Sea-Land Service, Inc. v. Workers' Comp. Appeals Bd.

Decision Date17 July 1995
Docket NumberSEA-LAND,No. A064917,A064917
Citation36 Cal.App.4th 1041,42 Cal.Rptr.2d 865
PartiesPreviously published at 36 Cal.App.4th 1041, 41 Cal.App.4th 486, 46 Cal.App.4th 94 36 Cal.App.4th 1041, 41 Cal.App.4th 486, 46 Cal.App.4th 94, 95 Cal. Daily Op. Serv. 5558, 95 Daily Journal D.A.R. 9410 SERVICE, INC. et al., Petitioners, v. WORKERS COMPENSATION APPEALS BOARD of the State of California and Chris A. Lopez, Respondents.
CourtCalifornia Court of Appeals Court of Appeals

Frank B. Hugg, Jeanne M. Bates, San Francisco, for petitioners.

Boxer, Elkind & Gerson, Michael G. Gerson, Oakland, for respondents.

SMITH, Associate Justice.

We hold that an employer who first pays benefits to an industrially injured worker under the federal Longshore and Harbor Workers' Compensation Act (33 U.S.C.A. § 901 et seq.) (LHWCA) and then pays benefits under the California workers' compensation system is entitled to category by category credit against the state award but not to dollar for dollar credit.


Chris Lopez (applicant), born December 5, 1962, worked for Sea-Land Service, Inc. (Sea-Land or employer) as a maritime warehouse worker (container loader). He suffered an industrial injury to his shoulder while loading boxes on July 15, 1985. The parties stipulated that the injury was the subject of concurrent jurisdiction with the California workers' compensation act and the LHWCA.

Employer, permissibly self-insured, provided all medical care and made temporary disability indemnity (TD) payments under the LHWCA. The TD payments under LHWCA totaled $25,457.14, which was $9,617.40 more than the TD payments of $15,840 which applicant would have received under the California system. Applicant also received, before the award was reversed on appeal, an unscheduled wage loss permanent disability payment under LHWCA of $7,040.88.

In the proceedings before the Workers' Compensation Appeals Board (Board) applicant conceded that employer was entitled to category by category credit, that is to credit before the Board for all payments made under the LHWCA for benefits of the same class or species. In other words because TD payments under LHWCA were higher than the state would have paid, applicant conceded he was not entitled to any additional TD under state law. Also, applicant agreed that employer was entitled to a credit against his state permanent disability indemnity (PD) for payments of $7,040.88 paid (before reversal) under the LHWCA. The issue before the Board, therefore, was whether employer was entitled to dollar for dollar credit so that it could receive credit against the state PD award for the TD payments under LHWCA in excess of what California TD payments would have been.

Workers' Compensation Judge Joel Gomberg (WCJ) denied employer's petition for dollar for dollar credit, holding that because TD and PD serve different purposes, denial of dollar for dollar credit to employer did not give applicant an impermissible double recovery or otherwise unjustly reward him. The Board denied reconsideration. We denied employer's petition for writ of review, but the Supreme Court granted the petition, transferred it to us, and ordered that we issue a writ of review. Upon further consideration we again conclude that the Board properly granted category by category credit and denied dollar for dollar credit.

I. The Prohibition Against Double Recovery

Relying on Sun Ship, Inc. v. Pennsylvania (1980) 447 U.S. 715, 100 S.Ct. 2432, 65 L.Ed.2d 458 (Sun Ship ), Sea-Land argues that refusal to give it dollar for dollar credit violates a prohibition against double recovery of workers' compensation benefits. We do not agree. The history of concurrent workers' compensation jurisdiction which underlies this assertion has been set out elsewhere and need not be repeated here in detail. (E.g., Larson, The Conflict of Laws Problem Between the Longshoremen's Act and State Workmen's Compensation Acts (1972) 45 So.Cal.L.Rev. 699 [hereafter Larson]; Larson, The Conflicts Problem Between the Longshoremen's Act and State Workmen's Compensation Acts Under the 1972 Amendments (1977) 14 Houston L.Rev. 287 [hereafter Larson 2], [referring to the history as a "convoluted and often tedious story"]; Note, Bouford v. Bath Iron Works: Defining Double Recovery Under State and Federal Compensation Laws for Maritime Workers (1987) 39 Me.L.Rev. 465.) A brief summary suffices for our purposes.

The Supreme Court held in 1917 that in order to preserve the uniformity of maritime law, a state workers' compensation act could not constitutionally be applied to anyone engaged in any kind of maritime work. (Southern Pacific Co. v. Jensen (1917) 244 U.S. 205, 37 S.Ct. 524, 61 L.Ed. 1086; Larson, supra, at p. 700.) Five years later the court eased the Jensen rule and permitted recovery of state workers' compensation if the work was local in character (e.g. construction work on an uncompleted vessel). (Grant Smith-Porter Ship Co. v. Rohde (1922) 257 U.S. 469, 42 S.Ct. 157, 66 L.Ed. 321; Larson, supra, at pp. 700-701.) In 1927, Congress enacted the LHWCA, bringing compensation coverage to workers injured on navigable waters who were not covered by state systems. (33 U.S.C.A. § 903; Larson, supra, at pp. 702-703.)

Under the "twilight zone" rule established by the court in 1942, when a worker came within an uncertain area between federal and state coverage, the tribunal before which the worker first appeared was presumed to have jurisdiction over the case. (Davis v. Department of Labor (1942) 317 U.S. 249, 63 S.Ct. 225, 87 L.Ed. 246; Larson, pp. 703-705.) An ensuing series of decisions established a broad area of concurrent state and federal compensation jurisdiction, thereby creating a theoretical risk of double recovery. (Calbeck v. Travelers Insurance Co. (1962) 370 U.S. 114, 82 S.Ct. 1196, 8 L.Ed.2d 368 (Calbeck ); Larson, supra, at pp. 705-709.)

The principal holding in Calbeck was that federal coverage under LHWCA does not depend on whether a state compensation statute covers the same case. (370 U.S. at pp. 115-131, 82 S.Ct. at 1197-1205.) The court also addressed briefly an employer's contention that, an employee who first accepted benefits under the state system and then filed a claim under LHWCA had elected his remedy and was barred from LHWCA recovery. The Supreme Court disagreed, observing that the federal compensation order before it provided that "the full amount of all payments made by the employer was credited against the award, and no impermissible double recovery is possible." (Id. at p. 131, 82 S.Ct. at 1206; italics added.) Accordingly the court held that "acceptance of the payments does not constitute an election of the remedy under state law precluding recovery under the [LHWCA]." (Ibid.) The discussion concluded: "Nothing in the statute requires a contrary result. And we agree that the circumstances do not support a finding of a binding election to look solely The Calbeck court expressly stated the issue before it to be whether there was an election of remedies. The question before the court was not whether double recovery was permissible, and therefore its reference to "impermissible double recovery" is dictum. Also, because Calbeck dealt with a state application preceding an LHWCA application, even if the statement about "impermissible double recovery" could be considered a holding, it would not be applicable to the case before us in which the first application is made in the federal system, followed by a state application.

to the state law for recovery. [Citations.]" (Ibid.)

By 1971, 11 maritime states had enacted workers' compensation statutes granting benefits higher than those under the LHWCA. Workers therefore consistently sought first to bring their cases in the state rather than the federal forum. In 1972, Congress more than doubled the LHWCA benefits and amended the LHWCA to extend federal coverage to qualified workers beyond the water's edge. (33 U.S.C.A. §§ 902(2)-(3), 903(a); Johnson v. Texas Employers Ins., Ass'n (1977) 558 S.W.2d 47.) The trend in application preference then reversed and workers (except those in Alaska, which still had higher rates) generally sought federal compensation first. (Larson 2, supra, at p. 290; see Johnson v. Texas Employers Ins., Ass'n, supra, 558 S.W.2d at p. 51.)

In Sun Ship, supra, 447 U.S. 715, 100 S.Ct. 2432, the court stated the issue before it as "[W]hether a State may apply its workers' compensation scheme to land-based injuries that fall within the coverage of the [LHWCA], as amended in 1972. (33 U.S.C.A. §§ 901-950.)" The court held that a state could do so. (447 U.S. at p. 716, 100 S.Ct. at 2434.)

Pennsylvania employees of Sun Ship had filed claims for state compensation first, although LHWCA applied. The state compensation board held that LHWCA did not preempt state compensation laws, and the state courts denied review (447 U.S. at pp. 716-717, 100 S.Ct. at 2434.) The Supreme Court reviewed the evolution of the law of compensation for maritime workers, noting that the 1972 amendments supplement rather than supplant state laws. (447 U.S. at pp. 719-720, 100 S.Ct. at 2436.)

The court found that the "disparities which Congress had in view in amending the LHWCA lay primarily in the paucity of relief under state compensation laws. The thrust of the amendments therefore was to 'upgrade the benefits.' [Citation.] Concurrent jurisdiction for state and federal compensation laws is in no way inconsistent with this policy of raising awards to a federal minimum. When laborers file claims under the LHWCA, they are compensated under federal standards. And workers who commence their actions under state law will generally be able to make up the difference between state and federal benefit levels by seeking relief under the [LHWCA] if the latter applies." (447 U.S. pp. 723-724, 100 S.Ct. at 2438, italics added, fn. omitted.) Thus where concurrent jurisdiction exists the...

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  • Sea-Land Service, Inc. v. W.C.A.B.
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    • California Supreme Court
    • October 5, 1995
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