Court Opinion

ID: 9481727
Source: CourtListenerOpinion
Date Created: 2023-08-05 08:29:22.162405+00
Date Added: 2024-06-11T17:48:29.997251
License: Public Domain

O’SCANNLAIN, Circuit Judge,
concurring:
Under the applicable regulations, a request for special fund 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. § 702.321(b). The court today concludes that permanency is either “known” or “in dispute” whenever it is mentioned in a compensation-related document, however tangential to the actual course of proceedings such reference may be. This harsh rule does not comport with the relevant statutory or regulatory language, nor is it supported by the policies underlying the LHWCA or by common sense. Accordingly, I disagree with the court’s conclusion that Container Stevedoring’s request for special fund relief was untimely. Rather, I — like the Benefits Review Board — would affirm the denial of special fund relief on the merits.
I
“The LHWCA ... favors the dispositions of claims — the allocation of statutory benefits and burdens — on the merits of particular cases.” Cornell University v. Velez, 856 F.2d 402, 405 (1st Cir.1988) (upholding ALJ’s sua sponte consideration of an untimely special fund application). There is, of course, a “systemic interest in demanding timely pleadings which narrow and define the issues” which must be balanced against the “need to render justice.” Id.; see also Brady-Hamilton Stevedore Co. v. Director, OWCP, 779 F.2d 512, 513 (9th Cir.1985) (observing that a “claim for [special fund] relief must be made by the employer at the first hearing ... to assure that all factual issues are known and subject to litigation at the same time”). Here, however, the court’s reading of the relevant statutes and regulations has needlessly tipped the scales against the rendering of justice. Indeed, this is one of the rare cases in which both the interest of justice and the interest of expediency favor resolution of the relevant issue on the merits.
In reaching its result today, the court found two isolated references to permanency from which it concluded, in complete disregard of the rest of the record, that permanency was either “known” or “at issue.” 1 The relevant statutory and regulatory language, however, suggests that such a rigid approach should not be employed in determining the timeliness of a request for special fund relief. For example, the applicable federal regulation provides 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. This could be when benefits are first paid for permanent disability, or at an informal conference held to discuss the permanency of the claimant’s condition.
20 C.F.R. § 702.321(b). The illustrations in this regulation are telling. Notably, under either scenario — payment of permanent disability benefits or discussion of permanency at an informal conference — all parties involved will necessarily understand which issues are truly disputed. Under both scenarios listed in the regulation, the likelihood of confusion or misunderstanding, such as occurred here, would be diminished.
Similarly, the controlling statute also does not require the court’s harsh result. Section 908(f)(3) provides in relevant part:
Any request ... for apportionment of liability to the special fund ... shall be presented to the deputy commissioner prior to the consideration of the claim by the deputy commissioner. Failure to present such request prior to such consideration shall be an absolute defense to the special fund’s liability for the pay*1553ment of any benefits with such claim, unless the employer could not have reasonably anticipated the liability of the special fund prior to the issuance of a compensation order.
33 U.S.C. § 908(f)(3) (emphasis added). Determination of “reasonable anticipation” requires, almost by definition, consideration of the entire record.2
When the record in the present case is viewed in its entirety, a different picture than that presented by the court emerges. The record, such as it is,3 suggests that Gross pursued recovery of benefits for temporary, total disability before the OWCP’s claims examiner. Gross requested an informal hearing before the deputy commissioner at least twice; each request was denied. Following the second, an OWCP claims examiner wrote to Gross’s counsel:
Your request for informal conference was addressed on 12/30/86. There have been no subsequent medical reports submitted indicating that the claimant is TTD [Temporary Total Disabled], The last medical report that you submitted from Dr. Wilder indicated that the claimant continued to work.
While Gross’s actual requests for an informal hearing are not part of the record, the claims examiner’s response suggests that Gross requested a hearing only on the temporary total disability issue. Container Stevedoring was entitled to rely upon Gross’s requests in determining the matters at issue. See 20 C.F.R. § 702.231(b)(i) *1554(“All parties are required to list issue [sic] reasonably anticipated to be discussed at the conference when the initial request for a conference is made and to notify all parties of additional issues which arise during the period before the conference is actually held.”).
Moreover, there is nothing in the record to indicate that the deputy commissioner ever actually considered Gross’s claim of permanent disability, a necessary element in the court’s timeliness analysis. As previously noted, the record suggests that the deputy commissioner considered only Gross’s claim of temporary total disability. I agree with the court that the deputy commissioner, while required to consider all claims presented to him or her, is not obligated to correspond or to hold an informal hearing regarding each such claim. See ante at 1548. However, I, unlike the court, cannot assume that the claim was considered where the clear inference drawn from the correspondence in the record is that the deputy commissioner considered only the total temporary disability claim.
Finally, and perhaps most significantly, the equities in this case weigh in Container Stevedoring’s favor. The OWCP’s correspondence to Gross suggests that an informal hearing was unnecessary due to Gross’s failure to provide evidence corroborating his temporary, total disability claim. It is truly ironic that Gross’s failure to articulate clearly his claims before the deputy commissioner now supports a procedural bar against Container Stevedoring in its request for section 8(f) relief. Indeed, the court’s reasoning may actually encourage parties to obfuscate issues and to fail to disclose fully.
In short, this case at the administrative level was marked by a lack of communication between the parties and the ALT. The parties must equally share responsibility for the communications breakdown. The negative consequences of the failure to communicate should not redound solely to the employer. Because Container Steve-doring sought special fund relief as soon as it was reasonably clear that permanency was truly at issue, I would hold that the request was timely.
II
While I would not bar Container Steve-doring’s request for special fund relief on grounds of untimeliness, I would affirm the denial of special fund relief on the merits. To be entitled to section 8(f) relief, the employer must establish (1) that the employee had an existing permanent partial disability prior to the employment injury; (2) that the disability was manifest to the employer prior to the employment injury; and (3) that the current disability is not due solely to the most recent injury. Todd Pacific Shipyards v. Director, OWCP (Mayes), 913 F.2d 1426, 1429 (9th Cir.1990) (hereinafter Mayes).
Container Stevedoring contends that Mr. Gross had two pre-existing injuries: (1) a compression fracture sustained in 1969, and (2) a degenerative disc disease diagnosed in November 1987. As to the first alleged pre-existing jury, the AU found that Container Stevedoring had not shown either the first or third factors. Based on testimony of one Dr. Wilder, the AU concluded that the 1969 back injury was neither a “permanent” disability, nor did it in any way impact the seriousness of Mr. Gross’s 1984 injury.
As to the degenerative disc disease, the AU concluded that Container Stevedoring proved neither the first nor the second factor. The AU observed that the disease was first diagnosed in November 1987, three years after the injury at issue. Thus, the AU concluded, the injury was neither pre-existing nor manifest to Container Ste-vedoring.
The AU’s findings of fact must be treated as conclusive if supported by substantial evidence. See Mayes, 913 F.2d at 1428. Here, while evidence adduced by Container Stevedoring supported contrary inferences, the AU’s conclusions were reasonable and supported by medical testimony. Thus, I do not believe that it can fairly be said that the conclusions were not supported by substantial evidence.
*1555III
In sum, I would affirm the denial of Container Stevedoring’s request for special fund relief on the merits, rather than on the procedural ground invoked by the court. However, I concur in the court’s opinion in all other respects.

. The court is not clear about which standard of review it employed in analyzing the timeliness issue. Whether a request for special fund relief is timely is a legal issue which we may review de novo. See Brady-Hamilton, 119 F.2d at 513 (“Whether the matter of Section 8(f) relief may be considered is a procedural legal matter and not a question of fact which requires the AO to make a finding based upon substantial evidence.”).

. A brief aside on the purpose of the special fund is warranted here. Under section 8(f) of the LHWCA, an employer’s liability for compensating a permanently disabled employee might be limited if the employee was disabled prior to the most recent injury. "By so limiting an employer’s liability, Congress wished to facilitate and encourage the hiring of partially disabled people. Congress sought to ensure that employers would not hesitate to hire a partially disabled person out of fear of increasing their liability in the event that a work-related injury combined with the pre-existing partial disability to result in a [greater] disability.” Todd Pacific Shipyards Corp. v. Director, OWCP (Mayes), 913 F.2d 1426, 1429 (9th Cir.1990) (citations omitted).
Employers are the prime beneficiaries of the special fund. However, in 1984 Congress, alarmed by the “burgeoning and uncontrolled growth in the utilization of the Special Fund," see H.R.Rep. No. 98-570 (pt. I), 98th Cong., 2d Sess. 20 (1983), reprinted in 1984 U.S.Code Cong. & Admin.News 2734, 2753, amended section 8(f) to added the present version of the timeliness defense. “[T]he Secretary,” the House Committee reasoned, “has an obligation to safeguard the Special Fund.” H.R.Rep. No. 98-570 at 21, 1984 U.S.Code Cong. & Admin. News at 2754. Similarly, the Conference Committee stated that ”[t]he conferees intend by this provision to encourage employers to raise the special fund issue early in .the claims adjudication process, in order to assure the deputy commissioner and the Director of OWCP the opportunity to examine the validity of the employer's basis for seeking special fund relief.” H.R.Conf. Rep. No. 98-1027, 98th Cong., 2d Sess. 32 (1984), reprinted in 1984 U.S.Code Cong. & Admin.News 2771, 2781. Thus, the provisions of section 8(f) must be construed in light of the special fund’s overarching purpose, albeit tempered by the need to safeguard the fund's limited resources.

. The record regarding the timeliness issue is notably incomplete. As the court correctly notes, the deputy commissioner’s file is not transferred to the ALJ “under any circumstances." Ante at 1547-48 n. 3 (quoting 20 C.F.R. §§ 702.318-19). Thus, the burden of providing copies of pre-ALJ proceedings falls upon the parties. In part because of the miscommu-nications which have characterized virtually every aspect of this case, some of the documents which would have been helpful for our review were not made part of the record.
Shortly after the case was transferred to the ALJ, Container Stevedoring requested that the case be remanded to the deputy commissioner so that Container Stevedoring could request special fund relief. The OWCP expressly did not oppose this motion. The ALJ, however, denied the motion in the apparent belief that Container Stevedoring could apply for special fund relief at the formal hearing. Thereafter, in its pre-hearing statement, the OWCP listed as an issue ”[w]hether there is an absolute bar to section 8(f) relief based on the employer’s untimely request for such relief.” The OWCP did not elaborate on its reasoning, nor did it introduce any evidence on the issue. Indeed, the issue was not mentioned again until nearly a month after the formal hearing, when the OWCP raised the issue again in its Proposed Findings of Fact and Conclusions of Law. While Container Ste-vedoring could have been more diligent in defending against the OWCP’s timeliness contentions, its failure to present a finely tuned defense is understandable in light of OWCP’s con-clusory allegations, OWCP’s permissible but tardy position-switch on the issue, and Container Stevedoring’s reasonable belief that permanency had not, in fact, been raised before the OWCP.