Pallas Shipping Agcy., Ltd. v. Duris, 461 U.S. 529 (1983)

Pallas Shipping Agency, Ltd. v. Duris

No. 82-502

Argued April 25, 1983
Decided May 23, 1983
461 U.S. 529

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR

THE SIXTH CIRCUIT

Syllabus

Under § 33(b) of the Longshoremen’s and Harbor Workers’ Compensation Act (Act), an injured longshoreman who accepts "compensation under an award in a compensation order filed by the deputy commissioner or [Benefits Review] Board" has six months in which to file a negligence action against a third party, after which time the longshoreman’s cause of action is irrevocably assigned to his employer. Respondent was injured while working as a longshoreman aboard a vessel that had been chartered by petitioner’s predecessor corporation. Respondent’s employer (another company) did not contest his right to compensation under the Act, and filed a form (Form LS-206) with the Labor Department indicating the employer’s agreement to make payments to respondent. Approximately 23 months later, the employer terminated the payment of benefits by filing another form (Form LS-208) with the Department. Respondent subsequently filed suit in Federal District Court to recover for his injuries, alleging that they had been caused by the vessel charterer’s negligence. The District Court dismissed the claim for lack of jurisdiction. The Court of Appeals reversed, holding that jurisdiction could properly be asserted over petitioner and that, in the absence of a formal compensation order or award entered by the Secretary of Labor, an employee’s acceptance of compensation payments could not lead to an assignment of his right of action against third parties.

Held: Respondent’s acceptance of voluntary compensation payments did not constitute acceptance of compensation "under an award in a compensation order" so as to give rise to the assignment of his claims against third parties under § 33(b). Pp. 532-539.

(a) Under the Act’s comprehensive scheme governing the rights of an injured longshoreman, the term "compensation order" refers specifically to an administrative award of compensation. Here, no administrative proceedings ever took place. Although respondent’s employer, as required by the Act, filed Forms LS-206 and LS-208 relating to voluntary payment of compensation, nothing in the Act suggests that the filing of the forms is equivalent to an "award in a compensation order." Pp. 532-535.

(b) The Act’s history confirms that "a compensation order" does not include a document testifying to an employer’s voluntary payment of compensation under the Act. The requirement of a formal award was designed to protect the longshoreman from the unexpected loss of his rights against a negligent third party by acceptance of voluntary compensation payments, and to permit him to make a considered choice among available remedies. Cf. Bloomer v. Liberty Mutual Ins. Co., 445 U.S. 74; American Stevedores, Inc. v. Porello, 330 U.S. 446. Pp. 535-538.

(c) The requirement of a formal compensation order prior to the assignment of an injured longshoreman’s claims does not frustrate the Act’s aims of ensuring prompt payment to injured workers and of relieving claimants and their employers of the undue expense and administrative burden of litigating compensation claims. Under Labor Department regulations, employers who desire to seek indemnification from a negligent third party may make voluntary compensation payments and obtain a compensation order upon request if there is no disagreement among the parties. Moreover, even without a statutory assignment of the longshoreman’s claims, an employer can seek indemnification from negligent third parties for payments it has made to the longshoreman. Thus, an employer who seeks to bring an action against a shipowner, charterer, or other third person has little to gain from contesting his liability to the longshoreman under the Act. Pp. 538-539.

684 F.2d 352, affirmed.

MARSHALL, J., delivered the opinion for a unanimous Court.