Essentially, Section 18 offers a quick and inexpensive mechanism for the prompt enforcement of
unpaid compensation awards. Tidelands Marine Serv. v. Patterson, 719 F.2d 126, 16 BRBS 10 (CRT)
(5th Cir. 1983); Jourdan v. Equitable Equipment Co.,
1989 WL 11089 (Civ. A. No. 88-5432)(Feb. 4, 1989)(Unpublished)("Although the procedure for entry of an immediate judgment is unusual, it reflects the
apparent intent of Congress to transfer the fact-finding burden from the federal district courts to the
[ALJs]."), aff'd at 889 F.2d 637 (5th Cir. 1989)(Rule
81(a)(6) of the [FRCP] provides that the Federal Rules "apply to proceedings for enforcement or review of compensation orders under the
[LHWCA]...except to the extent that matters of procedure are provided for in that Act.").
A claimant's remedies under Section 18 are also applicable against the Special Fund since the
Fund's liability is derivative of an employer's liability. Maria v. Del Monte/Southern Stevedore, 22 BRBS
132 (1989).
Section 18 only applies to the enforcement of compensation awards. Bruce v. Atlantic Marine,
12 BRBS 65 (1980), aff'd on other grounds, 14 BRBS 63 (5th Cir. 1981). In the Fifth Circuit, "medical
benefits" are included in "compensation" for purposes of enforcement proceedings
under Section 18(a). Lazarus v. Chevron USA, Inc., 25 BRBS 145 (CRT) (5th Cir. 1992).
An attorney's fee award is not enforceable under Section 18. Wells v. Int'l Great Lakes Shipping
Corp., 14 BRBS 868 (1982). See also Wells v. Int'l Great Lakes Shipping Co., 693 F.2d 663, 15 BRBS
47 (CRT) (7th Cir. 1982). Moreover, attorney's fees awards, unlike compensation orders, are not
enforceable during the pendency of an appeal. Wells, 14 BRBS at 868; see also 33
U.S.C. § 921(d).
Supplemental orders issued by the district director pursuant to Section 18 are final when issued and
are not subject to review by the Board. Lazarus, 25 BRBS 145 (CRT) (Fifth Circuit held that an award
was not final order enforceable under Section 18(a) because it did not adequately state the amount of
compensation owed to claimant); Providence Wash. Ins. Co. v. Director, OWCP, 765 F.2d 1381, 17
BRBS 135 (CRT) (9th Cir. 1985); Tidelands Marine Serv., 719 F.2d 126, 16 BRBS 10 (CRT); Henry
v. Gentry Plumbing & Heating Co., 704 F.2d 863, 15 BRBS 149 (CRT) (5th Cir. 1983); Snowden v.
OWCP, 253 F.3d 725 (D.C. Cir. 2001)(Held, Board lacks jurisdiction to review a supplementary
compensation order issued as per Section 18 since that order is final when issued, and therefore,
unreviewable by the Board). The claimant may take a certified copy of the district director's supplemental
order to a United States district court for enforcement. The district court's role is to determine whether the
order was issued in accordance with law. Providence Wash. Ins. Co., 765 F.2d at 1384, 17 BRBS at
138. Review of a supplemental order is available only in an enforcement proceeding in federal district
court. Snowden.
[ED. NOTE: It should be noted, however, that though an order is not determined to be final and
is transferred back to the administrative law judge pursuant to Section 18(a), the judge does not
have the authority to raise new issues sua sponte. See, e.g., Kelley v. Bureau of Nat'l Affairs, 20
BRBS 169 (1988) (where a case was transferred to the ALJ pursuant to Section 18(a) solely for a
determination as to whether disputed medical expenses should be paid, which was an issue involving
interpretations and findings under a final compensation order, the ALJ had no authority to raise the
issue of jurisdiction sua sponte).]
One court has held that where an employee seeks to enforce a supplemental default order, the
employer need pay nothing pending the court's determination of whether the supplemental order is in
accordance with law. Leonard v. Walter, 356 F. Supp. 56 (D.D.C. 1973). The court in Leonard also
indicated that the claimant could not get a supplemental order if the Board or court had issued an order
staying payments pending appeal pursuant to Section 21(b)(3) or 21(c).
Enforcement of a default judgment under Section 18 can be stayed by a court of appeals pending
its appeal to the circuit court. A general stay of payments, however, cannot be granted by the circuit court
under Section 18 pending an administrative appeal of the original award to the Board since Section
21(b)(3) of the LHWCA vests such power exclusively in the Board. Henry, 704 F.2d at 865, 15 BRBS
at 150 (CRT).
The Fifth Circuit has held that where an order does not explicitly answer a question which
emerges during the period of payment, a Section 18 proceeding may be appropriate. Bray v. Director,
OWCP, 664 F.2d 1045, 14 BRBS 341 (5th Cir. 1981); but see Lazarus, 25 BRBS 145 (CRT) (award
was not a final order enforceable under Section 18(a) because it did not adequately state the amount of
compensation owed to claimant); Keen v. Exxon Corp., 35 F.3d 226 (5th Cir. 1994)(Held, ALJ's
compensation order did not become final until such time as the district director furnished computations
dictated by the ALJ order); Severin v. Exxon Corp., 910 F.2d 286 (5th Cir. 1990)("To constitute a final
decision and order of the ALJ, the order must at a minimum specify the amount of compensation due or
provide a means of calculating the correct amount without resort to extra-record facts which are potentially
subject to dispute between the parties."); Ledet v. Phillips Petroleum Co., 163 F.3d 1999 (5th Cir. 1998),
Although the ALJ provided a means of calculating the amount of benefits due, he impermissibly delegated
his fact-finding duty to the Director who would have to resort to extra-record facts; such is impermissible.).
The Fifth Circuit in Bray also held that where error is asserted with regard to a matter of law or fact in
the supplementary order finding no default, the Board has jurisdiction to hear the appeal. Bray, 664 F.2d
1045, 14 BRBS 341.
Constitutionality of Section 18
Section 18, as applied is not violative of Article III of the United States Constitution or due process
rights. Schmit v. ITT Fed. Elec. Int'l, 26 BRBS 166 (CRT) (7th Cir. 1993); Abbott
v. Louisiana Ins. Guaranty Ass'n (LIGA) (In re Compensation under Longshore & Harbor
Workers' Compensation Act),
889 F.2d 626 (5th Cir. 1989), cert. denied, 494 U.S. 1082 (1990).
In Abbott, LIGA had been precluded from participating in the pre-deprivation due process rights
ALJ hearing. Thus, the issue was whether other procedural protections in the LHWCA were sufficient to
protect LIGA's due process rights. The only reason the court discussed post-deprivation review was
because LIGA had no opportunity to participate in the pre-deprivation hearing. In Bunol v. George Engine
Co., 996 F.2d 67 (5th Cir. 1993), the Fifth Circuit held that delays involved in obtaining administrative
review of a decision awarding compensation did not deny due process. In Bunol, as distinguished from
Abbott, LIGA fully participated in the ALJ hearing, and thus the post-deprivation review process was not
at issue.
"The fundamental requirement of due process is the opportunity to be heard
'at a meaningful time and in a meaningful manner.'" Mathews v. Eldridge, 424 U.S. 319, 333 (1976). In Abbott, the Fifth
Circuit noted that due process generally means that a party must have the opportunity for a hearing before
the government interferes with the party's protected interest. 889 F.2d at 631. In Bunol, the Fifth Circuit found
that since LIGA had an opportunity to be heard "at a meaningful time and in a meaningful manner" before
there was any government interference with its property rights, its rights
to due process had been adequately protected. 996 F.2d at 69.
[ED. NOTE: In arguing a lack of due process, LIGA, in Bunol, had pointed to the Fifth Circuit
rule that if a compensation order is reversed neither an employer nor a carrier has a cause of action
for reimbursement from the claimant of monies paid but not owed. Instead, there is only a claim
for a credit against future compensation. See Ceres Gulf v. Cooper, 957 F.2d 1199, 1209 (5th Cir.
1992). If the compensation order in Bunol was eventually overturned in its entirety, LIGA would
be unable to recover the compensation erroneously paid to the claimant. In that event, LIGA
argues, the LHWCA's post-deprivation review would not be meaningful and a due process violation
would result.]
[ED. NOTE: See Schmit and Abbott for a complete analysis of the constitutional aspects of Section
18.]
18.2 SECTION 18(a) SUPPLEMENTAL ORDER DECLARING DEFAULT
Section 18(a) of the LHWCA states:
In case of default by the employer in the payment of compensation
due under any award of compensation for a period of thirty days
after the compensation is due and payable, the person to whom
such compensation is payable may, within one year after such
default, make application to the deputy commissioner making the
compensation order or a supplementary order declaring the amount
of the default. After investigation, notice, and hearing, as provided
in section 19, a deputy commissioner shall make a supplementary
order, declaring the amount of the default, which shall be filed in
the same manner as the compensation order. In case the payment
in default is an installment of the award, the deputy commissioner
may, in his discretion, declare the whole of the award as the amount
in default. The applicant may file a certified copy of such
supplementary order with the clerk of the Federal district court for
the judicial district in which the employer has his principal place of
business or maintains an office, for the judicial district in which the
injury occurred. In case such principal place of business or office
or place where the injury occurred is in the District of Columbia, a
copy of such supplementary order may be filed with the clerk of the
United States District Court for the District of Columbia. Such
supplementary order of the deputy commissioner shall be final, and
the court shall upon the filing of the copy enter judgment for the
amount declared in default by the supplementary order if such
supplementary order is in accordance wit law. Review of the
judgement so entered may be had as in civil suits for damages at
common law. Final proceedings to execute the judgment may be
had by writ or execution in the form used by the court in suits at
common law in actions of assumpsit. No fee shall be required for
filing the supplementary order nor for entry of judgment thereon,
and the applicant shall not be liable for costs in a proceeding for
review of the judgment unless the court shall otherwise direct. The
court shall modify such judgment to conform to any later
compensation order upon presentation of a certified copy thereof
to the court.
33 U.S.C. § 918(a).
Section 18(a) provides that if an employer fails to pay compensation, including medicals, Ware v.
Dresser Offshore Services, 9 BRBS 160 (1978), aff'd, 598 F.2d 618 (5th Cir. 1979), due under a final
or non-final award for a period of 30 days after the compensation is due, the claimant may, within one year
after the default, request that the district director issue a supplemental order declaring the amount due.
Under Section 18(a), an order regarding an employer's default in paying a compensation award
may be enforced only by the Federal District court for the judicial district in which the employer
has its principal place of business, or maintains an office, or in which the injury occurred. Lauzon
v. Strachan Shipping Co., 782 F.2d 1217, 1219, 18 BRBS 60, 62-63 (CRT) (5th Cir. 1985); Providence
Wash. Ins. Co. v. Director, OWCP, 765 F.2d 1381, 1386, 17 BRBS 135, 139 (CRT) (9th Cir. 1985);
Tidelands Marine Serv. v. Patterson, 719 F.2d 126, 129, 16 BRBS 10, 12-13 (CRT) (5th Cir. 1983).
In Pleasant-El v. Oil Recovery Company, Inc., 148 F.3d 1300 (11th Cir. 1998), the Eleventh
Circuit found that Section 18(a) of the LHWCA gives the federal district court a general grant of authority
to determine whether the imposition and enforcement of a supplemental order is lawful although the federal
district court lacks authority to consider the validity of the underlying compensation order.
Section 18(a) makes no provision for district court review of a deputy commissioner's order where
no default award was made and no enforcement is required. Durham v. Embassy Dairy, 19 BRBS 105
(1986) (Board retains jurisdiction of cases involving only a question of law regarding the propriety of a
Section 14(f) penalty and not requiring Section 18 enforcement of that penalty).
When a final decision and order underlies the district director's supplemental
order of default, and the district director has correctly followed the procedures
required by Section 18(a), the supplemental
order is "in accordance with law," and the district court must enforce it,
despite the procedural or substantive errors the administrative law judge may
have made in arriving at the underlying compensation
order. Abbott v. Louisiana Ins. Guaranty Ass'n, 889 F.2d 626 (5th Cir. 1989), cert. denied, 494 U.S.
1082 (1990) (district court's scope of review of Section 18(a) enforcement proceedings is limited to the
lawfulness of the supplemental order and does not include the procedural or substantive correctness of the
underlying compensation orders).
An ALJ does have jurisdiction, pursuant to Section 18(a), to review the language of his Decision
and Order on Remand in order to address the ambiguity that arose after the decision was issued. Bray v.
Director, OWCP, 664 F.2d 1045, at 1047, 14 BRBS 341, at 343 (5th Cir. 1981)(While
the most common §18(a) proceeding is based on an employer's failure to pay benefits where a compensation order
clearly provides for them, an unusual case may arise where a compensation order is "ambiguous or unclear,
or uncertainy arises in its application, which was not reasonably apparent at the time of the entry of the
order; use of §18(a) under such circumstances.").
In Severin v. Exxon Corp., 910 F.2d 286, 24 BRBS 21 (CRT) (5th Cir. 1990), the Fifth Circuit held
that a compensation order which does not specify the amount of credit employer
was to receive or provide a method for its calculation was not "a final decision and order" which was "due" or "effective," even
though it was filed in the office of the deputy commissioner. In Jourdan v. Equitable Equipment Co.,
889 F.2d 637, 23 BRBS 9 (CRT) (5th Cir. 1989), the court held
that a supplemental order of default was "in accordance with law" even though
the underlying compensation order did not designate which of the employer's
insurance carriers was responsible for paying the claimant's benefits.
In Bunol v. George Engine Co., 996 F.2d 67 (5th Cir. 1993), the Fifth Circuit held that a
compensation order containing a clerical error (it awarded both temporary total disability and permanent
partial disability during the same time period) was nevertheless enforceable since the rest of the decision
made clear that the overlap was simply a clerical error.
Where the district court issues an enforcement order, the statute is silent as to whether a stay may
be granted pending appeal of that order to the circuit court. Bunol, 996 F.2d 67.
[ED. NOTE: In Bunol such
a stay was granted upon LIGA's posting of a supersedeas bond. The U.S. Department
of Labor subsequently filed a motion to vacate, arguing that a stay of the
enforcement order would be directly contrary to the LHWCA's purpose of providing "a
quick and inexpensive mechanism for the prompt enforcement of unpaid compensation
awards." Tidelands
Marine Serv. v. Patterson, 719 F.2d 126, 129 (5th Cir. 1983). That motion to vacate, however, was
withdrawn at oral arguments by the Department of Labor. Thus, the Fifth Circuit did not reach
the question of whether it was proper for the district court to grant the stay of execution pending
appeal.]
Under Section 21(b)(3), payments are due, despite appeal, unless stayed. McCrady v.
Stevedoring Servs. of America, 23 BRBS 106 (1989).
[ED. NOTE: As a practical matter, the Board sparingly issues stays of compensation orders.]
By the terms of Section 18(a), appellate review is in the federal courts. Since the district director's
order declaring the amount of compensation defaulted upon is final, it is not appealable to the Board. See
Jones & Laughlin Steel Corp. v.
Wertz, 720 F.2d 324 (3d Cir. 1983); Davis v. Strachan Shipping Co.,
5 BRBS 414 (1977). Also, where there is a default order, the assessment of additional compensation on
the defaulted amount pursuant to Section 14(f) is not appealable to the Board. Providence Wash. Ins. Co.
v. Director, OWCP, 765 F.2d 1381, 17 BRBS 135 (CRT); Patterson, 719 F.2d 126, 16 BRBS 10
(CRT). Where there is no default order to be enforced under Section 18, however, the Board retains
jurisdiction over Section 14(f). Rucker
v. Lawrence Mangum & Sons, Inc., 18 BRBS 74 (1986).
Under Section 18(a), a claimant can obtain judgment for defaulted payments due under a non-final
award, i.e., one which is being appealed, or from a final order. Section 21(d) provides an alternate method
for enforcement of a final order through an action in equity to enjoin an employer's compliance with the
award. See 33 U.S.C. § 921(d).
For some differences between the two sections, see, e.g., Cassell v.
Taylor, 243 F.2d 259 (D.C. Cir. 1957); Leonard v. Walter, 356 F. Supp. 56 (D.D.C. 1973).
The prime distinctions between Section 18 orders and Section 21 orders are: (1) Orders
issued under Section 18, unlike Section 21 orders, are not appealable to the Board; (2) Section 18 orders
are final when issued, unlike Section 21 orders which do not become final until after 30 days or, if
appealable after appeal; and (3) as a result, Section 18 supplementary orders can immediately be filed with
the federal district court for enforcement. Snowden.
Section 18(a) specifically provides that the action must be brought within one year after the default.
Thus, an employee, who brought suit to enforce the compensation order against his employer 16 years after
the award, was barred from procuring a judgment on the filing of the deputy commissioner's supplemental
order certifying the amount in default. Cassell v. Taylor, 243 F.2d 259 (D.C. Cir. 1957).
The Secretary of Labor would then have a right to seek reimbursement against the employer under
this section or Section 21(d), and is subrogated to the claimant's preferences in bankruptcy proceedings
under Section 17. For an explanation of the purpose and problems of Section 18(b), see Director, OWCP
v. Peabody Coal Co., 554 F.2d 310, 6 BRBS 1, 22 (7th Cir. 1977). In Sicker v. Muni Marine Co., 8
BRBS 268 (1978), the Board suggested that Section 18(b) may be an avenue for the claimant to get
compensation from an employer who may be unreachable because of an apparent Department of Labor
error in informally processing the claim.
[ED. NOTE: For more on bankruptcy, see Topic 19.10.]
In Stevens v. Tacoma Boatbuilding Co.,
22 BRBS 274 (ALJ) (1989), the judge held that where the employer filed for
bankruptcy and the carrier was under receivership, the case was not stayed.
Where no responsible party is financially sound, payments of benefits may be made
from the Special Fund. 33 U.S.C. §§ 918(b), 944. In Stevens,
the employer and carrier cited 11 U.S.C. § 362 and contended that
the claimant's claim with the bankruptcy court is her exclusive remedy against
the employer.
Section 363(b)(4) of the Bankruptcy Act provides that in
bankruptcy cases, there shall be no stay of "the commencement or continuation
of an action or proceeding by a governmental unit to enforce such governmental
unit's police or regulatory power."
In re Mansfield Tire & Rubber
Co., 660 F.2d 1108 (6th Cir. 1981), the Sixth Circuit held that
a state's workers' compensation act proceeding was exempt under the Bankruptcy Act's Section
362(b)(4). In Mansfield, the court reasoned that such funds are specifically for the payment of
compensation claims and not part of the debtor's estate. See also In re McLean Trucking Co., 74 B.R.
820 (Bankruptcy W.D.N.C. 1987).
In Stevens, 22 BRBS 274 (ALJ), the ALJ cited Mansfield and stated that he was not convinced
that such an exemption applies to a federal agency. The judge further noted that even in cases where no
responsible party is financially solvent, payment of benefits may be made from the Special Fund, and
therefore, the case would still go forward.
However, see Howell v. Jacksonville Shipyards, Inc., (96-LHC-2217)(J. Levin) (Oct. 6. 1997)
(Unpublished) (Section 362 of the Bankruptcy Act was found not to apply to the LHWCA.); see also In
Re Western States Drywall, Inc., 150 BR 774 (1993) (Automatic stay did not preclude DOL from
determining debtor's liability in Davis-Bacon Act case.); In Re Howell, Bankruptcy, Tenn., 4 BR 102
(1980) (Federal Employees' Compensation Act).
Upon consideration of the procedures set forth in Section 18 of the LHWCA, one can reasonably
argue that, where there is no state guaranty association, it is clear that the LHWCA contemplates the entry
of an award in cases involving insolvent employers and disabled workers. It is actually the award following
the LHWCA proceeding which triggers potential access to the Fund. Given the framework of pertinent
statutory provisions, an award against the employer is entered pro forma, even if technically
unenforceable as such. See generally, In Re Western States Drywall, Inc., 150 BR 774 (1993). In
essence, the award following a determination of entitlement is a procedural mechanism which begins the
process by which the injured worker may pursue his case against the bonding company or petition the
Secretary of Labor for relief from the Special Fund. As such, Section 362 of the Bankruptcy Act does not
appear to be applicable to proceedings to determine the nature and extent of disability under the LHWCA
Under another theory, a claim under the LHWCA could still be pursued even after the responsible
employer had been discharged in bankruptcy from all such liability. Coleman v. Kaiser Steel Corporation,
22 BRBS 408 (ALJ) (1989) (judge decided claim on its merits and remanded to
OWCP so that it could determine the identity of any insurance carrier, or,
if the employer was uninsured, the identity of the surety
or § 32(a) security deposit provided by employer; if no carrier, surety or security deposit was available for
payment, payment should be made by the Special Fund pursuant to § 18(b)).
In Ferrario v. Kaiser Steel Corp.,
27 BRBS 166 (ALJ) (1993) (employer dismissed in bankruptcy court is entitled
to be dismissed as a party to LHWCA proceeding), the ALJ held that the regulation
implementing Section 18(b), 20 C.F.R. § 702.145(f), authorizes the Director
to enter an award against the Special Fund and remanded the case to the District
Director without a decision on the merits. As a
practical matter, however, the Director continues to refer such cases to OALJ
for hearing, notwithstanding the ambiguous language of the above regulation.
In this manner, the parties are able to have an APA
hearing on such issues as fact of employment and injury, employer insolvency,
nature and extent of disability, average weekly wage, etc. The decision and
order (award) issued by the ALJ may not require
payment by the Fund..
[ED. NOTE: The process noted at Topic 19.10 naming the bankrupt employer/carrier as a nominal
party so that an adjudication can take place provides a solution that adheres to the adjudicatory
process.]
Insurance Aspects
Where an employer and carrier are insolvent, and there is no "cut through" endorsement
between a surplus line carrier and an insurance company authorized to do business in the state, the state
insurance guaranty association was not liable. Deville v. Oilfield Indus., 26 BRBS 123 (1992). In a case
such as this, the Secretary has the discretion to satisfy a judgment from the Special Fund. Shaller
v. Cramp Shipbuiding & Dry Dock Co., 23 BRBS 140 (1989).