Hisle v. Louisiana Dock Co.
| Decision Date | 26 June 1986 |
| Docket Number | No. 85-5213,85-5213 |
| Citation | 798 F.2d 469 |
| Parties | Unpublished Disposition NOTICE: Fourth Circuit I.O.P. 36.6 states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Fourth Circuit. Edgar T. HISLE, Plaintiff-Appellee, v. LOUISIANA DOCK COMPANY, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Sixth Circuit |
Before KRUPANSKY and GUY, Circuit Judges, and HOLSCHUH, District Judge. *
The issue presented by this appeal from the district court's enforcement of an award made under the Longshoremen's and Harbor Workers' Compensation Act, 33 U.S.C. 1 901 et seq., is whether the Act violates an employer's due process rights by requiring employers to pay compensation awards pending appeal and by imposing a substantial penalty when payment is not timely made.
Plaintiff Edgar Hisle filed a claim for compensation pursuant to the Longshoremen's and Harbor Workers' Compensation Act ("the Act"), alleging that he had injured his back while engaged in the performance of his duties. On August 7, 1984 an Administrative Law Judge ordered defendant Louisiana Dock compan y to pay plaintiff lost wages, past and future medical expenses related to his back injury, interest, attorney's fees, and a fine. Defendant petitioned the Benefits Review Board for review of the ALJ's decision and moved for an order staying payment of the award pending review. The Board denied defendant's motion for a stay but agreed to hear the appeal, which remains pending.
When defendant did not pay the amounts awarded, plaintiff requested a supplementary compensation award. On December 17, 1984, the United, States Department of Labor Office of Workers' Compensation Programs, Sixth District (OWCP) found defendant in default for the sum of $46,519.55. Pursuant to section 14(f) of the Act, the OWCP awarded plaintiff an additional sum of $9,303,91. 1 Defendant was ordered to pay plaintiff a total of $55,823.46, plus interest.
Plaintiff filed the supplementary compensation order in the district court, seeking enforcement of the OWCP's order. On January 18, 1985 the court entered judgment on the supplementary compensation order. 2 The court vacated its judgment on February 12, 1985. however, having decided that such decision was improvident, the court later reinstated the judgment. Subsequent to filing a notice of appeal, defendant posted a supercedeas bond and the district court stayed enforcement of its judgment pending appeal to this Court. On April 19, 1985 this Court set aside the stay of execution, concluding that the district court lacked authority to issue the stay absent irreparable harm to the employer. The matter is now before the Court for disposition on the merits of the appeal from the judgment of the district court.
The Longshoremen's Act provides a comprehensive scheme governing the rights of a longshoreman who sustains a work-related injury. Pallas Shipping Agency Ltd. v. Duris, 461 U.S. 529 (1983) . When a claim for injury is made under the Act, the employer must pay compensation to the injured employee within two weeks of learning of his injury, or, if liability is contested, the dispute is resolved through administrative, channels. 33 U.S.C. I 914. If the dispute cannot be resolved informally, the claim proceeds to a formal hearing before an ALJ. 33 U.S.C. I 919. The ALJ's final compensation order may be appealed to the Benefits Review Board. 33 U.S.C. 1 921(b) (3). An adverse decision by the Board is then appealable to the United States Court of Appeals for the circuit in which the injury occurred.33 U.S.C. 1 921(c).
Defendant challenges the constitutionality of two provisions of the Act as violative of the due process clause of the Fifth Amendment. Those sections provide first, that payment of an ALJ's award cannot be stayed pending appeal unless the employer establishes that irreparable injury would result, 3 and second, that in the event payment is not timely made, a substantial penalty of twenty percent of the original compensation award may be assessed against the employer. 4 It is defendant's position that the statutory requirement that the employer pay benefits and penalties pending appeal, when the practical likelihood of recovery of those payments in the event of reversal is minimal, deprives employers of property without due process of law because it renders the appellate process meaningless.
The due process clause of the Fifth Amendment is intended to protect against arbitrary deprivations of liberty or property by the federal government. When deprivation of a liberty or property interest is threatened, what process is due depends upon. (a) the private interest affected by government action; (b) the risk of erroneous deprivation and the value of additional safeguards I and (c) the governmental interest, including the importance of the function and fiscal and administrative burdens. Mathews v. Eldridge, 424 U.S. 319, 335 (1976); Fleming v. United States Dept. of Agriculture, 713 F.2d 179, 183 (6th Cir. 1983). The primary consideration in any procedural due process case is whether the individual has been given an opportunity to be heard at a meaningful time and in a meaningful manner. Mathews, 424 U.S. at 333. Fundamental to this concept is that the administrative process be accurate and provide a fair consideration of the case. Flem, 713 F.2d at 183.
In the present case, the challenged governmental action impinges upon a property interest--the payment by employers of compensation to injured employees. To protect against erroneous deprivation, prior to the time that an employer is required to make any payment to the injured employee, if liability is contested, an impartial ALJ determines the substantive rights of the parties after conducting a formal adversarial hearing. The hearing is conducted in accordance with the Administrative Procedure Act, 5 U.S.C. I 554, which provides for presentation of evidence and cross-examination of witnesses. In the event that a party is not satisfied with the outcome of the hearing, the merits of the decision are appealable to the Benefits Review Board in the first instance and ultimately to the Court of Appeals. When an application for a supplementary compensation award due to default is made to the Deputy Commissioner, the Commissioner must investigate the application, provide ten days notice to interested parties, and provide a formal hearing if so requested. 33 U.S.C. 1 918(a), # 919.
The Longshoremen's Act was enacted in 1927 to ensure that every person engaged in maritime employment received workers' compensation coverage. Home Indemnity Co. v. Stillwell, 597 F.2d 87, 88 (6th Cir.), cert. denied, 444 U.S. 869 (1979). The Act includes a compromise common in workers' compensation legislation--it guarantees injured employees the right to receive immediate, fixed benefits regardless of fault and without lengthy litigation, but also precludes them from later filing other types of legal actions against their employers. See Lockheed Aircraft Corp. v. United States, 460 U.S. 190, 194 (1983). More importantly, the Act strikes a balance between the competing interests of disabled laborers and their employers.
The LHWCA, like other workmen's compensation legislation, is indeed remedial in that it was intended to provide a certain recovery for employees who are injured on the job. It imposes liability without fault and precludes the assertion of various common-law defenses that had frequently resulted in the denial of any recovery for disabled laborers. While providing employees with the benefit of a more certain recovery for work-related harms, statutes of this kind do not purport to provide complete compensation for the wage earner's economic loss. On the contrary, they provide employers with definite and lower limits on potential liability than would have been applicable in common-law tort actions for damages....The use of a schedule of fixed benefits as an exclusive remedy in certain cases is consistent with the employees' interest in receiving a prompt and certain recovery for their industrial injuries as well as with the employers' interest in having their contingent liabilities identified as precisely and as early as possible.
Potomac Electric Power Co. v. Director OWCP, 449 U.S. 268, 281-82 (1980) (footnote omitted). Thus, the Act not only provides for the financial needs of injured employees and their families, it also serves to strengthen the employers' incentive to promote on-the-job safety. H.R. Rep. No. 92-1441, 92d Cong., 2d Sess., reprinted in 1972 U.S. Code Cong. & Ad. News 4698, 4699.
The legislative history of the challenged stay provisions could not be clearer. The Act is expressly designed to provide for prompt payment of compensation orders notwithstanding subsequent appeals by the employer. Providence Washington Ins. Co. v. Director OWCP, 765 F.2d 1381, 1384 (9th Ciro 1985). The House report on the amendments to the Act which established the Benefits Review Board is unequivocal:
The Committee does not intend that the appellate process result in delay of payment of compensation. Initial awards are not to be stayed pending review proceedings except by specific order of the board or the court based on a finding that irreparable injury would otherwise result to the employer.
H.R. Rep. 92-1441, supra at 4710. This language clearly represents a legislative determination that "except in extreme circumstances of irreparable injury to the payer it is preferable that an injured worker receive regular compensation, even (compensation which is] later determined to have been wrongly exacted and not recoverable by the payer, than that (an injured worker) be left without assistance until all amounts are finally determined." Henry v. Gentry Plumbing & Heating Co., 704 F.2d 863, 865 (5th Cir. 1983). That section of the...
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