S. H. Du Puy and Liberty Mutual Insurance Company v. Director, Office of Workers' Compensation Programs, United States Departmentof Labor

519 F.2d 536
CourtCourt of Appeals for the Seventh Circuit
DecidedSeptember 3, 1975
Docket74-1666
StatusPublished
Cited by24 cases

This text of 519 F.2d 536 (S. H. Du Puy and Liberty Mutual Insurance Company v. Director, Office of Workers' Compensation Programs, United States Departmentof Labor) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
S. H. Du Puy and Liberty Mutual Insurance Company v. Director, Office of Workers' Compensation Programs, United States Departmentof Labor, 519 F.2d 536 (7th Cir. 1975).

Opinions

PELL, Circuit Judge.

Oscar Allen was severely injured on November 6, 1972, while employed by S.H. Du Puy Company (Du Puy)1 as a grain trimmer at the Jones Island Docks in Milwaukee, Wisconsin. Allen received medical attention and was hospitalized. He refused blood transfusions for religious reasons and died November 11, 1972. Liberty Mutual Insurance Co., the insurance carrier for Du Puy, gave notice that it would controvert the case since Mr. Allen refused to accept reasonable “medical treatment.” Mrs. Allen made a claim for death compensation for herself by notification. A conference with Mrs. Allen, Liberty Mutual, and a deputy commissioner for the United States Secretary of Labor was held in May 1973. The deputy commissioner concluded that there was a necessity for an evidentiary hearing which “will be held by an Administrative Law Judge of the U.S. Department of Labor, who will follow the Administrative Procedure Act.” The hearing was scheduled for October 1973 before the Administrative Law Judge (ALJ).

At the hearing the parties informed the ALJ that a settlement agreement had been reached. The ALJ entered an order based on this agreement, which provided for a lump sum payment. Attorney’s fees were to be paid from the award. The Director, Office of Worker’s Compensation Programs, Department of Labor, appealed this order to the Benefits Review Board, which vacated the Compensation Order on the grounds that a settlement could only be approved by a deputy commissioner. The board declined to rule on the question óf attorney’s fees raised before the board.

Du Puy and Liberty Mutual jointly petition this court pursuant to 33 U.S.C. § 921(c) to set aside the decision of the Benefits Review Board and to reinstate the compensation order filed by the ALJ. In their briefs and during oral argument in this court the parties have principally addressed themselves to two issues: 1) whether the ALJ had the authority and power to approve the settlement of the death claim and 2) whether attorney’s fees should have been assessed in addition to the award by the ALJ, assuming he had the power to make an award.

The Longshoremen’s and Harbor Workers’ Compensation Act, 33 U.S.C. § 901 et seq., was enacted to provide the type of coverage generally denominated as workmen’s compensation to certain designated employees of whom Allen was one.2 In furtherance of the protec[538]*538tive purpose of the Act, other provisions specified that no agreement by an employee to waive his right to compensation would be valid and that no assignment, release, or commutation of compensation or benefits would be valid except as provided in the Act. 33 U.S.C. §§ 915(b), 916.3 These sections have operated as a general bar to settlements. See generally, Henderson v. Glens Falls, Indemnity Co., 134 F.2d 320 (5th Cir. 1943), cert. denied, 319 U.S. 756, 63 S.Ct. 1175, 87 L.Ed. 1709; Lumber Mutual Casualty Insurance Co. v. Locke, 60 F.2d 35 (2d Cir. 1932).

While the underlying policy of the Act generally precluded disposition of these cases by way of compromise and settlement, Congress did provide an exception. That exception, the only one of which we are aware in the Act prior to the amendments of October 27, 1972, was contained in 33 U.S.C. § 908(i), which provided that if the deputy commissioner' determined that it is for the best interests of an injured employee entitled to compensation, he could, with the approval of the Secretary of Labor, approve agreed settlements in cases involving temporary partial disability and certain cases involving permanent partial disability.4

In 1972, § 908(i) was amended to allow the deputy commissioner to approve agreed settlements whenever he determined that it is for the best interests of the injured employee. The reference to certain subdivisions and the reference to approval of the Secretary were eliminated.5 The House Report accompanying [539]*539the bill stated: “Subsection [90]8(i)(A) provides that the deputy commissioner, Board, or Court may approve a settlement discharging an employer from liability for compensation if he deems it to be in the best interest of the employee.” H.R.Rep. No. 92-1441, 92d Cong., 2d Sess., 3 U.S. Code Congressional and Administrative News at pp. 4698, 4720 (1972).

We note one other amendment to the Act which was included in the 1972 amendments. Section 919(d) had provided for the presentation of evidence at a hearing to be conducted by the deputy commissioner as provided for in subdivisions (a) through (c) and also that the claimant and employer could be represented at the hearing by any person authorized in writing. This subdivision was amended to read as follows:

“(d) Notwithstanding any other provisions of this chapter, any hearing held under this chapter shall be conducted in accordance with the provisions of section 554 of Title 5. Any such hearing shall be conducted by a hearing examiner qualified under section 3105 of that Title. All powers, duties, and responsibilities vested by this chapter, on October 27, 1972, in the deputy commissioners with respect to such hearings shall be vested in such hearing examiners.”

Section 554 is the adjudication section of the Administrative Procedure Act. In addition to providing that hearings are to be held in accordance with §§ 556 and 557, section 554 provides, inter alia, as follows:

“(c) The agency shall give all interested parties opportunity for—
(1) the submission and consideration of facts, arguments, offers of settlement, or proposals of adjustment when time, the nature of the proceeding, and the public interest permit; and
(2) to the extent that the parties are unable so to determine a controversy by consent, hearing and decision on notice and in accordance with sections 556 and 557 of this title.” 5 U.S.C. § 554(c).

The powers and duties of a hearing examiner or an administrative law judge are set forth in Section 556 which provides in part:

“(b) . . This subchapter does not supersede the conduct of specified classes of proceedings, in whole or in part, by or before boards or other employees specifically provided for by or designated under statute. .
“(c) Subject to published rules of the agency and within its powers, employees presiding at hearings may—
“(6) hold conferences for the settlement or simplification of issues by consent of the parties;” 5 U.S.C. 556(b), (c).

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Bluebook (online)
519 F.2d 536, Counsel Stack Legal Research, https://law.counselstack.com/opinion/s-h-du-puy-and-liberty-mutual-insurance-company-v-director-office-of-ca7-1975.