TOPIC 27

[ED. NOTE:  For information on expert witness fees, see Topics 24.1  Witnesses—Generally; and 19.3.6.2 Procedure—Adjudicatory Powers—Discovery.]

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Topic  27.1     Powers of Administrative Law Judges--Procedural Powers Generally

Floyd v. Penn Terminals, Inc., 37 BRBS 141 (2003).

            At issue here is the application of Section 8(j) forfeiture. The claimant has questioned the ALJ's authority to initiate consideration of forfeiture. The Board has previously held that an ALJ has the authority to adjudicate whether benefits should be suspended pursuant to Section 8(j). In the instant case the Board found that Section 8(j) itself provides no direction on the procedures for adjudicating forfeiture proceedings. The Board also noted that the legislative history is equally lacking any relevant information that might indicate whether Congress intended to make the district director the exclusive initial adjudicator of forfeitures.

            After examining the regulations, the Board noted that Section 702.286(b) provides that an employer may initiate forfeiture proceedings by filing a charge with the district director, who shall then convene an informal conference and issue a decision on the merits. Nevertheless, if either party disagrees with the district director's decision, the regulation authorizes an ALJ to consider "any issue" pertaining to the forfeiture. The Board explained that for this reason, despite the statutory reference to the deputy commissioner, the Board has previously held that an ALJ has the authority to adjudicate a forfeiture charge.

            In holding that forfeiture proceedings may, depending upon the specific facts of a case, be initiated before the ALJ, the Board used the following logic:

Section 702.286(b) makes the subpart C rules for [ALJ] hearings (20 C.F.R 702.331-702.351) applicable to forfeiture disputes. Section 702.336, in turn, authorizes an [ALJ] to consider "any" new issue at "any" time prior to the issuance of a compensation order. Thus, as the Director suggests, Sections 702.286 and 702.336 maybe construed harmoniously because section 702.286 does not qualify the authority conferred by Section 702.336. Consequently, the formal hearing procedures permit a party to raise the forfeiture issue for the first time at the hearing.

            Further, the Board rejected the claimant's contention that his right to procedural due process would be abridged unless the district director initially considers all forfeiture charges and noted that ALJ hearings include protective procedural safeguards.

            The Board declined to review the ALJ's certification of the facts of this case to the federal district court, pursuant to Section 27(b) regarding alleged misstatements on an LS-200 form and also regarding a pre-existing back condition. The Board cited A-Z Int'l v. Phillips [Phillips I], 179 F.3d 1187, 33 BRBS 59(CRT) (9th Cir. 1999).

Topic 27.1      Powers of ALJs–Procedural Powers Generally

Macktal v. Chao, Secretary of Labor, 286 F.3d 822 (5th Cir. 2002).

[ED. NOTE: This whistle blower case is included for informational purposes only.]

            The de novo issue here for the court was whether the (Administrative Review Board) ARB has inherent authority to reconsider its decisions when the Energy Reorganization Act does not mention reconsideration by the ARB of its orders. The court noted that while it has never expressly held so, it has generally accepted that in the absence of a specific statutory limitation, an administrative agency has the inherent authority to reconsider its decisions. It went on to note that the reasonableness of an agency's reconsideration implicates two opposing policies: "the desirability of finality on one hand and the public's interest in reaching what, ultimately, appears to be the right result on the other." After weighing these policies, the court found that in this instance, the ARB had the inherent authority to reconsider its decision.

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Topic  27.1.1  Powers of the ALJ–ALJ Can Exclude Evidence Offered in Violation of Order

Dodd v. Crown Central Petroleum Corp., 36 BRBS 85 (2002).

            This remand involved both a traumatic as well as psychological injury. Although finding the claimant to be entitled to total disability benefits, the ALJ ordered the benefits suspended pursuant to Section 7(d)(4), on the ground that the claimant unreasonably refused to submit to medical treatment, i.e., an examination which the ALJ ordered and the employer scheduled. The Board noted that Section 7(d)(4) requires a dual inquiry. Initially, the burden of proof is on the employer to establish that the claimant's refusal to undergo a medical examination is unreasonable; if carried, the burden shifts to the claimant to establish that circumstances justified the refusal. For purposes of this test, reasonableness of refusal has been defined by the Board as an objective inquiry, while justification has been defined as a subjective inquiry focusing narrowly on the individual claimant.

            Here the Board supported the ALJ's finding that the claimant's refusal to undergo an evaluation was unreasonable and unjustified, citing the pro se claimant's erroneous belief that he has the right to determine the alleged independence and choice of any physician the employer chooses to conduct its examination or can refuse to undergo the examination because the employer did not present him with a list of doctors in a timely manner, and the claimant's abuse of the ALJ by yelling and insulting the integrity of other parties. (The Board described the telephone conference the ALJ had with the parties as "contentious.") The Board held that the ALJ did not abuse his discretion by finding that the claimant's refusal to undergo the employer's scheduled examination was unreasonable and unjustified given the circumstances of this case. However, the Board noted that compensation cannot be suspended retroactively and thus the ALJ was ordered to make a finding as to when the claimant refused to undergo the examination.

            The Board further upheld the ALJ's denial of the claimant's request for reimbursement for expenses related to his treatment for pain management. The ALJ rejected the claimant's evidence in support of his request for reimbursement for pain management treatment pursuant to 29 C.F.R. § 18.6(d). That section provides that where a party fails to comply with an order of the ALJ, the ALJ, "for the purpose of permitting resolution of the relevant issues may take such action thereto as is just," including,

(iii) Rule that the non-complying party may not introduce into evidence...documents or other evidence...in support of... any claim....

(v) Rule...that a decision of the proceeding be rendered against the non-complying party.

            In a footnote, the Board noted that medical benefits cannot be denied under Section 7(d)(4) for any other reason than to undergo an examination. However, the Board went on to note, "The Act also provides for imposition of sanctions for failure to comply with an order. Under Section 27(b), the [ALJ] may certify the facts to a district court if a person resists any lawful order. 33 U.S.C. § 927(b). As these provisions are not inconsistent with the regulation at 29 C.F.R. §18.6(d)(2), the [ALJ] did not err in applying it in this case."

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Topic 27.2      Powers of ALJs—Discovery

[ED. NOTE:  For information on expert witness fees, see Topics 24.1  Witnesses—Generally; and 19.3.6.2 Procedure—Adjudicatory Powers—Discovery.]

Topic  27.2     Powers of ALJs--Discovery

P & O Ports Louisiana, Inc. v. Newton, (Dismissal of Petition for Review)(No. 04-60403)(5th Cir. July 30, 2004).

            The Fifth Circuit dismissed the employer's motion for lack of jurisdiction. Previously, while the matter was before OWCP the claimant had filed a Motion to Compel Discovery, seeking enforcement of an OALJ subpoena pursuant to Maine v. Bray-Hamilton Stevedore Co., 18 BRBS 129 (1986). The claimant had sought to discover information about potential employers identified by P & O's vocational expert regarding suitable alternate employment. P & O filed a Motion to Quash Subpoena Ducem Tucem and a Motion for Protective Order. The ALJ denied P & O's motions, finding that its vocational evidence is discoverable, relevant and not privileged. P & O appealed to the Board and the claimant moved to dismiss the employer's appeal. The Board recognized that the employer was appealing a non-final order of an ALJ and noted that it "generally declines to review interlocutory discovery orders, as they fail to meet the third prong of the collateral order doctrine, that is, the discovery order is reviewable when a final decision is issued." The Board further found that the case did not involve due process considerations, that the employer did not contend the documents were privileged, and that the employer would not suffer undue hardship by complying with the ALJ's subpoena since the evidence was already in existence. Thus the Board dismissed the employer's appeal. The employer then petitioned the Fifth Circuit.

Topic  27.2     Powers of ALJs--Discovery

P&O Ports Louisiana, Inc. v. Newton, (Fifth Circuit No. 04-60403)(Petition for Review).

            Recently P & O Ports filed a Petition for Review with the Fifth Circuit, asking that the court review the Board's interlocutory Order in this matter. See Newton v. P & O Ports Louisiana, Inc., 38 BRBS 23 (2004), reported in the March/April Digest. In response to the Petition for Review, the Director has filed a Motion in Opposition urging that the issues are not final. Interestingly, in a foot note in the motion, the Director questions the scope of Maine v. Brady-Hamilton Stevedore Co., 18 BRBS 129 (1986)(en banc) which limits the powers of district directors to issue subpoenas. In Maine, the Board held that only ALJs have authority to issue subpoenas, even in cases pending before the Director.

Topic  27.2     Powers of Administrative Law Judges--Discovery

[ED. NOTE: The following is an Order to Compel Vocational Information Discovery issued by an ALJ in a matter still pending before OWCP. Pursuant to Maine v. Brady-Hamilton, 18 BRBS 129 (1986)(en banc), since the 1972 amendments, only OALJ has authority to issue subpoenas and process other discovery matters even though the claim is pending before the Director.)]

Newton v. P & O Ports, Inc., (OWCP No. 07-163948) (Oct. 7, 2003).

            Here the claimant filed a Motion to Compel Discovery with OALJ seeking enforcement of a subpoena issued by OALJ for the names and addresses of the companies identified as suitable alternative employment by the employer's vocational expert. The employer resisted the subpoena on the grounds that, based on case law, an employer need not produce to a claimant the identity of suitable alternative jobs located by the employer. Maintaining that position the employer filed a Motion to Quash Subpoena Duces Tecum and a Motion for Protective Order.

            In addressing this matter, the ALJ first noted that pursuant to Maine, it is manifest that OALJ possesses the authority in LHWCA cases not only to issue subpoenas, but also to decide matters arising from the subpoenas it has issued. Second, the ALJ found that the Employer "conflates the substantive standards for proving suitable alternative employment with the standards for discovery.  He explained that the former involves a determination on the merits, while the latter is procedural in nature. The ALJ noted that the substantive standards for suitable alternative employment, as noted in New Orleans (Gulfwide) Stevedores v. Turner [Turner], 661 F.2d 1031, 14 BRBS 156 (5th Cir. 1981), do not govern the discovery dispute before OALJ.  The former involves a determination on the merits, while the latter is procedural in nature."   See also, P & M Crane Co. v. Hayes, 930 F.2d 424, 430-31, 24 BRBS 116, 120-21 (CRT) (5th Cir. 1991). Similarly, an employer can prevail on the merits with respect to suitable alternative employment without producing to the claimant the jobs its vocational expert has identified. See e.g. P & M Crane Co., 930 F.2d at 429 n. 9, 24 BRBS at 120 n. 9 (CRT); Palombo v. Director, OWCP, 937 F.2d 70, 74, 25 BRBS 1, 7 (CRT) (2d Cir. 1991).

            However, the ALJ went on to explain that the substantive correctness of the case law cited by P & O, namely Turner and its progeny, are not at issue in a discovery matter. Under discovery rules, parties may obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the proceeding or which appears reasonably calculated to lead to the discovery of admissible evidence. 18 C.F.R. § 18.14.

            The ALJ found that to grant the employer's motions would be to convert the substantive suitable alternative employment standards of Turner and its progeny into the standard for discovery. As the two standards are discrete, the ALJ refused to grant the motion. He reasoned that there is a distinction between the necessity of procuring certain evidence in the first place and the necessity of producing the evidence one has already procured. Turner and its progeny pertain to the former; the rules of discovery pertain to the latter.

            The ALJ specifically noted, "Evidence that is not required to prevail on the merits may nonetheless be evidence that is admissible. Information that need not be divulged voluntarily to prevail on the merits may nonetheless be information that reasonably may lead to the discovery of admissible evidence. Handcuffing discovery with substantive standards would disqualify from discovery all information that is helpful yet substantively unnecessary."

            Next, the ALJ addressed the employer's reliance on policy concerns to support its position and noted that such reliance is misplaced. Citing language from Turner, P & M Crane, and Palombo, the employer had asserted that employers are not meant under the LHWCA to be employment agencies for claimants and that requiring employers to identify specific employment openings would provide a disincentive for claimants to independently seek alternate employment. The ALJ reasoned, "Those policy concerns are important in the reasoning of Turner and its progeny. However, those policy concerns do not warrant heavy consideration here because the dispute before the Court is not about the employer's hardship in satisfying its burden for suitable alternate employment nor the quality of the claimant's job search. Rather, this dispute is about the claimant's ability to test the quality of the employer's vocational evidence."

            The ALJ next determined that the information at issue was not privileged and that good cause existed to compel its production. The ALJ found that vocational information in dispute is still relevant for discovery purposes post-Turner. He explained that while the case law relied upon by the employer indicated that a showing of specific openings was not necessary to meet the employers' burden regarding suitable alternative employment, those cases did not indicate that specific job openings were irrelevant altogether.

            The judge found that the information is relevant based on the claimant's right to challenge the employer's vocational evidence. The employer argued that the claimant's attorney was already familiar with its vocational expert through first-hand experience and therefore had no reason to question the expert's competency or credibility. The employer further argued that the claimant's attorney did not need the identity of the suitable alternate employers to challenge the expert's qualifications or methodology.

            However, the ALJ found these arguments flawed. First, the claimant's right to challenge vocational evidence is not limited to the expert's credentials and methods. The claimant has a right to challenge the substance of the expert's findings. The findings in this case were based in part upon information from actual, specific employers. The ALJ explained, when a vocational report is formulated based on information from actual employers, the claimant would be at a disadvantage to challenge the accuracy of the report if the claimant were deprived of the identities of those employers. The judge concluded that for each of the positions identified by the expert, the claimant should have the opportunity to verify from the source of the information that the job description, including the physical duties and wage information, was reported accurately by the expert.

            In addition, the ALJ found that furnishing the claimant with the names and addresses of employers identified for suitable alternative employment would allow the claimant to fully exercise his right to challenge the suitability, not only of the type of work, but also of the specific employers and work locations referenced by the vocational expert. He specifically noted that, although the claimant's attorney has been familiar with the expert's methods in the past, the claimant is not limited under the law to presuming that the expert, in the present case, used the same methods and used those methods properly.

            Finally the ALJ noted that there is a distinction between the needs of a claimant in discovery and the entitlement of a claimant in discovery. "Even if Claimant ultimately did not use the information in dispute to prepare his case, Claimant would nonetheless be entitled to obtain the information because the information is relevant."

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Topic 27.3      Federal District Court Enforcement

[ED. NOTE:  For information on expert witness fees, see Topics 24.1  Witnesses—Generally; and 19.3.6.2 Procedure—Adjudicatory Powers—Discovery.]

Topic  27.3     Federal District Court Enforcement

Floyd v. Penn Terminals, Inc., 37 BRBS 141 (2003).

            At issue here is the application of Section 8(j) forfeiture. The claimant has questioned the ALJ's authority to initiate consideration of forfeiture. The Board has previously held that an ALJ has the authority to adjudicate whether benefits should be suspended pursuant to Section 8(j). In the instant case the Board found that Section 8(j) itself provides no direction on the procedures for adjudicating forfeiture proceedings. The Board also noted that the legislative history is equally lacking any relevant information that might indicate whether Congress intended to make the district director the exclusive initial adjudicator of forfeitures.

            After examining the regulations, the Board noted that Section 702.286(b) provides that an employer may initiate forfeiture proceedings by filing a charge with the district director, who shall then convene an informal conference and issue a decision on the merits. Nevertheless, if either party disagrees with the district director's decision, the regulation authorizes an ALJ to consider "any issue" pertaining to the forfeiture. The Board explained that for this reason, despite the statutory reference to the deputy commissioner, the Board has previously held that an ALJ has the authority to adjudicate a forfeiture charge.

            In holding that forfeiture proceedings may, depending upon the specific facts of a case, be initiated before the ALJ, the Board used the following logic:

Section 702.286(b) makes the subpart C rules for [ALJ] hearings (20 C.F.R 702.331-702.351) applicable to forfeiture disputes. Section 702.336, in turn, authorizes an [ALJ] to consider "any" new issue at "any" time prior to the issuance of a compensation order. Thus, as the Director suggests, Sections 702.286 and 702.336 maybe construed harmoniously because section 702.286 does not qualify the authority conferred by Section 702.336. Consequently, the formal hearing procedures permit a party to raise the forfeiture issue for the first time at the hearing.

            Further, the Board rejected the claimant's contention that his right to procedural due process would be abridged unless the district director initially considers all forfeiture charges and noted that ALJ hearings include protective procedural safeguards.

            The Board declined to review the ALJ's certification of the facts of this case to the federal district court, pursuant to Section 27(b) regarding alleged misstatements on an LS-200 form and also regarding a pre-existing back condition. The Board cited A-Z Int'l v. Phillips [Phillips I], 179 F.3d 1187, 33 BRBS 59(CRT) (9th Cir. 1999).

Topic  27.3     Federal District Court Enforcement

Olsen v. Triple A Machine Shop, Inc., (Unreported) (BRB No. 02-0612) (June 4, 2003).

            Here the Board held that a claimant is within his right to act on his own behalf and thus, the ALJ can not suspend a proceeding until such time as the claimant retains a licensed legal representative. The Board further held that if an ALJ believes the claimant should be sanctioned for his conduct, then sanctions must be issued in accordance with the statutory provisions of Section 27(b). OALJ Rules of Practice, such as 20 C.F.R. §§ 18.29(a) and 18.36, do not apply "[t] the extent that [they] may be inconsistent with a rule of special application as provided by statute. The Board found that a distinction can not be drawn between civil and criminal contempt: "We need not decide what type of ‘contempt' Section 27(b) contemplates because ...the language of the section demonstrates that the nature of a party's offense, rather than the sanctions available, invokes the applicability of Section 27(b).....We hold that Section 27(b) applies to this case because claimant disobeyed the lawful orders of the ALJ."

Topic  27.3     Federal District Court Enforcement

A-Z International v. Phillips, 323 F.3d 1141(9th Cir.2003).

            Section 27(b) of the LHWCA does not authorize a federal district court to sanction a claimant for contempt for filing a false claim for benefits under the LHWCA.  The term “lawful process” is not broad enough to include the filing of a complaint that misrepresents the jurisdictional facts.  The Ninth Circuit found that in enacting the LHWCA, Congress expressly provided mechanisms other than contempt sanctions to deal with fraudulent claims before an ALJ.  “In interpreting a statute, courts must consider Congress’s words in context “with a view to their place in the overall statutory scheme.” Citing Davis v. Mich. Dep’t of Treasury, 489 U.S. 803, 809 (1989).  The Ninth Circuit went on to note, “The LHWCA has specific provisions that deal with fraud before the ALJ, such as 33 U.S.C. §§ 931(a) and 948.

Topic  27.3     Federal District Court Enforcement

Goicochea v. Wards Cove Packing Co., 37 BRBS 4 (2003).

            The Board held that an ALJ cannot rely upon the Federal Rules of Civil Procedure to dismiss a  claim based upon the claimant’s failure to comply with the multiple orders issued by an ALJ.  The ALJ must consider the applicability of Section 27(b) to the facts before him/her.  “As claimant’s failure to execute and deliver an authorization releasing his INS records to employer was in direct noncompliance with [the judge’s] orders, it constitutes conduct which should be addressed under the procedural mechanism of Section 27(b).  Rather than dismissing claimant’s claim, the [ALJ] must follow the procedures provided for in Section 27(b) of the Act.”  The employer had cited Section 18.29(a)(8) of the OALJ regulations, 29 C.F.R. § 18.29(a)(8), as a source of authority for the ALJ’s decision to dismiss the claimant’s claim.  An ALJ’s authority in general to dismiss a claim with prejudice stems from 29 C.F.R. § 18.29(a), which affords the ALJ all necessary powers to conduct fair and impartial hearings and to take appropriate action authorized by the Federal Rules of Civil Procedure.  See Taylor v. B. Frank Joy Co., 22 BRBS 408 (1989).  “As Section 27(b) of the Act is a ‘rule of special application’ which addresses the issue presented on appeal, however, the OALJ regulations do not apply.”  29 C.F.R. §18.1(a).

Topic  27.3     Federal District Court Enforcement

Olsen v. Triple A Machine Shop, Inc., (Unreported) (BRB No. 02-0612) (June 4, 2003).

            Here the Board held that a claimant is within his right to act on his own behalf and thus, the ALJ can not suspend a proceeding until such time as the claimant retains a licensed legal representative. The Board further held that if an ALJ believes the claimant should be sanctioned for his conduct, then sanctions must be issued in accordance with the statutory provisions of Section 27(b).  OALJ Rules of Practice, such as 20 C.F.R. §§ 18.29(a) and 18.36, do not apply “[t] the extent that [they] may be inconsistent with a rule of special application as provided by statute.  The Board found that a distinction can not be drawn between civil and criminal contempt: “We need not decide what type of ‘contempt’ Section 27(b) contemplates because ...the language of the section demonstrates that the nature of a party’s offense, rather than the sanctions available, invokes the applicability of Section 27(b).....We hold that Section 27(b) applies to this case because claimant disobeyed the lawful orders of the ALJ.” 

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