Temporary Employment Services v. Trinity Marine Group, Inc.

Revised August 29, 2001

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

_____________________

No. 00-60064
_____________________

TEMPORARY EMPLOYMENT SERVICES; MARYLAND CASUALTY CO

Petitioners

and

DIRECTOR, OFFICE OF WORKER’S COMPENSATION PROGRAMS,
US DEPARTMENT OF LABOR

Respondent

v.

TRINITY MARINE GROUP, INC

Respondent

_________________________________________________________________

Petition for Review of a Final Order
of the Benefits Review Board
_________________________________________________________________

August 7, 2001

Before KING, Chief Judge, and ALDISERT* and BENAVIDES, Circuit
Judges.

KING, Chief Judge:

Petitioners Temporary Employment Services, Inc. and Maryland

Casualty Company appeal from the final order of the Benefits

*
Circuit Judge of the Court of Appeals for the Third
Circuit, sitting by designation.
Review Board holding them liable for compensation owed to Leroy

Ricks under the Longshore and Harbor Workers’ Compensation Act

and advocate a reversal of the Benefits Review Board’s decision

on the merits. Respondent Director, Office of Workers’

Compensation Programs, United States Department of Labor, urges

reversal on the ground that the administrative tribunal lacked

jurisdiction to resolve the contractual dispute in this case.

Respondent Trinity Marine Group, Inc. requests affirmance of the

Benefits Review Board’s decision on the merits.

For the following reasons, we GRANT the petition for review,

VACATE the Benefits Review Board’s decision, and REMAND with

instructions to reinstate the original decision of the

Administrative Law Judge holding Respondent Trinity Marine Group,

Inc. alone liable under the Longshore and Harbor Workers’

Compensation Act and to dismiss without prejudice the claims

regarding the contractual indemnification provisions for lack of

jurisdiction.

I. FACTUAL AND PROCEDURAL BACKGROUND

Petitioner Temporary Employment Services, Inc. (“TESI”)

provides temporary employees and payroll services to various

businesses, including shipyards. TESI and Respondent Trinity

Marine Group, Inc. (“Trinity”) entered into a contract in which

TESI agreed to provide temporary workers to Trinity. Pursuant to

2
this agreement, Leroy Ricks, a TESI employee, was assigned to

work for Trinity.

While working for Trinity, Ricks was injured at Trinity’s

shipyard on January 11, 1993. From January 15, 1993 through

April 24, 1994, Petitioner Maryland Casualty Company

(“Maryland”),1 TESI’s workers’ compensation insurance carrier

under the Longshore and Harbor Workers’ Compensation Act (the

“LHWCA”), 33 U.S.C. §§ 901-950, voluntarily paid Ricks’s

temporary total disability compensation and medical benefits.

Thereafter, Maryland controverted the claim on the basis of a

doctor’s medical opinion that Ricks could return to work. Ricks

then filed a claim for workers’ compensation benefits under the

LHWCA against TESI and Maryland. Subsequently, at the request of

TESI and Maryland, Trinity was added as an additional alleged

employer to the action.

A formal hearing was held before an Administrative Law Judge

(“ALJ”) on January 10, 1996. The ALJ issued a decision on

November 26, 1996, awarding Ricks certain benefits; holding

Trinity, as Ricks’s “borrowing employer,” solely responsible for

those benefits; and ordering Trinity to reimburse Maryland for

benefits that Maryland had previously paid to Ricks.

Trinity appealed the ALJ’s decision to the Benefits Review

Board (the “Board”), and on December 26, 1997, the Board issued a

1
TESI, Trinity, and Maryland will be collectively
referred to hereinafter as “the parties.”

3
decision remanding the matter to the ALJ and directing him to

consider whether a valid contractual obligation between TESI and

Trinity obligated TESI, rather than Trinity, to pay the benefits

owed to Ricks. On remand, the ALJ held that TESI had agreed to

indemnify Trinity and that Maryland’s insurance policy contained

a waiver of subrogation in favor of Trinity. Accordingly,

Maryland reimbursed Trinity for the amounts Trinity had paid to

Ricks and to Maryland. TESI and Maryland then appealed the

merits of this ALJ decision to the Board. The Respondent

Director, Office of Workers’ Compensation Programs, United States

Department of Labor (the “Director”) challenged the jurisdiction

of the administrative tribunal to decide these contractual

issues. Rejecting the Director’s jurisdictional challenge, the

Board affirmed the merits of the ALJ’s decision on June 8, 1999.

Subsequently, the Board denied a motion by TESI and Maryland for

reconsideration.

TESI and Maryland timely appealed to this court, urging

reversal on the merits. The Director has also filed in this

court urging reversal, but on jurisdictional grounds.2

We have jurisdiction over petitions for review of final

orders of the Board pursuant to 33 U.S.C. § 921(c).

2
The Supreme Court has held that the Director may appear
as a respondent before the courts of appeals. See Ingalls
Shipbuilding Inc. v. Dir., Office of Workers’ Comp. Programs,
Dep’t of Labor, 519 U.S. 248, 265-266 (1997).

4
 II. STANDARD OF REVIEW

“The Supreme Court has instructed us that the preferred

starting point in reviewing an administrative order is to satisfy

ourselves that the agency whose order we are asked to review ‘had

jurisdiction over the matter in dispute.’” Harmar Coal Co. v.

Dir., Office of Workers’ Comp. Programs, U.S. Dep’t of Labor, 926

F.2d 302, 307 (3d Cir. 1991) (quoting Cardillo v. Liberty Mut.

Ins. Co., 330 U.S. 469, 473 (1947)). “Jurisdiction is a question

of law which we review de novo.” Groome Res. Ltd., L.L.C. v.

Parish of Jefferson, 234 F.3d 192, 198 (5th Cir. 2000).

“This court reviews the [Board’s] interpretation of the

LHWCA, an issue of law, de novo, affording no special deference

to the [Board’s] construction because it is not a policymaking

agency.” Equitable Equip. Co. v. Dir., Office of Worker’s Comp.

Programs, U.S. Dep’t of Labor, 191 F.3d 630, 631 (5th Cir. 1999);

see also Estate of Cowart v. Nicklos Drilling Co., 505 U.S. 469,

476 (1992) (stating that “the [Board] is not entitled to any

special deference”); H.B. Zachry Co. v. Quinones, 206 F.3d 474,

478 (5th Cir. 2000) (“Indeed, deference is owed to the Director’s

views and not the views of the [Board].”); Ceres Gulf & ESIS/INA

v. Cooper, 957 F.2d 1199, 1204 (5th Cir. 1992) (stating that

“[s]ubject matter jurisdiction is a question of law[, and] our

review is plenary”).

5
 III. JURISDICTION

Due to the maritime character of their employment, longshore

workers3 were precluded from participating in state workers’

compensation schemes. See S. REP. NO. 973, at 16 (1926); 1 THOMAS

J. SCHOENBAUM, ADMIRALTY AND MARITIME LAW § 7-1, at 380 (3d ed. 2001).

Therefore, in order to protect longshore workers, Congress

enacted a federal no-fault workers’ compensation system — the

LHWCA. See 33 U.S.C. § 904; 1 SCHOENBAUM, ADMIRALTY AND MARITIME LAW

§ 7-1, at 380-81 (“In return for compelling the employer to pay

compensation without proof of negligence, [the LHWCA] provides a

statutory scheme of benefits which are substantially less than

tort damages, and grants the employer immunity from tort

liability, regardless of how serious its fault may have been.”).

“A fundamental aspect of [this system] is the expectation

that employers will pay compensation promptly and directly,

without the necessity of a formal award.” 1 SCHOENBAUM, ADMIRALTY AND

MARITIME LAW § 7-1, at 381. However, when a worker’s benefits are

controverted, a claim for compensation may be filed and heard

before an ALJ, see 33 U.S.C. § 919, and appealed to the Board,

see id. § 921.

3
The class of land-based workers who perform a variety of
tasks for, on, and around vessels were commonly known as
“longshoremen.” See 1 THOMAS J. SCHOENBAUM, ADMIRALTY AND MARITIME LAW
§ 7-1, at 380 (3d ed. 2001). The term “longshore” was
substituted for “longshoremen” in the 1984 amendments. See Pub.
L. No. 98-426, 98 Stat. 1639, 1654 (1984).

6
 Under the LHWCA, an ALJ has jurisdiction over a “claim for

compensation” and has “full power and authority to hear and

determine all questions in respect of such claim.” Id. § 919(a)4

(emphasis added); see also id. § 919(d) (vesting the powers,

duties, and responsibilities of the deputy commissioners with

respect to hearings in the ALJ).5 The threshold issue we must

decide is whether the parties’ claims regarding their

indemnification contractual provisions are “questions in respect

of” an LHWCA compensation claim and thus questions over which the

ALJ has jurisdiction. As we explain below, we find the

4
Section 919(a), “Filing of claim,” reads in full:

Subject to the provisions of section 913 of this title
a claim for compensation may be filed with the deputy
commissioner in accordance with regulations prescribed
by the Secretary at any time after the first seven days
of disability following any injury, or at any time
after death, and the deputy commissioner shall have
full power and authority to hear and determine all
questions in respect of such claim.

33 U.S.C. § 919(a).
5
Section 919(d), “Provisions governing conduct of
hearing; administrative law judges,” reads in full:

Notwithstanding any other provisions of this chapter,
any hearing held under this chapter shall be conducted
in accordance with the provisions of section 554 of
Title 5. Any such hearing shall be conducted by a
[sic] administrative law judge qualified under section
3105 of that title. All powers, duties, and
responsibilities vested by this chapter, on October 27,
1972, in the deputy commissioners with respect to such
hearings shall be vested in administrative law judges.

33 U.S.C. § 919(d) (footnote omitted).

7
contractual issues in this case are beyond the scope of the

authority granted to the LHWCA administrative tribunals.

A. The Question Presented

Before addressing the jurisdictional question, we make clear

precisely what the parties are asking us to decide in this case.

A body of law has developed under the LHWCA in response to

situations in which multiple employers and carriers possibly

played a role in the worker’s employment. The “borrowed

employee” doctrine deals with one such situation. This doctrine

is applicable in cases where one employer “loans” or “lends”

employees to another employer.

The instant case required application of this doctrine

because, as described supra in Part I, TESI “loaned” Ricks to

Trinity. We have determined that the “borrowing employer” is the

employer for purposes of the LHWCA and, as such, is responsible

for the payment of the worker’s compensation benefits. See Total

Marine Services, Inc. v. Dir., Office of Worker’s Comp. Programs,

U.S. Dep’t of Labor, 87 F.3d 774, 779 (5th Cir. 1996).

Therefore, Trinity, as the borrowing employer, is solely liable

for Ricks’s benefits.

This determination was made in the initial ALJ decision and

affirmed by the Board. It is not being contested in this appeal.

What is at issue here is Trinity’s contention that a contract

exists between itself and TESI pursuant to which TESI has agreed

to indemnify it from any claims arising from Ricks’s employment

8
(i.e., the worker’s compensation benefits) and that Maryland’s

insurance policy contains a waiver of subrogation in favor of

Trinity. In essence, Trinity is claiming that, although the

LHWCA places liability on its shoulders, it has contracted around

that rule via the Maryland-TESI/Trinity agreement. Trinity’s

claims are dependent, therefore, upon contractual provisions that

are not governed by the LHWCA. These issues are the ones

addressed by the ALJ on remand, an action that the Board

affirmed.

B. Scope of Authority of LHWCA Adjudicative

Administrative Tribunals in this Case

1. Jurisdictional Arguments

The Board held that the ALJ “acted within his authority in

resolving the issue of whether Maryland is liable for [Ricks’s]

disability compensation, based on his interpretation of the

relevant contracts.” Ricks v. Temp. Employment Servs., Inc.,

[1999] 33 Ben. Rev. Bd. Serv. (MB) 81, 84, available at 1999 WL

648934, at *3. To support its holding, the Board referenced

Pilipovich v. CPS Staff Leasing, Inc., [1997] 31 Ben. Rev. Bd.

Serv. (MB) 169, 171-72, available at 1997 WL 764428, in which it

had held that an ALJ should resolve contractual indemnity and

insurance issues between the lending employer, its insurer, and

the borrowing employer. The Board also relied on this court’s

holding in Total Marine, in which we stated: “[W]e conclude that

9
a borrowing employer is required to pay the compensation benefits

of its borrowed employee, and, in the absence of a valid and

enforceable indemnification agreement, the borrowing employer is

required to reimburse an injured worker’s formal employer for any

compensation benefits it has paid to the injured worker.” 87

F.3d at 779 (emphasis added). The Board stated further that it

was not in the interest of judicial economy to defer

consideration of the contractual issues “to another place and

time.” Ricks, [1999] 33 Ben. Rev. Bd. Serv. (MB) at 83,

available at 1999 WL 648934, at *3.

Objecting to the Board’s determination, the Director argues

that the LHWCA does not give ALJs the authority to determine

common law contractual rights and liabilities. He asserts that

an ALJ can decide only whether a valid compensation claim exists

and, if so, the amount of that claim and which insurer is

responsible for making that payment under the LHWCA. In essence,

the Director maintains that, by its terms, § 919(a) only grants

authority to ALJs to determine issues under LHWCA law as they

relate to compensation claims. The Director argues that

questions relating to who may be liable under non-LHWCA law is

beyond the purview of LHWCA adjudicative administrative

tribunals. In this regard, the Director points out that reading

§ 919(a) to grant expansive adjudicative powers to LHWCA

administrative tribunals could violate Article III. The Director

also states that the principles guiding our decision in Equitable

10
Equipment Co. v. Director, Office of Worker’s Compensation

Programs, U.S. Department of Labor, 191 F.3d 630, 632 (5th Cir.

1999), in which we held that an ALJ lacked jurisdiction to

adjudicate an employer’s claim against its insurers for

attorneys’ fees, command a finding that no jurisdiction exists in

this case. As for the Board’s reliance on its decision in

Pilipovich6 and Total Marine, the Director contends that

Pilipovich was wrongly decided and that the Total Marine language

on which the Board relied is dictum (i.e., that the panel in the

case was merely reserving a question not presented on the facts

before it).

In addition, the Director points out that placing non-LHWCA

contractual issues within the ambit of the ALJ’s authority will

result in an erosion of the objectives of the LHWCA. He states

that the critical, central theme of the LHWCA is to get benefits

(to which the claimant is entitled) to the claimant promptly.

This objective would be frustrated when ALJs attempt to decide

common law contract issues, questions that are beyond their

expertise, and when the claimant must rely on non-LHWCA-approved

entities, which are not set up to make such payments, to produce

those disbursements. Thus, the Director argues that finding that

ALJs do not have authority to interpret non-LHWCA indemnity

6
The Director notes that the Pilipovich decision was also
appealed on jurisdictional grounds, but the case settled on the
eve of oral argument before this court.

11
agreements supports the public policy justification of the ready

determinability of who it is that owes LHWCA benefits.

The parties all disagree with the Director that the ALJ did

not have authority to consider the contractual indemnification

dispute in this case.7 TESI and Maryland conclusorily state that

the ALJ does have authority to decide their contract issues and

that it would be inefficient to have to litigate these issues in

another forum. The public policy considerations of avoiding

multiplicity of litigation and efficacy underpin TESI’s and

Maryland’s arguments.

Trinity argues that the import of Total Marine is that it is

proper for ALJs to consider whether a valid and enforceable

indemnification agreement exists between the employers. Trinity

notes that, as in this case, an allocation question (i.e., which

of two employers is responsible for the compensation benefits)

was at issue in Total Marine. Trinity also states that

consideration of the indemnification dispute conforms to

§ 919(a)’s requirement that the issues are “in respect of” a

compensation claim because the ALJ would be determining who pays

the claimant’s benefits. Finally, Trinity objects to the

7
Although the Director thoroughly briefed his
jurisdictional challenge, the parties did not respond to the
issue in their initial briefing to this court. During oral
argument, when pressed by the panel, the parties put forth the
arguments described infra in the text, and Trinity included some
of these arguments in its response to the Director’s supplemental
brief (filed after oral argument).

12
Director’s reliance on Equitable Equipment Co., stating that,

while attorneys’ fees are clearly ancillary to the compensation

determination, the responsible payer inquiry is not.

2. Analysis of Jurisdiction in this Case

We begin, of course, with the text of § 919(a). See

Landreth Timber Co. v. Landreth, 471 U.S. 681, 685 (1985) (“It is

axiomatic that ‘[t]he starting point in every case involving

construction of a statute is the language itself.’” (alteration

in original) (citation omitted)). The relevant language states

that an ALJ has authority “to hear and determine all questions in

respect of such claim” and the phrase “such claim” references “a

claim for compensation.” 33 U.S.C. § 919(a). Thus, a plain

reading of the text indicates that the ALJ’s authority extends

only to questions that are in respect of the LHWCA claim of an

injured or deceased worker.

The Supreme Court has not looked beyond the text of § 919(a)

to discern its meaning. In Cardillo v. Liberty Mutual Insurance

Co., the Court stated simply that “questions as to whether an

injury arose out of and in the course of employment necessarily

fall within the scope of [the administrative tribunal’s]

authority.” 330 U.S. 469, 477 (1947); see also Crowell v.

Benson, 285 U.S. 22, 62 (1932) (finding that the LHWCA withstood

various constitutional challenges and stating that the “such

claim” language in § 919(a) meant “the claim for compensation

13
under the [LHWCA] and by its explicit provisions is that of an

‘employee,’ as defined in the [LHWCA], against his ‘employer’”).

This court has, however, provided some guidelines regarding the

jurisdictional reach of § 919(a).

In interpreting § 919(a), we have explained that the

disputed issue must be “integral to deciding the compensation

claim.” Equitable Equip. Co., 191 F.3d at 632, 633 (stating that

§ 919(a) “does not vest jurisdiction in ALJs to decide a contract

dispute between an employer and its carriers when the cause of

action is wholly unrelated to an underlying claim for

compensation”). We held, therefore, that “a state law breach of

contract claim between an insurer and its insured . . . . is

beyond the jurisdictional reach of § 919(a), particularly when

the underlying compensation claim has been resolved and no

factual dispute regarding the compensation claim itself must be

decided.” Id. at 632; see also RESTATEMENT (SECOND) OF JUDGMENTS § 83

cmt. g (1982) (stating that an administrative tribunal

“ordinarily lacks authority to adjudicate claims arising out of

the transaction in question but based upon other substantive

legal premises”).

Equitable Equipment Co. essentially echoed the approach to

§ 919(a) taken by other courts. For instance, in BethEnergy

Mines, Inc. v. Director, Office of Workers’ Compensation

Programs, U.S. Department of Labor, the Court of Appeals for the

Third Circuit held that administrative bodies under the Black

14
Lung Benefits Act (which incorporates by reference the claim

management and adjudication procedures of the LHWCA, such as

§ 919(a)) lacked jurisdiction to resolve disputes regarding

interest assessed against employers on reimbursements to the

black lung disability trust fund for medical benefits that the

fund had previously paid into on behalf of the claimants. See 32

F.3d 843, 845-48 (3d Cir. 1994). Agreeing with the Director’s

construction of § 919(a) in the case, the court stated that

“[b]ecause the ‘claim’ to which [the LHWCA] sections refer is

that of the injured or deceased [worker], the administrative

procedure . . . is available only to a party . . . who seeks to

challenge some aspect of the [worker’s] ‘claim,’ such as the

[worker’s] eligibility for some or all of the compensation sought

or granted.” Id. at 847. The court contrasted “underlying

liability determinations” (i.e., “[p]roceedings before the ALJ

and the Board . . . [which] center on the evaluation of the

claimant’s entitlement to payments”), id. at 847-48 (emphasis

added), and interest assessments, which do not benefit the

claimant and are not sought on behalf of the claimant. See id.

Thus, the court concluded that “although the demand for interest

is predicated in the first instance on the fact that the [worker]

filed the claim, it cannot be said to raise any ‘questions in

respect of such claim,’ all of which have been resolved by then.”

Id. at 848.

15
 Also regarding interest assessments in Black Lung Benefits

Act cases, the Court of Appeals for the Fourth Circuit held that

such disputes were not within the cognizance of the ALJ and the

Board. See Sea “B” Mining Co. v. Dir., Office of Workers’ Comp.

Programs, U.S. Dep’t of Labor, 45 F.3d 851, 854-56 (4th Cir.

1995). Relying on BethEnergy, the court noted that because

“underlying liability” was not at issue, “‘all questions in

respect of such claim’ have been resolved.” Id. at 855; see also

Indian Mountain Coal Co. v. Dir., Office of Workers’ Comp.

Programs, U.S. Dep’t of Labor, No. 96-2262, 1998 WL 382630, at *5

(4th Cir. June 11, 1998) (reaffirming Sea “B” Mining and stating

that questions “collateral to” an underlying claim for benefits

are those that do not involve the claimant’s eligibility for some

or all of the compensation sought or granted). Other circuits

have also similarly resolved the extent of administrative

adjudicatory authority under § 919(a) in this regard. See, e.g.,

Peabody Coal Co. v. Dir., Office of Workers’ Comp. Programs, U.S.

Dep’t of Labor, 40 F.3d 906, 908-09 (7th Cir. 1994) (stating that

“all questions in respect of such claim” had been resolved

because underlying liability was not at issue); B & S Coal Co. v.

Dir., Office of Workers’ Comp. Programs, U.S. Dep’t of Labor, 35

F.3d 1041, 1045-46 (6th Cir. 1994).

Thus, while no court has apparently considered the precise

question facing us today (i.e., whether issues involving

contractual indemnification provisions are “questions in respect

16
of” a worker’s compensation claim), courts have repeatedly

rejected attempts to read the “in respect of” language

expansively; rather, courts have focused on the fact that the

disputed issue must be essential to resolving the rights and

liabilities of the claimant, the employer, and the insurer

regarding the compensation claim under the relevant statutory

law.8 As in cases involving the Black Lung Benefits Act (which

incorporates, inter alia, § 919(a)) and other analogous

circumstances, we are presented today with a dispute that does

not involve the claimant’s entitlement to benefits or the

8
Although Board decisions regarding questions of law are
entitled to no deference, see supra Part II, we briefly discuss
some relevant decisions only to demonstrate that Trinity and the
Board’s reliance on those decisions is flawed. In Rodman v.
Bethlehem Steel Corp., the Board held that an ALJ had
jurisdiction “to merely adjudicate those limited insurance
contract disputes which arise out of or under the [LHWCA], the
resolution of which are necessary in order to determine
compensation liability in claims under the [LHWCA].” [1984] 16
Ben. Rev. Bd. Serv. (MB) 123, 126 (emphasis added). In addition,
the Board has acknowledged that an ALJ has jurisdiction to
resolve issues regarding insurance contract coverage when
determining the responsible employer or carrier under the LHWCA.
See Barnes v. Ala. Dry Dock & Shipbuilding Corp., [1993] 27 Ben.
Rev. Bd. Serv. (MB) 188, 191, available at 1993 WL 404281, at *3
(stating that the ALJ “has the power to hear and resolve
insurance issues which are necessary to the resolution of a claim
under the [LHWCA]” (emphasis added)).
We need not and do not address these decisions. They are
inapposite to this case. No party here contends that the
resolution of those contractual questions that were addressed by
the decisions of the ALJ and the Board after remand is required
to determine compensation liability under the LHWCA in the first
instance, a determination that was made in the initial decision
of the ALJ.

17
question who, under the LHWCA, is responsible for paying those

benefits.

Our Total Marine case is not to the contrary because it does

not stand for the proposition that any contractual

indemnification issues may be adjudicated by the administrative

tribunal. To restate, we held in Total Marine: “[W]e conclude

that a borrowing employer is required to pay the compensation

benefits of its borrowed employee, and, in the absence of a valid

and enforceable indemnification agreement, the borrowing employer

is required to reimburse an injured worker’s formal employer for

any compensation benefits it has paid to the injured worker.” 87

F.3d at 779. Thus, we held that, in the borrowed-employee

context, the borrowing employer is the entity responsible for the

payment of the claimant’s benefits. This holding was the result

of an analysis regarding how the LHWCA determines the responsible

employer in borrowed employee situations. As such, the

administrative tribunal properly adjudicated questions arising

under the LHWCA that bore directly on the compensation claim.

Furthermore, the language in Total Marine regarding “the absence

of a valid and enforceable indemnification agreement” was not

dispositive of the issues presented in that case because no such

agreement even existed. We agree with the Director that Total

Marine merely reserved a question not presented, a question we

resolve today.

18
 Interpreting § 919(a) authority as not extending to the

contractual issues in this case is faithful not only to the

language of the statutory provision and the cases interpreting

that language, but also to the objectives and policy

considerations underlying the LHWCA. As mentioned briefly at the

outset of this section, the LHWCA is a no-fault compensation

scheme, in return for which employers are immune from tort

liability. The basic structure of the LHWCA provides that the

employer and its insurance carrier are responsible for the

claimant’s compensation benefits. The insurance relationship

under the LHWCA is closely regulated for the security, prompt

provision, and convenient supervision of payments of benefits to

the worker. See 33 U.S.C. §§ 932, 935-936; see also, e.g., id.

§ 914(a), (b) (stating payments must be paid promptly,

periodically, and directly to the claimant). See generally 20

C.F.R. pt. 703 (2001). The carrier of record for the entity

ultimately determined to be the responsible employer under the

LHWCA must bear the liability for the compensation of the

claimant. See id. § 932(a)(1); 20 C.F.R. §§ 703.003, .115

(2001); see also 33 U.S.C. § 932(a)(2) (stating the requirements

for an employer to be authorized as a self-insurer and thus its

own carrier and the attending obligations); 20 C.F.R. §§ 703.002,

.301-.312 (2001) (same). The convenient and effective

administration of the LHWCA intended to be provided by the

LHWCA’s terms and implementing regulations depends in significant

19
measure on the prompt, accurate identification of the liable

employer and its carrier to whom the compensation system is

entitled to look for the prompt and continuing payment of all

benefits. See Rodriguez v. Compass Shipping Co., Ltd., 451 U.S.

596, 612 (1981) (stating that “the general policy of the [LHWCA

is] to encourage the prompt and efficient administration of

compensation claims”).

Once all the LHWCA issues in respect of the compensation

claim have been adjudicated (as they have been in this case), an

adjudication of who else may be liable on other grounds is,

therefore, unnecessary to the objective of the LHWCA proceedings.

Moreover, such resolution is potentially destructive to the

security of future payments, which has been accomplished by

identifying and ordering payments from an LHWCA-authorized

carrier. This is because a party deemed to be ultimately

responsible on contractual or other grounds may have far less

financial stability and long-term reliability than is required of

LHWCA carriers.

Not only could security and prompt administration of the

LHWCA be impaired if ALJs resolve questions such as the

contractual agreement at issue in this case, but ALJs would be

acting beyond their expertise, thus further hindering the mission

of the LHWCA. As the Supreme Court stated: “[T]he obvious

purpose of the [LHWCA is] to furnish a prompt, continuous, expert

and inexpensive method for dealing with a class of questions of

20
fact which are peculiarly suited to examination and determination

by an administrative agency specially assigned to that task.”

See Crowell, 285 U.S. at 46 (emphasis added). The “judicial

economy” rationale on which the parties and the Board heavily

rely in their argument to permit the ALJ to make the contractual

indemnification determinations in this case is unpersuasive: “It

cannot be regarded as an impairment of the intended efficiency of

an administrative agency that it is confined to its proper

sphere[.]” Id. at 65. Therefore, the policy considerations

underlying the LHWCA provide further support for the

determination that Congress did not grant administrative

tribunals authority in § 919(a) to adjudicate the contractual

issues in this case because such a grant would undermine the very

goals it was attempting to achieve in creating and structuring

the LHWCA as it did.

Because we conclude that administrative tribunals under the

LHWCA have not been granted adjudicatory authority by Congress to

resolve the parties’ claims, we need not reach the question

whether such an adjudication would violate Article III of the

Constitution under Northern Pipeline Construction Co. v. Marathon

Pipe Line Co., 458 U.S. 50 (1982), and its progeny. We note,

however, that common law contract disputes generally “involve

‘private rights’ which are at the ‘core’ of ‘matters normally

reserved to Article III courts [and thus beyond the purview of

non-Article III entities].’” Coit Indep. Joint Venture v. Fed.

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Sav. & Loan Ins. Corp., 489 U.S. 561, 578-79 (1989) (quoting

Commodity Futures Trading Comm’n v. Schor, 478 U.S. 833, 853

(1986)). In this regard, “statutes can and should be read to

avoid [serious constitutional] difficulties.” Id. at 579 (citing

Schor, 478 U.S. at 841, and Crowell, 285 U.S. at 62); see also

Equitable Equip. Co., 191 F.3d at 632 (“Underpinning . . . cases

is a concern . . . that the jurisdiction of a non-article III

tribunal like those under the LHWCA workers compensation statute

should be consistent with . . . [Northern Pipeline].”).

We reaffirm, therefore, the principles put forth in our

Equitable Equipment Co. case and determine that those principles

dictate that the ALJ and Board overstepped their statutory

authority in this case by deciding questions that are not

“integral to” the compensation claim, see Equitable Equip. Co.,

191 F.3d at 633. In essence, whether TESI agreed to indemnify

Trinity for workers’ compensation claims relates to the

compensation claim only in the sense that the question would not

arise but for Ricks’s compensation claim. This “but for”

approach to § 919(a) casts too wide a net, and for the reasons

discussed above, we decline to rest administrative jurisdiction

“on too thin a reed,” id. at 632. As such, we are not presented

with a “question in respect of a claim” within the meaning of

§ 919(a) because all questions regarding Ricks’s LHWCA

compensation claim have already been resolved. See, e.g.,

BethEnergy, 32 F.3d at 847-48. Consequently, the ALJ and the

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Board lacked authority to adjudicate the Maryland-TESI/Trinity

contractual dispute in this case.

Because we find the Director’s jurisdictional challenge to

the actions of the ALJ and the Board to be meritorious, we need

not and do not address the merits of this case. Therefore, the

parties’ claims are to be dismissed without prejudice and may be

filed in a court of general jurisdiction.

IV. CONCLUSION

For the foregoing reasons, we GRANT the petition for review,

VACATE the Board’s decision, and REMAND with instructions to

reinstate the original decision of the ALJ holding Trinity alone

liable, as employer and self-insurer, under the LHWCA and

ordering Trinity to reimburse Maryland for compensation paid to

Ricks and to dismiss without prejudice the claims regarding the

contractual indemnification provisions for lack of jurisdiction.

Each party shall bear its own costs.

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