AFIA/CIGNA Worldwide v. Felkner

• Decision Date: 10 May 1991
• Docket Number: No. 90-2339,90-2339
• Parties: AFIA/CIGNA WORLDWIDE, and American Express Co., Plaintiffs-Appellants, v. Marilyn C. FELKNER, Deputy Commissioner, Office of Workers' Compensation Programs, and Wanda Sue Frazier, Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1111

930 F.2d 1111

AFIA/CIGNA WORLDWIDE, and American Express Co., Plaintiffs-Appellants, v. Marilyn C. FELKNER, Deputy Commissioner, Office of Workers' Compensation Programs, and Wanda Sue Frazier Defendants-Appellees.

No. 90-2339.

United States Court of Appeals Fifth Circuit.

May 10, 1991.

Michael D. Williams, Kenneth G. Engerrand, Brown, Sims, Wise & White, Houston, Tex., for plaintiffs-appellants.

Joshua T. Gillelan, Janet R. Dunlop, U.S. Dept. of Labor, Office of the Solicitor, Washington, D.C., Jack Shepherd, Chief, Asst. U.S. Atty., Houston, Tex., for Felkner.

Stephen M. Vaughan, Mandell & Wright, Houston, Tex., for Frazier.

Appeal from the United States District Court for the Southern District of Texas.

Before GOLDBERG, JOLLY and WIENER, Circuit Judges.

WIENER, Circuit Judge:

Plaintiffs-Appellants, American Express Company and its insurer, AFIA/CIGNA Worldwide, (collectively, AFIA/CIGNA), appeal the district court's dismissal of their suit to set aside an award of compensation made by Deputy Commissioner, Marilyn C. Felkner to claimant, Wanda Sue Frazier, Defendants-Appellees, for lack of subject matter jurisdiction under section 21(b) of the Longshoremen and Harbor Workers' Compensation Act, 33 U.S.C. Secs. 901-950, as incorporated in the Defense Base Act, 42 U.S.C. Secs. 1651-1654. Finding that dismissal of the suit was proper, we affirm.

FACTS AND PROCEEDINGS BELOW

Frazier was employed by the American Express Company when she suffered an injury in the course of her employment at the Rhein-Main Air Force Base in West Germany. This injury caused temporary total disability from October 13, 1976, to December 3, 1980, and permanent total disability thereafter.

Frazier filed for workers' compensation under the Longshoremen and Harbor Workers' Compensation Act (LHWCA) as incorporated by the Defense Base Act (DBA). In July 1989, a compensation order was filed by Deputy Commissioner Felkner of the Eighth Compensation District of the United States Department of Labor awarding compensation to Frazier.

Purporting to comply with section 3(b) of the DBA, 42 U.S.C. Sec. 1653(b) (1982), AFIA/CIGNA sought judicial review of the deputy commissioner's order by filing suit in the United States District Court for the Southern District of Texas ¹ to set aside the compensation order. As a precaution, they also sought administrative review by appealing the compensation order to the Benefits Review Board (BRB) under section 21(b) of the LHWCA, 33 U.S.C. Sec. 1921(b) (1982). Deputy Commissioner Felkner filed a motion to dismiss the district court suit on the ground that the district court lacked subject matter jurisdiction under section 3 of the DBA, insisting that exclusive jurisdiction for the initial appeal of the compensation order was with the Benefits Review Board. The district court agreed and granted the motion, dismissing the case for lack of subject matter jurisdiction.

AFIA/CIGNA timely appealed. To the best of our knowledge, AFIA/CIGNA's administrative appeal to the BRB has not yet been resolved.

The Interplay Between the DBA and LHWCA

The DBA provides workers' compensation coverage for employees of American contractors engaged in construction related to military bases in foreign countries, and to foreign projects related to the national defense whether or not the project is located on a military base. See Sec. 1, 55 Stat. 622, 42 U.S.C. Sec. 1651; University of Rochester v. Hartman, 618 F.2d 170, 172, 173 n. 1 (2d Cir.1980). Section 1 of the DBA provides:

Except as herein modified, the provisions of the Longshoremen['s] ... Act, approved March 4, 1927 (44 Stat. 1424), as amended, shall apply in respect to the injury or death of any employee [covered by the Defense Base Act ...]

42 U.S.C. Sec. 1651(a) (1982); Pearce v. Director, Office of Workers' Compensation Programs, 603 F.2d 763, 765 (9th Cir.1979). Therefore, the compensation protocol provided Before the LHWCA was amended in 1972, section 19 of the LHWCA provided for the deputy commissioner initially to investigate and decide all claims for compensation. ² In 1972, section 19 of the LHWCA was amended to transfer the deputy commissioner's hearing authority to an administrative law judge. See 33 U.S.C. Sec. 919 (c) & (d) (1982). That amendment bifurcated the various powers previously vested in the deputy commissioner, reserving the investigative and enforcement responsibilities to the deputy commissioners but transferring the adjudicative functions to administrative law judges. S.Rep. No. 92-1125, 92 Cong., 2d Sess. 13-14 (1972). Because the DBA contains no special provisions modifying the procedures set forth in LHWCA section 19, that section applies to DBA claims through section 1651(a)'s general incorporation provision. ³ Therefore, the procedures applicable to file a claim under the DBA and to obtain an initial determination of the claim are the very procedures set forth in the LHWCA for a claim arising under that Act. ⁴

                by the LHWCA governs a claim under the DBA except to the extent the DBA specifically modifies a provision of the LHWCA.  See Pearce, 603 F.2d at 766.    If the DBA provides a specific modification then the provisions of the DBA control.  Home Indemnity Co. v. Stillwell, 597 F.2d 87, 88-89 (6th Cir.), cert. denied, 444 U.S. 869, 100 S.Ct. 145, 62 L.Ed.2d 94 (1979)
                

Before 1972, appeal of a deputy commissioner's decision under both the LHWCA and DBA was judicial only. Under LHWCA section 21(b) judicial review was by injunction proceedings "in the federal district court for the judicial district in which the injury occurred." Pub.L. No. 92-576, 86 Stat. 1251, 33 U.S.C. Sec. 921(b) (1970)(amended 1972). Because the DBA by definition applied to overseas sites, the injury or death in most if not all such cases could not possibly occur within any federal judicial district. See Pearce, 603 F.2d at 766. Therefore, Congress specifically modified the judicial review provisions under Judicial proceedings provided under sections 18 and 21 of the Longshoremen['s] ... Act in respect to a compensation order made pursuant to [the Defense Base Act] shall be instituted in the United States District Court of the judicial district wherein is located the office of the deputy commissioner whose compensation order is involved if his office is located in a judicial district, and if not ... [the proceeding] shall be instituted in the judicial district nearest the base at which the injury or death occurs.

section 21(b) of the LHWCA by enacting section 3(b) of the DBA which states:

42 U.S.C. Sec. 1653(b)(emphasis added).

Under the 1972 amendments to the LHWCA, section 21's procedures, calling for initial review of a compensation order to be judicial, was discarded in favor of the initial review being administrative, by the BRB, a specialized three-member board. See Amendments Sec. 15(a), 86 Stat. 1261, amending Longshoremen's Act Sec. 21(b) & (c) (1988). The 1972 amendments to the LHWCA also amended the provisions governing judicial review of compensation orders, making a final decision of the BRB reviewable not in federal district court but in the federal court of appeals for the circuit in which the injury occurred. See Sec. 21(c) LHWCA, 33 U.S.C. Sec. 921(c) (1982). Significant to our consideration, section 3 of the Defense Base Act, which provides for judicial review of final compensation orders in the federal district court, was not concurrently amended.

ANALYSIS

The core issue on appeal is whether the 1972 Amendments to section 21 of the LHWCA, providing for initial review of compensation orders to be administrative with the BRB, apply to initial review of compensation orders under the DBA. After parsing the statutory language and analyzing the interrelationship of the LHWCA and the DBA, we conclude that the initial appeal of a compensation order issued pursuant to a claim under the DBA is to the Benefits Review Board as an administrative appeal under section 21(b) of the LHWCA, just as is the initial review of an order issued pursuant to a claim originating under the LHWCA. But following administrative review by the BRB, the judicial review provisions under these two statutory schemes diverge: following BRB review of a claim brought pursuant to the LHWCA, judicial review begins in the cognizant United States court of appeals; but, as unambiguously provided in section 3(b) of the DBA, judicial review of compensation orders under the DBA begins in the United States district court for the judicial district wherein is located the office of the deputy commissioner whose compensation order is to be reviewed. Therefore, in DBA cases, initial review of a compensation order is administrative to the BRB, and the BRB's decision is judicially reviewed by appeal to the appropriate district court.

A. Initial Appeal to the BRB

AFIA/CIGNA argues that the 1972 amendments to section 21 of the LHWCA do not apply to the DBA because the review provisions of the LHWCA are inconsistent with the specific modifying provisions in section 3(b) of the DBA. AFIA/CIGNA contends that, under the plain wording of section 1653(b), review of compensation orders is in "the United States district court of the judicial district wherein is located the office of the deputy commissioner whose compensation order is involved...." 42 U.S.C. Sec. 1653(b). Therefore, concludes AFIA/CIGNA, review of a compensation order by the BRB is inconsistent with the plain language of a specific modifying provision of the DBA.

But AFIA/CIGNA misreads this provision, neglecting to recognize that the first word in section 1653(b)--"judicial"--modifies "proceedings," an observation that is crucial to proper construction of the DBA. Section 1653(b) of the DBA states in part:

Judicial proceedings provided under sections 18[33 U.S.C. Sec. 918] and 21 [33 U.S.C. Sec. 921] of the Longshoremen['s] ... Act in respect to a compensation order made pursuant to [the Defense 42 U.S.C. Sec. 1653(...