Bloomer v. Liberty Mutual Insurance
Headline: Court rules stevedore need not pay part of injured longshoreman's lawyer costs, allowing stevedores to recover full compensation lien and leaving longshoremen to bear legal fees.
Holding: The Court held that when a longshoreman sues a shipowner, the stevedore’s lien is not reduced by the longshoreman’s legal expenses, so the stevedore may recover the full compensation payment.
- Injured longshoremen generally must pay their own legal fees when suing shipowners.
- Stevedores can recover full compensation payments without contributing attorney fees.
- Congress can change this allocation by passing a statute requiring proportional sharing.
Summary
Background
An injured longshoreman sued the owner of the ship where he was hurt after receiving $17,152.83 in compensation from his employer’s insurer. He settled the shipowner claim for $60,000 and asked the employer’s insurer (the stevedore) to reduce its lien by a proportionate share of his lawyer’s fees. The District Court and the Second Circuit denied that request, and the Supreme Court agreed to resolve a split among the circuits.
Reasoning
The Court examined the Longshoremen’s and Harbor Workers’ Compensation Act and its history, including amendments in 1959 and 1972. The statute expressly lets a stevedore recover compensation paid plus its costs when the stevedore brings suit, and Congress left unresolved how to divide recoveries when the longshoreman brings the suit. The majority concluded Congress did not intend to force stevedores to share the employee’s legal expenses and that the Act’s structure and legislative history support allowing the stevedore to recover its full lien.
Real world impact
As a result, when a longshoreman sues a shipowner, the employer or its insurer generally keeps the full compensation repayment and is not required to pay a proportional share of the longshoreman’s attorney fees. The Court noted special situations (for example, very small recoveries) were not decided and that Congress could change the rule by statute.
Dissents or concurrances
Justice Blackmun dissented, arguing the 1972 Amendments removed the stevedore’s prior indemnity burdens and that equity and the Act’s protective purpose support allocating attorney fees in proportion to recovery.
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