OCTOBER TERM, 1991
Syllabus
ESTATE OF COWART
v. NICKLaS DRILLING CO.
ET AL.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIFTH
CIRCUIT
No. 91-17. Argued March 25, 1992-Decided June 22,1992
Floyd Cowart, whose estate is the petitioner, was injured while
working on an oil drilling platform owned by Transco Exploration
Company (Transco), in an area subject to the Longshore and Harbor
Workers' Compensation Act (LHWCA or Act). The Department of Labor
gave respondent Compass Insurance Co. (Compass), the insurer for
Cowart's employer, respondent Nicklos Drilling Company (Nicklos),
an informal notice that Cowart was due permanent disability
payments, but none were ever made. In the meantime, Cowart settled
a negligence action with Transco, which Nicklos funded under an
indemnification agreement with Transco. However, Cowart did not
secure from Nicklos or Compass a formal, prior, written approval of
the settlement. Subsequently, Cowart filed a claim with the
Department of Labor seeking disability payments from Nicklos.
Nicklos denied liability on the ground that recovery was barred
under § 33(g) of the Act, which provides that a "person entitled to
compensation" must obtain prior written approval from the employer
and its insurer of any settlement of a third-party claim, §
33(g)(1), and that the failure of the "employee" to secure the
approval results in forfeiture of all rights under the Act, §
33(g)(2). The Administrative Law Judge awarded benefits, relying on
past Benefits Review Board (BRB) decisions: one in which the BRB
held that in an earlier version of § 33(g) the words "person
entitled to compensation" did not refer to a person not yet
receiving benefits; and another in which it held that, since this
phrase was not altered in the 1984 amendments to the LHWCA that
added § 33(g)(2), Congress was presumed to have adopted the BRB's
interpretation. The Court of Appeals reversed, holding that § 33(g)
unambiguously provides for forfeiture whenever an LHWCA claimant
fails to meet the written-approval requirement.
Held: Section 33(g)'s forfeiture provision applies to a
worker whose employer, at the time the worker settles with a third
party, is neither paying compensation to the worker nor subject to
an order to pay under the Act. The section's language is plain and
cannot support the BRB's interpretation. The normal meaning of
entitlement includes a right or benefit for which a person
qualifies, regardless of whether the right or benefit has been
acknowledged or adjudicated. Thus, Cowart became
470
"entitled to compensation" at the moment his right to recovery
under the Act vested. If the language of § 33(g)(1) left any doubt,
the ambiguity would be eliminated by the statute's structure,
especially the addition of subsection (g)(2). This interpretation
of § 33(g) is reinforced by the fact that the phrase "person
entitled to compensation" is used elsewhere in the statute in
contexts in which it cannot bear Cowart's meaning, and is not
altered by the fact that subsection (g)(2) uses the term "employee"
rather than that phrase. Contrary to Cowart's argument, this
interpretation of § 33(g) gives full meaning to all of subsection
(g)(2)'s notification and consent requirements. The question
whether Nicklos' participation in the settlement brings this case
outside § 33(g)(1)'s terms is not addressed, since it was not
fairly included within the question on which certiorari was
granted. The possible harsh effects of § 33(g) are recognized, but
it is the duty of the courts 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, affirmed.
KENNEDY, J., delivered the opinion of the Court, in which
REHNQUIST, C. J., and WHITE, SCALIA, SOUTER, and THOMAS, JJ.,
joined. BLACKMUN, J., filed a dissenting opinion, in which STEVENS
and O'CONNOR, JJ., joined,
post, p. 484.
Lloyd N.
Frischhertz argued the cause and filed
briefs for petitioner.
Michael R. Dreeben argued the cause for the federal
respondent. With him on the brief were
Solicitor General Starr,
Deputy Solicitor General Mahoney, Steven J.
Mandel, and
Edward D. Sieger. H. Lee Lewis, Jr.,
argued the cause and filed a brief for the private respondents.
*
JUSTICE KENNEDY delivered the opinion of the Court. The
Longshore and Harbor Workers' Compensation Act (LHWCA or Act), 44
Stat. 1424, as amended, 33 U. S. C. § 901
et seq., creates a
comprehensive federal scheme to compen-
*Thomas D. Wilcox and
Franklin W Losey filed a
brief for the National Association of Stevedores et al. as
amici
curiae urging affirmance.
Vance E. Ellefson and C.
Theodore Alpaugh III
filed a brief for Petroleum Helicopters, Inc., et al. as
amici
curiae.
471
sate workers injured or killed while employed upon the navigable
waters of the United States. The Act allows injured workers,
without forgoing compensation under the Act, to pursue claims
against third parties for their injuries. But § 33(g) of the LHWCA,
33 U. S. C. § 933(g), provides that under certain circumstances if
a third-party claim is settled without the written approval of the
worker's employer, all future benefits including medical benefits
are forfeited. The question we must decide today is whether the
forfeiture provision applies to a worker whose employer, at the
time the worker settles with a third party, is neither paying
compensation to the worker nor yet subject to an order to pay under
the Act.
I
The injured worker in this case was Floyd Cowart, and his estate
is now the petitioner. Cowart suffered an injury to his hand on
July 20, 1983, while working on an oil drilling platform owned by
Transco Exploration Company (Transco). The platform was located on
the Outer Continental Shelf, an area subject to the Act. 43 U. S.
C. § 1333(b). Cowart was an employee of the Nicklos Drilling
Company (Nicklos), who along with its insurer Compass Insurance Co.
(Compass) are respondents before us. Nicklos and Compass paid
Cowart temporary disability payments for 10 months following his
injury. At that point Cowart's treating physician released him to
return to work, though he found Cowart had a 40% permanent partial
disability. App. 75. The Department of Labor notified Compass that
Cowart was owed permanent disability payments in the total amount
of $35,592.77, plus penalties and interest. This was an informal
notice which did not constitute an award. No payments were
made.
Cowart, meanwhile, had filed an action against Transco alleging
that Transco's negligence caused his injury. On July 1, 1985,
Cowart settled the action for $45,000, of which he received
$29,350.60 after attorney's fees and expenses. Nicklos funded the
entire settlement under an indemnifica-
472
tion agreement with Transco, and it had prior notice of the
settlement amount. But Cowart made a mistake: He did not secure
from Nicklos a formal, prior, written approval of the Transco
settlement.
After settling, Cowart filed an administrative claim with the
Department of Labor seeking disability payments from Nicklos.
Nicklos denied liability on the grounds that under the terms of §
33(g)(2) of the LHWCA, Cowart had forfeited his benefits by failing
to secure approval from Nicklos and Compass of his settlement with
Transco, in the manner required by § 33(g)(1).
Section 33(g) provides in pertinent part:
"(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 Secretary and shall be filed in the office of
the deputy commissioner within thirty days after the settlement is
entered into.
"(2) If no written approval of the settlement is obtained and
filed as required by paragraph (1), or if the employee fails to
notify the employer of any settlement obtained from or judgment
rendered against a third person, all rights to compensation and
medical benefits under this chapter shall be terminated, regardless
of whether the employer or the employer's insurer has
473
made payments or acknowledged entitlement to benefits under this
chapter." 33 U. S. C. § 933(g).
The Administrative Law Judge (ALJ) rejected Nicklos' argument on
the basis of prior interpretations of § 33(g) by the Benefits
Review Board (Board or BRB). In the first of those decisions,
O'Leary v.
Southeast Stevedoring Co., 7 BRBS 144
(1977), aff'd mem.,
622 F.2d
595 (CA9 1980), the Board held that in an earlier version of §
33(g) the words "person entitled to compensation" referred only to
injured employees whose employers were making compensation
payments, whether voluntary or pursuant to an award. The
O'Leary decision held that a person not yet receiving
benefits was not a "person entitled to compensation," even though
the person had a valid claim for benefits.
The statute was amended to its present form, the form we have
quoted, in 1984. In that year Congress redesignated then subsection
(g) to what is now (g)(l) and modified its language somewhat, but
did not change the phrase "person entitled to compensation."
Congress also added the current subsection (g)(2), as well as other
provisions. Following the 1984 amendments the Board decided
Dorsey v.
Cooper Stevedoring Co., 18 BRBS 25 (1986),
app. dism'd,
826 F.2d
1011 (CAll 1987). The Board reaffirmed its interpretation in
O'Leary of the phrase "person entitled to compensation,"
saying that because the 1984 amendments had not changed the
specific language, Congress was presumed to have adopted the
Board's previous interpretation. It noted that nothing in the 1984
legislative history disclosed an intent to overrule the Board's
interpretations. The Board decided that the forfeiture provisions
of subsection (g)(2), including the final phrase providing that
forfeiture occurs "regardless of whether the employer ... has made
payments or acknowledged entitlement to benefits," was a "separate
provisio[n] applicable to separate situations." 18 BRBS, at 29.
The ALJ in this case held that under the reasoning of
O'Leary and
Dorsey, Cowart was not a person entitled
to
474
compensation because he was not receiving payments at the time
of the Transco settlement. Thus, the written-approval provision did
not apply and Cowart was entitled to benefits. Cowart's total
disability award was for $35,592.77, less Cowart's net recovery
from Transco of $29,350.60, for a net award of $6,242.17. In
addition, Cowart was awarded interest, attorney's fees, and future
medical benefits, the last constituting, we think, a matter of
great potential consequence. The Board affirmed in reliance on
Dorsey. 23 BRBS 42 (1989)
(per curiam).
On review, a panel of the Court of Appeals for the Fifth Circuit
reversed.
907 F.2d
1552 (1990). Without addressing the Board's specific statutory
interpretation, it held that § 33(g) contains no exceptions to its
written-approval requirement. Because this holding, and a decision
by a panel in a different case,
Petroleum Helicopters, Inc.
v.
Barger, 910 F. 2d 276 (CA5 1990), conflicted with a
previous unpublished decision in the same Circuit,
Kahny v.
O.
W C.
p., 729 F.2d
777 (CA5 1984), the Court of Appeals granted rehearing en bane.
The Director of the Office of Workers' Compensation Programs
(OWCP), a part of the Department of Labor, 20 CFR § 701.201 (1991),
appeared as a respondent before the full Court of Appeals to defend
the interpretation and decision of the Board.
In a
per curiam opinion, the en bane Court of Appeals
confirmed the panel's decision reversing the BRB in its
Cowart case.
927 F.2d
828 (CA5 1991). The Court of Appeals' majority held that §
33(g) is unambiguous in providing for forfeiture whenever an LHWCA
claimant fails to get written approval from his employer of a
third-party settlement. The majority acknowledged the
well-established principle requiring judicial deference to
reasonable interpretations by an agency of the statute it
administers, but concluded that the plain language of § 33(g)
leaves no room for interpretation. Judge Politz, joined by Judges
King and Johnson, dissented on the ground that the OWCP's was a
reasonable
475
agency interpretation of the phrase "person entitled to
compensation," to which the Court of Appeals should have
deferred.
We granted certiorari because of the large number of LHWCA
claimants who might be affected by the Court of Appeals' decision.
502 U. S. 1003 (1991). We now affirm.
II
In a statutory construction case, the beginning point must be
the language of the statute, and when a statute speaks with clarity
to an issue judicial inquiry into the statute's meaning, in all but
the most extraordinary circumstance, is finished.
Demarest
v.
Manspeaker, 498 U. S. 184, 190
(1991). The question is whether Cowart, at the time of the Transco
settlement, was a "person entitled to compensation" under the terms
of § 33(g)(1) of the LHWCA. Cowart concedes that he did not comply
with the written-approval requirements of the statute, while
Nicklos and Compass do not claim that they lacked notice of the
Transco settlement. By the terms of § 33(g)(2), Cowart would have
forfeited his LHWCA benefits if, and only if, he was subject to the
written-approval provisions of § 33(g)(1). Cowart claims that he is
not subject to the approval requirement because in his view the
phrase "person entitled to compensation," as long interpreted by
both the BRB and the OWCP, limits the reach of § 33(g)(1) to
injured workers who are either already receiving compensation
payments from their employer, or in whose favor an award of
compensation has been entered. Nicklos and Compass, supported by
the United States, defend the holding of the Court of Appeals that
§ 33(g) cannot support that reading. We agree with these
respondents and hold that under the plain language of § 33(g),
Cowart forfeited his right to further LHWCA benefits by failing to
obtain the written approval of Nicklos and Compass prior to
settling with Transco.
476
The controlling principle in this case is the basic and
unexceptional rule that courts must give effect to the clear
meaning of statutes as written. The principle can at times come
into some tension with another fundamental principle of our law,
one requiring judicial deference to a reasonable statutory
interpretation by an administering agency.
Chevron U. S.
A. Inc. v.
Natural Resources Defense Council, Inc.,
467 U. S. 837 (1984);
National Railroad Passenger
Corporation v.
Boston &
Maine Corp., 503 U. S. 407, 417
(1992). Of course, a reviewing court should not defer to an agency
position which is contrary to an intent of Congress expressed in
unambiguous terms.
K mart Corp. v.
Cartier, Inc.,
486 U. S. 281,
291 (1988);
Chevron, supra, at 842-843. In any event, we
need not resolve any tension of that sort here, because the
Director of the OWCP and the Department of Labor have altered their
position regarding the best interpretation of § 33(g). The Director
appears as a respondent before us, arguing in favor of the Court of
Appeals' statutory interpretation, and contrary to his previous
position. See Brief for Federal Respondent 8, n. 6. If the Director
asked us to defer to his
new statutory interpretation, this
case might present a difficult question regarding whether and under
what circumstances deference is due to an interpretation formulated
during litigation. See
Bowen v.
Georgetown Univ.
Hospital, 488 U.
S. 204, 212-213 (1988);
Martin v.
Occupational Safety
and Health Review Comm'n, 499 U. S. 144, 158
(1991). The agency does not ask this, however. Instead, the federal
respondent argues that the Court of Appeals was correct in saying
the language of § 33(g) is plain and cannot support the
interpretation given it by the Board. Because we agree with the
federal respondent and the Court of Appeals, and because Cowart
concedes that the position of the BRB is not entitled to any
special deference, see Brief for Petitioner 25; see also
Potomac
Electric Power Co. v.
Director, Office of Workers'
Compensation Programs, 449 U. S. 268, 278, n. 18
(1980);
Martin v.
Occupational Safety and
477
Health Review Comm'n, supra, we need not resolve the
difficult issues regarding deference which would be lurking in
other circumstances.
As a preliminary matter, the natural reading of the statute
supports the Court of Appeals' conclusion that a person entitled to
compensation need not be receiving compensation or have had an
adjudication in his favor. Both in legal and general usage, the
normal meaning of entitlement includes a right or benefit for which
a person qualifies, and it does not depend upon whether the right
has been acknowledged or adjudicated. It means only that the person
satisfies the prerequisites attached to the right. See generally
Board of Regents of State Colleges v.
Roth, 408 U. S. 564, 577 (1972)
(discussing property interests protected by the Due Process Clause
and contrasting an entitlement to an expectancy); Black's Law
Dictionary 532 (6th ed. 1990) (defining "entitle" as "To qualify
for; to furnish with proper grounds for seeking or claiming").
Cowart suffered an injury which by the terms of the LHWCA gave him
a right to compensation from his employer. He became a person
entitled to compensation at the moment his right to recovery
vested, not when his employer admitted liability, an event even yet
to happen.
If the language of § 33(g)(1), in isolation, left any doubt, the
structure of the statute would remove all ambiguity. First, and
perhaps most important, when Congress amended § 33(g) in 1984, it
added the explicit forfeiture features of § 33(g)(2), which specify
that forfeiture occurs "regardless of whether the employer or the
employer's insurer has made payments or acknowledged entitlement to
benefits under this chapter." We read that phrase to modify the
entirety of subsection (g)(2), including the beginning part
discussing the written-approval requirement of paragraph (1). The
BRB did not find this amendment controlling because the quoted
language is not an explicit modification of subsection (1). This is
a strained reading of what Congress intended. Subsection (g)(2)
leaves little doubt that the contemplated for-
478
feiture will occur whether or not the employer has made payments
or acknowledged liability.
The addition of subsection (g)(2) in 1984 also precludes the
primary argument made by the BRB in favor of its decisions in
Dorsey and this case, and repeated by Cowart to us:
That Congress in 1984, by reenacting the phrase "person entitled
to compensation," adopted the Board's reading of that language in
O'Leary. The argument might have had some force if § 33(g)
had been reenacted without changes, but that was not the case. In
1984 Congress did more than reenact § 33(g); it added new
provisions and new language which on their face appear to have the
specific purpose of overruling the prior administrative
interpretation. In light of the clear import of § 33(g)(2), the
Board erred in relying on the purported lack of legislative history
showing an explicit intent to reject the
O'Leary decision.
Even were it relevant, the Board's reading of the legislative
history is suspect because as the federal respondent demonstrates,
the legislative history of predecessor bills to the eventual 1984
enactment do indicate an intent to overturn
O'Leary. See
Longshoremen's and Harbor Workers' Compensation Act Amendments of
1981: Hearings on S. 1182 before the Subcommittee on Labor of the
Senate Committee on Labor and Human Resources, 97th Cong., 1st
Sess., 209, 210-211, 396 (1981). In any event, administrative
interpretation followed by congressional reenactment cannot
overcome the plain language of a statute.
Demarest v.
Manspeaker, 498 U. S., at 190. And the language of § 33(g)
is plain.
Our interpretation of § 33(g) is reinforced by the fact that the
phrase "person entitled to compensation" appears elsewhere in the
statute in contexts in which it cannot bear the meaning placed on
it by Cowart. For example, § 14(h) of the LHWCA, 33 U. S. C. §
914(h), requires an official to conduct an investigation upon the
request of a person entitled to compensation when,
inter
alia, the claim is controverted and payments are not being
made. For that provision, the inter-
479
pretation championed by Cowart would be nonsensical. Another
difficulty would be presented for the provision preceding § 33(g),
§ 33(f). It mandates that an employer's liability be reduced by the
net amount a person entitled to compensation recovers from a third
party. Under Cowart's reading, the reduction would not be available
to employers who had not yet begun payment at the time of the
third-party recovery. That result makes no sense under the LHWCA
structure. Indeed, when a litigant before the BRB made this
argument, the Board rejected it, acknowledging in so doing that it
had adopted differing interpretations of the identical language in
§§ 33(f) and 33(g).
Force v.
Kaiser Aluminum and Chemical
Corp., 23 BRBS 1, 4-5 (1989). This result is contrary to the
basic canon of statutory construction that identical terms within
an Act bear the same meaning.
Sullivan v.
Stroop,
496 U. S. 478,
484 (1990);
Sorenson v.
Secretary of Treasury,
475 U. S. 851,
860 (1986). The Board's willingness to adopt such a forced and
unconventional approach does not convince us we should do the same.
And we owe no deference to the BRB, see
supra, at 476.
Yet another reason why we are not convinced by the Board's
position is that the Board's interpretation of "person entitled to
compensation" has not been altogether consistent; and Cowart's
interpretation may not be the same as the Board's in precise
respects. At times the Board has said this language refers to an
employee whose "employer is actually paying compensation either
pursuant to an award or voluntarily when claimant enters into a
third party settlement."
Dorsey, 18 BRBS, at 28; 23 BRBS, at
44 (case below). At other times, sometimes within the same opinion,
the Board has spoken in terms of the employer either making
payments
or acknowledging liability.
O'Leary, 7 BRBS,
at 147-149;
Dorsey, supra, at 29; see also
In re
Wilson, 17 BRBS 471, 480 (ALJ 1985). Cowart, on the other hand,
would include within the phrase both employees receiving
compensation benefits and employees who have a judicial award of
compen-
480
sation but are not receiving benefits. Brief for Petitioner 6.
This distinction is an important part of Cowart's response to the
position of the United States. Reply Brief for Petitioner 8. It may
be that the gap between the Board's and Cowart's positions can be
explained by the Board's inconsistency; but that in itself weakens
any argument that the Board's interpretation is entitled to some
weight.
We do not believe that Congress' use of the word "employee" in
subsection (g)(2), rather than the phrase "person entitled to
compensation," undercuts our reading of the statute. The plain
meaning of subsection (g)(l) cannot be altered by the use of a
somewhat different term in another part of the statute. Subsection
(g)(2) does not purport to speak to the question of who is required
under subsection (g)(l) to obtain prior written approval.
Cowart's strongest argument to the Court of Appeals was that any
ambiguity in the statute favors him because of the deference due
the OWCP Director's statutory construction, a deference which
Nicklos and Compass concede is appropriate. Brief for Private
Respondents 7. As we have said, we are not faced with this
difficult issue because the views of the OWCP Director have changed
since we granted certiorari.
Supra, at 476. It seems
apparent to us that it would be quite inappropriate to defer to an
interpretation which has been abandoned by the policymaking agency
itself. It is noteworthy, moreover, that even prior to this case
the position of the Department of Labor has not been altogether
consistent. It is true that the Director has twice, albeit in a
somewhat equivocal manner, endorsed the Board's rulings in
O'Leary and
Dorsey. First, in a 1986 circular
discussing the Board's
Dorsey case a subordinate of the
Director stated:
"While the Board's position may not be totally consistent with
the amended language of Section 33(g), we think it is a rational
approach and have advised the Associate Solicitor that we will
support this position." United States Dept. of Labor, LHWCA
Circular No. 86-3, p. 1 (May 30, 1986).
481
N ext, in a manual published in 1989 the Director again adopted
the Board's position that written approval of a settlement is
required only from employers who are paying compensation; but the
statement ends with a qualifying comment, that "[t]he issue of
consent to a settlement can be a complex matter. Judicial
interpretation may be necessary to resolve the issue. (See LHWCA
CIRCULAR 86-03, 530-86)." U. S. Dept. of Labor, Longshore and
Harbor Workers' Compensation Act (LHWCA) Procedure Manual, ch.
3600, , 9 (Sept. 1989). On the other hand, the Department of Labor
has issued regulations (effective in their current form since 1986)
which are explicit that the written-approval requirement of § 33(g)
applies to a settlement for less than the amount of compensation
due under the LHWCA, "regardless of whether the employer or carrier
has made payments of
[sic] acknowledged entitlement to
benefits under the Act." 20 CFR § 702.281(b) (1991). So the
Department of Labor has not been speaking with one voice on this
issue. This further diminishes the persuasive power of the
Director's earlier decision to endorse the BRB's questionable
interpretation, a decision he has since reconsidered.
The history of the Department of Labor regulation goes far
toward confirming our view of the significance of the 1984
amendments. The original § 702.281, proposed in 1976 and enacted in
final form in 1977, required only that an employee notify his
employer and the Department of any third-party claim, settlement,
or judgment. 41 Fed. Reg. 34297 (1976); 42 Fed. Reg. 45303 (1977).
The sole reference to the forfeiture provisions was a closing
parenthetical: "Caution:
See 33 U. S. C. § 933(g)." In 1985, in response to the 1984
congressional amendments, the Department proposed to amend §
702.281 by replacing the closing parenthetical with a subsection
(b), stating that failure to obtain written approval of settlements
for amounts less than the compensation due under the Act would lead
to forfeiture of future benefits. 50 Fed. Reg. 400 (1985). In
response to comments, the final
482
rulemaking modified § 702.281(b) to clarify that the forfeiture
provision applied regardless of whether the employer was paying
compensation. 51 Fed. Reg. 4284-4285 (1986). Thus the evolution of
§ 702.281 suggests that at least some elements within the
Department of Labor read the 1984 statutory amendments to adopt a
rule different from the Board's previous decisions.
We also reject Cowart's argument that our interpretation of §
33(g) leaves the notification requirements of § 33(g)(2) without
meaning. An employee is required to provide notification to his
employer, but is not required to obtain written approval, in two
instances: (1) Where the employee obtains a judgment, rather than a
settlement, against a third party; and (2) Where the employee
settles for an amount greater than or equal to the employer's total
liability. Under our construction the written-approval requirement
of § 33(g)(1) is inapplicable in those instances, but the
notification requirement of § 33(g)(2) remains in force. That is
why subsection (g)(2) mandates that an employer be notified of "any
settlement. "
This view comports with the purposes and structure of § 33.
Section 33(f) provides that the net amount of damages recovered
from any third party for the injuries sustained reduces the
compensation owed by the employer. So the employer is a real party
in interest with respect to any settlement that might reduce but
not extinguish the employer's liability. The written-approval
requirement of § 33(g) "protects the employer against his
employee's accepting too little for his cause of action against a
third party."
Banks v.
Chicago Grain Trimmers Assn.,
Inc., 390 U. S.
459, 467 (1968). In cases where a judgment is entered, however,
the employee does not determine the amount of his recovery, and
employer approval, even if somehow feasible, would serve no
purpose. And in cases where the employee settles for greater than
the employer's liability, the employer is pro-
483
tected regardless of the precise amount of the settlement
because his liability for compensation is wiped out. Notification
provides full protection to the employer in these situations
because it ensures against fraudulent double recovery by the
employee.
As a final line of defense, Cowart's attorney suggested at oral
argument that Nicklos' participation in the Transco settlement
brought this case outside the terms of § 33(g)(1). Tr. of Oral Arg.
4-7. Relying on the recent decision of the Court of Appeals for the
Fourth Circuit in 1.
T. O.
Corporation of Baltimore
v.
Sellman, 954 F.2d
239, 242-243 (1992), counsel argued that § 33(g)(1) requires
written approval only of "settlement[s] with a third person," and
that Nicklos' participation in the Transco settlement meant it was
not with a
third person. Without indicating any view on the
merits of this contention, we do not address it because it is not
fairly included within the question on which certiorari was
granted. See this Court's Rule 14.1(a).
We need not today decide the retroactive effect of our decision,
nor the relevance of res judicata principles for other LHWCA
beneficiaries who may be affected by our decision. Cf.
Pittston
Coal Group v.
Sebben, 488 U. S. 105, 121-123
(1988). We do recognize the stark and troubling possibility that
significant numbers of injured workers or their families may be
stripped of their LHWCA benefits by this statute, and that its
forfeiture penalty creates a trap for the unwary. It also provides
a powerful tool to employers who resist liability under the Act.
Counsel for respondents stated during oral argument that he had
used the Transco settlement as a means of avoiding Nicklos'
liability under the LHWCA. Tr. of Oral Arg. 23-26. These harsh
effects of § 33(g) may be exacerbated by the inconsistent course
followed over the years by the federal agencies charged with
enforcing the Act. But Congress has spoken with great clarity to
the precise question raised by this case. It is the duty of the
courts to
484
enforce the judgment of the Legislature, however much we might
question its wisdom or fairness. Often we have urged the Congress
to speak with greater clarity, and in this statute it has done so.
If the effects of the law are to be alleviated, that is within the
province of the Legislature. It is Congress that has the authority
to change the statute, not the courts.
For the reasons stated, the judgment of the Court of Appeals
is
Affirmed.
JUSTICE BLACKMUN, with whom JUSTICE STEVENS and JUSTICE O'CONNOR
join, dissenting.
For more than 14 years, the Director of the Office of Workers'
Compensation Programs interpreted the Longshore and Harbor Workers'
Compensation Act (LHWCA or Act), 44 Stat. 1424, as amended, 33 U.
S. C. § 901
et seq., in the very same way that petitioner
Floyd Cowart's estate now urges. Indeed, the Director
advocated Cowart's position in the Court of Appeals, both
before the panel and before that court en bane.
After certiorari was granted, however, and after Cowart's
opening brief was filed, the federal respondent informed this
Court: "In light of the en bane decision in this case, the
Department of Labor reexamined its views on the issue." Brief for
Federal Respondent 8, n. 6. The federal respondent now assures us
that the interpretation the Director advanced and defended for 14
years is inconsistent with the statute's "plain meaning." The Court
today accepts that improbable contention, and in so doing rules
that perhaps thousands of employees and their families must be
denied death and disability benefits. I cannot agree with the
federal respondent's newly discovered interpretation, and still
less do I find it to be compelled by the "plain meaning" of the
statute. The Court needlessly inflicts additional injury upon these
workers and their families. I dissent.
485
I
Ever since the LHWCA was adopted in 1927, it has included some
version of the present § 33(g), 33 U. S. C. § 933(g), the provision
at issue in this case. Because that provision cannot be considered
in isolation from the broader context of § 33, or indeed, the LHWCA
as a whole, some background on the structure of the Act and the
history of § 33's interpretation is essential.
A
The LHWCA requires employers to provide compensation,
"irrespective of fault," for injuries and deaths arising out of
covered workers' employment. §§ 3(a) and 4(b), 33 U. S. C. §§
903(a) and 904(b). In return for requiring the employer to pay
statutory compensation without proof of negligence, the Act grants
the employer immunity from tort liability, regardless of how
serious its fault may have been. See §§ 5(a) and 33(i). Benefits
under the LHWCA are strictly limited, generally to medical expenses
and two-thirds of lost earnings, and are set out in detailed
schedules contained in the Act itself. See §§ 7-9. A fundamental
assumption of the Act is that employers liable for benefits will
pay compensation "promptly," "directly," and "without an award"
having to be issued. See § 14(a).
In a case where a third party may be liable, the LHWCA does not
require a claimant to elect between statutory compensation and tort
recovery. § 33(a). Where a claimant has accepted compensation under
a formal award, then, within a specified time, he may file a civil
action against the third party. § 33(b). If a claimant recovers in
that action, his compensation under the LHWCA is limited to the
excess, if any, of his statutory compensation over the net amount
of his recovery. § 33(f). Section 33(f) thus operates as a setoff
provision, allowing an employer to reduce its LHWCA liability by
the net amount a claimant obtains from a third party. Where the
claimant nets as much or more from the third
486
party as he would have received from his employer under the
LHWCA, the employer owes him no benefits.
Section 33(g) of the LHWCA, 33 U. S. C. § 933(g), addresses the
situation in which a claimant-plaintiff settles an action against a
third party for
less than he would have received under the
Act. Under § 33(f), considered alone, the claimant in this
situation would always be able to collect the remainder of his
statutory benefits from the employer. To protect the employer from
having to pay excessive § 33(f) compensation because of an
employee's "lowball" settlement, § 33(g) conditions LHWCA
compensation, in specified circumstances, upon the employer's
written approval of the third-party settlement. See
Banks v.
Chicago Grain Trimmers Assn., Inc., 390 U. S. 459, 467
(1968).
Before the LHWCA's 1984 amendments, § 33(g) provided that if a
"person entitled to compensation" settled for less than the
compensation to which he was entitled under the Act, then the
employer would be liable for compensation, as determined in §
33(f), only if the person obtained and duly filed with the
Department of Labor the employer's written approval of the
settlement. The meaning of the term "person entitled to
compensation" has proved to be a difficult issue, both in the
pre-1984 version of the Act and-as this case demonstrates-in the
Act's current form.
B
This issue apparently was considered first in
O'Leary
v.
Southeast Stevedoring Co., 7 BRBS 144 (1977), aff'd,
622 F.2d
595 (CA9 1980). In that case, the employer denied liability for
the death of the claimant's husband, contending that the decedent
was not an employee covered by the LHWCA and that the injury did
not arise out of his employment. 7 BRBS, at 145. The employer
persisted in denying liability even after its position was rejected
by the Benefits
487
Review Board (BRB or Board).! See
id., at 146-147.
Eventually, more than 28 months after her husband's accident, the
claimant settled a third-party suit for $37,500. About one month
thereafter, an Administrative Law Judge (ALJ), on remand from the
BRB, entered an award for the claimant. The value of the death
benefits awarded, assuming that the claimant would live out her
normal life expectancy without remarrying, amounted to more than
$150,000. See
In re O'Leary, 5 BRBS 16, 20 (ALJ 1976). At
that point, the employer contested liability for any compensation
on the ground that, under § 33(g), the claimant had forfeited that
compensation by failing to obtain the employer's written approval
of the settlement.
The ALJ rejected the employer's position, reasoning that the
claimant was not a "person entitled to compensation" at the time of
the settlement. The BRB affirmed. The Board pointed out that the
"underlying concept" of the LHWCA is that "the employer upon being
informed of an injury will voluntarily begin to pay compensation."
O'Leary, 7 BRBS, at 147 (citing § 14(a)). Further, the Board
observed, § 33(g) refers to the conditions under which an employer
will be "liable" for compensation under § 33(f); the reference to
"liability," the Board reasoned, "contemplat[es] that [the]
employer either be making voluntary payments under the Act or that
it ha[s] been found liable for benefits by a judicial
determination."
Id., at 148. Moreover, the Board continued,
§ 33(b) gives the employer the right to pursue third parties only
if the employer is paying compensation under an award. Thus, the
premise of employer rights under § 33, the Board concluded, is that
the employer is "making either voluntary payments under the Act or
pursuant to an award."
Ibid.
1 The BRB consists of persons appointed by the Secretary of
Labor and empowered to "hear and determine appeals raising a
substantial question of law or fact" with respect to LHWCA benefits
claims. § 21(b)(3), 33 U. S. C. § 921(b)(3).
488
The BRB observed that the employer in
O'Leary had not
paid compensation either voluntarily or pursuant to an award, but,
instead, consistently had denied liability. It could hardly have
been clear to the claimant at the time she settled her third-party
suit that the BRB would ultimately decide in her favor. Indeed,
only after that settlement and after the ALJ award did the employer
concede that the claimant represented a "person entitled to
compensation," and then only to argue that, for that reason, she
had forfeited her right to compensation under § 33(g). The Board
emphasized that the employer's interpretation would place claimants
in a severe bind:
"If a claimant was injured through the negligence of a third
party and the employer denied coverage under the Act, a claimant
would be forced to sue the third party. However, even if the
claimant obtained a reasonable settlement offer, an employer could
refuse to give its consent to the third party settlement for any
number of reasons, e. g., it does not wish to approve the
settlement on a form provided under the Act since its consent to
jurisdiction under the Act might be inferred. This could result in
a claimant not being paid any compensation, yet the claimant would
be afraid to make a third party settlement for in so doing he might
waive his rights to compensation under the Act. Ultimately, a
claimant going without income for a long enough time could be
forced into a third party settlement without employer's consent to
obtain money .... " Id., at 149.
And under the employer's interpretation of § 33(g), the employee
would thereby forfeit all right to compensation under the Act.
Surely, the Board concluded, "Congress by requiring written consent
could not have contemplated such a result."
Ibid.
The Court of Appeals for the Ninth Circuit affirmed in an
unpublished opinion, App. 113, stating: "The Board's ruling
489
is reasonable and furthers the underlying purpose of the Act."
Id., at 117. The Court of Appeals for the Fifth Circuit, in
an unpublished opinion, upheld a similar BRB decision in 1984,
finding the
O'Leary approach "fully consistent with the
language, legislative history, and rationale of" § 33(g). See
Kahny v.
OWCp, 729 F.2d
777 (table) and App. 96, 108. No other courts had occasion to
examine the
O'Leary interpretation before the LHWCA was next
amended.
C
The Longshore and Harbor Workers' Compensation Act Amendments of
1984, 98 Stat. 1639, revisited § 33(g).
Id., at 1652. The
former § 33(g) was carried over, with minor changes not relevant
here, as § 33(g)(1), and a new subsection (g)(2) was added. Section
33(g) now reads as follows:
"(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) for an amount less than the
compensation to which the person (or the person's representative)
would be entitled under this Act, the employer shall be liable for
compensation as determined under subsection (f) 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 Secretary and
shall be filed in the office of the deputy commissioner within
thirty days after the settlement is entered into.
"(2) If no written approval of the settlement is obtained and
filed as required by paragraph (1), or if the employee fails to
notify the employer of any settlement obtained from or judgment
rendered against a third person, all rights to compensation and
medical benefits under this Act shall be terminated, regardless
490
of whether the employer or the employer's insurer has made
payments or acknowledged entitlement to benefits under this
Act."
In
Dorsey v.
Cooper Stevedoring Co., 18 BRBS 25
(1986), appeal dism'd
sub nom. Cooper Stevedoring Co. v.
Director, Office of Workers' Compo Programs, U. S.
Dept.
of Labor, 826 F. 2d 1011 (CAll 1987), the Board rejected an
employer's argument that the final clause of the new § 33(g)(2)
should be understood as overturning the
O'Leary rule that no
duty to obtain approval arises until the employer begins to pay
compensation. Subsection (g)(l), the Board stated, reenacted the
prior version of § 33(g) as it was interpreted in
O'Leary;
the new subsection, (g)(2), was intended to apply to situations not
covered by (g)(l) or
O'Leary. In these situations-where the
employer has neither paid compensation nor acknowledged
liability-notice, but not written approval, is required. 18 BRBS,
at 29-30. The Board interpreted the final clause of (g)(2)-language
that echoes the Board's words in
O'Leary-to make clear that
the notification requirement, described in (g)(2), was not subject
to the
O'Leary limitation that is incorporated in (g)(l). 18
BRBS, at 29.
This interpretation is reinforced, the Board continued, by two
other considerations. First, although in a number of instances the
1984 legislative history indicates a congressional intention to
override other BRB and judicial decisions, that history "indicates
no congressional intent to overrule
O'Leary." Id., at 30.
Second, the Board observed, this Court has held that the LHWCA
"should be construed in order to further its purpose of
compensating longshoremen and harbor workers 'and in a way which
avoids harsh and incongruous results.'"
Id., at 31, quoting
Voris v.
Eikel, 346 U. S. 328, 333 (1953), and citing
Northeast Marine Terminal Co. v.
Caputo, 432 U. S. 249, 268
(1977). As
O'Leary made clear, allowing employers to escape
all LHWCA liability by withholding approval from any settlement,
while refusing to
491
pay benefits or acknowledge liability, could hardly be thought
consistent with the purpose of encouraging prompt, voluntary
payment of LHWCA compensation.
D
Such was the legal background against which Cowart's claim was
considered. In the administrative proceedings, the BRB relied on
O'Leary and
Dorsey to reject the argument, offered by
respondent Nicklos Drilling Company, that by failing to obtain
prior written approval of his third-party settlement Cowart had
forfeited his LHWCA benefits. Because Nicklos was not paying Cowart
benefits, either voluntarily or under an award, the Board reasoned,
Cowart was not a "person entitled to compensation" within the
meaning of § 33(g)(1), and he therefore was not required to obtain
Nicklos' approval of his settlement. 23 BRBS 42, 46 (1989).
Instead, the Board held, Cowart was required only to give Nicklos
notice of the settlement, as provided in § 33(g)(2). Because
Nicklos indisputably had notice of the settlementindeed, it had
notice three months before the settlement was consummated-the Board
ruled Cowart was eligible for LHWCA benefits.
On Nicklos' petition for review, the Director of the Office of
Workers' Compensation Programs (OWCP)-head of the agency charged
with administering the Act-defended the Board's interpretation
before the Court of Appeals for the Fifth Circuit. First a panel of
the Court of Appeals, and then the full court, by a divided vote
sitting en bane, however, rejected the Director's position, ruling
that Cowart was a "person entitled to compensation" and was
required by § 33(g)(1) to obtain Nicklos' written approval. See
907 F.2d
1552 (1990) (panel), and
927 F.2d
828 (1991) (en bane). We are told that after this Court granted
certiorari, and after Cowart filed his opening brief, the Director
"reexamined" his position and argued that the interpretation of §
33(g) he had maintained for 14 years, and defended in the
492
Court of Appeals, was inconsistent with the Act's plain
meaning.
II
This Court today agrees with the Director's postcertiorari
position that Cowart's claim for compensation is barred by the
"clear meaning" of the statute "as written."
Ante, at 476.
According to the Court, Cowart is plainly a "person entitled to
compensation" within the meaning of § 33(g)(1), and his failure to
obtain Nicklos' written approval of his third-party settlement
requires, by the "plain language" of § 33(g), that he be deemed to
have forfeited his statutory benefits. Although the Court does not
identify any plausible statutory purpose whatsoever advanced by its
reading, and although-to its credit-it acknowledges the "harsh
effects" of its interpretation,
ante, at 483, the Court
ultimately concludes that the language of § 33 compels it to reject
Cowart's position.
In my view, the language of § 33 in no way compels the Court to
deny Cowart's claim. In fact, the Court's reliance on the Act's
"plain language,"
ante, at 475, is selective: as discussed
below, analysis of §§ 33(b) and (f) of the Act shows that, even
leaving aside the question whether Cowart is a "person entitled to
compensation," a
consistently literal interpretation of the
Act's language would not require Cowart to have obtained Nicklos'
written approval of the settlement. Indeed, under a thoroughgoing
"plain meaning" approach, Cowart would be entitled to receive
full LHWCA benefits in addition to his third-party
settlement, not just the excess of his statutory benefits over the
settlement.
At the same time, a consistently literal interpretation of the
Act would commit the Court to positions it might be unwilling to
take. The conclusion I draw is not that the Court should adopt a
purely literal interpretation of the Act, but instead that the
Court should recognize, as it has until today, that the LHWCA must
be read in light of the purposes and policies it would serve. Once
that point is recog-
493
nized, then, as suggested by the Court's closing remarks on the
"stark and troubling" implications of its interpretation,
ante, at 483, it follows that recognition of Cowart's claim
is fully consistent with the Act.
A
Were the Court truly to interpret the Act "as written," it would
not conclude that Cowart is barred from receiving compensation.
Section 33(g)(1) of the LHWCA, on which the Court's "plain meaning"
argument relies, provides that if a "person entitled to
compensation" settles with a third party for an amount less than
his statutory benefits, his employer will be "liable for
compensation
as determined under subsection (f)" only if the
"person entitled to compensation" obtains and files the employer's
written approval. The "plain language" of subsection (g)(l) does
not establish any general written-approval requirement binding
either all "persons entitled to compensation," or the subset of
those persons who settle for less than their statutory benefits.
Instead, it requires written approval only as a condition of
receiving compensation "as determined under subsection (f)." Where
the "person entitled to compensation" is not eligible for
compensation "as determined under subsection (f)," subsection
(g)(l) does not require him to obtain written approval.
The "plain language" of subsection (f) in turn suggests that the
provision does not apply to Cowart's situation. Subsection (f), by
its terms, applies only "[i]f the person entitled to compensation
institutes proceedings within the period prescribed in subsection
(b)." And the "period prescribed in subsection (b)" begins, by the
terms of that subsection, upon the person's "[a]cceptance of
compensation under an award in a compensation order filed by the
deputy commissioner, an administrative law judge, or the Board."
Cowart's third-party suit was clearly
not instituted within
this period: He filed suit
before any award of LHWCA
benefits, and he still has not accepted (or been offered)
compensation
494
under any award. Thus, he does not come within the "plain
meaning" of subsection (f), and, accordingly, for the reasons given
above, he would not be bound by the subsection (g)(l)
written-approval requirement. It would also follow that, because
Nicklos indisputably received the notice required by subsection
(g)(2), that provision would not bar Cowart from receiving LHWCA
compensation and medical benefits.
Indeed, if Cowart is not covered by subsection (f), he would
appear to have been eligible for a larger award than he sought.
Subsection (f) does not authorize compensation otherwise
unavailable; instead, it operates as a
limit, in the
specified circumstances, on the employer's LHWCA liability. If read
literally, subsection (f) would not bar Cowart from receiving full
LHWCA benefits,
in addition to the amount he received in
settlement of the third-party claim.
It is true that § 33(f) has not always been read literally.
Subsection (f) has been assumed to be applicable where, for
example, the claimant's third-party suit was filed after an
employer
voluntarily began paying LHWCA compensation, not
just where compensation was paid pursuant to an award. See,
e.
g., 1.
T. O.
Corp. of Baltimore v.
Sellman, 954 F.2d
239, 240, 243-245 (CA4 1992);
Shellman v.
United
States Lines, Inc., 528 F.2d
675, 678-679, n. 2 (CA9 1975) (referring to the availability of
an employer's lien, where the employer has paid compensation
without an award, as "judicially created" rather than statutory),
cert. denied, 425 U. S. 936 (1976). That interpretation is
eminently sensible and consistent with the statutory purpose of
encouraging employers to make payments "promptly," directly," and
"without an award." See § 14(a). A contrary interpretation would
penalize employers who acknowledge liability and commence payments
without seeking an award, and it would reward employers who,
whether in good faith or bad, contest their liability until faced
with a formal award. See
Shellman, 528 F. 2d, at 679, n. 2
("The purpose of this Act would be frustrated if a different result
could be reached merely because
495
the employer pays compensation without entry of a formal
award").
It is not obvious, however, that a similar argument from
statutory purpose should be available to employers such as Nicklos
who refuse to pay benefits and then seek shelter under § 33(f) (and
by extension, § 33(g)(1)). And the fact remains that the Court
professes to interpret the "clear meaning" of the statute "as
written." The Court's interpretation today, however, is no more
compelled by the language of the LHWCA than the interpretation
Cowart defends: The Court is simply insensible to the fact that it
implicitly has relied upon presumed statutory purposes and policy
considerations to bring Nicklos and Cowart under the setoff
provisions of § 33(f), thus absolving Nicklos of the first $29,000
in LHWCA liability. Only at
that point does the Court invoke
the plain meaning rule and insist on a "literal" interpretation of
§ 33(g)(1). This selective insistence on "plain meaning" deprives
Cowart's estate of the last $6,242.17 Nicklos would otherwise have
been bound to pay.
B
For these reasons, I think it clear that a purely textual
approach to the LHWCA cannot justify the Court's holding. In my
view, a more sensible approach is to consider § 33(g) as courts
always have considered the other parts of § 33-in relation to the
history, structure, and policies of the Act.
1
Looking first to § 33's history, for present purposes the most
relevant aspect is the 1984 amendment to § 33(g) through which that
provision assumed its present form. The amended provision clearly
bears the impress of the Board's
O'Leary decision. The
reference in § 33(g)(2) to that subsection's applicability,
"regardless of whether the employer or the employer's insurer has
made payments or acknowledged entitlement to benefits," tracks the
limitation
496
recognized in
O'Leary-a limitation that had been
unanimously approved by panels of two Federal Courts of Appeals.
The question, then, is whether Congress sought to incorporate that
holding or to repudiate it in the 1984 amendments to § 33(g).
The critical fact in this inquiry is Congress' use of the term
"employee," rather than "person entitled to compensation," in
connection with the notification requirement. The use of this term
is in marked contrast to the other clauses of § 33(g). Section
33(g)(1) conditions § 33(f) compensation of a settling "person
entitled to compensation" on securing the employer's written
approval, and § 33(g)(2) provides, somewhat redundantly, that a
"person entitled to compensation" forfeits all rights to
compensation and medical benefits if the written approval mentioned
in § 33(g)(1) is not obtained. The notification clause of §
33(g)(2), however, provides that "if the
employee fails to
notify the employer of any settlement obtained from or judgment
rendered against a third person, all rights to compensation and
medical benefits ... shall be terminated, regardless of whether the
employer or the employer's insurer has made payments or
acknowledged entitlement to benefits" (emphasis added).
The use of the term "employee" in § 33(g)(2) strongly suggests
that Congress intended to incorporate the BRB's holding in
O'Leary. As mentioned, the language Congress chose for the
last clause of § 33(g)(2) indicates that it was aware the Board had
adopted a restrictive interpretation of the term "person entitled
to compensation." Congress retained that term in connection with
the written-approval requirement of subsection (g)(l). Yet Congress
chose the broad term, "employee," for the notification clause of
subsection (g)(2), and "employee," unlike "person entitled to
compensation," is a term expressly defined in the statute. See §
2(3).2 The
2 Subject to exceptions not applicable here, that section of the
Act defines the term "employee" as "any person engaged in maritime
employment, including any longshoreman or other person engaged in
longshoring
497
Court cannot explain why Congress would have chosen two
different terms to apply to the different requirements. Indeed, on
the Court's interpretation, the two terms are identical in their
extension. On the Court's reading, the term "person entitled to
compensation" denotes only a statutory employee who has a claim
that, aside from the requirements of § 33(g), would be recognized
as valid. And that is exactly the denotation of the term "employee"
in connection with the notification requirement. The fact that
Congress chose to use different terms in connection with the
different § 33(g) requirements-using, with respect to the
written-approval requirement, a term that it knew had been narrowly
interpreted, and using, with respect to the notification
requirement, a term broadly defined in the statute itself-surely
indicates that Congress intended the two terms to have different
meanings. Had Congress intended the meaning the Court attributes to
it, it would have used the same term in both contexts.3
2
The inference that Congress intended to adopt the
O'Leary
rule in the amended language of § 33(g) is only strengthened
operations, and any harborworker including a ship repairman,
shipbuilder, and ship-breaker."
3 Two of the Court's other arguments concerning the 1984
amendments may deserve brief mention. First, the Court suggests in
passing that "the legislative history of predecessor bills to the
eventual 1984 enactment do indicate an intent to overturn
O'Leary," citing snippets of written testimony submitted
during the lengthy 1981 hearings. See
ante, at 478. Needless
to say, statements buried in hearings conducted
three years
before the bill's passage fall far short of demonstrating any
such congressional intent. The BRB was correct when it said in
Dorsey that the legislative history of the 1984 amendments
indicates no intention to overturn
O'Leary.
Second, the Court places great significance upon the fact that
"at least some elements within the Department of Labor" read the
post-1984 statute differently from the Director of OWCP.
Ante, at 482. The Court is quite clear, however, that it is
the Director who administers the Act, see
ante, at 480, not
these other "elements," and that the Director does not ask for
deference to his recently adopted interpretation.
498
by consideration of the factual context to which the provision
was designed to apply. As the Board noted in
O'Leary, and as
the Director argued to the Court of Appeals, the Act presumes that
employers, as a rule, will promptly recognize their LHWCA
obligations and commence payments immediately, without the need for
a formal award. See § 14(a). In that situation, the claimant
generally knows the value of the benefits to be received, and can
accurately compare that figure to any settlement offer. The
claimant in this situation has no strong interest in the precise
amount of any settlement that nets less than the statutory
benefits, so long as the costs of suit are covered, because by
operation of § 33(f), he would not be allowed to retain any of the
proceeds. On the other hand, the employer who has acknowledged
liability has a strong interest in recovering from the third party
any benefits already paid to the claimant and in reducing or
eliminating any future benefits it has committed itself to pay. For
the employer in this situation, the precise amount of a settlement
for less than the claimant's statutory benefits is vitally
important: any net dollar the claimant recovers in a third-party
action is a dollar less the employer will have to pay in LHWCA
benefits.
Given the parties' different incentives in the situation where
the employer already is paying benefits, it makes sense to require
the claimant to protect the employer's interest, by requiring
settlements to be reasonable in the employer's judgment. At the
same time, giving the employer this power of approval does not
generally threaten the claimant's interests, since, as mentioned,
only the employer has an interest in settlements above the
threshold of the claimantplaintiff's expenses and below the amount
of promised or delivered LHWCA benefits.
Matters are quite different, however, when (as in the present
case) the employer has refused to make statutory payments and is
not subject to an enforceable award at the time of settlement.
First, the claimant generally will not be able
499
to estimate with certainty whether he will receive any LHWCA
benefits, let alone how much. Accordingly, the calculation required
by § 33(g)-a comparison between LHWCA benefits and settlement
amount-will be far more difficult. Second, the claimant who is not
receiving LHWCA payments, and who cannot be certain that he ever
will receive payments, will have a much more powerful interest in
negotiating a third-party settlement that is as favorable as
possible. This claimant, unlike its counterpart who is receiving
payments, therefore will have a strong incentive-independent of the
§ 33(g) requirements-to protect any interest the employer might
have in reducing potential LHWCA liability. Finally, disabled
longshore employees, or the families of a longshoreman killed on
the job, are likely to be in a highly vulnerable position, subject
to financial pressure that may lead them to overvalue a present
lump-sum payment and undervalue future periodic payments that might
eventually be available under an LHWCA award.
The employer who refuses to pay, by contrast, has taken the
position that it owes no LHWCA benefits that may be reduced through
a third-party settlement, and thus that it has no real interest in
the amount for which the third party settles. Moreover, as has been
noted, the claimant who is not receiving benefits has a strong
incentive to protect the employer's interest in reducing or
eliminating any LHWCA liability that might eventually be imposed.
Under the Court's interpretation of § 33(g)(1), however, such an
employer in many cases can ensure that it will never be required to
pay LHWCA benefits, even if it might otherwise ultimately be
determined to be liable, simply by withholding approval of any
settlement offer, regardless of amount. In practice, recalcitrant
employers will seek to exempt themselves from statutory liability
by withholding approval of settlements, hoping that their
employees' need for present funds will force them to settle without
approval. I cannot believe that Congress intended to require LHWCA
claim-
500
ants to bet their statutory benefits on the possibility that
future administrative and perhaps judicial proceedings, years
later, might vindicate their position that the employer should have
been paying benefits-particularly when the employer's asserted
interest is already adequately protected independently of §
33(g)(1).
3
The Court recognizes the patent unfairness of this situation,
and it as much as admits that its interpretation is out ofline with
the policies of the Act. See
ante, at 483. Nevertheless, the
Court holds that the plain meaning of the term "person entitled to
compensation" clearly applies to both categories of claimants-those
whose employers have denied liability, as well as those whose
employers have acknowledged that they must pay statutory benefits.
See
ante, at 477. For that reason, the Court implies,
regardless of what Congress may have thought it was accomplishing
in the 1984 amendments, the words "person entitled to compensation"
simply will not bear the construction
O'Leary gave them. See
ante, at 478-479.
Even setting aside my doubts, expressed above, about the plain
meaning rule's application to this statute, I am not persuaded by
the Court's contention. In my view, it does not strain ordinary
language to describe claimants whose employers have acknowledged
LHWCA liability as "persons entitled to compensation," but to
withhold that description from claimants whose employers have
denied liability for compensation. This is particularly so, given
the context in which the term appears in the statute. Section
33(g)(1) requires the "person entitled to compensation" to compare
two figures-the amount of a settlement offer, on the one hand, and
the amount of compensation to which the person is entitled, on the
other. But what is that latter figure in a situation in which the
employer denies liability in full or in part? Doubtless, the
claimant could hazard a guess by consulting the Act's
jurisdictional provisions concerning who is covered
501
for which kind of accident, the compensation schedules included
in the Act, and, in the case of a disability claim, the opinion of
the claimant's doctor that the claimant, in fact, is disabled. The
very nature of the situation, however, is that it is not clear that
such a person is indeed "entitled to compensation"-that question,
after all, is exactly the issue that the employer's position
requires to be determined in administrative and perhaps subsequent
judicial proceedings. The
O'Leary limitation of the term
"person entitled to compensation" to the situation in which the
claimant's employer has acknowledged liability and commenced
payments seems to me fully consistent with the requirements of
ordinary language.
It is true, as the Court observes, that under the
O'Leary
interpretation, the term "person entitled to compensation" would
take on different meanings in different contexts. See
ante,
at 478. This Court, however, has not inflexibly required the same
term to be interpreted in the same way for all purposes. Compare
Barnhill v.
Johnson, 503 U. S. 393, 401-402,
and n. 9 (1992), with
id., at 406 (STEVENS, J., dissenting)
(noting that the maxim is "not inexorable," but arguing that
because "nothing in the [statute's] structure or purpose" counsels
otherwise, the Court should have applied it). This Court has
recognized:
"Most words have different shades of meaning and consequently
may be variously construed, not only when they occur in different
statutes, but when used more than once in the same statute or even
in the same section ....
"It is not unusual for the same word to be used with different
meanings in the same act, and there is no rule of statutory
construction which precludes the courts from giving to the word the
meaning which the legislature intended it should have in each
instance." Atlantic Cleaners & Dyers, Inc. v.
United States, 286 U. S. 427, 433
(1932).
502
This case is one in which the statutory term in question should
be read contextually, rather than under the assumption that the
term necessarily has the same meaning in all contexts. The phrase
"person entitled to compensation" is not defined in the statute,
and it is susceptible of at least two interpretations-a "formalist"
interpretation, according to which one may be entitled to
compensation whether or not anyone ever acknowledges that fact, and
a "positivist" or "legal realist" interpretation, according to
which one is entitled to compensation only if the relevant
decisionmaker has so declared. Which of these two senses is
"correct" will depend upon context. The latter sense, I have
suggested, is appropriate to a context in which liability for
compensation is disputed and the employee is called upon to predict
the future course of administrative and perhaps judicial
proceedings-not just as to liability, but as to the precise amount
of liability. And, in any event, I think, the text and
circumstances of the 1984 amendment to § 33(g) indicate that
Congress intended to adopt the "realist" interpretation found in
O'Leary.
Moreover, the Court simply has failed to apply, or even mention,
a maxim of interpretation, specifically applicable to the LHWCA,
that strongly supports Cowart's position. This Court long has held
that" '[t]his Act must be liberally construed in conformance with
its purpose, and in a way which avoids harsh and incongruous
results.'"
Director, OWCP v.
Perini North River
Associates, 459
U. S. 297, 315316 (1983), quoting
Voris v.
Eikel,
346 U. S., at 333. The only point at which the Court in this case
consults the purposes of the Act is at the end of its opinion, when
it assures the reader that its interpretation of the
notification requirement of § 33(g)(2)-as opposed to its
interpretation of the written-approval requirement stated in §
33(g)(1)-is consistent with the statute's purposes. See
ante, at 482. Finally, underscoring its refusal to apply the
maxim of liberal construction to this case, the Court ultimately
acknowledges
503
that the interpretation of § 33(g) it has adopted has "harsh
effects" and "creates a trap for the unwary."
Ante, at 483.
For my part, I can imagine no more appropriate occasion on which
the maxim should be applied.
4
Once it is recognized that a claimant whose employer denies
LHWCA liability is not a "person entitled to compensation" for
purposes of § 33(g)(1), the proper resolution of this case is
clear. Cowart was just such a claimant, and, accordingly, he was
not bound by § 33(g)(1)'s written-approval requirement. It is
undisputed that he satisfied the notice requirement of § 33(g)(2).
It follows that § 33(g) is no bar to Cowart's eligibility for
benefits.
III
The Court recognizes "the stark and troubling possibility that
significant numbers of injured workers or their families may be
stripped of their LHWCA benefits by this statute."
Ibid. It
attempts to justify the "harsh effects" of its decision on the
ground that it is but the faithful agent of the Legislature, and
"Congress has spoken with great clarity to the precise question
raised by this case."
Ibid. In my view, Congress did not
answer the question in the way the Court suggests, let alone did it
do so "with great clarity." The responsibility for today's
unfortunate decision rests not with Congress, but with this very
Court.
I dissent.
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