here   exceeded    its    subject-matter

jurisdiction     when    it    ordered    the   particular    distribution     of

Etienne’s award.        As a district court has no ability to shape or

structure    a   LHWCA     settlement,        the   court   here    was   without

jurisdiction to order Eagle to pay Shaffer in satisfaction of the

debt owed by Etienne.

     The district court’s order was intended to expedite payment to

Etienne and thus further the LHWCA’s purpose of providing prompt

compensation to injured workers.              Despite this laudable purpose,

the court lacked jurisdiction to order Eagle to pay Etienne’s

counsel.     That this apparently resulted in double recovery for

Etienne is regrettable; but, even though the court had jurisdiction

to order Shaffer to pay Etienne, it did not have jurisdiction to

order Eagle to pay Shaffer.         We have no choice, therefore, but to

     9
         33 U.S.C. § 908(h).

                                          5
vacate the latter order for lack of subject matter jurisdiction,

which only Congress can confer.

                                  III

                            Conclusion

     The district court’s order for Eagle to pay Shaffer is vacated

for lack of subject-matter jurisdiction.

ORDER VACATED.
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