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Kreschollek v. Southern Stevedoring Co.

March 18, 1996

CARL KRESCHOLLEK, APPELLANT

v.

SOUTHERN STEVEDORING COMPANY; LUMBERMEN'S MUTUAL CASUALTY CO.; ROBERT REICH, SECRETARY OF LABOR, AND R. DAVID LOTZ, REGIONAL DIRECTOR, REGION III, OFFICE OF WORKERS' COMPENSATION PROGRAMS, UNITED STATES DEPARTMENT OF LABOR



On Appeal from the United States District Court for the District of New Jersey (D.C. No. 93-cv-03903)

Before: SLOVITER, Chief Judge, STAPLETON and SAROKIN, Circuit Judges

SLOVITER, Chief Judge.

Argued December 4, 1995

Filed March 18, 1996)

OPINION OF THE COURT

Carl Kreschollek appeals from the district court's order dismissing for lack of subject matter jurisdiction his complaint interposing a facial challenge to the constitutionality of section 14 of the Longshore and Harbor Workers' Compensation Act (Longshore Act or Act). The district court so ruled after concluding that Kreschollek's claim could be raised in his pending administrative proceeding and thereafter on review in this court. Although we have previously held that the administrative review scheme provided in the Longshore Act supplants district court jurisdiction over claims for benefits, Kreschollek's claim presents a new twist on the question because his challenge to the Longshore Act is a constitutional one and he claims that the review process established by the Act is insufficient to address his injuries.

I.

Kreschollek suffered a work-related injury on or about March 20, 1990 while employed as a longshoreman by Southern Stevedoring Co. Southern did not controvert its liability for benefits, and in late June of that same year it undertook voluntary compensation for Kreschollek's disability pursuant to 33 U.S.C. Section(s) 914(b). It continued such payments until October 29, 1992. Thereafter, it filed a notice of controversion with the District Director of the Office of Workers' Compensation Programs, asserting that Kreschollek was now able to return to work. Kreschollek contested the termination of compensation and, after an informal conference produced no resolution, the District Director, upon request by Kreschollek, transferred the case with his recommendations to the Department of Labor for a formal hearing before an Administrative Law Judge (ALJ). See 33 U.S.C. Section(s) 919(c), (d) (1994); 20 C.F.R. 702.301 (1995). An ALJ held a hearing on the case on December 15, 1993.

While the matter was pending before the ALJ, Kreschollek filed this action in the United States District Court for the District of New Jersey invoking jurisdiction under 28 U.S.C. Section(s) 1331 and alleging that the review procedure under the Act is unconstitutional because it does not require a predeprivation hearing before employers who voluntarily compensated injured employees may terminate those benefits. Kreschollek sought restoration of his benefits, a declaration from the district court that section 14 of the Act, 33 U.S.C. Section(s) 914, is unconstitutional, an injunction against termination of his benefits without a prior evidentiary hearing, and attorney's fees and costs. Named as defendants were Southern Stevedoring Co.; Robert Reich, Secretary of Labor; R. David Lotz, Regional Director, Region III, Office of Workers' Compensation Programs; and Lumberman Mutual Casualty Co. All defendants moved to dismiss.

The ALJ's final decision on Kreschollek's administrative claim for benefits and the district court's ruling on the motion to dismiss were handed down within days of each other in March 1995. The ALJ denied Kreschollek's request for additional benefits. That ruling, which Kreschollek appealed to the Benefits Review Board, is not before us at this time.

The district court, in the decision that is on appeal to us, granted the motion to dismiss for lack of subject matter jurisdiction, holding that in light of the detailed administrative and judicial review procedure provided by the Act, Kreschollek's constitutional challenge must be raised in the court of appeals after exhaustion of administrative remedies, rather than in the district court through 28 U.S.C. Section(s) 1331.

II.

A.

The sole issue on appeal is whether the Longshore and Harbor Workers' Compensation Act, 33 U.S.C. Section(s) 901 et seq., precludes district court review of Kreschollek's constitutional challenge to the Act. Although Kreschollek concedes that his claim for benefits must be adjudicated through the Act's administrative review procedure, he argues that the district court nonetheless has ...


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