Wilkerson v. Ingalls Shipbuilding, Inc.

• Decision Date: 23 October 1997
• Docket Number: No. 96-60676,96-60676
• Citation: 125 F.3d 904
• Parties: Lovett R. WILKERSON, Petitioner, v. INGALLS SHIPBUILDING, INC.; Director, Office of Workers' Compensation Programs, United States Department of Labor, Respondents.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 904

125 F.3d 904

1998 A.M.C. 317

Lovett R. WILKERSON, Petitioner, v. INGALLS SHIPBUILDING, INC.; Director, Office of Workers' Compensation Programs, United States Department of Labor, Respondents.

No. 96-60676.

United States Court of Appeals Fifth Circuit.

Oct. 23, 1997.

Mitchell G. Lattof, Sr., Lattof & Lattof, Mobile, AL, for Petitioner.

Richard P. Salloum, Traci Marie Castille, Franke, Rainey & Salloum, Gulfport, MS, Robert Joseph Ariatti, William J. Powers, Jr., Ingalls Shipbuilding, Inc. Law Department, Pascagoula, MS, for Ingalls Shipbuilding, Inc.

Petition for Review of a Decision of the Benefits Review Board.

Before REYNALDO G. GARZA, SMITH and WIENER, Circuit Judges.

JERRY E. SMITH, Circuit Judge:

I.

In 1972, Lovett Wilkerson retired after working fourteen years at the shipyard of Ingalls Shipbuilding, Inc. ("Ingalls"), in Pascagoula, Mississippi. The year before he retired, his average weekly wage was $167.70. In 1992, he underwent tests that revealed he suffered a permanent hearing loss in both ears, and the parties agree that he suffered a binaural hearing impairment of 19.23%. It is undisputed that his hearing loss was a result of the noise to which he was exposed at Ingalls and thus that the injury occurred in the course of his employment.

In March 1992, Wilkerson notified Ingalls of his disability claim under the Longshore and Harbor Workers' Compensation Act ("LHWCA"). It is undisputed that the claim was timely filed. ¹ Although Ingalls controverted the claim, it nevertheless began compensating Wilkerson, paying him $4,299.83 between April 1992 and May 1993, based on the scheduled compensation under the LHWCA. ² Despite this payment, Wilkerson pursued his claim before an administrative law judge ("ALJ"). In addition to the $4,299.83, he sought attorneys' fees, penalties, and prejudgment interest from the 1972 date of his injury. ³

At a hearing before the ALJ, Ingalls argued that it had in fact already overcompensated Wilkerson for his injury. Under the statutory scheme in force at the time of his injury--upon his retirement--it owed only $2,692.20. Ingalls maintains this argument on appeal.

At the time of Wilkerson's retirement, the LHWCA allowed a maximum benefit of only $70 per week: much less than the $111.80 to which Wilkerson would otherwise have been entitled under § 908. After Wilkerson retired but before he filed his claim, Congress amended the LHWCA to provide a much higher maximum benefit, determined yearly by the Department of Labor as a factor of the national average wage. See 33 U.S.C. § 906. Thus, on November 26, 1972, the cap jumped to $167 and has been increasing with inflation ever since.

The ALJ agreed that Ingalls owed only the $70 weekly maximum, and held that because Wilkerson was entitled only to $2,692.20, he must reimburse Ingalls for its overpayment. The ALJ further ruled that Ingalls was not liable for penalties or attorneys' fees. The ALJ's decision was affirmed by the Benefits Review Board ("BRB") by operation of law on September 12, 1996. See Omnibus Consolidated Rescissions and Appropriations Act of 1996, Pub.L. No. 104-134, § 101(d), 110 Stat. 1321, 1321-219 (1996).

II.

The petition for review presents two distinct questions. The first--made apparent by the above recitation of facts--is whether Wilkerson should receive compensation according to the maximum rate in effect at the time of his injury (his retirement), or instead according to the maximum at some later time. This question is easily resolved, as the statute makes plain that compensation is governed by the maximum rate in effect at the time of an award.

The second question--not so straightforward--is from what date, if at all, prejudgment interest ought to be calculated. Particularly in light of the twenty-year lag between Wilkerson's injury and his claim, it matters very much whether interest should be awarded from the date of his injury, the date of his claim, or the date his compensation became due.

We are informed in part by Strachan Shipping Co. v. Wedemeyer, 452 F.2d 1225 (5th Cir.1971), which upheld an award of prejudgment interest under the LHWCA, dating from the time compensation becomes due without an award. Strachan did not decide whether an award of prejudgment interest under the compensation provisions of the LHWCA might accrue from the time of the injury. For the reasons set forth below, we conclude that it may not.

III.

We give deference to an ALJ's findings of fact. Miller v. Central Dispatch Inc., 673 F.2d 773 (5th Cir. Unit A 1982). The BRB, however, "is not a policymaking agency; its interpretation of the LHWCA thus is not entitled to any special deference from the courts." Potomac Elec. Power Co. v. Director, Office of Workers' Compensation Programs, 449 U.S. 268, 279 n. 18, 101 S.Ct. 509, 515 n. 18, 66 L.Ed.2d 446 (1980); see McDermott, Inc. v. Boudreaux, 679 F.2d 452, 456 n. 5 (5th Cir.1982).

IV.

We begin by noting that on appeal, Ingalls has waived its claim to reimbursement. ⁴ Wilkerson therefore would keep the $4,299.83, regardless of whether we find that amount was legally due. The amount of compensation originally due is relevant nonetheless, for it constitutes the principal amount on which prejudgment interest, if any, would be due.

The LHWCA, as amended, calls for the Secretary of Labor yearly to calculate the "national average weekly wage" and provides that 200% of this sum be the maximum compensation available under the LHWCA. 33 U.S.C. § 906(b). The same statutory provision resolves the question before us. It provides that a given year's maximum compensation "shall apply to employees or survivors ... newly awarded compensation during such [year]." 33 U.S.C. § 906(c) (emphasis added).

Wilkerson was "newly awarded compensation" by the ALJ on November 10, 1993. The maximum weekly compensation available during that year was $738.30. Wilkerson's scheduled compensation of $111.80 falls well below that maximum. Therefore, he is entitled to the full amount of scheduled compensation under § 908(c)(13)(B), the amount originally paid by Ingalls: 38.46 weeks at $111.80 per week, or $4,299.83.

We reject Ingalls's objection that the amended act--and the more generous maximum--should not be applied "retroactively." In addition to the unequivocal statutory imperative here, we note that "application of new statutes passed after the events in suit is unquestionably proper in many situations. When the intervening statute authorizes or affects the propriety of prospective relief, application of the new provision is not retroactive." Landgraf v. USI Film Prods., 511 U.S. 244, 273, 114 S.Ct. 1483, 1501 (1994).

V.

Wilkerson claims prejudgment interest commencing on the date he was injured. Ingalls maintains that the ALJ was correct in finding that prejudgment interest began to accrue only on the date Wilkerson made his claim known.

The LHWCA does not provide for prejudgment interest. This circuit, however, approved of such awards in Strachan, noting that "an employee does not receive full compensation due him where an employer controverts his right unless interest is added to the delayed payments." 452 F.2d at 1229. The question, then, is not whether prejudgment interest is appropriate in LHWCA cases, but from what date it begins to accrue. To our knowledge, no court has directly addressed this issue.

A.

There is a "general rule that prejudgment interest should be awarded in maritime cases, subject to a limited exception for 'peculiar' or 'exceptional' circumstances." City of Milwaukee v. Cement Div., Nat'l Gypsum Co., 515 U.S. 189, 195, 115 S.Ct. 2091, 2095, 132 L.Ed.2d 148 (1995), quoted in Probo II London v. Isla Santay MV, 92 F.3d 361 (5th Cir.1996). The purpose of prejudgment interest is the basic principle of compensatory damages: that the injured party should be made whole. In the parlance of admiralty courts, "restitutio in integrum is the leading maxim applied ... to ascertain damages." Id. at 196, 115 S.Ct. at 2096 (collision case). In order to compensate an aggrieved party fully, he must be compensated for the loss of use of the money due as damages. ⁵ Recognizing this principle, admiralty courts generally have awarded prejudgment interest accruing from the time the damage was incurred. See, e.g., In re Oil Spill by Amoco Cadiz, 954 F.2d 1279, 1335 (7th Cir.1992) (prejudgment interest award of about $128 million).

If Wilkerson's case sounded in negligence against a vessel under 33 U.S.C. § 905(b), the law guiding our decision would be relatively evident. In such cases, the award of prejudgment interest is left essentially to the district court's discretion and is reviewable only for clear error or abuse of discretion. See, e.g., Koch Refining Co. v. Jennifer L. Boudreaux MV, 85 F.3d 1178, 1183 (5th Cir.1996). And although it is within a court's discretion to borrow the prejudgment interest law of the state in which it sits, under the exclusivity provisions of the LHWCA it is the federal maritime law that applies. Webster v. M/V Moolchand, 730 F.2d 1035, 1040 (5th Cir.1984).

B.

Here, however, Wilkerson sued his employer under the compensation provisions of the LHWCA, 33 U.S.C. § 904. This presents a different circumstance. The amount of a compensation award for permanent partial disability leaves almost no room for discretion. The Act, id. § 908(c), spells out detailed payment terms for virtually every conceivable injury. With few exceptions, ⁶ all that is needed to formulate an award is a determination of the disability, knowledge of the wages of the worker and of the maximum compensation amounts, and a calculator.

The certainty of this scheme is not an accident. In return for a no-fault rule, 33 U.S.C. § 904(b), employers and insurers gain the benefit of relative certainty in their prospective liability, and the system gains from the reduced transaction costs associated with the presumably efficient administration of the scheme.

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