Compensation Under the Longshore and Harbor Workers' Compensation Act, Matter of

• Decision Date: 06 December 1989
• Docket Number: No. 89-3021,89-3021
• Citation: 889 F.2d 626
• Parties: In the Matter of the Claim for COMPENSATION UNDER THE LONGSHORE AND HARBOR WORKERS' COMPENSATION ACT. Neil ABBOTT, Jr., Plaintiff-Appellee, v. LOUISIANA INSURANCE GUARANTY ASSOCIATION, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 626

889 F.2d 626

In the Matter of the Claim for COMPENSATION UNDER THE LONGSHORE AND HARBOR WORKERS' COMPENSATION ACT Neil ABBOTT, Jr., Plaintiff-Appellee, v. LOUISIANA INSURANCE GUARANTY ASSOCIATION, Defendant-Appellant.

No. 89-3021.

United States Court of Appeals Fifth Circuit.

Dec. 6, 1989.

Rehearing Denied Jan. 3, 1990.

Collins C. Rossi, B. Ralph Bailey, Bailey & Rossi, Metairie, La., for defendant-appellant.

David B. Allen, Houma, La., for plaintiff-appellee.

Appeal from the United States District Court for the Eastern District of Louisiana.

Before CLARK, Chief Judge, GEE and SMITH, Circuit Judges.

CLARK, Chief Judge:

I.

The Louisiana Insurance Guaranty Association (LIGA) appeals from a district court judgment enforcing a Supplemental Order of Default against LIGA for the payment of worker's compensation under the Longshore and Harbor Workers' Compensation Act ("LHWCA" or "Act"). 33 U.S.C. Secs. 901-950. LIGA contends that the district court should have declined to enforce the Supplemental Order of Default (Supplemental Order) because LIGA was denied due process in the issuance of the original Compensation Order on which the Supplemental Order is based. Because LIGA's due process claims will properly be considered by the Benefits Review Board of the United States Department of Labor (BRB), we affirm.

II.

Niel Abbott, Jr. (Abbott) was injured during his employment at Universal Iron Works, Inc. (Universal). Abbott received worker's compensation payments from Universal's insurer, Western Preferred Casualty Company (Western) until that company became insolvent. Compensation then was paid by Universal itself, until it too became insolvent. The Western policy contained a "cut-through" endorsement requiring Early American Insurance Company (Early American) to pay Western's unpaid claims. However, Early American also became insolvent. Abbott received no further payments.

Abbott filed an administrative claim under the LHWCA against Universal and others for the unpaid benefits. Abbott later added LIGA as a party to the proceedings. LIGA was created by Louisiana law to pay the claims of insolvent Louisiana insurers. Although Western is not admitted as an insurer in Louisiana and therefore does not come under LIGA's coverage, Early American is a Louisiana insurer. After conducting a hearing on Abbott's eligibility for benefits, the Administrative Law Judge (ALJ) entered a Compensation Order requiring LIGA to pay the benefits based on the Early American "cut-through" endorsement.

LIGA refused to pay and appealed to the BRB. LIGA insisted that it had been deprived of due process because it received inadequate notice of the administrative hearing and was not allowed to present its arguments for non-liability. LIGA also petitioned the BRB for a stay of the Compensation Order pending final resolution of its appeal. The BRB denied the stay because LIGA was unable to show that it would suffer irreparable harm. See 33 U.S.C. Sec. 921(b)(3).

Abbott subsequently applied for and received from the Deputy Commissioner of the United States Department of Labor (Deputy Commissioner) a Supplemental Order of Default against LIGA, based on the unpaid Compensation Order. Abbott then petitioned the district court under section 21(d) of the LHWCA to enforce LIGA's payment of the benefits. 33 U.S.C. Sec. 921(d).

The district court recognized that enforcement was inappropriate under section 21(d), because the Compensation Order was still on appeal to the BRB, and treated Abbott's petition as a petition for enforcement of the Supplemental Order under LHWCA section 18(a). 33 U.S.C. Sec. 918(a). The court concluded that the Supplemental Order had been issued "in accordance with law" as required by section 18(a) and entered judgment against LIGA. The court reasoned that its function in section 18(a) enforcement proceedings was limited to determining whether the Supplemental Order itself had been entered "in accordance with law" and that LIGA's challenges to the underlying Compensation Order were properly being considered by the BRB.

LIGA now appeals from the district court's order, contending that LHWCA section 18(a) and due process required the district court to review the procedural correctness of the underlying Compensation Order before enforcing the Supplemental Order. LIGA asserts that the district court should have declined to enforce the Supplemental Order because LIGA was denied due process in the issuance of the underlying Compensation Order. Because LIGA's challenge to the Compensation Order is properly before the BRB, we affirm.

III.

LIGA's arguments in this appeal are based partly on its asserted construction of LHWCA section 18(a) and partly on due process grounds. We will first consider LIGA's statutory contentions and then turn to LIGA's due process claims.

A. LHWCA Section 18(a).

LIGA's first contention is that the district court's scope of review in LHWCA section 18(a) enforcement proceedings includes the procedural sufficiency of the original Compensation Order. LIGA asserts that the district court could not determine whether the Supplemental Order was "in accordance with law" as required by section 18(a), 33 U.S.C. Sec. 918(a), unless the district court also reviewed the underlying Compensation Order for procedural errors. LIGA maintains that the Supplemental Order could not be "in accordance with law" if the underlying Compensation Order was issued in violation of LIGA's right to due process. We disagree.

Before the Deputy Commissioner can enter a supplemental order of default against an employer or insurance carrier under section 18(a), he must follow certain procedures. The Deputy Commissioner must investigate the claimant's application, provide notice of the claim to interested parties, and give the parties an opportunity for a hearing in the manner specified in section 19 of the Act. 33 U.S.C. Sec. 918(a); see id. Sec. 919. If there is no dispute about whether benefits are due under a compensation order or whether there has been a default in payments, the Deputy Commissioner must calculate the amount of the default and enter a supplemental order. Id. Sec. 918(a). The Deputy Commissioner is required to file the supplemental order in the same manner as a compensation order and must notify the responsible parties. Id. Secs. 918(a), 919(e). At the claimant's request, the district court can then enforce the supplemental order of default "if such supplementary order is in accordance with law." Id. Sec. 918(a). We conclude that a supplemental order of default is "in accordance with law" as required by section 18(a) if the Deputy Commissioner has correctly followed the procedures outlined above.

Section 18(a) was intended to provide a "quick and inexpensive mechanism for the prompt enforcement of unpaid compensation awards, a theme central to the spirit, intent, and purposes of the LHWCA." Tidelands Marine Serv. v. Patterson, 719 F.2d 126, 129 (5th Cir.1983). For this reason, we have held that supplemental orders of default are final when entered and are not appealable to the BRB. Id. Allowing review of underlying compensation orders in proceedings to enforce supplemental orders of default could cause additional delay and expense and frustrate Congress' intent to get compensation into the injured workers' hands as quickly as possible. See Henry v. Gentry Plumbing & Heating Co., 704 F.2d 863, 865 (5th Cir.1983).

The legislative history of the statutes creating the BRB also supports this construction of section 18(a). Prior to the 1972 amendments to the Act, compensation orders were directly reviewable by the district court. See Alford v. American Bridge Div., U.S. Steel Corp., 642 F.2d 807, 809 (5th Cir.), modified, 655 F.2d 86, 668 F.2d 791 (5th Cir.1981), cert. denied, 455 U.S. 927, 102 S.Ct. 1292, 71 L.Ed.2d 472 (1982). However, in 1972 Congress created the BRB to hear all direct appeals of compensation orders. This replaced the district court's exercise of that function. See H.R.Rep. No. 1441, 92nd Cong., 2d Sess., reprinted in 1972 U.S.Code Cong. & Admin.News 4698, 4709. It would therefore be contrary to Congress' intent for the district courts to review the lawfulness of compensation orders in section 18(a) enforcement proceedings.

Congress has provided a comprehensive system of review for compensation orders. An aggrieved party may appeal a compensation order to the BRB and may petition the BRB for a stay of payments. 33 U.S.C. Sec. 921(b)(3). The BRB also has authority to remand a case at any time during its review "for further appropriate action," such as additional findings. Id. Sec. 921(b)(4); see, e.g., Aerojet-General Shipyards, Inc. v. Smith, 647 F.2d 518, 521 (5th Cir.1981). The BRB's final orders are then appealable to the United States Courts of Appeals. Id. Sec. 921(c). The BRB and Courts of Appeals may review "any substantial question of law or fact," including procedural errors such as those asserted by LIGA. Id. Sec. 921(b)(3); see, e.g., Aerojet-General Shipyards, 647 F.2d at 525 (alleged denial of due process because of inadequate notice and opportunity to defend). Collateral review of compensation orders in section 18(a) enforcement proceedings is therefore unnecessary and would be contrary to the "spirit, intent, and purposes of the LHWCA." Tidelands, 719 F.2d at 129. We conclude that the district court's scope of review in section 18(a) enforcement proceedings is limited to the lawfulness of the supplemental orders of default and does not include the procedural or substantive correctness of the underlying compensation orders.

In this case, once the BRB denied LIGA's motion for a stay of the ALJ's Compensation Order, the Deputy Commissioner had authority to issue the Supplemental Order of Default. See 33 U.S.C. Secs. 918(a), 921(b)(3). LIGA did not argue in the district court that the Deputy Commissioner failed to provide notice of Abbott's application for a...