Pettus v. American Airlines, Inc.

587 F.2d 627

• Court: Court of Appeals for the Fourth Circuit
• Decided: September 26, 1978
• Docket: No. 77-2230
• Status: Published

Opinions

ALBERT V. BRYAN, Senior Circuit Judge:

American Airlines, Inc. and its employees’ compensation insurance carrier, Commercial Insurance Company of Newark, New Jersey, appeal a final order of the Benefits Review Board, awarding American employee George Pettus benefits under the Longshoremen’s and Harbor Workers’ Compensation Act, (Longshoremen’s Act), 33 U.S.C. § 901 et seq. (1972), made applicable to the District of Columbia by the Workmen’s Compensation Act, 36 D.C.Code §§ 501-502 (1973). We reverse.

While seeking employment in 1969, Pet-tus was told by a District of Columbia employment agency that American Airlines had job openings. Going there again for an interview with American’s personnel, he learned there would be a position available. The next day Pettus and several other men were transported from the agency’s office in the District to National Airport in Virginia, for processing by the American personnel department.

After obtaining the employment, Pettus was assigned to duties at the Airport in ,1969 as a fleet service clerk in the “line cargo group,” loading and unloading planes. While so engaged on May 10, 1972 he suffered an injury to his back. He applied for and was allowed workmen’s compensation benefits by the Industrial Commission of Virginia, at the rate of $62 per week from May 10 to July 1, 1972 and from July 15, 1972 to May 16, 1973 under the Virginia Workmen’s Compensation Act. Va. Code Ann. § 65.1-1 et seq. (Repl.Vol. 1973). These payments were terminated, as of May 16, 1973, following a decision after hearing by the Commission that the claimant had unjustifiably refused to undergo recommended back surgery. With no appeal taken to the Supreme Court of Virginia, the decision became final. Va. Code Ann. § 65.1-98 (Cum.Supp.1978).

On June 28,1974, Pettus filed a claim for compensation under the District of Columbia Workmen’s Compensation Act. Initially, benefits were denied him when an Administrative Law Judge found the claim not to fall within the jurisdictional scope of the Longshoremen’s Act. The Benefits Review Board, however, concluded there were sufficient contacts of the claimant with the District to confer jurisdiction there and reversed. Pettus v. American Airlines, Inc., 3 B.R.B.S. 315, B.R.B. No. 75-197 (March 19, 1976). On remand, another Administrative Law Judge awarded the claimant benefits based upon temporary total disability. When the Board affirmed this decision on August 22, 1977, the present appeal was brought.

We accept the Board’s determination of jurisdiction, but that is not to say we accept its exercise thereof in favor of the claimant. Cardillo v. Liberty Mutual Co., 330 U.S. 469, 67 S.Ct. 801, 91 L.Ed. 1028 (1947). Here, reversal is mandated by the rules of res judicata and the Full Faith and Credit Clause of the Constitution. These principles required the Board to abide by the order of the Virginia Commission refusing Pettus further compensation.

Since the parties in Virginia and the District of Columbia are identical, the next question is whether “the right, question or fact,” Southern Pacific Railroad Co. v. United States, 168 U.S. 1, 48,18 S.Ct. 18, 42 L.Ed. 355 (1897), put to rest in the Virginia proceeding is the same as that raised under the Longshoremen’s Act before the Review Board.¹ This identity of issue will at once become apparent.

The State statute, at the time, provided that “the employee shall accept . such surgical and hospital service . as may be deemed necessary by the attending physician or the Industrial Commission.” Moreover, “[t]he refusal of the employee to accept such service shall bar the employee from further compensation . . . unless, in the opinion of the Industrial Commission, the circumstances justified the refusal.” (Va. Code Ann. § 65.1-88 (Repl.Vol. 1973). In section 7(d) of the Longshoremen’s Act, 33 U.S.C. § 907(d), it is declared that if “the employee unreasonably refuses to submit to medical or surgical treatment, . . . the Secretary may, by order, suspend the payment of further compensation during such time as such refusal continues, . . . unless the circumstances justified the refusal.”

The common issue is thus whether the employee’s refusal was “justified” under the circumstances as expressed in the State law, or “unreasonable]” as the District of Columbia law puts it. Virginia’s Commission saw it unjustified. Unappealed this resolution was “conclusive and binding as to' all questions of fact.” Va. Code Ann. § 65.1-98 (Repl.Vol. 1973).

However, the doctrine of res judicata also exacts that the determination has been made by the Virginia Commission after a full and fair adjudication of its legal and evidential factors. United States v. Utah Construction & Mining Co., 384 U.S. 394, 422, 86 S.Ct. 1545, 1560, 16 L.Ed.2d 642 (1966). A review of the record makes plain that the procedures afforded the appellee in Virginia and the proof adduced before the State agency abundantly met this criterion.

Upon employee’s refusal to accept surgery, a hearing was held thereon before one of the members of the Commission in Alexandria, Virginia. The claimant was represented by counsel. After receiving evidence, in the form of medical reports and the injured employee’s ore tenus testimony, the Commissioner on October 9, 1973 held the claimant’s refusal was not justified.² There followed an order terminating compensation as of May 16,1973. Upon appeal to the full Commission and a review hearing on January 8,1974 in Richmond, Virginia, the Commissioner’s order was upheld and adopted as the Commission’s own. Va. Code Ann. 1950, § 65.1-98 (Repl.Vol. 1973). Moreover, at that stage the award assumed the status of a judgment of a court of record of the State. The statute,³ Va. Code Ann. § 65.1-100 (Repl.Vol. 1973), provided:

Any party in interest may file in the circuit . . . court of the county or city in which the injury occurred, . . . an award of the Commission whereupon the court, . . . shall render judgment in accordance therewith and notify the parties. Such judgment shall have the same effect, ... as though such judgment had been rendered in a suit duly heard and determined by the court.

Thus, without question the decision of the Commission operates as an absolute bar to any other action on the same facts in the courts of Virginia.

Therefore, under res judicata the Benefits Review Board, when presented with the Virginia judgment, was compelled to give it the same force and effect as it possessed in Virginia.⁴

Notwithstanding, the claimant urges that he still had the right to proceed under the District of Columbia law for compensation benefits, with only the obligation to credit thereon any award he procured in Virginia. Precedent of last resort refutes this contention.

It begins with Magnolia Petroleum Co. v. Hunt, 320 U.S. 430, 64 S.Ct. 208, 88 L.Ed. 149 (1943). There the Chief Justice exhaustively explored the law asserted upon the privilege and found it without acceptable basis. A second and separate proceeding in another jurisdiction upon the same injury after a prior recovery in another State, he declared for a majority of the Court, was precluded by the Full Faith and Credit Clause.

The factual foundation of the case was that an employee, a resident of Louisiana, while engaged in the drilling of oil wells for his employer, Magnolia, in Texas was injured in his work. He obtained an award of compensation in Texas under its workmen’s compensation law. Payments were made by Magnolia’s insurer in accordance with the award, which became final under the Texas statute. Thereafter, the claimant brought a like proceeding in a State court in Louisiana. His employer excepted on the ground that recovery was barred as res judicata by the Texas award. This defense was overruled and judgment went for the employee for the sum fixed by the Louisiana law, after deducting the Texas payments. On affirmance by the Supreme Court of Louisiana, certiorari brought the case to the United States Supreme Court where it was reversed.

As in Virginia, the Texas statute provided that the award would be in lieu of any other recovery for the injury by the employee, the Act stating that employees “shall have no right of action against their employer . . . for damages for personal injuries, . . . but such employees . . shall look for compensation solely to the [insurer], . . .” Texas Rev.Civ.Stat., Title 130, art. 8306, § 3. Again, or similar to the Virginia law, an award which has become final “is entitled to the same faith and credit as a judgment of a court.” 320 U.S. at 435, 64 S.Ct. at 211. Continuing, the Chief Justice said:

In the ease of local law, since each of the states of the Union has constitutional authority to make its own law with respect to persons and events within its borders, the full faith and credit clause does not ordinarily require it to substitute for its own law the conflicting law of another state, even though that law is of controlling force in the courts of that state with respect to the same persons and events.

But it does not follow that the employee who has sought and recovered an award of compensation in either state may then have recourse to the laws and courts of the other to recover a second or additional award for the same injury. Where a court must make choice of one of two conflicting statutes of different states and apply it to a cause of action which has not been previously litigated, there can be no plea of res judicata. But when the employee who has recovered compensation for his injury in one state seeks a second recovery in another he may be met by the plea that full faith and credit requires that his demand, which has become res judicata in one state, must be recognized as such in every other. 320 U. S. at 436-37, 64 S.Ct. at 212.

Among the dissenters was Justice Black. However, the foremost ground of his difference was that the parties were not the same in the two proceedings — that the one in Texas was against the insurer only and the award limited to a release of the insurer, while in Louisiana the employer’s liability, as well as the insurer’s, was before the Louisiana tribunal. Thus his difference would not run to the proceeding before us.

The claimant further presses that Magnolia was overruled in Industrial Commission of Wisconsin v. McCartin, 330 U.S. 622, 67 S.Ct. 886, 91 L.Ed. 1140 (1947). There, decision favored the claimant’s contention that he was entitled to proceed in another State, even after he had prevailed earlier in a like proceeding elsewhere. The employee was a bricklayer for McCartin, and was, like his employer, a resident of Illinois. The contract of employment was made in Illinois, but the employee worked in Wisconsin, driving back and forth between his Illinois home and his Wisconsin job. Suffering an injury in Wisconsin, he there filed for compensation with the Industrial Commission of that State on June 7, 1943. Both employer and insurer, objected to jurisdiction of the Wisconsin Commission. On July 20, 1943, the employee applied to the Illinois Commission for adjustment of the claim.

The Wisconsin Commission on October 11 wrote the insurance carrier that the employee had been informed that under Wisconsin law he was entitled to proceed also under the Illinois Compensation Act, and thereafter claim compensation under the Wisconsin law, less any amounts paid him under the Illinois Act. In reply the carrier stated that it understood that if payment were made to the employee under the Illinois statute, credit would be given for those payments in the event of a Wisconsin award. So understanding, the insurer paid the employee compensation under the Illinois law.

On November 3, 1943, a settlement contract was made between the claimant-employee and his employer but it stated that: “This settlement does not affect any rights that applicant may have under the Workmen’s Compensation Act of the State of Wisconsin.” Nevertheless, that State’s Supreme Court applied Magnolia and refused to allow the Wisconsin proceeding. The United States Supreme Court reversed.

In so doing the Court unequivocally disavowed any intendment whatsoever to modify Magnolia. The distinction between the two was made altogether plain. In Magnolia the award “was made explicitly in lieu of any other recovery for injury to the employee, precluding even a recovery under the laws of another state. And since the Texas award had the degree of finality contemplated by the Full Faith and Credit Clause, it was held that Louisiana was constitutionally forbidden from entering a subsequent award under its statute.” 320 U.S. at 626-27, 67 S.Ct. at 889 (citation omitted). It concluded that these circumstances did not exist in McCartin, the Illinois award being “different in its nature and effect from the Texas award” in Magnolia. Id. at 627, 67 S.Ct. at 889. More importantly, prosecution of the proceeding in Wisconsin was virtually under stipulations of consent.

The United States Court of Appeals for the District of Columbia Circuit had occasion in Gasch v. Britton, 92 U.S.App.D.C. 64, 202 F.2d 356 (1953), to consider the influence of McCartin upon Magnolia. In denying there was any modification of Magnolia by McCartin, Judge Proctor stated:

They [appellants] go so far as to insist that McCartin overrules the Magnolia Petroleum Co. decision. We think that is not so. McCartin complements, rather than opposes, (sic) the earlier decision. 92 U.S.App.D.C. at 65, 202 F.2d at 358.

Turning to the Virginia statute, we find it as exclusive of a second proceeding as the Chief Justice in Magnolia found the Texas law. Under the statute, he noted an award “is explicitly made by statute in lieu of any other recovery for injury to the employee.” 320 U.S. at 435, 64 S.Ct. at 211. Quoting the Act, infra at 8, § 3, he said that employees subject to it “shall have no right of action against their employer but . . . shall look for compensation solely to the [insurer].” Id. (accent added). How precisely the Virginia law fits into the Texas mold appears at once upon reading Virginia’s Workmen’s Compensation law:

§ 65.1 — 40. Employee’s rights under the Act exclude all others. — The rights and remedies herein granted to an employee . . . shall exclude all other rights and remedies of such employee, at common law or otherwise, . . (Va. Code Ann. § 65.1 — 40 (Repl. Vol. 1973). (Accent added.)

In verification of our construction of this section, the Virginia Law Review⁵ observes: “Under the Workmen’s Compensation Act, any collateral action the employee might have against his employer is barred unless the employee expressly waives coverage of the Act’s provisions.” A footnote thereto adds: “Employees may waive coverage of the Act . . . but if they do not, their right to compensation excludes any other claims they may have against the employer. . . . ”

The order of the Benefits Review Board awarding compensation to George Pettus will be vacated for the foregoing reasons.

VACATED.

1 . The fact that the decision-maker in the initial adjudication was an administrative agency is of no consequence. For “[r]es judicata effect may attach to determinations of administrative agencies in appropriate circumstances. United States v. Utah Construction & Mining Co., 384 U.S. 394. 422. 86 S.Ct. 1545, 16 L.Ed.2d 642 (1966). See Industrial Comm’n of Wisconsin v. McCartin, 330 U.S. 662, 67 S.Ct. 886, 91 L.Ed. 1140 (1947); Magnolia Petroleum Co. v. Hunt, 320 U.S. 430, 64 S.Ct. 208, 88 L.Ed. 149 (1943).” Mitchell v. National Broadcasting Co., 553 F.2d 265, 268-69 (2nd Cir. 1977).

2 . The attending orthopaedic surgeon had recommended surgery to correct the condition. When the employee refused, a period of conservative treatment was attempted, but it was finally concluded that surgery was necessary to restore the claimant to an employable status.

3 . Recodified, the citation of this section appears in the 1978 Cum.Supp. to Va. Code Ann. as § 65.1-100.1.

4 . The Constitution of the United States, art. IV, § 1, fathered the Act of Congress, now § 1738 of Title 28, United States Code:

§ 1738. State and Territorial statutes and judicial proceedings; full faith and credit

The records and judicial proceedings of any court of any such State, Territory or Possession, or copies thereof, shall be proved or admitted in other courts within the United States and its Territories and Possessions by the attestation of the clerk and seal of the court annexed, if a seal exists, together with a certificate of a judge of the court that the said attestation is in proper form.

Such Acts, records and judicial proceedings or copies thereof, so authenticated, shall have the same full faith and credit in every court within the United States and its Territories and Possessions as they have by law or usage in the courts of such State, Territory or Possession from which they are taken.

5 . Workmen’s Compensation, Eighteenth Annual Survey of Developments in Virginia Law: 1972-1973, 59 Va.L.Rev. 1632 (1973).