Terry Grimm v. Vortex Marine Construction , 921 F.3d 845 ( 2019 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
TERRY GRIMM, No. 18-15104
Plaintiff-Appellant,
D.C. No.
v. 3:17-cv-03103-
EDL
VORTEX MARINE CONSTRUCTION;
SIGNAL MUTUAL INDEMNITY
ASSOCIATION; ACCLAIM RISK OPINION
MANAGEMENT, INC.; EDWARD PAUL
MARTIN; DALE ANN MARTIN;
CASSANDRA LANE,
Defendant-Appellee.
Appeal from the United States District Court
for the Northern District of California
Elizabeth D. Laporte, Magistrate Judge, Presiding
Argued and Submitted March 12, 2019
San Francisco, California
Filed April 16, 2019
Before: William A. Fletcher, Paul J. Watford,
and Andrew D. Hurwitz, Circuit Judges.
Opinion by Judge Hurwitz;
Concurrence by Judge Watford
2 GRIMM V. VORTEX MARINE CONSTRUCTION
SUMMARY *
Labor Law
The panel affirmed the district court’s dismissal of an
action seeking enforcement of a Department of Labor order
requiring payment of a worker’s future medical expenses
under the Longshore and Harbor Workers’ Compensation
Act.
A Department of Labor administrative law judge ordered
the worker’s employer to pay for medical expenses arising
from his work-related injuries and to provide treatment
going forward. The worker alleged that the employer
refused to pay for required medical treatment and he was
therefore forced to rely on Medicare to pay his expenses. He
sought enforcement of the ALJ’s order and also asserted a
claim under the Medicare Secondary Payer Act, seeking
double damages for the amounts Medicare paid for the
services.
The panel held that the district court lacked subject
matter jurisdiction to enforce the ALJ’s order because the
order was not final, as required by 33 U.S.C. § 921(d).
Joining other circuits, the panel held that to be “final” for
purposes of § 921(d), an 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.
*
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
GRIMM V. VORTEX MARINE CONSTRUCTION 3
The panel affirmed the district court’s conclusion that the
worker’s claim under the Medicare Secondary Payer Act
was premature.
Concurring, Judge Watford agreed that the district court
lacked jurisdiction to hear the Longshore Act claim. He
wrote that 33 U.S.C. § 921(d) limits the jurisdiction of the
district court to enforcing “compensation orders,” and the
portion of the ALJ’s order directing the employer to pay
future medical expenses was not a compensation order
within the meaning of the Longshore Act.
COUNSEL
Lara D. Merrigan (argued), San Rafael, California; Paul
Myers and Eric A. Dupree, Coronado, California; for
Plaintiff-Appellant.
David L. Doeling (argued), Aleccia & Mitani, Long Beach,
California, for Defendants-Appellees.
OPINION
HURWITZ, Circuit Judge:
The central issue in this case is whether a Department of
Labor order requiring payment of a worker’s future medical
expenses was sufficiently “final” to support a judicial
enforcement action under the Longshore and Harbor
Workers’ Compensation Act (“Longshore Act”) and a
double damages claim by the worker against the employer
under the Medicare Secondary Payer Act (“MSP”). The
district court found the order was not final and dismissed the
4 GRIMM V. VORTEX MARINE CONSTRUCTION
worker’s complaint. We have jurisdiction over this appeal
under 28 U.S.C. § 1291 and affirm.
I
A
Terry Grimm worked 32 years as a pile driver for several
employers, including Vortex Marine Construction. After
leaving work, Grimm filed a claim against Vortex under the
Longshore Act, 33 U.S.C. § 901, et seq., seeking workers’
compensation and medical benefits. A Department of Labor
administrative law judge (“ALJ”) found that Grimm had
sustained work-related injuries while employed by Vortex.
The ALJ therefore ordered Vortex to “pay or reimburse the
Claimant for all medical expenses arising from the
Claimant’s work-related injuries,” and to “provide treatment
going forward, including the diagnostic procedures and
therapies his treating physicians judge appropriate.” The
Benefits Review Board (“BRB”) affirmed the ALJ’s order.
Vortex petitioned this Court for review of the BRB decision,
but withdrew the petition.
B
In this action, Grimm alleges that Vortex refused to pay
for required medical treatment and he was therefore forced
to rely on Medicare to pay his expenses. The operative
amended complaint sought to enforce the ALJ’s order and
also asserted a claim under the MSP, seeking double
GRIMM V. VORTEX MARINE CONSTRUCTION 5
damages for the amounts Medicare paid for the services. See
42 U.S.C. § 1395y(b). 1
The district court granted Vortex’s motion to dismiss,
finding it lacked jurisdiction to enforce the ALJ’s order
because it was not final and that the MSP claim was
premature. This timely appeal followed.
II
A
“The Longshore Act is a worker’s compensation plan
under which employers subject to the Act are required,
within statutory limits, to compensate their employees for
job-related injuries or deaths.” Thompson v. Potashnick
Constr. Co., 812 F.2d 574, 575 (9th Cir. 1987).
Compensation claims are “filed with the deputy
commissioner in the compensation district in which such
injury or death occurred,” 33 U.S.C. § 913, and disputes
requiring a hearing referred to an ALJ, id. § 919(c)–(d). The
ALJ can issue a “compensation order,” either “rejecting the
claim or making the award.” Id. § 919(e); 20 C.F.R.
§ 702.348. Appeals from compensation orders go to the
BRB. 33 U.S.C. § 921(b)(3). “Final orders of the BRB are
reviewable by the United States Courts of Appeals.”
Thompson, 812 F.2d at 576 (citing 33 U.S.C. § 921(c)).
If an employer “fails to comply with a compensation
order . . . that has become final,” the beneficiary may bring
an enforcement action in the district court. 33 U.S.C.
1
The defendants are Vortex; Signal Mutual Indemnity Association,
Vortex’s insurer; Acclaim Risk Management, Inc., third party
administrator for Vortex’s Longshore Act claims; an Acclaim insurance
adjuster; and two Acclaim officers.
6 GRIMM V. VORTEX MARINE CONSTRUCTION
§ 921(d). “Unlike the BRB and court of appeals, the district
court has no jurisdiction over the merits of the litigation.”
Thompson, 812 F.2d at 576. A district court accordingly
“cannot affirm, modify, suspend or set aside the order.” Id.Rather, its “jurisdiction extends only to the enforcement of
compensation orders.” Id.The district court dismissed Grimm’s enforcement
action because it found the ALJ’s order not final under
§ 921(d). We previously have not addressed when an order
becomes final under that statute. However, several of our
sister Circuits have done so, and we join them in holding that
to be “final” for purposes of § 921(d), an 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
genuine dispute between the parties.” Severin v. Exxon
Corp., 910 F.2d 286, 289 (5th Cir. 1990); see also Stetzer v.
Logistec of Conn., Inc., 547 F.3d 459, 463–64 (2d Cir. 2008)
(adopting Severin’s analysis). 2
2
Other courts of appeal have also reached identical conclusions in
suits under 30 U.S.C. § 932, the Black Lung Benefits Act (“BLBA”).
Section 932 expressly incorporates the enforcement scheme in the
Longshore Act. See, e.g., Connors v. Amax Coal Co., 858 F.2d 1226,
1228–29 (7th Cir. 1988) (“[A] claimant . . . does not possess a
compensation order making an award, that has become final—the ticket
to admission to district court under section 921(d)—until that party
obtains a final administrative determination resolving any dispute as to
whether particular expenses are covered expenses.” (internal quotations
omitted)); Connors v. Bethlehem Mines Corp., 862 F.2d 461, 463 (3d
Cir. 1988) (requiring “the Secretary of Labor to make an initial
determination of benefits before the district court has jurisdiction to
enforce a final order”); Connors v. Oglebay Norton Co., 848 F.2d 84, 85
(6th Cir. 1988) (holding that a plan could not “proceed directly” in
district court to recover BLBA payments made to miners “since it has
GRIMM V. VORTEX MARINE CONSTRUCTION 7
The Longshore Act does not specify when a
“compensation order” becomes “final” under § 921(d). But
the Act defines “compensation” as “the money allowance
payable to an employee,” 33 U.S.C. § 902(12), suggesting
that a final order must either specify the “money allowance”
or provide a ready method for determining it. And, the
governing regulations define “medical care” as that which is
“recognized as appropriate by the medical profession for the
care and treatment of the injury.” 20 C.F.R. § 702.401(a).
The district court’s enforcement power does not extend to
determining whether specific medical care is appropriate, or
even whether the fees charged by a treating physician are
reasonable. See 20 C.F.R. § 702.413 (requiring the agency
to determine the reasonableness of disputed fees). It thus
stands to reason, as Severin holds, that a district court’s
limited jurisdiction over a compensation order extends only
to orders whose monetary sweep cannot be disputed.
Under the Severin rubric, the district court correctly
found that it lacked jurisdiction over Grimm’s § 921(d)
enforcement claim. The ALJ’s order stated “Vortex . . .
must pay or reimburse the Claimant for all medical expenses
arising from the Claimant’s work related injuries.” It did not
list an amount to be paid or a means of calculating what
Vortex owed. See Severin, 910 F.2d at 289. Nor did the
order specify any specific medical service for which Vortex
would be liable. “[A] decision is not final where the extent
of damage remains undetermined.” BethEnergy Mines, Inc.
v. Dir., Office of Workers’ Comp. Programs, 32 F.3d 843,
849 (3d Cir. 1994) (internal quotations omitted).
never been determined administratively that the miners are entitled to
any specific award”).
8 GRIMM V. VORTEX MARINE CONSTRUCTION
The relief that Grimm seeks, however justified, would
plainly require the district court to insert itself into the
“merits of the litigation.” Thompson, 812 F.2d at 576. The
court would be called on to resolve disputes about whether
the services Grimm received were for work-related injuries,
and perhaps over the charges incurred for those services.
Resolution of that dispute plainly turns on “extra-record
facts which are potentially subject to genuine dispute
between the parties.” Severin, 910 F.2d at 289. Those
disputes must be addressed in the first instance to the
agency. 3
Moreover, the amended complaint improperly requested
modification of the ALJ’s order. For example, it sought
issuance of three LS-1 forms authorizing payment for
medical services, as well as an order requiring Vortex to pay
timely for future medical care and hold Grimm harmless
against claims brought by others. Issuance of these forms
would modify, rather than enforce, the ALJ’s order and a
district court lacks jurisdiction under § 921(d) to “modify”
orders. See Thompson, 812 F.2d at 576.
Grimm correctly notes that the central purpose of the
Longshore Act is “to place the compensation award in the
hands of the entitled claimant as soon as possible.” Sea-
Land Serv., Inc. v. Barry, 41 F.3d 903, 907 (3d Cir. 1994).
That purpose might be furthered if Congress had seen fit to
3
While this appeal was pending, the Office of Workers’
Compensation Programs issued a Memorandum of Internal Conference,
recommending that Vortex (1) pay or reimburse Grimm for all submitted
chiropractic bills; (2) authorize Grimm’s medical group to treat him with
all appropriate medical care; and (3) review and resolve all outstanding
non-chiropractic provider bills within 90 days. We GRANT Vortex’s
motion for judicial notice of the Memorandum.
GRIMM V. VORTEX MARINE CONSTRUCTION 9
empower district courts to resolve disputes over whether a
specific service should be paid for by the employer. But
Congress did not do so, instead in § 921(d) limiting the
district court to enforcement of final agency orders. The
district court therefore did not err in dismissing the
enforcement claim for lack of subject matter jurisdiction.
B
The gravamen of Grimm’s MSP claim is that Medicare
was forced to pay his medical expenses after Vortex
wrongfully refused to do so. The district court correctly
rejected that claim as premature.
“The MSP makes Medicare insurance secondary to any
‘primary plan’ obligated to pay a Medicare recipient’s
medical expenses . . . .” Parra v. PacifiCare of Ariz., Inc.,
715 F.3d 1146, 1152 (9th Cir. 2013) (citing 42 U.S.C.
§ 1395y(b)(2)(A)). The term “primary plan” includes
“workmen’s compensation law[s] or plan[s].” 42 U.S.C.
§ 1395y(b)(2)(A); see § 1395y(b)(8)(F); 42 C.F.R.
§ 411.40(a) (interpreting “primary plan” to include the
Longshore Act). The MSP authorizes Medicare to make
conditional payment for services if a primary plan “has not
made or cannot reasonably be expected to make payment . . .
promptly.” Id. § 1395y(b)(2)(B)(i). Medicare can then seek
reimbursement “if it is demonstrated that such primary plan
has or had a responsibility to make payment.” Id.
§ 1395y(b)(2)(B)(ii).
The MSP’s private right of action allows a beneficiary to
recover double the amount of Medicare payments made
when a plan “fails to provide for primary payment (or
appropriate reimbursement).” Id. § 1395y(b)(3)(A); see
Parra, 715 F.3d at 1152. A primary payment includes a
“payment [that] has been made, or can reasonably be
10 GRIMM V. VORTEX MARINE CONSTRUCTION
expected to be made” by a primary plan. 42 U.S.C.
§ 1395y(b)(2)(A).
But, “the defined term ‘primary plan’ presupposes an
existing obligation (whether by statute or contract) to pay for
covered items or services.” Humana Med. Plan, Inc. v. W.
Heritage Ins. Co., 832 F.3d 1229, 1237 (11th Cir. 2016).
Grimm’s MSP claim would require the district court to
determine in the first instance whether Vortex was obliged
to pay for the items and services covered by a Medicare
conditional payment. Until an ALJ, subject to review by the
BRB and court of appeals, has found an employer liable for
specific medical expenses, a plaintiff cannot demonstrate the
employer’s responsibility as required by the MSP. Absent a
final compensation order requiring that specific services
either be paid for or reimbursed, Grimm has failed to state a
claim for recovery under the MSP.
III
For the reasons above, we AFFIRM the judgment of the
district court.
WATFORD, Circuit Judge, concurring:
I agree that the district court lacks jurisdiction to hear the
Longshore Act claim. But while the court casts the
jurisdictional issue as one of finality, in my view there is a
more basic deficiency. The Longshore Act limits the
jurisdiction of the district court to enforcing “compensation
orders.” 33 U.S.C. § 921(d). What Terry Grimm seeks to
enforce here is the portion of an administrative order
directing Vortex Marine Construction to pay or reimburse
Grimm in the future “for all medical expenses arising from
GRIMM V. VORTEX MARINE CONSTRUCTION 11
[his] work-related injuries.” That is not a compensation
order within the meaning of the Longshore Act. The Act
defines “compensation” as “the money allowance payable to
an employee or to his dependents as provided for in this
chapter.” § 902(12). That definition does not include an
employer’s obligation to furnish future medical care.
Marshall v. Pletz, 317 U.S. 383, 390–91 (1943). To obtain
an enforceable compensation order, Grimm must first
receive the medical care he requires and then seek an
additional order directing Vortex to pay for the medical bills
he has incurred. Id. at 391; see 33 U.S.C. § 907(d)(1). The
Longshore Act does not permit a district court to issue an
injunction under § 921(d) prospectively ordering an
employer to pay for future medical benefits, no matter how
specific the administrative order may be.