Holcim (U.S.) Inc. v. Reed ( 2008 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
September 9, 2008
No. 06-60842 Charles R. Fulbruge III
Clerk
HOLCIM (U.S.) INC.
Petitioner
v.
MARTHA REED; SHERRIE MCLAURIN; DIRECTOR, OFFICE OF
WORKER’S COMPENSATION PROGRAMS, U.S. DEPARTMENT OF
LABOR
Respondents
Petition for Review of an Order
of the Benefits Review Board
Before HIGGINBOTHAM, BENAVIDES, and DENNIS, Circuit Judges.
PER CURIAM:*
Holcim (U.S.) Inc. (“Holcim”) petitions for review of the final decision of the
Benefits Review Board (“BRB”) affirming an administrative law judge’s (“ALJ”)
decision. The ALJ ordered Holcim to pay death benefits and attorney’s fees to
the mistress of its decedent employee because she qualified as a “dependent”
under § 9(d) of the Longshore and Harbor Workers’ Compensation Act
(“LHWCA”), 33 U.S.C. § 909(d). We vacate and remand.
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
No. 06-60842
I.
Bernard Reed and Martha Reed, both Louisiana residents, were married
on January 8, 1987, and lived together as husband and wife until December
1994. At that time, Mr. Reed left his wife and their shared domicile. After Mr.
Reed moved out, Mrs. Reed filed for spousal support in 1995 and obtained a
judgment in the Civil District Court for the Parish of Orleans against Mr. Reed
awarding Mrs. Reed alimony. Later, in 2003, Mrs. Reed obtained a judgment
against Mr. Reed for back support because he had failed to make $2,265 in
alimony payments. Yet, Mr. and Mrs. Reed never divorced, and neither spouse
ever instituted divorce proceedings. Beginning in 2001, Mr. Reed lived with
another woman, Sherrie McLaurin, in a house belonging to McLaurin’s sister.
They were not married and there was no legal or familial relationship between
them.
On September 12, 2003, Mr. Reed drowned while loading a barge on the
Industrial Canal in the course of his employment with Holcim. The LHWCA
provides for the payment of compensation when an employee is injured or killed
while engaged in maritime employment on the navigable waters of the United
States. 33 U.S.C. §§ 902, 903, 908, 909. Section 9 of the LHWCA, codified at 33
U.S.C. § 909, provides the statutory criteria for awarding compensation to
survivors of an employee who dies from a work-related injury. A total of 66 2/3
percent of the deceased employee’s average weekly wage may be paid to
survivors. 33 U.S.C. §§ 909(b), (c). A widow, with no child of the deceased, is
entitled to 50 percent of the total average weekly wage. 33 U.S.C. § 909(b). The
remainder, 16 2/3 percent, may be awarded to “any [] persons who satisfy the
definition of the term ‘dependent’ in section 152 of Title 26 [of the United States
Code], but are not otherwise eligible under [§ 9 of the LHWCA].” 33 U.S.C. §
2No. 06-60842
909(d).1 Title 26 United States Code § 152, part of the Internal Revenue Code,
provides extensive criteria for determining whether a person may qualify as a
taxpayer’s dependent. Under this provision, an adult who bears no legal or
familial relationship to the taxpayer may be considered the taxpayer’s dependent
if she satisfies two requirements. First, the taxpayer must provide over half of
the individual’s support during the taxable year. 26 U.S.C. § 152(a) (2003)
(amended in 2004 and 2005).2 Second, the individual must have “as [her]
principal place of abode the home of the taxpayer and [be] a member of the
taxpayer’s household.” 26 U.S.C. § 152(a)(9). “An individual is not a member of
the taxpayer’s household if at any time during the taxable year of the taxpayer,
the relationship between such individual and the taxpayer is in violation of local
law.” 26 U.S.C. § 152(b)(5).
After Mr. Reed’s death, both Mrs. Reed and McLaurin claimed to be Mr.
Reed’s “widow” and sought death benefits from his employer, Holcim, under the
LHWCA. Holcim requested an informal conference to determine who was
entitled to benefits. A claims examiner from the Department of Labor
recommended that Holcim pay benefits to Mrs. Reed and not McLaurin.
McLaurin then applied for a formal hearing, asserting that she was entitled to
benefits either as Mr. Reed’s widow or dependent.
At the hearing, McLaurin testified that, at the time of his death, Mr. Reed
had been living with McLaurin for about two years. McLaurin and Mr. Reed
filed separate income tax returns and Mr. Reed never declared McLaurin as a
1
This provision also specifically authorizes compensation to dependent grandchildren,
brothers, sisters, parents and grandparents of the deceased worker. No such individual has
made a claim for compensation in this matter.
2
We look to the 2003 version of the Internal Revenue Code because “[a]ll questions of
dependency shall be determined as of the time of the injury,” 33 U.S.C. § 909(f), meaning in
this case Mr. Reed’s death in September 2003.
3
No. 06-60842
dependent, but McLaurin testified that her earnings for the year 2002 totaled
$1,772, whereas Mr. Reed’s income was approximately $32,000. Mr. Reed
apparently paid for all of their household expenses, including rent and utilities,
and automobile purchase payments. McLaurin did not have a full-time job while
she lived with Mr. Reed, and testified that she relied on his support.
On March 16, 2005, the ALJ awarded the widow’s benefits (i.e., 50 percent
of Mr. Reed’s average weekly wage) to Mrs. Reed. The ALJ also determined that
McLaurin qualified as Mr. Reed’s dependent and awarded McLaurin the
remaining 16 2/3 percent of Mr. Reed’s average weekly wage. The ALJ also
awarded both Mrs. Reed and McLaurin attorney’s fees.3 Holcim appealed only
the ALJ’s award of benefits and attorney’s fees to McLaurin.4 On July 19, 2006,
the BRB affirmed the awards. Holcim then filed this petition. Respondent
Director, Office of Worker’s Compensation Programs (“OWCP”), filed a brief in
support of McLaurin.
II.
“This Court conducts a de novo review of the BRB’s rulings of law, owing
them no deference because the BRB is not a policymaking agency.” Avondale
Indus., Inc. v. Alario, 355 F.3d 848, 851 (5th Cir. 2003) (quoting Pool Co. v.
Cooper, 274 F.3d 173, 177 (5th Cir. 2001)). But this court does afford Skidmore
deference to the OWCP’s interpretations of the LHWCA; under Skidmore, the
amount of deference owed “will depend upon the thoroughness evident in its
consideration, the validity of its reasoning, its consistency with earlier and later
pronouncements, and all those factors which give it power to persuade, if lacking
3
The BRB subsequently reversed Mrs. Reed’s attorney’s fee award. That
determination is not at issue in this appeal.
4
Holcim never disputed that Mrs. Reed was entitled to the 50 percent as Mr. Reed’s
widow, and thus that award was not appealed to the BRB and is not at issue here.
4
No. 06-60842
power to control.” Id. (quoting Skidmore v. Swift & Co., 323 U.S. 134, 140
(1944)). With respect to issues of fact, “we examine ‘whether the BRB properly
concluded that the ALJ’s factual findings were supported by substantial evidence
on the record as a whole.’” Pool Co., 274 F.3d at 178 (quoting James J. Flanagan
Stevedores, Inc. v. Gallagher, 219 F.3d 426, 429 (5th Cir. 2000)). Substantial
evidence means “more than a mere scintilla. It means such relevant evidence
as a reasonable mind might accept as adequate to support a conclusion.” Id.(quoting Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)).
III.
Holcim offers several arguments for why the BRB erred when it affirmed
the ALJ’s award of death benefits to McLaurin. Because we agree that
McLaurin failed to establish that she continued to qualify as a dependent after
Mr. Reed’s death, which is a necessary condition for receipt of benefits under the
LHWCA, we need not consider Holcim’s alternative arguments.
As discussed above, the total amount payable to a deceased employee’s
survivors under the LHWCA is 66 2/3 percent of his average weekly wage. 33
U.S.C. §§ 909(b), (c). It is undisputed for purposes of Holcim’s petition that Mrs.
Reed, as the widow of the deceased employee, is entitled to receive 50 percent of
Mr. Reed’s average weekly wage. The underlying issue raised by Holcim’s
petition is whether McLaurin is entitled to receive the remaining 16 2/3 percent
of Mr. Reed’s average weekly wage. Section 9(d) of the LHWCA entitles “any []
persons who satisfy the definition of the term ‘dependent’ in section 152 of Title
26 of the United States Code” to receive that portion of the deceased employee’s
average weekly wage (i.e., 16 2/3 percent) “during such dependency.”5 Section
5
Section 9(d) provides in full:
If there be no surviving wife or husband or child, or if the amount payable to
5
No. 06-60842
9(f) of the LHWCA provides that “dependency shall be determined as of the time
of the injury.” 33 U.S.C. § 909(f). In other words, based on the plain language
of the statute, to receive death benefits as a dependent under the LHWCA, an
individual must satisfy two conditions: (1) qualify as a dependent under 26
U.S.C. § 152 at the time of the employee’s death; and (2) remain as a dependent
after the employee’s death. See also Standard Dredging Corp. v. Henderson, 150
F.2d 78, 81 (5th Cir. 1945) (“And if they were dependent at Nathan’s death,
which is the time when dependence is to be determined, the further question
arises how long such a dependency will continue, for death benefits to dependent
parents continue only ‘during such dependency.’”).
Here, in awarding death benefits to McLaurin, the ALJ found that
McLaurin qualified as Mr. Reed’s dependent at the time of his death. Likewise,
in reviewing the ALJ’s award, the BRB concluded that McLaurin qualified as
Mr. Reed’s dependent at the time of his death.6 However, neither the ALJ nor
a surviving wife or husband and to children shall be less in the aggregate
than 66 2/3 per centum of the average wages of the deceased; then for the
support of grandchildren or brothers and sisters, if dependent upon the
deceased at the time of the injury, and any other persons who satisfy the
definition of the term “dependent” in section 152 of Title 26, but are not
otherwise eligible under this section, 20 per centum of such wages for the
support of each such person during such dependency and for the support of
each parent, or grandparent, of the deceased if dependent upon him at the
time of the injury, 25 per centum of such wages during such dependency. But
in no case shall the aggregate amount payable under this subsection exceed the
difference between 66 2/3 per centum of such wages and the amount payable
as hereinbefore provided to widow or widower and for the support of surviving
child or children.
33 U.S.C. § 909(d) (emphasis added).
6
Holcim also challenges this aspect of the BRB’s decision. More specifically, Holcim
contends that McLaurin did not qualify as a dependent at the time of Mr. Reed’s death
because, under 26 U.S.C. § 152(b)(5), their adulterous relationship was “in violation of local
law.” Holcim also argues that the ALJ’s finding that McLaurin qualified as Mr. Reed’s
dependent at the time of his death was not supported by sufficient evidence and that the ALJ
6
No. 06-60842
the BRB made any finding as to whether McLaurin continued to qualify as a
dependent of Mr. Reed after his death. Rather, the written decisions of both the
ALJ and the BRB are completely silent on this issue. Accordingly, the award
must be vacated and the matter remanded for a determination whether the
dependency found to exist at death has continued beyond that time.
Our decision is compelled by Henderson, which, though time-worn, has
never been overruled, distinguished, or otherwise limited in any manner. In
Henderson, this court, interpreting the same LHWCA provision at issue here,
reversed an award of death benefits to a deceased employee’s parents because
the record failed to support the “necessary . . . case of dependence.” Id. at 80.
First, the court determined that it was unclear from the record whether the
parents actually depended on the decedent at the time of his death. Id. at 81.
Second, and more significantly for our case, the court found that the ALJ erred
by failing to inquire into “how long [the parents’] dependency will continue, for
death benefits to dependent parents continue only ‘during such dependency’.”
Id. Citing earlier versions of both § 9(b) and § 9(d),7 the court explained that
“dependency is twice made the condition of an award, and in both cases the
payments end with the dependency.” Id. It went on to state:
Subsection (f) declares that all questions of dependency shall be
determined as of the time of the injury, but this refers to the
dependency which generates the original right to an award. It
does not annul the quoted provisions which cause payments to
erroneously concluded that McLaurin was a member of Mr. Reed’s household at the time of his
death. For the purposes of our limited ruling here, we need not resolve these issues, and
instead assume, without deciding, that McLaurin in fact qualified as Mr. Reed’s dependent at
the time of his death.
7
The then-applicable version of § 9(b) is materially different from the current version
of that provision, but the version of § 9(d), for purposes of this petition, is not.
7
No. 06-60842
cease by cessation of dependency. The latter could not possibly be
determined at the time of the injury.
Id. at 81-82 (emphasis added). Thus, the court concluded that “regularity
requires that the award follow the statute in awarding compensation ‘during
such dependency.’” Id. at 82. Because the record in Henderson included no
findings as to “whether or not the dependency found to exist at death continued
beyond the time of the award,” the court held that “the award ought to be set
aside, but without prejudice to a further hearing and the making of such findings
and such an award as may appear proper.” Id.
The OWCP concedes in its brief that § 9(d) has a prospective element, in
that it entitles a dependent to continued compensation only “during such
dependency.” It also concedes that, under Henderson, “a claimant must remain
dependent to continue receiving compensation.” Moreover, the OWCP does not
dispute that the ALJ made no findings regarding McLaurin’s earnings after Mr.
Reed’s death or, more generally, whether McLaurin continued to remain
dependent on Mr. Reed after his death. The OWCP nevertheless contends that
Holcim’s only recourse to challenge McLaurin’s continued dependency on the
death benefits is to file a petition to modify the ALJ’s order under 33 U.S.C. §
922, which permits modification of compensation under the LHWCA based on
“a change in conditions.” Its argument is essentially that the ALJ was only
required to conclude that McLaurin depended on Mr. Reed at the time of his
death in order to properly award her benefits under § 9(d). While ordinarily, as
discussed above, the OWCP’s interpretation of the LHWCA is entitled to some
level of deference under Skidmore, we need not accord any deference to a
litigation position that is “wholly unsupported by regulations, rulings, or
administrative practice.” Total Marine Servs., Inc. v. Dir. OWCP, 87 F.3d 774,
777 n.2 (5th Cir. 1996) (quoting Smiley v. Citibank (S.D.), N.A., 517 U.S. 735,
8
No. 06-60842
741 (1996)) (internal quotation marks omitted). Here, the OWCP provides no
such support for its construction of the statute; rather, it summarily concludes
that, despite the prospective element of § 9(d), the proper method for contesting
a death benefits award that featured no finding of continued dependency is
through an ex post petition to modify under § 22 of the LHWCA. Tellingly, the
OWCP does not even argue in its brief for Skidmore-level deference to its
interpretation. In sum, we refuse to countenance the OWCP’s wholly
unsupported position on this issue, particularly when it is so clearly contradicted
by this court’s holding in Henderson.
Accordingly, we remand to the ALJ for factfinding and a determination in
the first instance as to whether the award of benefits to McLaurin comports with
§ 9(d)’s plain requirement that a claimant collect benefits only “during such
dependency.”
VACATED and REMANDED.
9