BRB Nos. 94-1427 - 94-2176
GEORGE A. GLADNEY, et al. )
)
Claimants-Petitioners )
)
v. )
)
INGALLS SHIPBUILDING, )
INCORPORATED )
)
Self-Insured ) DATE ISSUED: 01/31/1996
Employer-Respondent )
)
DIRECTOR, OFFICE OF WORKERS' )
COMPENSATION PROGRAMS, )
UNITED STATES DEPARTMENT )
OF LABOR )
)
Respondent ) DECISION and ORDER
Appeal of the Decision and Order Granting Employer's Motions for Summary
Judgments and the Decision on Motion for Reconsideration of C. Richard
Avery, Administrative Law Judge, United States Department of Labor.
Hayden S. Dent (Scruggs, Millette, Lawson, Bozeman & Dent), Pascagoula,
Mississippi, for claimants.
Paul M. Franke, Jr. (Franke, Rainey & Salloum), Gulfport, Mississippi,
for self-insured employer.
Mark Reinhalter (Thomas S. Williamson, Jr., Solicitor of Labor; Carol A.
DeDeo, Associate Solicitor; Samuel J. Oshinsky, Counsel for Longshore),
Washington, D.C., for the Director, Office of Workers' Compensation
Programs, United States Department of Labor.
Before: SMITH, DOLDER, and McGRANERY, Administrative Appeals Judges.
SMITH, Administrative Appeals Judge:
Claimants appeal the Decision and Order Granting Employer's Motions for
Summary Judgments and the Decision on Motion for Reconsideration (93-LHC-7050,
et al.) of Administrative Law Judge C. Richard Avery granting summary
judgment on 750 claims filed pursuant to the provisions of the Longshore and Harbor Workers' Compensation Act,
as amended, 33 U.S.C. §901 et seq. (the Act).[1] We must affirm the administrative law judge's
findings of fact and conclusions of law if they are supported by substantial
evidence, are rational, and are in accordance with law. 33 U.S.C. §921(b)(3);
O'Keeffe v. Smith, Hinchman & Grylls Associates, Inc., 380 U.S. 359 (1965).
This case represents a consolidation of 750 cases filed by claimants who were
allegedly exposed to asbestos during the course of their employment with employer.
After the cases were transferred to the Office of Administrative Law Judges,
employer filed a motion for summary judgment for the consolidated cases, and
claimants were ordered to show cause why the motion should not be granted.
Employer contended that claimants entered into third-party settlements without its
prior approval and that, therefore, all are barred from seeking compensation under
the Act pursuant to Section 33(g), 33 U.S.C. §933(g). Claimants and the
Director, Office of Workers' Compensation Programs (the Director), responded to the
motions, arguing that there are issues of fact which must be resolved before it can
be determined whether Section 33(g) can be invoked to bar claimants from seeking
benefits under the Act. Specifically, they asserted that the administrative law
judge must determine whether each claimant is a "person entitled to compensation"
under Section 33(g) and whether each claimant received third-party settlement
proceeds in amounts more or less than the amount to which each is entitled under
the Act. Alternatively, the Director asked the administrative law judge to hold
the cases in abeyance until various cases pending before the Board could be
decided.
The administrative law judge rendered his summary judgment based on William
Jordan's affidavit which was submitted by employer and averred that, without prior
approval, each claimant entered into third-party settlements for less than the
amount of compensation to which he would be entitled to under the Act.[2] Although claimants responded to employer's
motion, they filed no rebuttal affidavits, and the administrative law judge
concluded that the facts of each case were as employer averred. Decision and Order
at 3. He then purported to apply the law as set forth in Estate of Cowart v.
Nicklos Drilling Co., 505 U.S. 469, 112 S.Ct. 2589, 26 BRBS 49 (CRT) (1992),
Cretan v. Bethlehem Steel Corp., 1 F.3d 843, 27 BRBS 93 (CRT) (9th Cir.
1993), cert. denied, ___ U.S. ___, 114 S.Ct. 2705 (1994), and Villanueva
v. CNA Ins. Companies, 868 F.2d 684 (5th Cir. 1989), and he determined that
each claimant forfeited his right to compensation and medical benefits under the
Act by virtue of the failure to comply with the requirements of Section 33(g).
Decision and Order at 4-6. Consequently, the administrative law judge granted
employer's motion for summary judgment. Id. at 6.
Claimants filed a Motion for Reconsideration, attaching the affidavit of
Hayden S. Dent, counsel for claimants, who testified that the claimants can be
categorized into four different groups: those who have been diagnosed with a
pulmonary disease but who have no disability; those who have a disability;[3] those who died from causes relating to their
pulmonary condition; and those who died from causes unrelated to their pulmonary
condition. Based on the affidavit, claimants argued that there are unresolved
issues of fact affecting the applicability of Section 33(g) to each claimant. The
administrative law judge summarily denied claimants' motion for reconsideration,
concluding there is no compelling reason to alter his original decision. Claimants
appeal the administrative law judge's decisions. Employer responds, urging
affirmance, and the Director responds, urging the Board to vacate the decisions and
remand the cases to the administrative law judge.
On appeal, claimants contend the administrative law judge erred in granting
summary judgment in each case because questions of material fact remain unresolved.
They argue that the administrative law judge should have determined whether each
is a "person entitled to compensation" and whether each entered into third-party
settlements for amounts less than the amount of compensation to which he is
entitled under the Act before it can be determined whether Section 33(f) and/or
(g), 33 U.S.C. §933(f), (g), applies to extinguish employer's liability for
benefits under the Act. The Director agrees and contends the administrative law
judge erroneously failed to follow the Board's decision in Glenn v. Todd Pacific
Shipyards Corp., 26 BRBS 186 (decision on recon.), aff'd on recon., 27
BRBS 112 (1993) (Smith, J., concurring), which was subsequently reaffirmed in
Harris v. Todd Pacific Shipyards Corp., 28 BRBS 254 (1994), aff'd and
modified on recon. en banc, ___ BRBS ___, BRB No. 93-2227 (January 25, 1996)
(Brown and McGranery, JJ., concurring and dissenting). Additionally, claimants
challenge the administrative law judge's reliance on William Jordan's affidavit as
well as the constitutionality of Section 33(g)(1). Employer responds, maintaining
that the administrative law judge correctly disposed of the 750 cases before him.
Employer also asserts the propriety of the administrative law judge's reliance on
Villanueva, 868 F.2d at 684, as it contends that Glenn and
Harris were incorrectly decided by the Board.
We agree with claimants and the Director that there are unresolved issues of
material fact in the cases presently before the Board; therefore, we hold that it
was improper for the administrative law judge to grant employer's motion for
summary judgment. The Board recently addressed issues identical to the ones raised
in these cases in its two decisions in Harris. Harris v. Todd Pacific
Shipyards Corp., 28 BRBS 254 (1994), aff'd and modified on recon. en
banc, ___ BRBS ___, BRB No. 93-2227 (January 25, 1996) (Judges Brown and
McGranery dissenting from majority's construction of the term "person entitled to
compensation"). In Harris, the Board discussed when a claimant in an
occupational disease case sustains an "injury" within the meaning of the Act. It
held that a claimant who is a voluntary retiree does not sustain an injury until
he is aware of the relationship between his disease, his employment, and his
permanent physical impairment, and that a claimant who is not such a retiree must
be aware of a work-related disease which has caused a loss in his wage-earning
capacity. This awareness must occur before one can be considered a "person
entitled to compensation," thereby potentially invoking the Section 33(g) bar.
Resolution of this issue requires findings of fact. Thus, an administrative law
judge's failure to ascertain these facts and instead grant an employer's motion for
summary judgment is erroneous. Harris, slip op. at 10; see also Love v.
Owens-Corning Fiberglas Co., 27 BRBS 148 (1993); Glenn, 27 BRBS at 115;
Adams v. Newport News Shipbuilding & Dry Dock Co., 22 BRBS 78 (1989).
Further, the Board held that receipt of payments for medical treatment alone does
not make a claimant a "person entitled to compensation," and that in order for
Section 33(g) to bar a claimant's entitlement to compensation, a comparison must
be made between the gross amount of claimant's aggregate third-party settlement
recoveries and the amount of compensation, exclusive of medical benefits, to which
he would be entitled under the Act. Harris, slip op. at 16, 18; see also
Cowart, 112 S.Ct. at 2597, 26 BRBS at 53 (CRT) (Section 33(g)(1) is
inapplicable if a claimant's third-party settlement is for an amount greater than
the amount to which he is entitled under the Act). The Board also determined that
Section 33(f) does not extinguish an employer's total liability for benefits in
every case, but rather provides the employer with a credit in the amount of the
claimant's net third-party recovery against its liability for compensation and
medical benefits. Harris, slip op. at 20; see also Bundens v. J.E.
Brenneman Co., 46 F.3d 292, 29 BRBS 52 (CRT) (3d Cir. 1995) (deficiency
compensation due to minor child pursuant to Section 33(f)).
As the Board previously has addressed the issues presented in this
consolidation of cases, we decline to revisit them. For the reasons set forth in
the Board's prior decisions in Harris, we hold that the administrative law
judge erred in granting summary judgment because there are unresolved questions of
material fact. Specifically, there are questions as to whether each claimant is
a "person entitled to compensation" under Section 33(g) and whether each settled
a third-party claim for less than or more than the amount of compensation to which
he is entitled under the Act. Therefore, we vacate the administrative law judge's
decisions herein, and we remand these cases to him for further action consistent
with law.[4] Harris, 28 BRBS at 270;
Deakle v. Ingalls Shipbuilding, Inc., 28 BRBS 343 (1994) (dismissal is
appropriate when a claim is moot); Parker v. Ingalls Shipbuilding, Inc., 28
BRBS 339 (1994) (dismissal is appropriate when a claim is premature); see also
Linton v. Container Stevedoring Co., 28 BRBS 282 (1994); Boone v. Ingalls
Shipbuilding, Inc., 28 BRBS 119 (1994) (Brown, J., concurring), aff'g on
recon. en banc 27 BRBS 250 (1993) (Brown, J., concurring) (dismissal is
appropriate when there is no claim pending); Glenn, 26 BRBS at 189-190.
Further, we reject employer's argument that the administrative law judge
properly relied on Villanueva, 868 F.2d at 684, in concluding that he need
not make a factual determination of the amount for which each claimant settled his
third-party cases. In Villanueva, decided three years before the Supreme
Court of the United States rendered its decision in Cowart, the United
States Court of Appeals for the Fifth Circuit denied Villanueva's cross-claim for
additional workers' compensation benefits. The Fifth Circuit stated that, although
it was impossible to tell whether Villanueva's third-party settlement was for more
or less than his entitlement under the Act, it was not necessary to make such a
finding, as the employer and its carrier were not liable for any further
compensation. Specifically, the court stated that if Villanueva's settlement was
for more than his entitlement, Section 33(f) extinguished the employer's liability,
and if it was for less than his entitlement, Section 33(g) precluded additional
compensation because Villanueva failed to obtain prior approval of the third-party
settlement. Villanueva, 868 F.2d at 688. Contrary to the administrative law
judge's conclusion in this case that Cowart did not alter the outcome of
Villanueva, the Supreme Court's decision in Cowart made it clear that
an employee's third-party settlement proceeds must be compared with his workers'
compensation entitlement in order to determine the applicability of the Section
33(g)(1) bar. Cowart, 112 S.Ct. at 2597, 26 BRBS at 53 (CRT); see also
Bundens, 46 F.3d at 292, 29 BRBS at 52 (CRT); Harris, 28 BRBS at 265-266; Linton, 28 BRBS at 289-290; Glenn, 26 BRBS at 190-191. If an
employee obtains third-party settlement proceeds in excess of his entitlement under
the Act, the Section 33(g)(1) forfeiture provision does not apply; however, the
employer must be notified of such a settlement. Failure to make the comparison and
determine which subsection of Section 33(g) applies effectively reads the notice
requirement of Section 33(g)(2) out of the Act. See Harris, 28 BRBS at 266
n.12. Moreover, as is demonstrated by Bundens, factual situations may arise
where all benefits are not offset by Section 33(f). Therefore, we reject employer's argument that Villanueva
controls the outcome of this case.[5]
Accordingly, the administrative law judge's decision granting employer's
motion for summary judgment is vacated, and the cases are remanded for
consideration consistent with this opinion.[6]
SO ORDERED.
_______________________________
ROY P. SMITH
Administrative Appeals Judge
I concur: _______________________________
NANCY S. DOLDER
Administrative Appeals Judge
McGRANERY, Administrative Appeals Judge, concurring:
I concur only in the result reached by my colleagues in these cases.
_______________________________
REGINA C. McGRANERY
Administrative Appeals Judge
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Footnotes.
1)By Order dated April 19, 1994, the Board consolidated these 750
appeals and designated the Gladney case, BRB No. 94-1427, as the lead case
for purposes of briefing and decision. A list of all claimants and BRB Numbers is
attached to this decision.
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2)William Jordan is the Senior Staff Attorney for Ingalls
Shipbuilding, Inc., and he testified that he has legal responsibility for all
claims filed under the Act and that he observed the reviewing process for each of
the claims herein.
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3)Counsel subdivided this group into claimants who entered into
third-party settlements for less than the amount to which they would be entitled
under the Act and those who entered into settlements for more than they would be
entitled under the Act.
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4)In view of the case precedent, claimants' argument that the
administrative law judge improperly relied on the affidavit submitted by employer
is moot. We note that the administrative law judge acted within his discretion in
crediting Mr. Jordan's affidavit in ruling on the motion for summary judgment. 29
C.F.R. §18.40. Claimants, however, were not required to file counter
affidavits but merely to oppose the motion by setting forth specific facts
demonstrating the existence of a genuine issue of fact to be decided at a
hearing. 29 C.F.R. §18.40(c); Fed. R. Civ. P. 56(b). Claimants and the
Director did so in the instant case. Moreover, we conclude it was reversible error
for the administrative law judge to ignore the affidavit submitted by claimants in
their motion for reconsideration which also established the existence of a factual
dispute fundamental to the disposition of these cases. See generally Ramirez v.
Southern Stevedores, 25 BRBS 260 (1992); Gray & Co., Inc. v. Highlands
Insurance Co., 9 BRBS 424 (1978); 20 C.F.R. §§702.338 - 702.339; 29
C.F.R.§18.41(b).
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5)We also reject employer's argument that the administrative law
judge properly relied on Cretan, 1 F.3d at 843, 27 BRBS at 93 (CRT). In
Cretan, the United States Court of Appeals for the Ninth Circuit determined
that the Supreme Court's discussion of a "person entitled to compensation" is
dicta and it held that an employee's wife and daughter were "persons
entitled to compensation" at the time they entered into third-party settlements
prior to the employee's death. The Fifth Circuit recently disavowed Cretan
in its decision in Ingalls Shipbuilding, Inc. v. Director, OWCP [Yates], 65
F.3d 460, 29 BRBS 113 (CRT) (5th Cir. 1995), pet. for reh'g en banc denied,
___ F.3d ___ (5th Cir. Nov. 22, 1995), aff'g Yates v. Ingalls Shipbuilding,
Inc., 28 BRBS 137 (1994)(Brown, J., concurring)(Smith, J., dissenting on other
grounds), stating that the Supreme Court's definition of when a person becomes a
"person entitled to compensation" is the "core" of its holding in Cowart.
The court held that a widow was not a "person entitled to compensation" at the time
she entered into pre-death settlements as her right to seek death benefits did not
vest until the employee's death. As the case at bar arises within the jurisdiction
of the Fifth Circuit, Yates, and not Cretan, is controlling.
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6)In light of our decision to remand the cases herein for
appropriate adjudication, we decline to address claimants' challenge to the
constitutionality of Section 33(g) at this time. Claimants' arguments may be
presented to the administrative law judge when their cases are heard.
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NOTE: This is a PUBLISHED LHCA Document.
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