Ceres Gulf v. Cooper, 91-2097

Citation957 F.2d 1199
Decision Date27 March 1992
Docket NumberNo. 91-2097,91-2097
Parties, 22 Fed.R.Serv.3d 818 CERES GULF and ESIS/INA, Plaintiffs-Appellees, v. Cleaster COOPER, Defendant, Director, Office of Workers' Compensation Programs (U.S. Department of Labor), Intervenor-Appellant.
CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)

Edward D. Sieger, Allen H. Feldman, Assoc. Sol., Steven J. Mandel, Deputy Assoc. Sol., U.S. Dept. of Labor, Office of the Sol., Washington, D.C., for intervenor-appellant.

Kenneth G. Engerrand, Cynthia A. Galvan, Brown, Sims, Wise & White, Houston, Tex., for plaintiffs-appellees.

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

Before HIGGINBOTHAM and BARKSDALE, Circuit Judges, and McBRYDE, District Judge. 1

BARKSDALE, Circuit Judge:

Primarily at issue is subject matter jurisdiction vel non for an original action in district court against a former employee to recover advance payments made under the Longshore and Harbor Workers' Compensation Act, 33 U.S.C. § 901 et seq. (LHWCA), when additional LHWCA compensation is not owed the employee and the relief sought is not permitted, either procedurally or substantively, by the Act. After being denied such recovery in LHWCA administrative proceedings, but without seeking review in a court of appeals as allowed by the Act, the employer and its compensation insurer filed this separate suit. Several months later, when a default judgment was being considered, the Director, Office of Workers' Compensation Programs, fortuitously became aware of this action and immediately sought to intervene, based on his authority as administrator of the LHWCA. This notwithstanding, the district court entered the judgment and later denied intervention. The Director bases error, inter alia, on the denial and lack of subject matter jurisdiction. We agree and REVERSE and REMAND with instructions.

I.

Ceres Gulf is a stevedoring company subject to the LHWCA; ESIS/INA, its worker's compensation insurer. 2 Almost immediately after Ceres Gulf employed Cooper, he claimed that he had been injured in the course of that employment and sought compensation and medical benefits under the LHWCA. Ceres Gulf did not promptly controvert Cooper's LHWCA claim; instead, over a period of almost 18 months, it made advance payments to him totalling approximately $36,000. 3

Ceres Gulf did, however, contest the claim; and following a hearing, an Administrative Law Judge (ALJ) denied it, finding that a work injury had not occurred. 4 Concomitantly, the ALJ denied Ceres Gulf's request for reimbursement of the advance payments, ruling that "33 U.S.C. § 914(j) which is the only known authority for allowing reimbursement for overpayments applies only in cases where it is contemplated that additional [LHWCA] compensation will become due." Cooper and Ceres Gulf appealed to the Department of Labor Benefits Review Board (BRB); and it affirmed, holding in part:

The [LHWCA] ... provides for reimbursement of advance compensation payments only if unpaid installments of compensation remain owing. Since the [ALJ] found that [Cooper] had failed to establish a compensable injury and, therefore, was not entitled to any further compensation, [Ceres Gulf] cannot receive reimbursement.

The LHWCA provides for review of the BRB ruling in the courts of appeals. Ceres Gulf did not utilize this next step in the statutory scheme. Instead, within a month of the BRB's ruling, it brought this separate action for reimbursement in district court, asserting that the remedy sought was "essentially one to enforce the provisions of an administrative order" and that jurisdiction existed under the general federal question statute, 28 U.S.C. § 1331, and "the equitable powers of the Court".

Cooper did not answer the complaint. Accordingly, the district court entered a default and "asked [Ceres Gulf] to answer the question of recoverability." Ceres Gulf v. Cooper, 756 F.Supp. 303, 304 (S.D.Tex.1990). In its "Memorandum On Recovery of Excess Benefits", and based upon its analysis of the statutory framework the district court held that it had jurisdiction and that Ceres Gulf was entitled to recover. In so holding, it cited in support "a case involv[ing] similar facts and many of the same issues", Stevedoring Services of America, Inc. v. Eggert, 23 Ben.Rev.Bd.Serv. 25 (CRT) (W.D.Wash. Oct. 24, 1989). 756 F.Supp. at 306. (As discussed infra, that decision has been recently reversed by the Ninth Circuit. 953 F.2d 552 (9th Cir.1992)).

The district court's opinion and final judgment were signed (but the latter not entered) on December 11. Pursuant to earlier communication with the district court, the Director moved to intervene of right on December 12, one day before entry of the judgment; to set aside the default judgment; and to dismiss. Subsequent to entry of the judgment on December 13, the district court denied the motions.

II.

The Director timely appealed both the default judgment and the order denying its motions. 5 In addition to raising the intervention issue, the Director asserts that the district court lacked subject matter jurisdiction. 6 We opt to first address intervention. 7

A.

Intervention of right, unless conferred unconditionally by a federal statute, Fed.R.Civ.P. 24(a)(1), is addressed in Rule 24(a)(2). Rule 24(a) provides in part:

Upon timely application anyone shall be permitted to intervene in an action ... (2) when the applicant claims an interest relating to the property or transaction which is the subject of the action and the applicant is so situated that the disposition of the action may as a practical matter impair or impede the applicant's ability to protect that interest, unless the applicant's interest is adequately represented by existing parties.

See also New Orleans Public Serv., Inc. v. United Gas Pipe Line Co., 732 F.2d 452, 463-64 (5th Cir.) (en banc), cert. denied, 469 U.S. 1019, 105 S.Ct. 434, 83 L.Ed.2d 360 (1984). The district court denied intervention without listing reasons. Intervention of right rulings are reviewed de novo. 8 In so doing, we are cognizant that " 'the inquiry under [Rule 24] (a)(2) is a flexible one, which focuses on the particular facts and circumstances surrounding each application' "; that " 'intervention of right must be measured by a practical rather than technical yardstick.' " United States v. Texas E. Transmission Corp., 923 F.2d 410, 413 (5th Cir.1991) (citation omitted).

Timeliness is the first factor. Default was entered under Fed.R.Civ.P. 55(a) in mid-October 1990. The Director was not notified by Ceres Gulf of the pendency of this action; instead, he learned of it on November 28, 1990, when he saw it referenced in a reply brief in Eggert. 9 He contacted Ceres Gulf's counsel the next day to advise that he intended to intervene; by letter to the district court and counsel, filed the following day (November 30), he confirmed that intent, requested a stay, and enclosed a motion for leave to appear; and he received the pleadings and other court papers on December 3. By order signed on December 6 and entered on December 10, counsel for the Director was granted leave to appear; and on December 12, the motion to intervene was filed. The district court's opinion and the judgment had been signed, however, on December 11; the judgment was entered on December 13. Ceres Gulf concedes that the Director was not dilatory in seeking to intervene. Instead, it contests timeliness because the motion was filed after the judgment was signed, asserting that the efforts to set it aside are prejudicial to Ceres Gulf, because of the additional expense and delay incurred in seeking to satisfy its judgment. The prejudice to be considered in ruling on intervention of right, however, is that created by the intervenor's delay in seeking to intervene after it has learned of its interest in the action, not prejudice to existing parties if intervention is allowed. Stallworth v. Monsanto Co., 558 F.2d 257, 265 (5th Cir.1977). We have allowed post-judgment intervention in other cases. E.g., Thurman v. Federal Deposit Ins. Corp., 889 F.2d 1441, 1446 (5th Cir.1989); Baker v. Wade, 769 F.2d 289, 292 (5th Cir.1985) (en banc), cert. denied, 478 U.S. 1022, 106 S.Ct. 3337, 92 L.Ed.2d 742 (1986). See also Stallworth, 558 F.2d at 266 (whether intervention motion filed before or after entry of final judgment is "of limited significance" as a measure of timeliness).

In Stallworth, this court established four timeliness factors, 558 F.2d at 264-66; their application supports finding the Director's motion timely. First, he knew of his interest in the case only a short time before he moved to intervene. Second, because he moved just after learning this action was pending, there was no prejudice to existing parties from delay in seeking to intervene. Third, the prejudice to the Director if he is not allowed to intervene to assert his jurisdictional arguments is significant. And fourth, the existence of a substantial question about the district court's jurisdiction--a matter the Director is uniquely qualified to address--is a special factor that supports finding timeliness.

Pursuant to Rule 24(a)(2), we next determine whether the Director "claims an interest relating to the property or transaction which is the subject of the action and ... is so situated that the disposition of the action may as a practical matter impair or impede [his] ability to protect that interest". Ceres Gulf contends that this action is outside the administrative process; that it "is not challenging the Director's jurisdiction or authority to administer the LHWCA"; that the "property" in issue is the compensation payments Cooper received; and that the Director has no "interest" in claimants being allowed to retain such "property" when obtained improperly.

We need not define Rule 24(a)(2) "property or transaction" so narrowly. See New Orleans Public Serv., 732 F.2d...

To continue reading

Request your trial
99 cases
  • Stevedoring Services of America, Inc. v. Eggert, 62695-2
    • United States
    • United States State Supreme Court of Washington
    • April 18, 1996
    ...under LHWCA, relying primarily on the reasoning of two federal Court of Appeals cases, Eggert I, 953 F.2d 552, and Ceres Gulf v. Cooper, 957 F.2d 1199 (5th Cir.1992). In Eggert I, the Ninth Circuit overturned the district court's grant of summary judgment in favor of SSA because it found ne......
  • Edwards v. City of Houston
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • November 10, 1994
    ...Federal Rule of Civil Procedure 24(b). Denial of intervention of right is a question of law which we review de novo. Ceres Gulf v. Cooper, 957 F.2d 1199, 1202 (5th Cir.1992). Denial of permissive intervention is reviewed for clear abuse of discretion. Korioth v. Briscoe, 523 F.2d 1271, 1278......
  • Edwards v. City of Houston, AFL-CI
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • April 1, 1996
    ...intervention The denial of a motion to intervene of right is an appealable final order under 28 U.S.C. § 1291. Ceres Gulf v. Cooper, 957 F.2d 1199, 1202 n. 5 (5th Cir.1992) (and cases cited therein); Piambino v. Bailey, 610 F.2d 1306, 1320 (5th Cir.), cert. denied, 449 U.S. 1011, 101 S.Ct. ......
  • Voight v. R.L. Eldridge Const. Inc.
    • United States
    • United States District Courts. 5th Circuit. United States District Court of Eastern District Texas
    • February 8, 2006
    ...scheme to allow agency expertise to adjudicate and review all claims by land-based maritime workers. See Ceres Gulf v. Cooper, 957 F.2d 1199, 1208 (5th Cir. 1992) (citing Whitney Nat'l Bank in Jefferson Parish v. Bank of New Orleans & Trust Co., 379 U.S. 411, 420, 85 S.Ct. 551, 13 L.Ed.2d 3......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT