Opinion ID: 195068
Heading Depth: 2
Heading Rank: 1

Heading: Equitable Power to Refuse Injunctive Enforcement.

Text: 26 An enforcement order under LHWCA section 921(d) may take the form of a writ of injunction, a traditional equitable remedy which may expose the enjoined party to the district court's coercive contempt powers. Accordingly, fraud and unclean hands historically have been regarded as valid equitable defenses to injunctive relief, Loglan Inst., Inc. v. Logical Language Group, Inc., 962 F.2d 1038, 1042 (Fed.Cir.1992), and absent a controlling statute a federal court is presumed to possess the broad discretion and equitable power to configure its remedy to suit the needs of the case. Even in the context of congressionally created injunctive remedies, the Supreme Court has said that [u]nless a statute in so many words, or by a necessary and inescapable inference, restricts the court's jurisdiction in equity, the full scope of that jurisdiction is to be recognized and applied. Porter v. Warner Holding Co., 328 U.S. 395, 398, 66 S.Ct. 1086, 1089, 90 L.Ed. 1332 (1946) (emphasis added). See Weinberger v. Romero-Barcelo, 456 U.S. 305, 313, 102 S.Ct. 1798, 1803, 72 L.Ed.2d 91 (1982) ([W]e do not lightly assume that Congress has intended to depart from established [equity] principles.). 13 27 Under this rubric, the first question we confront is whether the LHWCA deprives the district court of its traditional discretionary powers to withhold equitable relief for the enforcement of a compensation award obtained through an employee's fraud. 14 Since section 921(d) contains no explicit delimitation of the district court's equitable powers, 15 we must look to the LHWCA's remedial framework as a whole. 28 The LHWCA affords Jones an adequate remedy for redressing any fraud alleged in the affirmative defense. Eschewing conventional res judicata principles, section 922 allows an employer to request the ALJ to reconsider the case where there has been a change of conditions or mistake of fact warranting modification or suspension in compensation payments. See 33 U.S.C. Sec. 922; see also 20 C.F.R. Sec. 702.373; Hudson v. Southwestern Barge Fleet Servs., Inc., 16 Ben.Rev.Bd.Serv. 367, 369 (1984) (holding that Sec. 922 was intended by Congress to displace traditional notions of res judicata) (citing Banks v. Chicago Grain Trimmers Ass'n, 390 U.S. 459, 88 S.Ct. 1140, 20 L.Ed.2d 30 (1968)). 16 [F]acts relating to the nature and extent of a claimant's disability typically are the subject of modification proceedings. Williams v. Geosource, Inc., 13 Ben.Rev.Bd.Serv. 643, 645 (1981). The factfinder [ALJ] has broad discretion to correct mistakes of fact, whether they be demonstrated by new evidence, cumulative evidence, or further reflection upon the evidence initially submitted. Id. (emphasis added). The overarching criterion for reopening a compensation award under the LHWCA is whether reexamination would serve the interests of justice. O'Keeffe v. Aerojet-General Shipyards, Inc., 404 U.S. 254, 255-56, 92 S.Ct. 405, 406-07, 30 L.Ed.2d 424 (1971). Perjured testimony resulting in an erroneous finding of fact concerning the nature or extent of an employee's disability would seem to come squarely within the realm of a mistake of fact. 29 On October 14, 1992, days before the recommended decision issued in this case, Jones filed a petition for modification pursuant to LHWCA section 922. 17 In these circumstances, and against this legislative framework, we think there are at least two sound reasons for not inferring a congressional intention to dedicate two forums to the task of assessing alleged mistakes of fact relating to an employee's testimony before the ALJ. First, where newly discovered evidence of fraud implicates the evidentiary basis for an employee's compensation claim, the LHWCA discloses a decided preference for utilizing the DOL's in-house expertise in resolving the dispute. See, e.g., Crowell v. Benson, 285 U.S. 22, 46, 52 S.Ct. 285, 290, 76 L.Ed. 598 (1932) (the LHWCA provides a prompt, continuous, expert and inexpensive method for dealing with a class of questions of fact which are peculiarly suited to examination and determination by an administrative agency specially assigned to that task) (emphasis added); cf. Youghiogheny & Ohio Coal Co. v. Vahalik, 970 F.2d 161, 162 (6th Cir.1992) (the benefits of agency expertise become irrelevant under the LHWCA only after claim determination is complete). 18 30 Under either section 921(d) or 922, the factfinder would be required to decide: (1) whether Jones could have discovered the putative fraud earlier, in the exercise of due diligence; (2) whether the affidavits proffered by Jones, together with the record evidence in the case before the DOL, credibly suggest that Williams misrepresented his physical capacities and activities during the relevant period; and (3) whether the putative perjury was sufficiently material to undermine the ALJ's finding of temporary total disability. See General Dynamics Corp. v. Director, Office of Workers' Compensation Programs, 673 F.2d 23, 25 (1st Cir.1982) (in reopening case, ALJ must balance the need to render justice against the need for finality in decisionmaking, and justice is not necessarily served where the employer could have presented his side of the case at the first hearing....); see also McCord v. Cephas, 4 Ben.Rev.Bd.Serv. 224, 225 (1976) (employer not entitled to modification if it exhibits a bad faith effort to relitigate issues ad nauseam). We think the DOL is better positioned to address such issues in these circumstances. 31 Second, section 922 modification rulings are appealable to the BRB and to the court of appeals. See 33 U.S.C. Sec. 921(b), (c); O'Loughlin v. Parker, 163 F.2d 1011, 1013 (4th Cir.1947) (ALJ's decision to reopen under section 922 is reviewed for abuse of discretion). Similarly, an employer would be allowed an appeal from a district court decision which discounted the employer's equitable defenses and directed enforcement of a compensation award. To allow the section 922 and the section 921(d) proceedings to go forward simultaneously would open up the possibility of inconsistent rulings on the fraud claim, which ultimately would have to be resolved by the court of appeals in either event. 32 As we can discern no good purpose for such a needless duplication of administrative and judicial effort, we conclude that LHWCA section 921(d), viewed in broad context, gives rise to the inescapable inference, see Porter, 328 U.S. at 398, 66 S.Ct. at 1089, that Congress did not intend the type of fraud defense here presented by Jones to be adjudicated by the district court but by the DOL. 33