*1 HARTZELL, McCLANAHAN v. & MORAUER INC., et al. Argued
No. 70-5097. October 1971 Decided November Smith, Jr., John Louis argued petitioner. the cause for Mitchell, With him on George the brief H. was Jr. James Gregg C. argued respondents. the cause for With him on the brief James F. Bromley.
Per Curiam.
Under (g) § the Longshoremen’s and Harbor Act, is not obli- gated pay an employee who, without written approval, settles a claim against person for an amount than less to which the employee is entitled under the Act. 44 Stat. 1441, as amended, 33 U. S. C. 933 (g). § Certiorari was granted in this case, 402 S. (1971), U. assumption it the question whether the consent judgment entered Judge District awarding petitioner damages against a person evidenced a “compromise” subject to 33 (g), or an award of damages “determined ... independent evaluation of a trial judge,” subject § 33 under U. S. 467 (1968). Fuller examination of the case on oral argument discloses that the record does not adequately present question. The writ of certiorari is therefore dismissed as improvi- dently granted.
It is so ordered. dissenting. Douglas, Mr. Justice of this *2 circumstances the agree to I unable am judgment a consent whether question the pose fail to case a constitutes a federal to pursuant the of § meaning the within “compromise” Compensation Harbor Longshoremen’s reads: amended, which 1441, as Act, Stat. made person is third with such compromise
“If of an compensation ... entitled person the to which the than amount less . . . the entitled . . . would person in determined as for liable shall be compro- only if such of this section (f) subdivision approval.” his written made with mise is respondent employed by was Petitioner McClanahan 24, 1964, August On struck his head. a steel bar when the Compensation found that Employees’ Bureau of the disability and ordered temporary total injury had caused amount McClanahan the compensate respondent the the pending, were proceedings these $3,780. While District Court in the a civil action instituted petitioner employees alleging party, against the action came injury. his Before civil contributed to dur- pretrial conference, a the conducted first and then spoke together he with counsel ing which judge sug- the individually. During these conversations the file that he believed that he had reviewed gested $5,000 (although worth about plaintiff’s case was $9,000). dis- had sued for Other sums were McClanahan accepted parties suggestion. cussed but his On a consent entered for March and he petitioner’s $3,000 of which wife received petitioner’s $800 received Of share was retained lawyer petitioner’s remaining his share was transferred to his carrier insurance disability previ- as for partial payments reimbursement ously made under the 1964 order. Board’s July on
Thereafter, 26, 1967, petitioner filed with compen- Bureau claim for of its modification sation award, injuries that his more alleging were serious previously than The Deputy realized. Commissioner part agreed with at least and added assertions $2,328.70 to prior award.
On appeal, however, persuaded the lower courts were that the employer was immune from further be- petitioner cause “compromised” against his claim party. Longshoremen’s and Harbor Workers’ provides Act an employer *3 that only is liable for the a excess of injury worker’s over a any amount may worker recover a party. Thus, em- ployer is benefited injured when an employee obtains a larger judgment from party. protect employ- To ers from compromises ill-advised by employees 33 (g) generally relieves an employer of further if, without his approval, injured written his servant settles with possible another defendant. in Thus, the instant case, because respondent had not subscribed to the consent the lower judgment, courts held that it had been spared payments further to McClanahan.
We granted certiorari
to consider whether the lower
courts’ holdings conflict with our decision in Banks v.
Banks involved a similar chain of except events Banks, unlike McClanahan, went to trial and jury a awarded him $30,000, which thought was ex- cessive. The court accordingly said it would order a new trial unless the parties agreed to a remittitur which the total reduce would consent. obtaining his without
accepted “com- a not constituted acquiescence held that “inde- by induced had been it because promise” danger judge” trial of a evaluation pendent present. not been little accepting too Banks’ 467. S., U. at Mc faced compromise of unwise no risk
Similarly, last are conferences Pretrial employer. Clanahan’s process. litigation in trial stage final before the stop pre the conference discovery, by pleadings Preceded illusory and out scenario, weeds trial expected views conflicting the substance exposes issues, frivolous the evidence review pretrial judges claims. Because in they are issues, clarified in of the light widely ap one Thus, assess the outcome. position to has been plauded function cases. personal-injury in of settlements encouragement per degree as to the dispute continues While some settlement, obtaining exercise suasion a should pretrial conference complained critics have or unfair. See have been unreasonable settlements Pre (1965); Wright, James, F. Civil Procedure 228 Bren (1960); Conference, 28 F. R. D. 145-147 Case, the Problem of the Protracted nan, Introduction to Objectives of (1958); Clark, F. D. 378-379 R. *4 (1956). L. 167 Procedure, Pre-Trial Ohio St. J. the evi surveyed trial below Thus, judge McClanahan’s to be at trial and after dis dence which was expected that the suggested cussion with both adversaries case was about That value of McClanahan’s experienced one in understand assessment made likely Absent cir juries how are to view a claim. ing here, presume cumstances not shown we should that such do not em prejudice evaluations are reasonable and ployers’ interests. jury full had seen a
In Banks —unlike here —the in both situations there worth of evidence. But trial’s expected plain- values of were critical assessments of the employee might In prospects. tiffs’ future different, evidence at a sec- stronger well have adduced been va- ond the remittitur order have or, may appeal. on In on a remittitur settling suggested cated may extrapolated the court have hind- but it had sight more, perhaps less, no even information concerning Banks’ success than had McClana- eventual im- judge concerning prospects. han’s The portant similarity between these cases is inde- that an pendent and informed yet forecast was made of events to unfold.
Moreover, we have so § construed as con- fine this employer defense to those situations where an can prejudice demonstrate actual from unilateral settle- employee. Hoage, ments In Chapman v. 296 U. S. 526 (1936), our opinion first discussing (g), prejudice claimed employee because his unilaterally discontinued a lawsuit against third party. The no made prospects. assessment The worker had simply failed prosecute his case. This Court ultimately determined that the lawsuit had been worthless and that absent a showing actual prejudice the employer was not entitled to a windfall “compromise” defense as a result of its dismissal. jurisdictions trend in other has been to avoid harshness resulting from applications strict of statutes requiring employers consent of in third-party settlements. Under the analogous provision of the New York em- ployees’ compensation after statute, which the federal Act was modeled,1 circumstances similar to the instant facts have been held nonprejudicial to employers. Banks Inc., 390 U. S.
21 Co., Div. 2d Sadowski v. W. Danforth App. J. the in effectively differed (1956),
N. Y. S. 2d in the only in the was held that stant case rather than in chambers: courtroom con attorneys the trial of the action, “Prior three as to settlement. cerned had two or discussions day On the the was reached for claimant’s case attorney told him he case would believed the him approve settled and later a settlement asked In of figure presence which he did. company representa and insurance attorney appears tive, claimant so far as signed paper, but no effort was made to subpoena paper hearing reached, herein. When the both case attorneys appeared and jury. waived a Claimant testified as to all the facts relevant and and damages exhibits were received. Defendant’s did attorney proof. not put cross-examine and in no The trial court then found negligent defendant plaintiff from negligence and directed judg free for $10,250. ment say, as matter of cannot upon law, the record before us, this result did represent the trial court’s considered and evaluation, based on evidence, ap which pears to adequate have been to enable him to reach a fair In determination. a case where facts were somewhat more to the compensation favorable insurance carrier than held here, we the judg represented ment the 'trial court’s evaluation damages sustained and was not of any result compromise.’ settlement or (Matter Klump Erie County Highway Department, App. Div. 1017, motion for leave to appeal denied N. Y. 761.)” 2 Klump, In party the third plaintiff-employee waived a jury, briefly, the latter testified liability, the former conceded *6 and Harbor purpose Longshoremen’s
Workers’ a minimum Compensation guarantee Act of compensation employees. level The record to covered clearly yet reveals that McClanahan has not received statutory minimum. depart holding should not from our in Banks. Where plaintiff rely judgment cannot experience of a judge, federal district he has no choice but any disposition to refuse of the case short of a full appeals. days and numerous In these crowded court dockets, adopted the effect of the rule of Appeals Court will be to discourage judg- consent ments cases of this kind and all litigation force through the trial process, further already overwhelming overburdened judges. Finally, there is something most inequitable in holding that plaintiff personal-injury who relies on the faith good and judgment of a federal should thereafter penalized deprived for his injury because of his I reliance. would reverse the decision below to enforce the con- gressional mandate contained in the Longshoremen’s and Harbor Act as we did in our decision in Banks. agreed when damages both ranged between the trial entered a for Before compen
sation argued board the later unsuccessfully judg that this ment had a compromise. constituted Klump County High v. Erie way Department, App. 1017, Div. 91 N. Y. S. 2d leave appeal denied, 300 N. Y. 90 N. E. 2d opinion 69. The state workman’s reported board is at State of New York Compensation Board, Workman’s Special Bulletin p. No.