Opinion ID: 563212
Heading Depth: 2
Heading Rank: 1

Heading: application for special fund relief

Text: 8 Container Stevedoring seeks relief from its compensation responsibilities through the Special Fund for disabled employees under 33 U.S.C. Sec. 908(f). Employers are required to apply for Special Fund relief to the deputy commissioner prior to the consideration of the claim by the deputy commissioner. Sec. 908(f)(3). Failure to do so is an absolute defense to Special Fund liability unless the employer could not have reasonably anticipated the liability of the special fund prior to the issuance of a compensation order. Id. 9 Permanent disability is a prerequisite to Special Fund relief. Sec. 908(f)(1). Container Stevedoring argues that existence of a permanent disability was not an issue in this case before the deputy commissioner referred the case to the OALJ. Therefore, it could not possibly have complied with the statute by applying for Special Fund relief before the case was transferred to the OALJ. Container Stevedoring's argument is contradicted by the facts. As early as October 1986, Mr. Gross stated in his claim for compensation that his injury resulted in severe permanent injuries to back, neck, legs, head, face and teeth. Four months earlier in June 1986, the Orthopaedic Panel informed Container Stevedoring that, in its opinion, Mr. Gross had suffered a three percent permanent partial disability from a vertebrae fracture. The panel said it knew of no treatment that would cure his back pain and recommended that even after an endurance program he should not lift over sixty pounds. These reports were sufficient to place the existence of permanent disability in issue before the deputy commissioner and to put Container Stevedoring on notice that it was in issue. 1 10 The regulations instruct employers that a request for section 8(f) relief should be made as soon as the permanency of the claimant's condition becomes known or is an issue in dispute. 20 C.F.R. Sec. 702.321(b)(1). 2 In this case, permanency was in issue arguably on June 19, 1986 when the Orthopaedic Panel issued its report, and certainly no later than Mr. Gross' claim for compensation on October 23, 1986. In keeping with the regulations, Container Stevedoring should have filed its application for Special Fund relief at that time. After October, Container Stevedoring delayed over seven months without submitting an application. At the very least, in April 1987 when the deputy commissioner requested pre-hearing applications which are used to prepare a case for a formal hearing before an ALJ, Container Stevedoring should have recognized that the deputy commissioner considered its work completed and should have raised the issue of Special Fund relief immediately. Instead, Container Stevedoring delayed raising the issue until after the deputy commissioner transferred the case to the OALJ. 3 11 Container Stevedoring next notes that the deputy commissioner must consider the claim before an application for Special Fund relief can be labeled untimely, Sec. 908(f)(3), and argues that the deputy commissioner never considered Mr. Gross' claim of permanent disabilities before he referred it to the OALJ. It is true that the deputy commissioner never held even an informal hearing on any issue in this case. However, the regulations make clear that the deputy commissioner can consider a claim in many ways short of a hearing: 12 The deputy commissioner is empowered to resolve disputes with respect to claims in a manner designed to protect the rights of the parties and also to resolve such disputes at the earliest practicable date. This will generally be accomplished by informal discussions by telephone or by conferences at the deputy commissioner's office. Some cases will be handled by written correspondence. 13 20 C.F.R. Sec. 702.311. After Mr. Gross filed his claim in October 1986, the deputy commissioner considered and responded to written correspondence on December 30, 1986, on March 24, 1987, and finally on June 3, 1987, when he referred the case to the OALJ. This correspondence dealt exclusively with the temporary total disability part of Mr. Gross' claim. Although the regulations require the deputy commissioner to consider all new and additional issues raised in the course of proceedings before the case is transferred to the OALJ, 20 C.F.R. Sec. 702.317(d), nothing in the statute or regulations requires the deputy commissioner and the parties to correspond on every issue that has been raised before the case is transferred. 14 In short, Sec. 908(f)(3) and the associated regulations instruct the deputy commissioner to consider the claim, but do not require correspondence or an informal hearing. Absent evidence that the deputy commissioner decided to transfer the case to the OALJ before evaluating every aspect of the claim, 4 we will assume that the deputy commissioner did consider every aspect of the claim when deciding whether to transfer it for a formal hearing. The regulations instruct the deputy commissioner that 15 where permanency has been raised, the failure of an employer to submit a timely and fully documented application for section 8(f) relief shall not prevent the deputy commissioner, at his/her discretion, from considering the claim for compensation and transmitting the case for formal hearing. 16 Sec. 702.321(b)(3). The lack of detailed correspondence from the deputy commissioner in this case did not preclude him from considering the case and transferring it to the OALJ. Likewise, the lack of detailed correspondence does not excuse Container Stevedoring for its delay in applying for Special Fund relief. 17 We agree with the ALJ's conclusion that the OWCP had an absolute defense to Special Fund liability based on Container Stevedoring's untimely application. The ALJ determined, in the alternative, that Container Stevedoring should not be granted Special Fund relief based on the merits. 5 The Board avoided the procedural issue altogether and affirmed on the merits. We are not bound by the Board's analysis even if we agree with the Board's conclusion. J.M. Martinac Shipbldg. v. Director, OWCP, 900 F.2d 180, 181 (9th Cir.1990); Todd Shipyards Corp. v. Director, OWCP, 848 F.2d 125, 127 n. 3 (9th Cir.1988); see 33 U.S.C. Sec. 921(c). We decline to consider the merits of Container Stevedoring's claim for Special Fund relief because the OWCP timely raised an absolute defense to the relief.