Lazarus v. Chevron U.S.A., Inc. ( 1992 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 91-3382
ANDRE P. LAZARUS,
Plaintiff-Appellant,
versus
CHEVRON USA, INC.,
Defendant-Appellee.
Appeal from the United States District Court
for the Eastern District of Louisiana
(April 13, 1992)
Before REAVLEY, JOLLY, and HIGGINBOTHAM, Circuit Judges.
HIGGINBOTHAM, Circuit Judge:
Andre Lazarus appeals the district court's dismissal of his
petition for enforcement of a supplementary order issued by a
deputy commissioner of the Department of Labor. He argues that the
district court erred in finding that medical benefits are not
included in compensation for the purposes of enforcement
proceedings under § 18(a) of the Longshore and Harbor Workers'
Compensation Act, 33 U.S.C. § 918(a). We find that compensation
under § 18(a) does include medical benefits and that the district
court erred in dismissing Lazarus' petition for this reason. We
affirm the district court's decision, however, because the
underlying compensation order was not a final and enforceable
order.
I.
In January of 1986, Lazarus was a petroleum engineer employed
by Chevron USA, Inc.. While working on one of Chevron's oil rigs
off the coast of Louisiana, he slipped and fell and injured his
back. Doctors diagnosed Lazarus' injury as a lower back strain and
prescribed a program of physical therapy, exercise, and medication.
Chevron paid Lazarus disability compensation and medical benefits
while he was recuperating. Lazarus returned to work briefly in
June of 1986, but later that month sought treatment for depression,
and entered a psychiatric hospital. He remained in the hospital
for a month, and then continued to receive treatment on an
outpatient basis thereafter. Lazarus asked Chevron to reinstate
his workers' compensation benefits, but Chevron refused, asserting
that Lazarus' psychiatric condition was unrelated to the back
injury he had sustained on the rig. In August of 1986, Lazarus was
laid off in a reduction in force.
Lazarus remained unemployed thereafter. He continued to
complain of back pain and depression in the ensuing months and
continued to visit doctors sporadically for treatment. In July of
1988, he was admitted to the River Oaks Hospital for treatment of
severe depression. He remained in residence at River Oaks for
about a year and a half. He filed a claim against Chevron with the
deputy commissioner of the Department of Labor, asserting his right
to workers' compensation benefits under the Longshore and Harbor
Workers' Compensation Act, 33 U.S.C. §§ 907, 914. The deputy
commissioner investigated the claim and found that Lazarus'
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psychiatric treatment was unrelated to the injury he sustained to
his back. Lazarus disputed this conclusion and asked for a hearing
before an administrative law judge. In September of 1989, an ALJ
found that Lazarus' psychological condition was causally related to
his back injury, and accordingly ordered Chevron to pay all unpaid
workers' compensation benefits dating back to January 1986. The
award included disability compensation based on an average weekly
wage of $ 817.67, all medical expenses related to the injury that
were previously incurred, and such reasonable and necessary future
medical care as Lazarus' disability required.
Chevron immediately reinstated the payment of Lazarus'
disability compensation and paid all past disability benefits that
were due. It did not pay any of Lazarus' medical bills, however.
Chevron appealed the ALJ's decision to the Benefits Review Board.
While this appeal remained pending, Lazarus applied to the deputy
commissioner for a supplementary order under § 18(a) of the Act,
arguing that Chevron was in default because it had not paid any of
his medical expenses as required by the ALJ's order. Chevron
requested an informal conference to contest the amount Lazarus
claimed was in default and the reasonableness of his medical bills.
The deputy commissioner did not respond to Chevron's request for an
informal conference, but issued a supplementary order declaring
Chevron in default on more than $ 300,000 of medical benefits.
Lazarus petitioned for enforcement of this supplementary order
in the district court. Chevron moved to dismiss the petition,
arguing that § 18(a) provides for immediate enforcement only of
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compensation awards, not awards of medical benefits. Chevron also
urged that the amounts Lazarus claimed were in default were not due
under the ALJ's order, and that the deputy commissioner erred in
denying its request for a hearing on this matter. The district
court found that the deputy commissioner's order to pay medical
expenses was not in accordance with law because the word
"compensation " as used in § 18(a) does not include medical
benefits. It therefore dismissed Lazarus' petition for
enforcement. Lazarus appeals.
II.
The Longshore and Harbor Workers' Compensation Act has two
provisions by which a district court can enforce compensation
awards. First, under § 21(d), the district court may enforce a
compensation order that has become final, if it determines that the
order was made and served in accordance with law. 33 U.S.C.
§ 921(d). A compensation order becomes final thirty days after it
is filed in the office of the deputy commissioner, or, in the event
a party appeals the order to the Benefits Review Board, when the
Board makes a decision which resolves the merits of the
administrative proceeding. 33 U.S.C. §§ 921(a); Newpark
Shipbuilding & Repair, Inc. v. Roundtree, 723 F.2d 399, 400 (5th
Cir. 1984). Second, under § 18(a), the district court may enforce
a supplementary order issued by the deputy commissioner to an
employer who has been in default for more than thirty days in the
payment of compensation due and payable under any award of
compensation. 33 U.S.C. § 918(a). Compensation is due and payable
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when a compensation order is filed in the office of the deputy
commissioner. 33 U.S.C. § 921(a); Tidelands Marine Serv. v.
Patterson, 719 F.2d 126, 127 n.1 (5th Cir. 1983). A supplementary
order under § 18(a) is final when entered and is immediately
enforceable by the district court if it is in accordance with law.
Abbott v. Louisiana Insurance Guaranty Ass'n, 889 F.2d 626, 629
(5th Cir. 1989).
These two provisions are the sole means of enforcing
compensation awards under the Act. 33 U.S.C. § 921(e); Henry v.
Gentry Plumbing & Heating Co., 704 F.2d 863, 864 n.1 (5th Cir.
1983). Whereas § 21(d) provides for enforcement of an appealed
order only after the appeal is finally resolved by the Board,
§ 18(a) allows a claimant who has obtained an award at the ALJ
level to enforce that award promptly via a supplementary order,
despite the possibility that the award may be overturned on review.
This section is expressly designed to provide "a quick and
inexpensive mechanism for prompt enforcement of unpaid compensation
awards, a theme central to the spirit, intent, and purposes of the
LHWCA." Tidelands, 719 F.2d at 129; see also Providence Washington
Insurance Co. v. Director, Office of Workers' Compensation
Programs, 765 F.2d 1381, 1385 (9th Cir. 1985). The Board is
authorized to grant a stay of enforcement pending appeal under
§ 21(b)(3), but no stay will issue unless irreparable injury would
otherwise ensue to the employer or carrier. 33 U.S.C. § 921(b)(3).
Congress has made a policy choice that in most circumstances, "it
is preferable that an injured worker receive regular compensation,
5
even that later is determined to have been wrongly exacted and not
recoverable by the payer, than that he be left without assistance
until all amounts are finally determined." Henry, 704 F.2d at 865.
The question we must decide is whether medical benefits are
included in "compensation" for the purposes of the accelerated
enforcement procedure under § 18(a). "Compensation" is defined in
§ 2 of the Act as "the money allowance payable to an employee or to
his dependents as provided for in this chapter. . . ." 33 U.S.C.
§ 902(12). We must construe this definition liberally in favor of
injured workers. Holcomb v. Robert W. Kirk & Associates, Inc., 655
F.2d 589, 592 (5th Cir. 1981). Medical benefits can constitute
monies payable to an employee or his dependents. Under § 7 of the
Act, an employee is entitled to recover any amount expended by him
for medical or other treatment if the employer refuses or neglects
a request to furnish such treatment, or if the nature of the
employee's injury requires treatment and the employer neglects to
authorize treatment despite knowledge of the injury. 33 U.S.C.
§ 907(d). We are persuaded that an award obtained by an employee
under these circumstances is an award of compensation as defined in
§ 2.
The structure of the Act supports this interpretation.
Section 4(a) is entitled "liability for compensation" and states
that "[e]very employer shall be liable for and secure the payment
to his employees of the compensation payable under sections 907,
908, and 909 of this title." 33 U.S.C. § 904(a). These three
sections cover the three kinds of benefits to which an employee may
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be entitled: medical services and supplies (§ 7), compensation for
disability (§ 8), and compensation for death (§ 9). Since § 7
deals exclusively with the provision of medical services and
supplies, and § 4 refers to the "compensation" payable under § 7,
Congress must have intended the term "compensation" to encompass
the provision of medical benefits, at least in some circumstances.
See Oilfield Safety & Machine Specialties, Inc. v. Harman
Unlimited, Inc., 625 F.2d 1248, 1257 (5th Cir. 1980). Section 6(a)
also refers to § 7 benefits as compensation. 33 U.S.C. § 906(a).
Chevron observes that there are numerous other sections in the
Act which appear to contrast the provision of medical benefits with
the payment of compensation. For example, § 18(b) provides that in
cases where an employer is for some reason unable to pay, the
Secretary of Labor will pay awards from a special fund established
for this purpose, "and, in addition, provide any necessary medical,
surgical, and other treatment required by section 907 . . . ." 33
U.S.C. § 918(b). Similarly, § 33, which deals with settlements
with third parties, states that if no written approval of the
settlement is obtained, or if the employee fails to notify the
employer of any settlement, "all rights to compensation and medical
benefits under this chapter shall be terminated . . . ." 33 U.S.C.
§ 933(g). Indeed, in Chevron's view, the very fact that medical
benefits and disability compensation are treated in separate
sections indicates that the two are mutually exclusive categories.
We disagree. The separate treatment of medical care and
compensation that runs throughout the Act is readily explained.
7
Whereas death and disability benefits generally come in the form of
monetary compensation from employer to employee, § 7 indicates that
Congress envisioned that employers would provide medical care in
kind. The provision states that "[t]he employer shall furnish such
medical, surgical, and other attendance or treatment, nurse and
hospital service, medicine, crutches, and apparatus, for such
period as the nature of the injury or the process of recovery may
require." 33 U.S.C. § 907(a). Originally, the employer or its
carrier would select the health care provider and pay the medical
expenses incurred in treating the employee directly to that
provider. See Marshall v. Pletz, 317 U.S. 383, 391 (1943) ("In the
normal case . . . the insurer defrays the expense of medical care
but does not pay the injured employee anything on account of such
care."). Monetary payments to employees for medical expenses were
necessary, however, in cases where the employer refused to provide
medical care and the employee had to obtain it himself and file a
claim against the employer. Id.Congress changed this procedure somewhat in 1960 because
employees complained that they should be able to select their own
doctors. See H. Rep. No. 2187, 86th Cong., 2d Sess., reprinted in
1960 U.S. Code Cong & Admin. News 3556, 3556. It provided a
mechanism whereby employees would be allowed to select their own
doctors from a panel of physicians named by the employer and
approved by the deputy commissioner. Pub. L. No. 86-756, 74 Stat.
899, reprinted in 1960 U.S. Code Cong & Admin. News 1269, 1269-71.
In 1972, the procedure was further liberalized, allowing the
8
employee to choose any doctor authorized by the Secretary to render
medical care under the Act. Pub. L. No. 92-576, 86 Stat. 1251,
reprinted in 1972 U.S. Code Cong. & Admin. News 1452, 1456-57; H.
Rep. No. 92-1441, 92nd Cong., 2d Sess., reprinted in 1972 U.S. Code
Cong. & Admin. News 4698, 4713-14. Thus employers no longer choose
health care providers to treat their employee's work-related
injuries. Instead, injured employees ask their employers to
authorize medical treatment by the doctors they select. See id..
Nevertheless, the employer's obligation to furnish medical
services in kind remains unchanged. 33 U.S.C. § 907(a). As we
understand the current practice, employers remain directly liable
to health care providers for the medical expenses of their injured
workers when they consent to the provision of medical care. If an
employer refuses or neglects to provide or authorize medical care,
however, the employee must procure medical services independently
and then file a claim with the Secretary to recover his expenses.
33 U.S.C. § 907(d).
The distinction between providing medical services in kind and
paying employees for expenses incurred in obtaining such services
themselves is important to our inquiry here. If an employer
furnishes medical services voluntarily, by paying a health care
provider for its services, it does not pay "compensation" within
the meaning of the Act. Compensation includes only money payable
to an employee or his dependents, 33 U.S.C. § 902(12), not payments
to health care providers on an employee's behalf. If, however, the
employer refuses or neglects to furnish medical services, and the
9
employee incurs expense or debt in obtaining such services, an
award of medical expenses obtained by the employee in a suit
against the employer is "compensation" within the meaning of § 2.
It is money payable to the employee.
Chevron's reliance on Marshall v. Pletz, supra, is therefore
misplaced. In Pletz, the Court held that the furnishing of medical
care to an employee was not payment of compensation within the
meaning of § 13(a) of the Act. The Court did not say that money
paid to the employee for debts incurred in obtaining medical care
could not constitute compensation. Indeed, it implied that an
award reimbursing an employee for money spent to obtain medical
care arguably does qualify as compensation.
Those cases in which this court and others have held that an
award of attorney's fees is not "compensation" within the meaning
of the Act, see, e.g., Guidry v. Booker Drilling Co., 901 F.2d 485,
487 (5th Cir. 1990); Thompson v. Potashnick Construction Co., 812
F.2d 574, 576 (9th Cir. 1987), are also inapposite here. First,
§ 28(a) expressly provides that an award of attorney's fees "shall
be paid directly by the employer or carrier to the attorney for the
claimant." 33 U.S.C. § 928(a). Since the fees are not payable to
the employee, they cannot constitute compensation within the plain
meaning of § 2. Furthermore, unlike the case of medical benefits,
there are no statutory provisions in the Act which refer to
attorney's fees as compensation to the employee.
Of course, there are some sections in the Act in which it is
clear that Congress used the term "compensation" to refer to
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disability benefits. See, e.g., 33 U.S.C. § 910 ("the average
weekly wage of the injured employee shall be taken as the basis
upon which to compute compensation"). This does not mean that
compensation cannot also be used to refer to an award of medical
benefits. The same word can be used to describe different kinds of
benefits that fall within the Act's broad definition of
compensation as "the money allowance payable to an employee."
The only provision in the Act that we have discovered which
appears to contradict our interpretation of "compensation" is
§ 7(c)(1)(B)(i), 33 U.S.C. § 907(c)(1)(B)(i). This section states
that a health care provider may be disqualified from providing
medical care under the Act if it makes false statements "in a claim
for compensation or claim for reimbursement of medical expenses."
This seems to indicate that reimbursing an employee for medical
expenses is something different from "compensation" as the Act
defines it. However, this provision was added to the Act in 1984.
See P.L. No. 98-426, 98 Stat. 1639, 1642; H. Rep. No. 98-570, 98th
Cong., 2d Sess., reprinted in 1984 U.S. Code Cong. & Admin. News
2734, 2745-46. We therefore accord it less weight in determining
the original meaning of "compensation" when Congress enacted the
statute in 1927.
The Longshore and Harbor Workers' Compensation Act "'must be
liberally construed in conformance with its purpose, and in a way
which avoids harsh and incongruous results.'" Director, Office of
Workers' Compensation Programs v. Perini North River Associates,
459 U.S. 297, 316-17 (1983) (citations omitted). Interpreting the
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term "compensation" in § 18(a) as including medical benefits
fulfills the purpose of the Act and avoids an incongruous result.
As we have noted, Congress included § 18(a) in the Act so that a
disabled worker could receive benefits promptly after being found
deserving of them, rather than suffer hardship while the benefits
were appealed. See Rivere v. Offshore Painting Contractors, 872
F.2d 1187, 1190 (5th Cir. 1989); Tidelands, 719 F.2d at 129; Henry,
704 F.2d at 865. It did not intend for the administrative review
process added in the 1972 amendments to the Act to frustrate this
goal. See H. Rep. No. 92-1441, 92nd Cong., 2d Sess., reprinted in
1972 U.S. Code Cong. & Admin. News 4698, 4709. We see no reason
why Congress would have provided for immediate enforcement of
awards of disability benefits but not awards of medical benefits.
The financial burden that medical costs impose on an injured
employee is just as debilitating as the loss of income resulting
from the employee's inability to work. Indeed, the provision in
§ 21 limiting the availability of stays pending appeal to the Board
states that "[t]he payment of amounts required by an award shall
not be stayed pending final decision . . . unless ordered by the
Board." 33 U.S.C. § 921(b)(3). This language indicates that
Congress intended any "amount required by an award" to be payable
pending appeal, whether it be disability benefits or medical
expenses or both.
Chevron argues that a delay in payment of medical expenses has
imposed no hardship on Lazarus, since he received medical care from
River Oaks without paying anything. This argument ignores the fact
12
that Lazarus is personally liable for his medical bills. The fact
that River Oaks has not yet attempted to collect from Lazarus is a
fortuity. Furthermore, if awards of medical benefits were not
promptly enforceable, there would be a substantial chilling effect
on the provision of medical services to injured employees whose
ability to pay is dubious. Many health care providers would be
reluctant to provide treatment without some indication that payment
will soon be forthcoming. This would detract from the prompt
relief of injured workers that Congress intended.
Finally, if the term "compensation" does not include medical
benefits in any instance, there is a strong argument that
administrative awards of medical benefits under the Act are never
judicially enforceable, before or after appeal. Section 21
contains the only other enforcement mechanism in the Act other than
§ 18. It is entitled "review of compensation orders" and provides
for judicial enforcement of a "compensation order making an award."
33 U.S.C. § 921(d). If medical benefits cannot constitute
"compensation," they arguably cannot be part of a "compensation
order" enforceable under this section. This cannot have been the
intent of Congress.
In sum, we are persuaded that medical benefits are included in
"compensation" for the purposes of enforcement proceedings under
§ 18(a). The district court erred in refusing to enforce the
deputy commissioner's order to Chevron to pay Lazarus' medical
expenses for this reason.
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III.
Chevron also argues that the district court properly refused
to enforce the deputy commissioner's supplementary order because it
was not "in accordance with law" as required by § 18(a). It
contends, inter alia, that the ALJ's underlying order was not a
final enforceable order because it did not adequately state the
amount of compensation which was owed to Lazarus.
Neither the deputy commissioner nor the district court should
review the underlying merits of the ALJ's decision and order in the
course of § 18(a) enforcement proceedings. Abbott, 889 F.2d at
629-30; Jourdan v. Equitable Equipment Co., 889 F.2d 637, 639-40
(5th Cir. 1989). This would undermine the prompt relief of injured
employees which this section was designed to facilitate. But we
have explained that a compensation order which is not final is not
"in accordance with law" and is therefore not enforceable by resort
to § 18(a). Severin v. Exxon Corp., 910 F.2d 286, 289 (5th Cir.
1990). "To constitute a final decision and order of the ALJ, the
order must at a minimum specify the amount of compensation due or
provide a means of calculating the correct amount without resort to
extra-record facts which are potentially subject to dispute between
the parties." Id.The portion of the ALJ's order in this case relating to
medical benefits falls afoul of the rule set forth in Severin. The
order provided that Chevron shall furnish "such reasonable and
necessary future medical care and treatment as Claimant's work-
related injury of January 28, 1986, may require, and shall pay for
14
all medical expenses related thereto previously incurred." The
ALJ added that "[t]he specific dollar computations of the
compensation award shall be administratively performed by the
Deputy Commissioner." He never specified the amount of
compensation due, nor did he provide a means of calculating this
amount. He did not say what expenses were related to the injury
and did not refer to Lazarus' medical bills as providing the basis
for its award. We do not know for sure whether the ALJ even
reviewed Lazarus' medical bills. The ALJ must not delegate the
task of calculating the amount of the award to the deputy
commissioner unless it provides some method of doing so.1
Lazarus argues that Chevron waived any arguments it may have
had as to the reasonableness of his medical expenses because it did
not raise this issue before the ALJ. We agree that the
reasonableness of Lazarus' medical expenses is a substantive matter
that should have been resolved at the initial ALJ hearing, and that
Chevron cannot raise this issue in the course of enforcement
proceedings. Jourdan, 889 F.2d at 640. However, this does not
relieve the ALJ of his responsibility to prescribe the amount of
its award, or to establish some means of deriving this amount.
The problem with the ALJ's indeterminate award was compounded
by the deputy commissioner's failure to provide Chevron with a
1
Technically, the award of future benefits was not an
award of "compensation" under § 18(a), since the ALJ ordered
Chevron to furnish medical services rather than pay medical
expenses. To make the enforceability of such orders clear, ALJs
should characterize their awards as compensation for medical
expenses the employee will incur, and describe the expenses that
will qualify.
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hearing on this matter. Chevron asked for an informal conference,
which the Secretary has provided for by regulation as a means of
resolving disputes over claims without resort to the formal hearing
process. See 20 C.F.R. §§ 702.372, 702.311 et seq. It argued not
only that the medical bills were unreasonable, but also that not
all of the expenses claimed by Lazarus were in fact due under the
ALJ's award. The latter issue is one properly resolved by the
deputy commissioner at an informal conference or, if necessary, at
a formal hearing. See Abbott, 889 F.2d at 629; Jourdan, 889 F.2d
at 639. Instead of convening such proceedings, the deputy
commissioner simply accepted the figure that Lazarus asserted was
in default, without explanation. She does not appear to have made
the "specific dollar computations" contemplated by the ALJ when he
delegated the determination of the amount of the award to the
deputy commissioner. Thus we are left with the possibility that
neither the ALJ nor the deputy commissioner actually calculated the
amount of money Chevron owed.
We are reluctant to extend Lazarus' road to recovery further,
but we cannot ignore the potential prejudice to Chevron in the
proceedings below. Because the ALJ's award was not a final order
enforceable under § 18(a), the district court was entitled to
dismiss Lazarus' petition. We therefore affirm the district
court's decision on grounds independent of those stated by the
court. Cf. United Brands Co. v. Melson, 594 F.2d 1068, 1072 (5th
Cir. 1979). When the ALJ makes express findings as to the amount
16
of the award and the kind of expenses for which Chevron is liable,
its order will be enforceable under § 18(a).
AFFIRMED.
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