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.
451 U. S.
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 eases. 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
Page 451 U. S. 597
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.
451 U. S.
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.
451 U. S.
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.
451 U. S.
612-617.
617 F.2d 955 and 622 F.2d 572 and 575, affirmed. STEVENS, J.,
delivered the opinion for a unanimous Court.
Page 451 U. S. 598
JUSTICE STEVENS delivered the opinion of the Court.
The question presented in these three cases [
Footnote 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.
[
Footnote 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. [
Footnote
3] More
Page 451 U. S. 599
than six months later, [
Footnote
4] each commenced an action against the shipowner alleging that
the defendant had negligently caused his injury. [
Footnote 5] The District Courts granted
motions for summary
Page 451 U. S. 600
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. [
Footnote 6] The Court
of Appeals for the Second Circuit affirmed, 617 F.2d 955 (1980);
622 F.2d 572 and 575 (1980), [
Footnote 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. [
Footnote 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 pursuant
Page 451 U. S. 601
to the award belongs entirely to the longshoreman. [
Footnote 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. [
Footnote
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
Page 451 U. S. 602
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,
445 U. S. 77-78.
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). [
Footnote 11]
Page 451 U. S. 603
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.
[
Footnote 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 postassignment
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 claim reassigned if the employer fails to sue.
Normally, these contentions would be foreclosed by the lack of any
ambiguity in the statutory language. But the statutory language was
also unambiguous in
Page 451 U. S. 604
1956 when this Court held, in
Czaplicki v. The Hoegh
Silvercloud, 351 U. S. 525,
that § 33(b) contained a limited exception. It therefore is
appropriate to evaluate petitioners' contentions in the light of
the relevant legislative history. In making this evaluation,
however, we adhere to the rule that, "[a]bsent a clearly expressed
legislative intention to the contrary, [the statutory] language
must ordinarily be regarded as conclusive."
Consumer Product
Safety Comm'n v. GTE Sylvania, Inc., 447 U.
S. 102,
447 U. S.
108.
II
As originally enacted in 1927, the Act gave an injured
longshoreman the right to elect between the certain recovery of
compensation from his employer without any proof of fault, or the
less certain, but probably more generous, remedy of an action for
damages against a negligent third party. [
Footnote 13] The employee's election to accept
compensation under the Act effected an immediate assignment to his
employer of his cause of action for negligence. [
Footnote 14] Under the original Act, the
longshoreman could pursue either remedy, but not both, and nothing
more than the acceptance of compensation was required to evidence
the employee's election.
See, e.g., Toomey v. Waterman S.S.
Corp., 123 F.2d 718, 721 (CA2 1941).
In 1938, Congress amended the Act to provide that the
Page 451 U. S. 605
acceptance of .compensation would operate as an assignment only
if the payment was "under an award in a compensation order filed by
the deputy commissioner." [
Footnote 15] This procedural change was designed to
protect the employee from the harsh consequences of an improvident
election. [
Footnote 16]
Although Congress thereby reduced the danger that an employee would
make an election without being advised about its consequences, the
1938 amendment did nothing to mitigate those consequences once the
election was made.
In 1956, this Court held that an injured longshoreman could
enforce his right of action against a third party notwithstanding
his acceptance of compensation from his employer.
Czaplicki v.
The Hoegh Silvercloud, supra. [
Footnote 17] In
Page 451 U. S. 606
that case, both the employer and the third party allegedly
responsible for the unseaworthy condition that had caused the
employee's injury were insured by the Travelers Insurance Co.
Because the stevedore had no interest in recovering the
compensation payments that had been made by its insurance carrier,
[
Footnote 18] and because
that carrier would be responsible for both prosecuting and
defending any third-party claim, no one other than the injured
longshoreman had a sufficient interest in the claim to bring suit.
Because of the conflict between t.he assignee's interest and the
interest of the employee, the Court construed the Act to allow the
longshoreman to enforce the third-party claim in his own name.
[
Footnote 19] The Court
Page 451 U. S. 607
did not hold .that no assignment had occurred; rather, it held
that, under "the peculiar facts" of the case, the election and
consequent assignment did not bar the employee's action. [
Footnote 20]
Two years after
Czaplicki, in
Johnson v. Sword
Line, Inc., 257 F.2d 541 (1958), the Court of Appeals for the
Third Circuit held that a different sort of conflict of interest
would also preserve the longshoreman's right to sue a third party
after accepting compensation from his employer. This Court had
previously held, in
Ryan Stevedoring Co. v. Pan-Atlantic S.S.
Corp., 350 U. S. 124,
that a shipowner who was liable to a longshoreman could assert a
claim for indemnity against the employer stevedore. That holding
inevitably created a
Page 451 U. S. 608
conflict between the stevedore's interest in recouping the
compensation awarded to the longshoreman and its interest in
avoiding the risk of a substantially larger liability as an
indemnitor. The Court of Appeals reasoned that the stevedore's
potential liability under the indemnity claim authorized by
Ryan Stevedoring had the practical effect of enlarging the
conflict of interest rationale of
Czalicki, which had
narrowly rested on the peculiar fasts of that case, to encompass
substantially every case in which a stevedore failed to bring a
third-party action. [
Footnote
21] Accordingly, the court concluded that a conflict of
interest could be presumed to exist whenever the statutory assignee
failed to pursue or to reassign the assigned claim, unless that
claim was obviously lacking in merit.
See 257 F.2d at
544-546. [
Footnote 22]
Page 451 U. S. 609
The impact of
Ryan Stevedoring upon third-party claims
assigned to employers by operation of § 33(b) was brought to the
attention of Congress as well. In 1956, a House Subcommittee
conducted hearings on proposed legislation that ultimately evolved
into the 1959 amendments to the Act. [
Footnote 23] One of the bills considered by the
Subcommittee was H.R. 5357, which provided, among other things,
that an employee could commence a third-party suit within six
months after accepting compensation, and that an employer who
successfully pursued an assigned third-party claim was entitled to
keep one-third of any net recovery. As explained by Congressman
Zelenko, the bill's author, these provisions were designed to
mitigate the problems identified in Justice Black's dissenting
opinion in
Ryan Stevedoring. [
Footnote 24] Other witnesses
Page 451 U. S. 610
appearing before the Subcommittee also expressed concern about
the conflict of interest problem created by
Ryan
Stevedoring, and endorsed H.R. 5357 as an effective solution
to that problem. [
Footnote
25]
In 1959, Congress acted to remedy the problems created by the
potential conflict between the interests of the employer and the
employee in prosecuting third-party claims. [
Footnote 26] Its solution was not to create or
to define an exception to the assignment by operation of law.
Rather, Congress substantially adopted the central provisions of
the Zelenko bill by amending § 33(b) to postpone the assignment by
operation of law until six months after the acceptance of
compensation under an award, and by amending § 33(e) to allow an
employer to retain one-fifth of the net proceeds of its
successful
Page 451 U. S. 611
third-party action. [
Footnote
27] The effect of the 6-month provision, of course, was to give
the longshoreman an unqualified right to bring a third-party action
during the 6-month period. If his financial circumstances made it
imperative that he accept a prompt settlement of his compensation
claim, he could do so without forfeiting his right to seek a more
liberal recovery from a responsible third party. Moreover, by
bringing his own action, the longshoreman could avoid the risk that
his employer's potential conflict of interest -- or possibly
erroneous evaluation of the merits of the claim -- might result in
its abandonment. [
Footnote
28] The amendment to § 33(e) provided an additional incentive
to the employer to sue after assignment of the claim by giving him
a share in any excess recovery.
Nothing in the 1959 amendments purports to preserve the
employee's right to commence a third-party suit after the 6-month
period expires. Although the amendments encourage employers to
pursue assigned claims, they do not qualify the assignee's control
of the cause of action after the assignment takes place. To the
contrary, the legislative history indicates
Page 451 U. S. 612
that, once the 6-month period expires, the employer possesses
complete control of third-party claims. [
Footnote 29]
This 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 statutory language provides
a different and clearly defined solution to the conflict of
interest problem that had been created by
Ryan
Stevedoring. [
Footnote
30] Congress unequivocally made the choice in favor of first
giving the employee exclusive control of the cause of action for a
6-month period and then giving the employer exclusive control
thereafter, instead of opting for any form of simultaneous joint or
partial control. The simple standard set forth in § 33(b) protects
the interests of both employees and employers, and is consistent
with the general policy of the Act to encourage the prompt and
efficient administration of compensation claims.
See Potomac
Electric Power Co. v. Director, Office of Workers' Compensation
Programs, 449 U. S. 268,
449 U. S.
282.
III
Although the assignment at the end of the 6-month period occurs
automatically, the Court of Appeals for the Fourth Circuit has held
that the employee retains a right 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.
See Caldwell v. Ogden Sea Transport, Inc., 618 F.2d
1037 (1980). The court "readily found" the procedural mechanism for
implementing this nonstatutory right to a reassignment,
id. at 1046, but we
Page 451 U. S. 613
find no evidence that Congress created either the substantive
right itself or the procedural rights that the court discerned.
The predicate for the Fourth Circuit's analysis was an
assumption that Congress did not intend to allow the longshoreman
to lose his rights against a third party simply because (a) he
failed to take any action within six months and (b) his employer
decided not to sue the third party thereafter. [
Footnote 31] To avoid the "practical
problem" presented in such a situation, the court fashioned a
"solution" that the Act "does not specifically provide."
Id. at 1045. We are persuaded that the reason Congress did
not specifically provide the solution which the court readily found
is that Congress did indeed intend to require the employee either
to act promptly or to accept the consequences of an assignment
of
Page 451 U. S. 614
his claim to the employer. [
Footnote 32] One of the consequences of such an
assignment is the risk that the employer will choose not to sue.
The comprehensive character of the procedures outlined in the Act
precludes the fashioning of an entirely new set of remedies to deal
with an aspect of a problem that Congress expressly addressed.
[
Footnote 33] The fact that
parties sometimes fail to assert meritorious claims within the
period authorized by law is not a sufficient reason for refusing to
enforce an unequivocal statutory bar.
IV
Finally, relying upon
Edmonds v. Compagnie Generale
Transatlantique, 443 U. S. 256,
petitioners argue that Congress' failure to amend 33(b) in 1972,
when the Act was thoroughly reexamined, evidences implicit
congressional approval of the decision of the Court of Appeals for
the District of Columbia Circuit in
Potomac Electric Power Co.
v. Wynn, 120 U.S.App.D.C. 13, 343 F.2d 295 (1965) (per
curiam). In that case, the court held that 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.
Id. at 16,
343 F.2d at 298.
See also Joyner v. F.& B Enterprises,
Inc., 145 U.S.App.D.C. 262, 264, 448 F.2d
Page 451 U. S. 615
1185, 1187 (1971). The court construed the 1959 amendments as
enlarging the employee's protection, and considered the rationale
of
Czaplicki to apply whenever a potential conflict of
interest is present. In its judgment, the employer's failure to sue
was sufficient evidence of a conflict to justify an independent
action by the employee, notwithstanding the assignment provisions
in the Act. [
Footnote 34] 12
U.S.App.D.C. at 16, 343 F.2d at 298.
For reasons already stated, we are satisfied that that opinion
did not correctly construe the 1959 amendments. [
Footnote 35] It is true that Congress did
not expressly disclaim that case in 1972, but that legislative
inaction does not modify the plain terms of the 1959 amendments.
Nor did Congress expressly endorse the
Wynn decision. More
importantly, the statutory
Page 451 U. S. 616
interpretation announced in
Wynn can hardly be compared
to the well established rule of maritime law at issue in
Edmonds. There is no reason to believe that "Congress has
relied upon conditions" that
Wynn created.
Edmonds,
supra, at
443 U. S. 273.
[
Footnote 36] In fact, the
statutory changes adopted in 1972 are entirely consistent with our
interpretation of § 33(b). Moreover, those changes remind us that
one of the purposes of the Act is to minimize the need for
litigation as a means of providing compensation for injured
workmen.
See Bloomer, 445 U.S. at
445 U. S.
86.
Three of the 1972 Amendments are pertinent. First, the level of
benefits was substantially increased, thereby increasing the
likelihood that the statutory compensation recoverable without
proof of fault would be adequate. [
Footnote 37] Second, the shipowner's right to seek
indemnity from the stevedore under Ryan Stevedoring was eliminated,
thereby removing a category of litigation from the courts, placing
more definite limits on the stevedore's insurance costs, and
removing a potential source of conflict between the interests of
employers and employees. [
Footnote 38] Third, the shipowner's nearly absolute
liability for unseaworthiness was eliminated, thereby further
narrowing the area of potential litigation and increasing the
relative importance of statutory awards as the favored method of
compensation. [
Footnote 39]
See generally Scindia Steam Navigation Co.
Page 451 U. S. 617
v. De los Santos, ante, at
451 U. S.
164-165. In making these changes, Congress necessarily
balanced the conflicting interests of the vessel owner, the
stevedore, and the longshoreman. As with other problems of
interpreting the intent of Congress in fashioning various details
of this legislative compromise, the wisest course is to adhere
closely to what Congress has written. [
Footnote 40] The meaning of § 33(b) is plain, and
should be respected.
V
In sum, we conclude that the Court of Appeals in these cases
correctly held that § 33(b) precludes petitioners from pursuing
their third-party claims. Whatever the continued validity of our
decision in
Czaplicki, a question we need not and do not
decide today, [
Footnote 41]
these cases do not involve "the
Page 451 U. S. 618
peculiar facts" on which
Czaplicki was based. Rather,
petitioners essentially have relied upon conflicts inherent in the
statutory scheme and in the relationships among longshoremen,
stevedores, and shipowners. The notion adopted in some
post-
Czaplicki decisions that a conflict of interest may
be presumed whenever an employer does not sue on an assigned claim
is simply untenable in light of the plain statutory language and
the history of the 1959 and 1972 Amendments. We leave for another
day the question whether an assignment under § 33(b) will bar a
longshoreman's third-party action if there is specific evidence of
a serious conflict of interest Congress could not have foreseen
when it enacted and amended § 33.
The judgments of the Court of Appeals are
Affirmed.
* Together with
Perez v. Arga National Shipping Line,
Ltd., and
Barulec v. Ove Skou, R.A., also on
certiorari to the same court (
see this Court's Rule
19.4).
[
Footnote 1]
Although a single petition for certiorari was filed on behalf of
the three petitioners, their lawsuits proceeded independently of
one another at earlier stages of the litigation. Three separate
District Court opinions were issued.
See Rodriguez v. Compass
Shipping Co., 456 F.
Supp. 1014 (SDNY 1978);
Perez v. Arya National Shipping
Line, Ltd., 468 F.
Supp. 799 (SDNY 1979);
Barulec v. Ove Skou,
R.A., 471 F.
Supp. 358 (SDNY 1979). The Court of Appeals affirmed the
decision in
Rodriguez in a published opinion, 617 F.2d 955
(1980), and on the same day affirmed the
Perez and
Barulec decisions in unpublished orders citing its opinion
in
Rodriguez. See Barulec v. Ove Skou, R.A., 622
F.2d 572 (1980);
Perez v. Arya National Shipping Line,
Ltd., 622 F.2d 575 (1980).
[
Footnote 2]
Section 33(b) of the Act provides:
"Acceptance of such compensation under an award in a
compensation order filed by the deputy commissioner or [Benefits
Review] Board 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."
44 Stat. (part 2) 1440, as amended, 33 U.S.C. § 933(b).
[
Footnote 3]
In the
Rodriguez and
Barulec cases, the
plaintiffs and their employers agreed to settlements in informal
conferences convened by the Office of Workers' Compensation
Programs. Although a since-amended regulation required that such
settlements be embodied in formal compensation orders,
see
20 CFR § 702.315 (a) (1976), no formal orders were entered in these
cases. Accordingly, the plaintiffs argued in the lower courts that
the assignment provision of § 33(b) had not been activated, because
they had not accepted "compensation under an award in a
compensation order filed by the deputy commissioner or Board," as
required by the statute. The District Courts rejected petitioners'
argument, concluding that settlement agreements reached after
official informal conferences were equivalent to formal orders for
purposes of § 33(b).
See Rodriguez, supra, at 1018-1020;
Barulec, 471 F. Supp. at 360-362. The Court of Appeals
agreed.
See 617 F.2d at 958-960. Although petitioners
challenged this ruling in their petition for certiorari, our order
granting the petition did not extend to this question. 449 U.S.
818. Accordingly, for purposes of our decision, we assume that
their acceptance of compensation operated as an assignment under §
33(b). Petitioner Perez apparently did not contend below that he
had not accepted "compensation under an award" within the meaning
of § 33(b).
See 468 F.
Supp. 799 (SDNY 1979).
[
Footnote 4]
Rodriguez filed suit approximately 32 months, Perez filed suit
approximately 15 months, and Barulec filed suit approximately 1
year after accepting compensation.
See 617 F.2d at 957;
Perez, 468 F. Supp. at 800;
Barulec, 471 F. Supp.
at 359.
[
Footnote 5]
The Act expressly provides that the employee is not required to
elect between his right to compensation from his employer and his
claim for damages against a third party. Section 33 (a), as set
forth in 33 U.S.C. § 933 (a), provides :
"If on account of a disability or death for which compensation
is payable under this chapter the person entitled to such
compensation determines that some person other than the employer or
a person or persons in his employ is liable in damages, he need not
elect whether to receive such compensation or to recover damages
against such third person."
Section 5(b) of the Act, as set forth in 33 U.S.C. § 905(b),
provides:
"In the event of injury to a person covered under this chapter
caused by the negligence of a vessel, then such person, or anyone
otherwise entitled to recover damages by reason thereof, may bring
an action against such vessel as a third party in accordance with
the provisions of section 933 of this title, and the employer shall
not be liable to the vessel for such damages directly or indirectly
and any agreements or warranties to the contrary shall be void. If
such person was employed by the vessel to provide stevedoring
services, no such action shall be permitted if the injury was
caused by the negligence of persons engaged in providing
stevedoring services to the vessel. If such person was employed by
the vessel to provide ship building or repair services, no such
action shall be permitted if the injury was caused by the
negligence of persons engaged in providing ship building or repair
services to the vessel. The liability of the vessel under this
subsection shall not be based upon the warranty of seaworthiness or
a breach thereof at the time the injury occurred. The remedy
provided in this subsection shall be exclusive of all other
remedies against the vessel except remedies available under this
chapter."
[
Footnote 6]
In all three cases, although the District Courts rejected the
contention that a stevedore's failure to pursue an assigned claim,
without more, establishes a conflict of interest resulting in
reassignment of the claim to the longshoreman, the plaintiffs were
given an opportunity to present evidence establishing a specific
conflict of interest, such as that found in
Czaplicki v. The
Hoegh Silvercloud, 351 U. S. 525.
See Rodriguez, supra, at 1023;
Perez, 468 F.
Supp. at 801;
Barulec, 471 F. Supp. at 362. Despite the
opportunity to pursue further discovery, none of the plaintiffs was
able to present evidence supporting his conflict of interest
allegation, and the District Courts accordingly entered summary
judgment in favor of the shipowners.
[
Footnote 7]
See n 1,
supra.
[
Footnote 8]
The Fourth Circuit issued its opinion in
Caldwell eight
days after the
Rodriguez opinion was issued by the Second
Circuit.
[
Footnote 9]
Section 33(f) of the Act, as set forth in 33 U.S.C. § 933(f),
provides:
"If the person entitled to compensation institutes proceedings
within the period prescribed in subdivision (b) of this section the
employer shall be required to pay as compensation under this
chapter a sum equal to the excess of the amount which the Secretary
determines is payable on account of such injury or death over the
amount recovered against such third person."
[
Footnote 10]
Section 33(e) of the Act, as set forth in 33 U.S.C. § 933(e),
provides:
"Any amount recovered by such employer on account of such
assignment, whether or not as the result of a compromise, shall be
distributed as follows:"
"(1) The employer shall retain an amount equal to -- "
"(A) the expenses incurred by him in respect to such proceedings
or compromise (including a reasonable attorney's fee as determined
by the deputy commissioner or Board);"
"(B) the cost of all benefits actually furnished by him to the
employee under section 907 of this title;"
"(C) all amounts paid as compensation;"
"(D) the present value of all amounts thereafter payable as
compensation, such present value to be computed in accordance with
a schedule prepared by the Secretary, and the present value of the
cost of all benefits thereafter to be furnished under section 907
of this title, to be estimated by the deputy commissioner, and the
amounts so computed and estimated to be retained by the employer as
a trust fund to pay such compensation and the cost of such benefits
as they become due, and to pay any sum finally remaining in excess
thereof to the person entitled to compensation or to the
representative; and"
"(2) The employer shall pay any excess to the person entitled to
compensation or to the representative, less one-fifth of such
excess which shall belong to the employer."
[
Footnote 11]
In
Edmonds v. Compagnie Generale Transatlantique,
443 U. S. 256,
443 U. S. 269,
we described § 33(b):
"Under § 933(b), an administrative order for benefits operates
as an assignment to the stevedore employer of the longshoreman's
rights against the third party unless the longshoreman sues within
six months."
[
Footnote 12]
See nn.
3 4 supra.
[
Footnote 13]
As originally enacted, and until 1959, § 33(a) read:
"If on account of a disability or death for which compensation
is payable under this Act the person entitled to such compensation
determines that some person other than the employer is liable in
damages, he may elect, by giving notice to the deputy commissioner
in such manner as the commission may provide, to receive such
compensation or to recover damages against such third person."
44 Stat. (part 2) 1440.
[
Footnote 14]
The original § 33(b) provided:
"Acceptance of such compensation shall operate as an assignment
to the employer of all right of the person entitled to compensation
to recover damages against such third person, whether or not the
person entitled to compensation has notified the deputy
commissioner of his election."
44 Stat. (part 2) 1440.
[
Footnote 15]
From 1938 until 1959, § 33(b) provided:
"Acceptance of such compensation under an award in a
compensation order filed by the deputy commissioner shall operate
as an assignment to the employer of all right of the person
entitled to compensation to recover damages against such third
person."
52 Stat. 1168.
[
Footnote 16]
The amendment's purpose was explained in the House Report:
"The purpose of this amendment is to remove possible cause of
complaint regarding the operation of the provision in
subdivision(b) of section 33 in making the mere acceptance of
compensation work automatically an assignment to the employer of
all rights of action against the third party tortfeasor. Acceptance
of compensation without knowledge of the effect upon such rights
may work grave injustice. The assignment of this right of action
against the third party might properly be contingent upon the
acceptance of compensation under an award in a compensation order
issued by the deputy commissioner, thus giving opportunity to the
injured person . . . to consider the acceptance of compensation
from the employer with the resulting loss of right to bring suit in
damages against the third party, or a refusal of compensation so as
to pursue the remedy against the third party alleged to be liable
for the injury."
H.R. Rep. No.1945, 75th Cong., 3d Sess., 9 (1938).
See also
Hernandez v. Costa Armatori, S.p.A., 467 F.
Supp. 1064, 1066 (EDNY 1979),
affirmance order, 622
F.2d 573 (CA2 1980).
[
Footnote 17]
In the interim between the 1938 amendment and the decision in
Czaplicki, this Court issued two decisions of some
significance to the present case. In 1946, in
Seas Shipping Co.
v. Sieracki, 328 U. S. 85, the
Court concluded that an injured longshoreman could pursue a
third-party claim against a shipowner for unseaworthiness, as well
as for negligence. In 1956, in
Ryan Stevedoring Co. v.
Pan-Atlantic S.S. Corp., 350 U. S. 124, the
Court held that a shipowner found liable to a longshoreman for
damages in a third-party action could seek indemnification from the
stevedore based upon the stevedore's contractual duty to provide
workmanlike service. Congress in 1972 overruled both
Sieracki and
Ryan Stevedoring. See Edmonds v.
Compagnie Generale Transatlantique, 443 U.S. at
443 U. S.
262.
[
Footnote 18]
Section 33(i) of the Act, as it read in 1956, provided that a
stevedore's compensation insurer was subrogated to the stevedore's
rights in the assigned claim. "Travelers, therefore, was the proper
party to sue on those rights of action." 351 U.S. at
351 U. S. 529.
The subrogation provision is now § 33(h), 33 U.S.C. § 933(h).
[
Footnote 19]
The Court explained its reasoning in detail:
"[T]he injured employee has an interest in his right of action
even after it has been assigned. Normally, this interest will not
be inconsistent with that of the assignee, for presumably the
assignee will want to recoup the payments made to the employee.
Since the assignee's right to recoup comes before the employee's
interest, and because the assignee is likely to be in a better
position to prosecute any claims against a third party, control
over the right of action is given to the assignee, who can either
institute proceedings for the recovery of damages against a third
person, 'or may compromise with such third person either without or
after instituting such proceeding.' § 33(d), 33 U.S.C. § 933(d). In
giving the assignee exclusive control over the right of action,
however, we think that the statute presupposes that the assignee's
interests will not be in conflict with those of the employee, and
that, through action of the assignee, the employee will obtain his
share of the proceeds of the right of action, if there is a
recovery. Here, where there is such a conflict of interests, the
inaction of the assignee operates to defeat the employee's interest
in any possible recovery. Since an action by Travelers would, in
effect, be an action against itself, Czaplicki is the only person
with sufficient adverse interest to bring suit. In this
circumstance, we think the statute should be construed to allow
Czaplicki to enforce, in his own name, the rights of action that
were his originally."
351 U.S. at
351 U. S.
531.
[
Footnote 20]
At several points in the
Czaplicki opinion, the Court
emphasized the limited nature of its holding:
"Czaplicki's rights of action were held by the party most likely
to suffer were the rights of action to be successfully enforced. In
these circumstances, we cannot agree that Czaplicki is precluded by
the assignment of his rights of action from enforcing those rights
in an action brought by himself."
Id. at
351 U. S.
530.
"Respondents contend that since Czaplicki did not, under §
33(a), 33 U.S.C. § 933(a), elect to proceed against third parties,
but rather chose to accept compensation, he can in no event revoke
this election and maintain this suit. But, as this Court has
already pointed out, 'election not to sue a third party and
assignment of the cause of action are two sides of the same coin.'
American Stevedores, Inc. v. Porello, 330 U. S.
446,
330 U. S. 455. Czaplicki can
bring suit not because there has been no assignment, but because,
in the peculiar facts here, there is no other procedure by which he
can secure his statutory share in the proceeds, if any, of his
right of action. For the same reason, we hold that the election to
accept compensation, as a step toward the compensation award, does
not bar this suit."
Id. at
351 U. S.
532-533.
[
Footnote 21]
The Court of Appeals explained the conflict created by
Ryan
Stevedoring:
"Since any recovery by the injured employee against the
shipowner could be recouped in an action by the shipowner against
the stevedoring company, the practical effect of the
Ryan
case is to cause the employer stevedoring companies who may
anticipate a shipowner's claim to indemnity to resist the making of
any payment to the injured stevedore until an award is made, at
which time assignment of the cause of action by reason of the
provisions of the statute takes place. When the statutory
assignment has taken place, the employer stevedoring company will
then refuse to bring an action against the shipowner, and, by the
same token, would also refuse to reassign the cause of action to
the injured stevedore, for to do so might result in an eventual
high award by way of indemnification against the stevedoring
company, and hence against the insurance carrier."
257 F.2d at 545. The Court of Appeals essentially articulated in
greater detail a concern expressed by Justice Black in his
dissenting opinion in
Ryan Stevedoring:
"The employer as an assignee of an employee's claim will know
that, if he wins a lawsuit, he loses a lawsuit."
350 U.S. at
350 U. S.
145.
[
Footnote 22]
Cf. Di Somma v. N.V. Koninklyke Nederlandische
Stoomboot, 188 F.
Supp. 292 (SDNY 1960). This expansion of Czaplicki was not,
however, uniformly accepted by all federal courts. Other courts
rejected a broad reading of
Czaplicki and limited the
conflict of interest exception to the peculiar situation presented
in that case.
See, e.g., Sabol v. Merritt Chapman & Scott
Corp., 241 F.2d 765 (CA2 1957).
[
Footnote 23]
See Hearings before a Special Subcommittee of the House
Committee on Education and Labor on Bills Relating to the
Longshoremen's and Harbor Workers' Compensation Act, 84th Cong., 2d
Sess. (May 23, 24, and June 11, 1956) (House Hearings).
[
Footnote 24]
Congressman Zelenko opened his testimony by inserting into the
record a copy of the
Ryan Stevedoring decision, which he
asserted "endangered or seriously weakened" the right of
longshoremen to recover from third parties.
See House
Hearings, at 1. Congressman Zelenko indicated that Justice Black's
dissent accurately summarized the damaging effects of that
decision.
Id. at 12. He went on to explain:
"H.R. 5357 avoids and eliminates the circumstances indicated by
Judge Black where, to the detriment of the employee, the employer,
under the present section and by reason of the
Ryan
decision, may decide not to proceed with the third-party
action."
Ibid. Later, in response to questioning by members of
the Subcommittee, Congressman Zelenko explained the connection
between H.R. 5357 and
Ryan Stevedoring in more detail:
"I hope I have answered your question by trying to show what the
situation in the
Ryan case would be. That is the factual
and the legal situation, and, assuming we had the
Ryan
case pending at this time, the employer would lose any interest in
proceeding with it, and the longshoreman would suffer. That is what
Judge Black was talking about. Under H.R. 5357 both parties go in
there and if the longshoreman chooses to go ahead, he does so; and
if he does not go ahead, the employer starts a lawsuit in his own
behalf only after the longshoreman has had the opportunity to do
so, and he does not want to avail himself of it, then they give the
employer this right of assignment automatically, so he gets the
same measure of protection."
House Hearings, at 15. The Zelenko bill also provided an added
incentive for employers to sue by giving them one-third of any
excess recovery.
See, e.g., id. at 12-13, 19, 43-44,
102.
[
Footnote 25]
See, e.g., id. at 28, 44-45, 61-62, 72, 103-105,
106-107, 110, 115, 124-125.
Cf. id. at 83-84, 92-93. It
should be noted that, at the time of these hearings,
Czaplicki was pending before this Court. Czaplicki's
attorneys participated in the hearings, and described to the
Subcommittee the facts of
Czaplicki and the Court of
Appeals' decision in that case. They also informed the Subcommittee
that this Court had granted Czaplicki's petition for certiorari,
and that the case had been argued.
See House Hearings at
59, 62.
[
Footnote 26]
The House Report on a predecessor of the bill that amended §
33(b) in 1959 stated:
"Developments under the act which concerned the Subcommittee on
Safety and Compensation have been . . . the automatic assignment of
a third-party cause of action to the employer and the refusal by
the employer to pursue the third-party claim because of a conflict
of interest. . . ."
H.R.Rep. No. 229, 86th Cong., 1st Sess., 3 (1959).
[
Footnote 27]
At the same time, Congress amended § 33(a) to provide expressly
that the employee need not elect between his statutory right to
compensation from his employer and his claim against a third party.
See n 5,
supra.
[
Footnote 28]
The Senate Report contained the following evaluation of the bill
amending § 33(b):
"The bill, as amended by the committee, would revise section 33
of the act so as to permit an employee to bring a third-party
liability suit without forfeiting his right to compensation under
the act. . . . The committee believe that, in theory and practice,
this is [a] sound approach to what has been a difficult problem. As
embodied in the committee amendment, the principle would be applied
with due recognition of the equities and rights of all who are
involved."
". . . In the event that an employee does not elect to sue for
damages within 6 months of the compensation award, the employer is
assigned the cause of action."
S.Rep. No. 428, 86th Cong., 1st Sess., 2 (1959).
[
Footnote 29]
See id. at 2-3; H.R.Rep. No. 229,
supra, at
3-4.
See also House Hearings at 15, 19-20, 44-45.
[
Footnote 30]
Whether the statutory language provides the exclusive solution
for unusual conflict of interest problems, such as that identified
in
Czaplicki, is a question that is not presented on the
facts of these cases. We accordingly do not decide whether, or to
what extent,
Czaplicki survived the 1959 amendments.
[
Footnote 31]
"Ordinarily, therefore, it is likely that the interests of both
longshoreman and assignee in having their substantive rights
pursued and of the third person in facing a single action will be
achieved under LHWCA."
"But LHWCA does not yet deal directly with certain practical
problems that may interrupt or wrench these expectations. These can
arise whenever, by design or inadvertence, the longshoreman fails
during the statutory period to prosecute the claim while the right
of action is exclusively his. Following this failure, the assignee
may, for a variety of reasons, not then itself prosecute the claim.
It may not consider a claim thought meritorious by the longshoreman
to be sufficiently so to warrant the expense of litigation. It may
have a specific conflict of interest that militates against
prosecuting the claim. It may simply be dilatory to the point that
the claim is threatened by a limitations bar. Under all of these,
and to precisely the same degree under all, the longshoreman faces
a practical problem for which LHWCA provides no direct solution:
forcing action by the assignee, or somehow retrieving the right of
action. While LHWCA does not specifically provide the solution, it
certainly cannot be thought to have been intended by Congress that
the longshoreman's substantive right might be lost simply through
inaction of the assignee until the claim is barred from prosecution
by anyone. What is needed is a solution that adequately protects
the assignee's first right of exclusive action, but that also
protects the longshoreman's substantive right against loss through
inaction of the assignee for whatever reason."
618 F.2d at 1045.
[
Footnote 32]
The District Court in the
Perez case aptly evaluated
the so-called "problem" created by an employer's failure to sue
after statutory assignment of the employee's cause of action:
"[W]hatever the consequences of a failure to sue, an employee
who fails to sue within six months of accepting compensation under
an award . . . is as responsible for that failure as an employer
who neglects, for whatever reason, to pursue an assigned
claim."
468 F.
Supp. at 802.
[
Footnote 33]
"Consequently, as we have done before, we must reject a"
"theory that nowhere appears in the Act, that was never
mentioned by Congress during the legislative process, that does not
comport with Congress' intent, and that restricts . . . a remedial
Act. . . ."
"
Northeast Marine Terminal Co. v. Caputo, 432 U.S. at
432 U. S. 278-279."
Edmonds v. Compagnie Generale Transatlantique, 443 U.S.
at
443 U. S.
271.
[
Footnote 34]
Petitioners suggest that such an automatic rule is justified
because of a stevedore's normal reluctance to file suit against a
customer. However, in rejecting a similar conflict of interest
argument, the District Court in
Hernandez v. Costa Armatori,
S.p.A., 467 F. Supp. at 1067-1068, identified the flaw in this
reasoning:
"[T]his is not the kind of matter that Congress could have
viewed as sufficient to invalidate the assignment. Such a conflict
has always been inherent in the statutory scheme. Presumably, every
stevedore would prefer not to give offense to its customer."
"
* * * *"
"Plaintiff has thus referred only to 'conflicts of interest' of
which Congress was aware in enacting the statute. To allow them as
exceptions to the statutory assignment would be to read Section
933(b) out of the Act."
In addition, where, as is often the case, the stevedore's
insurer is subrogated to the stevedore's interest in an assigned
claim,
see 33 U.S.C. § 933 (h), this potential conflict
probably will not be of much significance. The insurer is unlikely
to sacrifice a meritorious claim for fear of antagonizing a
customer of the stevedore.
[
Footnote 35]
Nor did it correctly construe
Czaplicki. As discussed
supra at
451 U. S.
605-607, that decision was narrowly drawn to redress
certain inequities that arose from "the peculiar facts" of that
case.
Czaplicki did not hold that the § 33(b) assignment
could be avoided whenever an employer failed to pursue an assigned
claim.
[
Footnote 36]
Indeed, shortly after
Wynn was decided, the Fifth
Circuit concluded that, while
Czaplicki was still good
law, it should be narrowly applied to specific conflicts of
interest identified on a case-by-case basis.
See McClendon v.
Charente Steamship Co., 348 F.2d 298, 301-303 (1965). The
court expressly declined to adopt the automatic rule applied in
Wynn. See 348 F.2d at 303.
[
Footnote 37]
See Director, Office of Workers' Compensation Programs v.
Rasmussen, 440 U. S. 29,
440 U. S.
32-35.
[
Footnote 38]
See Edmonds v. Compagnie Generale Transatlantique,
supra, at
443 U. S.
262.
[
Footnote 39]
In its explanation of the reasons for eliminating the
unseaworthiness remedy, the House Report accompanying the 1972
Amendments stated:
"The Committee heard testimony that the number of third-party
actions brought under the
Sieracki and
Ryan line
of decisions has increased substantially in recent years, and that
much of the financial resources which could be better utilized to
pay improved compensation benefits were now being spent to defray
litigation costs. Industry witnesses testified that, despite the
fact that, since 1961, injury frequency rates have decreased in the
industry, and maximum benefits payable under the Act have remained
constant, the cost of compensation insurance for longshoremen has
increased substantially because of the increased number of
third-party cases and legal expenses and higher recoveries in such
cases. The Committee also heard testimony that, in some cases,
workers were being encouraged not to file claims for compensation
or to delay their return to work in the hope of increasing their
possible recovery in a third party action."
H.R.Rep. No. 92-1441, p. 5 (1972).
[
Footnote 40]
"Congress has put down its pen, and we can neither rewrite
Congress' words nor call it back 'to cancel half a Line.' Our task
is to interpret what Congress has said. . . ."
Director, Office of Workers' Compensation Programs v.
Rasmussen, supra, at
440 U. S.
47.
[
Footnote 41]
As our analysis indicates, the 1959 and 1972 Amendments have
substantially undercut the basis for the
Czaplicki
exception to § 33(b). The Court was troubled in
Czaplicki
because, under the Act in 1956, there was "no other procedure" by
which a longshoreman could enforce his rights against a third party
where the employer failed to sue due to a conflict of interest. 351
U.S. at
351 U. S.
532-533. After the 1959 amendments, there is such a
procedure: the employee may simply file his own third-party suit
within six months after accepting compensation.
Similarly, to the extent that
Czaplicki and its progeny
sought to mitigate the conflict of interest created by
Ryan
Stevedoring, the 1972 Amendments eliminate the need for a
judicially created exception to § 33(b):
"[B]efore the [1972] Amendments, the longshoreman and the
stevedore had adverse interests in the third-party action: if the
longshoreman were successful in that suit, the shipowner frequently
would attempt to require the stevedore to make payment of amounts
due the longshoreman. With the abolition of the shipowner's cause
of action, the stevedore and the longshoreman had a common interest
in the longshoreman's recovery against the shipowner."
Bloomer v. Liberty Mutual Ins. Co., 445 U. S.
74,
445 U. S. 85.
See also Valentino v. Rickners Rhederei, G.M.B.H., 552
F.2d 466, 470 (CA2 1977).