445 U.S.

74
100 S.Ct. 925
63 L.Ed.2d 215

William E. BLOOMER, Jr., Petitioner,

v.
LIBERTY MUTUAL INSURANCE COMPANY, etc.
No. 78-1418.
Argued Dec. 4, 1979.
Decided March 3, 1980.

Syllabus
Held: A stevedore's lien for the amount of its compensation payment to an
injured longshoreman under the Longshoremen's and Harbor Workers'
Compensation Act against the longshoreman's recovery in a negligence
action against the shipowner may not be reduced by an amount
representing the stevedore's proportionate share of the longshoreman's
legal expenses in obtaining recovery from the shipowner. The language,
structure, and history of the Act support this conclusion, rather than the
application of the equitable "common fund" doctrine that when a third
person benefits from litigation instituted by another, that person may be
required to bear a portion of the expenses of suit. Pp. 77-78.
586 F.2d 908, affirmed.
Alan C. Rassner, New York City, for petitioner.
Douglas A. Boeckmann, New York City, for respondent.
Mr. Justice MARSHALL delivered the opinion of the Court.

Under the Longshoremen's and Harbor Workers' Compensation Act, 44 Stat.

1424, as amended, 33 U.S.C. 901 et seq., a longshoreman is entitled to
receive compensation payments from his stevedore for disability or death
resulting from an injury occurring on the navigable waters of the United States.
If the longshoreman believes that his injuries warrant a recovery in excess of
the compensation provided under the Act, he may also bring a negligence

action against the owner of the vessel on which the injury occurred. The
longshoreman's recovery from the shipowner is subject to the stevedore's lien in
the amount of the compensation payment. The question for decision is whether
the stevedore's lien must be reduced by a proportionate share of the
longshoreman's expenses in obtaining recovery from the shipowner, or whether
the stevedore is instead entitled to be reimbursed for the full amount of the
compensation payment.
2

* Petitioner William E. Bloomer, Jr., was injured during the course of his
employment on board the vessel S. S. Pacific Breeze. He received $17,152.83
in compensation from respondent Liberty Mutual Insurance Co., the designated
carrier of workers' compensation for petitioner's employer, Connecticut
Terminal Co.1 Thereafter petitioner brought this diversity action against the
owner of the vessel. He alleged that the shipowner had negligently created
hazardous conditions on board the vessel, that the ship's deck was slippery and
dangerous, and that as a result he had fallen and incurred severe injuries.

During settlement negotiations, petitioner's counsel gave respondent notice of

the pending action and requested it to reduce its lien by a share of the costs of
recovery. That share would be computed as an amount bearing the same ratio to
the total cost of recovery as the compensation payments bear to the total
recovery. Respondent refused petitioner's request, asserted its right to full
reimbursement, and successfully moved to intervene in the action. Soon
thereafter petitioner settled with the shipowner for $60,000. He moved for
summary judgment directing that respondent's lien on the recovery be reduced
by an amount representing its proportionate share of the expenses of the suit
against the shipowner. Petitioner claimed that since the recovery from the
shipowner would benefit respondent, equity required that respondent bear a
portion of the expenses of obtaining that recovery.

The District Court denied petitioner's motion,2 and the United States Court of
Appeals for the Second Circuit affirmed. Bloomer v. Tong, 586 F.2d 908
(1978). The Court of Appeals concluded that a stevedore should not be required
to pay a share of the longshoreman's legal expenses in a suit brought against the
shipowner. We granted certiorari to resolve this recurring question, on which
the Courts of Appeals have been divided.3 441 U.S. 942, 99 S.Ct. 2158, 60
L.Ed.2d 1043 (1979). We affirm.

II
5

Petitioner's argument amounts to an appeal to the equitable principle that when

a third person benefits from litigation instituted by another, that person may be

required to bear a portion of the expenses of suit. He invokes cases establishing

that in certain circumstances, courts should exercise their equitable powers to
charge beneficiaries with a share of the expenses of obtaining a "common fund"
through litigation. See Boeing Co. v. Van Gemert, 444 U.S. 472, 100 S.Ct. 745,
62 L.Ed.2d 676 (1980); Alyeska Pipeline Service Co. v. Wilderness Society, 421
U.S. 240, 257-259, 95 S.Ct. 1612, 1621-1622, 44 L.Ed.2d 141 (1975); id., at
275-280, 95 S.Ct., at 1630-1633 (MARSHALL, J., dissenting); Mills v. Electric
Auto-Lite Co., 396 U.S. 375, 90 S.Ct. 616, 24 L.Ed.2d 593 (1970); Sprague v.
Ticonic National Bank, 307 U.S. 161, 59 S.Ct. 777, 83 L.Ed. 1184 (1939).
When measured against the language, structure, and history of the
Longshoremen's and Harbor Workers' Compensation Act, however, petitioner's
argument must fail.
6

The Act provides a comprehensive scheme governing an injured

longshoreman's rights against the stevedore and shipowner. The longshoreman
is not required to make an election between the receipt of compensation and a
damages action against a third person, 33 U.S.C. 933(a). After receiving a
compensation award from the stevedore, the longshoreman is given six months
within which to bring suit against the third party. 33 U.S.C. 933(b). If he fails
to seek relief within that period, the acceptance of the compensation award
operates as an assignment to the stevedore of the longshoreman's rights against
the third party. The Act makes explicit provision for the distribution of any
amount obtained by the stevedore in a suit brought pursuant to that assignment.
The stevedore is entitled to reimbursement of all compensation benefits paid
the employee, and its costs, including attorney's fees. Of the remainder, fourfifths is distributed to the longshoreman, and one-fifth "shall belong to the
employer." 33 U.S.C. 933(e).4

The Act does not expressly provide for the distribution of amounts recovered in
a suit brought by the longshoreman. The unambiguous provision that the
stevedore shall be reimbursed for all of his legal expenses if he obtains the
recovery does, however, speak with considerable force against requiring him to
bear a part of the longshoreman's costs when the longshoreman recovers on his
own. There is no reason to believe that Congress intended a different
distribution of the expenses of suit merely because the longshoreman has
brought the action. Petitioner asserts, however, that in the absence of an explicit
statutory resolution, the recovery against the shipowner represents a common
fund for whose creation the stevedore may properly be charged. To evaluate
this argument we turn to the history of the relevant provisions of the Act.

III

As originally enacted in 1927, the Act required a longshoreman to choose

between the receipt of a compensation award from his employer and a damages
suit against the third party. Act of Mar. 4, 1927, 33, 44 Stat. 1440. If the
longshoreman elected to receive compensation, his right of action was
automatically assigned to his employer. In 1938, however, Congress provided
that in cases in which compensation was not made pursuant to an award by a
deputy commissioner (appointed by the Secretary of Labor, see 33 U.S.C.
940), the longshoreman would not be required to choose between the
compensation award and an action for damages. Under the 1938 amendments,
no election was required unless compensation was paid pursuant to such an
award. See Act of June 25, 1938, ch. 685, 12, 13, 52 Stat. 1168.

Like the present version, the Act as amended in 1938 did not make provision
for the distribution of amounts recovered from the third party in a suit brought
by the longshoreman. The lower courts, however, interpreted the Act to require
that the stevedore be reimbursed for his compensation payment out of the sum
recovered from the third party. Congress was understood not to contemplate
double recovery on the longshoreman's part, and the stevedore did not,
therefore, lose the right to reimbursement for its compensation payment. See, e.
g., The Etna, 138 F.2d 37 (CA3 1943); Miranda v. Galveston, 123 F.Supp. 889
(SD Tex.1954); Fontana v. Pennsylvania R. Co., 106 F.Supp. 461 (SDNY
1952) (Weinfeld, J.), aff'd on opinion below sub nom. Fontana v. Grace Line,
Inc., 205 F.2d 151 (CA2), cert. denied, 346 U.S. 886, 74 S.Ct. 137, 98 L.Ed.
390 (1953).

10

Under the 1938 legislation the lower courts also decided that the stevedore
should not be required to bear a proportionate share of the longshoreman's legal
expenses. To force the stevedore to do so, it was observed, would guarantee the
longshoreman a total recovery in excess of the amount he received in his thirdparty action. Solely by virtue of the compensation scheme then the
longshoreman would receive a greater sum than would be possible in an
ordinary suit for damages. At the same time the stevedore would be prevented
from recovering the full amount of its compensation payment. The courts
concluded that these results would violate legislative purposes made manifest
by the express provision that the employer may recover its legal expenses from
the fund created by its own suit against the third party. See Davis v. United
States Lines Co., 253 F.2d 262 (CA3 1958); Oleszczuk v. Calmar S. S. Corp.,
163 F.Supp. 370 (D.C.Md.1958); Fontana v. Pennsylvania R . Co., supra, 106
F.Supp., at 463-464.

11

In 1959, Congress amended the Act to delete the election-of-remedies

requirement altogether. Act of Aug. 18, 1959, 73 Stat. 391. Existing law was
felt to "wor[k] a hardship on an employee by in effect forcing him to take
compensation under the act because of the risks involved in pursuing a lawsuit
against a third party." S.Rep.No. 428, 86th Cong., 1st Sess., 2 (1959), U.S.Code
Cong. & Admin.News, p. 2134. The result was that an injured employee
"usually elects to take compensation for the simple reason that his expenses
must be met immediately, not months or years after when he has won his
lawsuit." Ibid., U.S.Code Cong. & Admin.News, p. 2134, see H.R.Rep.No.229,
86th Cong., 1st Sess. (1959).
12

Responding to this inequity, the 1959 amendment provided that even when
compensation was paid pursuant to an award of the deputy commissioner, the
longshoreman's right of action would not be assigned to the stevedore until six
months from the date of the award. The legislative history demonstrates that
Congress did not intend to alter the rule allowing the stevedore to recover the
full amount of its lien from the longshoreman's third-party recovery. An
employee "would not be entitled to double compensation," for "an employer
must be reimbursed for any compensation paid to the employee out of the net
proceeds of the recovery." S.Rep.No.428, supra, at 2; U.S.Code Cong. &
Admin.News, p. 2135. During the hearings on the 1959 amendments, the rule
that an employer would not be required to bear a proportionate share of the
longshoreman's cost of recovery was specifically drawn to Congress' attention,
and one witness suggested that it should be abandoned.5 Instead, Congress
elected not to disturb the existing rule.6 Recognizing that no change had been
contemplated, the courts continued to hold that a stevedore would not be
required to bear a proportionate share of the longshoreman's legal expenses.
See Haynes v. Rederi A/S Aladdin, 362 F.2d 345 (CA5 1966); Ashcraft & Gerel
v. Liberty Mutual Ins. Co., 120 U.S.App.D.C. 51, 343 F.2d 333 (1965); Petition
of Sheffield Tankers Corp., 222 F.Supp. 441 (ND Cal.1963).

13

In 1972 Congress enacted more extensive Amendments to the Act, see

Edmonds v. Compagnie Generale Transatlantique, 443 U.S. 256, 262, 99 S.Ct.
2753, 2757, 61 L.Ed.2d 521 (1979), and it is these Amendments that, according
to petitioner, justify a change in the rule with respect to attorney's fees.
Concerned that compensation benefits had been far too low, Congress altered
the benefit structure of the Act so as to increase both maximum and minimum
benefits substantially.7 These increases were linked to two provisions designed
to reduce litigation and to ensure that stevedores would have sufficient funds to
pay the additional compensation. First, Congress abolished the unseaworthiness
remedy for longshoremen, recognized in Seas Shipping Co. v. Sieracki, 328
U.S. 85, 66 S.Ct. 872, 90 L.Ed. 1099 (1946), and limited the longshoreman's
action against the shipowner to one based on negligence. Second, Congress

eliminated the third-party action by the shipowner against the stevedore,

recognized in Ryan Stevedoring Co. v. Pan-Atlantic S.S. Corp., 350 U.S. 124,
76 S.Ct. 232, 100 L.Ed. 133 (1956). In that case the Court held that a
shipowner could obtain damages from the stevedore when it showed that the
stevedore had breached its warranty to the shipowner of workmanlike service.
As the House Report notes, the consequence was that "a stevedore-employer is
indirectly liable for damages to an injured longshoreman who utilizes the
technique of suing the vessel," with the result "that much of the financial
resources which could better be utilized to pay improved compensation benefits
were now being spent to defray litigation costs." H.R.Rep.No.92-1441, p. 5
(1972); see S.Rep.No.92-1125, p. 9 (1972), U.S.Code Cong. & Admin.News,
pp. 4698, 4702. Indeed, there was considerable testimony during the hearings
that third-party actions had resulted in congested courts and that the primary
beneficiaries had been lawyers, not injured longshoremen.8 The Senate Report
stated that "[t]he social costs of these law suits, the delays, crowding of court
calendars and the need to pay for lawyers' services have seldom resulted in a
real increase in actual benefits for injured workers." Id., at 4. The elimination of
the shipowner's cause of action against the stevedore was intended to reduce
litigation, immunize stevedores and their insurers from liability in third-party
actions, and assure conservation of stevedore resources for compensation
awards to longshoremen.
14

Witnesses also brought to the attention of Congress the longstanding rule 9 that
an employer could recover the full amount of its compensation award from the
longshoreman's recovery against the shipowner.10 Congress did not, however,
enact any legislation concerning that rule.

15

Petitioner argues that the 1972 Amendments so altered the equities as to compel
a holding that a stevedore must pay a proportionate share of the longshoreman's
expenses in a third-party action brought against the shipowner. He observes
that before the amendments, the longshoreman and the stevedore had adverse
interests in the third-party action: if the longshoreman were successful in that
suit, the shipowner frequently would attempt to require the stevedore to make
payment of amounts due the longshoreman. With the abolition of the
shipowner's cause of action, the stevedore and the longshoreman had a
common interest in the longshoreman's recovery against the shipowner.
Petitioner concludes that the common-fund doctrine should be available to
permit the employee to recover from the stevedore a proportionate share of the
expenses of suit.

16

In light of the Act and its legislative history, however, we are unable to accept
petitioner's argument. It is of course true that the stevedore and longshoreman

now have a common interest in the longshoreman's recovery against the

shipowner, but it does not follow that the stevedore should be required to pay a
share of the longshoreman's legal expenses. Congress has not modified 33
U.S.C. 933(e), providing that the stevedore is not required to pay its legal
expenses in cases in which it has recovered against the shipowner pursuant to
an assignment from the longshoreman. Moreover, in 1972 Congress was
informed of, but did not alter, the uniform rule that the longshoreman's legal
fees would be paid by the longshoreman alone. In these circumstances we are
reluctant to take steps to change that rule on our own. See Edmonds v.
Compagnie Generale Transatlantique, supra, 443 U.S., at 273, 99 S.Ct., at
2763.
17

In addition, to the extent that the 1972 amendments offer guidance, they
strongly suggest that the rule for payment of attorney's fees, was not intended to
be altered. The legal expenses incurred by stevedores in connection with thirdparty actions were understood to be a major obstacle to the funding of increased
compensation payments. Numerous witnesses testified that third-party actions
frequently inured to the benefit of lawyers, depleting the stevedore's resources
and congesting the courts without aiding the injured employee. It would be
ironic indeed if statutory amendments designed to eliminate the stevedore's
liability in connection with third-party actions were interpreted to give birth to
an entirely new liability in the form of a charge for the longshoreman's legal
expenses.11 We are unwilling to attribute to Congress an intention to allow
creation of a new liability irreconcilable with its general desire to reduce
litigation and to ensure conservation of the legal expenses of stevedores and
their insurers.12

18

Finally, we return to the original basis for the rule that a stevedore would not be
required to pay a portion of the longshoremen's expenses in his suit against the
shipowner. The compensation award was intended to be an immediate and
readily available payment to the injured longshoreman. By receiving this
payment, the longshoreman was not foreclosed from pursuing an action against
the shipowner. At the same time, he was not entitled to double recovery, and
the stevedore would be reimbursed in full for his compensation payment.13 The
result we reach enables the longshoreman to recover an amount no less than
that which he would receive through an ordinary negligence action,14 and also
immunizes the stevedore from liability in connection with the third-party
action. If we were to accept petitioner's view, an injured longshoreman would
ultimately receive a sum equal to the full amount of his recovery against the
shipowner and, in addition, a supplement consisting of the stevedore's
contribution to the longshoreman's legal expenses. This supplement would
represent a windfall in excess of the amount the longshoreman received as

compensation for the injuries he has suffered. The stevedore would not obtain
reimbursement for the full amount of its compensation payment, but would
instead have that amount reduced by a possibly substantial legal fee. This result
would be contrary to the allocation of attorney's fees expressly provided by
Congress for suits brought by the stevedore pursuant to an assignment from the
longshoreman. In these circumstances we do not believe that the Act and its
legislative history can fairly be read to support the distribution proposed by
petitioner.15
The judgment of the Court of Appeals is
19

Affirmed.

20

Mr. Justice BLACKMUN, dissenting.

21

The Court's approach in this case strikes me as somewhat crabbed. By tilting

with the specter of "double recovery," the Court adopts a construction of the
Longshoremen's and Harbor Workers' Compensation Act, 33 U.S.C. 901 et
seq., that relegates the injured longshoreman's welfare to secondary status, well
behind the interest of his stevedore-employer in conserving resources.

22

Under the Court's rule, the stevedore has everything to gain and nothing to lose.
The longshoreman takes the risk and the worry of the litigation and, if he gains
enough, the stevedore is home free. This result does not seem to me to square
with the Court's recent recognition that the Act should be construed with the
beneficent purpose of worker protection foremost in mind. Northeast Marine
Terminal Co. v. Caputo, 432 U.S. 249, 268, 97 S.Ct. 2348, 2359, 53 L.Ed.2d
320 (1977). Nor does it entirely square with the modern concept that the costs
of industrial accidents are expenses to be borne by the industrial enterprise and
not by the injured workman.1 It also fails to do equity where equity is due.
Since I cannot agree that Congress has required us so to deviate from the
principles of equity and the governing purposes of the Act, I respectfully
dissent.

23

The Court recognizes, ante, at 79, that although Congress has provided a
detailed scheme for the distribution of the amount recovered in a third-party
action initiated by the stevedore, it has never fixed by statute the details of
distribution when it is the longshoreman who brings suit. The Court,
nonetheless, discovers and espouses a settled judicial rule for division of the
recovery in an action by the longshoreman, and it transforms that rule into a
statutory mandate by pronouncing that we should not presume to change what

the Court thinks Congress, by inaction, apparently has left in force. Ante, at 8586. I feel the Court has oversimplified the variegated history of the judicial
"rule," has overdrawn the clarity of congressional approval of it, and has failed
to estimate the degree to which the rationale for exonerating the stevedore from
bearing a portion of the attorney's fees was undermined by the 1972
Amendments to the Act.
24

The earliest cases mentioned by the Court, The Etna, 138 F.2d 37 (CA3 1943),
and Fontana v. Pennsylvania R. Co., 106 F.Supp. 461 (SDNY 1952), aff'd
mem. sub nom. Fontana v. Grace Line, Inc., 205 F.2d 151 (CA2), cert. denied,
346 U.S. 886, 74 S.Ct. 137, 98 L.Ed. 390 (1953), chiefly concerned the broad
question, not at issue here, whether the stevedore is entitled to any recoupment
from the longshoreman's recovery against the shipowner. These cases
established that the stevedore is entitled to recoupment, and thus that the
longshoreman is not to receive the "double recovery" of full statutory
compensation plus full damages in an action at law. No one, at this juncture,
doubts the validity of this holding or its approval by Congress. See 33 U.S.C.
933(f); S.Rep.No.428, 86th Cong., 1st Sess., 2 (1959). The question we
presently face is a much narrower one that a general dislike for any double
recovery does not at all resolve.

25

To be sure, Fontana, supra, and Davis v. United States Lines Co., 253 F.2d 262
(CA3 1958), held, as the Court does today, that attorney's fees for a third-party
action must be borne in their entirety by the longshoreman. These cases drew
support for this conclusion from both the statutory division of recovery when
the stevedore brings suit and the view that the "expense of securing the
recovery is, as in equity it should be, a first charge against the fund itself."
Fontana v. Pennsylvania R. Co., 106 F.Supp. at 464. As a review of subsequent
case law demonstrates, however, this reasoning never has achieved the broad
acceptance that the Court's opinion implies. In the Fourth and the Fifth
Circuits, and perhaps even in the Second Circuit, alternative approaches to the
problem have been advocated and applied.

26

In Ballwanz v. Jarka Corp., 382 F.2d 433 (1967), the Fourth Circuit adopted an
entirely different rationale. The court recognized that Ryan Stevedoring Co. v.
Pan-Atlantic S. S. Corp., 350 U.S. 124, 76 S.Ct. 232, 100 L.Ed. 133 (1956),
which permitted shipowners to bring indemnity actions against stevedores,
produced a "rotary situation" in which the stevedore was effectively aligned
with the shipowner against the third-party suit. 382 F.2d, at 434. As a result,
recoupment of the stevedore's compensation lien from the longshoreman's
recovery involved "no more than a transfer of the charge in that amount from
its [insurer's] loss as compensation carrier to its loss as liability carrier." Id., at

435. It was the contrariety of interests and lack of true benefit to the stevedore,
and not the arguments advanced in Fontana and Davis, that led the court to
refuse proration of fees.
27

In the Fifth Circuit, the proper distribution of recoveries in third-party actions

initiated by longshoremen has been the subject of continuing debate. Strachan
Shipping Co. v. Melvin, 327 F.2d 83 (1964), applied Fontana conclusion that
attorney's fees are a "first charge" against the recovery in a case where the
recovery was so small that nothing was left for the longshoreman. The decision
provoked a vigorous dissent, which proposed a different reading of Fontana
and Davis that would give the compensation lien priority over the fees. Id., at
87-89. This alternative appears to have been applied in Haynes v. Rederi A/S
Aladdin, 362 F.2d 345, 351 (CA5 1966), cert. denied, 385 U.S. 1020, 87 S.Ct.
731, 17 L.Ed.2d 557 (1967), albeit on the ground that the stevedore was
represented in the action by its own counsel. Eventually, however, both
readings of the Fontana-Davis "rule" were displaced in the Fifth Circuit by an
approach that, in certain circumstances, required the longshoreman and the
stevedore to "pay attorney's fees and litigation expenses in proportion to their
recoveries." Chouest v. A & P Boat Rentals, Inc., 472 F.2d 1026, 1035-1036,
cert. denied, sub nom. Travelers Ins. Co. v. Chouest, 412 U.S. 949, 93 S.Ct.
3012, 37 L.Ed.2d 1002 (1973).

28

In the Second Circuit, Fontana approach has not been uniformly followed.
Landon v. Lief Hoegh & Co., 521 F.2d 756, 761 (1975), cert. denied, sub nom.
A/S Arcadia v. Gulf Ins. Co., 423 U.S. 1053, 96 S.Ct. 783, 46 L.Ed.2d 642
(1976), treated the compensation lien as an "express trust for the benefit of the
employer" with the longshoreman as statutory trustee. In the District Courts,
moreover, both the "conflict" theory developed in Ballwanz and the approach
advocated by the Strachan dissent gained some currency. See, e. g., Spano v. N.
V. Stoomvaart Maatschappij "Nederland," 340 F.Supp. 1194 (SDNY 1971);
Russo v. Flota Mercante Grancolombiana, 303 F.Supp. 1404, 1407 (SDNY
1969). These cases were subsequently disapproved in Valentino v. Rickners
Rhederei, G. M. B. H., Etha, 552 F.2d 466 (CA2 1977), which reinstated the
Fontana rationale.

29

I mention these variations and counterpoints to the Fontana-Davis theme not to

challenge the Court's assertion that, prior to the 1959 and 1972 amendments to
the Act, stevedores generally were exonerated from bearing a portion of
attorney's fees incurred in longshoreman-initiated actions, but rather to suggest
that the Court errs when it implies that the case law presented a settled judicial
construction of the Act for Congress to approve. Indeed, the situation was even
more complicated than this brief exposition illustrates, since the various

rationales employed by the courts led them into disarray over the handling of
attorney's fees in cases where the third-party recovery was insufficient to
satisfy both the fees and the stevedore's compensation lien in their entirety. See
Valentino v. Rickners Rhederei, G. M. B. H., Etha, 417 F.Supp. 176, 177179 (EDNY 1976), aff'd on other grounds, 552 F.2d 466 (CA2 1977). The
legislative history relied upon by the Court, ante, at 80-81, 84, fails to show
that Congress delved into the intricacies of this judicial debate, or indeed that it
did more than barely scratch the surface in consideration of fee allocations in
actions brought by longshoremen. The most that can be gleaned from this
history is that Congress intended not to interfere with judicial developments in
this sphere.
30

As a result, I think that the Court informs congressional inaction with the
wrong meaning, and that it draws an analogy to the statutory allocation of
stevedore-initiated recoveries where none, in fact, exists. Had Congress
intended rote application of the allocation scheme in 33 U.S.C. 933(e) to
recovery in a longshoreman-initiated action, specification of this result would
have been a simple task, and one would have expected Congress to say so.
Instead, despite the obvious prevalence of such suits,2 Congress left the matter
to the judicial process. Although it is somewhat precarious to find significance
in a congressional omission, I view the absence of action in this case as a clear
signal that Congress regarded the allocation of a recovery in a suit by a
longshoreman as a more fluid and complicated matter than allocation in a suit
by a stevedore, and that it left the courts free to balance the equities instead of
commanding adherence to a strict "arithmetic ranking" of liens. See Mitchell v.
Scheepvaart Maatschappij Trans-Ocean, 579 F.2d 1274, 1279 (CA5 1978).

31

Adaptation of the statutory framework, of course, might be desirable if it

achieved an equitable result. But it does not. Indeed, the analogy to the division
of a recovery under 933(e) itself is flawed. When the stevedore brings the
lawsuit, its own recovery comes first after expenses and costs of litigation have
been paid; the longshoreman, as nonparticipating beneficiary, receives only a
portion of the remainder. In contrast, under the Court's ruling, the
longshoreman who brings suit must wait in line until the nonparticipating
stevedore's interests have been satisfied in full. Under the statute, then, the
party who takes the risk of loss receives priority of treatment. Under the Court's
ruling, he does not. The apparent symmetry of a strict analogy to the statutory
formula thus produces, for the longshoreman, an asymmetrical result.
Considerations of equity surely do not require that approach.

32

As I weigh the equities, the most persuasive reason heretofore for exonerating
the stevedore from bearing a proportionate share of attorney's fees has been the

stevedore's contingent liability for indemnity of the shipowner under Ryan

Stevedoring Co. v. Pan-Atlantic S. S. Corp., 350 U.S. 124, 76 S.Ct. 232, 100
L.Ed. 133 (1956). That liability, of course, was eliminated by the 1972
Amendments to the Act. See Edmonds v. Compagnie Generale
Transatlantique, 443 U.S. 256, 262, 99 S.Ct. 2753, 2757, 61 L.Ed.2d 521
(1979); Northeast Marine Terminal Co. v. Caputo, 432 U.S., at 261-262, 97
S.Ct., at 2356. Thus, it is now clear from the outset of each longshoreman's suit
that the attorney's efforts serve the interests of the stevedore as well as those of
the longshoreman. If the action is successful, the stevedore obtains recoupment
of the compensation benefits it has paid, without risk, without the jeopardy to
customer relations that might arise if the stevedore or its insurer brought the
suit, and without adjustment for the possibility that the stevedore itself is partly
responsible for the injury. The amount of the stevedore's recoupment ordinarily
depends directly on the lawyer's skill in proving both the shipowner's
negligence and damages. This direct pecuniary interest in the outcome of the
litigation justifies, in my view, an equitable allocation of the costs of bringing
suit in proportion to recovery from the common fund. See Sprague v. Ticonic
National Bank, 307 U.S. 161, 166-167, 59 S.Ct. 777, 779-780, 83 L.Ed. 1184
(1939). Without that allocation, the longshoreman must bear all the risk for
only a limited part of the benefit.
33

In addition to eliminating the only sound reason for refusing an allocation on

equitable grounds, the 1972 Amendments also show clearly that congressional
concern was primarily for the workman and not for the stevedore-employer or
for the shipowner. The chief purpose of the Amendments was to benefit the
longshoreman. Congress' desire to reduce excessive litigation and thus to
conserve stevedore resources, of which the Court makes so much, was
incidental and secondary to this purpose. When, for example, Congress
eliminated the litigation merry-go-round produced by the indemnity and
unseaworthiness actions created in Ryan Stevedoring Co. v. Pan-Atlantic S. S.
Corp., supra, and Seas Shipping Co. v. Sieracki, 328 U.S. 85, 66 S.Ct. 872, 90
L.Ed. 1099 (1946), see ante, at 82-83, it did so not out of naked solicitude for
shipowners and stevedores, but because this layering of recoveries failed to
produce "a real increase in actual benefits for injured workers." S.Rep.No.921125, p. 4 (1972), quoted, ante, at 84. Yet the Court now advances this
secondary purpose to justify a reduction of the longshoreman's recovery in the
third-party negligence action that Congress retained primarily for his benefit;
and it does so because proration of attorney's fees would result in a "real
increase" in the longshoreman's total compensation. I cannot avoid the
suspicion that congressional intent has been stood on its head.

34

The Court also makes much of the putative "windfall" a longshoreman would

receive if petitioner prevailed. Ante, at 87. The longshoreman would receive no

windfall. Any costs or fees he must pay reduce his net recovery below the
amount of his adjudicated injuries. This deficit would be alleviated, but never
exceeded, if the stevedore were charged with a proportionate share of the
attorney's fees. The longshoreman, of course, would be better off than if he had
to depend either on the statutory compensation or on the negligence suit alone.
But Congress long ago eliminated the necessity of electing a remedy, and an
increase in total recovery accomplished by resort to both methods of redress is
fully consistent with the statutory scheme. So long as the longshoreman's total
compensation remains less than his actual damages, there is no true "double
recovery."
35

To use the Court's own adjective, ante, at 85, it is "ironic" that from this
litigation petitioner will receive, by today's ruling, only $2,779.57 more than
the attorney's fees of $19,932.40. The Court thus acts to ensure that third-party
actions will remain, as they were before the 1972 Amendments, a litigation
playground for others instead of a method by which the injured longshoreman
realistically may hope to recover for losses that are not covered by the statutory
compensation scheme. I shall be interested to see whether the Court adheres to
its present logic when presented with a case where the third-party recovery is
so small that virtually nothing is left for the longshoreman. Where the recovery
against the shipowner is less than the stevedore's lien and the expenses of the
suit, see ante, at 86-87, n. 13, it is to be hoped that the injured longshoreman
will not be required to disgorge part of his compensation payments. Yet such
disgorgement would not be inconsistent with the gloss on congressional
priorities that the Court imposes today.

For convenience we shall use the term "stevedore" to refer to both the employer
and its insurer.

The District Court's distribution was as follows:

Recovery $60,000.00
less expenses __(202.80)
balance for distribution 59,797.20
less attorney's fee of one-third _(19,932.40)
balance 39,864.80

less lien of respondent (17,152.83)

net to petitioner 22,711.97
Under this distribution scheme, petitioner received a total of $39,864.80 from
the stevedore and shipowner, an amount equivalent to the full $60,000 recovery
minus expenses.
Petitioner sought to have the fund distributed in the following manner:
Recovery $60,000.00
less expenses (202.80)
balance for distribution 59,797.20
less attorney's fee of one-third (19,932.40)
balance 39,864.80
lien of respondent 17,152.83
less proportionate share of fees and
expenses (.3355866 X $17,152.83) (5,756.26)
11,396.57 (11,396.57)
net to petitioner 28,468.23
Under this distribution, petitioner would receive a total of $45,621.06,
$5,756.26 over and above the amount representing his $60,000 damages
recovery minus expenses.
3

The Ninth and Fourth Circuits have held that the stevedore should be charged
with a share of the longshoremen's legal expenses, Bachtel v. Mammoth Bulk
Carriers, Ltd., 605 F.2d 438 (CA9 1979); Swift v. Bolten, 517 F.2d 368 (CA4
1975). The First Circuit, like the Second, has disallowed apportionment, Cella
v. Partenreederei MS Ravenna, 529 F.2d 15 (1975), cert. denied, 425 U.S. 975,
96 S.Ct. 2175, 48 L.Ed.2d 799 (1976). The Fifth Circuit has adopted a third
approach calling for an individualized inquiry into whether apportionment is
fair in the particular case, Mitchell v. Scheepvaart Maatschappij Trans-Ocean,
579 F.2d 1274 (1978).

That section provides:

"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 (including a reasonable attorney's fee as determined by the deputy
commissioner or Board);
"(B) the cost of all benefits actually furnished by him to the employee under
section 907 of this title;
"(C) all amounts paid as compensation;
"(D) the present value of all amounts thereafter payable as compensation, . . .
and the present value of the cost of all benefits thereafter to be furnished under
section 907 of this title . . . ; 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."
5

See Hearings on Bills Relating to the Longshoremen's and Harbor Workers'

Compensation Act before a Special Subcommittee of the House Committee on
Education and Labor, 84th Cong., 2d Sess., 51-58 (1956) (discussing difference
between New York law, which allowed an employer to receive full
reimbursement of its workmen's compensation payment, and New Jersey law,
which required proportionate payment of expenses); see also id., at 38. Indeed,
the 1959 bill was largely modeled after the New York workmen's compensation
provisions, see S.Rep.No.428, 86th Cong., 1st Sess., 3 (1959), and under New
York law it was well established that the longshoreman would be required to
pay his own legal fees. See Kussack v. Ring Constr. Corp., 1 App.Div.2d 634,
153 N.Y.S.2d 646 (1956), aff'd, 4 N.Y.2d 1011, 177 N.Y.S.2d 522, 152 N.E.2d
540 (1958); Hobbs v. Dairymen's League Co-op. Assn., 258 App.Div. 836, 15
N.Y.S.2d 694 (1939), appeal dism'd, 282 N.Y. 710, 26 N.E.2d 823 (1940).

That rule was expressly approved on the floor of the Senate:

"Mr. BUTLER: . . . I understand that the bill merely amends section 33 of the
Longshoremen's and Harbor Workers' Act, so as to permit an employee to bring
a third-party liability suit without forfeiting his right to compensation under the
act. It is my further understanding that the courts have consistently held that the
present section 33 of the act gives the employer a lien on the employee's third
party recovery for the compensation and benefits paid by the employer.

"Is it the Senator's understanding, then, that the passage of this measure would
in no way affect the present construction of the act with respect to the
employer's lien on the employee's third-party recovery for compensation and
benefits paid by the employer?
"Mr. BARTLETT. The distinguished Senator from Maryland is correct.
"In further explanation on this point, I ask unanimous consent to have
printed at this point in the RECORD a brief statement from the Committee on
Labor and Public Welfare . . . :
" 'There is no necessity for a provision giving the employer a lien on the
employee's third-party recovery for the compensation and benefits paid by the
employer, inasmuch as the courts have construed the present section 33 as
providing such lien. In addition, as a result of judicial construction of the
existing section, the employee is entitled to deduct his expenses incurred in
third-party proceedings,' " 105 Cong.Rec. 12674 (1959) (emphasis added).
The express statement that the employee should deduct his expenses from the
recovery is, of course, a plain indication that those expenses would not be borne
by the stevedore. Cf. n. 13, infra.
The House version of the amendment would have provided: "[T]he carrier
liable for the payment of . . . compensation shall have a lien on the proceeds of
any recovery from [a] third person, whether by judgment, settlement, or
otherwise, after the deduction of the reasonable and necessary expenditures,
including attorney's fees, incurred in effecting such recovery, to the extent of
the total amount of compensation awarded under, or provided, or estimated, by
this Act . . . ." H.R.Rep.No.229, 86th Cong., 1st Sess., 6 (1959). The House
passed this version of the amendment, 105 Cong.Rec. 5561-5562 (1959), but
later concurred in the Senate version on the evidence assumption that the
Senate version also adopted existing judicial practice. See id., at 15343.
7

Before the Amendments, the maximum weekly compensation payment was

$70; after the Amendments, the maximum is 200% of the national average
weekly wage, to be determined annually by the Secretary of Labor. Before the
Amendments, the minimum weekly payment was $18; the Amendments
provide for a minimum in the amount of the lesser of the employee's full
average weekly wage or 50% of the national average weekly wage. The
Amendments increased or improved benefits in other ways not material here.
See 33 U.S.C. 906-910.

See Hearings on S. 2318 et al. before the Subcommittee on Labor of the Senate

Committee on Labor and Public Welfare, 92d Cong., 2d Sess., 33, 38-39, 244,
258, 263, 271, 290, 304, 416, 431, 621-623, 632, 642, 661, 725, 730 (1972);
Hearings on H.R. 247 et al. before the Select Subcommittee on Labor of the
House Committee on Education and Labor, 92d Cong., 2d Sess., 47-48, 60, 8586, 176 (1972).
9

Contrary to Mr. Justice BLACKMUN's suggestion, see post, at 92, that the
somewhat divergent rationales adopted by the lower courts demonstrate that
there was no settled rule prior to the 1972 Amendments, we have been unable
to find a single case, and none is cited in the dissenting opinion, in which a
court held that a stevedore would be required to pay a share of the
longshoreman's legal expenses. The uniform rule was to the contrary, and it is
that rule of which Congress was informed in 1959 and 1972 and which it
approved in 1959. See n. 6, supra.

10

See Hearings on S. 2318 et al., supra n. 8, at 160, 371, 720; Hearings on H.R.
247 et al., supra n. 8, at 119, 157-158, 295.

11

The dissenting opinion suggests that the "chief" purpose of the 1972
Amendments was to benefit longshoremen, and that the distribution we
approve would disserve this purpose in favor of the merely "incidental"
intention to conserve stevedore expenses. Post, at 94-95. The attempted
separation of the two legislative purposes is unpersuasive. Congress found it
necessary to eliminate stevedore liability in connection with third-party actions
precisely in order to assure that stevedores would have sufficient funds to pay
vastly increased compensation benefits to longshoremen. In these
circumstances it is for Congress, not this Court, to determine whether a
requirement of proportional payment of legal expenses would ultimately benefit
injured longshoremen, or instead longshoremen's lawyers, who were found to
have been the primary beneficiaries of third-party actions in the past. See
supra, at 82-84.

12

Petitioner suggests that a requirement of proportional payment would ultimately

aid stevedores by encouraging third-party suits and thus making it more likely
that stevedores will receive reimbursement for the compensation payment. The
Act, however, contains special incentives designed to encourage the stevedore
to bring suit on its own if the longshoreman elects not to do so. See n. 4, supra.

13

Respondent does not challenge the approach adopted in Fontana v.

Pennsylvania R. Co., 106 F.Supp. 461, 463-464 (SDNY 1952), aff'd on opinion
below sub nom. Fontana v. Grace Line, Inc., 205 F.2d 151 (CA2), cert. denied,
346 U.S. 886, 74 S.Ct. 137, 98 L.Ed. 390 (1953), under which the expenses of
suit, including attorney's fees, represent the first charge on the recovery against

the third party. See S.Rep.No.428, 86th Cong., 1st Sess., 2 (1959); n. 6, supra.
Under this view, if the recovery against the shipowner is less than the sum of
the lien and the expenses of suit, the longshoreman will receive the full amount
of his expenses even if the remainder is insufficient to reimburse the stevedore
for its lien. See Valentino v. Rickners Rhederei, G. M. B. H., Etha, 552 F.2d
466 (CA2 1977). We do not today address the Valentino situation, and contrary
to the implication of the dissent, nothing in our decision suggests that the
stevedore's lien has priority over the longshoreman's expenses.
14

See n. 2, supra, illustrating that petitioner's distribution scheme would result in

a recovery of $5,756.26 in excess of the amount he would receive if there were
a simple negligence action and no compensation scheme.
The Act explicitly allows attorney's fees in cases in which an employer declines
to pay compensation, 33 U.S.C. 928, and in cases in which the employer
brings suit pursuant to an assignment from the longshoreman. These provisions
reinforce the conclusion that if Congress had intended to allow proportionate
sharing of legal expenses, it would have done so expressly.
Petitioner suggests that the distribution we approve will result in a $5,756.26
windfall to the respondent, since it is in effect permitted to recover its lien
without contributing to the costs of the recovery. But as explained in the text,
our review of the Act and its legislative history persuades us that Congress
intended the stevedore to recover the full amount of its lien, regardless of who
brings the action.

15

Nothing we say today is intended to affect the established power of a court of

equity to charge beneficiaries with a proportionate share of the costs of creating
a common fund through litigation. See Dawson, Lawyers and Involuntary
Clients: Attorney Fees From Funds, 87 Harv.L.Rev. 1597 (1974). Nor are we
presented the question whether that power would be properly exercised in the
setting of a workers' compensation scheme if the particular Act and its
legislative history were ambiguous on the subject. For disparate results in the
state courts, compare Burt v. Hartford Acc. & Ind. Co., 252 Ark. 1236, 483
S.W.2d 218 (1972); Liberty Mut. Ins. Co. v. Western Cas. & Sur. Co., 111 Ariz.
259, 527 P.2d 1091 (1974); Commercial Union Ins. Co. v. Scott, 116 Ga.App.
633, 158 S.E.2d 295 (1967); Tucker v. Nason, 249 Iowa 496, 87 N.W.2d 547
(1958), with Quinn v. State, 15 Cal.3d 162, 124 Cal.Rptr. 1, 539 P.2d 761
(1975); Security Ins. Co. of Hartford v. Norris, 439 S.W.2d 68 (Ky.1969);
Broussard, Broussard & Moresi, Ltd. v. State Auto & Cas. Underwriters Co.,
287 So.2d 544 (La.App.1973), cert. denied, 290 So.2d 908 (La.1974); Carter v.
Wooley, 521 P.2d 793 (Okl.1974). See generally 2A A. Larson, Workmen's
Compensation 74.32 (1976 and 1979 Supp.).

A number of States have required proportional sharing of legal expenses by

statute. See, e. g., Idaho Code 72-223 (1973); Ill.Rev.Stat., ch. 48, 138.5
(1977); Mich.Comp.Laws Ann. 418.827 (Supp.1978); N.Y.Work.Comp.Law
29 (McKinney Supp.1979); Pa.Stat.Ann., Tit. 77, 671 (Purdon Supp.1979);
Va.Code 65.1-43 (1973); Wash.Rev.Code Ann. 51.24.010 (Supp.1978). See
generally Larson, supra ; Atleson, Workmen's Compensation: Third Party
Actions and the Apportionment of Attorney's Fees, 19 Buffalo L.Rev. 515
(1970). That route, of course, remains available to Congress.
1

See J. Boyd, The Law of Compensation for Injuries to Workmen 10 (1913); H.

Somers & A. Somers, Workmen's Compensation 26 (1954).

See Valentino v. Rickners Rhederei, G. M. B. H., Etha, 552 F.2d 466, 469
(CA2 1977), where the court took notice that "stevedores do not, as a practical
matter, pursue these lawsuits presumably for fear of antagonizing their
customers."