# Petition — Shell Oil Co. v. Olsen

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition
- **Published:** January 1, 1984
- **Citation:** 464 U.S. 1045

## Text

83-828 [irr

FILED
NOV 18 1983

iene dineonianataannntennis

CLERK

NO.

In the
Supreme Court of the United States

OCTOBER TERM, 1983

SHELL OIL COMPANY,
Petitioner,
V.
MARY OLSEN, ARGONAUT INSURANCE
COMPANY, CHRISTINE W. CARVIN, and
GORDON DAVIS WALLACE,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO THE
UNITES STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT

PETITION FOR WRIT OF CERTIORARI

JOHN O. CHARRIER, JR.

ROBERT T. LEMON, II

JONES, WALKER, WAECHTER,
POITEVENT, CARRERE &
DENEGRE

225 Baronne Street, 28th Floor

New Orleans, Louisiana 70112

Telephone: (504) 581-6641

Counsel for Petitioner

A B Letter Service, Inc., 327 Chartres St., New Orleans, La. (504) 581-5555

i

QUESTIONS PRESENTED FOR REVIEW

Petitioner applies for a writ of certiorari to the
United States Court of Appeals for the Fifth Circuit for
review of the following questions:

I. Whether the Court of Appeals erred as a matter of
law in granting the LHWCA compensation carrier an
award larger than that amount for which petitioner was
held liable in tort to certain of the claimants?

(a) In an action by the LHWCA compensation carrier
against a vicariously liable third-party tortfeasor for reim-
bursement for workmen’s compensation benefits paid,
whether the LHWCA compensation carrier is entitled to an
award in excess of the judgment in tort against the third-
party tortfeasor? or

(b) Whether the vicariously liable third party tort-
feasor’s liability to the LHWCA compensation carrier for
reimbursement of workmen’s compensation benefits paid
is limited to the amount of the tort award against the third
party tortfeasor?

II. Whether the Court of Appeals erred as a matter
of law in obligating petitioner to assume responsibility for
administration and distribution of all of the LHWCA com-
pensation carrier’s future workmen’s compensation liabili-
ty to claimants arising out of the casualty?

III. Whether the Court of Appeals erred as a matter
of law in awarding claimants prejudgment interest in an ac-
tion arising under the Outer Continental Shelf Lands Act?

ii
STATEMENT OF INTERESTED PARTIES

I, John O. Charrier, Jr., counsel of record for Peti-
tioner, Shell Oil Company, certify that the following listed
persons have or may have an interest in the outcome of this
case:

1. Shell Oil Company and Travelers Insurance
Company

2. Movible Offshore, Inc., Teledyne Movible Off-
shore, Teledyne Inc., and Pacific Indemnity Company

3. Argonaut Insurance Company
4. Mary Olsen
5. Christine Carvin

6. Gordon Davis Wallace

JOHN O. CHARRIER, JR.
ROBERT T. LEMON, II

TABLE OF CONTENTS

Page
Questions Presented for Review..................... i
Statement of Interested Parties.................... ii
I tt 5 oS KE aco av Solo oe eee eee iii
I Ss lac orks Lae ee eee iv
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i a es se bls aa 3
Rs sos ap wae alee Gee eet 9
SE hte ets ee a aw win't 0 va aig se Mee A OED 13
ER 20 tee Se a ae ee ee 22
SG SRE ie ee a Ror OT Ne ee eT 23

iv
TABLE OF AUTHORITIES

CASES: PAGE
Aldon Industries, Inc. v. Don Myers & Associates, Inc.,

yk es gf. ob ho: rs Meme: 19
Aymond v. Texaco, Inc.,

pee pe see ceeem CO. I0T7).... «2. ccs eke. 21
Berry v. Sladco, Inc.,

496 F.2d 623 (6th Cir. 1974) ................... 21
Brock v. Baroid Div., National Lead Co.,

339 F.Supp. 728 (W.D. La. 1972)............... 13
Calmar S.S. Corp. v. Taylor,

303 U.S. 525, 58 S.Ct. 651 (1938)............... 18
Caldwell v. Ogden Sea Transport, Inc.,

Gna Fae nee? ete Cir, 1000)... .. 2. we es. 13
Chevron Oil Co. v. Huson,

404 U.S. 97, 92 S.Ct. 349 (1971)................ 20
Compania Pelineon de Navegasion S.A. v. Texas

Petroleum Co., 540 F.2d 53 (2d Cir. 1976)...... .19

Evans v. Chevron Oil Co.,
438 F.Supp. 1097 (E.D. La. 1077), aff'd

per curiam 616 F.2d 565 (5th Cir. 1980)......... 21
Farrell v. United States,

336 U.S. 511, 69 S.Ct. 707 (1949)............... 18
Federal Marine Terminals Inc. v. Burnside Shipping Co.,

394 U.S. 404, 89 S.Ct. 1144 (1969)........ 14, 15, 16
Gulf Oil Co. v. Mobil Oil Corp.,

453 U.S. 473, 101 S.Ct. 2870 (1981)............. 20
Haynes v. Rederi A/S ALADDIN,

362 F.2d 345 (5th Cir. 1966).....%............. 13
Hinson v. S/S PAROS,

461 F.Supp. 219 (S.D. Tex. 1978)......... 13, 14, 19

Italia Societa per Azioni di Navigazione v.
Oregon Stevedoring Co., 376 U.S. 315,
EER Ce a erie Pe 14
Musial v. A&A Boat Rentals, Inc.,
696 F.2d 1149 (5th Cir. 1983)... =-=.=.-.«.............. 21

Vv

Rodrigue v. Aetna Casualty & Surety Co.,

395 U.S. 352, 89 S.Ct. 1835 (1969)........... 20, 21
Robins Dry Dock & Repair Co. v. Flint,
275 U.S. 303, 48 S.Ct. 134 (1927)............... 19
Story Parchment Co. v. Paterson Parchment Paper Co.,
262 U.S. 566, 61 S.Ct. 248 (1981). .............. 19
Travelers Indemnity Co. v. Peacock Construction Co.,
aap 7.20 1iGS Gta Cir. IGT)... ee eee es 19
STATUTES:
Longshoremen’s and Harbor Workers’ Compensation
Act, §33, 33 U.S.C. §933...... veo 5 oy Oy ae OM Bee
Outer Continental Shelf Lands Act,
Is a e, 2, 6, 16, 20
Federal Interest Statutes... ...... sie eaten 9, 20, 21
pee es 8 Ci OS es 9, 20, 21

La. Rev. Stat. §13:4203....... ase ae ee 20, 21

1

IN THE
SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1983
SHELL OIL COMPANY,
Petitioner
versus
MARY OLSEN, CHRISTINE W. CARVIN,
GORDON W. WALLACE, and ARGONAUT
INSURANCE COMPANY

Respondents

PETITION FOR WRIT OF CERTIORARI

DECISIONS BELOW

This matter has had a complex and tortured legal
history. The matter was first tried, and all appeals ex-
hausted, on liability. The damages issue was then tried,
and this application pertains to that issue.

LIABILITY
DISTRICT COURT—
1. The opinions of the United States District Court

for the Eastern District of Louisiana [Minute Entry (June
6, 1974) and Minute Entry (July 15, 1975) are not reported.

COURT OF APPEALS—

2. Olsen v. Shell Oil Co., 561 F.2d 1178 (5th Cir. 1977),
rehearing en banc denied, 565 F.2d 163 (5th Cir. 1977) [in-
itial decision on liability affirming negligence of Movible Off-
shore, Inc.]

3. Olsen v. Shell Oil Co., 574 F.2d 194 (5th Cir. 1978)
[certification to Louisiana Supreme Court of questions of
Louisiana strict liability and its effect on Shell Oil Co.]

4. Olsen v. Shell Oil Co., 365 So.2d 1285 (La. 1978) [cer-
tified questions answered finding Shell Oil C6. strictly

(vicariously) liable}

5. Olsen v. Shell Oil Co., 595 F.2d 1099 (5th Cir. 1979)
[final decision on liability]

QUANTUM (DAMAGES)
DISTRICT COURT—
6. The opinion of the United States District Court for
the Eastern District of Louisiana [minute entry (April 22,
1982)] is not reported.
COURT OF APPEALS—

7. Olsen v. Shell Oil Co., 708 F.2d 976 (5th Cir. 1983),
rehearing en banc denied (September 26, 1983)

JURISDICTION

This appeal raises questions of law under the United
States Longshoremen’s and Harbor Workers’ Compensation

3

Act, 33 U.S.C. §901 et seg., and the Outer Continental Shelf
Lands Act, 43 U.S.C. §1333 et seg.

The decision of the United States Court of Appeals
for the Fifth Circuit at issue was entered on July 5, 1983.
The Application for Rehearing En Banc was denied by the
Court of Appeals in an order entercd on September 26, 1983.

This Court has jurisdiction pursuant to 28 U.S.C.
§1254(1).

STATUTES INVOLVED

This Petition raises issues under the following provi-
sions of the United States Longshoremen’s and Harbor
Workers’ Compensation Act [LHWCA] and the Outer Con-
tinental Shelf Lands Act [OCSLA):

LHWCA 33 U.S.C. §933

§933. Compensation for injuries where third per-
sons are liable

(a) Election of remedies. If on account of a disability
or death for which compensation is payable under
this Act, the person entitled to such compensation
determines that some person other than the
employer or a person or persons in his employ is
liable in damages, he need not elect whether to
receive such compensation or to recover damages
against such third person.

(b) Acceptance of compensation acting as assign-
ment. Acceptance of such compensation under an
award in a compensation order filed by the depu-
ty commissioner of Board shall operate as an
assignment to the employer of all right of the

4

person entitled to compensation to recover dam-
ages against such third person unless such person
shall commence an action against such third per-
son within six months after such award.

(c) Payment into section 944 fund operating as
assignment. The payment of such compensation
into the fund established in section 44 [33
U.S.C.S. §944] shall operated as an assignment to
the employer of all right of the legal represen-
tative of the deceased (hereinafter referred to as
representative’) to recover damages against
such third person.

(d) Institution of proceedings or compromise by
assignee. Such employer on account of such
assignment may either institute proceedings for
the recovery of such damages or may compromise
with such third person either without or after in-
stituting such proceeding.

(e) Recoveries by assignee. Any amount recovered
by such employer on account of such assignment,
whether or not as the result of a compromise,
shall be distributed as follows:

(1) The employer shall retain an amount
equal to—

(A) the expenses incurred by him in respect
to such proceedings or compromise (in-
cluding a reasonable attorney’s fee as deter-
mined by the deputy commissioner or

Board);

(B) the cost of all benefits actually furnish-
ed by him to the employee under section 7
[33 U.S.C.S. §907];

(C) all amounts paid as compensation;

5

(D) the present value of all amounts there-
after payable as compensation, such present
value to be computed in accordance with a
schedule prepared by the Secretary, and the
present value of the cost of all benefits
thereafter to be furnished under section 7 [33
U.S.C.S. §907], to be estimated by the depu-
ty commissioner, and the amounts so com-
puted and estimated to be retained by the
employer as a trust fund to pay such compen-
sation and the cost of such benefits as they
become due, and to pay any sum finally re-
maining in excess thereof to the person entitl-
ed to compensation or to the representative;
and

(2) The employer shall pay any excess to the
person entitled to compensation or to the
representative, less one-fifth of such excess
which shall belong to the employer.

(f) Institution of proceedings by person entitled to
compensation. If the person entitled to compensa-
tion institutes proceedings within the period
prescribed in section 33(b) [subsec. (b) of this sec-
tion] the employer shall be required to pay as com-
pensation under this Act, a sum equal to the ex-
cess of the amount which the Secretary determines
is payable on account of such injury or death over
the amount recovered against such third person.

(g) Compromise obtained by person entitled to
compensation. If compromise with such third per-
son is made by the person entitled tc compensa-
tion or such representative of an amount less than
the compensation to which such person or
representative would be entitled to under this
Act, the employer shall be liable for compensation
as determined in subdivision (f) only if the written
approval of such compromise is obtained from the

6

employer and its insurance carrier by the person
entitled to compensation or such representative
at the time of or prior to such compromise on a
form provided by the Secretary and filed in the of-
fice of the deputy commissioner having jurisdic-
tion of such injury or death within thirty days
after such compromise is made.

(h) Subrogation. Where the employer is insured
and the insurance carrier has assumed the pay-
ment of the compensation, the insurance carrier
shail be surbrogated to all the rights of the
employer under this section.

(i) Right to compensation as exclusive remedy.
The right to compensation or benefits under this
Act shall be the exclusive remedy to an employee
when he is injured, or to his eligible survivors or
legal representatives if he is killed, by the
negligence or wrong of any other person or per-
sons in the same employ: Provided, That this pro-
vision shall not affect the liability of a person
other than an officer or employee of the employer.

(Mar. 4, 1927, ch 509, § 33, 44 Stat. 1440; June 25,
1938, ch 685, §§ 12, 13, 52 Stat. 1168; Aug. 18,
1959, P.L. 86-171, 73 Stat. 391; Oct. 27, 1972,
P.L. 92-576, § 15(f)-(h), 86 Stat. 1262).

OCSLA 43 U.S.C. §1333

(a) Constitution and United States laws; laws of
adjacent States; publication of projected State
lines; international boundary disputes; restriction
on State taxation and jurisdiction. (1) The Con-
stitution and laws and civil and political jurisdic-
tion of the United States are hereby extended to
the subsoil and seabed of the outer Continental
Shelf and to all artificial islands, and all in-
stallations and other devices permanently or

7

temporarily attached to the seabed, which may be
erected thereon for the purpose of exploring for,
developing, or producing resources therefrom, or
any such installation or other device (other than
a ship or vessel) for the purpose of transporting
such resources, to the same extent as if the outer
Continental Shelf were an area of exclusive
Federal jurisdiction located within a State: Pro-
vided, however, That mineral leases on the outer
Continental Shelf shall be maintained or issued
only under the provisions of this Act.

(2) (A) To the extent that they are applicable
and not inconsistent with this Act or with
other Federal laws and regulations of the
Secretary now in effect or hereafter adopted,
the civil and criminal laws of each adjacent
State now in effect or hereafter adopted,
amended, or repealed are hereby declared to
be the law of the United States for that por-
tion of the subsoil and seabed of the outer
Continental Shelf, and the President shall
determine and publish in the Federal
Register such projected lines extending
seaward and defining each such area. All of
such applicable laws shall be administered
and e. /orced by the appropriate officers and
courts of the United States. State taxation
laws shall not apply to the outer Continental
Shelf.

(B) Within one year after the date of enact-
ment of this subparagraph [enacted Sept. 18,
1978], the President shall establish pro-
cedures for setting [setting] any outstanding
international boundary dispute respecting
the outer Continental Shelf.

(3) The provisions of this section for adoption
of State law as the law of the United States

8

shall never be interpreted as a basis for
claiming any interest in or jurisdiction on
behalf of any State for any purpose over the
seabed and subsoil of the outer Continental
Shelf, or the property and natural resources
thereof or the revenues therefrom.

(b) Longshoremen’s and Harbor Workers’ Com-
pensation Act applicable; definitions. With
respect to disability or death of an employee
resulting from any injury occurring as the result
of operations, conducted on the outer Continental
Shelf for the purpose of exploring for, developing,
removing, or transporting by pipeline the natural
resources, or involving rights to the natural
resources, of the subsoil and seabed of the outer
Continental Shelf compensation shall be payable
under the provisions of the Longshoremen’s and
Harbor Workers’ Compensation Act [33 U.S.C.S.
§§901 et seq.] For the purposes of the extension of
the provisions of the Longshoremen’s and Harbor
Workers’ Compensation Act [33 U.S.C.S. §§901
et seq.] under this section—

(1) The term ‘‘employee’’ does not include a
master or member of a crew of any vessel, or
an officer or employee of the United States or
any agency thereof or of any State or foreign
government, or of any political subdivision
thereof;

(2) the term ‘“‘employer’’ means an employer
of whose employees are employed in such
operations; and

(3) the term ‘“‘United States’’ when used in a
geographical sense includes the outer Con-
tinental Shelf and artificial islands and fixed
structures thereon.

9

This Petition also raises issues under the Federal Interst
Statute:

Federal Interest Statute 28 U.S.C. §1961

§1961. Interest

(a) Interest shall be allowed on any money judg-
ment in a civil case recovered in a district court.
Execution therefor may be levied by the marshal,
in any case where, by the law of the State in which
such court is held, execution may be levied for in-
terest on judgments recovered in the courts of the
State. Such interest shall be calculated from the
date of the entry of the judgment, at a rate equal
to the coupon issue yield equivalent (as determin-
ed by the Secretary of the Treasury) of the
average accepted auction price for the last auc-
tion of fifty-two week United States Treasury
bills settled immediately prior to the date of the
judgment. The Director of the Administrative Of-
fice of the United States Courts shall distribute
notice of that rate and any changes in it to all
Federal judges.

STATEMENT OF THE CASE

On May 6, 1970, several persons were either killed or
severely injured when a water heater exploded in the living
quarters (offshore modular unit) of a fixed drilling plat-
form. Movible Offshore, Inc. (‘‘Movible’’) was the owner of
the water heater and the offshore modular living quarters.
Movible was also the employer of those injured or killed in
this explosion. The fixed drilling platform was owned by
Shell Oil Company (‘Shell’), and was located on the Loui-
siana Outer Continental Shelf.

10

Following this casualty, Argonaut Insurance Com-
pany, Movible LHWCA’s workmen’s compensation car-
rier, paid compensation benefits under the Longshoremen’s
and Harbor Workers’ Compensation Act, 33 U.S.C. §901 et
seq. These compensation benefits were paid without entry
of a formal award by the Deputy Commissioner, because
Movible did not contest the claimants’ right to compensa-
tion. Thereafter, Argonaut filed suit against Shell Oil Com-
pany and other defendants, seeking reimbursement for the
workmen compensation benefits paid to the claimants and
other Movible employees injured as a result of the explo-
sion. Several of those injured, as well as the representatives
of those killed, also filed separate suits against Shell Oil
Company and other defendants. !

On June 6, 1974, and again on July 15, 1975, Chief
Judge Frederick J. R. Heebe of the United States District
Court for the Eastern District of Louisiana, rendered judg-
ment in these consolidated actions on the issue of liability
in favor of Shell Oil Company. The District Court found
that the active negligence of Movible was the proximate
cause for the explosion and resulting injuries and deaths.

On appeal, Olsen v. Shell Oil Co., 561 F.2d 1178 (5th
Cir. 1977), reh. en banc den., 565 F.2d 164 (5th Cir. 1977),
the United States Court of Appeals for the Fifth Circuit

! The plaintiffs in these consolidated cases are: (a) Mrs. Mary
Olsen on behalf of the children of her marriage to the deceased Kenneth
Mahaney, suing for the wrongfu! death of Kenneth Mahaney; (b) Mrs.
Christine W. Carvin, on behalf of herself and the children of hor marriage
to the deceased Joseph P. Carvin, suing for the wrongful death of Joseph
R. Carvin; (c) Mr. Gordon D. Wallace, suing in his own right for personal
injuries; (d) Argonaut Insurance Company, Movible’s workmen's com-
pensation carrier, suing for reimbursement of workmen's compensation
benefits paid to several claimants injured or killed, noninclusive of
Mahaney, Carvin and Wallace. Argonaut intervened as a party plaintiff
in these three actions.

11

affirmed the District Court’s findings and conclusions that
the explosion was proximately caused by the active
negligence of Movible. However, the Court of Appeals then
certified to the Louisiana Supreme Court certain questions
of Louisiana law,” and its effect on Shell Oil Company as
owner of the platform. Olsen v. Shell Oil., 574 F.2d 194 (5th
Cir. 1978). The Louisiana Supreme Court, Olsen v. Shell Oil
Co., 365 So.2d 1285 (La. 1978), contrary to then-established
precedent, extended the doctrine of Louisiana strict liabili-
ty and resolved the certified questions against Shell Oil
Company, and concluded that Shell Oil Company was
strictly (vicariously) liable, as owner of the fixed drilling
platform, for the explosion and resulting injuries and
deaths, notwithstanding that the active negligence of
Movible was the proximate cause of the casualty.

Thereafter, the United States Court of Appeal, Olsen
v. Shell Oil Co., 595 F.2d 1099 (5th Cir. 1979), resolved the
remaining questions of liability, and remanded these con-
solidated cases to the District Court for trial on the issue
of quantum (damages).

The issue of quantum was tried by Special
Magistrate on December 18-21, 1979. On June 29, 1981, the
Special Magistrate entered its proposed findings and
recommendations. Thereafter, the United States District
Court for the Eastern District of Louisiana, Chief Judge
Frederick J. R. Heebe, affirmed and modified the Special
Magistrate’s proposed findings and recommendations by
minute entry dated April 22, 1982. The District Court
found Shell Oil Company liable in tort in an amount less

* Included among the questions was the Louisiana tort doctrine
of strict liability under the Louisiana Civil Code Art. 2322, and its ap-
plication to the owner of a fixed drilling platform located on the Loui-
siana Outer Continental Shelf.

12

than the total workmen’s compensation benefits paid by
Argonaut to the injured claimants and the decedents’
representatives.? Nevertheless, the District Court held
that Argonaut, as the LHWCA workmen’s compensation
carrier, was entitled to complete reimbursement from Shell
Oil Company for all workmen’s compensation benefits paid
in the past, as well as all workmen’s compensation benefits
to be paid in the future.

On appeal, Olsen v. Shell Oil Co., 708 F.2d 976 (5th
Cir. 1983), the United States Court of Appeals jor the Fifth
Circuit affirmed the District Court’s judgment and award
on the issue of quantum. Specifically, the Court of Appeals
affirmed the District Court’s holding (1) that Shell Oil Com-
pany was to completely reimburse Argonaut for all
workmen’s compensation benefits paid to the claimants,
notwithstanding that Shell Oil Company’s liability in tort
to these claimants was less than those amounts paid as
workman’s compensation benefits; and (2) that Shell Oil
Company was to assume the administrative responsibility
for payment of any and all workmen’s compensation
benefits and medical expenses which would have to be paid
to these claimants in the future. The United States Court
of Appeals for the Fifth Circuit thereafter denied rehearing
en banc on September 26, 1983.

Shell now petitions for a writ of certiorari from this
judgment and opinion of the United States Court of Ap-
peals for the Fifth Circuit.

° For example, the District Court awarded Mary Olsen only
$16,000. However, Argonaut’s compensation obligation to the Olsen
family was much greater than this amount.

13
ARGUMENT

I. THE COURT OF APPEALS DECISION IS
CONTRARY TO THE STATUTORY PROVI-
SIONS OF THE LHWCA AND THE DECI-
SIONS OF THIS COURT INTERPRETING
THAT STATUTE.

Petitioner, Shell Oil Company’s liability is encom-
passed by a single judgment in tort for damages in each of
the personal injury and death cases; accordingly, peti-
tioner’s liability to the LHWCA compensation carrier
(Argonaut) for reimbursement of workmen’s compensation
benefits paid to claimants is limited to the amount of the
tort judgment. The Court of Appeals’ decision to the con-
trary is in direct conflict with the provisions of the
Longshoremen’s and Harbor Workers’ Compensation Act,
33 U.S.C. §901 et seg.

It is an elementary principle of workr:en’s compensa-
tion law that the compensation lien comes out of the
judgment—the injured employee is permitted to retain the
compensation subject to reimbursement to the employer
out of the tort damages collected from the negligent third
party tortfeasor. LHWCA §33(b,e,h), 33 U.S.C. §933 (b,e,h).
Haynes v. Rederi and A/S ALADDIN, 362 F.2d 345 (5th
Cir. 1966); Brock v. Baroid Div., National Lead Co., 339
F.Supp. 728 (W.D. La. 1972). See also Caldwell v. Ogden
Sea Transport, Inc., 618 F.2d 1037 (4th Cir. 1980). A cor-
ollary to this principle is that the negligent third party
tortfeasor can never be held liable for reimbursement to the
compensation carrier for more than the amount of damage
for which it is held liable in tort. Hinson v. S/S PAROS, 461
F.Supp. 219, 223 (S.D. Tex. 1978). See LHWCA §33(b,e,h),
33 U.S.C. §933 (b,e,h). Thus, LHWCA compensation carrier

14

Argonaut’s compensation lien is limited to the amount of
the tort judgment against third party Shell Oil Company.
Hinson v. S/S PAROS, 461 F.Supp. 219, 222-23 (S.D. Tex.
1978).

LHWCA §33 (33 U.S.C. §933) governs the rights of
the employee, the employer, and the compensation carrier
against third persons whose negligence was the cause for
the employee’s injury. Section 33 of the Act grants the
employer (or the employer’s compensation carrier) the right
to bring an action for reimbursement against the third per-
son in those instances where the employee fails to bring
such an action on his own behalf. See LHWCA §33(e & f),
33 U.S.C. §933 (e & f). It is plain from the face of the statute
that the negligent third party tortfeasor’s liability is en-
compassed and limited by the tort damages due the
employee. Compare LHWCA §33 (b,e,f,h,i), 33 U.S.C. §933
(b,e,f,h,i) with LHWCA §85(a), 33 U.S.C. §905(a).

This Honorable Court has held that the objective of
the reimbursement provisions of the LHWCA [§33 (33
U.S.C. §933)] is that ‘‘of placing the burden ultimately on
the company whose fault caused the injury.” Italia Societa
per Azioni di Navigazione v. Oregon Stevedoring Co., 376
U.S. 315, 324 84 S.Ct. 748, 754 {1964). See Federal Marine
Terminals Inc. v. Burnside Shipping Co., 394 U.S. 404, 420
n.22, 89 S.Ct. 1144, 1153 n.22 (1969). Thus the intent of §33
is to force the actively negligent third party which causes
injury to reimburse the non-negligent employer (or the
employer’s compensation carrier) whose only responsibility
for the injury is the compensation liabilitly imposed by the
statute. See LHWCA §5, 33 U.S.C. §905.

The decision of the United States Court of Appeals
for the Fifth Circuit in this instance is completely contrary

15

to the objective of LHWCA §33. The Court of Appeals deci-
sion permits the employer (or the employer's compensation
carrier) to recover from the third party tortfeasor over and
above that to which the third party tortfeasor is held liable
in tort. Moreover, the Court of Appeals decision permits
the employer (or the employer’s compensation carrier) to
recover in excess of the tort judgment against a non-
negligent vicariously liable third party. The decision of the
Court of Appeals does not “‘place the burden ultimately on
the company whose default caused the injury’’, particular-
ly in this instance where the negligent party was the
claimants’ LHWCA employer, Movible. Therefore, peti-
tioner submits the Court of Appeals decision is completely
without statutory authority, nor is it in compliance with
the statutory objective of the LHWCA.

Nor is the Court of Appeals decision compatible with
the decision of this Honorable Court in Federal Marine Ter-
minals, Inc. v. Burnside Shipping Co., 394 U.S. 404, 89
S.Ct. 1144 (1969). There, the United States Supreme Court
held LHWCA §33 was not the exclusive source of the
employer’s remedies against negligent third parties for
reimbursement of workmen's compensation benefits. In
Burnside, this Honorable Court held that the employer (or
his compensation carrier) could proceed against the
negligent third party on the theory that the third party
breached some duty owed directly to the employer. The
Burnside remedy applies only to actively negligent third
party tortfeasors; the Burnside remedy does not apply to
the vicariously liable third party, particularly where the ac-
tively negligent party is the LHWCA employer. Moreover,
the Burnside remedy is limited to those situations where
state law limits recovery in tort (the applicable Louisiana

16

law in this instance imposes no such limitation).4

The Court of Appeals decision is contrary to Burn-
side. Unlike the situation in Burnside, Shell Oil Company
breached no independent duty owed LHWCA employer
Movible, or its compensation carrier, Argonaut. Instead,
this casualty was proximately caused by the active
negligence of the LHWCA employer, Movible. Petitioner,
Shell Oil Company, only was found strictly (vicariously)
liable under a strained interpretation of Louisiana law.>
Therefore, petitioner submits the Court of Appeals erred in
holding a non-negligent, vicariously liable third party liable
for workmen’s compensation benefits in excess of the tort
judgment against said third party. Therefore, petitioner
submits the Court of Appeals decision has no statutory or
jurisprudential basis, and that the Court of Appeals deci-
sion should be reversed.

II. THE LHWCA IMPOSES NO OBLIGATION
ON THE THIRD PARTY TORTFEASOR TO
ASSUME THE ADMINISTRATIVE RESPON-
SIBILITY FOR THE DISBURSEMENT OF
FUTURE WORKMEN’S COMPENSATION
BENEFITS. THE COURT OF APPEALS ER-
RED AS A MATTER OF LAW IN
OBLIGATING PETITIONER TO ASSUME
THE ADMINISTRATION OF FUTURE
WORKMEN’S COMPENSATION CLAIMS
AGAINST THE COMPENSATION CARRIER
ARGONAUT.

4 On its facts, Burnside applies only to those actions between the
vessel and the stevedore-employer, and is based exclusively on federal
maritime law. In the instant action, the injuries and deaths occurred on
a fixed drilling platform located on the Louisiana Outer Continental Shelf;
the applicable law is Louisiana law, adopted as surrogate federal law pur-
suant to the Outer Continental Shelf Lands Act, 43 U.S.C. §1333.

5 Louisiana Civil Code Art. 2322.

17

The District Court imposed upon petitioner the
obligation to undertake the payment and administration of
the existing claims against Argonaut for workmen's com-
pensation arising out of the casualty; the Court of Appeals
affirmed this decision. In effect, the judgment forces peti-
tioner, an oil company, to enter into the business of an
American casualty insurance company. Under the Court of
Appeals’ decision, petitioner will now have to assume the
burden of issuing weekly compensation checks, paying the
various medical bills which are submitted by the claimants,
and monitoring the continued viability of the compensa-
tion claims. Such judicial action on the part of the Court of
Appeals is without statutory authority, and imposes an
unreasonable financial and administrative burden upon
petitioner.

Moreover, the Court of Appeals decision imposes a
greater obligation than the straightforward award of a
money judgment to the compensation carrier; instead, the
Court of Appeals decision additionally (and improperly)
places the cost of administration of the compensation
claims on petitioner, rather than the compensation carrier.
Nowhere does the LHWCA authorize the employer/com-
pensation carrier to recover (in addition to the workmen's
compensation benefits) the cost of administration of the
compensation claims from the third party. The statutory
scheme behind LHWCA makes clear that the compensa-
tion carrier will continue to be liable to the workmen’s com-
pensation claimants for future benefits, even in the case of
the claimants’ successful suit against a third person for
money damages, and even in the case of the compensation
carrier’s successful suit for reimbursement against the
negligent third person. See LHWCA §33(f), 33 U.S.C.
§933(f). Thus, the statute places the on-going costs of ad-
ministration of the compensation claim squarely on the

18

compensation carrier, not on the third party tortfeasor.

The Court of Appeals’ decision affirming the District
Court’s judgment also works as an ‘open-ended judgment”
against petitioner in that (1) it imposes an infinite period
for which petitioner will be liable to pay damages, and (2)
the judgment, as written, is not for a sum certain, contrary
to well-established principles of tort law. In effect, the
Court of Appeals has given the LHWCA compensation car-
rier “carte blanche’’ recovery against petitioner with
respect to any future payments which Argonaut may
decide to incur. The potential for abuse is readily apparent.

This ‘‘carte blanche’’ recovery for the LHWCA com-
pensation carrier is completely contrary to the established
view of the courts. The law does not permit an infinite
period of liability for prospective damages; the law permits
only a finite period, the reason being that only then can
damages be calculated with any degree of reasonable preci-
sion. The ‘“‘maintenance and cure’’ cases best illustrate this
point. See Farrell v. United States, 336 U.S. 511, 519, 69
S.Ct. 707, 711 (1949); Calamar S.S. Corp. v. Taylor, 303
U.S. 525, 531,-58 S.Ct. 651, 655 (1938). In the
“maintenance and cure’’ cases, the courts impose a limita-
tion of ‘‘maximum cure’ on the extent of the seaman’s
ability to recover maintenance and cure: the seaman can
recover up until the point his condition reaches maximum
cure. The rationale for this limitation on the seaman’s
recovery is that any damages beyond this period of max-
imum care are not capable of precise measurement. |

The similarity of maintenance and cure to workmen's
compensation logically dictates that the same rationale
apply here—petitioner Shell should not be held liable
beyond that period of time in which damages can be

19

calculated with reasonable precision. The prohibition
against the award of speculative damages is well-settled.
See Story Parchment Co. v. Patterson Parchment Paper
Co., 282 U.S. 555, 562-63, 51 S.Ct. 248, 250 (1931); Robins
Drydock & Repair Co. v. Flint, 275 U.S. 303, 48 S.Ct. 134,
72 L.Ed. 290 (1927). See also Compania Pelineon De
Navegacion S.A. v. Texas Petroleum Co., 540 F.2d 53,
55-56 (2d Cir. 1976); Aldon Industries, Inc. v. Don Myers &
Associates, Inc. 517 F.2d 188, 191 (5th Cir. 1975);
Travelers Indemnity Co. v. Peacock Construction Co., 423
F.2d 1153, 1157 (5th Cir. 1970).

Moreover, the Court of Appeals decision is without
statutory basis; there is nothing in the LHWCA permitting
the court to obligate petitioner to pay any and all claims for
workmen’s compensation benefits which might arise in the
future. Nor is there anything in the statute permitting the
court to obligate petitioner to administer the future
workmen’s compensation claims of the claimants. Indeed,
there is contrary authority. See Hinson v. S/S PAROS, 461
F.Supp. 219, 223-24 (S.D. Tex. 1978) [compensation carrier
barred from recovery of total projected amount of
workmen's compensation benefits that would have to be
paid in future]. Accordingly, petitioner submits the Court
of Appeals decision obligating petitioner to assume the role
of the compensation carrier is in error, and should be
reversed.

III. THE COURT OF APPEALS DECISION AF-
FIRMING THE AWARD OF PREJUDGMENT
INTEREST IN AN OCSLA CASE IS A COM-
PLETE DEPARTURE FROM CONTROLLING
PRECEDENT ON THIS ISSUE, AND IS CON-
TRARY TO FEDERAL LAW AS APPLIED
UNDER OCSLA.

1%

20

Under the Outer Continental Shelf Lands Act,
(OCSLA), 43 U.S.C. $1333 et seq., federal law is the
substantive law to be applied on the Outer Continental
Shelf. The law of the adjoining state is to be applied only
in the absence of an inconsistent federal law; where state
law is found inconsistent, federal law, and not state law, is
the applicable law for personal injury and death actions
arising on the Outer Continental Shelf. Rodrigue v. Aetna
Casualty & Surety Co., 395 U.S. 352, 89 S.Ct. 1835 (1969).
See Gulf Oil Co. v. Mobil Oil Corp., 453 U.S. 473, 101 S.Ct.
28 70 (1981); Chevron Oil Co. v. Huson, 404 U.S. 97, 92
S.Ct. 349 (1971). The Rodrigue mandate is clear: the ex-
istence of Federal law on a substantive issue bars the ap-
plication of state law in resolving that issue; the federal law
still is pre-eminent over state law when substantive rights
on the Outer Continental Shelf are at issue. Rodrigue, 395
U.S. at 355-58, 89 S.Ct. at 1837-38.

There is controlling federal law on the subject of
legal interest, which precludes application of the state in-
terest statute (La. Rev. Stat. §13:4203). The federal in-
terest statute, 28 U.S.C. §1961, provides:

Interest shall be allowed on any money judgment
in a civil case recovered in a district court. Execu-
tion therefore may be levied by the marshall, in
any case where, by the law of the state in which
such court is held, execution may be levied for in-
terest on judgments rendered in the courts of this
state. Such interest shall be calculated from the
date from entry of the judgment, at the rate ...
(emphasis added).

The Court of Appeals interpreting the federal interest
statute in cases arising out of the Outer Continental Lands
Act, have consistently held that the federal interest statute

21

absolutely precludes an award of prejudgment interest.
Musial v. A&A Boats, Inc., 696 F.2d 1149, 1154 (5th Cir.
1983); Aymond v. Texaco, Inc., 554 F.2d 206, 211-12 (5th
Cir. 1977); Berry v. Sladco, Inc., 495 F.2d 523, 528 (5th Cir.
1974); Evans v. Chevron Oil Co., 435 F.Supp. 1097 (E.D.
La. 1977}. aff'd per curiam 616 F.2d 565 (5th Cir. 1980).
These courts of appeals holdings are clear and specific: pre-
judgment interest is not to be awarded in actions arising
under the OCSLA; the federal interest statute precludes as
a matter of federal law an award of prejudgment interest
for cases arising on the Outer Continental Shelf. Such
holdings are completely consistent with Rodrigue’s man-
date: federal law (28 U.S.C. §1961) is to control over state
law (La. Rev. Stat. §13:4203), where the federal law is in-
consistent with the state law.

Therefore, the Court of Appeals decision in the ins-
tant matter is simply inconsistent with previous precedent
on this issue, and is certainly contrary to this Honorable
Court's mandate in Rodrigue v. Aetna Casualty & Surety
Co. Accordingly, petitioner submits that the Court of Ap-
peals award of prejudgment interest in the instant matter
should be reversed.

22
CONCLUSION

For these reasons, a writ of certiorari should issue to
review the decision of the United States Court of Appeals
for the Fifth Circuit.

Respectfully submitted,

JOHN O. CHARRIER, JR.

ROBERT T. LEMON, II

Jones, Walker, Waechter, Poitevent,
Carrere & Denegre

225 Baronne Street, 28th Floor

New Orleans, Louisiana 70112

Counsel for Shell Oil Company
Petitioner

23
CERTIFICATE OF SERVICE

I do hereby certify on this 17 ane day of November,
1983, that three copies of this Petition for Writ of Cer-
tiorari were mailed, postage prepaid, to all counsel of
record in this matter.

JOHN O. CHARRIER, JR.

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385011_0619%3A1. Public record. Not legal advice.