Grimm v. Vortex Marine Constr.

• Decision Date: 16 April 2019
• Docket Number: No. 18-15104,18-15104
• Citation: 921 F.3d 845
• Parties: Terry GRIMM, Plaintiff-Appellant, v. VORTEX MARINE CONSTRUCTION; Signal Mutual Indemnity Association ; Acclaim Risk Management, Inc. ; Edward Paul Martin; Dale Ann Martin; Cassandra Lane, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

921 F.3d 845

Terry GRIMM, Plaintiff-Appellant,

v.VORTEX MARINE CONSTRUCTION; Signal Mutual Indemnity Association ; Acclaim Risk Management, Inc. ; Edward Paul Martin; Dale Ann Martin; Cassandra Lane, Defendant-Appellee.

No. 18-15104

United States Court of Appeals, Ninth Circuit.

Argued and Submitted March 12, 2019 San Francisco, California

Filed April 16, 2019

HURWITZ, Circuit Judge:

The central issue in this case is whether a Department of Labor order requiring payment of a worker's future medical expenses was sufficiently "final" to support a judicial enforcement action under the Longshore and Harbor Workers' Compensation Act ("Longshore Act") and a double damages claim by the worker against the employer under the Medicare Secondary Payer Act ("MSP"). The district court found the order was not final and dismissed the worker's complaint. We have jurisdiction over this appeal under 28 U.S.C. § 1291 and affirm.

I

A

Terry Grimm worked 32 years as a pile driver for several employers, including Vortex Marine Construction. After leaving work, Grimm filed a claim against Vortex under the Longshore Act, 33 U.S.C. § 901, et seq ., seeking workers' compensation and medical benefits. A Department of Labor administrative law judge ("ALJ") found that Grimm had sustained work-related injuries while employed by Vortex. The ALJ therefore ordered Vortex to "pay or reimburse the Claimant for all medical expenses arising from the Claimant's work-related injuries," and to "provide treatment going forward, including the diagnostic procedures and therapies his treating physicians judge appropriate." The Benefits Review Board ("BRB") affirmed the ALJ's order. Vortex petitioned this Court for review of the BRB decision, but withdrew the petition.

B

In this action, Grimm alleges that Vortex refused to pay for required medical treatment and he was therefore forced to rely on Medicare to pay his expenses. The operative amended complaint sought to enforce the ALJ's order and also asserted a claim under the MSP, seeking double damages for the amounts Medicare paid for the services. See 42 U.S.C. § 1395y(b).¹

The district court granted Vortex's motion to dismiss, finding it lacked jurisdiction to enforce the ALJ's order because it was not final and that the MSP claim was premature. This timely appeal followed.

II

A

"The Longshore Act is a worker's compensation plan under which employers subject to the Act are required, within statutory limits, to compensate their employees for job-related injuries or deaths." Thompson v. Potashnick Constr. Co. , 812 F.2d 574, 575 (9th Cir. 1987). Compensation claims are "filed with the deputy commissioner in the compensation district in which such injury or death occurred," 33 U.S.C. § 913, and disputes requiring a hearing referred to an ALJ, id . § 919(c)–(d). The ALJ can issue a "compensation order," either "rejecting the claim or making the award." Id . § 919(e); 20 C.F.R. § 702.348. Appeals from compensation orders go to the BRB. 33 U.S.C. § 921(b)(3). "Final orders of the BRB are reviewable by the United States Courts of Appeals." Thompson , 812 F.2d at 576 (citing 33 U.S.C. § 921(c) ).

If an employer "fails to comply with a compensation order ... that has become final," the beneficiary may bring an enforcement action in the district court. 33 U.S.C. § 921(d). "Unlike the BRB and court of appeals, the district court has no jurisdiction over the merits of the litigation." Thompson , 812 F.2d at 576. A district court accordingly "cannot affirm, modify, suspend or set aside the order." Id. Rather, its "jurisdiction extends only to the enforcement of compensation orders." Id.

The district court dismissed Grimm's enforcement action because it found the ALJ's order not final under § 921(d). We previously have not addressed when an order becomes final under that statute. However, several of our sister Circuits have done so, and we join them in holding that to be "final" for purposes of § 921(d), an order must "at a minimum specify the amount of compensation due or provide a means of calculating the correct amount without resort to extra-record facts which are potentially subject to genuine dispute between the parties." Severin v. Exxon Corp. , 910 F.2d 286, 289 (5th Cir. 1990) ; see also Stetzer v. Logistec of Conn., Inc. , 547 F.3d 459, 463–64 (2d Cir. 2008) (adopting Severin 's analysis).²

The Longshore Act does not specify when a "compensation order" becomes "final" under § 921(d). But the Act defines "compensation" as "the money allowance payable to an employee," 33 U.S.C. § 902(12), suggesting that a final order must either specify the "money allowance" or provide a ready method for determining it. And, the governing regulations define "medical care" as that which is "recognized as appropriate by the medical profession for the care and treatment of the injury." 20 C.F.R. § 702.401(a). The district court's enforcement power does not extend to determining whether specific medical care is appropriate, or even whether the fees charged by a treating physician are reasonable. See 20 C.F.R. § 702.413 (requiring the agency to determine the reasonableness of disputed fees). It thus stands to reason, as Severin holds, that a district court's limited jurisdiction over a compensation order extends only to orders whose monetary sweep cannot be disputed.

Under the Severin rubric, the district court correctly found that it lacked jurisdiction over Grimm's § 921(d) enforcement claim. The ALJ's order stated "Vortex ... must pay or reimburse the Claimant for all medical expenses arising from the Claimant's work related injuries." It did not list an amount to be paid or a means of calculating what Vortex owed. See Severin , 910 F.2d at 289. Nor did the order specify any specific medical service for which Vortex would be liable. "[A] decision is not final where the extent of damage remains undetermined." BethEnergy Mines, Inc. v. Dir., Office of Workers' Comp. Programs , 32 F.3d 843, 849 (3d Cir. 1994) (internal quotations omitted).

The relief that Grimm seeks, however justified, would plainly require the district court to insert itself into the "merits of the litigation." Thompson , 812 F.2d at 576. The court would be called on to resolve disputes about whether the services Grimm received were for work-related injuries, and perhaps over the charges incurred for those services. Resolution of that dispute plainly turns on "extra-record facts which are potentially subject to genuine dispute between the parties." Severin , 910 F.2d at 289. Those disputes must be addressed in the first instance to the agency.³

Moreover, the amended complaint improperly requested modification of the ALJ's order. For example, it sought issuance of three LS-1 forms authorizing payment for medical services, as well as an order requiring Vortex to pay timely for future medical care and hold Grimm harmless against claims brought by others. Issuance of these forms would modify, rather than enforce, the ALJ's order and a district court lacks jurisdiction under § 921(d) to "modify" orders. See Thompson , 812 F.2d at 576.

Grimm correctly notes that the central purpose of the Longshore Act is "to place the compensation award in the hands of the entitled claimant as soon as possible." Sea-Land Serv., Inc. v. Barry , 41 F.3d 903, 907 (3d Cir. 1994). That purpose might be furthered if Congress had seen fit to empower district courts to resolve disputes over whether a specific service should be paid for by the employer. But Congress did not do so, instead in § 921(d) limiting the district court to enforcement of final agency orders. The district court therefore did not err in dismissing the enforcement claim for lack of subject matter jurisdiction.

B

The gravamen of Grimm's MSP claim is that Medicare was forced to pay his medical expenses after Vortex wrongfully refused to do so. The district court correctly rejected that claim as premature.

"The MSP makes Medicare insurance secondary to any ‘primary plan’ obligated to pay a Medicare recipient's medical expenses...." Parra v. PacifiCare of Ariz., Inc. , 715 F.3d 1146, 1152 (9th Cir. 2013) (citing 42 U.S.C. § 1395y(b)(2)(A) ). The term "primary plan" includes "workmen's compensation law[s] or plan[s]." 42 U.S.C. § 1395y(b)(2)(A) ; see § 1395y(b)(8)(F) ; 42 C.F.R. § 411.40(a) (interpreting "primary plan" to include the Longshore Act). The MSP authorizes Medicare to make conditional payment for services if a primary plan "has not made or cannot reasonably be expected to make payment ... promptly." Id. § 1395y(b)(2)(B)(i). Medicare can then seek reimbursement "if it is demonstrated that such primary plan has or had a responsibility to make payment." Id. § 1395y(b)(2)(B)(ii).

The MSP's private right of action allows a beneficiary to recover double the amount of Medicare payments made when a plan "fails to provide for primary payment (or appropriate reimbursement)." Id. § 1395y(b)(3)(A) ; see Parra , 715 F.3d at 1152. A primary payment includes a "payment [that] has been made, or can reasonably be expected to be made" by a primary plan. 42 U.S.C. § 1395y(b)(2)(A).

But, "the defined term ‘primary plan’ presupposes an existing obligation (whether by statute or contract) to pay for covered items or services." Humana Med. Plan, Inc. v. W. Heritage Ins. Co. , 832 F.3d 1229, 1237 (11th Cir. 2016). Grimm's MSP claim would require the district court to determine in the first instance whether Vortex was obliged to pay for the items and services covered by a Medicare conditional payment. Until an ALJ, subject to review by the BRB and court of appeals, has found an employer liable for specific medical expenses, a plaintiff cannot demonstrate the employer's responsibility as required by the MSP. Absent a final compensation order requiring that specific services either be paid for or reimbursed, Grimm has failed to state a claim for recovery under the MSP.

III

For the reasons above, we AFFIRM the judgment of the district court.

WATFORD,...