ISSUE: Office of Administrative Law Judges, Part Three

Jack_crop 72dpiThe Appeal

We are at the third tier of the Department of Labor’s three step adjudication process. The first step was informal proceedings at DOL district offices; the second step was formal hearings at the OALJ; the third step is the appeal to the Benefits Review Board (Board).

The Board was established by section 921 (33 U.S.C. 921) of the Act as amended in 1972 (effective date 11/26/72). Members are appointed by the Secretary of Labor and serve indeterminate terms at the Secretary’s discretion. There are five permanent members, with three members constituting a quorum.

First, let’s understand the Board’s “scope of review”. This defines the manner in which the Board reviews an ALJ’s Order or other actions taken by the ALJ. It varies according to the nature of what is being reviewed, and it is important in determining the outcome of an appeal.

In the first paragraph of every Board Decision on Appeal, there is the same boilerplate language, “We must affirm the findings of fact and conclusions of law of the ALJ if they are rational, supported by substantial evidence, and in accordance with law.” So, the Board reminds us that it is mindful that it is the ALJ’s prerogative to assess the credibility of all witnesses and to determine the weight to be accorded to the evidence.

NOTE: What is “substantial evidence”? According to the U.S. Supreme Court, it is “… more than a mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” So, the catchphrase is, more than a mere scintilla, which means evidence sufficient so that a rational conclusion may be based on it.

The Board repeatedly reminds us that it cannot reweigh the evidence, and that it must affirm a decision supported by substantial evidence. The ALJ conducts the hearing and observes the witnesses and is the trier of fact.

The legality of the ALJ’s findings, whether they conform to the statute, are reviewed “de novo” by the Board, i.e., from the beginning. This is the same standard by which ALJ’s grants of Summary Decision are reviewed. Note that under “de novo” review there is no presumption of correctness that attaches to the ALJ’s legal conclusions. The issue is reviewed “anew”.

Certain other actions by the ALJ are reviewed by a different standard, i.e., “abuse of discretion”. For example, an ALJ’s denial of a motion for reconsideration is reviewed under the abuse of discretion standard. His decision will be affirmed unless it was arbitrary or capricious.

As for the appeal process itself, it is orderly but time consuming.

Any party in interest may appeal an ALJ’s Compensation Order to the Benefits Review Board within 30 days of the Order’s effective date by filing a Notice of Appeal with the Clerk of the Board in Washington, DC. At this point, they are the “petitioner”. If the petitioner files the Notice with the DOL district director who served the ALJ’s order, the district director will forward it to the Board with the filing date protected.

Within 30 days after receipt of the acknowledgement of the Notice of Appeal from the Clerk, the petitioner must submit a Petition for Review, listing the issues being appealed, along with a supporting brief presenting arguments on each issue appealed. He must serve this on all parties.

Within 30 days of receipt of a Petition for Review, each party may submit its own response brief, served on all the parties.

Any reply briefs are due within 20 days.

The Board may enlarge any of these times on the appropriate and timely motion of a party.

Any party may file a cross appeal of its own. This is done by filing a Notice of Appeal within 14 days of the date on which the first notice of appeal was filed or within the 30 day time limit for filing an appeal.

NOTE: Electronic filing of appeals, briefs, and motions is now available through the Board’s internet based Electronic File and Service Request System. An “e-Filer” must register as a user before using the System. Information regarding registration and a user guide is at https://dol-appeals.entellitrak.com.

ANOTHER NOTE: parties cannot submit new evidence to the Board on appeal. The Board will only consider the record established at the formal hearing by the ALJ along with the parties’ briefs to the Board. Any party who believes that it has indispensable new evidence should request a modification under section 22 on the grounds of a mistake in fact or a change in circumstances. The Board will then dismiss the appeal without prejudice.

At this point, when all of the filings are in place, and if the Board does not take the unusual step of ordering oral argument on any issue, it proceeds to review the record established at the formal hearing within its scope of review.

Finally, the Board will issue its written decision affirming, modifying, vacating, or reversing the ALJ’s Compensation Order, or it may remand the case back to the OALJ for additional action or proceedings. The Board will usually follow the law of the federal circuit appropriate to the location of the injury, since there are conflicts among the circuits on many issues, or at least differences in analytic framework.

NOTE: section 928(b) states that, “the deputy commissioner or Board shall set the case for informal conference ….” In spite of this statement, the Board has held that under section 921 it has no authority to hold informal conferences. It is restricted to appellate review.

The Board’s decision is final in 60 days. It may be appealed within this time limit to the appropriate U.S. Court of Appeals.

The Courts of Appeal review decisions by the Board to determine whether it has adhered to its proper scope of review, i.e., whether the ALJ’s findings of fact are supported by substantial evidence and are consistent with the law. This scope of review of Board decisions is the same as the Board’s review of ALJ decisions.

Personal note: the scope of review can be a tricky business in the hands of the BRB. Brace yourself when the Board goes out of its way to emphasize that the ALJ is the trier of fact and it is his exclusive prerogative to evaluate the credibility of witnesses and to weigh the evidence. There have been times when the Board has misapplied the burden of production of substantial evidence (as opposed to the burden of persuasion) necessary to rebut the section 20(a) presumption, and they have been lectured on the point by the federal circuits. And there have been cases of muscle strains that resolve within a week that are turned into a running Order for temporary total disability by virtue of the “aggravation rule” applied to a pre-existing, non work related, degenerative condition. The Board has on occasion reweighed medical evidence and even credibility determinations to turn ALJ denials into awards or serial remands.

It must be acknowledged that among the employer and defense community the Board has the reputation of being very liberal in favor of injured workers. The fact of the matter, however, is that the Longshore Act, as remedial legislation, is written to favor the injured worker, and the U.S. Supreme Court has instructed that it be liberally interpreted. With this as its mandate, and the statute written as it is, in spite of occasional lapses, in my humble opinion the Board generally does a very good job fulfilling its role.

At any rate, as I noted, the Board’s decisions may be appealed to the federal circuit courts of appeal.

ISSUE: Office of Administrative Law Judges (OALJ), Part Two

Jack_crop 300dpiThe Decision

Once the hearing is terminated and the record is closed the ALJ writes his decision. The decision contains findings of fact, and conclusions of law, and it contains the Compensation Order of the ALJ.

NOTE: The U.S. Supreme Court invalidated the so-called “true doubt rule” in 1994, i.e., the unwritten doctrine that held that where the evidence is equal on both sides of any issue then all doubts must be resolved in the claimant’s favor. The Supreme Court held that under the APA there is no such doctrine. Under Section 556(d) of the APA, the claimant bears the ultimate burden of proof, for example, on the issue of nature and extent of disability. To prevail on any issue, other than the issue of rebutting the section 20 statutory presumptions by substantial evidence, the party bearing the burden of proof on an issue must win its case by presenting a preponderance of the evidence. (Based on this allocation of the burden of proof, if the evidence is in fact exactly equal as to nature and extent of disability, then the claimant would have failed to establish entitlement.)

The ALJ sends the Decision to the District Director, who “files” it and “issues” it, and who mails a copy to each party by the close of business the next day. The ALJ’s Compensation Order is effective when “filed”. Section 919(e) states, “The order rejecting the claim or making the award (called a compensation order) shall be filed in the office of the deputy commissioner (in this context this means district director), 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.”

The act of “filing” makes the compensation order “effective”, and the ambiguous term “filing” is not defined. The consensus is that “filing” occurs once the initial acts of the district director have occurred, i.e., the district director receives the Compensation Order, dates it, and files it in his office, all in the most generic sense. Filing does not include the next step of mailing the Order to the parties (as usual in the Ninth Circuit the approach may be different. There, the act of “filing” may include mailing the Order to the parties). In most instances, the Order has been filed, it is effective, compensation is due, but at that point, it has not yet been mailed to the parties.

Any party may request reconsideration of the compensation order from the ALJ within 10 days of the effective date, or a party may file an appeal with the Benefits Review Board (BRB) within 30 days by filing a notice of appeal with the office of the Clerk of the Board. A timely request for reconsideration will keep the 30 day appeal time from running until the reconsideration request is dealt with by the ALJ.

NOTE: Section 914(f) provides, “If any compensation, payable under the terms of an award, is not paid within 10 days after it becomes due, there shall be added to such unpaid compensation an amount equal to 20 per centum thereof ….” The compensation is due when the compensation order is filed in the office of the district director. As we’ve seen, the Compensation Order is filed, thus effective, with the 10 day clock running, before it is mailed to the parties. Neither the request to the ALJ for Reconsideration of his Order nor the filing of a notice of appeal to the BRB will interrupt the 10 day time limit. Only an Order of the BRB granting a stay based on a showing of prejudice based on “irreparable harm” to the employer will interrupt the time limit. The term “irreparable harm” is generally interpreted to mean severe financial hardship of the brink of bankruptcy variety. The Board rarely grants even a temporary stay.

The mailing to the parties by the district director is accompanied by “proof of service”. This is the certification of the district director that the Order was mailed on the date stated and to each of the parties listed.

NOTE: Section 919(c) states that the deputy commissioner (in this context the ALJ), “shall within twenty days after such hearing is had, by order, reject the claim or make an award in respect of the claim.” Although this is an unconditional statement in the statute, it is not to be taken literally. The “20 day rule” doesn’t mean what it says. An aggrieved party must show that it was prejudiced by any delay beyond 20 days. Since the “20 day rule” apparently can not realistically be met, good luck showing prejudice. At any rate, by the time that you are (very unlikely) successful at getting a remand from the BRB because of failure by the ALJ to meet the 20 day requirement, significant additional time has elapsed. It’s best to ignore the 20 day rule.

Section 8 of the APA (5 U.S.C. section 557) states that ALJ decisions must 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 ALJ has to detail the rationale behind his decision, and must specify which evidence was relied on and why. The ALJ must make specific, unambiguous findings on every issue.

The Compensation Order must resolve all questions of fact and conclusions of law, and the hearing record (the Compensation Order, the transcript of the hearing, and all exhibits and submissions of the parties) constitutes the entire record in the case. It is on the basis of this record that an aggrieved party may appeal the decision to the Benefits Review Board. It must be clear for appellate review how and why the ALJ made his decision.

In the course of discussing the evidence, weighing the evidence, and providing reasons for his findings, ALJ decisions can become quite lengthy as the ALJ seeks to avoid remand by the Board. ALJs frequently discuss each and every relevant piece of the typically voluminous medical record in cases where nature and extent of disability is at issue.

So, the ALJ has issued his Compensation Order, and it is filed and served by the district director. We have now arrived at the DOL’s third tier for the adjudication of Longshore claims.

This brings us to Part Three for next time, The Appeal.

ISSUE: Office of Administrative Law Judges (OALJ), Part One

Jack_crop 72dpiThe U.S. Department of Labor (DOL), through the Division of Longshore and Harbor Workers’ Compensation (DLHWC), in the Office of Workers’ Compensation Programs (OWCP), administers the Longshore and Harbor Workers’ Compensation Act and extensions, the Defense Base Act, the Outer Continental Shelf Lands Act, and the Nonappropriated Fund Instrumentalities Act.

The Longshore Act provides for a three step process for the adjudication of claims.

Step One – Informal mediation at DLHWC district offices,

Step Two – Formal hearings at the OALJ,

Step Three – Appellate review at the Benefits Review Board (BRB)

DLHWC maintains district offices where District Directors (DD) and their staffs provide informal dispute resolution services and medical management. District offices are located in Boston, New York, Baltimore, Norfolk, Jacksonville, New Orleans, Houston, San Francisco, Long Beach, Seattle and Honolulu. Claims examiners may hold Informal Conferences, issue recommendations, and generally try to avoid delays and resolve claim disputes in an expeditious manner.

What happens when a party disagrees with a district office’s recommendation, or the parties are otherwise unable to resolve one or more issues at the informal district office level? Upon the request of any party the DD transfers the file to the OALJ. Information transferred includes Forms LS-18 (Pre-Hearing Statement) filed by each party, along with all evidence that the parties intend to submit for the record at the formal hearing; the information transferred does not include any memoranda or recommendations prepared in the district office. The DD’s instructions to the parties states, “All documents and other exhibits to be submitted at the formal hearing must be furnished by the party who intends to submit them. All exhibits must be listed and identified on the LS-18”.

At this point, you’re at Step Two in the process of adjudication. Once a case is transferred, the District Director no longer has control over the file. There is no simultaneous jurisdiction on any issue.

The OALJ is a function of the DOL in which the Administrative Law Judges operate independently. The Agency hires ALJs from lists provided by the Office of Personnel Management (OPM). OPM holds periodic competitive examinations and maintains lists of eligible candidates for agencies seeking to hire ALJs.

When the case referral arrives at the OALJ a docket number is assigned, and the case goes to an OALJ regional office. When a docket is full for a particular location, hearings will be held.

OALJ Regional Offices are located in Boston MA, Cherry Hill NJ, Cincinnati OH, Covington LA, Newport News VA, Pittsburgh PA, and San Francisco CA. The OALJ National Office is in Washington DC.

The pre-hearing stage is used by the parties for discovery procedures, such as, obtaining documents from opposing parties, by subpoena if necessary, and for conducting interrogatories and depositions.

At the pre-hearing stage, the assignment of a Settlement Judge may be requested. The Settlement Judge is a fully qualified ALJ acting as a mediator using alternative dispute resolution techniques. The process is “off the record”, and the purpose is to settle the case and avoid a formal hearing. It is based on the voluntary participation of all the parties, and the settlement process can be terminated at any time by any party. There is no fee for this mediation service.

If the efforts of the Settlement Judge are unsuccessful the case goes forward for formal hearing.

Formal hearings at the OALJ are conducted in accordance with the Administrative Procedures Act (APA) provisions at 5 U.S.C. section 554. This is the result of the transfer of hearing functions from Deputy Commissioners to the OALJ as part of the 1972 Amendments to the Longshore Act.

NOTE: Section 19(d) (33 U.S.C. 919(d)) of the Longshore Act was amended in 1972 to provide that, “All powers, duties, and responsibilities … in the deputy commissioners with respect to such hearings shall be vested in such administrative law judges.”

The 1972 Amendments did not change references to deputy commissioners elsewhere in the statute. You can read the title “District Director” as generally interchangeable with the holdover title “Deputy Commissioner”, except where deputy commissioner means ALJ. At this point, case law and the 1984 Amendments have sorted out the separate authority previously belonging to the successors to the pre-72 title “deputy commissioner”. For example, the 1984 Amendments resolved an ambiguity and expressly provide that both ALJs and District Directors can approve lump sum settlements under section 8(i).

The Longshore Act in sections 19, 23, 24, and 27, as well as the implementing regulations at 20 C.F.R. 702.331 – 702.351 pertains to formal hearings. The OALJ Rules of Practice and Procedure applies in situations not specifically addressed in the Act and regulations, while the Federal Rules of Civil Procedure (FRCP) is a final resource for situations not covered by any other provision.

The formal hearing itself is basically a trial. Witnesses testify and are cross examined, written and oral evidence is proposed and if accepted by the ALJ marked with an exhibit number and made a part of the record, a complete transcript of the entire proceeding is made, and the ALJ has the authority to enforce attendance, compel testimony, preserve order, administer oaths, and issue subpoenas.

There are, however, significant differences between adjudication through an administrative hearing conducted by an ALJ under the Administrative Procedures Act and trials conducted by judges in the courts of the Judiciary Branch.

Section 23(a) of the Longshore Act provides that an ALJ, “shall not be bound by common law or statutory rules of evidence or by technical or formal rules of procedure.” The ALJ has very wide latitude and discretion in conducting the hearing and ruling on the admissibility of evidence.

An ALJ can resolve any issue pertinent to the Longshore claim that arises at the hearing, including new issues, by, for example, adding new parties or by holding the record open at the close of the hearing for the admission of additional evidence. Hearsay evidence is generally admissible if the ALJ considers it to be relevant and probative. In fact, the ALJ’s decision may be based entirely on hearsay or circumstantial evidence.

Any ruling by the ALJ with regard to the admissibility or exclusion of evidence is reversible on appeal only if arbitrary, capricious, or an abuse of discretion.

Miscellaneous provisions pertaining to formal hearings:

Hearings are open to the public, and the ALJ decisions are published.

No person shall be required to attend any proceeding as a witness outside his state or more than 100 miles from his residence unless he is paid mileage and a fee.

Witness fees are the same as in federal district courts.

A claimant is not required to travel more than 75 miles for a hearing.

A representative of the Solicitor of Labor (SOL) may appear at any formal hearing, representing the Director, Office of Workers’ Compensation Programs.

The purpose of the hearing is to satisfy the requirement of the APA that the parties have the opportunity for submission and consideration of all of the facts, an opportunity to make their argument, to attend a hearing, and to receive a written decision that includes a statement of findings and conclusions, and the reasons and basis therefor on all material issues of fact, law, or discretion in the record.

Next – Part Two – The Decision