Nicklos Drilling Co. v. Cowart, Nos. 89-4944

CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)
Writing for the CourtBefore CLARK; PER CURIAM; POLITZ, Circuit Judge, with whom KING and JOHNSON
Citation927 F.2d 828
Parties, 59 USLW 2613 NICKLOS DRILLING COMPANY and Compass Insurance Company, Petitioners, v. Floyd COWART and Director, Office of Workers' Compensation Programs, U.S. Department of Labor, Respondents. PETROLEUM HELICOPTERS, INC. and American Home Assurance Company, Petitioners, v. Mary E. BARGER and Director, Office of Workers' Compensation Programs, United States Department of Labor, Respondents.
Decision Date29 March 1991
Docket Number90-4022,Nos. 89-4944

Page 828

927 F.2d 828
1991 A.M.C. 2627, 59 USLW 2613
NICKLOS DRILLING COMPANY and Compass Insurance Company, Petitioners,
v.
Floyd COWART and Director, Office of Workers' Compensation
Programs, U.S. Department of Labor, Respondents.
PETROLEUM HELICOPTERS, INC. and American Home Assurance
Company, Petitioners,
v.
Mary E. BARGER and Director, Office of Workers' Compensation
Programs, United States Department of Labor, Respondents.
Nos. 89-4944, 90-4022.
United States Court of Appeals,
Fifth Circuit.
March 29, 1991.

Page 829

H. Lee Lewis, Jr., Griggs & Harrison, Houston, Tex., for Nicklos Drilling Co. and Compass Ins. Co.

Lloyd N. Frischhertz, Seelig, Cosse', Fischhertz & Poulliard, New Orleans, La., for Floyd Cowart.

Donald Shire, Joshua T. Gillelan, II, Samuel J. Oshinsky, Sol., U.S. Dept. of Labor, Washington, D.C., for Director.

Linda Meekins, Clerk, Benefit Review Bd., U.S. Dept. of Labor, Washington, D.C., for other interested parties.

Vance E. Ellefson, C. Theodore Alpaugh, III, Metairie, La., for Petroleum Helicopters, Inc. and American Home Assur. Co.

Mary Ellen Blade, Beckenstein, Oxford, Radford & Johnson, Beaumont, Tex., for Mary E. Barger.

On Petition for Review of a Decision and Order of The Benefits Review Board, U.S. Department of Labor.

Before CLARK, Chief Judge, GEE, * POLITZ, KING, JOHNSON, GARWOOD, JOLLY, HIGGINBOTHAM, DAVIS, JONES, SMITH, DUHE, WIENER and BARKSDALE, Circuit Judges.

PER CURIAM:

Today we sit en banc to resolve a conflict in the law of our Circuit. In the cases consolidated on this appeal, two panels of our Court held that section 33 of the Longshore and Harbor Workers' Compensation Act (LHWCA), 33 U.S.C. Sec. 933 (1988), conditions eligibility for continuing LHWCA benefits on the employer's and the employer's insurance carrier's prior written approval of any settlement between an injured employee and a third person for less than his LHWCA compensation entitlement; 1 and we further held that this approval requirement applies regardless of whether the employer or the employer's insurer was paying LHWCA benefits at the time of settlement. See also Petroleum Helicopters, Inc. v. Collier, 784 F.2d 644, 647 (5th Cir.1986). In an unpublished opinion, Kahny v. Director, Office of Workers' Compensation Programs, 729 F.2d 777 (5th Cir.1984), a panel of our Court held the contrary: that section 33's approval requirement applies only if the employer or

Page 830

its carrier is paying LHWCA benefits at the time of the settlement. Resolving this conflict, we now hold that the plain language of section 33 shows Congress's unambiguous intent to require prior approval whether or not the employer or its carrier was actually paying LHWCA benefits at the time of settlement. In the face of this manifest congressional intent, no administrative reinterpretation can be countenanced.

Background

In each case before us today, a person seeking LHWCA compensation for death or injury settled a related claim with a third person; and, in each case, the settlement occurred at a time when the person was not receiving LHWCA benefits, was for less than the employee's compensation entitlement, and was consummated without the approval of the employer or his carrier. In Nicklos Drilling Co. v. Cowart, 907 F.2d 1552 (5th Cir.1990), Floyd Cowart, an employee of Nicklos Drilling Company, sought LHWCA compensation for injuries he had received on Nicklos's drilling rig. At a time when Mr. Cowart was not receiving LHWCA benefits from Nicklos or its insurance carrier, he settled his claim against Transco Exploration Company, which owned the offshore platform that supported Nicklos's rig. In Petroleum Helicopters, Inc. v. Barger, 910 F.2d 276 (5th Cir.1990), Mary Barger, the widow of Walter Barger, sought LHWCA compensation for her husband's death. Mr. Barger died when the helicopter that he was piloting crashed. The helicopter was owned by his employer, Petroleum Helicopters, Inc. (PHI), and manufactured by Bell Helicopter Textron. Ms. Barger settled her claim against Bell at a time when she was not receiving LHWCA benefits from either PHI or its insurance carrier. The panel opinions contain more detailed accounts of the facts.

Review of an Administrative Interpretation

Generally, the question before us is whether section 33 of the LHWCA permits any exception to its requirement that all settlements with third persons that leave the employer liable for further compensation benefits have the prior written approval of the employer and the employer's insurance carrier. Specifically, the Office of Workers' Compensation Programs (OWCP) urges us to accept its in-house administrative interpretation that section 33 requires prior written approval only if the employer or its carrier is actually paying LHWCA benefits at the time of settlement. In Kahny we accepted OWCP's administrative interpretation, but in Collier, Nicklos Drilling, and Barger we rejected this interpretation.

In support of its position, the OWCP points out that section 33's purpose is to allow a person entitled to LHWCA benefits to receive those benefits and still pursue civil remedies against third persons. According to the OWCP, the predecessor to section 33 required an election of remedies and often caused severe financial hardship to individuals who chose to pursue civil action and forego LHWCA benefits. OWCP argues that to alleviate this hardship Congress expressly eliminated election of remedies by enacting section 33(a). Extending this argument, OWCP maintains that financial hardship can be avoided only by paying benefits during the pendency of a civil action; thus, settlements require prior written approval only if the employer or its carrier is actually paying benefits. The actual payment of benefits, according to OWCP, is the price which Congress intended employers to pay for the right of prior approval.

Second, OWCP maintains that section 33(g)(2) can be given complete meaning only if we accept OWCP's administrative interpretation. For convenience, we set out the relevant portions of section 33 here:

(a) Election of remedies

If on account of a disability or death for which compensation is payable under this chapter the person entitled to such compensation determines that some person other than the employer or a person or persons in his employ is liable in damages, he need not elect whether to receive

Page 831

such compensation or to recover damages against such third person.

* * * * * *

(g) Compromise obtained by person entitled to compensation

(1) If the person entitled to compensation (or the person's representative) enters into a settlement with a third person referred to in subsection (a) of this section for an amount less than the compensation to which the person (or the person's representative) would be entitled under this chapter, the employer shall be liable for compensation as determined under subsection (f) of this section only if written approval of the settlement is obtained from the employer and the employer's carrier, before the settlement is executed, and by the person entitled to compensation (or the person's representative). The approval shall be made on a form provided by the...

To continue reading

Request your trial
26 practice notes
  • U.S. v. Rodriguez-Rios, RODRIGUEZ-RIO
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • 11 Febrero 1994
    ...Griffin v. Oceanic Contractors, 458 U.S. 564, 575, 102 S.Ct. 3245, 3252, 73 L.Ed.2d 973 (1982)). Accord Nicklos Drilling Co. v. Cowart, 927 F.2d 828, 831-32 (5th Cir.1991) (en banc), aff'd, --- U.S. ----, 112 S.Ct. 2589, 120 L.Ed.2d 379 (1992) (per curiam). Finding no such reason to deviate......
  • Ankney v. Franch, No. 348
    • United States
    • Court of Special Appeals of Maryland
    • 1 Septiembre 1994
    ...See, e.g., Parmelee v. International Paper Co., 157 A.D.2d 878, 550 N.Y.S.2d 150, 151 (1990). See also Nicklos Drilling Co. v. Cowart, 927 F.2d 828, 831 (5th Cir.1991) (construing the Longshore and Harbor Workers' Compensation[652 A.2d 1148] Act). Other courts have concluded that terminatio......
  • Estate of Cowart v. Nicklos Drilling Company, No. 91-17
    • United States
    • United States Supreme Court
    • 22 Junio 1992
    ...to enforce the judgment of the legislature; it is Congress that has the authority to change the statute, not the courts. Pp. 475-484. 927 F.2d 828, (CA5 1991), affirmed. KENNEDY, J., delivered the opinion of the Court, in which REHNQUIST, C.J., and WHITE, SCALIA, SOUTER, and THOMAS, JJ., jo......
  • Milam v. Mason Technologies, BRB 00-270
    • United States
    • Court of Appeals of Longshore Complaints
    • 22 Noviembre 2000
    ...to a fundamental purpose of the Act; it is entitled to no deference because it is plainly wrong. See Nicklos Drilling Co. v. Cowart, 927 F.2d 828, 831 (5th Cir. 1991). The Director's construction is superficial because he fails to consider the significance of the term "individual"......
  • Request a trial to view additional results
26 cases
  • U.S. v. Rodriguez-Rios, RODRIGUEZ-RIO
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • 11 Febrero 1994
    ...Griffin v. Oceanic Contractors, 458 U.S. 564, 575, 102 S.Ct. 3245, 3252, 73 L.Ed.2d 973 (1982)). Accord Nicklos Drilling Co. v. Cowart, 927 F.2d 828, 831-32 (5th Cir.1991) (en banc), aff'd, --- U.S. ----, 112 S.Ct. 2589, 120 L.Ed.2d 379 (1992) (per curiam). Finding no such reason to deviate......
  • Ankney v. Franch, No. 348
    • United States
    • Court of Special Appeals of Maryland
    • 1 Septiembre 1994
    ...See, e.g., Parmelee v. International Paper Co., 157 A.D.2d 878, 550 N.Y.S.2d 150, 151 (1990). See also Nicklos Drilling Co. v. Cowart, 927 F.2d 828, 831 (5th Cir.1991) (construing the Longshore and Harbor Workers' Compensation[652 A.2d 1148] Act). Other courts have concluded that terminatio......
  • Estate of Cowart v. Nicklos Drilling Company, No. 91-17
    • United States
    • United States Supreme Court
    • 22 Junio 1992
    ...to enforce the judgment of the legislature; it is Congress that has the authority to change the statute, not the courts. Pp. 475-484. 927 F.2d 828, (CA5 1991), affirmed. KENNEDY, J., delivered the opinion of the Court, in which REHNQUIST, C.J., and WHITE, SCALIA, SOUTER, and THOMAS, JJ., jo......
  • Milam v. Mason Technologies, BRB 00-270
    • United States
    • Court of Appeals of Longshore Complaints
    • 22 Noviembre 2000
    ...to a fundamental purpose of the Act; it is entitled to no deference because it is plainly wrong. See Nicklos Drilling Co. v. Cowart, 927 F.2d 828, 831 (5th Cir. 1991). The Director's construction is superficial because he fails to consider the significance of the term "individual"......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT