Artis v. Norfolk & Western Railway Co.

PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

ZEB ARTIS,

Petitioner,

v.

NORFOLK & WESTERN RAILWAY

No. 96-2677

COMPANY; DIRECTOR, OFFICE OF

WORKERS' COMPENSATION PROGRAMS,

UNITED STATES DEPARTMENT OF

LABOR,

Respondents.

NORFOLK & WESTERN RAILWAY

COMPANY,

Petitioner,

v.

No. 96-2678

ZEB ARTIS; DIRECTOR, OFFICE OF

WORKERS' COMPENSATION PROGRAMS,

UNITED STATES DEPARTMENT OF

LABOR,

Respondents.

On Petitions for Review of Orders

of the Benefits Review Board.

(94-3742)

Argued: October 1, 1997

Decided: February 22, 2000

Before WIDENER and MICHAEL, Circuit Judges, and

Lacy H. THORNBURG, United States District Judge for the

Western District of North Carolina, sitting by designation.

The petition of Artis is denied, the petition of Norfolk and Western

Railway is granted, and the order of the Board is reversed and the

case remanded by published opinion. Judge Widener wrote the major-

ity opinion, in which Judge Thornburg joined. Judge Michael wrote

a dissenting opinion.

_________________________________________________________________

COUNSEL

ARGUED: Robert Elliott Walsh, RUTTER & MONTAGNA, L.L.P.,

Norfolk, Virginia, for Petitioner. Joan F. Martin, WILLIAMS,

KELLY & GREER, P.C., Norfolk, Virginia, for Respondents. ON

BRIEF: Matthew H. Kraft, RUTTER & MONTAGNA, L.L.P., Nor-

folk, Virginia, for Petitioner.

_________________________________________________________________

OPINION

WIDENER, Circuit Judge:

The claimant, Zeb Artis, Jr., worked as a brakeman at the Norfolk

& Western Railway Company's Barney Yard at Lambert's Point ter-

minal in Norfolk, Virginia. He assisted in moving loaded and empty

railcars within the terminal in effectuating the transloading of coal

from railcars to ocean-going vessels. The job required him to uncou-

ple cars and to use a pinch bar to move the cars. On April 25, 1984,

Artis injured his back while moving a railcar. Artis reinjured his back

while throwing a rail switch on May 6, 1984 and has not returned to

his previous work since that date.

Following his injuries, Artis filed an action in the Circuit Court of

the City of Norfolk under the Federal Employers' Liability Act

(FELA), 45 U.S.C. §§ 51-60, against the railroad. The parties settled

that claim for $150,000 in January 1985, and the state court entered

an order that the case was "dismissed agreed" on February 5, 1985.1

_________________________________________________________________

1 Artis at that time executed a release releasing the N&W from "loss of

any kind resulting or in any way arising from an accident(s) which

2

On April 23, 1991, Artis filed a claim for the same injuries under

the Longshore and Harbor Workers' Compensation Act (LHWCA),

33 U.S.C. §§ 901-52 (1986). A formal hearing was held before an

administrative law judge in October and November of 1993. The

administrative law judge held that Artis was within the jurisdiction of

LHWCA and implicitly found that the FELA settlement previously

entered between the parties was not a jurisdictional bar. The judge

also concluded that Artis was entitled to temporary total disability

benefits from May 7, 1984 through December 27, 1984 and perma-

nent partial disability benefits from December 28, 1984 and continu-

ing. Finally, the ALJ granted the railroad a credit against the LHWCA

benefits award for the $150,000 settlement pursuant to 33 U.S.C.

§ 903(e).

Artis filed a timely appeal with the Benefits Review Board on the

finding of permanent partial disability and the grant of the credit. The

railroad cross-appealed asserting that the LHWCA claim was barred

by the prior settlement of the FELA claim. The Benefits Review

Board did not render a formal decision. Rather, Public Law 104-134

affirmed the decision of the administrative law judge on September

12, 1996.2

Artis filed a petition for review on November 8, 1996 pursuant to

33 U.S.C. § 912(c), and N&W filed its cross-petition for review. On

account of the doctrine of election of remedies, we reverse.

The doctrine of election of remedies "refers to situations where an

individual pursues remedies that are legally or factually inconsistent."

Dionne v. Mayor and City Council of Baltimore , 40 F.3d 677, 681

(4th Cir. 1994) (quoting Alexander v. Gardner-Denver Co., 415 U.S.

_________________________________________________________________

occurred at or near Norfolk, Virginia on or about" the April and May

1984 dates involved here. The release provided that he was prevented

"from making any further claims against [the railway] in connection with

said accident(s)."

In Virginia "dismissed agreed" means that"the plaintiff forever loses

his action." Hoover v. Mitchell, 25 Gratt. (66 Va.) 387, 391 (1874).

2 Public Law 104-134 affirmed all appeals before the Benefits Review

Board that were more than one year old

3

36, 49 (1974)). It has been considered in determining whether rights

in one statute may be pursued cumulatively with those rights granted

in another statute. See United States v. Brown , 348 U.S. 110 (1954);

Feres v. United States, 340 U.S. 135 (1950) (discussing situations

when claims under different federal statutes are exclusive or cumula-

tive); 18 Wright & Miller, Federal Procedure & Practice § 4476

(1981). "The clearest remedial dimension of election doctrine is found

in decisions that simply seek to prevent double recovery for a single

injury." 18 Wright & Miller, Federal Practice & Procedure § 4476,

at 775 (1981).

Under FELA, a worker must demonstrate that he is an employee

of a common carrier by railroad to fall within the statute. 45 U.S.C.

§ 51. In contrast, a land-based worker to prove that he is within the

statute, must be engaged in activity which is "integral or essential to

the loading process" to recover under LHWCA. Etheridge v. Norfolk

& Western Ry. Co., 9 F.3d 1087, 1090 (4th Cir. 1993).

The law is that if a claimant is a maritime worker, then his exclu-

sive remedy is under LHWCA. Chesapeake & Ohio Ry. Co. v.

Schwalb, 493 U.S. 40, 42 (1989); Caldwell v. Ogden Sea Transport

Inc., 618 F.2d 1037, 1049 (4th Cir. 1980). Conversely, if a worker is

not a maritime worker, then his remedy must be provided by another

statute or the common law. Accordingly, at the time of filing a law-

suit, the claimant must decide whether he is a maritime worker and

thus eligible for a remedy under LHWCA or whether he must find

another cause of action. In the present case, Artis correctly deter-

mined that at the time of his FELA lawsuit he could not claim that

he was a maritime worker. At the time Artis's FELA case was filed

and disposed of in the Circuit Court in Norfolk, Conti v. Norfolk &

Western Ry. Co., 566 F.2d 890 (4th Cir. 1977), held that brakemen

at the Lambert's Point yard were not maritime workers and were not

covered by LHWCA. Thus, Artis, being a brakeman at the Lambert's

Point yard, filed suit under FELA and recovered a settlement of

$150,000.

Subsequent to Artis's settlement of his FELA suit, the law of this

circuit changed. We held in Etheridge v. Norfolk & Western Ry. Co.,

9 F.3d 1087, 1090 (4th Cir. 1993), that the Supreme Court decision

in Chesapeake & Ohio Ry. Co. v. Schwalb, 493 U.S. 40 (1989), had

4

changed the law set out in Conti; that brakemen at Lambert's Point

yard were acting in a fashion that was integral or essential to the load-

ing or unloading of a vessel; and thus were covered by LHWCA.

Artis, in 1991,3 had asserted his claim against the railroad under

LHWCA. Because of his recovery under the FELA claim, the defense

argued, Artis might not now advance an LHWCA claim. To permit

an LHWCA claim subsequent to an FELA recovery, the argument

went, would ignore the LHWCA provision providing that it is the

exclusive remedy against employers for injuries suffered by maritime

workers. 33 U.S.C. § 905(a) (1986); Schwalb, 493 U.S. at 42. The two

claims were legally inconsistent, the defense concluded, because

LHWCA is not a cumulative remedy.

This court has never held that a worker may pursue an LHWCA

remedy after obtaining a remedy under FELA. It has approved an

FELA remedy after a worker received LHWCA benefits for reasons

that are distinguishable. In Freeman v. Norfolk & Western Ry. Co.,

596 F.2d 1205 (4th Cir. 1979), we held in a case in which FELA pro-

vided a cause of action, that an employee could pursue an FELA

claim notwithstanding previous receipt of LHWCA benefits. See also

Caldwell, 618 F.2d 1037, 1048-50 (4th Cir. 1980) (following

Freeman). The decision in Freeman was based on the rationale that

workers' compensation statutes, including LHWCA, are designed to

provide "quick certain relief for work related injuries." Freeman, 596

F.2d at 1208. (italics in original.) Thus, we considered that the

LHWCA payments would be creditable against an FELA award and

that receiving compensation under such a statute would not be a

meaningful election of remedy. Freeman, 596 F.2d at 1208. This case

presents a different situation because Artis's FELA action preceded

his action under the LHWCA. We do not view Artis's LHWCA claim

as receipt of quick, certain relief for work related injuries when he has

previously recovered, some five or six years previously, under FELA,

for the same injury. Because Artis has fully recovered damages for his

injury under FELA, the compensatory purpose of LHWCA is not

harmed by denying Artis's LHWCA suit.4

_________________________________________________________________

3 The claim is also referred to as a 1992 case, the difference in dates

being inconsequential.

4 Freeman has not been followed in this circuit since Schwalb. Whether

it remains fully authoritative, however, is a question not before us and

upon which we express no opinion.

5

The next point we consider is whether or not N&W would be enti-

tled to a credit for the FELA settlement under 33 U.S.C. § 914(j).

That section provides that:

If an employer has made advance payments of compensa-

tion, he shall be entitled to be reimbursed out of any unpaid

installment or installments of compensation due.

The argument is that the FELA settlement and judgment was an

advance payment of compensation and that since the railroad would

be entitled to be reimbursed out of any unpaid installment of compen-

sation under the LHWCA, the suit under the LHWCA should be

allowed to proceed. A principal difficulty with the argument is that

the payment of $150,000 to Artis under the FELA was not an advance

payment of compensation.5 It was complete satisfaction for an injury,

paid following litigation, and should not be equated with the advance

payments an employer would make to his employee as"quick, certain

relief for work related injuries." Freeman , 596 F.2d 1208. As previ-

ously noted, note 1, supra, Artis signed a complete release of all

claims at issue here.6 Not only that, at the time Artis pursued his

FELA remedy against the railroad, that was entirely in accord with

precedent in this circuit. Conti v. Norfolk & Western Ry., 566 F.2d

890 (4th Cir. 1977). Indeed, under Conti, Artis had no cause of action

under the LHWCA. The final order in Artis's FELA case against Nor-

folk & Western was entered February 5, 1985, and the liability of the

railway was fixed by court order at that time. Later, on November 28,

1989, the Supreme Court decided Chesapeake & Ohio Ry. Co. v.

Schwalb, 493 U.S. 40 (1989), in which the Court decided that an

employee in Artis's shoes at the Norfolk & Western installation in

Norfolk was subject to the LHWCA rather than the FELA and that

"resort may not be had to the Federal Employer's Liability Act."

_________________________________________________________________

5 We agree with Shell Offshore Inc. v. Director, Office of Worker's

Comp. Programs, 122 F.3d 312, 317-318 (5th Cir. 1997), cert. den'd, 66

U.S.L.W. 3604 (1998), that payments under § 914(j) are not available to

be credited to the employer unless they are "intended to be advance pay-

ments of compensation" which the FELA payment in this case patently

was not.

6 While the railroad does not claim the release is a bar to the LHWCA

action, it nevertheless is worthy of mention.

6

Schwalb, 493 U.S. at 42. On that account only was Artis able to pros-

ecute his present claim under the LHWCA. In these circumstances,

we are of opinion that the payments made to Artis in his FELA case

were not intended to be and in fact were not advance payments of

compensation and that, therefore, the railroad would not be entitled

to be reimbursed for those payments under the LHWCA, 33 U.S.C.

§ 914(j).

We also note that no credit is allowable to the railroad for the

FELA settlement under the provisions of 33 U.S.C.§ 903(e) of the

LHWCA. That section provides in pertinent part that"any amounts

paid to an employee for the same injury . . . for which benefits are

claimed under this chapter pursuant to any other workers' compensa-

tion law . . . shall be credited against any liability imposed by" the

LHWCA. In Consolidated Rail Corp. v. Gottshall , 512 U.S. 532, 543

(1994), the Court held that FELA is not a workers' compensation stat-

ute. It stated:

That FELA is to be liberally construed, however, does not

mean that it is a workers' compensation statute. We have

insisted that FELA does not make the employer the insurer

of the safety of his employees while they are on duty. The

basis of his liability is his negligence, not the fact that inju-

ries occur. (internal quotations omitted).

The FELA settlement not being paid under a workers' compensa-

tion law, that payment should not be credited under§ 903(e).

While the cases and the text cited state that the doctrine of election

of remedies is not favored, in this case we are of opinion to apply it.

Because the injury in question is the same and the claims arise from

the same facts; because recovery under the FELA and LHWCA rest

on different substantive theories, the first on negligence, the second

on a workers' compensation statute based on liability without fault;

because Artis proceeded entirely consistent with circuit precedent

under the FELA to sue the railway and collected $150,000 in the set-

tlement; because the later Schwalb decision was entirely fortuitous;

and because, in this case, permitting first, a suit for complete recovery

under the FELA, and second, a claim under the LHWCA, would per-

mit a double recovery for the same injuries; we are of opinion that

7

Artis elected his remedy when he prosecuted his FELA suit to judg-

ment and that the doctrine of election of remedies would bar his

LHWCA claim.

The petition for review of Artis is denied; the cross-petition of the

railway is granted; the order of the Benefits Review Board from

which review is sought is reversed; and the case is remanded to that

Board for entry of an order consistent with this opinion.

REVERSED AND REMANDED

MICHAEL, Circuit Judge, dissenting:

As the majority recognizes, "the doctrine of election of remedies

is not favored." Ante at 7. Moreover, if a final judgment has been

entered in the prior case, the doctrine is of little use because claim

preclusion principles work better in determining whether a new claim

is barred. I would therefore apply res judicata principles to decide

whether Artis's subsequent longshoremen's claim is precluded.

Because the later claim is not barred by res judicata, I must respect-

fully dissent.

I.

Federal courts from way back have taken a dim view of the elec-

tion of remedies doctrine. See Friederichsen v. Renard, 247 U.S. 207,

213 (1918) ("At best this doctrine of election of remedies is a harsh,

and now largely obsolete rule, the scope of which should not be

extended . . . ."). Our own court has refused to apply the doctrine in

cases involving claims under the very statute before us today, the

Longshore and Harbor Workers' Compensation Act (LHWCA). In

Newport News Shipbuilding and Dry Dock Company v. Director,

OWCP, 583 F.2d 1273, 1277 (4th Cir. 1978), we noted that "courts

have been reluctant to extend this relatively harsh doctrine." We went

on to hold that an election of remedies defense would not bar a

LHWCA claim brought by a welder who had earlier sought (and been

denied) relief under a state workers' compensation statute. Id. at

1277. We have also declined to use the doctrine to bar a FELA claim

brought by a worker who had already been awarded LHWCA bene-

8

fits. See Freeman v. Norfolk and Western Ry. Co. , 596 F.2d 1205,

1208 (4th Cir. 1979) (holding that plaintiff's "acceptance of LHWCA

benefits did not constitute, as a matter of law, a binding election of

remedies which would bar a subsequent recovery under FELA").

The election of remedies doctrine is especially unsuitable when a

second claim can be analyzed under claim preclusion principles. Once

a final judgment is entered, the doctrine is "usually superfluous . . .

because the doctrines of claim preclusion and issue preclusion can

and should determine the viability of any claims seeking additional

remedies." 18 James Wm. Moore et al., Moore's Federal Practice

§ 131.13[5][c] (3d ed. 1999). See also 18 Charles Alan Wright et al.,

Federal Practice & Procedure § 4476, at 773 (1981) ("Whatever util-

ity it may retain in other areas, election of remedies reasoning has

become useless and potentially dangerous in dealing with preclusion

by judgment."). Accordingly, we have refused to apply the election

of remedies doctrine in a Title VII case where the plaintiff had previ-

ously obtained a favorable state administrative decision that was not

appealed. We applied res judicata principles instead. See Dionne v.

Mayor and City Council, 40 F.3d 677, 681 (4th Cir. 1994) (citing with

approval 18 Wright et al., supra, § 4476, at 773 ("[T]he election label

has traditionally been used to explain decisions that today seem better

explained in terms of claim preclusion.")); see also Haphey v. Linn

County, 953 F.2d 549, 552 (9th Cir. 1992) (en banc).

Here, after Artis hurt his back at work, he brought a FELA claim

against his employer (the railroad) in state court, settled the case, and

consented to the entry of a dismissal order, which amounted to a final

judgment. Later, after the law changed, Artis filed a LHWCA claim

against the railroad based on the same injury. In these circumstances,

res judicata principles, not the election of remedies doctrine, should

determine whether the second claim is barred.1 I now turn to the res

judicata analysis.

_________________________________________________________________

1 The election of remedies doctrine does not in any event bar Artis's

LHWCA claim. The doctrine "refers to situations where an individual

pursues remedies that are legally or factually inconsistent." Alexander v.

Gardner-Denver Co., 415 U.S. 36, 49 (1974). The proof and theories are

not identical in FELA and LHWCA claims, and when Artis established

his LHWCA claim, he did not offer facts or arguments that were incon-

sistent with positions he took in his earlier FELA suit.

9

II.

The Full Faith and Credit Statute, 28 U.S.C. § 1738, directs a fed-

eral court to follow state preclusion law to determine the res judicata

effect of a state court judgment even when the federal court has exclu-

sive jurisdiction over the subsequent suit. See Marrese v. American

Academy of Orthopaedic Surgeons, 470 U.S. 373, 380-82 (1985).

Because Artis's FELA claim was brought and disposed of in Virginia

state court, we look to Virginia's res judicata doctrine. Under Virginia

law res judicata bars a claim if all of four elements are present: "`(1)

identity of the remedies sought; (2) identity of the cause of action; (3)

identity of the parties; and (4) identity of the quality of the persons

for or against whom the claim is made.'" Smith v. Ware, 421 S.E.2d

444, 445 (Va. 1992) (quoting Wright v. Castles , 349 S.E.2d 125, 128

(Va. 1986)).

Because the causes of action under FELA and the LHWCA are not

identical, res judicata does not bar Artis's second (LHWCA) claim.

In Virginia "[t]he principle test to determine whether claims are part

of the same cause of action is whether the same evidence will support

both claims." Flora, Flora & Montague, Inc. v. Saunders, 367 S.E.2d

493, 495 (Va. 1988). Unless "the same evidence is necessary to prove

each claim," the causes of action are distinct. Brown v. Haley, 355

S.E.2d 563, 567 (Va. 1987). While a worker must prove employer

negligence under FELA, no such proof is required for a claim under

the LHWCA, which is a no-fault workers' compensation system. See

45 U.S.C. § 51; 33 U.S.C. § 903. Because there are some fundamental

differences in the evidence required to prove these two claims, the

prior judgment on Artis's FELA claim is not res judicata as to his

LHWCA claim.

Nor does the doctrine of judicial estoppel bar Artis's second claim.

"The `determinative factor' in the application of judicial estoppel is

whether the party who is alleged to be estopped`intentionally misled

the court to gain unfair advantage.'" John S. Clark Co. v. Faggert &

Frieden, P.C., 65 F.3d 26, 29 (4th Cir. 1995) (quoting Tenneco Chem-

icals, Inc. v. William T. Burnett & Co., 691 F.2d 658, 665 (4th Cir.

1982)). When Artis brought his FELA suit in Virginia state court, the

case law established that he was not entitled to assert a claim under

10

the LHWCA. As a result, he could not have intended to mislead the

Virginia court in any way.

Furthermore, section 5 of the LHWCA does not affect my conclu-

sion that Artis's LHWCA claim is viable. That section provides that

the LHWCA is meant to be a worker's exclusive remedy. See 33

U.S.C. § 905(a); Chesapeake & Ohio Ry. Co. v. Schwalb, 493 U.S.

40, 42 (1989). As the Supreme Court has recognized, however, the

purpose of this section is to circumscribe an employer's liability. See

Ryan Stevedoring Co. v. Pan-Atlantic S.S. Corp., 350 U.S. 124, 129

(1956) ("The obvious purpose of this provision is to make the statu-

tory liability of an employer to contribute to its employee's compen-

sation the exclusive liability of such employer to its employee . . . .")

(emphasis omitted). The ALJ was faithful to this purpose by granting

the railroad a credit for benefits paid to Artis in the FELA settlement,

and I would do the same.

I would authorize a credit to the railroad based on the following

reasoning of the Benefits Review Board in Jenkins v. Norfolk & West-

ern Railway Company, 1996 WL 582388 (DOL Ben. Rev. Bd. 1996),

a case in which an employee's FELA settlement was subtracted from

his LHWCA award:

The Longshore Act contains various offset or credit pro-

visions which prevent employees from receiving a double

recovery for the same injury, disability or death. See 33

U.S.C. §§ 903(e), 914(j), 933(f); see also Lawson v. Stan-

dard Dredging Co., 134 F.2d 771 (5th Cir. 1943). Although

the settlement recovery under the FELA in this case does

not fall within the explicit terms of any of these sections,

they nonetheless provide guidance in this case. Section 3(e)

provides [an] employer with a credit for payments under

other workers' compensation laws or the Jones Act, and

Section 33(f) provides an offset for recovery from a third

party who is liable in damages for an employment-related

disability or death. Section 14(j) covers the advance pay-

ment of benefits pursuant to the Longshore Act. See, [e.g.],

Mason v. Baltimore Stevedoring Co., 22 BRBS 413 (1989).

In addition, an independent credit doctrine exists in case law

that provides [an] employer with a credit for prior disability

11

payments under certain circumstances to avoid a double

recovery of compensation for the same disability. See

Strachan Shipping Co. v. Nash, 782 F.2d 513, 18 BRBS 45

(CRT) (5th Cir. 1986) (en banc); Adams v. Parr Richmond

Terminal Co., 2 BRBS 303 (1975).

Jenkins, 1996 WL 582388, at *2. Here, with a credit, the railroad is

no worse off than it would have been if Artis had been able to bring

his claim under the LHWCA in the first place.2

III.

I would affirm the ALJ's award of permanent partial disability ben-

efits to Artis. However, I would remand for the ALJ to recalculate the

railroad's credit for the FELA settlement by excluding the amount

that went for attorney's fees.

_________________________________________________________________

2 In calculating the amount of the credit, I would (unlike the ALJ)

deduct attorney's fees from the gross amount of Artis's FELA settle-

ment. This should be done because attorney's fees are not considered

"compensation" for workplace injury under the usual workers' compen-

sation scheme. See Jenkins, 1996 WL 582388, at *3; Bundens v. J.E.

Brenneman Co., 46 F.3d 292, 304 n.24 (3d Cir. 1995).

12