Pleasant-El v. Oil Recovery Co., Inc., PLEASANT-E

• Decision Date: 06 August 1998
• Docket Number: P,PLEASANT-E,No. 97-6500,97-6500
• Citation: 148 F.3d 1300
• Parties: 11 Fla. L. Weekly Fed. C 1702 Curtis J.laintiff-Appellee, v. OIL RECOVERY COMPANY, INC., Aetna Insurance Company, Defendants-Appellants.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1300

148 F.3d 1300

11 Fla. L. Weekly Fed. C 1702

Curtis J. PLEASANT-EL, Plaintiff-Appellee, v. OIL RECOVERY COMPANY, INC., Aetna Insurance Company,

Defendants-Appellants.

No. 97-6500.

United States Court of Appeals, Eleventh Circuit.

Aug. 6, 1998.

James P. Green, Thomas H. Nolan, Jr., Brown, Hudgens, P.C., Mobile, AL, for Defendants-Appellants.

D. A. Bass-Frazier, Huey & Leon, Mobile, AL, for Plaintiff-Appellee.

Appeal from the United States District Court for the Southern District of Alabama.

Before DUBINA and MARCUS, Circuit Judges, and HILL, Senior Circuit Judge.

DUBINA, Circuit Judge:

Appellants, Oil Recovery Company, Inc. ("employer") and its insurance carrier, Aetna Insurance Company ("Aetna") (collectively "Defendants"), appeal the entry of a default judgment, which held them liable for a penalty for late payment of compensation due under the Longshore and Harbor Workers Compensation Act ("LHWCA") 33 U.S.C. §§ 901-950.

I. BACKGROUND FACTS

The Appellee, Curtis Pleasant-El ("Pleasant"), and his employer reached a private settlement on Pleasant's claims for benefits under the LHWCA. On June 19, 1995, an administrative law judge ("ALJ") signed an order approving the settlement. ¹ On June 30, pursuant to the governing regulations, the district director filed the order and sent copies by certified mail to the parties. 20 C.F.R. § 702.349 (1997).

The employer's lawyer received the order on July 6, 1995, and on July 14, full payment of the compensation order was hand delivered to Pleasant's lawyer. The LHWCA provides that payment of compensation due under an award of compensation must be made within ten days of the filing of the order, or the employer will be assessed a 20% penalty. 33 U.S.C. § 914(f). Pleasant asked the Department of Labor to issue a supplemental order assessing the 20% penalty, and, over the employer's objections, the district director issued the supplemental order requiring the employer to pay an additional $12,000. See 33 U.S.C. § 918(a) (providing for supplementary order declaring amount of default after investigation, notice, and hearing).

Pleasant then filed a petition for enforcement of this order in federal district court. See 33 U.S.C. § 918(a). The district court summarily entered a default judgment before the employer's answer to the petition could be received or considered. The Defendants sought to have the default judgment vacated under Fed.R.Civ.P. 59. Finding that the supplemental award had been entered in accordance with § 918(a), the district court denied the Defendants' motion to vacate. The Defendants then perfected this appeal.

II. ISSUES

The primary issue presented by this appeal is whether the ten days allowed under 33 U.S.C. § 914(f) for payment of a compensation order are ten business days or ten calendar days. In addition, Defendants raise a flurry of constitutional challenges to the standards and procedures employed in imposing and enforcing the penalty for late payment. They argue that interpreting the statute to require payment within ten calendar days violates the Due Process and Equal Protection Clauses to the Fifth Amendment; that imposing a penalty under the facts of this case violates their due process rights; that the manner in which the judgment was enforced violates their due process rights; and that § 914(f) violates the Eighth Amendment prohibition of cruel and unusual punishment.

III. STANDARD OF REVIEW

Review of the judgment entered by the district court on Pleasant's petition for enforcement of the supplementary compensation order is the same as in civil suits for damages at common law. See 33 U.S.C. § 918(a). This appeal presents questions of law only, and thus the court's review is de novo. See United States v. Garrett, 3 F.3d 390 (11th Cir.1993)(challenge to the constitutionality of a statute is a question of law subject to de novo review).

IV. ANALYSIS

The LHWCA provides that "[i]f any compensation, payable under the terms of an award, is not paid within ten days after it becomes due, there shall be added to such unpaid compensation an amount equal to 20 per centum thereof...." 33 U.S.C. § 914(f). The Defendants' primary argument on appeal is that the ten day period of § 914(f) should be calculated under Rule 6(a) of the Federal Rules of Civil Procedure, pursuant to which intermediate weekend days and holidays are excluded. Under this method of counting, the Defendants' payment would have been timely. By reference to various constitutional provisions, the Defendants also argue that to hold otherwise, especially under the circumstances of this case, would be unfair and contrary to law. Significantly, the Defendants do not contend that the procedures employed in this case failed to give them timely notice of their obligation to pay the compensation award.

A. The Scope of A District Court's Review of a Supplemental Order Under § 918(a).

The district court refused to consider the Defendants' challenges to the legitimacy of the supplemental order. The LHWCA provides that when a claimant files with the court a supplemental order, declaring the amount of default and the consequent penalty, the court shall "enter judgment for the amount declared in default by the supplementary order if such supplementary order is in accordance with the law." 33 U.S.C. § 918(a). The district court construed this as a narrow grant of authority to review the supplemental order merely to ensure that it complied with the requirements of § 918(a). We disagree. It is certainly true that when enforcing defaulted payments under § 918(a), a district court lacks authority to consider the validity of the underlying compensation order. See Schmit v. ITT Federal Elec. Int'l, 986 F.2d 1103, 1106 (7th Cir.1993); Abbott v. Louisiana Ins. Guar. Ass'n (In re Compensation Under the Longshore and Harbor Workers' Compensation Act), 889 F.2d 626, 630 (5th Cir.1989). However, here, the Defendants' challenges pertain exclusively to the imposition and enforcement of the supplemental order, and § 918(a) gives the district court a general grant of authority to determine whether that order is lawful.

B. Constitutional Challenges

As noted above, the Defendants have raised a number of constitutional concerns with § 914(f) on its face and as applied to them. We are precluded from considering these arguments. Title 28 U.S.C. § 2403(a) states in pertinent part as follows:

In any action, suit or proceeding in a court of the United States to which the United States or any agency, officer or employee thereof is not a party, wherein the constitutionality of any Act of Congress affecting the public interest is drawn in question, the court shall certify such fact to the Attorney General, and shall permit the United States to intervene for presentation of evidence, if evidence is otherwise admissible in the case, and for argument on the question of constitutionality.

Because there has been no certification as required by 28 U.S.C. § 2403(a), we must remand this case to the district court to give the proper notice to the Attorney General and to rule on the Defendants' constitutional challenges to the penalty.

C. Statutory Analysis of § 914(f)

The Second and Fourth Circuits, as well as the Benefits Review Board, have held that § 914(f) requires payment within ten calendar days. Burgo v. General Dynamics Corp., 122 F.3d 140 (2nd Cir.1997), cert. denied, --- U.S. ----, 118 S.Ct. 1839, 140 L.Ed.2d 1089 (1998); Reid v. Universal Maritime Serv. Corp., 41 F.3d 200 (4th Cir.1994); Irwin v. Navy Resale Exchange, 29 Ben. Rev. Bd. Serv. 77 (1995). Among the Courts of Appeals, only the Fifth Circuit has held that the ten day period should be ten business days, pursuant to Rule 6(a) of the Federal Rules of Civil Procedure. Quave v. Progress Marine, 912 F.2d 798 (5th Cir.1990).

As its starting point, the Fifth Circuit noted that the Federal Rules of Civil Procedure apply to proceedings for enforcement or review of compensation orders under § 918 except to the extent that matters of procedure are provided for in the LHWCA. Id. at 800 (citing Fed.R.Civ.P. 81(a)(6)). Although § 914 is not specifically mentioned in Rule 81, the Quave court reasoned that an order making a § 914(f) assessment is a "supplementary order declaring the amount of the default within the meaning of Section [918(a) ] of the LHWCA." Id. (internal quotations and citations omitted). The Fifth Circuit therefore concluded that the Federal Rules of Civil Procedure, including the Rule 6(a) method of computing time, should be applied to § 914(f), because that provision governs the circumstances under which a default order should be issued.

The Fourth Circuit dismissed the Fifth Circuit's rationale as "tortuous." Reid, 41 F.3d at 202. The Fourth Circuit found that the meaning of "ten days" was plain on its face: "[T]he statute means what it says--that ten days is ten twenty-four hour periods as a day is commonly understood." Id. at 201. The Reid court reasoned that Rule 81(a)(6) does not mention § 914, because the sections that are enumerated in Rule 81, 33 U.S.C. §§ 918 and 921, both require agencies to conduct quasi-judicial proceedings for collecting defaulted payments and reviewing compensation orders. Id. at 202. In contrast, § 914(f) is substantive, not procedural, and therefore requires a § 918 proceeding to give it effect. Id. Because it is not a "proceeding for enforcement or review of compensation orders," there is no authority, nor any need, for the Federal Rules of Civil Procedure to apply to § 914. Id. (quoting Fed.R.Civ.P. 81(a)(6)).

In concluding that § 914(f) requires payment of compensation awards within ten calendar days, the Second Circuit in Burgo and the Benefits Review Board in Irwin followed Reid's analysis and rejected Quave's. We, too, agree with the analysis in Reid and hold that when § 914(f) says that a compensation award must be paid within ten days, it means ten calendar days. In rejecting Defendants'...