UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_______________________
No. 98-60303
_______________________
MAYOLA A. HENRY,
SURVIVING SPOUSE OF JOHNNIE HENRY
AND HIS SOLE LEGATEE;
Petitioner,
versus
COORDINATED CARIBBEAN TRANSPORT;
AMERICAN MOTORISTS INSURANCE COMPANY; and
DIRECTOR, OFFICE OF WORKERS’ COMPENSATION PROGRAMS,
UNITED STATES DEPARTMENT OF LABOR;
Respondents.
_________________________________________________________________
Petition for Review of an Order of the Benefits Review Board
_________________________________________________________________
February 18, 2000
Before JONES and WIENER, Circuit Judges, and LITTLE, District
Judge.*
EDITH H. JONES, Circuit Judge:
The issue in this case is whether an agreement between an
injured longshoreman’s attorney, the employer, and its insurance
carrier is enforceable where the employee died before a settlement
application conforming to LHWCA regulations was prepared or
*
District Judge of the Western District of Louisiana,
sitting by designation.
executed. We affirm the decision of the Benefits Review Board
(“BRB”) that no valid settlement agreement existed pursuant to
section 8(i) of the Longshoremen and Harborworkers Compensation
Act, 33 U.S.C. § 908(i) (1994).
BACKGROUND
Johnnie Henry suffered a severe injury to his left hand
while employed by Caribbean in 1984.1 Caribbean, through its
insurer, paid his medical care and benefits for several years. When
the benefits payments ceased, Henry filed a claim with the Benefits
Review Board. Caribbean was unsatisfied with the award of total
permanent disability and appealed to this court, while it paid the
required periodic amounts to Henry. The parties stayed the appeal
to discuss settlement, but when no settlement appeared forthcoming,
they requested a briefing schedule from the court. On November 22,
1993, five days after this request, Caribbean faxed to Henry’s
counsel an offer to settle the future compensation and medical
claims for $180,000 and attorneys fees for an additional $20,000.
That same day, via facsimile, Henry’s attorney confirmed acceptance
of the lump sum settlement offer.
Unbeknownst to Respondents, Henry had died – of causes
unrelated to his hand injury – the day after the settlement faxes
were exchanged. In their ignorance, the Respondents reconfirmed
1
As used herein, “Caribbean” or “Respondents” refers both
to Caribbean and its insurer American Motorists Insurance Company.
2
the settlement on November 29, agreeing to prepare the application
required by Section 8(i) to secure approval by the District
Director. The parties jointly moved for a remand from the Fifth
Circuit to the District Director to complete the settlement.
Henry’s attorney notified the respondents of Henry’s
death in December and suggested opening a succession and executing
settlement through Henry’s son. A week later, Caribbean wrote a
letter to the District Director advising that it intended to
withdraw from the undocumented and unapproved settlement.
Countering Respondents’ notice of final payment to the District
Director, Henry’s attorney moved to enforce the settlement
agreement, relying upon this court’s decision in Oceanic Butler,
Inc. v. Nordahl, 842 F.2d 773 (5th Cir. 1988). The Respondents
sought summary disposition of the motion. An ALJ denied Henry’s
motion. The BRB affirmed the decision, and Henry’s widow has
timely appealed to this court.
DISCUSSION
Henry’s widow contends that the BRB erred in concluding
that no enforceable settlement agreement existed with Caribbean
and, alternatively, that the District Director should have required
Caribbean to execute the documents necessary to secure
administrative approval of the settlement. The Department of
Labor, siding with Mrs. Henry, further suggests that if Caribbean
were to refuse to participate in preparing a settlement
3
application, the District Director should authorize Henry’s counsel
to do so on behalf of all parties.
These contentions raise legal questions reviewable by
this court de novo. The Department of Labor, however, invokes
Chevron’s rule of judicial deference to administrative authorities2
to shield its novel approach to the LHWCA and the regulations
governing compensation settlements thereunder.
Explaining how the settlement in this case fell short of
ordinary procedures attendant to Section 908(i) settlements goes a
long way to justify the BRB’s decision. Like many employee
compensation programs, LHWCA requires administrative supervision of
the settlement of claims. Thus, a deputy commissioner or
administrative law judge “shall” approve a settlement within thirty
days of its submission unless it is “inadequate or procured by
duress.” 33 U.S.C. § 908(i)(1). The employer’s and insurance
carrier’s liability for benefits shall not be discharged unless the
“application for settlement” is so approved. Id.
Regulations describe how the settlement is completed.
All parties must sign a “settlement application,” a “self-
sufficient document which can be evaluated without further
reference to the administrative file.” 20 C.F.R. § 702.242(a).
The contents of the settlement application are comprehensively
2
Chevron U.S.A., Inc. V. NRDC, 467 U.S. 837, 104 S.Ct.
2778 (1984).
4
prescribed, as emphasized by the provision’s title – “Information
Necessary for a Complete Settlement Application.” Id.3 The
regulations forbid an adjudicator to approve or disapprove a
settlement agreement until a complete application, fulfilling
section 702.242, has been submitted to him. Sections 702.243(a)
and (b).
3
See 20 C.F.R. § 702.242(b):
(b) The settlement application shall contain the following:
(1) A full description of the terms of the settlement which
clearly indicates, . . . the amounts to be paid for compensation,
medical benefits, . . .
(2) The reason for the settlement, and the issues which are in
dispute, if any.
(3) The claimant’s date of birth and, in death claims, the names
and birth dates of all dependents.
(4) Information on whether or not the claimant is working or is
capable of working. This should include, but not be limited to, a
description of the claimant’s educational background and work
history, as well as other factors which could impact, either
favorably or unfavorably, on future employability.
(5) A current medical report which fully describes any injury
related impairment as well as any unrelated conditions. This
report shall indicate . . .
(6) A statement explaining how the settlement amount is considered
adequate.
(7) . . . an itemization of the amount paid for medical expenses
by year for the three years prior to the date of the application.
. . .
(8) Information on any collateral source available for the payment
of medical expenses.
5
The interest of the employee and administrative
convenience are served by these “paternalistic” regulations. See
Nordahl, 842 F.2d at 781. The prescription of a self-sufficient
stipulation, signed by all parties, enables the employee to know
all that he needs to know about his case, his medical and any
disability conditions, and the amounts of benefits he will receive.
It is important for a claimant to be able to review the relevant
information at one time. The Section 8(i) agreement accomplishes
full disclosure for his benefit. Similarly, such a format
facilitates effective, protective review by the adjudicator. The
prescribed settlement application is the sine qua non of the
regulations, which carry out the statutory intent.
Henry never executed a settlement agreement with
Respondents that complied with § 908(i) and the foregoing
regulations. The most that can be said here is that Henry’s
counsel, acting within his client’s alleged delegated authority,
accepted a settlement offer transmitted by Carribean the day before
Henry died. Even if all the information necessary to complete a
settlement application existed in the administrative files, as
Henry’s counsel asserts, a reference to the files is insufficient
under the regulations, which require a settlement agreement to be
a “self-sufficient document.” More important, of course, is that
without Henry’s signature, no fully compliant application could be
filed. The Board reasonably relied upon the comprehensiveness of
6
the procedure provided in the regulations, and the insufficiency of
Henry’s counsel’s agreement with Caribbean for compliance purposes,
in concluding that no valid and enforceable agreement existed.
According to Mrs. Henry, however, the BRB’s straight-
forward logic fails to account for this court’s holding in Nordahl,
which held enforceable a settlement application that had been
executed and submitted by the claimant and all other parties but
lacked administrative approval at the time of the employee’s death.
As the BRB explained, Nordahl is distinguishable from Henry’s case
on its facts:
It is undisputed in the instant case that a
formal settlement document was never prepared,
that no settlement application was signed by
the parties, and that no settlement
application was submitted for approval in
accordance with § 8(i) and the implementing
regulations prior to the employee’s death, a
meeting of the minds with respect to the
settlement amount notwithstanding.”
Henry v. Coordinated Caribbean Transport, 32 B.R.B.S. 29, 31
(1998).
While minimizing this distinction, Mrs. Henry urges
Nordahl’s emphasis on the asymmetric obligations of an employer
(and its insurer) and employee under LHWCA. 842 F.2d at 778. She
points to Nordahl’s exposition of a general rule:
Setting aside for the moment the problem
exemplified by the present case (the
claimant’s death after execution of the
settlement agreement but before approval), the
LHWCA’s provisions thus require different
analyses of the parties’ rights under a
7
settlement agreement. [The claimant’s
obligation under the contract cannot become
binding without administrative approval.]
. . .
The insurer’s obligation under the
agreement -- to pay the designated sum in
exchange for a release of the liability that
otherwise result under the Act’s terms -- is
not rendered invalid by anything in the LHWCA.
Id. at 779. This correct statement of the structure of LHWCA
regarding settlements begs the question critical to Henry’s case,
which is, what constitutes a binding settlement. Taken in full
context, Nordahl discusses withdrawal rights only in terms of a
settlement that has been executed pursuant to the regulations and
submitted for administrative approval. See Id. at 779-81.4 Thus,
Nordahl does not support the enforcement of agreements that have
been made in principle among the parties but have not been
documented according to the regulations and lack a self-sufficient
4
For instance, the court states:
This disparity [between the positions of
claimant and employer] leads directly to the
general administrative construction that,
absent contrary provisions in the contract,
executed settlement agreements submitted for
administrative approval are binding upon the
employer or insurer and not subject to
rescission at their election; on the other
hand, the agency feels that such submitted
settlements are not binding upon claimants,
and are subject to rescission by them, until
approved, because of the statutory asymmetry
of treatment.
842 F.2d at 781 (emphasis added).
8
settlement agreement that can fulfill the purposes of
administrative review.5
If Mrs. Henry’s and the Labor Department’s interpretation
of Nordahl were correct, a District Director would require
authority to enforce specific performance of improperly documented
settlement agreements, to compel employers and their insurers to
participate in the preparation of settlement applications, and even
to allow employees’ counsel unilaterally to prepare, sign, and
submit settlement applications. Indeed, petitioners cite Nordahl
-- and only Nordahl – for the grant of such authority to the
District Director. The absence of any statutory or regulatory
mandate for the desired relief is telling. Section 908(i)
authorizes a limited role for the adjudicator, requiring him to
approve settlements or applications for settlements unless they are
inadequate or procured by duress. The regulations governing agreed
to settlements, 20 C.F.R. §§ 702.241-243, enable an adjudicator to
assess the settlement under the statutory criteria; these
regulations contain no standards for determining when a settlement
has been “agreed to” apart from the filing of a fully-signed
application.
5
Mrs. Henry also attempts to rely on the statement in
Nordahl that an employer can protect itself from the possibility of
a claimant’s death prior to settlement approval by inserting
appropriate conditional language into the settlement agreement.
842 F.2d at 780, n.6. The BRB responded to this contention
definitively: the employer could hardly have included such language
without a formal agreement in which to place it.
9
That a proper settlement application is the trigger for
administrative approval is evident because, according to the
regulations, the thirty-day approval period is tolled pending
receipt of a complete application. The adjudicator can do nothing
to approve or disapprove settlements under the regulations without
a proper application. When antecedent questions arise concerning
the existence or scope of an undocumented settlement agreement, no
enforceable agreement had been reached. Compare Fuller v. Matson
Terminals, 24 B.R.B.S. 252 (1991) (no valid settlement agreement
pursuant to Section 8(i) without a document conforming to the
regulations and signed by the parties) with Nelson v. American
Dredging Co., 143 F.3d 789, 792-93 (3d Cir. 1998) (no enforceable
settlement agreement, where parties only “agreed in principle” and
failed to complete § 8(i) stipulation). We may not defer, even
under Chevron, to a proposed administrative interpretation that has
no statutory or other support. The District Director could not
enforce an agreement that was not documented according to the
regulations, and he was not empowered to compel the filing of a
§ 8(i) settlement application under these circumstances.
The result reached in this case is not unjust generally
or specifically. It comports with the LHWCA and its regulations.
Further, Caribbean paid Henry all the compensation he was owed
during his lifetime; a settlement would only have covered future
10
disability. The BRB did not err in failing to enforce a settlement
unsigned by Henry and noncompliant with the regulations.
The Board’s decision and order are AFFIRMED.
11