Heath v. Gulf Island Fabrication, Inc.

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF LOUISIANA

JIMMY HEATH * CIVIL ACTION

VERSUS * NO. 24-2939

GULF ISLAND FABRICATION, INC., ET AL. * SECTION L

ORDER & REASONS

Before the Court is a 12(b)(6) motion to dismiss, or in the alternative a motion for summary

judgement, filed by Defendants Gulf Island Fabrication, Inc. (“GIF”) and Gulf South Risk

Services. Inc. (“GSRS”). R. Doc. 8. Plaintiff Jimmy Heath opposes the motion. R. Doc. 9. After

considering the record, briefing, and applicable law, the Court now rules as follows.

I. BACKGROUND & PRESENT MOTION

This case arises out of injuries sustained by the Plaintiff when he slipped and fell while

working as a shipfitter supervisor for Defendants GIF and GSRS (collectively, “Defendants”) on

January 11, 2017. R. Doc. 8-1 at 1. Plaintiff subsequently brought various workers’ compensation

claims against Defendants before the Department of Labor pursuant to the Longshore and Harbor

Workers’ Compensation Act (“LHWCA”). Id. The parties notably do not dispute that Plaintiff

injured his left shoulder and biceps during the incident. Id. Indeed, the Defendants have already

paid for Plaintiff’s surgeries to repair tears in his left rotator cuff and bicep tendons and provided

him wage compensation post-surgery while he was classified as “temporarily totally disabled.” Id.

at 1-2. However, the Defendants do contest Plaintiff’s claim that he suffered a traumatic brain

injury (“TBI”) from his fall. Id. at 2-3. They specifically argue that Plaintiff did not report hitting

his head or losing consciousness when he fell and noted that the physician who examined him

immediately post-accident recorded no signs of a head injury. Id.

The Department of Labor Administrative Law Judge (“ALJ”) assigned to the case held a

trial to determine, inter alia, the TBI disability claim and issued a Decision and Order (“D&O”)

on August 2, 2024 in favor of Plaintiff. Id. at 3. The D&O specifically ordered the Defendants to

pay Plaintiff permanent partial disability compensation from June 15, 2022 to present and

continuing “based on the AWW of $2,155.68 and residual wage-earning capacity of $838.23.” Id.

at 3-4. It further ordered that the District Director of the Office of Workers’ Compensation

Programs (the “District Director”) to “make all calculations necessary to carry out [the D&O],

including any Richardson adjustment.”1 Id. at 4. On August 5, 2024, the District Director served

the Defendants with his calculations of the Plaintiff’s disability compensation, determining that

Plaintiff was owed $103,095.10 in wage indemnity plus interest. The District Director also

clarified that the Defendants should pay the Plaintiff all awards compensation benefits owed to

him “within ten (10) days regardless of a motion to reconsider or an appeal.” Id. Thereafter, the

Defendants appealed the ALJ’s findings in the D&O, which remains pending before the

Department of Labor’s Benefits Review Board, Case No. 2024-4823. Id. at 3.

On August 30, 2024, Plaintiff filed a motion asking the District Director to levy monetary

penalties against the Defendants because they had not paid any of his compensation award by the

applicable August 15, 2024 deadline as required. R. Doc. 8-4. While this motion was pending, the

Defendants attempted to comply with the order and made three separate payments totaling

$103,095.10 to the Plaintiff on September 23, 2024. R. Doc. 8-8. However, the District Director

nevertheless granted the Plaintiff’s motion and declared the Defendants to be in default of payment

because they had failed to show cause why they did not timely pay the past amount due. R. Doc.

1-5. Accordingly, the District Director issued a supplemental compensation order pursuant to

section 14(f) of the LHWCA, which required the Defendants to pay interest on the underpayment

1 The Richardson adjustment requires that when post-injury wages are used to establish wage-earning capacity,

the wages earned in the claimant’s post-injury job must be adjusted to represent the wages which that job paid at the

time of his injury. See Richardson v. General Dynamics Corp., 19 BRBS 48, 49 (1986).

of compensation and an additional 20% of the amount in default, totaling $20,619.02. Id. Plaintiffs

allege Defendants have yet to pay them this penalty. R. Doc. 1.

On December 26, 2024, Plaintiff filed the instant suit requesting this Court to enforce both

the ALJ’s August 2, 2024 order requiring the Defendants to pay permanent partial disability

benefits and the District Director’s December 3, 2024 order declaring the Defendants in default

and levying a 20% penalty against them for failing to timely pay Plaintiff’s owed backpay of

$103,095.10. Id. Plaintiff specifically alleges that despite the D&O award of “permanent partial

disability at a rate of $878.30 per week, [D]efendants have paid permanent partial disability

sporadically at a rate of $570.48 per week.” Id. at 1-2. Furthermore, he claims that this Court has

jurisdiction over this matter under section 21 of the LHWCA, which provides that a beneficiary of

a compensation order may apply for enforcement of that order to the federal district court for the

judicial district in which the injury occurred. Id. at 5.

In the present motion, Defendants seek dismissal of the Plaintiff’s suit, or in the alternative,

seek summary judgment in their favor, pursuant to Fed. R. Civ. P. 12(b)(6), 12(d), 56(a) and 56(c).

R. Doc. 8-1 at 1. They provide two arguments in support of their motion. First, Defendants contend

that the District Director’s declaration of default and levying of penalties are unenforceable

because their motion to modify the Plaintiff’s weekly benefits was erroneously denied. Id. at 7-8.

Second, the Defendants assert that there is no final D&O for this Court to enforce because the

District Director did not comply with the direction of the ALJ to apply the Richardson adjustment

when calculating Plaintiff’s compensation award. Id. at 8-12. Plaintiff opposes the motion and

briefly argues that their complaint is true, accurate, and adequately presents a claim upon which

relief can be granted. R. Doc. 9.

II. LAW & ANALYSIS

The outcome of the Court’s decision on this motion rests on whether it has the jurisdiction

to enforce: (1) the ALJ’s underlying August 2, 2024 compensation order and (2) the District

Director’s December 3, 2024 supplemental compensation order. The Court takes each order at

issue in turn.

A. The ALJ’s Underlying August 2, 2024 Compensation Order

The question of whether the ALJ’s August 2, 2024 order as to the weekly rate of pay is

enforceable by this Court is governed by section 21(d) of the LHWCA. In interpreting this statutory

provision, the Fifth Circuit has consistently held that “[section] 21(d) provides for enforcement of

an appealed order only after the appeal is finally resolved by the Board.” Lazarus v. Chevron

U.S.A., Inc., 958 F.2d 1297, 1299 (5th Cir. 1992); see also Abbott v. Louisiana Ins. Guaranty

Ass’n, 889 F.2d 626, 628 (5th Cir. 1989) (affirming district court’s determination that

“enforcement was inappropriate under section 21(d), because the [c]ompensation [o]rder was still

on appeal to the [Benefits Review Board]”). Here, the Plaintiff does not dispute the Defendants’

contention that they have appealed the ALJ’s August 2, 2024 order, which this Court understands

to still be pending before the Benefits Review Board under Case No. 2024-4823. R. Doc. 8-1 at 3.

Indeed, there is simply no evidence on the record that the Board has reached a final determination

on appeal in this matter. Accordingly, the Court finds that it does not have jurisdiction under

section 21(d) to enforce ALJ’s August 2, 2024 compensation order at this time. Plaintiff’s request

is premature. Instead, he must wait until the appropriate appeals process before the Board is

complete before he may sue the Defendants in order to enforce it.

B. The District Director’s December 3, 2024 Supplemental Compensation Order

The enforceability of the District Director’s December 3, 2024 supplemental compensation

order is subject to a different jurisdictional analysis. While an underlying compensation order is

on appeal to the Benefits Review Board, the Board is authorized to grant a stay of enforcement of

the award to be paid pending appeal if the employer can prove irreparable injury would ensue. 33

U.S.C. § 921(b)(3). However, in the event that a stay is not procured, the employer is obligated to

make timely payments pursuant to the compensation award regardless of any appeal or motion to

reconsider. See id. To ensure the employer’s compliance with their obligations during this period,

the District Director is authorized to issue a supplemental compensation order providing for

penalties against an employer for failing to timely pay the award. 33 U.S.C. § 914(f). The section

14(f) penalty is self-executing and admits no equitable exceptions for late payment. Lauzon v.

Strachan Shipping Co., 782 F.2d 1217, 1222 (5th Cir. 1985). Under section 18(a) of the LHWCA,

such supplemental compensation orders are final when entered and immediately enforceable by

the district court so long as if it is in accordance with the law. Abbott, 889 F.2d at 629 (emphasis

added).

Notably, the district court is not permitted “to review the underlying merits of the ALJ’s

decision and order in the course of section 18(a) enforcement proceedings.” Lazarus, 958 F.2d

1297, 1303. Although there is some possibility that the underlying order upon which the penalty

is based may be overturned on review, Congress has made a policy choice that in most

circumstances, “it is preferable that an injured worker receive regular compensation, even that later

is determined to have been wrongly exacted and not recoverably by the payer, than that he be left

without assistance until all amounts are finally determined.” Id. As such, the LHWCA

contemplates the use of supplemental orders as “a quick and inexpensive mechanism for prompt

enforcement of unpaid compensation awards, a theme central to the spirit, intent, and purposes of

the [statute].” Tidelands Marine Serv. v. Patterson, 719 F.2d 126, 127 n.1 (5th Cir. 1983).

Despite the fact that there is no dispute that a stay pending appeal was not issued by the

Board in the present matter and the LHWCA’s statutory scheme clearly weighs in favor of prompt

enforcement of orders penalizing the late payment of awards, the Defendants nevertheless

challenge this Court’s ability to enforce the District Director’s December 3, 2024 supplemental

order. In support of their argument, they note that the Fifth Circuit has held that an underlying

compensation order which is not final cannot be “in accordance with law” and thus not subject to

penalties by resort to section 18(a). Severin v. Exxon Corp., 910 F.2d 286, 289 (5th Cir. 1990). In

interpreting this “finality” requirement, the court in Keen v. Exxon Corp. explained that where the

ALJ’s underlying compensation order does not state the total amount of compensation to be paid

and provides for the District Director to make the final calculations, it is not considered a final

order subject to penalties until he or she furnishes the calculations required by that order. 35 F.3d

226, 227-28 (5th Cir. 1994). Put simply, an order is not final where the District Director entirely

fails to calculate the money actually owed when that task is delegated to him or her by the ALJ.

See id. Based on these foregoing principles, the Defendants contend that the underlying

compensation order that the penalty is based on here never became final because the District

Director failed to adjust his award calculations for inflation pursuant to the Richardson adjustment

as ordered by the ALJ. The Court disagrees for the following reasons.

At first instance, the Court notes that to the extent the Defendants take issue with the

District Director’s alleged failure to use the Richardson adjustment in his calculations, such an

argument is substantive in nature and beyond the scope of review in a section 18(a) enforcement

proceeding. Here, the Court’s inquiry “is limited to the lawfulness of the supplemental orders of

default and does not include the procedural or substantive correctness of [] underlying

compensation orders.” Abbott, 889 F.2d at 629. Indeed, courts have found that “[a]llowing review

of underlying compensation orders in proceedings to enforce supplemental orders of default could

cause additional delay and expense and frustrate Congress’ intent to get compensation into the

injured workers’ hands as quickly as possible.” Id. (citing Henry v. Gentry Plumbing & Heating

Co., 704 F.2d 863, 865 (5th Cir. 1983)).

Moreover, the Defendants’ reliance on Keen regarding the finality of the ALJ’s underlying

compensation order is misplaced. This case does not stand for the proposition that an underlying

compensation order is not final due to the substantive nature of a District Director’s calculations.

See Keen, 35 F.3d at 227-28. Rather, Keen merely establishes that an underlying compensation

order becomes final upon the rendering of the District Director’s calculations, which the

Defendants do not dispute occurred here when they were filed in the administrative record on

August 5, 2024. Id. Lastly, the Court is hesitant to agree with the Defendants that the District

Director did in fact fail to incorporate the Richardson adjustment into his calculations given they

have provided no proof or explanation to support their contention. The Court merely has the

District Director’s calculations, the Defendant’s assertion that they are wrong, and nothing more.

Accordingly, this Court finds that its jurisdiction to enforce the December 3, 2024

supplemental compensation order is not in question. Here, the ALJ’s underlying compensation

order did not provide a total amount of compensation and instead ordered the District Director to

finalize the calculations on August 2, 2024. The District Director subsequently completed those

calculations and filed them in a “Memorandum to File” on August 5, 2024, finding the Defendants

owed Plaintiff backpay in the amount of $103,095.10. As such, the ALJ’s D&O became final on

August 5, 2024, and the Defendants had 10 days from that date to pay the award or suffer a penalty.

The Defendants clearly missed this deadline because they paid the $103,095.10 to the Plaintiff on

September 23, 2024, which led to the default penalty outlined in the December 3, 2024

supplemental compensation order. The issue of whether the District Director’s computation of the

award is indeed correct must be dealt with on appeal before the Department of Labor and does not

obviate the Defendants’ obligation to timely pay absent a Board-issued stay.

lt. CONCLUSION

Considering the foregoing;

IT IS HEREBY ORDERED that Gulf Island Fabrication, Inc. and Gulf South Risk

Services, Inc.’s 12(b)(6) Motion to Dismiss, or alternatively, motion for summary judgement, R.

Doc. 8, is GRANTED in part and DENIED in part. The Court grants the motion and dismisses

Plaintiff's claim as to the ALJ’s August 2, 2024 compensation order because the Defendants have

already paid Plaintiff's backpay of $103,095.10 and the enforcement of continuing payments is

dependent upon future supplemental orders.” Indeed, further penalties may be necessary under

section 14(f) of the LHWCA to secure the Defendants’ compliance, which this Court would have

Jurisdiction to enforce. However, the Court denies motion as to the District Director’s December

3, 2024 supplemental compensation order because it has jurisdiction to enforce the penalty against

Defendants for failing to timely pay Plaintiff's backpay as explained above. Plaintiff may now

move this Court to grant his requested relief regarding the District Director’s December 3, 2024

supplemental compensation order only.

New Orleans, Louisiana, this 14th day of April, 2025.

hy Clo

«United States District Judge

2 To the extent Plaintiff's allegations concerning the Defendants’ deficient weekly payments are true, the Court

recognizes that although it does not have jurisdiction at this time to provide for enforcement and definitively set the

correct rate pending appeal, this issue should be raised before either the ALJ or the District Director in the

administrative proceedings in order to address the potential delinquency.