UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
COOPER/T. SMITH STEVEDORING COMPANY,
ROSEMARY LIUZZA, Widow of Jake Liuzza;
DIRECTOR, OFFICE OF WORKER'S COMPENSATION
U.S. DEPARTMENT OF LABOR,
Petition for Review of an Order of the Benefits
June 5, 2002
Before HIGGINBOTHAM, WIENER, and BENAVIDES,
BENAVIDES, Circuit Judge:
Cooper/T. Smith Stevedoring Company, Incorporated
(Cooper/T. Smith), petitions for review
of a final order of the Benefits Review Board
(BRB) issued January 10, 2000, and a final order of the BRB issued June
29, 2001, affirming a decision and order on remand by an administrative
law judge (ALJ) awarding disability and death benefits pursuant to the
Longshore and Harbor Workers' Compensation Act (LHWCA), 33 U.S.C. §
901 et seq. (1994). In its petition, Cooper/T. Smith raises an issue of
first impression: whether 33 U.S.C. § 914(j) entitles an employer
to a credit or offset against a widow's death benefits for the overpayment
of disability benefits erroneously awarded by the ALJ. Cooper/T. Smith
also argues that the BRB erred in finding substantial evidence demonstrating
that the employee's lung disease was causally related to his employment
with Cooper/T. Smith and that Cooper/T. Smith was the last responsible
employer. Finding no error, we deny the petition for review.
Jake Liuzza, now deceased, worked as a longshoreman
for numerous employers between 1947 and 1984. During this time period it
is alleged that he was exposed to asbestos. He voluntarily retired in 1984.
In May 1993, he was diagnosed as having squamous cell carcinoma, a malignant
lung cancer. Later that month, a left upper pulmonary lobectomy was performed.
The cancer reappeared in August of 1994, and a second resection was performed.
He died on September 30, 1994. Subsequently, Liuzza's widow, Rosemary Liuzza
(widow), filed a claim under the LHWCA, seeking death benefits as well
as disability benefits on behalf of the decedent.
The ALJ found that the widow had established
a causal relationship between Liuzza's employment and his lung cancer.
The ALJ also determined that Liuzza had been totally disabled from May
18, 1993 through the date of his death on September 30, 1994. Accordingly,
the ALJ awarded permanent partial disability compensation based upon a
one hundred percent impairment for the relevant time period pursuant to
33 U.S.C. § 908(c)(23), death benefits pursuant to § 909, and
Cooper/T. Smith appealed, arguing that the
ALJ erred in concluding that it was the responsible employer, that the
widow had established a causal relationship between the employment and
the lung cancer, and that Liuzza had been totally disabled. The BRB vacated
the finding with respect to the extent of Liuzza's disability prior to
his death and remanded the case for reconsideration of the extent of impairment
pursuant to the American Medical Association Guides to the Evaluation
of Permanent Impairment (4th ed. 1993). The BRB affirmed the decision
in all other respects.
On remand, the ALJ found that the decedent
was not entitled to any permanent partial disability benefits from June
1, 1993, through July 27, 1994, but was entitled to compensation benefits
based on a fifty-one percent impairment rating from May 18, 1993, to May
31, 1993, and from July 28, 1994, until his death. The ALJ rejected Cooper/T.
Smith's claim that it was entitled to an offset of overpayment of disability
benefits already paid against death benefits it owed the widow. The BRB
affirmed the ALJ's decision and order on remand. Cooper/T. Smith now petitions
this Court for review of the BRB's decisions.
A. Standard of Review
We review statutory interpretation by the
BRB de novo. Equitable Equip. Co. v. Dir., OWCP, 191 F.3d
630, 631 (5th Cir. 1999). Further, our review of BRB decisions is limited
to considering errors of law and whether the BRB properly concluded that
the ALJ's factual findings were supported by substantial evidence on the
record as a whole. See Darby v. Ingalls Shipbuilding, Inc., 99 F.3d
685, 688 (5th Cir. 1996); see also 20 C.F.R. § 802.301(a) (setting
forth BRB's scope of review of ALJ's decision). "Substantial evidence is
that relevant evidence--more than a scintilla but less than a preponderance--that
would cause a reasonable person to accept the fact finding." Director,
OWCP v. Ingalls Shipbuilding, Inc., 125 F.3d 303, 305 (5th Cir. 1997).
This Court "may not substitute our judgment for that of the ALJ, nor reweigh
or reappraise the evidence, but may only determine whether evidence exists
to support the ALJ's findings." Pool Co. v. Cooper, 274 F.3d 173,
178 (5th Cir. 2001) (internal quotation marks and citations omitted).
B. Denial of Offset for Overpayment under
33 U.S.C. § 914(j)
As previously set forth, Cooper/T. Smith paid
disability benefits erroneously awarded by the ALJ's initial decision and
order. Relying on 33 U.S.C. § 914(j), Cooper/T. Smith challenges the
ALJ's denial of its request to offset against the death benefits due to
the widow any overpayment of the employee's disability benefits. This appears
to be a question of first impression.
Like other workers' compensation programs,
the LHWCA "represents a compromise between the interests of injured workers,
who receive a certain and immediate recovery, and the interests of employers
and insurers, who in turn receive definite and lower limits on potential
liability than would have been applicable in common-law tort actions for
damages." Ceres Gulf v. Cooper, 957 F.2d 1199, 1205 (5th Cir. 1992)
(internal quotation marks and citations omitted). With respect to reimbursement,
we have explained that the LHWCA does not provide a basis upon which an
employer may recover overpayments directly from the employee. Id.
Recovery of any overpayment "can only be an offset against future LHWCA
In answering any statutory question, we begin
with the language of the statute itself. United States v. Ron Pair Enterprises,
489 U.S. 235, 241, 109 S.Ct. 1026, 1030 (1989). Section 914(j) is entitled
"Reimbursement for advance payments," and provides that: "If the employer
has made advance payments of compensation, he shall be entitled to be reimbursed
out of any unpaid installment or installments of compensation due."(1)
In denying Cooper/T. Smith's request for offset
of the overpayment, the ALJ cited our decision in Ceres Gulf, 957
F.2d 1205, and ruled that there was no statutory basis for such an offset
because the claims were separate. Cooper/T. Smith correctly contends that
the primary issue in
Ceres Gulf was whether the district court had
subject matter jurisdiction for an original action by an employer to recover
advance payments made to its former employee under the LWHCA. As previously
indicated, in Ceres Gulf we explained that because Congress permitted
recovery only as an offset against future benefits in the statutory provisions
of the LHWCA, we should not imply a federal remedy for reimbursement. 957
F.2d 1205-09. Ceres Gulf, however, does not address the issue joined
in this case, which is whether disability compensation may be credited
against death benefits. Cooper/T. Smith cites no Fifth Circuit precedent
(or any other circuit for that matter) in support of its argument.(2)
On the other hand, the Director of the Office
of Workers' Compensation Programs, U.S. Department of Labor (Director),
relying on circuit precedent, has filed a brief arguing that § 914(j)
does not provide a basis for Cooper/T. Smith to be reimbursed for its overpayment
of Liuzza's disability payments by collecting out of unpaid installments
of the widow's death benefits. We afford deference to the Director's interpretations
of the LHWCA and the amount of deference depends upon the "thoroughness
evident in its consideration, the validity of its reasoning, its consistency
with earlier and later pronouncements, and all those factors which give
it power to persuade, if lacking power to control." Pool Co., 274
F.3d at 177. Here, we are persuaded by the Director's reasoning that the
BRB did not err in denying Cooper/T. Smith's request for reimbursement
pursuant to § 914(j).
The Director propounds two principal arguments
in support of its position. First, it argues that the plain language of
§ 914(j) forecloses reimbursement. Second, the Director argues that
interpreting § 914(j) to be claim specific is consistent with caselaw
interpreting the LHWCA.
With respect to the former argument, the Director
asserts that the overpayments of compensation for which Cooper/T. Smith
seeks reimbursement were made in satisfaction of a compensation order issued
by the ALJ, thereby not in "advance" of that order as indicated by the
language of § 914(j).(3) Section 914(j),
however, does not specify the event to which the payments are made in advance.
Additionally, the Director states that neither the LHWCA nor the regulations
define the phrase "advance payments of compensation."
"The canons of statutory construction dictate
that when construing a statute, the court should give words their ordinary
meaning and should not render as meaningless the language of the statute."
White v. Black, 190 F.3d 366, 368 (5th Cir. 1999) (citation
omitted). The Director asserts that the word "advance" is commonly understood
to indicate that the payments must take place prior to a specific event.
"Advance payments" are defined as "payments made in anticipation of a contingent
or fixed future liability or obligation." Black's Law Dictionary 52 (6th
If "advance" payments included payments made
after an award was ordered, that would appear to render the term "advance"
nearly meaningless. In other words, virtually all payments of compensation
would be "advance" if we included payments made after an award was ordered.
Such an interpretation would contravene the canon of statutory construction
that "a statute must, if possible, be construed in such fashion that every
word has some operative effect."(4) Further,
such an interpretation would not be consistent with a fundamental tenet
of the LHWCA, "'the expectation that employers will pay compensation promptly
and directly, without the necessity of a formal award.'" Temporary Employment
Services v. Trinity Marine Group, Inc., 261 F.3d 456, 459 (5th
Cir. 2001) (quoting 1 THOMAS J. SCHOENBAUM, ADMIRALTY AND MARITIME LAW
§ 7-1, at 381 (3d ed. 2001)).(5)
We are mindful that § 914(j), a provision
for reimbursement, is an incentive for employers to promptly make payments
for injuries. Once an employer has been ordered to pay an award, the need
for incentive pursuant to § 914(j) disappears. Indeed, the statute
has another provision that applies if payment is not made pursuant to an
award. Section 914(f) provides that if any compensation ordered pursuant
to an award is not paid within ten days after it is due, "there shall be
added to such unpaid compensation an amount equal to 20 per centum thereof."
Under these circumstances, we are persuaded that "advance" refers to a
time prior to the award. Here, Cooper/T. Smith did not pay compensation
until the award was ordered, and thus, the payments should not be deemed
"advance payments of compensation" under § 914.
Further, although we have discovered no controlling
case, our precedent informs our decision. In Oceanic Butler, Inc. v.
Nordahl, 842 F.2d 773 (5th Cir. 1988), this Court held that
an employer and insurer were not entitled to offset the disability settlement
amount against liability to the employee's widow for death benefits. In
that case, an employee, his employer, and insurer entered into a settlement
agreement for disability compensation and applied for the required approval
of the deputy commissioner pursuant to the provisions of the LHWCA. See
§ 908(i). One week later the employee perished. At that point,
the settlement application was awaiting approval by the district director.
The widow subsequently filed a separate claim for death benefits.
The employer and insurer then sought to withdraw
from the settlement agreement, and in the alternative, argued they were
entitled to offset the settlement payment for the employee's disability
benefits against its liability for the widow's death benefits claims to
avoid a "double recovery." With respect to the withdrawal determination,
we held the employer's/insurer's promise to pay disability benefits valid
and binding when made, thus rejecting the request to withdraw from the
settlement agreement. With respect to the double recovery argument, the
employer/insurer did not rely on § 914(j), and we characterized the
request as an "extrastatutory" offset. We recognized that if the settlement
had been approved prior to the employee's death, there could have been
no "extra-statutory" offset. Thus, we framed the question to be "whether
a submitted but unapproved settlement is closer to an approved application
or an entirely unsettled claim." Nordahl, 842 F.2d at 785. We found
it to be the former and therefore concluded that the employer/insurer was
not entitled to an "extra-statutory offset" of the disability payment against
its liability to the widow for death benefits.
Cooper/T. Smith argues that because the instant
award for both the disability and death benefits were made payable to the
widow, the award is one payment. This Court has recognized that disability
and death benefits are "two distinct statutory benefits." Nordahl,
842 F.2d at 786; see § 908 ("Compensation for disability")
and § 909 ("Compensation for death"). Also, there is language in Nordahl
that counsels against such a determination: [The] settlement of [the employee's]
disputed disability claims has no effect whatsoever upon her widow's benefits,
because she does not seek the disability settlement. While it is reasonable
to assume that Mrs. Nordahl will take at least some portion of her childless
husband's estate, it is equally plausible that the entire $75,000 will
go to a home for destitute longshoremen; the point is that her right to
death benefits is unaffected by potential payment from proceeds of her
husband's claim. No inquiry into the disposition of the estate is necessary
or even appropriate in evaluating the existence of her right, though administrative
determination of the level of death benefits payable, if any, will consider
her other sources of support, including the size of the estate.
Nordahl, 842 F.2d at 785.(6)
In the instant case, there is no contention
that the widow prosecuted the disability claim in anything other than a
proper capacity, i.e., legal representative of the decedent's estate.
As such, we are not persuaded that the ALJ's order to pay the widow the
decedent's compensation somehow changed the nature of the statutory benefit.
Thus, we reject the invitation to deem these two claims as one.
Cooper/T. Smith's final argument with respect
to reimbursement is that the principles of equity and fairness require
that it receive a credit against any further death benefits owed to the
widow. This Court has previously rejected the opportunity to weigh the
equities in the context of a request for reimbursement pursuant to §
914(j). See Guidry v. Booker Drilling Co., 901 F.2d 485 (5th Cir.
1990) (concluding that an award of attorney's fees was "separate" from
a compensation award, we held that the employer could not deduct from the
attorney's fees the amount it had overpaid to the employee pursuant to
§ 914(j)). Even were we willing to weigh the equities, we do not find
that the instant situation warrants departure from the language of the
In conclusion, we are satisfied that, in view
of the language of § 914 and congressional intent, our precedent addressing
similar issues, and the deference owed the Director's interpretation, the
BRB properly concluded that § 914(j) does not provide a basis for
Cooper/T. Smith to be reimbursed for its overpayment of a deceased employee's
disability payments by collecting out of unpaid installments of the widow's
C. Substantial Evidence
Cooper/T. Smith argues that the widow failed
to bring forth substantial evidence that Liuzza's illness or death was
caused by asbestos. Essentially, Cooper/T. Smith faults the ALJ for crediting
the opinion of Liuzza's expert rather than its experts' opinions. Liuzza's
expert, Dr. Gerald E. Liuzza,(7) is Board
Certified in anatomic and clinical pathology, with a certified subspecialty
in forensic pathology. Unlike Cooper/T. Smith's experts, Dr. Liuzza did
not subscribe to the theory that because the employee was not diagnosed
with the disease asbestosis, the exposure to asbestos could not have contributed
to his illness. Instead, Dr. Liuzza testified that the exposure to asbestos,
combined with the employee's cigarette consumption, caused the lung cancer.
The ALJ found that such a position was supported by the medical literature
submitted by the widow. Additionally, although one of Cooper/T. Smith's
experts, Dr. Cagle, did not believe that the exposure to asbestos caused
the disease, he admitted that the finding of two asbestos bodies on iron
stained sections of the employee's lung indicated an above background level
of exposure to asbestos.
More specifically, Cooper/T. Smith contends
that the employee's expert relied solely on undocumented history provided
to him by widow's counsel. In its decision and order awarding benefits,
the ALJ recognized that the employee's expert stated that his opinion was
contingent on a "documented significant exposure to asbestos and that [his
opinion] is based on probabilities." The ALJ expressly found that the exposure
to asbestos was significant and that the varying accounts of the employee's
history of smoking did not change the fact that the "amount was significant."
The ALJ concluded that although the employee's expert "testified that his
conclusions were based on some assumptions regarding Decedent's history,
these assumptions proved to be accurate." We have determined that there
is substantial evidence to support this finding.
Cooper/T. Smith also challenges the ALJ's
finding that the employee's last exposure to asbestos had been during his
employment with Cooper/T. Smith. It is well established that under the
LHWCA the last employer "is responsible for payment of the full amount
of benefits awarded as compensation to claimants for occupational diseases."
Avondale Industries, Inc., v. Director, OWCP, 977 F.2d 186, 190
(5th Cir. 1992). We have recognized that:
Congress intended that the employer during
the last employment in which the claimant was exposed to injurious stimuli,
prior to the date upon which the claimant became aware of the fact that
he was suffering from an occupational disease arising out of his employment,
should be liable for the full amount of the award.
Id. (quoting Travelers Insurance
Co. v. Cardillo, 225 F.2d 137, 145 (2d Cir. 1955)). This rule is not
one of compensability. Id. Instead, "it is a judicially created
rule for allocating liability among employers in cases where an occupational
disease develops after prolonged exposure." Id. (citation omitted).
A prima facie case is made by establishing that the conditions existed
during the employment that could have caused the harm. An employer may
rebut this presumption by demonstrating that the exposure did not cause
the harm or that the employee was exposed to injurious stimuli during subsequent
employment covered by the LHWCA. Id. We have held that if the exposure
has the potential to cause the harm, the length of the exposure is irrelevant.
In the instant case, the employee's son and
wife testified that he was exposed to asbestos during his employment with
Cooper/T. Smith. As set forth above, we have rejected the argument that
exposure to asbestos did not cause the harm. Cooper/T. Smith also argues
that Liuzza failed to bring forth "any reliable evidence to establish .
. . that the decedent was employed by Cooper/T. Smith at the time of his
last injurious exposure." Cooper/T. Smith misunderstands the burden-shifting
framework that underlies the last employer rule. Under this rule, the employee
does not have to prove that the employer is liable. Avondale, 977
F.2d at 190. As previously indicated, once the employee meets his burden
of showing that he sustained harm and that he was exposed to conditions
during his employment that could have caused the harm, there exists a compensable
claim. There is no requirement that the employee prove that the employer
in question was the last employer. It is the employer's burden to rebut
the presumption that rises after the employee presents a prima facie
case. In its brief, Cooper/T. Smith points to evidence indicating that
Liuzza performed more work as a longshoreman for other employers during
the years he was exposed to asbestos. Nevertheless, we are unpersuaded
that it has carried its burden of showing a specific, subsequent employment
during which Liuzza was exposed to asbestos. Under these circumstances,
we find substantial evidence to support the ALJ's conclusion that the employee's
last exposure to asbestos was during his employment with Cooper/T. Smith.
For the above reasons, the petition for review
1. The LHWCA contains only
two other provisions for recovery of overpayment from the employee, §§
908(j) and 922. Ceres Gulf, 947 F.2d at 1205. As with § 914(j),
those two sections only allow recovery from the employee's unpaid compensation.
Cooper/T. Smith does not allege that these sections apply to the instant
2. Cooper/T. Smith does
cite a BRB decision. Hawkins v. Harbert International, Inc., 33
BRBS 198 (1999). However, because the BRB is not a policy-making agency,
we owe its decisions no deference. Pool Co., 274 F.3d at 177. In
any event, the BRB decision in Hawkins is inapposite. Indeed, in
the case at bar on appeal from the ALJ's decision on remand, the BRB expressly
distinguished Hawkins because it involved one death benefit (on
behalf of the widow and child), and this case involves two separate claims,
a disability claim and a death benefits claim.
3. As previously quoted,
§ 914(j) provides as follows: "If the employer has made advance
payments of compensation, he shall be entitled to be reimbursed out of
any unpaid installment or installments of compensation due." (emphasis
4. United States v.
Nordic Village, Inc., 503 U.S. 30, 36, 112 S.Ct. 1011, 1015 (1992).
5. Congress was aware of
the shipbuilders' position against allowing offsets against only future
benefits pursuant to the proposed § 914(j) for fear of losing an opportunity
to recover overpayments. Lennon v. Waterfront Transport, 20 F.3d
658, 661 (5th Cir. 1994) (Compensation for Employees in Certain Maritime
Employments: Hearings on S. 3170 Before a Subcomm. Of the Senate Comm.
On the Judiciary, 69th Cong., 1st Sess. 53 (1926)). Despite this awareness,
Congress made clear that it "was concerned about the disabled worker receiving
benefits promptly after being found deserving of same." Id. (citation
and internal quotation marks omitted).
6. In Nordahl, immediately
after the above-quoted language, we continued discussing a decision by
an ALJ in another case in which the ALJ allowed disability payments to
offset a widow's death benefits. 842 F.2d at 785 (discussing Martin
v. Kaiser Co., 20 B.R.B.S. 679 (1987)(ALJ)). Without much explanation,
we speculated that "[i]n Martin, the widow sought both benefits
in the same proceeding, and so administrative offset may have been
appropriate under overriding policy considerations, despite the lack of
statutory authority." Id. (emphasis in original). In any event,
we expressly found the "persuasiveness of Martin" to be "suspect."
Nordahl, 842 F.2d at 785. We agree and based on the analysis set
forth above expressly reject the ruling in Martin.
7. Dr. Liuzza is of no
relation to the employee or the widow.