Workers’ Compensation · Primary-source case analysis

Bloomer: A Longshore Compensation Lien Was Not Reduced by a Share of Litigation Costs

By Aneeta Mishra and Timothy Chan

Published September 8, 2026 · Updated October 18, 2026

Decision: Bloomer v. Liberty Mutual Ins. Co., 445 U.S. 74 (1980).

Bloomer v. Liberty Mutual Insurance Co. examined allocation of a Longshore Act compensation lien after an injured worker settled a negligence action against the vessel owner. The useful distinction is between deducting the worker’s litigation expenses from a recovery and making an additional proportionate reduction to the carrier’s reimbursement. The Court rejected the latter; it did not put the carrier’s lien ahead of every expense or decide every insufficient-recovery problem.

The worker received compensation and sued the vessel owner

Bloomer was injured aboard the S.S. Pacific Breeze and received compensation from his employer’s carrier. He later sued the vessel owner for allegedly creating a slippery and dangerous deck.

The carrier asserted a lien against the settlement

Bloomer received $17,152.83 in compensation. During settlement negotiations, he asked the carrier to reduce its lien by a proportionate share of the costs of obtaining the recovery. The carrier refused and intervened; he then settled with the vessel owner for $60,000. Bloomer, 445 U.S. at 75–76.

The common-fund theory did not reduce the lien

The worker argued that equity should allocate litigation expenses because the carrier benefited from the third-party recovery. The Court instead relied on the Act’s language, structure, and history.

The carrier received full reimbursement

The Court affirmed that the lien for compensation paid could not be reduced by a proportional share of attorney fees and litigation expenses under the theory presented.

The actual distribution makes the distinction clearer. From the $60,000 settlement, the district court first deducted $202.80 in expenses and then a $19,932.40 attorney fee. That left $39,864.80 before paying the $17,152.83 lien, leaving $22,711.97 for Bloomer from the settlement. His proposed additional reduction of the lien would instead have left $28,468.23. The Supreme Court rejected that additional $5,756.26 shift. These were the case’s actual figures, not a recommended fee or a formula for another claim. Bloomer, 445 U.S. at 76 n.2.

Footnote 13 supplies an important limit. The carrier did not challenge the approach treating expenses, including attorney fees, as the first charge on the recovery. The Court expressly did not decide the cited situation in which the recovery was too small to pay both expenses and the lien. It also said its decision did not suggest that the lien had priority over the worker’s expenses. A headline about “full reimbursement” should not be read as resolving that reserved question. Bloomer, 445 U.S. at 86–87 n.13.

Justice Marshall wrote for eight Justices; Justice Blackmun dissented. His disagreement concerned the statute’s history and the fairness of refusing proportionate fee sharing. His view did not change the judgment affirming the Second Circuit. The majority also expressly left other compensation statutes and the broader equitable common-fund power outside its holding. Bloomer, 445 U.S. at 74, 88 n.15, 88–96.

Key takeaways

• Separate the gross settlement, litigation expenses, attorney fee, claimed compensation lien and amount left to the worker; a settlement headline does not state the worker’s net recovery.
• Give the carrier timely notice of the action and settlement discussions.
• Apply the current statutory allocation rules before assuming a common-fund reduction.
• If the recovery cannot pay both expenses and the lien, identify that problem expressly; this decision reserved it rather than supplying a universal priority answer.