U.S. Court of Appeals, Ninth Circuit
Two widows of California shipyard workers, whose husbands were allegedly exposed to asbestos and died as a result, sought compensation under the Longshore and Harbor Workers Compensation Act (“the Longshore Act” or “the Act”). The Longshore Act was enacted to protect longshore workers who suffered injuries related to their employment, but terminates benefits when “‘the person entitled to compensation (or the person’s representative) enters into a settlement with a third person’ for the employee’s disability or death for an amount less than that to which they would otherwise be entitled under the Act and fails to obtain the approval of the employer before doing so.” Here, the decedents’ daughters had entered into settlement agreements with third parties in their capacities as successors-in-interest to certain legal claims that had been filed by their fathers when they were still alive. As such, the respondent-employers argued that this forfeited the widows’ claims to benefits under the Act. The U.S. Department of Labor’s Benefits Review Board agreed, finding that because the settlements at issue bound all heirs, which would include the widows, the settlements indeed forfeited their claims for Longshore Act benefits.
On appeal, in reviewing the plain language of the Act, the Ninth Circuit reversed, concluding that the “person[s] entitled to received compensation” in these cases were the widows, and even if they were bound by third-party settlements signed by the daughters, no evidence suggests that they entered into any settlement agreement with third persons. Additionally, there was no evidence to suggest that the daughters acted on the widows’ behalves in entering into the settlement agreements at issue. The Ninth Circuit also held that the widows were not the decedents’ “representatives” for purposes of the Act, as this phrase refers to the legal representative of the deceased, which would have been the decedents’ daughters. As such, Ninth Circuit concluded that the termination of benefits did not apply in circumstances such as these, where the Act’s benefits have accrued to a living person entitled to compensation—the widows.