Kreschollek v. Southern Stevedoring Co., 95-5253

• Decision Date: 18 March 1996
• Docket Number: No. 95-5253,95-5253
• Citation: 78 F.3d 868
• Parties: , 64 USLW 2609 Carl KRESCHOLLEK, Appellant, v. SOUTHERN STEVEDORING COMPANY; Lumbermen's Mutual Casualty Co.; Robert Reich, Secretary of Labor, and R. David Lotz, Regional Director, Region III, Office of Workers' Compensation Programs, United States Department of Labor.
• Court: U.S. Court of Appeals — Third Circuit

Page 868

78 F.3d 868

1996 A.M.C. 1677, 64 USLW 2609

Carl KRESCHOLLEK, Appellant, v. SOUTHERN STEVEDORING COMPANY; Lumbermen's Mutual Casualty

Co.; Robert Reich, Secretary of Labor, and R. David Lotz,

Regional Director, Region III, Office of Workers'

Compensation Programs, United States Department of Labor.

No. 95-5253.

United States Court of Appeals, Third Circuit.

Argued Dec. 4, 1995.

Decided March 18, 1996.

On Appeal from the United States District Court for the District of New Jersey (D.C. No. 93-cv-03903); Joseph H. Rodriguez, Judge.

David M. Linker (Argued), Freedman & Lorry, Philadelphia, PA, for Appellant Carl Kreschollek.

David R. Kunz, Post & Schell, Philadelphia, PA, for Appellees Southern Stevedoring Co. and Lumbermen's Mutual Casualty Co.

Steven J. Mandel, Allen H. Feldman, Deborah Greenfield (Argued), United States Department of Labor, Washington, DC, for Appellee Secretary of Labor and Regional Director, Offc. of Workers' Compensation Programs.

Before: SLOVITER, Chief Judge, STAPLETON and SAROKIN, Circuit Judges.

OPINION OF THE COURT

SLOVITER, Chief Judge.

Carl Kreschollek appeals from the district court's order dismissing for lack of subject matter jurisdiction his complaint interposing a facial challenge to the constitutionality of section 14 of the Longshore and Harbor Workers' Compensation Act (Longshore Act or Act). The district court so ruled after concluding that Kreschollek's claim could be raised in his pending administrative proceeding and thereafter on review in this court. Although we have previously held that the administrative review scheme provided in the Longshore Act supplants district court jurisdiction over claims for benefits, Kreschollek's claim presents a new twist on the question because his challenge to the Longshore Act is a constitutional one and he claims that the review process established by the Act is insufficient to address his injuries.

I.

Kreschollek suffered a work-related injury on or about March 20, 1990 while employed as a longshoreman by Southern Stevedoring Co. Southern did not controvert its liability for benefits, and in late June of that same year it undertook voluntary compensation for Kreschollek's disability pursuant to 33 U.S.C. § 914(b). It continued such payments until October 29, 1992. Thereafter, it filed a notice of controversion with the District Director of the Office of Workers' Compensation Programs, asserting that Kreschollek was now able to return to work. Kreschollek contested the termination of compensation and, after an informal conference produced no resolution, the District Director, upon request by Kreschollek, transferred the case with his recommendations to the Department of Labor for a formal hearing before an Administrative Law Judge (ALJ). See 33 U.S.C. § 919(c), (d) (1994); 20 C.F.R. § 702.301 (1995). An ALJ held a hearing on the case on December 15, 1993.

While the matter was pending before the ALJ, Kreschollek filed this action in the United States District Court for the District of New Jersey invoking jurisdiction under 28 U.S.C. § 1331 and alleging that the review procedure under the Act is unconstitutional because it does not require a predeprivation hearing before employers who voluntarily compensated injured employees may terminate those benefits. Kreschollek sought restoration of his benefits, a declaration from the district court that section 14 of the Act, 33 U.S.C. § 914, is unconstitutional, an injunction against termination of his benefits without a prior evidentiary hearing, and attorney's fees and costs. Named as defendants were Southern Stevedoring Co.; Robert Reich, Secretary of Labor; R. David Lotz, Regional Director, Region III, Office of Workers' Compensation Programs; and Lumberman Mutual Casualty Co. All defendants moved to dismiss.

The ALJ's final decision on Kreschollek's administrative claim for benefits and the district court's ruling on the motion to dismiss were handed down within days of each other in March 1995. The ALJ denied Kreschollek's request for additional benefits. That ruling, which Kreschollek appealed to the Benefits Review Board, is not before us at this time.

The district court, in the decision that is on appeal to us, granted the motion to dismiss for lack of subject matter jurisdiction, holding that in light of the detailed administrative and judicial review procedure provided by the Act, Kreschollek's constitutional challenge must be raised in the court of appeals after exhaustion of administrative remedies, rather than in the district court through 28 U.S.C. § 1331.

II.

A.

The sole issue on appeal is whether the Longshore and Harbor Workers' Compensation Act, 33 U.S.C. § 901 et seq., precludes district court review of Kreschollek's constitutional challenge to the Act. Although Kreschollek concedes that his claim for benefits must be adjudicated through the Act's administrative review procedure, he argues that the district court nonetheless has jurisdiction over his collateral constitutional challenge to the adjudicatory process provided under the Act.

This court previously addressed the more general question of whether the Longshore Act supplants district court jurisdiction over claims challenging the Secretary's interpretation of the Act. Although that case arose in the context of the Black Lung Benefits Act, the Black Lung Benefits Act incorporates the scheme of administrative and judicial review of benefits determinations set forth in the Longshore and Harbor Workers' Compensation Act, see 30 U.S.C. § 932(a) (1994), and decisions thereunder are of obvious applicability.

In Compensation Department of District Five, United Mine Workers of America v. Marshall, 667 F.2d 336 (3d Cir.1981), the United Mine Workers of America brought an action in federal district court to enjoin the Secretary of Labor from rereading X-rays of claimants seeking benefits pursuant to the Black Lung Benefits Act. The Union contended that the Black Lung Act required the Secretary, ALJ and Benefits Review Board (Board) to accept the x-ray reading made by the claimant's medical expert. The district court dismissed the action for lack of subject matter jurisdiction and this court affirmed, determining that "the scheme of review established by Congress for determinations of black lung disability benefits was intended to be exclusive." Id. at 340.

Several considerations led to our determination. First, we noted the general rule that if "there exists a special statutory review procedure, it is ordinarily supposed that Congress intended that procedure to be the exclusive means of obtaining judicial review in those cases to which it applies." Id. (quoting City of Rochester v. Bond, 603 F.2d 927, 931 (D.C.Cir.1979)). Moreover, we recognized the "strong presumption against the availability of simultaneous review in both the district court and the court of appeals." Id. (quoting Sun Enterprises, Ltd. v. Train, 532 F.2d 280, 287 (2d Cir.1976)).

We next considered whether "the statute's legislative history, purpose, and design" suggested that the circumstances of the particular case should overcome the presumption, id., and concluded that they did not. In reaching this conclusion, we considered the following: 1) the Benefits Review Board was created to provide uniformity in application of the Act and to prevent duplication of review; 2) the Act was amended in 1972 in part to oust the district courts from jurisdiction over benefits claims; 3) Congress's provision for review of Board determinations in the court of appeals reflected its intention to require exhaustion of administrative remedies prior to seeking judicial review; and 4) permitting the Board and district court to consider the same issue would create a danger of duplicative and conflicting litigation. We acknowledged, however, that in certain circumstances, such as if the remedies available through the statutory scheme of review are inadequate, a district court might have subject matter jurisdiction over a complaint involving the Black Lung Benefits Act. Id. at 341-44.

The issue of preclusion of district court jurisdiction for claims arising under the Black Lung Act arose again in Connors v. Tremont Mining Co., 835 F.2d 1028 (3d Cir.1987). In Connors, a union Benefit Plan and Trust sought reimbursement from coal mine operators for medical benefits it had paid to a large number of black lung claimants. The Plan argued that the issue was governed by the terms of the Plan, which was covered by the Employee Retirement Income Security Act, and therefore it invoked federal question jurisdiction. We rejected the Plan's attempt to assert jurisdiction in the district court, holding once again that in a case involving disability benefits pursuant to the Black Lung Benefits Act, federal question jurisdiction is supplanted by the procedure established by the statute. Id. at 1030-31.

The reasoning of Compensation Department and Connors is consistent with the approach taken by the Supreme Court in its recent decision in Thunder Basin Coal Co. v. Reich, --- U.S. ----, 114 S.Ct. 771, 127 L.Ed.2d 29 (1994), raising a similar issue in the context of the Federal Mine Safety and Health Amendments Act of 1977 (Mine Act). Thunder Basin, a mine operator, sued in district court challenging the Mine Safety and Health Administration's instruction that it post the names of the two representatives its employees had chosen pursuant to the Mine Act to participate in mine inspections, obtain certain health and safety information and promote health and safety enforcement. The mine operator's objection was that the designated representatives were not its employees, but were employed by the union. Although there was a statutory procedure for administrative review of a citation for violation of such an order, the mine operator challenged the Administration's interpretation of the Mine Act as permitting such designations by seeking a pre-enforcement injunction from ...