Office of Administrative Law Judges
United States Department of Labor
MONTHLY DIGEST # 138
September 1998 - October 1998
James Guill
Associate Chief Judge for Longshore
Thomas M. Burke
Associate Chief Judge for Black Lung
A. Circuit Courts of Appeals
Director, OWCP v. Coos Head Lumber & Plywood Co., Case No.
96-70973 (9th Cir. Aug. 21, 1998)(unpub.) (in the event that the publication status of this
decision changes, you will be informed). In this Section 8(f) case, the Director argued that the
ALJ should not have awarded relief based on a stipulation in which the Director did not concur.
The Ninth Circuit found that the ALJ heard evidence and independently arrived at a judgment,
not based on the stipulation, that Employer was entitled to second injury fund coverage because
of the employee's previous broken back. The Ninth Circuit went on to state that the stipulation
between Employer and Claimant did not bind the Director, and he was free to introduce contrary
evidence before the ALJ. Importantly, the Ninth Circuit concluded that the Director's
"election not to offer any evidence or suggest any inference from the evidence that would
be contrary to the stipulation waived his right to challenge the ALJ's determination
subsequently." The Director, according to the court, should have made his evidentiary
presentation and argument to the ALJ.
[ Director's Responsibility to Respond, 8.7.4 ]
In Amos v. Director,
OWCP, ___ F.3d ___, Case No. 96-70988 (9th Cir. Sept. 1, 1998), the circuit court held
that, when an injured employee is faced with competing medical opinions about the best way to
treat his work-related injury, each of them medically reasonable, it is for the patient--not the
employer or the ALJ to decide what is best for him. In the instant case, Claimant's treating
orthopedic surgeon recommended surgery while two other orthopedic surgeons recommended
against it. The Ninth Circuit specifically noted that Section 7 of the LHWCA specifically
guarantees the right of employees to select their own doctors. Although Employer is not required
to pay for unreasonable and inappropriate treatment, when the patient is faced with two or more
valid medical alternatives, it is the patient, in consultation with his own doctor, who has the right
to chart his own destiny.
[ Free Choice of Physician, 7.4 ]
In Matulic v. Director,
OWCP, ___ F.3d ___, Case No. 96-70874 (9th Cir. Sept. 8, 1998), the issue was
whether to use Section 10(a) or 10(c) to determine Claimant's average weekly wage. Section
10(a) applies where a claimant worked "during substantially whole of the year immediately
preceding his injury" whereas Section 10(c) provides for any "reasonable"
method of calculating average weekly wage in the event that a claimant has not worked
"during substantially whole of the year." Under the facts of Matulic,
Claimant had worked 82% of the total possible working days. His employment was not seasonal
or intermittent; rather, it was stable and continuous. The evidence indicated that, during that
year, Claimant had moved and spent time working on his house. Acknowledging that some
"overcompensation" is built into the system institutionally, the Ninth Circuit
concluded that there is a presumption that Section 10(a) is applied when a claimant works more
than 75% of the workdays during the measuring year. The Ninth Circuit cautioned, however,
that it does not mean to suggest that a figure that is 75% or lower will necessarily result in the
application of 10(c) as "[t]here may be other circumstances which demonstrate that a
reduction in working days during the one-year period preceding that worker's injury is atypical of
the worker's actual earning capacity." The Ninth Circuit held that Section 10(c) may not
be invoked in cases in which the only significant evidence that the application of Section 10(a)
would be unfair or unreasonable is that claimant worked more than 75% of the days in the year
preceding his injury.
This decision is contrary to that of the Seventh Circuit which upheld the
use of Section 10(c) when a claimant worked 84% of total working days in the measuring year.
["Substantially the Whole of the Year, " 10.2.4;
Application of Section 10(c), 10.4.1]
In Shade v. Great Lakes Dredge
& Dock Co., ___ F.3d ___, (Case No. 97-2023)(3rd Cir. September 3, 1998), after
initially receiving benefits under the LHWCA, Claimant filed a complaint seeking damages
under the Jones Act and the general maritime law doctrine of unseaworthiness. The jury found
for the claimant and the employer appealed.
The Third Circuit held that, in determining seaman status, the employee's
specific activity at the time of his or her injury is not dispositive of the issue of seaman status.
However, a court should limit its examination of the employee's duties to the employee's basic
job assignment as it existed at the time of injury.
The Third Circuit went on to hold that evidence of an employee's prior
assignment with the same employer is not admissible under the Fleet Seaman Doctrine if those
assignments were not part of a continuous employment relationship between the employer and
employee. The Fleet Seaman Doctrine permits an employee to aggregate contacts with multiple
vessels in order to show that he is more or less permanently attached to a vessel and thereby
complies with one prong of the "seaman test." However, an employee's contacts
with multiple vessels must have occurred with vessels owned or controlled by the same
employer. In the instant case, the issue was whether the contact must be during the same
employment.
[LHWCA v. Jones Act, 1.4.1]
B. Benefits Review Board
In Jourdan v. Equitable Equipment Co., ___ B.R.B.S. ___, BRB
No. 97-1634 (Aug. 20, 1998), the issue before the Board was whether an award of attorney's fees
to Employer based on an alleged breach of an insurer's duty to defend under the terms of its
insurance policy with Employer, was a question "in respect of a claim" as is required
to fall within the ALJ's jurisdiction under Section 19(a). The Board held that the ALJ properly
found that he lacked jurisdiction to address the Employer's request for a fee payable by its
carriers based on a breach of the insurers' contractual duty to defend. Because the ALJ's
authority is to adjudicate those insurance contract disputes which arise out of or under the
LHWCA only if their resolution is necessary to determine compensation liability in claims under
the LHWCA, and the insurance contract dispute at issue was not integral to a determination of
compensation liability, the ALJ's conclusion that he lacked jurisdiction to resolve this issue was
affirmed.
In so holding, the Board specifically overruled the previous insurance-related case of Gray & Co., Inc. v. Highland Ins. Co., 9 B.R.B.S. 424 (1978). It noted
that, "[i]n retrospect, the holding in Gray is an anomaly in that it is the only case
in which the Board found that the [ALJ] had jurisdiction over an insurance contract dispute
involving an issue which did not derive from, and was not directly related to, any other issue
necessary to resolution of the claim. In each of the other insurance contract dispute cases where
the Board found jurisdiction, the insurance contract right being adjudicated bore a relationship to
an issue either necessary or related to the compensation award."
[ Adjudicatory Powers, 19.3 ]
In McCormick v. Newport News Shipbuilding & Dry Dock Co.,
___ B.R.B.S. ___, BRB No. 98-0101 (Aug. 27, 1998) Claimant, who worked for Employer for
14 years was found not to be covered under the LHWCA as he lacked situs (location of the
injury), as defined by the Fourth Circuit. Claimant generally worked at the shipyard onboard
ships and worked at other locations on no more than six occasions. Claimant was injured while
obtaining parts at Employer's warehouse which was located three public streets and one security
gate away from the shipyard; it was located more than one-half mile from the James River. The
Board, in affirming the ALJ, held that since the building in question was physically separated
from Employer's shipyard by public streets as well as a security fence, it was a separate and
distinct piece of property rather than part of the overall shipyard facility. This holding is in line
with, Sidwell v. Express Container Services Inc., 71 F.3d 1134 (4th Cir. 1995), cert.
denied, 116 S.Ct. 2570 (1996) (an area is "adjoining" navigable waters only if it
is contiguous with or otherwise touches navigable waters). Contra, Textports
Stevedore Co. v. Winchester, 632 F.2d 504 (5th Cir. 1980), cert. denied, 452 U.S.
905 (1981)("adjoining area" should focus on functional relationship or nexus
between "adjoining area" and marine activity on navigable waters.).
[Situs--"Over land," 1.6.2]
In Ridley v. Surface Technologies Corp., ___ B.R.B.S. ___, BRB
No. 97-1362 (June 10, 1998) (Order to Publish issued Aug. 28, 1998), the Board held that a
request by Claimant that an ALJ remand a pending case to the district director because Claimant
was "no longer pursuing a Longshore claim for his injury of 3/7/96," was not
necessarily the equivalent of a motion to withdraw since it lacks clarity. While a claim is
pending, the ALJ may not remand the case to the district director absent the presentation of a
new issue or new evidence especially where, as here, there are contested issues and Employer
objected to remand, requesting a hearing on at least one of those issues (the jurisdiction issue
involving a covered situs determination). The Board ordered that, on remand, the ALJ seek
clarification as to whether Claimant seeks withdrawal of his claim. If he does not seek
withdrawal, the ALJ must adjudicate the merits, as Employer requested. If Claimant does seek
withdrawal, the ALJ must consider the motion in light of the regulatory criteria in 20 C.F.R.
§702.225 (whether the withdrawal is for a proper purpose or is in Claimant's best
interests).
[Adjudicatory Powers, 19.3; Withdrawal, 8.11]
In Bush v. I.T.O. Corporation, ___ B.R.B.S. ___, BRB No. 97-1707 (Sept. 2, 1998), the Board held that Claimant is entitled to total disability compensation
during the period that his full-time enrollment in a DOL-sponsored rehabilitation program
precluded him from working, even if he already possessed a college degree prior to rehabilitation
and Employer established that he had a capacity to earn greater than minimum wage during the
full-time enrollment in the DOL plan. Claimant, who had a degree in marine biology, entered a
full-time nursing program at the suggestion of the DOL vocational counselor. The vocational
counselor had determined that Claimant was an excellent candidate for retraining and that a
career in nursing would be the best way to utilize his prior education and transferable skills, and
to ensure his ability to care for himself and his family while at the same time minimizing
Employer's compensation liability. Thus, Claimant was not pursuing a personal choice, but
rather a program based upon the course his counselor found would maximize his skills and
minimize Employer's liability.
The Board noted that, given the fact that Claimant was only 42 years old
when this case was heard on remand, it was virtually certain that Employer and the Special Fund
will more than recoup the compensation paid during the period of rehabilitation and the cost of
Claimant's retraining by virtue of Claimant's higher post-injury wage-earning as a nurse. The
Board noted the Fifth Circuit's admonition in the similar case of Abbott v. Louisiana Ins.
Guaranty Ass'n, 27 B.R.B.S. 192 (1993), aff'd, 40 F.3d 122 (5th Cir. 1995), that
courts should not frustrate DOL-sponsored rehabilitation efforts where, as here, they are
reasonable and result in lower total compensation liability for Employer and its insurers in the
long run. It is unduly "harsh and incongruous" to find suitable alternate employment
available where Claimant, due to his diligent effort at rehabilitation, is unable to accept such
employment.
In Shano v. Rene Cross Construction, ___ B.R.B.S. ___, BRB No.
98-0166 (Sept. 21, 1998), the sole issue was whether Claimant was covered under the LHWCA.
In holding that Claimant lacked status, the ALJ found that Claimant fell within the exception
enumerated by Congress at Section 2(3)(C), wherein the LHWCA states that the term
"employee" does not include "individuals employed by a marina and who are
not engaged in construction, replacement or expansion of such marina (except for routine
maintenance)."
In determining whether Claimant is a covered maritime employee under
the LHWCA, the inquiry centers on Claimant's assignable duties at the time of his injury, not the
corporate purpose or structure of Employer. In the instant case, the ALJ found that Claimant's
primary duty was the launching and storage of boats, with the additional duties of collecting
money, fueling boats, cutting grass, picking up trash and stocking the marina store. The ALJ
further found that Claimant's employment duties while working there did not include
participation in the construction of the marina firewalls, as this construction had been completed
prior to Claimant's transfer to Employer. Further, the ALJ found that the task of filling potholes
in the marina access road by Claimant constituted routine maintenance of the marina and was,
therefore, not an activity intended by Congress to fall outside the exclusion to coverage. Finding
that the ALJ's factual findings are rational and supported by substantial evidence, the Board
upheld the ALJ.
[ Marina workers, 1.11.9 ]
In Hargrove v. Strachan Shipping Co., ___ BRBS ___, (BRB No.
97-911) (September 23, 1998), the claim resulted from a 1971 injury. After an informal
conference, it was determined that the parties would discuss the possibility of a settlement and
that if a settlement could not be achieved, a formal hearing would be held to adjudicate the claim.
On April 2, 1973, Claimant and his attorney wrote to the district director asking that the claim be
withdrawn. This request was confirmed by a follow-up letter after Claimant was advised by the
district director of the possible hazards of withdrawal. Claimant was paid $12, 591.61 in
compensation benefits, of which ,267.67 represented temporary total disability compensation,
and the balance, a "settlement" to conclude the case. The district director wrote to
Claimant advising that he was closing the file. On March 13, 1996 Claimant's counsel requested
an informal conference, maintaining that Claimant continued to be disabled.
The ALJ found that the "settlement" was never approved under
Section 8(i) and that Claimant had never stated in writing to the district director his reasons for
requesting withdrawal of his claim as required by regulation. The ALJ concluded that there was
no reliable evidence that the district director approved Claimant's request for withdrawal of the
claim as being for a proper purpose or in claimant's best interest. Thus, the ALJ determined that
Claimant's original claim should still be viable and open for adjudication. However, the ALJ
found that the Board's decision in Rodriquez v. California Stevedore & Ballast Co., 16
BRBS 371 (1984), is controlling and the matter should not be reopened "as a matter of
policy."
On appeal, the Board initially affirmed the ALJ's findings that the claim
was neither settled pursuant to Section 8(i) nor withdrawn pursuant to 20 C.F.R. §
702.216. The Board found, however, that the ALJ erred in holding Rodriquez
applicable. On reconsideration, the Board stated that the ALJ properly applied § 702.216
rather than 20 C.F.R. § 31.7, its predecessor. Procedural regulations in force at the time
the administrative proceedings take place govern, not those in effect at the date of injury.
[ Settlements--generally, 8.10.1; Withdrawal of Claim--generally,
8.11.1; Dismissal of Claim, 19.3.3 ]
In Ladd v. Tampa Shipyards, Inc., ___ B.R.B.S. ___, BRB No.
98-0156 (Sept. 28, 1998), the issue was whether a "production clerk" is covered by
the LHWCA. Claimant's primary duties consisted of preparing production reports, delivering
correspondences, answering telephones, typing and filing. Additionally, he was required to make
manpower distribution reports which involved receiving reports from other clerks in various
departments and reporting this information to employer's main office. He performed the
majority of his duties in a house trailer which served as his office. The trailer was located in a
noisy, high-traffic area about 50 to 60 feet from one of Employer's dry docks, and was in close
proximity to a number of Employer's ship repair shops. About 80 per cent of the time Claimant
performed his duties in his office, while the other 20 per cent was spent making trips throughout
the yard to gather and deliver correspondence and summon people to meetings. He was never
involved with the actual building or repairing of ships, nor did he ever directly assist in the
loading or unloading of cargo from any ship.
In finding that Claimant was not covered by the LHWCA, the ALJ
observed that when Claimant was not working in his office, he was merely checking the accuracy
of the numbers that he was reporting and forwarding those numbers to the main office, tasks
which the ALJ found were exclusively clerical and did not involve any decision-making.
Further, the ALJ found that Claimant's work involved processing data on paper, and not handling
shipbuilding materials or cargo or allocating manpower for shipbuilding and repair or loading
and unloading. She concluded that Claimant was employed exclusively to perform office clerical
work, and that his trips outside his office were merely incidental to performing his clerical duties.
The Board affirmed the ALJ's findings that Claimant's work was clerical in nature, it was
performed primarily in an office setting, and Claimant's forays outside the office were merely an
extension of his office work.
