Rodriguez v. Compass Shipping Co Ltd

• Decision Date: 18 May 1981
• Docket Number: No. 79-1977,79-1977
• Parties: Frederico RODRIGUEZ, Luis Perez, and Srecko Barulec, Petitioners, v. COMPASS SHIPPING CO., LTD., et al
• Court: U.S. Supreme Court

451 U.S. 596

101 S.Ct. 1945

68 L.Ed.2d 472

Frederico RODRIGUEZ, Luis Perez, and Srecko Barulec, Petitioners,

v COMPASS SHIPPING CO., LTD., et al.

No. 79-1977.

Argued Jan. 12, 1981.

Decided May 18, 1981.^*

Rehearing Denied July 2, 1981.

See 453 U.S. 923, 101 S.Ct. 3160.

Syllabus

Section 33(b) of the Longshoremen's and Harbor Workers' Compensation Act provides that a longshoreman's acceptance, pursuant to an award in a compensation order, of compensation from his employer for injuries incurred in the course of employment "shall operate as an assignment to the employer of all right of the person entitled to compensation to recover damages against [a person other than the employer] unless [the longshoreman] shall commence an action against such third person within six months after such award." Petitioner longshoremen, who had been injured aboard ship in the course of their employment, accepted compensation under such an award from their respective stevedore employers. More than six months after the awards, each petitioner commenced an action in Federal District Court against the shipowner involved, alleging that the shipowner had negligently caused his injury. The District Courts granted summary judgments for the shipowners (respondents) on the ground that, because petitioners failed to bring suit within six months of the compensation awards, their causes of action had been assigned to their employers who thereafter had the exclusive right to pursue the third-party claims. The Court of Appeals affirmed.

Held : Section 33(b) precludes petitioners from pursuing their third-party claims against respondent shipowners. Pp. 602-618.

(a) The language of § 33(b) is both mandatory and unequivocal. The only conditions precedent to the statutory assignment are the acceptance of compensation pursuant to an award in a compensation order and the passage of the required 6-month period, both of which conditions were satisfied in these cases. When such assignment occurs, it transfers to the employer the employee's entire right to commence a third-party action, the words "all right" in § 33(b) precluding the possibility of only a partial assignment or concurrent rights in the employee and employer to sue in the postassignment period. Although petitioners' employers failed to pursue the assigned claims, the statute does not expressly require that they do so nor does it provide for relief to employees should the assigned claims lie dormant. Pp. 602-604.

(b) Nothing in the legislative history shows any intent by Congress to preserve the employee's right to commence a third-party suit after the 6-month period expires. To the contrary, the history indicates that once that period expires, the employer possesses complete control of third-party claims. Moreover, the history forecloses the argument that Congress did not intend an assignment of a third-party claim to be effective unless there was an absence of any potential conflict of interest between the assignee and the longshoreman. The simple standard set forth in § 33(b)—exclusive control of the cause of action in the employee for six months and in the employer thereafter protects the interests of both employees and employers and is consistent with the Act's general policy of encouraging the prompt and efficient administration of compensation claims. Pp. 604-612.

(c) There is no evidence that Congress gave the employee the right or procedural mechanism, after assignment, to compel the assignee either to bring a third-party suit or to reassign the cause of action to the employee in response to a formal request to do so. And Congress' failure to amend § 33(b) in 1972, when the Act was thoroughly reexamined, does not evidence congressional approval of a Court of Appeals' decision holding that, notwithstanding § 33(b), a longshoreman who has accepted compensation under an award may maintain a third-party action whenever it becomes evident that his employer has no intention to file suit on the assigned claim. Such legislative inaction does not modify the plain terms of § 33(b). Pp. 612-617.

617 F.2d 955 and 622 F.2d 572 and 575, affirmed.

Martin Lassoff, New York City, for petitioners.

Joseph T. Stearns and Francis X. Byrn, New York City, for respondents. Justice STEVENS delivered the opinion of the Court.

The question presented in these three cases ¹ is whether a longshoreman may prosecute a personal injury action against a negligent shipowner after his right to recover damages has been assigned to his employer by operation of § 33(b) of the Longshoremen's and Harbor Workers' Compensation Act (Act), 33 U.S.C. § 901 et seq.²

Each petitioner is a longshoreman who was injured aboard ship in the regular course of his employment. Each asserted a claim for compensation against the stevedore by whom he was employed. Each accepted compensation from his employer pursuant to an award in a compensation order.³ More than six months later,⁴ each commenced an action against the shipowner alleging that the defendant had negligently caused his injury.⁵ The District Courts granted motions for sum- mary judgment filed by the respondent shipowners on the ground that, by reason of the longshoremen's failure to bring suit within six months, their causes of action had been assigned to the stevedores who thereafter had the exclusive right to pursue the third-party claims.⁶ The Court of Appeals for the Second Circuit affirmed, 617 F.2d 955 (1980); 622 F.2d 572 and 575 (1980),⁷ and we granted certiorari to resolve the conflict with the contrary holding of the Court of Appeals for the Fourth Circuit in Caldwell v. Ogden Sea Transport, Inc., 618 F.2d 1037 (1980). 449 U.S. 818, 101 S.Ct. 69, 66 L.Ed.2d 20.⁸

There is no dispute about the parties' respective interests in either (a) a claim asserted by a longshoreman against a shipowner within the 6-month period following acceptance of a compensation award, or (b) a claim asserted by the stevedore against the shipowner after the 6-month period has elapsed. In the former situation, the longshoreman has exclusive control of the action; any recovery in excess of the amount required to pay the cost of litigation and to reimburse the employer for the statutory compensation paid pur- suant to the award belongs entirely to the longshoreman.⁹ In the latter situation, the stevedore has exclusive control of the litigation; any net recovery—after the compensation award and the litigation costs have been recouped—must be shared 80% by the longshoreman and 20% by the employer.¹⁰ The question presented by these cases is what right, if any, the longshoreman has against the third-party shipowner if he does not sue within the 6-month period and the employer fails to do so thereafter. Both the plain language of the statute and the history of its amendments dictate the same answer.

I

Even though the language of § 33(b) is simple and direct, it is appropriate to begin by quoting our description last Term of the context in which it appears:

"The Act provides a comprehensive scheme governing an injured longshoreman's rights against the stevedore and shipowner. The longshoreman is not required to make an election between the receipt of compensation and a damages action against a third person, 33 U.S.C. § 933(a). After receiving a compensation award from the stevedore, the longshoreman is given six months within which to bring suit against the third party. 33 U.S.C. § 933(b). If he fails to seek relief within that period, the acceptance of the compensation award operates as an assignment to the stevedore of the longshoreman's rights against the third party." Bloomer v. Liberty Mutual Ins. Co., 445 U.S. 74, 77-78, 100 S.Ct. 925, 927-928, 63 L.Ed.2d 215.

As is apparent, § 33(b) plays a central role in this comprehensive legislative scheme.

The language of § 33(b) is both mandatory and unequivocal. It provides that the acceptance of compensation under an award "shall operate as an assignment to the employer of all right of the person entitled to compensation to recover damages against such third person unless such person shall commence an action against such third person within six months after such award." 33 U.S.C. § 933(b) (emphasis supplied).¹¹

The only conditions precedent to the statutory assignment are the acceptance of compensation pursuant to an award in a compensation order and the passage of the required period of six months. These conditions are admittedly satisfied in these cases.¹² The statutory assignment encompasses "all right" of the employee to recover damages from a third party. These words preclude the possibility that the assignment is only a partial one that does not entirely divest the employee of his right to sue, or that the employee and the employer possess concurrent rights to sue in the post-assignment period. When the § 33(b) assignment occurs, it transfers the employee's entire right to commence a third-party action to the employer.

Application of this plain statutory language to the undisputed facts in these cases leads to the conclusion that petitioners may not pursue their claims for damages against the respondent shipowners. Petitioners filed these actions well beyond the 6-month period following acceptance of compensation, and offered no excuse for their delay. Although their employers failed to pursue the assigned claims, the statute does not expressly require that employers pursue third-party claims, nor does it provide for relief to employees should the assigned claims lie dormant. Therefore, petitioners appear to be without a cause of action under the statute.

In an attempt to avoid the conclusion mandated by its plain language, petitioners contend that the Act should be construed either to include an unexpressed condition precedent to any effective assignment—namely, the absence of any possible conflict of interest between the employer-stevedore and the employee—or to grant the employee an implicit right to have the third-party...