Estate of Cowart v. Nicklos Drilling Co., 505 U.S. 469 (1992)

Page:   Index   1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  Next




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


Page:   Index   1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  Next

Last modified: October 4, 2007