Ochoa v. Employers Nat. Ins. Co., 82-3618

• Decision Date: 21 February 1985
• Docket Number: No. 82-3618,82-3618
• Parties: Jorge OCHOA, Plaintiff-Appellant, v. EMPLOYERS NATIONAL INSURANCE CO. et al., Intervenors-Appellees, Waterman Steamship Corp., Defendant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1196

754 F.2d 1196

1985 A.M.C. 2195

Jorge OCHOA, Plaintiff-Appellant, v. EMPLOYERS NATIONAL INSURANCE CO. et al., Intervenors-Appellees, Waterman Steamship Corp., Defendant.

No. 82-3618.

United States Court of Appeals, Fifth Circuit.

Feb. 21, 1985.

Owen J. Bradley, Michael R. Guidry, New Orleans, La., for plaintiff-appellant.

Thomas W. Thorne, Jr., New Orleans, La., for Employers & N.O. Stevedores.

Appeal from the United States District Court for the Eastern District of Louisiana.

ON REMAND FROM THE SUPREME COURT OF THE UNITED STATES

Before WISDOM, REAVLEY and JOHNSON, Circuit Judges.

REAVLEY, Circuit Judge:

Our prior judgment in this case (Ochoa v. Employers National Insurance, 724 F.2d 1171 (5th Cir.1984) has been vacated by the Supreme Court, and the case remanded "for further consideration in light of Pub.L. 98-426." Employers National Insurance v. Ochoa, --- U.S. ----, 105 S.Ct. 583, 83 L.Ed.2d 694 (1984).

In our prior decision we made two holdings to apply in the case where the recovery from a negligent shipowner is insufficient to reimburse the stevedore employer or compensation carrier and to pay the injured longshoreman's attorney a reasonable fee.

First, the costs of litigation include reasonable attorneys' fees as assessed by the district court. Those costs are to be subtracted from the gross recovery, leaving the net for satisfaction of the compensation carrier's lien. In the different case where all of these costs and the full compensation lien could be satisfied out of the recovery from the tortfeasor, the court may not shift to the compensation carrier any part of the longshoreman's attorney fee. Bloomer v. Liberty Mutual Insurance Co., 445 U.S. 74, 100 S.Ct. 925, 63 L.Ed.2d 215 (1980).

Second, after allocating the net recovery to the compensation carrier, the district court should then review the fairness of the positions of the injured longshoreman and his attorney and may make an equitable adjustment of the recovery award between them.

Following our decision Congress enacted the Longshore and Harbor Workers' Compensation Act Amendments of 1984, Pub.L. 98 Stat. 1639. Section 21(c) of this Act amends the statute to read:

If the person entitled to compensation institutes proceedings within the period prescribed in subdivision (b) of this section the employer shall be required to pay as compensation under this Act a sum equal to the excess of the amount which the Secretary determines is payable on account of such injury or death over the net amount recovered against such third person. Such net amount shall be equal to the actual amount recovered less the expenses reasonably incurred by such person in respect to such proceedings (including reasonable attorneys' fees).

33 U.S.C. Sec. 933(f) (amendments emphasized).

Section 28 of the 1984 Act made the amendment effective on September 28, 1984 as to claims then pending. We believe the amended law is applicable, prescribing the extent of the compensation the employer is required to pay or recoup while that very issue is the subject of the pending appeal. See Crowe v. Lucas, 595 F.2d 985, 993-94 (5th Cir.1979); Turner v. United States, 410 F.2d 837, 842 (5th Cir.1969). However, we believe the same disposition of the present case is proper under either the 1972 or the 1984 Acts.

The amended statute now expressly directs a disposition of the compensation lien in accord with the disposition of our first holding in the prior decision. In light of the Supreme Court's writing in Bloomer we have read the 1972 statute to this effect. Now the statute is explicit.

Furthermore, we find the following paragraphs in the Joint Explanatory Statement of the Committee of Conference on the 1984 amendment:

The Senate bill and the House amendment both alter the priority for distribution of proceeds in a recovery by judgment or settlement where the employee brings an action against a third party. The Senate bill gives priority to the employer's lien on compensation and medical benefits paid, with the employee retaining any excess first for payment of attorney fees and costs. In a recovery by judgment only, the House amendment guarantees the employee 15 percent of any recovery remaining after reduction for attorney fees and costs, before exercise by the employer of its subrogation lien rights.

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The Conference substitute establishes the following priority for distribution of proceeds in a recovery by an employee: First, the litigation expenses, including reasonable attorney fees, are satisfied. This may require that the court exercise its discretion to adjust the attorney fee to assure equity for both the employee and his attorney. The compensation lien on the net recovery remains inviolable, consistent with Bloomer v. Liberty Mutual Insurance Co., 445 U.S. 74 [100 S.Ct. 925, 63 L.Ed.2d 215] (1980).

H.R.Rep. No. 1027, 98th Cong., 2d Sess. 36, reprinted in 1984 U.S.Code Cong. & Ad. News 2734, 2771, 2786.

The committee says that allocation to the compensation lien from the net recovery (after subtraction of attorney fees and other costs) is consistent with Bloomer, as we decided...