TOPIC 19 PROCEDURE
19.1 THE CLAIM: GENERALLY
A person seeking compensation under the LHWCA must file a timely claim with the local deputy
commissioner (now district director). 33 U.S.C. § 913(a) (one-year limitation period); 33 U.S.C. §
913(b)(2)(for occupational disease claims which do not immediately result in death or disability). The
district director notifies the employer of the claim, see 33 U.S.C. § 919(b), at which time the employer
might: (i) agree to pay the amount of benefits fixed by the LHWCA, see 20 C.F.R. § 702.231 et seq.
(1996) (procedures for payment of non-controverted claims); (ii) enter into a formal settlement with the
person seeking compensation for a (presumably) lesser amount, subject to the approval of the district
director or an ALJ, see 33 U.S.C. § 908(i); 20 C.F. R. § 702.241 et seq. (1996); or (iii) give notice that
it is denying liability for, or controverting, the claim, see 20 C.F.R. § 702.251. If the employer controverts
the claim, the district director is empowered to attempt to resolve the parties' disputes informally. 20
C.F.R. § 702.311 et seq. Should informal discussions prove unsuccessful, the district director refers the
matter to an ALJ and a formal hearing is held. 33 U.S.C. §§ 919(c)-(d); 20 C.F.R. § 702.316 (1996).
"Any party in interest" may appeal the ALJ's decision to the Benefits Review Board. 33 U.S.C. §
921(b)(3). An appeal from the Board's decision to the courts of appeals may be initiated by "any person
adversely affected or aggrieved by a final order of the Board." 33 U.S.C. § 921(c); see also 20 C.F.R.
§ 802.410(a) (1996).
Section 19 vests jurisdiction in an ALJ only over claims for compensation and authorizes an ALJ
to hear only questions in respect of such claims. Equitable Equipment Co. v. Director, OWCP, 191 F.3d
630 (5th Cir. 1999). In Equitable Equipment, the employer had filed a "claim" seeking attorney fees
incurred under the LHWCA from its insurers. As the employer's cause of action in this case was
independent of, and wholly unrelated to, an underlying claim for compensation pursuant to Section 19(a),
the Fifth Circuit held that the ALJ lacked jurisdiction over the dispute.
In Pilipovich v. CPS Staff Leasing, Inc., 31 BRBS 169 (1997), the Board held that the ALJ "has
the power to hear and resolve insurance issues which are necessary to the resolution of a claim under the
Act." The Board concluded that the ALJ erred in finding two employers liable for the claimant's attorney's
fees where "CPS has no longshore workers itself, but merely provides workers to longshore employers,
[and Carrier] was on the risk not for CPS itself, but for ... other employers to whom CPS loaned
employees." The Board held that "[b]y virtue of the contractual agreements, [Carrier] is solely liable to
claimant as the insurance carrier, as its policy insures [the longshore employer] for injuries covered under
the Longshore Act and as it waived its right to seek reimbursement from [the longshore employer]." But
see, Temporary Employment Services v. Trinity Marine Group, Inc., 261 F.3d 456 (5th Cir. 2001) (ALJ
did not have jurisdiction to determine the merits of certain contractual rights and liabilities arising from an
indemnification agreement between the borrowing employer and the loaning employer; did ALJ have
jurisdiction to address a waiver of subrogation by the loaning employer's carrier.).
A claim for compensation must be filed with the district director. Section 19(a) of the LHWCA
provides:
(a) Subject to the provisions of section 13 a claim for compensation
may be filed with the deputy commissioner in accordance with
regulations prescribed by the Secretary at any time after the first
seven days of disability following any injury, or at any time after
death, and the deputy commissioner shall have full power and
authority to hear and determine all questions in respect of such
claim.
33 U.S.C. § 919(a).
However, the ALJ does not have authority to address all tangential issues. For example, whether
an award of attorney's fees to an employer based on an alleged breach of an insurer's duty to defend under
the terms of its insurance policy with employer, was not a question "in respect of a claim" as is required to
fall within the ALJ's jurisdiction under Section 19(a). Jourdan v. Equitable Equipment Co., 32 BRBS 200
(1998), over-ruling Gray & Co., Inc. v. Highland Ins. Co., 9 BRBS 424 (1978). In reference to Gray,
the Board stated: "[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."
The right to disability compensation survives the employee's death and the employee's
survivors have standing to file on his behalf. Maddon v. Western Asbestos Co., 23 BRBS 55, 59 (1989);
Muscella v. Sun Shipbuilding & Dry Dock Co., 8 BRBS 830, 831-32 (1978). Section 19(f) explicitly
provides that an award of compensation for disability may be made after the death of an injured employee.
See Andrews v. Alabama Dry Dock & Shipbuilding Co., 17 BRBS 209, 211 (1985); Wilson v. Vecco
Concrete Constr. Co., 16 BRBS 22, 25 (1983).
The test for what constitutes a claim is: Whether the communication reasonably conveys the
message that a claim is being filed. Downey v. General Dynamics Corp., 22 BRBS 203, 205 (1989)
(where claim was filed in 1981 based upon 1981 audiogram, but subsequent audiogram was proffered at
1984 formal hearing, Board held that ALJ acted in most judicially efficient manner in finding that 1984
audiogram documented aggravation of original hearing loss through continued exposure to industrial noise
and therefore constituted new injury and new claim with appropriate notice); Peterson v. Washington
Metro. Area Transit Auth., 17 BRBS 114, 116 (1984); Welding v. Bath Iron Works Corp., 13 BRBS
812, 819 (1981).
The claim must be in writing and is normally filed on a form supplied by the district director.
Walker v. Rothschild Int'l Stevedoring Co., 526 F.2d 1137 (9th Cir. 1975); See 20 C.F.R. § 702.221(a).
However, a memorandum recording by OWCP of a telephone conversation with a claimant has been found
by the Board to constitute a claim since it disclosed the claimant's intent to assert a right to compensation.
I.T.O. Corp. Of Virginia v. Pettus, 73 F.2d 523, 30 BRBS 6 (CRT)(4th Cir. 1996), cert. denied, 519
U.S. 807 (1996); McKnght v. Carolina Shipping Co., 32 BRBS 165, aff'd on recon en banc, 32 BRBS
165, aff'd on recon en banc, 32 BRBS 251 (1998).
The claim need not appear on the form designated by the Department of Labor. A letter from
counsel has been deemed sufficient. Employers Liability Assurance Corp. v. Donovan, 279 F.2d 76, 78
(5th Cir.), cert. denied, 364 U.S. 884 (1960); Nix v. O'Keeffe, 255 F. Supp. 752, 754 (N.D. Fla.
1966). An oral interview of the claimant is not sufficient. Slade v. Branham, 48 F. Supp. 769, 770 (D.
Md. 1942). Nonetheless, any written filing will toll the prescriptive period. Walker, 526 F.2d 1137. It
will be barred if it is filed outside the applicable limitations period set forth in Section 13. See also 20
C.F.R. §§ 702.221, 702.222.
Within 10 days after the claim has been filed with the district director, the district director must
give written notice to the employer by either personal service or certified mail. 20 C.F.R. § 702.224;
33 U.S.C. § 919(b). If the employer declines to pay benefits voluntarily, it must controvert the right to
compensation within 14 days from the date it receives notice or knowledge of the injury or death. 20
C.F.R. § 702.251. In the instance the employer wishes to controvert the claim, a notice stating the grounds
for controversion must be filed on or before the fourteenth day after he has knowledge of the injury or
death. 20 C.F.R. § 702.251; 33 U.S.C. § 914(b). Controversion may be withdrawn in situations where
there is no longer any issue to be litigated before the administrative law judge. 20 C.F.R. § 702.351. See
Edwards v. Willamette Western Corp., 13 BRBS 800, 802-03 (1981) (attempted withdrawal of
controversion by one of two employers was invalid because issue of liability remained pending before ALJ);
Lundy v. Atlantic Marine, 9 BRBS 391, 393 (1978).
An employer who desires to cease payment of compensation to a claimant (after the
administrative law judge has issued a compensation order) should request a predeprivation hearing
before an ALJ rather than unilaterally stopping compensation. Vincent v. Consolidated Operating Co., 17
F.3d 782 (5th Cir. 1994).
Claims may be withdrawn, without prejudice, subject to certain conditions. 20 C.F.R. §
702.225. The immediate predecessor of this regulation was 20 C.F.R. § 702.216. (The predecessor of
§ 702.216 was found at 20 C.F.R. § 31.7 (1951). See infra for former text.) Section 702.216 was
redesignated, in its entirety, as 20 C.F.R. § 702.225 designation on January 3, 1985. 50 FR 397. The
wording was not altered at the time of this redesignation.
In order to withdraw a claim prior to adjudication (20 C.F.R. § 702.225(a)), the district director
or ALJ must approve the withdrawal as being for a proper purpose and in the claimant's best interest.
Norton v. National Steel & Shipbuilding Co., 25 BRBS 79, 83 (1991), on recon., 27 BRBS 33 (1993);
Madrid v. Coast Marine Constr. Co., 22 BRBS 148, 152 (1989); Rodman v. Bethlehem Steel Corp., 16
BRBS 123, 127 n.5 (1984); Matthews v. Mid-States Stevedoring Corp., 11 BRBS 139, 142 (1979);
Graham v. Director, OWCP, 9 BRBS 155, 159 (1978).
In Smith v. Stevedoring Services of America, 30 BRBS 576 (ALJ) (1996), the judge denied the
employer's request for repayment of all benefits previously paid to the claimant prior to the Order
Granting Withdrawal of Claim. Citing Graham v. Director, OWCP, 9 BRBS 155 (1978), the judge found
that 20 C.F.R. § 702.255(b) (which deals with withdrawals "After adjudication of claim" and includes
a provision for the repayment of the amount of benefits previously paid) is inapplicable to motions to
withdraw pending before OALJ before there is an adjudication of a claim. The judge found that motions
pending before OALJ must be decided pursuant to § 702.255(a) which does not contain a provision for
the repayment of benefits as a prerequisite to the granting of a motion to withdraw. The judge, therefore,
found that the employer's sole remedy would be to seek an offset against any benefits awarded by another
forum.
The Code of Federal Regulations (20 C.F.R. § 702.225(a)) clearly states that the request for
withdrawal [Before adjudication of claim] must be filed on or before the date the OWCP makes a
determination on the claim. 20 C.F.R. § 702.225(b) notes that "After adjudication of claim" a claim may
be withdrawn after the date the OWCP makes a determination on the claim provided that "...[t]here is
repayment of the amount of benefits previously paid because of the claim that is being withdrawn or it can
be established to the satisfaction of the Office that repayment of any such amount is assumed."
Prior to the 1972 Amendments, deputy commissioners [now district directors] were empowered
to act on requests for withdrawal of claims under 20 C.F.R. § 31.7 (1951). Section 31.7 read as follows:
Withdrawal of claim for compensation. Any claimant not desiring to
proceed with a claim filed in case of injury or death pursuant to said act
and the regulations in this subchapter, may apply for withdrawal of the
claim to the deputy commissioner with whom filed, stating the reason for
such withdrawal. The deputy commissioner whose jurisdiction has been
invoked for the filing of such claim shall in consideration of such
application determine whether such withdrawal is for a proper purpose
and for the claimant's best interest prior to authorizing such withdrawal.
Any claim so withdrawn is withdrawn without prejudice to the filing of
another claim subject to the provisions relating to the limitation of time in
section 13 of said act.
20 C.F.R. § 31.7 (1951).
No limitation was placed on the stage of proceedings at which this power could be exercised. If,
in the midst of a formal hearing, a claimant expressed a desire not to proceed with the claim, the deputy
commissioner could consider the request for withdrawal. Graham, 9 BRBS at 158. The withdrawal
regulation was subsequently amended and redesignated as 20 C.F.R. § 702.216 on September 26, 1973
and again redesignated as 20 C.F.R. § 702.225 on January 3, 1985.
In Graham, the Board reviewed 20 C.F.R. § 702.216(a) and found that "[b]y its very terms, this
section of the Regulations relates only to proceedings before the [district director]." 9 BRBS at 157.
However, the Board went on to state that
We conclude that Congress intended administrative law judges to have the
same authority at the formal hearing level as was vested in the deputy
commissioners prior to the 1972 amendments. As the deputy
commissioners were authorized to act on requests for withdrawal of claims
even at the formal hearing level, administrative law judges now have that
authority.
Graham, 9 BRBS at 158.
The Board, in Graham, further noted:
Subsection (b) of 20 C.F.R. § 702.216 provides for withdrawal "after
adjudication of claim." As subsection (b) refers specifically only to
requests for withdrawal "after the date the OWCP makes a
determination on the claim." (emphasis added), we find that its
provisions apply only to claims that have been resolved informally resulting
in determinations without the necessity of transference to the Office of
Administrative Law Judges.
9 BRBS at 158 n. 2.
[ED. NOTE: However, simply substituting OALJ for the district director and assuming the wording
of the regulation retains its previous meaning (i.e. that "adjudication" means "formal hearing" or
"determination") is perplexing in light of the Board's footnote just cited. In that footnote, while
referring to subsection (b) of the regulation ("After Adjudication of claim"), the Board stated that
it found that this provision applied only to claims that have been resolved informally resulting in
determinations without the necessity of referral to OALJ.
This footnote by the Board would make more sense had it referred to subsection (a) of the regulation
("Before adjudication of claim"). If, as the Board states in the body of Graham, the regulation for
withdrawal is to also be applied to ALJs at the formal level, and have the same meaning as prior
to 1972, then one cannot refer to the footnote and find that subsection (b) of the regulation applies
only to cases resolved informally, resulting in determinations without transfer to OALJ.
Adding to the confusion is recent United States Supreme Court case law which now clearly
indicates that OALJ is the beginning of the adjudicatory process. See Ingalls Shipbuilding, Inc. v.
Director, OWCP, (Yates), 519 U.S. 248 (1997) and Director, OWCP v. Newport News Shipbuilding
& Dry Dock Co., 514 U.S. 122 (1995). Moreover, it is noted that the Black Lung Act regulation
dealing with withdrawal of claims specifically states that there may be a withdrawal provided
"[a]ny benefits previously paid with respect to the claim are reimbursed." 20 C.F.R. §
725.306(a)(3).
If one interprets "adjudication" in the context of 20 C.F.R. § 702.225 to continue to refer to the
date the OWCP makes a determination on the claim (albeit now only an informal
order/memorandum of conference), then one can argue that once the claim is referred to OALJ and
then a motion to withdraw is filed, a prerequisite for that withdrawal will be repayment as per §
702.225(b)(2). On the other hand, if "adjudication" is now given a more formal meaning, (i.e., just
as adjudication once meant determination by OWCP, it must now mean determination by OALJ)
then a withdrawal at the ALJ level will not include a repayment of previously paid benefits unless
the ALJ has actually "adjudicated" the claim.
From a practical standpoint, a motion for withdrawal, in general, only occurs when a claimant
strategically chooses to pursue relief in another forum, i.e., state compensation or Jones Act tort
relief. Thus, giving the employer/carrier an offset against an award from another forum will provide
equity. However, what happens when relief is not pursued elsewhere? Does this then provide one
more reason why employer/carriers will not voluntarily provide compensation?]
After withdrawal, no provision exists under 20 C.F.R. § 702.225(b) allowing employer to be
reimbursed for LHWCA benefits paid to claimant before claimant was allowed to withdraw LHWCA
claim; employer's remedy is to seek offset against any state compensation awarded. Soboczynski v. Pile
Foundation Construction, 30 BRBS 580 (ALJ) (1996).
The receipt of money in exchange for withdrawal is not a proper purpose. Norton, 25 BRBS at
83; Rodman, 16 BRBS at 127 n.5; Matthews, 11 BRBS at 142.
In Eneberg v. Todd Pacific Shipyards, 30 BRBS 59 (1996), the Board found that it was error for
the district director to fail to refer a claim on the grounds that the claimant may, at some point
in the future, file a motion for withdrawal. The Board determined that it had subject-matter jurisdiction
over the legal issue at bar and noted that "the Board's exercise of its statutory review in this case is an
exercise of mandamus authority." Id. Section 19(c) of the LHWCA imposes a mandatory duty upon the
district director to refer a claim once a hearing is requested by an interested party. See 33 U.S.C. §
919(c).
In order to withdraw a claim after adjudication by the Office of Workers' Compensation Programs
(OWCP), the district director or administrative law judge must approve the withdrawal as being for a
proper purpose and in the claimant's best interest and there must be repayment of the amount of benefits
previously paid because of the claim that is being withdrawn or it must be established to the satisfaction of
the Office that repayment of any such amount is assured. 20 C.F.R. § 702.225(b).
Where a claim is timely filed under Section 13, but is never adjudicated, it remains open and
pending until an order is issued. Intercounty Constr. Corp. v. Walter, 422 U.S. 1, 7-10, 2 BRBS 3, 6-8
(1975); Madrid, 22 BRBS at 152 (where claimant filed no written request to withdraw claim and
modification request was never adjudicated, claim remained open and pending); Krotsis v. General
Dynamics Corp., 22 BRBS 128, 131 (1989), aff'd sub nom. Director, OWCP v. General Dynamics
Corp., 900 F.2d 506, 23 BRBS 40 (CRT) (2d Cir. 1990) (where no action was taken on claimant's 1979
claim following disapproval of settlement and employer's voluntary payment of compensation, claim
remained open at time of hearing on subsequent claim); O'Berry v. Jacksonville Shipyards, 21 BRBS 355,
359-60 (1988), overruled in part, Estate of Cowart v. Nicklos Drilling Co., 505 U.S. 469 (1992) (1970
claim was still pending in 1982 where there was no valid compensation order or approved settlement).
The judge has the authority to dismiss a claim where it has been abandoned. 29 C.F.R. §
18.29; Federal Rule of Civil Procedure 41(b). The availability of dismissal as a procedural tool is
"restricted to prevent prejudice to parties and to protect their right to a fair hearing." Taylor v. B. Frank
Joy Co., 22 BRBS 408, 411 (1989) (dismissal of claim affirmed where claimant's counsel failed to show
good cause for his and claimant's failure to appear at the formal hearing and claimant clearly was not
pursuing his claim). Consideration is also given, however, to "the countervailing policy of allowing ALJ to
exercise those powers necessary to conduct fair and impartial hearings, as well as the policy against
encouraging protracted litigation." Id.
The LHWCA does not provide for a "protective filing" in occupational disease cases to avoid
possible future statute of limitation problems. Black v. Bethlehem Steel Corp., 16 BRBS 138, 142 (1984).
A claim for additional benefits can not be deemed an impermissible protective filing against speculative
future injuries where the claim arose from a specific injury which was identified on the claim form and since
the claimant had not attained maximum medical improvement. Pool Co. v. Cooper, 274 F.3d 173 (5th
Cir. 2001). The Fifth Circuit distinguished Pool from asbestos cases where the claimants had endured
exposure to asbestos but "as yet suffered neither physical nor economic disability." Ingalls Shipbuilding,
Inc. v. Asbestos Health Claimants, 17 F.3d 130 (5th Cir. 1994). In Pool, there existed substantial
evidence from which the ALJ could infer that at the time the claim was filed, the claimant was undergoing
continuing treatment for his original injury in the hope of improving his condition, and he and his physicians
reasonably believed that he had not attained maximum medical improvement after all.
A private insurer's decision to withhold benefits does not amount to governmental action,
and the due process clause is, therefore, not applicable. Kreschollek v. Southern Stevedoring Co.,
223 F.3d 202 (3rd Cir. 2000)(A claimant has no protectable property right in the continued receipt of
benefits in light of the lack of a prior finding of entitlement.). In Kreschollek, the Third Circuit followed
American Mfr. Mut. Ins. Co. v. Sullivan, 526 U.S. 40 (1999), which dealt with a similar state worker's
compensation claim. In Sullivan, the Court held that "an insurer's decision to withhold payment and seek
utilization review of the reasonableness and necessity of particular medical treatment is not fairly
attributable to the State." Sullivan at 58. The Court further noted that, employees do not have a property
interest in workers compensation benefits when they have not demonstrated that they are entitled to them
and a state statute requires that they prove "that an employer is liable for a work-related injury, and ... that
the particular medical treatment at issue is reasonable and necessary." Sullivan at 61.
In Admiralty Coatings Corp. v. Emery, 228 F.3d 513 (4th Cir. 2000) the employer unsuccessfully
challenged the ALJ's authority to award temporary partial benefits beyond the date of the evidentiary
hearing. The employer had argued that the ALJ's holding violated the APA's mandate that all findings and
conclusions be supported by the evidence of record.
19.2 DISTRICT DIRECTOR MUST NOTIFY EMPLOYER
Within 10 days after the filing of a claim with the district director, the district director is required
to give written notice to the employer either by personal service or certified mail. 33 U.S.C. § 919(b); 20
C.F.R. § 702.224. Specifically, section 19(b) of the LHWCA provides:
(b) Within ten days after such claim is filed the deputy
commissioner, in accordance with regulations prescribed by the
Secretary, shall notify the employer and any other person (other
than the claimant), whom the deputy commissioner considers an
interested party, that a claim has been filed. Such notice may be
served personally upon the employer or other person, or sent to
such employer or person by registered mail.
33 U.S.C. § 919(b). See Jones v. Chesapeake & Potomac Tel. Co., 11 BRBS 7, 13 (1979), aff'd, 615
F.2d 1368 (D.C. Cir. 1980).
19.3 ADJUDICATORY POWERS
Section 19(c) of the LHWCA deals with adjudication. It provides:
(c) The deputy commissioner shall make or cause to be made
such investigations as he considers necessary in respect of the
claim, and upon application of any interested party shall order a
hearing thereon. If a hearing on such claim is ordered the deputy
commissioner shall give the claimant and other interested parties
at least ten days' notice of such hearing, served personally upon
the claimant and other interested parties or sent to such claimant
and other interested parties by registered mail or by certified mail,
and shall within twenty days after such hearing is had, by order,
reject the claim or make an award in respect of the claim. If no
hearing is ordered within twenty days after notice is given as
provided in subdivision (b), the deputy commissioner shall, by order
reject the claim or make an award in respect of the claim.
33 U.S.C. § 919(c).
Section 19(c) of the LHWCA imposes a mandatory duty upon the district director to refer a claim
once a hearing is requested by an interested party. See Eneberg v. Todd Pacific Shipyards, 30 BRBS 59
(1996) ("[T]he Board's exercise of its statutory review... is an exercise of mandamus authority."). See
also Ingalls Shipbuilding, Inc. v. Director, OWCP (Yates), 519 U.S. 248 (1997) (Supreme Court refers
to OALJ as the beginning of the adjudicatory process.).
Section 19(a) of the LHWCA provides that the "deputy commissioner shall have full power and
authority to hear and determine all questions" pertaining to claims filed under the LHWCA. 33 U.S.C. §
919(a). This provision, along with Sections 19(c), 23(a), and 27(a), reflected the dual roles of adjudication
and investigation that were held by the district director prior to the enactment of the 1972 Amendments to
the LHWCA.
The 1972 Amendments amended Section 19(d), withdrawing the adjudicatory power to conduct
hearings from the district directors and conferring it on hearing examiners, i.e., administrative law judges,
who are qualified to conduct adjudications in accordance with the Administrative Procedure Act (APA),
5 U.S.C. § 554. Barthelemy v. J. Ray McDermott & Co., 537 F.2d 168, 170, 4 BRBS 325, 326 (5th
Cir. 1976); Lauzon v. Strachan Shipping Co., 602 F. Supp. 661, 664 (S.D. Tex.), aff'd, 782 F.2d 1217,
18 BRBS 60 (CRT) (5th Cir. 1985); Blake v. Hurlburt Field Billeting Fund, 17 BRBS 14, 16 (1985);
Percoats v. Marine Terminals Corp., 15 BRBS 151, 153 (1982); Clefstad v. Perini N. River Assocs., 9
BRBS 217, 220-21 (1978); Neal v. Strachan Shipping Co., 1 BRBS 279, 281 (1974).
The separation of duties of the deputy commissioner [now district director] from those of the
administrative law judge was clearly expressed by Congress in 1972 when it amended Section 19(d) to
provide that, "[a]ll powers, duties, and responsibilities [formerly] vested in the deputy commissioners with
respect to hearings shall be vested in ...hearing examiners [i.e., administrative law judges]." 33 U.S.C. §
919(d). Shell v. Teledyne Movible Offshore, Inc., 14 BRBS 585 (1981), at 589, aff'd 694 F.2d 720 (5th
Cir. 1982)(table).
In the Black Lung case of Yates v. Armco Steel Corp., 10 BLR 1-132 (1987) at 1-134, the Board
stated that the deputy commissioner is a non-judicial officer. While Yates is a black lung case, the Board
took the opportunity to state its opinion as to what the 1972 amendments accomplished. The Board stated
that the bifurcation of administrative and adjudicative functions reflected in § 19(d) effects a "neatly
legislated procedural separation of informal settlement conferences and formal adjudications," Yates at 1-135, citing Shell at 589. Also in Yates, the Board observed that the legislation reflected legislative concerns
that the administrative and adjudicative functions had been too closely tied together prior to the 1972
amendments. This is bore out by the 1972 House Report which accompanied the 1972 Amendments and
stated:
H.R. 12006 amends Section 19(d) of the [Longshore] Act to make clear that all hearings
under this Act are to be conducted in conformity with the Administrative Procedure Act
(5 USC 554) by hearing examiners [now called administrative law judges] qualified under
the Act. It is the committee's belief that the administration of the Longshoremen's and
Harbor Workers' Compensation Act has suffered by virtue of the failure to keep separate
the functions of administering the program and sitting in judgment on the hearings.
Moreover, with the new responsibilities that will devolve upon the Secretary with the
passage of this bill it will be extremely important to have full time able administrators who
will not also have to wear the dual hat of being hearing officers for purposes of the disputes
brought under this statute.
House Report No. 82-1441, 1972 U.S. Code Cong. & Adm. News 4708.
[ED. NOTE: The Black Lung case of Yates v. Armco Steel Corp., 10 BLR 1-132 (1987) has no
connection with the Longshore case of Ingalls shipbuilding, Inc. v. Director, OWCP (Yates), 519
U.S. 248 (1997).]
More recently, in Director, OWCP v. Newport News Shipbuilding & Dry Dock Co., 514 U.S.
122, 115 S.Ct. 1278 (1995)(eight person majority, one concurrence), the Court spoke in terms of the
Director as having a "duty of uniform administration and enforcement" as opposed to the adjudicatory
process that initially takes place at OALJ. See also, Barthelemy v. J. Ray McDermott, 537 F.2d 168 (5th
Cir. 1976). Still more recently, in Ingalls Shipbuilding, Inc. v. Director, OWCP, (Yates), 519 U.S. 248,
(1997), the Court again referred to OALJ as the beginning of the adjudicatory process.
If informal procedures fail to resolve the claim, the district director must transfer the case to the
Office of the Chief Administrative Law Judge together with all available evidence which the parties intend
to submit at the hearing. See 20 C.F.R. § 702.317.
[ED. NOTE: Despite the wording of the regulation, however, the district director transfers only
a bare bones "file" to OALJ, consisting generally of LS-18 forms filled out by the parties, and a
transmittal letter indicating the transfer of the case as well as whether or not Section 8(f) is at issue.
(Previously, the district director, on behalf of the Director, may have raised the ultimate § 8(f)
defense. However, Abbey v. Navy Exchange, 30 BRBS 139 (1996), has held that it is not sufficient
for the District director to raise a defense to § 8(f) relief by way of a transmittal letter. The Director
must raise and plead the absolute defense directly to OALJ. 20 C.F.R. 702.321(b)(3).)
The entire OWCP file is NOT forwarded to OALJ. The OALJ hearing is de novo. If the parties
intend on offering into evidence anything other than the LS-18 forms or transmittal letter it is the
responsibility of the party so offering to obtain a copy of the document(s) so offered and submit it
to OALJ as per the hearing judge's direction.]
The regulations pertaining to formal hearings before the administrative law judge are set forth in 20
C.F.R. §§ 702.331 through 702.351. Pursuant to statute and regulation, formal hearings are conducted
in accordance with the provisions of the APA. 5 U.S.C. § 554 et seq. See 33 U.S.C. § 919(d); 20
C.F.R. § 702.332.
Notice delivered to the correct address is sufficient to warn a party of the potential waiver of its
right to a hearing. Newport News Shipbuilding & Dry Dock Co.v.Gregory, 213 F.3d 632 (Case No. 99-2356)(4th Cir. 2000)(Unpublished). In Gregory, employer sought reconsideration of the ALJ's order
awarding benefits because it alleged that it was unaware of the fact the case had been assigned to a
different ALJ on remand from the circuit court. The employer asserted that it never received notice of the
reassignment of the case despite the fact that notice was served at the correct address to the attorney of
record as shown in the administrative file at OALJ. After reviewing the record and the ALJ's order
denying reconsideration, the circuit court found that it could discern no reversible error on the part of the
ALJ. The circuit court stated that employer failed to demonstrate how the ALJ's determination (that notice
delivered to the correct address was sufficient to warn employer of the potential waiver of their right to a
hearing) rendered her refusal to grant reconsideration contrary to the law.
In Admiralty Coatings Corp. v. Emery, 228 F.3d 513 (4th Cir. 2000) the employer unsuccessfully
challenged the ALJ's authority to award temporary partial benefits beyond the date of the evidentiary
hearing. The employer had argued that the ALJ's holding violated the APA's mandate that all findings and
conclusions be supported by the evidence of record.
Claimant does not have to be an "active" participant in the adjudication proceedings, so
long as the issue to be adjudicated arises under the LHWCA. Schaubert v. Omega Services Industries
Inc., 31 BRBS 24 (1997) (ALJ has requisite jurisdiction to decide the responsible employer issue, including
whether the borrowed employee doctrine is applicable, even if claimant is not an "active" participant in the
adjudication proceedings).
The Third Circuit has held that due to the inadequacy of the administrative review scheme
to address harm, a longshoreman was not required to bring constitutional challenge within the
LHWCA's administrative claim process. Rather, the district court had jurisdiction to hear the claim
in which the longshoreman alleged that the LHWCA's review procedure unconstitutionally deprived him
of a hearing prior to deprivation of benefits. Kreschollek v. Southern Stevedoring Co., 78 F.3d 868 (3d
Cir. 1996). The court stated:
The inadequacy of the administrative review scheme to address the harm
at issue -- here, the pretermination hearing -- is precisely the sort of
situation which we envisioned … would permit a district court to exercise
jurisdiction over a claim involving the Act. 78 F.3d at 874-875.
But see Bunol v. George Engine Co., 996 F.2d 67 (5th Cir. 1993) (anticipated three-year delay
in obtaining review of administrative law judge's decision awarding benefits under the LHWCA was not
so long as to amount to denial of due process); Garvey Grain v. Director, OWCP, 639 F.2d 366 (7th Cir.
1981) ("[20 C.F.R. § 702.349] contains no provision which requires vacating an award made more than
twenty days after official termination of the hearing before the ALJ, nor do its provisions require a
rehearing").
[ED. NOTE: The Third Circuit conceded that the LHWCA confers only limited jurisdiction in the
district courts, and that the 1972 Amendments restricted access to the district courts; however, it
did not consider these factors significant enough to stop the claimant's constitutional claim. The
court did not cite any cases dealing with termination of workers' compensation benefits. The only
cases the court cited involved government paid benefits or procedures. The court exposited several
situations where predeprivation hearings have been held essential to due process, and concluded
that the termination of Longshore benefits could require a pretermination hearing. Completely
overlooked in the discussion by the court, however, was that the cases in which a pretermination
hearing was held necessary all involved benefits provided directly by the federal government. A
major distinction between those cases and the Longshore benefits was completely overlooked by the
court; each of the other examples involves a government service or a government benefit, to which
due process strictures clearly apply. See Bunol, 996 F.2d at 69 ("due process generally means that
a party must have the opportunity for a hearing before the government interferes with the party's
protected interest" [emphasis excluded]).]
19.3.1 ALJ Cannot Review Discretionary Acts of District Director
The judge's adjudicatory power does not encompass the authority to review discretionary acts by
the district director, such as approved or awarded attorney's fees, pursuant to cases agreed upon or settled
by the parties. Review of such discretionary acts is properly undertaken by the Board. Mazzella v. United
Terminals, 8 BRBS 755, 758, aff'd on recon. 9 BRBS 191 (1978); Dunn v. United Terminals, 8 BRBS
751, 753, aff'd on recon. sub nom. Mazzella v. United Terminals, 9 BRBS 191 (1978); Traina v. Pittston
Stevedoring Corp., 8 BRBS 715, 720 aff'd on recon. sub nom. Mazzella v. United Terminals, 9 BRBS
191 (1978).
Section 19(d) "does not ipso facto confer an absolute right to a hearing before an ALJ on all
contested issues." Healy Tibbitts Builders, Inc. v. Cabral, 201 F.3d 1090, 33 BRBS 209(CRT) (9th Cir.
2000)(Party challenging an attorney's fee award made by the district director does not have a right to a
formal hearing before OALJ when there are no factual issues in dispute.). Cf. Pearce v. Director, OWCP,
647 F.2d 716 (7th Cir. 1981)(LHWCA and its regulations made no distinction between requests for
hearings on claims that are "adjudicatory" in nature and those that are "administrative" in nature.). In
Pearce, the Seventh Circuit held that the district director has a duty to transfer disputes to OALJ because
the Board has "no authority to consider or review the evidence that [has] been gathered by the deputy
commissioner" because the Board can only review a "hearing record" and such a record can only be
developed in an ALJ proceeding.
19.3.2 District Director Lacks Jurisdiction Over Claim Once Referred to OALJ
The district director lacks jurisdiction over a claim once the claim is referred to the OALJ. This
position is supported by references within the LHWCA, C.F.R., A.P.A., B.R.B. caselaw, Fifth and
Seventh Circuit case law and recent U.S. Supreme Court caselaw.
The 1972 Amendments to the LHWCA separates the administrative functions from the
adjudicatory functions. In pertinent part, Section 19(d) of the LHWCA provides as follows:
Notwithstanding any other provisions of this Act, any hearing held under this Act
shall be conducted in accordance with the provisions of section 554 of title 5 of
the United States Code. Any such hearing shall be conducted by the hearing
examiner [now administrative law judge] qualified under section 3105 of that title.
All powers, duties, and responsibilities vested by this Act, on the date of
enactment of the Longshoremen's and Harbor Workers' Compensation
Amendments of 1972, in the deputy commissioners with respect to such
hearings shall be vested in such hearing examiners.
33 U.S.C. § 919(d) (emphasis added.)
20 C.F.R § 702.316 states in pertinent part:
...[I]f he or she is satisfied that any further conference would be unproductive, or
if any party has requested a hearing, the district director shall prepare the case
for transfer to the Office of the Chief Administrative Law Judge. (emphasis
added.)
Seemingly, more is implied than a mere transmittal of a file folder. In fact, the regulations, at one
point, state that after the last memorandum of conference, "the district director shall transfer the case to
the Office of the Chief Administrative Law Judges only after having considered such issues or evaluated
such evidence..." 20 C.F.R. §702.317(d).
Additionally, the Code of Federal Regulations (20 C.F.R. § 702.241(c)), in part, states that
"[w]here a case is pending before the ALJ but not set for a hearing, the parties may request the case be
remanded to the district director for consideration of the settlement." (emphasis added.) This implies that
the ALJ is in full control of the case.
The case law involving the separation of adjudicative and administrative functions is clear. A brief
synopsis follows:
The recent United States Supreme Court decision in Director, OWCP v. Newport News
Shipbuilding & Dry Dock Co., 514 U.S. 122 (1995) is noteworthy as to the division of jurisdiction
between OWCP and OALJ. The Court, in its eight person majority opinion, described the district director
as having a "lack of control over the adjudicatory process." 514 U.S. at 133. Specifically, the Court held
that the Director will ordinarily not have standing to appeal a final order of the Board, since only
a person adversely affected can seek appellate review. Id.
Importantly, the Court spoke in terms of the Director as having a "duty of uniform administration
and enforcement" as opposed to adjudication. 514 U.S. at 133. The Court stated:
If the correctness of adjudications were essential to the Director's
performance of her assigned duties, Congress would presumably have
done what it has done with many other agencies: made adjudication her
responsibility. In fact, however, it has taken pains to remove adjudication
from her realm. The LHWCA Amendments of 1972, 86 Stat. 1251,
assigned administration to the Director, 33 U.S.C. § 939(a); assigned
initial adjudication to ALJ's, § 919(d); and created the Board to consider
appeals from ALJ's, § 921. The assertion that proper adjudication is
essential to proper performance of the Director's functions is quite simply
contrary to the whole structure of the Act.
514 U.S. at 133.
In Ingalls Shipbuilding, Inc. v. Director, OWCP, (Yates), 519 U.S. 248 (1997), the United States
Supreme Court again referred to OALJ as the beginning of the adjudicatory process.
See also Parker v. Director, OWCP, 75 F.3d 929 (4th Cir. 1996) (holding that the Director is
not a necessary party to appeals before the Circuit Court and that an affirmative showing that he is
adversely affected by the decision of the Board is required prior to his participation in an appeal).
In Barthelemy v. J. Ray McDermott, 537 F.2d 168 (5th Cir. 1976), the Fifth Circuit held that
although a district director had held the first part of a two part hearing prior to the effective date of the 1972
amendments (which vested the hearing powers of the district director in OALJ), the district director was
divested of authority to continue the hearing. The Fifth Circuit concluded:
[T]his case...is one where the very purpose of Congress is to take away
jurisdiction. The amendment of section 19(d) of the Act did not itself
affect substantive rights. It merely substituted administrative law judges for
deputy commissioners as those empowered to conduct hearings, thus
evincing a change of congressional policy, based on the conclusion that
administrative and adjudicatory functions under the Act should be
separated to better effectuate its purposes and policies.
Barthelemy, 537 F.2d at 173; see also Du Puy v. Director, OWCP, 519 F.2d 536, 540 (7th Cir. 1975),
cert. denied, 424 U.S. 965 (1976).
In Ingalls Shipbuilding, Inc. v. Asbestos Health Claimants, 17 F.3d 130 (5th Cir. 1994), the Fifth Circuit
again stated its position:
The Director retains authority for the overall administration of the statute.
Substantive legal or factual disputes arising under the LHWCA, however,
are to be decided by the OALJ with review to the Board.
17 F.3d at 133. The Fifth Circuit went on to cite 20 C.F.R. § 702.316.
The Director has a "clear, non-discretionary duty " to transfer the case to OALJ under the above
noted circumstances. Ingalls Shipbuilding, Inc., 17 F.3d at 133; see also Atlantic & Gulf Stevedores, Inc.
v. Donovan, 274 F.2d 794, 802 (5th Cir. 1960). The Atlantic & Gulf court found that every agency has
a duty to conclude any matter before it with reasonable dispatch and that the courts are essentially
empowered to review the inaction of an agency and to "compel agency action unlawfully withheld or
unreasonably delayed." Atlantic & Gulf, 274 F.2d at 802 (quoting 5 U.S.C. § 706(1)); see also 5 U.S.C.
§ 555(b) ("With due regard for the convenience and necessity of the parties or their representatives and
within a reasonable time, each agency shall proceed to conclude a matter presented to it.")
If the Director has a clear, mandatory duty to transfer a case to the OALJ, then the Director is
indeed relinquishing jurisdiction over the case. This is indeed in line with the Board's pronouncement in
Boone v. Ingalls Shipbuilding, Inc., 27 BRBS 250 (1993), aff'd en banc, 28 BRBS 119, 122 (1994)
wherein the Board stated:
Initially, we note that the Act does not remove jurisdiction from the
district director's office until the case has been referred to the
OALJ by the district director.
(Boone, for other reasons, was appealed to the Fifth Circuit. See Ingalls Shipbuilding, Inc. v. Director,
OWCP [Boone], 102 F.3d 1385 (5th Cir. 1996) vacating and remanding 28 BRBS 119 (1994) (Decision
and Order on Recon.) (en banc) (Brown, J., concurring).)
In order to compel the district director to transfer claims to the Office of Administrative Law
Judges, mandamus is the proper remedy. Ingalls Shipbuilding v. Asbestos Health Claimants, 17 F.3d 130
(5th Cir. 1994) (the Director lacks discretion to delay the ordering of a hearing) (citing Atlantic & Gulf
Stevedores, Inc. v. Donovan, 274 F.2d 794, 802 (5th Cir. 1960), reh'g denied, 279 F.2d 75 (district
director is bound by LHWCA and APA to refer a claim for hearing upon the request of either party)).
The prior jurisprudence by the Board seems to support the position that only OALJ has jurisdiction
of a case once it is transferred to the Office of the Chief Judge for adjudication. See Neal v. Strachan, 1
BRBS 279, at 281 (1975); Clefstad v. Perini North River Assocs., 9 BRBS 217, at 221 (1978); Percoats
v. Marine Terminals Corporation, 15 BRBS 150, at 155 (1982), overruled in part on other grounds at
Maine v. Brady-Hamilton Stevedore Company, 18 BRBS 129 (en banc) (1986); Maine v. Brady-Hamilton Stevedore Company, 18 BRBS 129 (en banc) (1986); Carter v. Merritt Ship Repair, 19 BRBS
94 (1986); O'Berry v. Jacksonville Shipyards, Inc., 22 BRBS 430 (1989); Falcone v. General Dynamics
Corp., 21 BRBS 145 at 147 (1988); and Sans v. Todd Shipyards Corp., 19 BRBS 24, 28 (1986).
In Blake v. Hurlburt Field Billeting Fund, 17 BRBS 14, 16 (1985) (Board reaffirms prior holdings
that both district directors and ALJs may approve settlements.), the Board noted that "the interest in judicial
efficiency was best served by allowing administrative law judges to approve settlements where the case had
been referred to that office for hearing prior to the settlement being reached." The Board explained that
it determined on a case-by-case basis which powers are adjudicatory and thus transferred to the ALJs.
Blake, 17 BRBS at 16-17. If a settlement is reached after a case is referred to OALJ, the ALJ may rule
on the settlement proposal, unless the case has not yet been set for a hearing and the parties request that
the matter be remanded. (See paragraph below.).
When Section 19(d) of the LHWCA was amended in 1972, it created the OALJ by giving it
adjudicatory powers which the district director had previously held. Consequently, the jurisprudence and
regulations support the position that the district director lacks jurisdiction over a claim once it is referred
to the OALJ. However, the parties may request that a case pending before an ALJ, but not set for a
hearing , be remanded to the district director for consideration of the settlement. 20 C.F.R. § 702.241(c).
19.3.3 Dismissal of Claim
Neither the LHWCA nor the implementing regulations (20 C.F.R. § 702 et seq.) addresses the
propriety of dismissal of a claim by a judge. In a 1981 case, the Board vacated a judge's order dismissing
a claim since "neither the Act nor the regulations establish a procedure whereby an administrative law judge
may dismiss a claim (with or without prejudice). Rather, the Act requires that an administrative law judge
either award or deny benefits after a hearing." Brown v. Reynolds Shipyard, 14 BRBS 460, 461 (1981).
In Graham v. Director, OWCP, 9 BRBS 155 (1978), the Board held that a motion for dismissal
should have been treated as a request for withdrawal. The Board found that the dismissal of a claim upon
the claimant's motion for dismissal without a finding as to whether withdrawal was for a proper purpose
or in the claimant's interest was improper.
The regulations governing the Rules of Practice and Procedure For Administrative Hearings Before
the Office of Administrative Law Judges at 29 C.F.R. § 18.39(b) provide, however, that "[a] request for
hearing may be dismissed upon its abandonment or settlement by the party or parties who filed it."
The claim is considered abandoned if neither the party nor his representative appears at the
hearing and good cause is not shown for the failure to appear. Taylor v. B. Frank Joy Co., 22 BRBS 408,
411 (1989); see also 20 C.F.R. § 18.29(a) (affording ALJ all powers necessary to conduct fair and
impartial hearings and take appropriate actions authorized by Rules of Civil Procedure for U.S. District
Courts); F.R.C.P. 41(b) (allowing involuntary dismissal for, inter alia, failure to prosecute claims);
F.R.C.P. 37(b)(2)(c) (permits dismissal of an action for failure to comply with a discovery order).
Repeated and numerous abuses of the administrative process by a party may constitute
grounds for dismissal with prejudice. In Harrison v. Barrett Smith, Inc., 24 BRBS 257 (1991), the Board
affirmed the dismissal of a claim where the claimant filed over 100 motions pro se and hearings were
repeatedly continued due to the claimant's failure to cooperate. The Board has stated that a clear record
of intentional conduct must be shown and the factfinder must consider whether lesser sanctions would serve
the interests of justice or whether other sanctions have proven unavailing. Twigg v. Maryland Shipbuilding
& Dry Dock Co., 23 BRBS 118 (1989).
Also, a default decision, see 29 C.F.R. § 18.5(b), may be entered against any party who fails to
appear without good cause.
Note, however, it is error for the judge to dismiss a claim where the claimant expresses a desire
not to pursue the claim; rather, the proper procedure is to grant a withdrawal without prejudice. Lundy
v. Atlantic Marine, 9 BRBS 391, 394 (1978); Graham, 9 BRBS 155.
19.3.4 Hearing Order Within 20 Days
In the event the case goes to a formal hearing, Section 19(c) requires that the judge issue an order
within twenty days accepting or rejecting the claim. The "twenty day rule" set forth in the LHWCA and
at 20 C.F.R. § 702.349 is not mandatory, however. Rather, failure to issue a decision within 20 days
only requires remand where the aggrieved party shows that it was prejudiced by the delay. Leone v.
Sealand Terminal Corp., 19 BRBS 100, 102 (1986); Dean v. Marine Terminals Corp., 15 BRBS 394,
399 (1983); Welding v. Bath Iron Works Corp., 13 BRBS 812, 816-17 (1981) (overruling prior
decisions, including Rosensweig v. Namar Foods, 7 BRBS 898 (1978), to the extent that they did not
require prejudice). Accord Garvey Grain Co. v. Director, OWCP, 639 F.2d 366, 372, 12 BRBS 821,
828 (7th Cir. 1981), aff'g 11 BRBS 441 (1979).
Prejudice may be established where a party demonstrates errors in the ALJ's consideration of the
evidence. See Champion v. S & M Traylor Bros., 14 BRBS 251, 257 (1981), rev'd on other grounds,
690 F.2d 285, 15 BRBS 33 (CRT) (D.C. Cir. 1982) (contention that claimant prejudiced by being forced
to continue receiving welfare held insufficient); Valencia v. Marine Terminals Corp., 9 BRBS 788, 790
(1978). Cf. Jeyakaran v. Daniel, Mann, Johnson & Mendenhall, 8 BRBS 505, 507 (1978), overruled by
Welding v. Bath Iron Works Corp., 13 BRBS 812 (1981); Rosenzweig, 7 BRBS at 905 (noting numerous
errors regarding facts and unsupported statements by ALJ, although Board concluded it could not say for
certain there was prejudice due to delay).
19.3.5 ALJ Must Detail the Rationale Behind His Decision and Specify Evidence Relied
Upon
Section 552(a)(2)(B) of the APA requires that a final order be in writing. Additionally, the ALJ
must adequately detail the rationale behind his decision and specify the evidence upon which he relied. See
Teutonico v. Staten Island Operating Co., (BRB No. 96-0206)(October 17, 1996)(Unpublished); see
Ballesteros v. Willamette Western Corp., 20 BRBS 184 (1988). Hearings of claims arising under the
LHWCA are subject to the APA, see 33 U.S.C. § 919(d), which requires that every adjudicatory decision
be accompanied by a statement of
findings and conclusions and the reasons or basis therefor, on all the
material issues of fact, law, or discretion presented on the record ...
5 U.S.C. § 557(c). See Randall v. Comfort Control, Inc., 725 F.2d 791, 797-98, 16 BRBS 56, 64-65
(CRT) (D.C. Cir. 1984); Devillier v. National Steel & Shipbuilding Co., 10 BRBS 649, 661 (1979) (APA
requires that ALJ make "explicit findings on all relevant aspects of the determination"). It is a "fundamental
rule of administrative law ... that the agency must set forth clearly the grounds on which it acted." Atchison,
Topeka & Santa Fe Ry. Co. v. Wichita Bd. of Trade, 412 U.S. 800, 807 (1973).
Furthermore, "[i]t has been a longstanding requirement that decisions and orders under the
[LHWCA] be specific and complete." Whittington v. National Bank of Washington, 8 BRBS 235, 237
(1978). The rationale behind this requirement is that it is impossible for the Board, or any other reviewing
body, to apply its standard of review without a sufficient explanation of the grounds upon which the fact-finder acted. Id. at 237-38.
The regulations further require the judge to "inquire fully into the matters at issue and ... receive in
evidence the testimony of witnesses and any documents which are relevant and material to such matters."
20 C.F.R. § 702.338. See Ramirez v. Southern Stevedores, 25 BRBS 260, 264 (1992) (ALJ's refusal
to allow post-hearing deposition by employer's vocational expert, although holding record open for post-hearing deposition of claimant's treating physician, violated Section 702.338, as he did not receive into the
record evidence on one of issues of case, extent of claimant's permanent partial disability); see also Kyle
v. Pool Company-Gulf Ensearch, (BRB No. 92-0740)(May 29, 1996)(Unpublished) (case remanded due
to failure of ALJ to analyze or discuss the relevant evidence and to identify the evidentiary basis for his
conclusion).
The omission of a portion of the ALJ's order may toll the30 day period. Grimmett v. Director,
OWCP, 826 F.2d 1015, 1017-18 (11th Cir. 1987)(Held: omission of portion of ALJ's order which
explained why medical evidence rebutted interim presumption of total disability was not mere clerical error
so that 30 day limitations period for filing appeal did not begin to run until original order was amended).
Compare this with the black lung decision in Graham-Stevenson v. Frigitemp Marine Div., 13 BRBS 558,
559 (1981)(Held: that ALJ's failure to multiply dollar amount of miner's weekly compensation rate by
appropriate percentage constituted "oversight" or "omission" within Fed.R.Civ.P. 60(a) and thus did not
suspend the appeals period until the ALJ issued sua sponte correction.
The ALJ is entitled to evaluate the credibility of all witnesses and to draw his own inferences and
conclusions from the evidence. Huff v. Strachen Shipping Co., (BRB No. 93-756)(August 28, 1996)
(Unpublished); Bolden v. G.A.T.X. Terminals Corp., 30 BRBS 71, 73 (1996); see also Calbeck v.
Strachan Shipping Co., 306 F.2d 693 (5th Cir. 1962), cert. denied, 372 U.S. 954 (1963); Todd
Shipyards Corp. V. Donovan, 300 F.2d 741 (5th Cir. 1962).
The ALJ's reliance of an affidavit does not constitute an abuse of discretion. Greenhouse v. Ingalls
Shipbuilding, Inc., (BRB No. 91-2087)(Dec. 10, 1993)(Unpublished).
19.3.6 Formal Hearing
If there are contested issues of fact or law that cannot be resolved by informal procedures, the
district director has the authority to bring the conference to a close and to prepare a written memorandum
with recommendations for resolving the issues. 20 C.F.R. § 702.316. If after receipt of this memorandum,
any party requests a hearing or the district director believes further conferences would not be
productive, the district director may transfer the case to the Office of Administrative Law Judges.
Id. The case cannot be stayed at the district director level until a disability arises at some future date.
Black v. Bethlehem Steel Corp., 16 BRBS 138, 143 (1984).
In order to compel the district director to transfer claims to the Office of Administrative Law
Judges, mandamus is the proper remedy. Ingalls Shipbuilding, Inc. v. Asbestos Health Claimants, 17 F.3d
130 (5th Cir. 1994) (the Director lacks discretion to delay the ordering of a hearing) (citing Atlantic & Gulf
Stevedores, Inc. v. Donovan, 274 F.2d 794, 802 (5th Cir. 1960), reh'g denied, 279 F.2d 75 (district
director is bound by LHWCA and APA to refer a claim for hearing upon the request of either party)).
A formal hearing is initiated after the district director transmits to the OALJ the prehearing statement
(form LS-18), forms prepared by the parties, the available evidence the parties intend to submit at the
formal hearing, and a letter of transmittal (this does not include the written memorandum prepared by the
district director). In pertinent part, section 19(c) of the Act provides as follows:
The Deputy Commissioner [now District Director] shall make or cause to
be made such investigations as he considers necessary with respect to the
claim, and upon application of any interested party shall order a
hearing thereon. (emphasis added)
20 C.F.R. § 702.331 of the Regulations governing the administration of the LHWCA states in
pertinent part:
Formal hearings are initiated by transmitting to the Office of the Chief
Administrative Law Judge the Pre-Hearing Statement forms, the available
evidence which the parties intend to submit at the formal hearing and the
letter of transmittal from the Deputy Commissioner [now District Director]
as provided in Section 702.316 and Section 702.317.
20 C.F.R. § 702.316 of the Regulations states in pertinent part:
...If [the Director] is satisfied that any further conference would be
unproductive, or if any party has requested a hearing, the [Director] shall
prepare the case for transfer to the Office of the Chief Administrative Law
Judge. (emphasis added)
Formal hearings are conducted in accordance with the provisions of the APA at 5 U.S.C. § 554
et seq. Section 5(b) of the APA, which controls proceedings under the LHWCA, provides that:
With due regard for the convenience and necessity of the parties ... and
within a reasonable time, each agency shall proceed to conclude a matter
presented to it.
All adjudicatory functions reside only in the administrative law judge. Maine v. Brady-Hamilton Stevedore Co., 18 BRBS 129, 131 (1986) (en banc) (Only the ALJ can issue subpoenas,
even when the matter is still before OWCP.). When an issue is in dispute, only the judge can hold a
formal hearing and make findings to resolve the dispute. Carter v. Merritt Ship Repair, 19 BRBS 94, 96
(1986); Sans v. Todd Shipyards Corp., 19 BRBS 24, 28 (1986). See Falcone v. General Dynamics
Corp., 21 BRBS 145, 147 (1988) (where parties were not in agreement, ALJ properly retained jurisdiction
and made findings on disputed issues). The formal hearing procedures are found at 20 C.F.R. §§ 702.331-702.351.
Pursuant to Sections 702.331 and 702.332 of the regulations, formal hearings must be conducted
by a judge assigned to the case by the Office of the Chief Administrative Law Judge. 20 C.F.R. §§
702.331, 702.332. "ALJs and judges serving on the BRB are entitled to absolute immunity for performing
judicial acts." Olsen v. Ms. Alexis Herman, et al, (No. 00-3165 MMC) (N. Dist. of CA)(Oct. 31, 2001)
(Unpublished) (Held: Federal district court lacked jurisdiction over plaintiff's claims against the federal
defendants, including ALJs, for injunctive relief and dismissed claims.). In Olsen, the employer filed a
Section 22 Modification Request challenging the claimant's entitlement to permanent and total disability
compensation benefits. The claimant resisted the employer's move to affect his benefits. During the course
of considering the modification request, the claimant sued members of the Department of Labor, OWCP,
OALJ, and members of the Board. The Federal District Court ruled that a disgruntled claimant cannot sue
the above noted persons for rulings they made in the course of considering the challenge to the claimant's
benefits:
As the Court previously ruled in its Order filed December 21, 2000, the LHWCA
provides the exclusive procedures for the determination of benefits available under the
LHWCA. Courts have repeatedly held that the comprehensive nature of the LHWCA's
administrative review scheme, its limited provision for district court jurisdiction, and its
legislative history, purpose, and design preclude subject matter jurisdiction in district courts
over claims for injunctive relief arising out of compensation proceedings under the
LHWCA.
Besides noting the federal defendants' immunity, the court specifically rejected the plaintiff's claims for 42
USC §§ 1981, 1983, 1985, 1986 and 1988, finding that these claims fall for a variety of reasons.
In the related case of Olsen v. Triple A Machine Shop, Inc., (No. C01-3354 BZ (ADR)) (N. Dist.
of CA.) (Dec. 14, 2001)(Unpublished) (Order Granting Defendant Triple A Machine Shop's Motion To
Dismiss),(Final Judgment entered December 17, 2001), the Northern District of California ruled that it does
not have jurisdiction over the LHWCA Modification Request. The district court, citing Thompson v.
Potashnick Construction Co., 812 F.2d 574 (9th Cir. 1987), noted that it only has jurisdiction to enforce
orders in relation to LHWCA matters.
The regulations require that the parties be notified of the place and time of the formal hearing not
less than 30 days in advance thereof. 20 C.F.R. § 702.335. See Abbott v. Universal Iron Works, 23
BRBS 196, 199 (1990) (Board affirmed ALJ's finding of adequate notice as rational and supported by
substantial evidence where ALJ concluded that record indicated that notice of hearing was issued, by mail,
to carrier almost two months prior to hearing, although carrier denied receiving it).
[ED. NOTE: In a Social Security Disability Income claim, the Ninth Circuit has ruled that a
claimant is not entitled to have an ALJ residing in the same state as the claimant, hear the case.
Subia v. Commissioner of Social Security, 264 F.3d 899 (9th Cir. 2001). The court stated that the
claimant failed to advance a "rational argument" explaining why an ALJ residing elsewhere would
be any less qualified to hear the case. "Although [the claimant] asserts that an-out-of-state ALJ
may not be familiar with local doctors and vocational experts, [the claimant] fails to explain why
such familiarity is essential to ensure a fair hearing. [The claimant] overlooks the fact that judges
routinely entertain testimony from experts with whom they are wholly unfamiliar."]
As far as the conduct of the actual hearing, the judge has great discretion, especially with regard
to the admission of evidence. Wayland v. Moore Dry Dock, 21 BRBS 177, 180 (1988); Durham v.
Embassy Dairy, 19 BRBS 105, 107-08 (1986). Pursuant to Section 702.338, the judge may reopen the
hearing for the receipt of evidence at any time prior to the filing of a compensation order. 20 C.F.R. §
702.338. See Wayland, 21 BRBS at 180-81 (Board held that although ALJ could have concluded his
consideration of claimant's compensation claim at end of hearing, he did not err in instead choosing to
continue proceedings before him by requesting submission of new evidence).
This Section also allows the judge to receive into evidence the testimony of witnesses and any
documents which are "relevant and material." 20 C.F.R. § 702.338. See Durham, 19 BRBS at 107-08
(ALJ may, within his discretion, exclude even relevant and material testimony for failure to comply with
terms of pre-hearing order). See also, Smith v. Loffland Bros., 19 BRBS 228 (1987)(Held: party seeking
to admit evidence must exercise due diligence in developing its claim prior to the hearing.) See "Pre-Hearing Order, " infra, this same subsection.
However, in Burley v. Tidewater Temps, Inc., ___ BRBS ___ (BRB No. 01-0405) (Jan. 17,
2002) (Held: ALJ's exclusion from evidence of a labor market survey was an abuse of discretion and a
violation of 20 C.F.R. § 702.338), the Board distinguished both Durham and Smith. The Board noted that
Durham did not involve the last minute addition of a new issue, i.e., the availability of suitable alternate
employment, but rather employer's failure to list a witness, whose testimony would have been with regard
to the sole issue in that case, in compliance with the ALJ's pre-hearing order. Similarly, the Board
distinguished Smith as a case where the party did not exercise due diligence in seeking to admit evidence.
In addressing the ALJ's ruling that excluded evidence in Burley, the Board stated:
Moreover, given the importance of the excluded evidence in this case and the
administrative law judge's use of permissive rather than mandatory language in his pre-hearing order, employer's pre-hearing submission of its labor market survey to claimant
... does not warrant the extreme sanction of exclusion.
[ED. NOTE: While the Board specifically noted in Burley that 20 C.F.R. § 702.338, in part states
that, "The ALJ shall inquire fully into the matters at issue and shall receive in evidence the
testimony of witnesses and any documents which are relevant and material to such matters," the
Board acknowledged the ALJ's discretion as to what is allowed into evidence. It did not overrule
Durham and Smith.]
Section 702.339 expands this discretion even further:
In making an investigation or inquiry or conducting a hearing, the
administrative law judge shall not be bound by common law or
statutory rules of evidence or by technical or formal rules of
procedure, except as provided by 5 U.S.C. 554 and these
regulations; but may make such investigation or inquiry or conduct
such hearing in such a manner as to best ascertain the rights of the
parties.
20 C.F.R. § 702.339. See Evidence, Topic 23, infra.
Jurisdiction to Address Issues
However, the ALJ does not have authority to address all tangential issues. For example, whether
an award of attorney's fees to an employer bases on an alleged breach of an insurer's duty to defend under
the terms of its insurance policy with employer, was not a question "in respect of a claim" as is required to
fall within the ALJ's jurisdiction under Section 19(a). Jourdan v. Equitable Equipment Co. 32 BRBS 200
(1998), over-ruling Gray & Co., Inc. v. Highland Ins. Co., 9 BRBS 424 (1978). In reference to Gray,
the Board stated: "[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."
Pre-Hearing Orders
In Williams v. Marine Terminals Corporation, 14 BRBS 728 (1981) the Board acknowledged that
the regulations do not specifically provide an ALJ with the authority to issue pre-hearing orders and
indicated that the issue had never expressly been addressed by any prior decision. Williams at 732-33.
However, the Board went on to hold that evidence offered in violation of a pre-hearing order may be
excluded in the judge's discretion pursuant to 20 C.F.R. § 702.338. Thus, one may argue, the Board
implicitly held that 20 C.F.R. § 702.338 authorizes the issuance of such orders. Section 702.338, in
relevant part, states:
The order in which evidence and allegations shall be presented and the procedures at the
hearings generally, except as these regulations otherwise expressly provide, shall be in the
discretion of the administrative law judge and of such nature as to afford the parties a
reasonable opportunity for a fair hearing.
Based on this language, the Board has stated that a decision to exclude evidence that does not
comply with the pre-hearing order may only be overturned if it was arbitrary, capricious or an abuse of
discretion. Williams, 14 BRBS at 733. Several cases are enlightening as to the limits of the administrative
law judge's discretion. First, it is clear that an ALJ is not bound by the common law and formal rules of
evidence, or by technical or formal rules of procedure, as long as the parties are provided adequate
protection of their due process rights. 33 U.S.C. §923(a). See also Southern Stevedoring Co. v. Voris,
190 F.2d 275, 277 (5th Cir. 1951); Avondale Shipyards v. Vinson, 623 F.2d 1117, 1121 (5th Cir. 1980).
In an unpublished opinion, the Second Circuit has held that, under 20 C.F.R. § 702.338, "the ALJ
must retain significant freedom to administer its considerable docket. Howell v. Universal Maritime Service
Corp., (ALJ Case No. 93-411)(2nd Cir. November 18, 1996)(Unpublished)(Held, it was not an abuse
of discretion to not adjourn the hearing to discover relevant evidence where claimant's counsel sought the
adjournment after the commencement of the hearing, "and described the then-potentially available evidence
only in the vaguest of terms."). Supreme Court Justice Brennan noted, in a dissenting LHWCA opinion,
the discretion provided to judges and the "sensible informality" of the hearings that such discretion allows.
U.S. Industries/Federal Sheet Metal, Inc. v. Director, OWCP, 455 U.S. 608, 622 (1982)(J. Brennan,
dissenting). Justice Brennan further noted that this informality allows claims and issues to be narrowed
"through a mixture of formal and informal pre-hearing procedures." Id.
Board decisions have also demonstrated the ALJ's breath of discretion. In Smith v. Ceres
Terminal, 9 BRBS 121 (1978), the Board held that an ALJ has broad discretion regarding evidentiary
matters based on Section 23 of the LHWCA. [Although this section of the LHWCA, references
"deputy commissioners," it is applicable to ALJs through Section 19(d).] Specifically, in Smith, the
Board held that an ALJ may, in his discretion, prohibit post-hearing depositions. In Durham v. Embassy
Dairy, 19 BRBS 106 (1986), the Board expressly held that it is within an ALJ's discretion to exclude the
relevant and material testimony of the employer's lone witness where that witness was not identified to the
claimant as required by the pre-hearing order, even though the employer's counsel admitted on the record
that he had misplaced the order. Durham, at 108. See Hughes v. Bethlehem Steel Corp., 17 BRBS 153
(1985)(ALJ has great discretion in the admission of evidence pursuant to § 23(a) and 20 C.F.R. §
702.338).
In Hansen v. Container Stevedoring Co., 31 BRBS 155 (1997), the Board noted that the just-noted pertinent regulations and LHWCA sections afford an ALJ "considerable discretion in rendering
determinations pertaining to the admissibility of evidence." [However, in Hansen, the ALJ had abused his
discretion when he granted the claimant's motion to suppress the employer's evidence for failing to answer
interrogatories, where the claimant had failed to request an order compelling response, and the evidence
had been identified within the time limits set out in the pre-hearing order. Exclusion was thus too harsh a
sanction.]
[ED NOTE: For more information on the discretion of the ALJ in pre-hearing matters, see 5 U.S.C.
§ 556(c), (d); and the introductory chapter of the "Manual for Administrative Law Judges," 2nd ed.
(1992) by Morrell E. Mullins. Professor Mullins specifically mentions "structured case management
devices" which include "court or agency rules which systematically regulate the parties' pre-trial
preparation."]
Subsequent to the formal hearing, the ALJ must prepare a final decision and order in the case.
20 C.F.R. § 720.350.
19.3.6.1 Issues at Hearing
The formal hearing will address issues noted by the parties in pre-hearing statements (LS-18) prior
to transfer pursuant to 20 C.F.R. § 702.317. Lewis v. Norfolk Shipbuilding & Dry Dock Corp., 20 BRBS
126, 129 (1987), overruled in part by Estate of Cowart v. Nicklos Drilling Co., 505 U.S. 469 (1992).
But see Hall v. Newport News Shipbuilding & Dry Dock Co., 24 BRBS 1, 3 (1990) (Board rejected
claimant's contention that ALJ erred in allowing coverage issue to be raised on basis of amended LS-18
after case was referred to OALJ where employer raised issue over three months prior to scheduled hearing
and claimant was provided with ample time to prepare).
The judge is mandated to adjudicate all of the issues before him in one proceeding in order to avoid
piecemeal litigation and needless procedural delay. Hudnall v. Jacksonville Shipyards, 17 BRBS 174
(1985); 20 C.F.R. § 702.338.
[ED. NOTE: However, there are rare occasions when judicial, as well as economic, efficiency are
better served by way of a bifurcated hearing. For example, where jurisdiction (coverage) is a major
and complicated issue, and the case will also have several other medical/economic issues, it seems
reasonable (with the agreement of the parties) to bifurcate the claim and first decide the coverage
issue. This may in effect cause the remaining issues to settle.]
The hearing may be expanded to allow consideration of new issues if the evidence presented
warrants their consideration. 20 C.F.R. § 702.336(a). See Emery v. Bath Iron Works Corp., 24 BRBS
238, 242-43 (1991) (ALJ did not abuse his discretion in refusing to allow employer to raise Section 8(f)
issue, where ALJ found that employer had evidence of claimant's pre-existing hearing loss within its
possession sufficient to alert it to possible Section 8(f) claim at district director level, and employer did not
raise issue until after formal hearing). See also 20 C.F.R. § 702.338. However, distinguish the above
situation from that where an employer seeks to add a late-asserted ground for Section 8(f) relief.
In Director, OWCP v. Newport News Shipbilding & Dry Dock Co., (Dillard), 230 F.3d 126, (4th Cir.
2000), the employer asserted, and the Director did not dispute, that the employer was unaware of the
critical information concerning the late-asserted ground for Section 8(f) relief. The ALJ therefore allowed
the late assertion. The Board found that the ALJ, in effect, must have found that the employer could not
have reasonably anticipated the late-asserted grounds. In remanding the matter back to the ALJ, the
Fourth Circuit found that the ALJ had not determined whether or not the employer reasonably anticipated
the ground. Interestingly, the court stated:
Whatever its powers on review, the Board cannot supply in lieu of what the ALJ did not
find, what he intended to find, or what he "in effect" found, rather it must deal with stated
findings or the absence thereof....Only an ALJ has the power to make the factual findings,
assess the credibility of the relevant witnesses, and resolve any inconsistencies in the
evidence necessary to determine if [Employer] demonstrated that it could not have
reasonably anticipated the late-asserted ground for §8(f) relief at the time the company
initially filed its application with the district director.
Under Section 702.336(b) of the regulations, at any time prior to the filing of a compensation order,
an ALJ may in his discretion, upon the application of a party or upon his own motion, consider a new issue
raised by one of the parties. 20 C.F.R. § 702.336(b). Similarly, the regulations require that parties be
notified and given the opportunity to present argument and new evidence on a new issue which arises during
the course of a hearing. 20 C.F.R. § 702.336(b); see also Cornell Univ. v. Velez, 856 F.2d 402, 405, 21
BRBS 155, 162-63 (CRT) (1st Cir. 1988) (ALJ's lack of notice of his decision to raise Section 8(f) issue
sua sponte deprived Director of opportunity to prepare to address issue); Currie v. Cooper Stevedoring
Co., 23 BRBS 420, 424 (1990); Estate of Cowart v. Nicklos Drilling Co., 23 BRBS 42, 47-48 (1989),
rev'd in part, 907 F.2d 1552, 24 BRBS 1 (CRT) (5th Cir. 1990), aff'd en banc, 927 F.2d 828, 24 BRBS
93 (CRT) (5th Cir. 1991), aff'd, 505 U.S. 469 (1992) (ALJ did not abuse discretion in issuing order
stating that although no discussion regarding issue of future medical benefits was held at hearing and not
raised in pleadings, he would consider the issue--employer's due process rights were not violated as it had
an opportunity to address issues, did so and submitted brief); Klubnikin v. Crescent Wharf & Warehouse
Co., 16 BRBS 182, 184 (1984); Taylor v. Plant Shipyards Corp., 30 BRBS 90 (1996) (ALJ's failure to
consider the Section 33(g) issue post-hearing constituted an abuse of discretion under Section 702.336(b));
Lewis v. Todd Pacific Shipyards Corp., 30 BRBS 154 (1996) (citing Taylor, 30 BRBS 90 (1996)).
[ED. NOTE: The record may also be reopened and a new issue raised pursuant to Section 22 [33
U.S.C. § 922], via a modification proceeding where reopening is premised on a mistaken
determination of fact or change in conditions. Modification is not available where the basis for
reopening is premised on a subsequent change in law. See Pittson Coal Group v. Sebben, 488 U.S.
105 (1988); Ryan v. Lane & Co., 28 BRBS 132 (1994); see also infra Topic 22.]
Where such notice is not provided, and a decision and order is issued, the decision must be vacated
and the case remanded. See id.; Spearman v. Foxhall E. Condominiums, 13 BRBS 722, 724 (1981)
(where employer confronted with new legal theory for which it had not prepared and ALJ nevertheless
proceeded with hearing, Board held it was error not to continue case without providing employer time to
meet new issue); Tisdale v. Owens-Corning Fiber Glass Co., 13 BRBS 167, 173 (1981), aff'd mem. sub
nom. Tisdale v. Director, OWCP, 698 F.2d 1233 (9th Cir. 1982), cert. denied, 462 U.S. 1106 (1983).
The Board has vacated an ALJ's refusal to consider a new issue that could not have been
anticipated by its proponent prior to the hearing. Bolden v. U.S. Stevedores Corp., 18 BRBS 172, 174
(1985) (ALJ abused her discretion by declining to address employer's claim for relief under Section 26,
inasmuch as basis for claim lay in claimant's testimony at hearing).
The Board holds that a judge may not raise a new issue sua sponte in his decision and order.
Bukovac v. Vince Steel Erection Co., 17 BRBS 122, 123 (1985). Contra Cornell Univ., 856 F.2d at 405,
21 BRBS at 161 (CRT) (ALJ's decision to raise Section 8(f) issue sua sponte was within his discretion
where: (1) evidence at least arguably sufficient to come within intent of statute, (2) case not too far along,
and (3) petitioners' failure to plead the defense was subject to some mitigating circumstances).
When a judge finds that a case presents an issue which has not been raised by a party, he must give
the parties notice that he is raising a new issue and hold the record open in order to provide them an
opportunity to respond before he issues his decision. Cowart, 23 BRBS at 47-48; Bukovac, 17 BRBS
at 123. A judge may not order a new hearing based on a new issue in a decision and order awarding
benefits. Once a compensation order is issued, the record is closed and the judge's authority to raise a new
issue expires. Bukovac, 17 BRBS at 123. See 20 C.F.R. § 702.336(b).
Although the judge is not obligated to accept all stipulations entered into by the parties, his
rejection or modification of a stipulation must be adequately explained. Grimes v. Exxon Co., U.S.A., 14
BRBS 573, 576 (1981). Ceres Marine Terminals v. Hinton, 243 F.3d 222 (5th Cir. 2001)(A judge is not
bound by nebulous stipulations pertaining to alternate employment where the employer had not established
the existence of jobs that he could secure.). The judge may not reject stipulations without giving the parties
prior notice that he will not automatically accept the stipulations and an opportunity to present evidence in
support of the stipulations. Beltran v. California Shipbuilding & Dry Dock, 17 BRBS 225, 228 (1985);
Misho v. Dillingham Marine & Mfg., 17 BRBS 188, 191 (1985); Phelps v. Newport News Shipbuilding
& Dry Dock Co., 16 BRBS 325, 327 (1984); Erickson v. Crowley Maritime Corp., 14 BRBS 218, 219-20 (1981). A stipulation cannot be accepted where it evinces an incorrect application of the law. Puccetti
v. Ceres Gulf, 24 BRBS 25, 29 (1990); McDevitt v. George Hyman Constr. Co., 14 BRBS 677, 680
(1982).
The Board will not review an issue raised on appeal where the facts were stipulated before the
judge; the general rule that stipulations are binding on the parties applies. Alexander v. Ryan-Walsh
Stevedoring, 23 BRBS 185, 187 (1990).
The Board has held that the parties may not stipulate jurisdiction under the LHWCA. Littrell v.
Oregon Shipbuilding Co., 17 BRBS 84, 88 (1985); Brown v. Reynolds Shipyard, 14 BRBS 460, 461
(1981); Erickson v. Crowley Maritime Corp., 14 BRBS 218, 220 (1981); Mire v. Mayronne Co., 13
BRBS 990, 991 (1982). A stipulation as to average weekly wage, which is based on a reasonable method
of calculation under the LHWCA, is not prohibited by Section 15(b) of the LHWCA. Fox v. Melville
Shoe Corp., 17 BRBS 71, 73-74 (1985).
Claimant does not have to be an "active" participant in the adjudication proceedings, so
long as the issue to be adjudicated arises under the LHWCA. Schaubert v. Omega Services Industries
Inc., 31 BRBS 24 (1997) (ALJ has requisite jurisdiction to decide the responsible employer issue, including
whether the borrowed employee doctrine is applicable, even if claimant is not an "active" participant in the
adjudication proceedings).
Whether an ALJ has jurisdiction to determine the merits of certain contractual rights and liabilities
arising from an indemnification agreement between an employer and borrowing employer turns on the
interpretation of the portion of Section 19(a) stating that an ALJ has authority "to hear and determine all
questions in respect of such claims." Temporary Employment Services v. Trinity Marine Group, Inc., 261
F.3d 456 (5th Cir. 2001). Here the Fifth Circuit found that the contract dispute was not integral to the
longshore compensation claim and that the Board and the ALJ did not have statutory authority to determine
this issue.
19.3.6.2 Discovery
The ALJ has broad power to direct and authorize discovery in support of the adjudication process.
33 U.S.C. § 927(a); 5 U.S.C. § 556(c); see generally 20 C.F.R. §§ 702.338 - 702.341; 29 C.F.R. §
18.14 et seq.; Bonner v. Ryan-Walsh Stevedoring Co., 15 BRBS 321, 325 (1983); Lopes v. George
Hyman Constr. Co., 13 BRBS 314, 321 (1981) (ALJ "empowered to allow the use of discovery
depositions when the ends of justice would be served").
A discovery ruling will constitute reversible error only if it is "so prejudicial as to result in a denial
of due process." Olsen v. Triple A Mach. Shops, 25 BRBS 40, 45 (1991); Martiniano v. Golten Marine
Co., 23 BRBS 363, 366 (1990). See Niazy v. Capital Hilton Hotel, 19 BRBS 266, 268-69 (1987)
(where discovery orders effectively denied intervenor-petitioner an opportunity to respond to employer's
motions to compel, that denial was violation of due process of law).
Pursuant to this broad power, the ALJ may compel depositions. Percoats v. Marine Terminals
Corp., 15 BRBS 151, 154 (1982); Lopes, 13 BRBS at 321. He may also compel the production of
documents. Sledge v. Sealand Terminal, 14 BRBS 334, 338 (1981). The judge may even compel a
claimant to undergo a vocational rehabilitation evaluation. Villasenor v. Marine Maintenance Indus., 17
BRBS 99, 102 n.5 (1985); Bonner, 15 BRBS at 325. The judge may also limit post-hearing discovery
to evidence relevant to a certain issue. Olsen, 25 BRBS at 44. It is also within the administrative law
judge's discretion to deny a discovery motion. Stark v. Washington Star Co., 833 F.2d 1025, 1030, 20
BRBS 40, 48 (CRT) (D.C. Cir. 1987); Duran v. Interport Maintenance Corp., 27 BRBS 8, 13 (1993).
An ALJ may not dismiss a claimant's claim for benefits pursuant to 29 C.F.R. § 18.6(d)(2)(v) when
the claimant fails to comply with a discovery order. DeMarco v. Global Terminal & Container Services,
Inc., (BRB No. 96-1619)(Aug. 22, 1997) (Unpublished). In DeMarco, the Board held that the Act
contains a specific procedure to be followed if any person resists any lawful order (including discovery).
See 33 U.S.C. § 27(b).
19.3.6.3 Federal Rules of Civil Procedure
The regulations provide the administrative law judge with all powers necessary to conduct fair and
impartial hearings. 29 C.F.R. § 18.29(a). Included among these powers is the right to
(8) Where applicable, take any appropriate action authorized by the
Rules of Civil Procedure for the United States District Courts...
29 C.F.R. § 18.29(a)(8). The Board has concluded that the Federal Rules of Civil Procedure "may be
applied in those instances where the Act and the regulations are silent." Twigg v. Maryland Shipbuilding
& Dry Dock Co., 23 BRBS 118, 120 (1989) (where ALJ chose FRCP 41(b) as means to dismiss claim
of pro se claimant, Board held that case must be remanded for ALJ to consider whether less drastic
sanctions exist to resolve case).
But see Taylor v. B. Frank Joy Co., 22 BRBS 408, 411-12 (1989) (where claimant's counsel
failed to show good cause for his and claimant's failure to appear at formal hearing, Board found that ALJ
had authority, pursuant to 29 C.F.R. § 18.29 and FRCP 41(b), to dismiss request for hearing and refuse
to remand case to district director, which was equivalent of entering "default decision" against claimant).
Before a particular rule of Civil Procedure may be applied in a case, the issue that must be resolved
is whether that rule is consistent with the LHWCA and its intent. Jourdan v. Equitable Equip. Co., 889
F.2d 637, 639, 23 BRBS 9, 10-11 (CRT) (5th Cir. 1989) (FRCP 4 inapplicable to procedures to be
used in obtaining and enforcing a supplementary order of default under Section 18(a) of LHWCA, as
engrafting FRCP 4 onto Section 18(a) procedures would frustrate Congress' intent to get compensation
into injured workers' hands as quickly as possible); Bogdis v. Marine Terminals Corp., 23 BRBS 136, 139
(1989) (use of FRCP 59(e) to provide additional requirement for filing document is not consistent with
Section 23, particularly where claimant is unrepresented by counsel).
See Ceres Gulf v. Cooper, 957 F.2d 1199, 1204, 25 BRBS 125, 129 (CRT) (5th Cir. 1992)
(district court erred in denying Director's intervention pursuant to FRCP 24(a)(2)--interest that justifies
intervention is protection of administrative jurisdiction over LHWCA claims); Quave v. Progress Marine,
912 F.2d 798, 800, 24 BRBS 43, 45 (CRT), on reh'g, 918 F.2d 33 (5th Cir. 1990), cert. denied, 500
U.S. 916 (1991) (district court's determination that FRCP 6(a) governs timeliness of employer's payment
to claimant was proper); Hall v. Newport News Shipbuilding & Dry Dock Co., 24 BRBS 1, 4 (1990)
(FRCP 56 and 29 C.F.R. § 18.40(a) analogous--promptly dispose of actions in which there is no genuine
issue of material fact).
19.3.7 ALJ Disqualifying Attorney
[ED. NOTE: These provisions apply to disqualification from "a particular proceeding" as
distinguished from the authority of the Secretary under Section 31(b) of the LHWCA to list attorneys
who are barred from representing claimants for not less than three years.]
Section 19(c) of the LHWCA and the regulations applicable to LHWCA adjudications empower
the judge to "conduct such hearing in such a manner as to best ascertain the rights of the parties," 33 U.S.C.
§ 923(a); 20 C.F.R. § 702.339, and the general powers of judges include "all powers necessary to the
conduct of fair and impartial hearings," 20 C.F.R. § 18.29(a). These provisions therefore afford direct and
indirect alternatives for attorney disqualification.
The direct alternative, set forth in section 18.34(g)(3) of the Rules of Practice and Procedure for
Administrative Hearings Before the Office of Administrative Law Judges, provides that the "privilege of
appearing" as counsel may be denied if it is found that counsel "does not possess the requisite qualifications
to represent others; or is lacking in character or integrity; has engaged in unethical or improper professional
conduct; or has engaged in an act involving moral turpitude."
Also, Section 18.36(b) provides that counsel may be excluded, suspended or barred from
participation in a particular proceeding for "refusal to comply with directions, continued use of dilatory
tactics, refusal to adhere to reasonable standards or orderly and ethical conduct, failure to act in good faith,
or violation of the prohibition against ex parte communications." 29 C.F.R. §§ 18.34(g)(3), 18.36(b).
Implicit in these provisions is the premise that unethical or improper professional conduct by one
party's counsel deprives the other party of "rights essential to a fair hearing." 29 C.F.R. § 18.34(c). See
Smiley v. Director, OWCP, 973 F.2d 1463, 26 BRBS 37 (CRT) (9th Cir. 1992), substituted opinion,
984 F.2d 278 (9th Cir. 1993) (ALJ has authority and duty to make complete inquiries if the question
arises, to disqualify counsel for conflicts of interest prohibited by applicable rules of professional conduct);
Baroumes v. Eagle Marine Servs., 23 BRBS 80 (1989) (ALJ has authority to immediately disqualify
attorney for "appearance of impropriety" applying State rules against conflict of interest and reasonable
standards of ethical conduct).
Procedurally, the direct denial of authority to appear may be imposed only "after notice of an
opportunity for hearing," the judge must "state in the record the cause for suspending or barring an attorney"
from participation, and any attorney so suspended or barred "may appeal to the Chief Judge but no
proceeding shall be delayed or suspended pending disposition of the appeal; provided, however, that the
judge shall suspend the proceeding for a reasonable time for the purpose of enabling the party to obtain
another attorney or representative." 29 C.F.R. §§ 18.34(g), 18.36(b).
As an indirect alternative, pursuant to the administrative law judge's general powers, certain
types of misbehavior (e.g., disobeying or resisting any lawful order; obstructing the hearing) may be certified
to a Federal District Court "to request appropriate remedies." 29 C.F.R. §§ 18.29(b).
19.4 FORMAL HEARINGS COMPLY WITH APA
Section 19(d) of the LHWCA provides:
(d) Notwithstanding any other provisions of this Act, any hearing
held under this Act shall be conducted in accordance with the
provisions of section 554 of title 5 of the United States Code. Any
such hearing shall be conducted by a hearing examiner qualified
under section 3105 of that title. All powers, duties, and
responsibilities vested by this Act, on the date of enactment of the
Longshoremen's and Harbor Workers' Compensation
Amendments of 1972, in the deputy commissioners with respect to
such hearings shall be vested in such hearing examiners.
33 U.S.C. § 919(d).
Section 19(d) "does not ipso facto confer an absolute right to a hearing before an ALJ on all
contested issues." Healy Tibbitts Builders, Inc. v. Cabral, 201 F.3d 1090, 33 BRBS 209(CRT) (9th Cir.
2000), cert. denied, 121 S.Ct. 378 (2000)(Party challenging an attorney's fee award made by the district
director does not have a right to a formal hearing before OALJ when there are no factual issues in dispute.).
Cf. Pearce v. Director, OWCP, 647 F.2d 716 (7th Cir. 1981)(LHWCA and its regulations made no
distinction between requests for hearings on claims that are "adjudicatory" in nature and those that are
"administrative" in nature.). In Pearce, the Seventh Circuit held that the district director has a duty to
transfer disputes to OALJ because the Board has "no authority to consider or review the evidence that
[has] been gathered by the deputy commissioner" because the Board can only review a "hearing record"
and such a record can only be developed in an ALJ proceeding.
Section 554(b) of the APA, 5 U.S.C. § 554(b), requires that persons entitled to notice of an
administrative hearing shall be informed of issues of fact and law to be resolved therein. The fundamental
problem of the notice requirement is one of due process, rather than "correct procedure." Although
administrative hearings are not bound by the same details of procedure as the common law courts, they are
governed by basic requirements of fairness and notice. Hess & Clark, Div. of Rhodia, Inc. v. Food &
Drug Admin., 495 F.2d 975, 984 (D.C. Cir. 1974).
In Ion v. Duluth, Missabe and Iron Range Railway Co., 32 BRBS 268 (1998), the Board found
that the ALJ had violated the employer's right to due process by failing to provide the employer with an
opportunity to cross-examine the claimant or respond to his post-hearing affidavit regarding his job search.
On remand the employer was given an opportunity and alleged that the passage of 20 months had
destroyed his due process rights because many potential employers had destroyed their employment
applications and/or did not remember the claimant as an applicant. In his Decision and Order on Remand,
the ALJ found that the passage of time had not automatically destroyed the employer's due process rights,
but rather, employer had not availed itself of all of the opportunities to submit meaningful rebuttal evidence
in that it had not deposed the claimant nor any of the employers he had contacted, but only made "cursory"
contacts with seven of the 12 employers mentioned in claimant's affidavits.
Section 554(d) of the APA, 5 U.S.C. § 554(d), provides that the post-hearing decision shall be
made by the judge who received the evidence and presided at the hearing, unless that officer is unavailable.
If the credibility of the witnesses is at issue, and the presiding judge is unavailable to issue a decision, the
parties have the right to a de novo proceeding before a new judge. This right may be waived. See
Van Teslaar v. Bender, 365 F. Supp. 1007 (D.C. Md. 1973); see also Pigrenet v. Boland Marine & Mfg.
Co., 656 F.2d 1091, 1095, 13 BRBS 843, 846 (5th Cir. 1981) (en banc), vac'g 631 F.2d 1190, 12
BRBS 710 (5th Cir. 1980) (claimant waived right to new hearing by not objecting to resubmission of case
on extant record or seeking to present further evidence and also did not raise resolution of credibility issues
based on transcript as error before ALJ in reconsideration or before the Board); Creasy v. J.W. Bateson
Co., 14 BRBS 434, 435-36 (1981) (parties' failure to opt for supplemental hearing offered by new ALJ
constituted waiver of de novo hearing). An ALJ's determination that notice delivered to the correct
address was sufficient to warn an employer of the potential waiver of its right to a hearing, is not contrary
to law. Newport News Shipbuilding & Dry Dock Co. v. Gregory, (ALJ Case No. 99-2356)(4th Cir.
April 24, 2000)(Unpublised)(Employer's allegation that it was unaware of the fact that a case had been
assigned to a different ALJ on remand was of no consequence since notice had been served at the correct
address to the attorney of record as shown in the administrative file at OALJ.).
Section 556 of the APA, 5 U.S.C. § 556, applies to hearings held under 5 U.S.C. § 554, and
pertains to formal hearings, trial officers and their power, evidentiary development and the formal record.
Under this section, a judge may disqualify himself. In cases where this results from allegations of bias,
the allegations must be supported by the record in order to show prejudice against the party seeking
disqualification. Swain v. Bath Iron Works Corp., 17 BRBS 145, 147 (1985).
Adverse rulings, alone, are insufficient to show bias. Olsen v. Triple A Mach. Shops, 25 BRBS
40, 45-46 (1991); Raimer v. Willamette Iron & Steel Co., 21 BRBS 98, 100 (1988). Written remarks
regarding the judge's conduct are insufficient to establish bias by the judge towards the author of the
remarks. Olsen, 25 BRBS at 46.
Each allegation of bias must be specific for the complaint to be heard, Pfister v. Director,
OWCP, 675 F.2d 1314, 1318, 15 BRBS 139, 142 (CRT) (D.C. Cir. 1982), and must be made "as soon
as practicable after a party has reasonable cause to believe that grounds for disqualification exist." Id.;
Marcus v. Director, OWCP, 548 F.2d 1044, 1050-51, 5 BRBS 307, 315 (D.C. Cir. 1976). See also
Walker v. Newport News Shipbuilding & Dry Dock Co., 10 BRBS 101 (1979), aff'd, 618 F.2d 107 (4th
Cir.), cert. denied, 446 U.S. 943 (1980).
To establish bias resulting from an ex parte communication, a party must show that such
communication formed the basis of the judge's decision. Nasem v. Singer Business Machs., 13 BRBS
429, 432 (1981), aff'd mem., 691 F.2d 495 (4th Cir. 1982). The Board will not consider an allegation
of bias if not timely raised at the hearing level. Jones v. J.F. Shea Co., Inc., 14 BRBS 207, 209 (1981).
Under Section 556(d) of the APA, the claimant bears the ultimate burden of persuasion by a
preponderance of the evidence. See 5 U.S.C. § 556(d). Because of this allocation of the burden of proof,
the United States Supreme Court had concluded that an injured worker claiming compensation must
prove the elements of his claim by a "preponderance of the evidence." The "true doubt" rule under which
the claimant wins if the evidence is evenly balanced, is inconsistent with the APA, 5 U.S.C. § 556(d).
Director, OWCP v. Greenwich Collieries, (Maher Terminals), 512 U.S. 267 (1994) (See Topic 20.3,
infra.)
The United States Supreme Court has held that this rule is contrary to the provisions of the APA
because it allows the claimant to prevail despite a failure to prove entitlement by a preponderance of the
evidence. Id. Contra Freeman United Coal Mining Co. v. OWCP, 988 F.2d 706, 17 BLR 2-195 (7th
Cir. 1993); Avondale Shipyards v. Kennel, 914 F.2d 88, 90-91, 24 BRBS 46, 47-48 (CRT) (1st Cir.
1990); Parsons Corp. of California v. Director, OWCP, 619 F.2d 38, 41, 12 BRBS 234, 235 (9th Cir.
1980); Bath Iron Works Corp. v. White, 584 F.2d 569, 574, 8 BRBS 818, 821 (1st Cir. 1978); Fidelity
& Casualty Co. v. Burris, 59 F.2d 1042, 1044 (D.C. Cir. 1932).
Section 556(e) of the APA, 5 U.S.C. § 556(e), states that the transcript of testimony and exhibits,
together with all papers and requests filed in the proceeding, constitute the exclusive record for decision.
Pursuant to the Code of Federal Regulations, evidence must be formally admitted into the record; a
decision issued based on evidence not formally admitted violates the APA. 20 C.F.R. § 702.338. See
Williams v. Hunt Shipyards, Geosource, 17 BRBS 32, 35 (1985) (ALJ erroneously decided Motion for
Modification on basis of evidence which was never formally admitted); Ross v. Sun Shipbuilding & Dry
Dock Co., 16 BRBS 224, 225 (1984) (because ALJ did not rule on objections to admission, documents
never became part of record).
See also Lindsay v. Bethlehem Steel Corp., 18 BRBS 20, 22 (1986) (Board cannot consider
evidence submitted at oral argument indicating that claimant is barred from compensation due to third party
settlement; case remanded to ALJ to admit and consider evidence); Woods v. Bethlehem Steel Corp., 17
BRBS 243, 245 (1985) (motion to dismiss appeal due to unapproved third-party settlement denied as facts
are not in record; employee may seek Section 22 modification).
The Code of Federal Regulations detail how formal hearings will be conducted. Section 702.337
pertains to the location and time of the formal hearing. Although continuances will not be granted
except in cases of extreme hardship, the judge's decision to continue a hearing will be overturned only for
a clear abuse of discretion. Colbert v. National Steel & Shipbuilding Co., 14 BRBS 465, 467 (1981).
Section 702.338 requires parties or their representatives to attend the hearings, dictates that the
judge shall inquire into all matters at issue and receive evidence pertaining thereto, and allows the hearing
officer to reopen the hearing for the receipt of new evidence deemed necessary. See Bingham v. General
Dynamics Corp., 14 BRBS 614, 616 (1982); Sprague v. Bath Iron Works Corp., 11 BRBS 134, 138
(1979), decision following remand, 13 BRBS 1083 (1981), aff'd sub nom. Sprague v. Director, OWCP,
688 F.2d 862, 15 BRBS 11 (CRT) (1st Cir. 1982) (ALJ may inquire into matters not in record to
determine whether they are relevant or subject to discovery).
The judge has the power, using 28 U.S.C. § 1961 (district courts have power to award interest),
as guidance to award interest. Brown v. Alabama Dry Dock and Shipbuilding Corp., 28 BRBS 160
(1994); (post-judgment interest, assessed on awarded but unpaid pre-judgment interest, serves the purpose
of the LHWCA by making claimants whole); see Santos v. General Dynamics Corp., 22 BRBS 226
(1989). See generally Topic 65, infra.
Under Section 702.351, the judge shall halt the proceedings upon receipt of a signed statement
from the party withdrawing controversion. 20 C.F.R. § 702.351. The judge is to notify the district
director, who shall then proceed to dispose of the case as provided for in Section 702.315. 20 C.F.R. §
702.315. The regulation assumes that the parties have decided to voluntarily dispose of the claim in a
manner consistent with informal proceedings, thus obviating the need for a formal hearing on any issues.
Lundy v. Atlantic Marine, 9 BRBS 391, 393 (1978).
Section 557 of the APA, 5 U.S.C. § 557, applies when hearings are conducted in accordance with
5 U.S.C. § 556. Section 557(c)(3)(A), 5 U.S.C. § 557(c)(3)(A), requires decisions rendered under
the APA to include a statement of "findings and conclusions, and the reasons or basis therefor, on all
material issues of fact, law, or discretion presented in the record." The rule is designed to allow reviewing
bodies to carry out their function of determining whether decisions have been made according to the
applicable statutes. See generally See v. Washington Metropolitan Area Transit Authority, 36 F.3d 375,
28 BRBS 96 (CRT) (4th Cir. 1994); Atchison, Topeka & Santa Fe Ry. v. Wichita Bd. of Trade, 412
U.S. 800, 807 (1973).
The judge must adequately detail the rationale behind his decision, and specify which medical
evidence was relied upon and why. Cotton v. Newport News Shipbuilding & Dry Dock Co., 23 BRBS
380, 382 (1990); McCurley v. Kiewest Co., 22 BRBS 115, 119 (1989); Ballesteros v. Willamette
Western Corp., 20 BRBS 184, 187 (1988); Williams v. Newport News Shipbuilding & Dry Dock Co.,
17 BRBS 61, 62-63 (1985); Whittington v. National Bank of Wash., 12 BRBS 439, 442 (1980);
Corcoran v. Preferred Stone Setting, 12 BRBS 201, 203 (1980).
The ALJ must also independently analyze and discuss the evidence; the failure to do so will
violate the APA's requirement for a reasoned analysis. Williams, 17 BRBS at 63; Frazier v. Nashville
Bridge Co., 13 BRBS 436, 437 (1981). But see Hayes v. P & M Crane Co., 23 BRBS 389, 394 (1990),
vac'd, 930 F.2d 424, 24 BRBS 116 (CRT) (5th Cir. 1991) (ALJ did not err in failing to discuss
physician's testimony, as it supported his denial of Section 8(f) relief).
The ALJ's incorporation of factual and legal assertions from a party's brief is impermissible
to the extent it prevents this independent review of the evidence by the adjudicator. Williams, 17 BRBS
at 63. See also Jaros v. National Steel & Shipbuilding Co., 21 BRBS 26, 29-30 (1988) (ALJ's adoption
of findings of grievance arbitrator and his failure to make independent findings of fact required remand).
The Board has remanded cases where the judge made conclusory findings of fact without
comment on conflicting evidence or without explicit acceptance or rejection of parts thereof.
Dodd v. Newport News Shipbuilding & Dry Dock Co., 22 BRBS 245, 248 (1989) (ALJ's cursory finding
that there existed "substantial evidence" to rebut Section 20(a) presumption failed to satisfy APA); Frye
v. Potomac Elec. Power Co., 21 BRBS 194, 196-97 (1988) (ALJ erred in failing to analyze conflicting
medical opinions in concluding that claimant's back condition and chronic pain syndrome were not work-related); Williams, 17 BRBS at 63; Williams v. Nicole Enters., 15 BRBS 453, 454 (1983); Bonner v.
Ryan-Walsh Stevedoring Co., 15 BRBS 321, 324 (1983); Frazier, 13 BRBS at 437; Willis v. Washington
Metro. Area Transit Auth., 12 BRBS 18, 22-23 (1980).
The Board has also remanded cases where the judge neglected to make specific findings
of fact in applying the LHWCA, or made ambiguous findings. Jones v. Midwest Mach. Movers, 15
BRBS 70, 73 (1982), aff'd, 840 F.2d 20 (7th Cir. 1988); McDevitt v. George Hyman Constr. Co., 14
BRBS 677 (1982); Grimes v. Exxon Co., U.S.A., 14 BRBS 573, 577 (1981); Bentley v. Sealand
Terminals, 14 BRBS 469, 470 (1981); Shoemaker v. Sun Shipbuilding & Dry Dock Co., 12 BRBS 141,
147 (1980); Moore v. Paycor, Inc., 11 BRBS 483, 489-90 (1979).
The Board has remanded where the judge failed to address issues raised by the parties
during the hearing. Wade v. Gulf Stevedore Corp., 8 BRBS 335, 341-42, on recon., 8 BRBS 627
(1978).
There is no provision of the LHWCA under which the ALJ may condition a claimant's entitlement
to benefits upon his relinquishing his firearms. Such conditioning exceeds the scope of the ALJ's authority.
Kish v. GATX Corp., (Unreported)(BRB Nos. 97-461, 00-445 and 00-445A)(Jan. 18, 2001). In the
original ALJ Decision and Order in Kish, the administrative law judge had found that the claimant suffered
from physical and psychological disabilities which rendered him unable to return to his former employment,
thus awarding the claimant continuing temporary total disability benefits.
In the Decision and Order Denying Petition for Modification, the judge conditioned the claimant's
continued receipt of benefits upon submission of a sworn statement that he has renounced all threatening
behavior, has removed all firearms and ammunition from his home, and has no access to the weapons of
his family and friends. In addition, the judge required the claimant to cooperate with the employer by
arranging a 30-day stay in an East Coast facility to address issues regarding substance dependence, pain
medication, and psychiatric problems, and to furnish documentation requested by physicians. The Board
vacated the 30-day treatment provision of the Order and ordered the judge to resolve conflicts in the
record. As to the firearms portion of the Order, the Board noted found that the judge exceeded his
authority.
Compensation benefits under the LHWCA may be suspended only if an employee unreasonably
refuses to submit to a medical examination or treatment. 33 U.S.C. § 907(d)(4), (f). Specifically, the
Board noted that "Although Section 27(a) grants the [ALJ] the authority to issue subpoenas, administer
oaths, compel attendance and testimony of witnesses, production of documents, and 'all things conformable
to law which may be necessary to enable him effectively to discharge the duties of his office,' the behavior
the [ALJ] is attempting to curtail in the instant case does not involve conduct in the hearing held before
him." Kish at 7.
Similarly, an ALJ was found to have exceeded his authority in mandating how a claimant must file
a second longshore claim as this procedure is covered by the LHWCA. See generally Stevens v. Matson
Terminals, Inc., 32 BRBS 197 (1998).
19.4.1 District Director Cannot Hold Hearings After 11/26/72
The 1972 Amendments amended Section 19(d), withdrawing the adjudicatory power to conduct
hearings from the district directors and conferring it on administrative law judges. See Topic 19.3, supra.
See also O'Berry v. Jacksonville Shipyards, 22 BRBS 430, 432-33 (1989) (where district director did
not have authority to issue a compensation order in 1973 because 1972 Amendments had already taken
effect, order was void from its inception and therefore without legal effect).
Pursuant to the amended Section 19, the district director performs only administrative and pre-hearing investigative functions, and facilitates settlement; all adjudicatory functions reside in the
administrative law judge. Carter v. Merritt Ship Repair, 19 BRBS 94, 95 (1986) (district director
exceeded his authority by vacating ALJ's decision). When an issue is in dispute, only the judge can hold
a formal hearing and make findings to resolve the dispute. Id. at 96; Sans v. Todd Shipyards Corp., 19
BRBS 24, 28 (1986) (remand to district director is justified only when it is clear that all interested parties
are in agreement and further formal proceedings are unnecessary).
The Board has therefore held that district directors no longer possess the authority to perform
certain adjudicatory duties which are referred to in Sections 19, 23, and 27. The district director may no
longer issue subpoenas duces tecum. Maine v. Brady-Hamilton Stevedore Co., 18 BRBS 129, 132
(1986) (en banc), overruling Rabb v. Marine Terminals Corp., 11 BRBS 498 (1978), and contrary
language in Percoats v. Marine Terminals Corp., 15 BRBS 151 (1982).
[ED. NOTE: For a discussion of the procedure involved in requesting/issuing subpoenas, see
www.oalj.dol.gov .]
The district director may not compel testimony at depositions. Percoats, 15 BRBS at 155. See
also Grandy v. Vinnell Corp., 14 BRBS 504, 511 (1981) (district director may not entertain motion for
exhumation and autopsy).
Absent an agreement by the parties or a request for an order under Section 702.315, the district
director is not empowered to issue a compensation order. Roulst v. Marco Constr. Co., 15 BRBS 443,
446 (1983). Upon request of any interested party, a hearing on the claim shall be ordered. Black v.
Bethlehem Steel Corp., 16 BRBS 138, 142 (1984). Section 19(c) then confers jurisdiction on the
administrative law judge. Id.
An order issued upon consent of the parties pursuant to Section 702.315 is subject to Section 22
modification. Stock v. Management Support Assocs., 18 BRBS 50, 52 (1986).
Although Section 22 explicitly refers to initiation of modification proceedings before the district
director, the Board has held that modification is properly sought before the administrative law judge who
heard the case where an appeal is pending before the Board. Craig v. United Church of Christ, Comm'n
for Racial Justice, 13 BRBS 567, 571 (1981).
In other cases, modification may be initiated before the district director. His function, however,
is to gather evidence and conduct informal investigations, he may not modify the decision of an ALJ in a
contested case. Carter, 19 BRBS at 96; Sans, 19 BRBS at 29.
The Board has held that the district director may not delegate to the claims examiner
discretionary duties such as the authority to determine attorney's fees. Mazzella v. United Terminals, 8
BRBS 755, 759, aff'd on recon., 9 BRBS 191 (1978). Cf. Bradley v. Director, OWCP, 8 BLR 1-418
(1985) (district director may delegate ministerial duties such as setting deadline for submitting fee petition).
Contra Barulec v. Skou, R.A., 471 F. Supp. 358, 361 (S.D.N.Y. 1979), aff'd, 622 F.2d 572 (2d Cir.
1980), aff'd sub nom. Rodriguez v. Compass Shipping Co., 451 U.S. 596, reh'g denied, 453 U.S. 923
(1981) (district director's authority to enter award based on settlement can be delegated to claims
examiner; delegation not in issue on appeal).
An assistant district director, however, who is duly authorized to perform the duties of a district
director, may approve a Section 8(i) settlement. House v. Southern Stevedoring Co., 14 BRBS 979, 981
(1982), aff'd, 703 F.2d 87, 15 BRBS 114 (CRT) (4th Cir. 1983).
The district director continues to possess the authority to approve settlements under Section
8(i) of the LHWCA. Blake v. Hurlburt Field Billeting Fund, 17 BRBS 14, 15 (1985); Clefstad v. Perini
N. River Assocs., 9 BRBS 217, 221 (1978). But see 20 C.F.R. § 702.241(c) The district director also
has the authority to approve attorney's fees for work performed before him. Mazzella v. United Terminals,
8 BRBS 755, 759, aff'd on recon., 9 BRBS 191 (1978). The district director can back up his
investigatory authority by referring a case to the Office of Administrative Law Judges for the issuance of
a subpoena. Maine, 18 BRBS at 133.
The district director's role, as it emerges in the scheme of the post-1972 LHWCA, is that of a
claims administrator who functions both to process claims and to facilitate their informal resolution in a
timely and fair manner. Maine, 18 BRBS at 132. See generally 20 C.F.R. Subparts A, B, and C, §§
702.301 to 702.321. For example, claims are initially filed with the district director, who must notify the
responsible employer thereof. 20 C.F.R. §§ 702.221, 702.224. The district director is also responsible
for supervising an injured employee's medical care and medical examinations. 20 C.F.R. §§ 702.401 et
seq.
Where a claim is disputed, the district director will attempt an informal resolution of the claim and
hold informal conferences, if necessary, to achieve that end. 20 C.F.R. §§ 702.311, 702.312. No
witnesses are called at the informal conference, and no stenographic report is taken. 20 C.F.R. §
702.314(a). If the parties reach agreement, the district director shall embody the agreement in a
memorandum or issue a formal compensation order. 20 C.F.R. § 702.315.
If the parties disagree, the district director shall close the conference, prepare a closing
memorandum of conference and submit it to the parties, who have 14 days to submit final comments on
their respective positions. 20 C.F.R. § 702.316. If the dispute persists, the district director shall transfer
the case to the Office of the Chief Administrative Law Judge for formal adjudication. 20 C.F.R. §§
702.316, 702.317, 702.331.
Informal conferences are not mandatory. The Board has therefore held that the district director
acted within his discretion in referring a case to the Office of Administrative Law Judges without an informal
conference where there were numerous complex issues, the employer had ample opportunity to develop
evidence and present issues to the administrative law judge, and the employer was not prejudiced.
Matthews v. Jeffboat, Inc., 18 BRBS 185, 187 (1986).
[ED.NOTE: However, the awarding of Section 28(b) fees is not appropriate if there has not been
an informal conference with the Department of Labor. FMC Corporation v. Perez, 128 F.3d 908
(5th Cir. 1997); Accord Todd Shipyards Corp. v. Director, OWCP, 950 F.2d 607 (9th Cir. 1991);
Staftex Staffing v. Director, OWCP, 217 F.3d 365 (5th Cir. July 18, 2000); re-issued at 237 F.3d 409
(5th Cir. July 25, 2000)(then subsequently re-issued again on March 26, 2001 using the 237 F.3d 409
cite.); but see, Mary J. Hawkins (Widow of Gilbert W. Hawkins) v. Harbert International, Inc. and
Insurance Company of North America, 33 BRBS 198 (1999) (Although technically no informal
conference had been held, the review of the claim by two claims examiners satisfied the informal
process requirements of the LHWCA.); Flanagan Stevedores, Inc. v. Gallagher, 219 F.3d 426 (5th
Cir. 2000). See discussion of Staftex Staffing v. Director, OWCP, 237 F.3d409 (5th Cir. 2000) (5th
Cir. Case No. 99-60587) at Topic 28.2.1 Attorney Fees-Controversion.]
19.4.2 SUMMARY DECISION
[ED. NOTE: For purposes of proceedings under the LHWCA, a motion for "summary decision"
is akin to a motion for "summary judgment." Administrative Law Judges issue "decisions" as
opposed to "judgments." In general, no distinction between the two terms is to be made.]
A motion for summary decision in a LHWCA case is governed by 29 C.F.R. §§ 18.40 and
18.41. The purpose of summary decision is to promptly dispose of actions in which there is no genuine
issue as to any material fact. Green v. Ingalls Shipbuilding, Inc., 29 BRBS 81 (1995); Harris v. Todd
Pacific Shipyards Corp., 28 BRBS 254 (1994); Hall v. Newport News Shipbuilding & Dry Dock Co.,
24 BRBS 1 (1990).
Any party may, at least 20 days prior to trial, move for a summary decision. Affidavits submitted
with the motion shall set forth facts admissible in a proceeding subject to Title 5 U.S.C. §§ 556-557.
An ALJ may grant a summary decision for either party if the pleadings, affidavits, materials obtained
by discovery or otherwise, or matters officially noticed show that there is no genuine issue as to any material
fact and that a party is entitled to a judgment as a matter of law. 29 C.F.R. § 18.40(d); Fed. R. Civ. P.
56.
An issue is material if the alleged are such as to constitute a legal defense or are of such nature as
to affect the result of the action. A fact is material and precludes a grant of a summary decision if proof of
that fact would have the effect of establishing or refuting one of the essential elements of a cause of action
or a defense asserted by the parties. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S.
574, 587 (1986). Furthermore, the fact must necessarily affect application of appropriate principles of law
to the rights and obligations of the parties. Id. If the court (ALJ) finds a fact or facts to be material, then
it must determine whether there is a "genuine issue" concerning any of them. 10 A. Wright and Miller,
Federal Practice and Procedure, § 2725, at 95 (1983). If no issues are present, the moving party is
entitled to a judgment as a matter of law. If the slightest doubt remains as to the facts, the motion must be
denied.
The burden of proof in a motion for summary decision is borne by the party bringing the motion.
See id. at § 2727, at 121. Because the burden is on the movant, the evidence presented is construed
in favor of the party opposing the motion who is given the benefit of all favorable inferences that
can be drawn from it. Id. at 124-25. Therefore, facts asserted by the party opposing the motion that are
supported by affidavits or other evidentiary material are regarded as true. Id. at 128. Nevertheless, when
the moving party has carried its burden under Section 56(c) of the Federal Rules of Civil Procedure, its
opponent must do more than simply show there is some metaphysical doubt as to the material facts.
Matsushita Elec., 475 U.S. at 574. Thus, under the summary decision rule, a non-moving party "may
not rest upon mere allegations or denials in his pleadings, but must set forth specific facts
showing that there is a genuine issue for trial. Anderson v. Liberty Lobby, 477 U.S. 242, 256-57
(1986); Matsushita Elec., 475 U.S. at 587; see Dunn v. Lockheed Martin Corp., 33 BRBS 204 (1999).
There must be no controversy regarding the evidentiary facts or the inferences to be drawn
therefrom. Donahue v. Windsor Locks Bd. of Fire Comm'rs, 834 F.2d 54 (2d Cir. 1987). The ALJ must
review the evidence and inferences in the light most favorable to the party opposing the motion. Hahn v.
Sargent, 523 F.2d 461, 464 (1st Cir. 1975), cert. denied, 425 U.S. 904 (1976); see Brockington v.
Certified Electric, Inc., 903 F.2d 1523 (11th Cir. 1990), cert. denied, 498 U.S. 1026 (1991); Dunn v.
Lockheed Martin Corp., 33 BRBS 204, at 207 (1999). Relying on those cases, the Board affirmed a
summary decision in Hall v. Newport News Shipbuilding & Dry Dock Co., 24 BRBS 1 (1990). The
motion may be denied if the moving party refuses discovery to a party opposing the request.
The ALJ cannot summarily try the facts. Rather, the ALJ must apply the law to the facts that
have been established by the parties. See 10 A. Wright and Miller, Federal Practice and Procedure, §
2725, at 104 (1983). A motion cannot be granted merely because the movant's position appears
more plausible or because the opponent is not likely to prevail at trial. Id. at 104-5. In short, the
trier of fact has no discretion to resolve factual disputes on a summary decision motion. Id. at § 2728, at
186. Accordingly, "if the evidence presented on the motion is subject to conflicting interpretations, or
reasonable men might differ on its significance, summary judgment is improper." Id. § 2725, at 106, 109.
Once it is determined that a triable issue exists, the inquiry is at an end and summary decision must be
denied. Id. at 187.
The United States Supreme Court has cautioned that "summary procedures should be used
sparingly … where motive and intent play lead roles…" Poller v. Columbia Broadcasting System, Inc.,
368 U.S. 464, 473 (1962).
Any decision issued as a summary judgment must conform to the requirements for all final decisions
and include:
(1) Findings of fact and conclusions of law on all issues.
(2) The terms and conditions of the order.
19.5 MOTION FOR RECONSIDERATION
Once the judge issues a decision, he may reconsider that decision and it is within his discretion to
grant or deny a motion to reconsider. Winburn v. Jeffboat, Inc., 9 BRBS 363, 365 (1978) (ALJ's denial
of employer's petition for reconsideration and motion to submit evidence of awarded claimant's
incarceration was not abuse of discretion, since ALJ has discretion to grant or deny motion for
reconsideration).
Section 802.206(f) of the Board's regulations state that "any appeal to the Board, whether filed
prior to or subsequent to the filing of the timely motion for reconsideration, shall be dismissed without
prejudice as premature." 20 C.F.R. § 802.206(f) (emphasis added). In Jourdan v. Equitable Equipment
Co., 29 BRBS 49 (1995), the Board held that the regulatory language of Section 802.206(f) is mandatory
and requires dismissal of an appeal when a motion for reconsideration is filed with an ALJ, regardless of
whether such motion requests reconsideration of the merits. In other words, whenever a motion for
reconsideration is filed with the OALJ, dismissal of the appeal is required by Section 802.206(f). Jourdan,
29 BRBS at 50.
A motion for reconsideration will toll the running of time for filing a notice of appeal. 20
C.F.R. § 802.206(a); McCrady v. Stevedoring Servs. of America, 23 BRBS 106, 110 (1989) (although
motion for reconsideration tolls running of time for filing notice of appeal, it does not toll the 10-day period
for paying benefits contained in Section 14(f)); McCabe v. Sun Shipbuilding & Dry Dock Co., 7 BRBS
923, 926 (1978), rev'd, 593 F.2d 234 (3d Cir. 1979).
If a timely motion for reconsideration of a decision or order is filed, any appeal to the Board
whether filed prior to or subsequent to the filing of the motion for reconsideration, shall be dismissed without
prejudice as premature. 20 C.F.R. § 802.206(f).
A motion for reconsideration is timely when it is filed not later than 10 days from the date
the decision or order was filed in the Office of the District Director. 20 C.F.R. § 802.206(b)(1);
see Bogdis v. Marine Terminals Corp., 23 BRBS 136, 138 (1989). Where the date of mailing of the
motion for reconsideration is timely, it is the date of mailing, not the date of filing, that determines the
timeliness of the motion. 20 C.F.R. § 802.206(c); Leete v. Petroleum Helicopters, 15 BRBS 51, 52
(1982).
[ED. NOTE: Query: What if the motion was sent overnight and not by U.S. Postal Service Over
Night? Does this "date of mailing suffice to determine timeliness?]
The ten day filing period for a motion for reconsideration of an ALJ's decision, as governed by
Section 802.206(b)(1), "commences on the date that the district director certifies that he filed the Decision
and Order." Hamilton v. Ingalls Shipbuilding, Inc., 30 BRBS 84, 87 (1996).
The ALJ Rule of Practice and Procedure at 29 C.F.R. § 18.4 does not govern motions for
reconsideration; rather, the Federal Rules of Civil Procedure (FRCP) apply. Galle v. Ingalls Shipbuilding,
Inc., 33 BRBS 141(1999). In Galle, the Board first noted that the general rules for proceedings before
an ALJ at 29 C.F.R. Part 18 do not provide for motions for reconsideration, nor do the longshore
regulations at 20 C.F.R. Part 702. Only the Board's regulation addresses this issue in the context of what
constitutes a timely appeal to the Board. Thus, the Board found that the federal civil procedural rules
govern the filing of these motions. The Board, in Galle, found it necessary to note the historical
development of its own regulation at 20 C.F.R. § 802.206.
The authority for the 10-day filing requirement was based on Rule 59(e) of the FRCP. Rule 59(e)
states: "Any motion to alter or amend a judgment shall be filed no later than 10 days after entry of the
judgment." The rule did not discuss the applicability of Rule 6(a) which excludes intermediate Saturdays,
Sundays and holidays. Rule 6(a) provides that if the final day of a period provided in a statute falls on a
Saturday, Sunday or holiday, the period runs until the end of the next day that is not a Saturday, Sunday
or holiday. Rule 6(a) also states that the day of the act is excluded such that counting begins the day
following the action.
The Board held that, as Rule 6(a) applies to Rule 59(e), which is the basis for the 10-day filing time
limit for motions for reconsideration contained in the Board's regulation at 20 C.F.R. § 802.206, Rule 6(a)
applies to the filing of motions for reconsideration before the ALJ for purposes of determining whether the
tolling provision of Section 802.206(a) applies. Of significance is the fact that the Board stated that the
ALJ Rules of Practice and Procedure do contain a "general provision on computation of time." The Board
noted that, at the time the provisions at 29 C.F.R. § 18.4 were promulgated, FRCP 6(a) also provided for
the exclusion of intermediate Saturdays, Sundays, and holidays when the applicable time period was seven
days or less. Thus. the two rules were consistent until the FRCP were amended in 1985, and Rule 6(a)
changed to expand the time frame from seven days or less to less than 11 days.
In Galle, the Board went on to state that "[i]n any event, Section 18.4 specifically states '[i]n
computing any period of time under these rules..." 29 C.F.R. § 18.4 (emphasis added). As there is no
rule regarding motions for reconsideration under the Part 18 Regulations, Section 18.4 is not applicable
on its face. Accordingly, as motions for reconsideration are governed by Federal Rules through Section
18.1, the computation of time is similarly governed by those rules."
If a motion for reconsideration is granted, the full time for filing an appeal commences on the date
the subsequent decision or order on reconsideration is filed pursuant to Section 802.205. 20 C.F.R. §
802.206(d). If the motion for reconsideration is denied, the full time for filing an appeal commences on the
date the order denying reconsideration is filed pursuant to Section 802.205. 20 C.F.R. § 802.206(e).
19.6 FORMAL ORDER FILED WITH DISTRICT DIRECTOR
Section 19(e) of the LHWCA provides:
(e) The order rejecting the claim or making the award (referred to
in this Act as a compensation order) shall be filed in the office of
the deputy commissioner, and a copy thereof shall be sent by
registered mail or by certified mail to the claimant and to the
employer at the last known address of each.
33 U.S.C. § 919(e). The Ninth Circuit has interpreted the word "filed" as used in this Section to include
the effecting of service on the parties. Nealon v. California Stevedore & Ballast Co., 996 F.2d 966, 969-73, 27 BRBS 31, 34-39 (CRT) (9th Cir. 1993).
The Ninth Circuit also reasoned that the purpose of the LHWCA is to deliver benefits to injured
workers and that all doubtful questions of fact be resolved in favor of the injured employee. Force v.
Director, OWCP, 938 F.2d 981, 985 (9th Cir. 1991). Therefore, it would frustrate the legislative intent
of Congress to hold claimants to timetables for filing when the claimant does not know that the time for filing
has begun.
[ED. NOTE: The Ninth Circuit's position is somewhat in conflict with the recent Supreme Court
decision which disregards the "true doubt" rule. See Director, OWCP v. Greenwich
Collieries,(Maher Terminals), 512 U.S. 267 (1994).]
The Seventh Circuit, however, has held that the district director's failure to mail a copy of the
administrative law judge's order to the employer's counsel did not prevent the order from being "filed" and
becoming effective. Jeffboat, Inc. v. Mann, 875 F.2d 660, 664, 22 BRBS 79, 81-82 (CRT) (7th Cir.
1989) (language of 20 C.F.R. § 702.349 does not make proper mailing part of filing).
Enforcement of a final compensation order may be had in a United States District Court, which is
accorded federal question jurisdiction. Stevedoring Servs. of America v. Eggert, 23 BRBS 25, 27-28
(CRT) (W.D. Wash. 1989) (unpub.), vac'd and remanded, 953 F.2d 552, 25 BRBS 92 (CRT) (9th
Cir.), cert. denied, 505 U.S. 1230 (1992); Travelers Ins. Co. v. Thompson, 20 BRBS 79 (CRT) (8th Cir.
1987).
"Final Order"
However, "finality" has become an issue in the Fifth Circuit. Keen v. Exxon Corp., 35 F.3d 226
(5th Cir. 1994)(Held, ALJ's compensation order did not become final until such time as the district director
furnished computations dictated by the ALJ order.); Ledet v. Phillips Petroleum Co., 163 F.3d 1999 (5th
Cir. 1998), Although the ALJ provided a means of calculating the amount of benefits due, he impermissibly
delegated his fact-finding duty to the Director who would have to resort to extra-record facts; such is
impermissible.); Lazarus v. Chevron USA, Inc., 958 F.2d 1297, 1304, 25 BRBS 145, 150-51 (CRT)
(5th Cir. 1992) (affirmed district court's dismissal of claimant's petition for enforcement because ALJ's
award was not a final order enforceable under Section 18(a), as it did not adequately state amount of
compensation owed to claimant); Severin v. Exxon Corp., 910 F.2d 286 (5th Cir. 1990)("To constitute
a final decision and order of the ALJ, the order must at a minimum specify the amount of compensation due
or provide a means of calculating the correct amount without resort to extra-record facts which are
potentially subject to dispute between the parties.").
[ED. NOTE: It is only within the Fifth Circuit that "finality" of orders has become an issue. A
careful reading of the above noted cases will disclose that this "issue" has been self-inflicted by the
court itself, and by its lack of understanding as to the realities of administrative/regulatory law in
this area. For example, in Keen, the Fifth Circuit stated:
It appears that ALJs, perhaps not routinely but at least regularly, include in
compensation orders the very language that has given rise to the present
controversy. The problem that we have confronted here can readily be avoided by
the elimination of such language [ordering the district director to perform the
calculations] from future orders, or alternatively, if such language is used, by the
setting of a a specific time period for the director's performance of the award
computation as a means of achieving finality.
35 F.3d 229, n. 6].
19.7 AWARD AFTER DEATH OF EMPLOYEE
Section 19(f) of the LHWCA provides:
(f) An award of compensation for disability may be made after the
death of an injured employee.
33 U.S.C. § 919(f). See Andrews v. Alabama Dry Dock & Shipbuilding Co., 17 BRBS 209, 211 (1985);
Wilson v. Vecco Concrete Constr. Co., 16 BRBS 22, 25 (1983). The right to disability compensation
survives the employee's death and his survivors have standing to file a claim for benefits on his behalf.
Maddon v. Western Asbestos Co., 23 BRBS 55, 59 (1989); Muscella v. Sun Shipbuilding & Dry Dock
Co., 8 BRBS 830, 831-32 (1978).
19.8 DISTRICT DIRECTOR MAY TRANSFER CLAIM TO OTHER DISTRICT DIRECTOR
Section 19(g) of the LHWCA provides:
(g) At any time after a claim has been filed with him, the deputy
commissioner may, with the approval of the Secretary, transfer
such case to any other deputy commissioner for the purpose of
making investigation, taking testimony, making physical
examinations or taking such other necessary action therein as may
be directed.
33 U.S.C. § 919(g).
19.9 MEDICAL EXAMINATIONS
Section 19(h) of the LHWCA provides:
(h) An injured employee claiming or entitled to compensation shall
submit to such physical examination by a medical officer of the
United States or by a duly qualified physician designated or
approved by the Secretary as the deputy commissioner may
require. The place or places shall be reasonably convenient for the
employee. Such physician or physicians as the employee,
employer, or carrier may select and pay for may participate in an
examination if the employee, employer, or carrier so requests.
Proceedings shall be suspended and no compensation be payable
for any period during which the employee may refuse to submit to
examination.
19.10 BANKRUPTCY
[ED. NOTE: If both the employer and carrier are bankrupt, the liberal construction of the LHWCA
logically makes the Section 44 Trust Fund available to the claimant. (Assuming there is no state
guaranty association involved.) Ordinarily, when an employer is discharged from liability, under
the bankruptcy laws, the employer's insurer remains fully responsible for the claim pursuant to the
provisions of Sections 35 and 36(a) of the LHWCA. When there is no insurer (e.g., the employer is
self-insured) recovery must come from the indemnity bond or securities deposited by the employer
pursuant to Section 32(a)(2). As noted above, there may also be a state guaranty association that
may be liable for payment. If none of the preceding resources are available, some benefits may
come from the Special Fund pursuant to the provisions of Section 18(b).]
When a matter is set for hearing before OALJ and either the employer or the insurance company
files for bankruptcy, an ALJ has two options in relation to proceeding with the hearing and/or the decision
and order (if the bankruptcy filing took place after the hearing, but before the issuance of the decision and
order). As noted above, the process should contemplate the possibility that there is a state guaranty
association and provide for its active participation.
Option I
Under Option I, the ALJ holds the hearing/decision in abeyance, waiting for the Bankruptcy Court
to lift the automatic stay. Normally at least one of the parties, finding it in its best interest, will move for the
stay to be lifted. The prevailing theory here is that Section 36 of the LHWCA does not state that the
underlying proceeding may continue despite the automatic stay created by the bankruptcy. In other words,
when the bankruptcy is eventually concluded, the longshore litigation will also conclude and at that time the
insurer of the employer herein will be obligated to pay any judgment rendered against the employer should
the ALJ so rule at that time. Section 36(a), in pertinent part reads: "Every policy or contract of insurance
issued under authority of this Act shall contain (1) a provision to carry out the provisions of section 35, and
(2) a provision that insolvency or bankruptcy of the employer and/or discharge therein shall not relieve the
carrier from payment of compensation for disability or death sustained by an employee during the life of
such policy or contract."
Option II
Under Option II, the ALJ proceeds under the theory that the employer or carrier is now simply
a "nominal" party in a proceeding where a successful claimant can then seek relief from the Section 44
Trust Fund, provided there is no state guaranty association to stand in the shoes of the insolvent party.
Avoiding the Stay
Section 362 of Title 11 of the United States Code sets forth the automatic stay provisions of the
Bankruptcy Code and reads in pertinent part, as follows:
(a) Except as provided in subsection (b) of this section, a petition filed
under section 301, 302, or 303 of this title...operates as a stay, applicable to all entities,
of-
(1) The commencement or continuation, including the issuance or
employment process, of a judicial, administrative, or other proceeding against the debtor
that was or could have been commenced before the commencement of a case under this
title, or to recover a claim against the debtor that arose before the commencement of the
case under this title;
(2) the enforcement, against the debtor or against property of the
estate of a judgment obtained before commencement of this case under this title...
(b) The filing of a petition under section 301, 302, or 303 of this title does
not operate as a stay-
(4) under subsection (a)(1) of this section, of the commencement
or continuation of an action or proceeding by a governmental unit's police or regulatory
power;
(5) under subsection (a)(2) of this section, of the enforcement of
a judgment, other than a money judgment obtained in an action or proceeding by a
governmental unit to enforce such governmental unit's police or regulatory power;
11 U.S.C.. § 362(1991).
The legislative history to subsection (b)(4) states that it is "to be given narrow construction in order
to permit governmental units to pursue actions to protect the public health and safety and not to apply to
actions by a governmental unit to protect a pecuniary interest in property of the debtor or property of the
estate." H.Rep. No. 95-595, 95th Cong., 2d Sess., 1978 U.S. Code and Cong. and Admin. News at
5787.
Moreover, with respect to subsection (b)(5), the House Report provides, in pertinent part as
follows:
[T]he exception extends to permit an injunction and enforcement of an injunction, and to
permit entry of a money judgment, but does not extend to permit enforcement of a money
judgment. Since the assets of the debtor are in the possession and control of the
bankruptcy court, and since they constitute a fund out of which all creditors are entitled to
share, enforcement by a government unit of a money judgment would give it preferential
treatment to the detriment of all other creditors. (H. Rep. No. 95-595, 95th Cong., 2d
Sess., 1978 U.S. code and Cong. and Admin. News at 5787.)
The Sixth Circuit applied the exemptions found at subsections (b)(4) and (b)(5) to state workers'
compensation cases in In Re Mansfield Tire and Rubber Co., 660 F.2d 1108, 1114 (6th Cir. 1981) on
grounds that "the administration of workers' compensation claims by the State of Ohio and the agencies
created for that purpose is a valid exercise of the police and regulatory power of a governmental unit." The
court concluded that it could "find no basis of any distinction between the enactment of workers'
compensation laws as a valid exercise of a state's police or regulatory power on the one hand, and the
administration of claims arising under such laws as not being an exercise or extension of that power on the
other." Id. at 1113. The court then determined that workers' compensation cases involve health and safety
issues and that the automatic stay does not apply to such proceedings because it "prevents the exercise by
the (state agency) of its lawful powers and operates to hinder, delay and deprive Mansfield's injured
workers of the benefits to which they are lawfully entitled and it affects their safety." Id. at 1113.
Whether or not a general proposition may be asserted that the automatic stay is inapplicable to all
workers compensation proceedings, one can argue that there are additional factors which render the
automatic stay inapplicable in respect to a Department of Labor proceeding the purpose which is to
determine the disability of a claimant under the LHWCA. See generally, In Re Howell, Bankruptcy. Tenn.
4BR 102 (1980), involving the Federal Employees' Compensation Act. Although a covered employer is
generally responsible for on-the-job injuries suffered by its workforce, Section 18(b) of the LHWCA
provides additional potential relief to claimants in employer-default situations. The employer may have
obtained a bond or other security guaranteeing its obligations or in the absence of adequate bonding, the
Secretary of Labor may be called upon to initiate payment from the Special Fund. In cases where
judgment on an award cannot be satisfied by reason of insolvency, the Secretary of Labor "may, in his
discretion, and to the extent he shall deem it advisable after consideration of current commitments payable
from the special fund established in Section 44 of the LHWCA make payment from such fund upon any
award made under this Act, and in addition, provide a necessary medical, surgical, or other treatment
required by Section 7 of the Act." Sections 17(a) and 18(b) of the LHWCA.
Under circumstances in which the employer may ultimately be relieved by bankruptcy of its
responsibility for the payment of all or part of an award, a claimant's disability must yet be determined, and
an award entered in contested cases, before a bonding company may be held responsible or petition for
payment by the fund may be considered. Thus the application of Section 362 of the Bankruptcy Act to
stay LHWCA proceedings would deprive a claimant of the opportunity to pursue the alternative avenue
of relief Congress has established in these types of cases.
Upon consideration of the procedures set forth in Section 18 of the LHWCA, one can argue that
it is clear that the LHWCA contemplates the entry of an award in cases involving insolvent employers and
disabled workers. It is actually the award following the LHWCA proceeding which triggers potential
access to the Fund. Given the framework of pertinent statutory provisions, an award against the
employer is entered pro forma, even if technically unenforceable as such. See generally, In Re Western
States Drywall, Inc., 150 BR 774 (1993). In essence, the award following a determination of entitlement
is a procedural mechanism which begins the process by which the injured worker may pursue his case
against the bonding company or petition the Secretary of Labor for relief from the Special Fund. As such,
Section 362 of the Bankruptcy Act does not appear to be applicable to proceedings to determine the
nature and extent of disability under the LHWCA.
[ED. NOTE: Option II has been successfully used since 1981, when it was first utilized in reference
to the Seatrain Shipbuilding Corporation. See 80 LHC 819, et seq. More recently, in 1997, it was
used with Jacksonville Shipyards, Incorporated. See for example, Howell v. Jacksonville Shipyards,
Inc., (96-LHC-2217)(J. Levin)(Oct. 6, 1997)(Unpublished). In fact, the editor is not aware of any
cases in which the Bankruptcy Court resisted Option II's use when an ALJ explained its application.
Four key points should be made when Option II is utilized: (1) It has been successfully used
previously; (2) Due process consideration for notice must be included. (For example, an order
notifying the parties as to how and why the ALJ intends to proceed with the hearing/decision, and
allowing time to file comments should be issued.); (3) The acknowledgment that any award against
the employer is entered pro forma; and (4) The explanation that the very language of the LHWCA
seems to support its application, i.e., Congress contemplated the orderly and timely medical
treatment and compensation needs of workers covered under the LHWCA due outside the context
of the bankruptcy proceeding from a Special Fund administered by the Department of Labor, and
created by Congress itself precisely for the purpose of protecting injured workers of financially
troubled employers.]