United States Court of Appeals,
Fifth Circuit.
No. 93-4157.
Thomas LENNON, Petitioner-Cross-Respondent,
v.
WATERFRONT TRANSPORT, Fireman's Fund Insurance Company,
Respondents-Cross-Petitioners,
and
Director, Office of Workers' Compensation of the United States
Department of Labor, Respondent.
May 17, 1994.
Petitions for Review of an Order of the Benefits Review Board.
Before WOOD, Jr.,* SMITH, and DUHÉ, Circuit Judges.
HARLINGTON WOOD, Jr., Circuit Judge:
Plaintiff Thomas Lennon, a marine dispatcher for Waterfront
Transport, injured his back while lifting a box at work. Lennon's
duties for Waterfront Transport consisted of contacting boats by
marine radio, arranging crew changes, handling the telephone, and
managing a film account. As part of the last of those duties,
Lennon was required to lift 35 to 50 pound boxes of motion-picture
films for use on passenger ships, and it was while lifting one such
box that Lennon sustained his back injury.
Soon after the accident Lennon sought medical advice and was
diagnosed as having a back strain compounded by pre-existing
degenerative disc disease. Although the back strain reached
*
Circuit Judge of the Seventh Circuit, sitting by
designation.
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maximum medical cure in October of 1981, Lennon continued to suffer
from back pain. In July of 1983, Lennon was diagnosed as having a
herniated disc, but only after six other physicians had examined
him and found to the contrary. Although Dr. Vogel, the physician
who diagnosed Lennon's herniated disc, attributed that injury to
the July 1, 1980 accident, he did so without having seen or known
about most of the records from Lennon's prior trips to other
physicians.
Lennon sought compensation for his back injury under the
Longshore and Harbor Workers' Compensation Act (LHWCA), 33 U.S.C.
§ 901 et seq. Waterfront and its insurer, Fireman's Fund Insurance
Company (Fireman's Fund), contested both jurisdiction and
causation. Regarding jurisdiction, Waterfront and Fireman's Fund
contended that Lennon was not a Longshoreman for the purposes of
the LHWCA. Regarding causation, Waterfront and Fireman's Fund
contend that Lennon's pre-existing degenerative disc disease caused
his back pain, and that his herniated disc was caused either by a
subsequent fall Lennon suffered that broke his tailbone, or by an
automobile accident that caused Lennon to seek medical treatment.
After trial before an administrative law judge, on December
16, 1985, the ALJ determined jurisdiction was proper under the
LHWCA and found in favor of Lennon on the causation issue based in
large part on Dr. Vogel's testimony. Fireman's Fund paid Lennon
$42,922.71 in past due benefits, paid for Lennon's medical
expenses, and began weekly payments of $205.49.
Waterfront and Fireman's Fund appealed to the Benefits Review
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Board,1 and on April 21, 1987, the BRB reversed the ALJ and
remanded the case to the ALJ to reconsider the issues of causation,
disability, and attorneys' fees. On remand the ALJ decided that
insufficient evidence existed to prove causation and therefore he
denied Lennon's claim. The ALJ also denied a motion by Waterfront
Transport requesting that Lennon refund all compensation paid under
the 1985 order. On January 23, 1993, the BRB affirmed the ALJ on
both accounts, and both Lennon and Waterfront Transport petition
for review.
I. ANALYSIS
A. Jurisdiction
An injured worker must satisfy occupational and geographical
status requirements to qualify for coverage under the LHWCA. 33
U.S.C. §§ 902(3), 903(a). Waterfront and Fireman's Fund contest
the ALJ's finding that Lennon satisfied the occupational
requirement of Section 902(3). Coverage pursuant to Section 902(3)
includes not only workers injured on navigable waterways, but also
those injured in the immediate waterfront area who participate in
ongoing longshoring operations. Chesapeake & Ohio Ry. v. Schwalb,
493 U.S. 40, 45, 110 S.Ct. 381, 384, 107 L.Ed.2d 278 (1989). The
LHWCA specifically excludes from coverage individuals employed
exclusively to perform office clerical work. 11 U.S.C. § 902(3).
Although the ALJ found that the majority of Lennon's
1
Fireman's Fund paid Lennon's benefits despite the appeal
because the LHWCA requires compensation be made despite the
pendency of an appeal unless irreparable injury would result.
See 33 U.S.C. § 921(b)(3).
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dispatcher duties were clerical, the ALJ also found that Lennon's
duties required him to sort, pack, and handle cargo destined to be
loaded upon vessels. Handling cargo, the Supreme Court has held,
is "as much an integral part of the process of loading and
unloading a ship as a person who participates in the entire
process." P.C. Pfeiffer Co. Inc. v. Ford, 444 U.S. 69, 75, 100
S.Ct. 328, 333, 62 L.Ed.2d 225 (1979). The ALJ found the instances
of Lennon handling cargo to be sufficiently regular so as not to be
considered episodic events excluded from the act's coverage, see
Boudloche v. Howard Trucking Co., 632 F.2d 1346, 1347-48 (5th
Cir.1980), and the ALJ therefore concluded that Lennon was a
longshoreman for purposes of the LHWCA.
This court may not reweigh the evidence, but rather must
confine its inquiry to whether substantial evidence supported the
findings of the ALJ. Universal Camera Corp. v. NLRB, 340 U.S. 474,
477, 71 S.Ct. 456, 459, 95 L.Ed. 456 (1951). The evidence of
Lennon's cargo sorting, packing, and handling activities is
substantial and supports the ALJ's finding that the claimant was
engaged in longshoring operations. We therefore conclude that
jurisdiction under the LHWCA is proper.
B. Reimbursement
This circuit has held that federal district courts have no
subject matter jurisdiction over original actions to recoup
overpaid benefits under the LHWCA. Ceres Gulf v. Cooper, 957 F.2d
1199, 1205-07 (5th Cir.1992); see also Stevedoring Services of
America, Inc. v. Eggert, 953 F.2d 552, 555-57 (9th Cir.1992).
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Although the instant case did not originate in federal district
court, Ceres Gulf and the Ninth Circuit decision in Stevedoring are
instructive regarding whether the LHWCA permits actions for
reimbursement of overpaid benefits. Both Ceres Gulf and
Stevedoring based their jurisdictional analysis on the holding that
all three statutory provisions for recoupment in the LHWCA2 permit
reimbursement as an offset against future benefits only. Ceres
Gulf, 957 F.2d at 1205-07; Stevedoring, 953 F.2d at 555-57.
Ceres Gulf and Stevedoring reasoned that because Congress
permitted recoupment only as an offset against future benefits in
three separate statutory provisions of the LHWCA, it would be
improper to imply a federal remedy for reimbursement. Ceres Gulf,
957 F.2d at 1205-07; Stevedoring, 953 F.2d at 555-57. We agree
with the reasoning of Ceres Gulf and Stevedoring. Although the
plain language of the LHWCA alone would support our holding, the
legislative history of the LHWCA further bolsters our decision not
to imply a federal remedy for reimbursement.
The legislative history of what is now Section 914(j) of the
LHWCA confirms that Congress intended to preclude methods of
recoupment other than offsets against future benefits. During
2
Section 914(j) provides that "[i]f the employer has made
advance payments of compensation, he shall be entitled to be
reimbursed out of any unpaid installment or installments of
compensation due." 33 U.S.C. § 914(j). Section 922 provides
that in cases in which a modified order decreases compensation to
which the claimant was entitled, the overpaid compensation may be
recovered from unpaid compensation only, if any exists. 33
U.S.C. § 922. The same is true for compensation forfeited
because the claimant failed to report, omitted, or understated
earnings. See 33 U.S.C. § 908(j).
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hearings on the matter, shipbuilders' representative O.G. Brown
argued against allowing offsets against future benefits only,
contending that "the compensation would all be paid out, and
irrevocably by the time [of a successful appeal]." Compensation
for Employees in Certain Maritime Employments: Hearings on S. 3170
Before a Subcomm. of the Senate Comm. on the Judiciary, 69th Cong.,
1st Sess. 53 (1926). Nevertheless, the response from the Chairman
of the Senate subcommittee and other comments made before a house
subcommittee showed that "Congress was concerned about the disabled
worker receiving benefits promptly after being found deserving of
same." Rivere v. Offshore Painting Contractors, 872 F.2d 1187,
1190 (5th Cir.1989). In fact, Congress tightened the criteria for
obtaining a stay of payments pending appeal. 1926 Senate Hearings
at 9-10 n. 2.
The legislative history of Section 922 demonstrates the same
principle. In fact, Congress originally allowed no method of
recovering overpayments, Act of Mar. 4, 1927, § 22, 44 Stat. 1437,
only later to loosen that rule to allow recovery from unpaid
compensation, Act of May 26, 1934, ch. 354, § 5, 48 Stat. 806, 807
(1934). Even in Section 908(j), the least favorable provision for
claimants because it governs claimants who have knowingly and
willfully engaged in misreporting, the House report states
explicitly that "[t]he Committee does not contemplate that the
employer could bring a cause of action to recover compensation paid
in the past." H.R.Rep. No. 570, 98th Cong., 1st Sess., pt. I at 18
(1983) U.S.Code Cong. & Admin.News 1984, pp. 2734, 2751. If
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Congress intended that employers not be able to seek reimbursement
from those who knowingly and willfully misreport, then certainly it
did not intend to allow reimbursement from less culpable employees.
Waterfront and Fireman's Fund attempt to dispute the clear
language of the LHWCA and legislative history by claiming that if
past compensation is unrecoverable directly from claimants, all
employers would be entitled to stays of compensation awards pending
review by the BRB because the lack of post-deprivation remedy
always would result in irreparable injury. See 33 U.S.C. 921(b)(3)
(providing for stays if irreparable injury would result).
Waterfront and Fireman's Fund overlook, however, that the
employer's inability to recover compensation on appeal is
insufficient alone to demonstrate irreparable injury. Rivere, 872
F.2d at 1191; Henry v. Gentry Plumbing & Heating Co., 704 F.2d
863, 865 (5th Cir.1983). Thus, the limited-recoupment rule is
consistent with the section governing stays of compensation awards
pending review. Additionally, given that employers are liable for
attorneys' fees for prevailing claimants, see 33 U.S.C. § 928,
employers still have an interest in appealing even when they have
completed benefits distribution.
Waterfront and Fireman's Fund contend that the limited
recoupment rule is precluded by Crowell v. Benson, 285 U.S. 22, 52
S.Ct. 285, 76 L.Ed. 598 (1922), because once the jurisdiction of an
Article III court is invoked, the power to enforce its orders
cannot be limited in any fashion. If Waterfront and Fireman's Fund
are correct, then Congress never can specify remedies in
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legislation—doing so would prevent Article III courts from
enforcing its orders. Federal courts may not create remedies that
Congress specifically intended not be available.
To the extent that Waterfront and Fireman's Fund believe that
the LHWCA violates their right to Due Process, that belief is not
founded in law. The LHWCA represents a compromise between the
interests of injured workers, employers, and insurers. See, e.g.,
In re Compensation Under Longshore & Harbor Workers' Compensation
Act, 889 F.2d 626, 632 (5th Cir.1989). Injured employees receive
benefits promptly and periodically during their disability, and may
take advantage of the benefits free of the worry of possible future
reimbursement orders. In return employers and insurers are able to
avoid employees taking advantage of superior (albeit less swift and
certain) remedies in tort—a substantial benefit given the
increasing number of sizable jury awards in personal injury cases.
Although in individual cases this trade-off may work to the
disadvantage of an employer, that result is part of the overall
balance Congress sought to provide. Potomac Electric Power Co. v.
Director, OWCP, 449 U.S. 268, 282-84, 101 S.Ct. 509, 516-18, 66
L.Ed.2d 446 (1980) ("like most workmen's compensation legislation,
the LHWCA represents a compromise between the competing interests
of disabled laborers and their employers.... if "compelling
language' produces incongruities, the federal courts may not avoid
them by rewriting or ignoring that language."). Waterfront and
Fireman's Fund have advanced no reason to upset this balance.
C. Causation
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The BRB correctly held that the ALJ initially erred in two
respects. First, the ALJ failed to consider whether Waterfront
rebutted with substantial evidence the presumption that Lennon's
injury was work related. See 33 U.S.C. § 920(a). If Waterfront
presented substantial evidence that Lennon's injury was not work
related, the ALJ was obligated to weigh all of the evidence of
record to determine whether the injury arose out of Lennon's
employment. Del Vecchio v. Bowers, 296 U.S. 280, 286-87, 56 S.Ct.
190, 193, 8 L.Ed. 229 (1935). The BRB was correct to remand the
case back to the ALJ to follow the proper analysis.
Secondly, the BRB properly reversed the ALJ on the
substantive causation issues. The credibility findings of
administrative law judges can be reversed only if they are patently
unreasonable. Cordero v. Triple A Machine Shop, 580 F.2d 1331,
1335 (9th Cir.1978). The ALJ relied heavily on the testimony of
Dr. Vogel, who saw Lennon in 1983, to the exclusion of six doctors
who tested Lennon between 1980 and 1983. Although believing the
testimony of one doctor over numerous others can be reasonable, in
this case it was not. The ALJ failed to note that Dr. Vogel was
unaware of: (1) the 1980 myelogram conducted by Dr. Williams
finding no ruptured disc, but rather pre-existing degenerative disc
disease in Lennon; (2) the 1981 diagnosis by Dr. Kenner that
Lennon had Reiter's Variant, a type of autoimmune arthritic
condition; (3) the January 1983 report by Dr. Shiffman indicating
that Lennon's back problems were due to pre-existing arthritic
changes and not the 1980 injury. The BRB correctly found that
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given the ALJ's failure to note the major problems with Dr. Vogel's
testimony, the ALJ's finding of causation was patently
unreasonable.
The ALJ's finding on remand of no causation was supported by
substantial evidence. Cardillo v. Liberty Ins. Co., 330 U.S. 469,
477-78, 67 S.Ct. 801, 806-07, 91 L.Ed. 1028 (1947). That evidence
consisted of the previously noted testimony of Lennon's doctors
regarding pre-existing medical conditions, including an automobile
accident and a fall that broke Lennon's tailbone (which, as Dr.
Vogel admitted, could have caused the ruptured disc). Lennon
failed to indicate how that evidence was insubstantial, and he
raised no instances of reversible error by the ALJ in weighing the
conflicting evidence and making credibility determinations. See
Avondale Shipyards, Inc. v. Kennel, 914 F.2d 88, 90 (5th Cir.1990).
The BRB was correct to affirm the ALJ's decision on remand.
II. CONCLUSION
Jurisdiction under the LHWCA was proper. Although no
causation existed between Lennon's 1980 injury and his herniated
disc, the remedy to which Waterfront and Fireman's Fund are
entitled is offsetting Lennon's future benefits—and as none are
owing, no remedy is available—not reimbursement of benefits already
paid. The petitions for review are DENIED, and the decision of the
Benefits Review Board is AFFIRMED.
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