United States Court of Appeals,
Fifth Circuit.
No. 96-60676.
Lovett R. WILKERSON, Petitioner,
v.
INGALLS SHIPBUILDING, INC.; Director, Office of Workers'
Compensation Programs, United States Department of Labor,
Respondents.
Oct. 23, 1997.
Petition for Review of a Decision of the Benefits Review Board.
Before REYNALDO G. GARZA, SMITH and WIENER, Circuit Judges.
JERRY E. SMITH, Circuit Judge:
I.
In 1972, Lovett Wilkerson retired after working fourteen years
at the shipyard of Ingalls Shipbuilding, Inc. ("Ingalls"), in
Pascagoula, Mississippi. The year before he retired, his average
weekly wage was $167.70. In 1992, he underwent tests that revealed
he suffered a permanent hearing loss in both ears, and the parties
agree that he suffered a binaural hearing impairment of 19.23%. It
is undisputed that his hearing loss was a result of the noise to
which he was exposed at Ingalls and thus that the injury occurred
in the course of his employment.
In March 1992, Wilkerson notified Ingalls of his disability
claim under the Longshore and Harbor Workers' Compensation Act
("LHWCA"). It is undisputed that the claim was timely filed.1
1
The LHWCA provides that the time for filing a hearing loss
claim does not begin to run "until the employee has received an
audiogram ... which indicates that the employee has suffered a loss
1
Although Ingalls controverted the claim, it nevertheless began
compensating Wilkerson, paying him $4,299.83 between April 1992 and
May 1993, based on the scheduled compensation under the LHWCA.2
Despite this payment, Wilkerson pursued his claim before an
administrative law judge ("ALJ"). In addition to the $4,299.83, he
sought attorneys' fees, penalties, and prejudgment interest from
the 1972 date of his injury.3
At a hearing before the ALJ, Ingalls argued that it had in
fact already overcompensated Wilkerson for his injury. Under the
statutory scheme in force at the time of his injury—upon his
retirement—it owed only $2,692.20. Ingalls maintains this argument
on appeal.
At the time of Wilkerson's retirement, the LHWCA allowed a
maximum benefit of only $70 per week: much less than the $111.80
to which Wilkerson would otherwise have been entitled under § 908.
After Wilkerson retired but before he filed his claim, Congress
amended the LHWCA to provide a much higher maximum benefit,
determined yearly by the Department of Labor as a factor of the
of hearing." 33 U.S.C. § 908(c)(13)(D).
2
This figure was based on the fact that Wilkerson's stipulated
19.23% hearing loss entitled him to 38.46 weeks of compensation at
a rate equal to two-thirds his average weekly wage of $167.70. See
33 U.S.C. § 908(c)(13)(B) (permanent partial binaural hearing loss
compensated by 200 weeks' wages, discounted by degree of loss).
3
A person suffering hearing loss after prolonged exposure to
excessive noise is deemed to have been injured on the last day he
was exposed. Bath Iron Works Corp. v. Office of Workers'
Compensation Programs, 506 U.S. 153, 165, 113 S.Ct. 692, 699-700,
121 L.Ed.2d 619 (1993). Here, the last exposure was the day of
Wilkerson's retirement on October 6, 1972.
2
national average wage. See 33 U.S.C. § 906. Thus, on November 26,
1972, the cap jumped to $167 and has been increasing with inflation
ever since.
The ALJ agreed that Ingalls owed only the $70 weekly maximum,
and held that because Wilkerson was entitled only to $2,692.20, he
must reimburse Ingalls for its overpayment. The ALJ further ruled
that Ingalls was not liable for penalties or attorneys' fees. The
ALJ's decision was affirmed by the Benefits Review Board ("BRB") by
operation of law on September 12, 1996. See Omnibus Consolidated
Rescissions and Appropriations Act of 1996, Pub.L. No. 104-134, §
101(d), 110 Stat. 1321, 1321-219 (1996).
II.
The petition for review presents two distinct questions. The
first—made apparent by the above recitation of facts—is whether
Wilkerson should receive compensation according to the maximum rate
in effect at the time of his injury (his retirement), or instead
according to the maximum at some later time. This question is
easily resolved, as the statute makes plain that compensation is
governed by the maximum rate in effect at the time of an award.
The second question—not so straightforward—is from what date,
if at all, prejudgment interest ought to be calculated.
Particularly in light of the twenty-year lag between Wilkerson's
injury and his claim, it matters very much whether interest should
be awarded from the date of his injury, the date of his claim, or
the date his compensation became due.
We are informed in part by Strachan Shipping Co. v. Wedemeyer,
3
452 F.2d 1225 (5th Cir.1971), which upheld an award of prejudgment
interest under the LHWCA, dating from the time compensation becomes
due without an award. Strachan did not decide whether an award of
prejudgment interest under the compensation provisions of the LHWCA
might accrue from the time of the injury. For the reasons set
forth below, we conclude that it may not.
III.
We give deference to an ALJ's findings of fact. Miller v.
Central Dispatch Inc., 673 F.2d 773 (5th Cir. Unit A 1982). The
BRB, however, "is not a policymaking agency; its interpretation of
the LHWCA thus is not entitled to any special deference from the
courts." Potomac Elec. Power Co. v. Director, Office of Workers'
Compensation Programs, 449 U.S. 268, 279 n. 18, 101 S.Ct. 509, 515
n. 18, 66 L.Ed.2d 446 (1980); see McDermott, Inc. v. Boudreaux,
679 F.2d 452, 456 n. 5 (5th Cir.1982).
IV.
We begin by noting that on appeal, Ingalls has waived its
claim to reimbursement.4 Wilkerson therefore would keep the
$4,299.83, regardless of whether we find that amount was legally
due. The amount of compensation originally due is relevant
nonetheless, for it constitutes the principal amount on which
prejudgment interest, if any, would be due.
The LHWCA, as amended, calls for the Secretary of Labor yearly
4
Ingalls states in its brief: "Solely for purposes of this
claim, Employer would be agreeable to an Order of this Court which
vacates the [ALJ's] holding that Claimant must reimburse Ingalls
the overpayments made."
4
to calculate the "national average weekly wage" and provides that
200% of this sum be the maximum compensation available under the
LHWCA. 33 U.S.C. § 906(b). The same statutory provision resolves
the question before us. It provides that a given year's maximum
compensation "shall apply to employees or survivors ... newly
awarded compensation during such [year]." 33 U.S.C. § 906(c)
(emphasis added).
Wilkerson was "newly awarded compensation" by the ALJ on
November 10, 1993. The maximum weekly compensation available
during that year was $738.30. Wilkerson's scheduled compensation
of $111.80 falls well below that maximum. Therefore, he is
entitled to the full amount of scheduled compensation under §
908(c)(13)(B), the amount originally paid by Ingalls: 38.46 weeks
at $111.80 per week, or $4,299.83.
We reject Ingalls's objection that the amended act—and the
more generous maximum—should not be applied "retroactively." In
addition to the unequivocal statutory imperative here, we note that
"application of new statutes passed after the events in suit is
unquestionably proper in many situations. When the intervening
statute authorizes or affects the propriety of prospective relief,
application of the new provision is not retroactive." Landgraf v.
USI Film Prods., 511 U.S. 244, 273, 114 S.Ct. 1483, 1501 (1994).
V.
Wilkerson claims prejudgment interest commencing on the date
he was injured. Ingalls maintains that the ALJ was correct in
finding that prejudgment interest began to accrue only on the date
5
Wilkerson made his claim known.
The LHWCA does not provide for prejudgment interest. This
circuit, however, approved of such awards in Strachan, noting that
"an employee does not receive full compensation due him where an
employer controverts his right unless interest is added to the
delayed payments." 452 F.2d at 1229. The question, then, is not
whether prejudgment interest is appropriate in LHWCA cases, but
from what date it begins to accrue. To our knowledge, no court has
directly addressed this issue.
A.
There is a "general rule that prejudgment interest should be
awarded in maritime cases, subject to a limited exception for
"peculiar' or "exceptional' circumstances." City of Milwaukee v.
Cement Div., Nat'l Gypsum Co., 515 U.S. 189, 195, 115 S.Ct. 2091,
2095, 132 L.Ed.2d 148 (1995), quoted in Probo II London v. Isla
Santay MV, 92 F.3d 361 (5th Cir.1996). The purpose of prejudgment
interest is the basic principle of compensatory damages: that the
injured party should be made whole. In the parlance of admiralty
courts, "restitutio in integrum is the leading maxim applied ... to
ascertain damages." Id. at 196, 115 S.Ct. at 2096 (collision
case). In order to compensate an aggrieved party fully, he must be
compensated for the loss of use of the money due as damages.5
5
This is the source of the old, but now little-regarded, rule
that prejudgment interest is awarded only on liquidated claims—that
is, claims in which the precise amount of damages is ascertainable.
Liquidated claims—for example, where contract payments are
wrongfully withheld—present the most obvious case in which full
compensation must include payment for the time value of the money
payable as damages. See Michael S. Knoll, A Primer on Prejudgment
6
Recognizing this principle, admiralty courts generally have awarded
prejudgment interest accruing from the time the damage was
incurred. See, e.g., In re Oil Spill by Amoco Cadiz, 954 F.2d
1279, 1335 (7th Cir.1992) (prejudgment interest award of about $128
million).
If Wilkerson's case sounded in negligence against a vessel
under 33 U.S.C. § 905(b), the law guiding our decision would be
relatively evident. In such cases, the award of prejudgment
interest is left essentially to the district court's discretion and
is reviewable only for clear error or abuse of discretion. See,
e.g., Koch Refining Co. v. Jennifer L. Boudreaux MV, 85 F.3d 1178,
1183 (5th Cir.1996). And although it is within a court's
discretion to borrow the prejudgment interest law of the state in
which it sits, under the exclusivity provisions of the LHWCA it is
the federal maritime law that applies. Webster v. M/V Moolchand,
730 F.2d 1035, 1040 (5th Cir.1984).
B.
Here, however, Wilkerson sued his employer under the
compensation provisions of the LHWCA, 33 U.S.C. § 904. This
presents a different circumstance. The amount of a compensation
award for permanent partial disability leaves almost no room for
discretion. The Act, id. § 908(c), spells out detailed payment
terms for virtually every conceivable injury. With few
Interest, 75 TEXAS L.REV. 293, 298 (1996).
7
exceptions,6 all that is needed to formulate an award is a
determination of the disability, knowledge of the wages of the
worker and of the maximum compensation amounts, and a calculator.
The certainty of this scheme is not an accident. In return
for a no-fault rule, 33 U.S.C. § 904(b), employers and insurers
gain the benefit of relative certainty in their prospective
liability, and the system gains from the reduced transaction costs
associated with the presumably efficient administration of the
scheme.
Working within this framework, and abiding by the text of the
statute, we must decline to adopt any rule that would change the
amount of statutory compensation. Under the statute, an employee's
compensation becomes due, if not controverted, fourteen days after
he files notice, even absent an award. 33 U.S.C. § 914(a),(b).
The amount of compensation due is explicitly set by statute. See
33 U.S.C. § 907. To hold that an employee is entitled to interest
dating from the time he is injured would be to alter the amount of
compensation he is due under the statute and thus to undermine the
will of Congress.
This reasoning is in accord with Strachan. There, the Deputy
Commissioner sought to award prejudgment interest "from the time
payment would have been due, had not the employer controverted the
right to compensation." Id. at 1226. Nowhere in that opinion, or
6
The most notable exception to this bright-line scheme is §
908(c)(20), which calls for "proper and equitable compensation not
to exceed $7,500" for serious disfigurement. Even here, we note
that a bright-line maximum is imposed.
8
in any other, was there a hint that prejudgment interest would be
appropriate from the time of injury.
Further, a rule that interest may accrue only from fourteen
days after the date of the claim not only is necessitated by the
terms of the statute, but also is consistent with the overall
scheme embodied in it. To allow interest from the time of injury
would introduce uncertainty into an otherwise straightforward
inquiry. In this case, Ingalls would not have known—and would not
have been able to pay immediately—the exact amount due Wilkerson,
as the rate, availability, and accrual date of prejudgment interest
would almost certainly be the subject of dispute.
Furthermore, the result we reach lends incentives to both
employees and employers. One of the reasons we upheld interest
awards in Strachan was to eliminate the incentive employers
otherwise would have to controvert—and thus delay—the payment of
meritorious claims. 452 F.2d at 1229-30. This rationale would not
be furthered by an award of interest dating from the injury, where
no claim has yet been made. On the contrary, such an award would
create an incentive for an employee to delay bringing any claim he
might have, secure in the knowledge that his employer would deliver
a risk-free return on the unpaid claim. For these reasons, then,
we decline to extend Strachan to allow prejudgment interest under
the LHWCA accruing from the date of the injury.
C.
Applying this rule to the present facts, we conclude that
Wilkerson is not entitled to prejudgment interest. Although
9
Ingalls controverted Wilkerson's March 12, 1992, claim, it
voluntarily began compensating him on April 7, 1992. The first
installment would have become due fourteen days after the claim was
filed, i.e., on March 28. Because Ingalls began compensating
Wilkerson but delivered its first payment late, we must again look
to the statute, which provides a remedy for late payments.
The LHWCA provides an exclusive remedy for the late payment of
compensation installments by stating that "[i]f any installment of
compensation payable without an award is not paid within 14 days
after it becomes due ... there shall be added to such installment
an amount equal to 10 per centum thereof." 33 U.S.C. § 914(e).
The statute thus allows a fourteen-day grace period for
compensation payments, after which a substantial penalty is
charged. The availability of this statutory remedy precludes the
availability of the judge-made remedy of prejudgment interest where
installment payments are made, but arrive late. Because Ingalls
commenced payment less than fourteen days after March 28 and
continued payment in accordance with the statute, it does not owe
interest or penalties.
VI.
The only remaining issue is Wilkerson's request for attorneys'
fees. It is now apparent that his attorneys gained him nothing
more than the $4,299.83 Ingalls had tendered before he brought the
matter before the BRB. He therefore is not entitled to recover
attorneys' fees. See 33 U.S.C. § 928(b).
VII.
10
In sum, we conclude that the ALJ erred by reducing Wilkerson's
compensation award to reflect the statutory maximum in effect on
October 6, 1972, and that Wilkerson is entitled to the $4,299.83 in
benefits paid. He is entitled to neither prejudgment interest nor
attorneys' fees. We GRANT the petition for review, VACATE the
decision of the BRB, and REMAND for further proceedings consistent
with this opinion.
11