697 F.3d 820 (9th Cir. 2012), 08-71719, Price v. Stevedoring Services of America, Inc.

Docket Nº:08-71719.
Citation:697 F.3d 820
Opinion Judge:BERZON, Circuit Judge:
Party Name:Arel PRICE, Petitioner, v. STEVEDORING SERVICES OF AMERICA, INC.; Eagle Pacific Insurance Company; Homeport Insurance Co.; Director, Office of Workers Compensation Programs, Respondents.
Attorney:Charles Robinowitz, Attorney, Portland, OR, for the petitioner Arel Price. Russell A. Metz, Attorney, Metz & Assocs. P.S., Seattle, WA, John Randall Dudrey, Attorney, Williams Fredrickson, LLC, Portland, OR, Matthew W. Boyle and Mark A. Reinhalter, Counsel, LABR-U.S. Dep't of Labor, Office of the...
Judge Panel:Before: ALEX KOZINSKI, Chief Judge, MARY M. SCHROEDER, STEPHEN REINHARDT, DIARMUID F. O'SCANNLAIN, SIDNEY R. THOMAS, BARRY G. SILVERMAN, WILLIAM A. FLETCHER, RONALD M. GOULD, MARSHA S. BERZON, CARLOS T. BEA, and MARY H. MURGUIA, Circuit Judges. Opinion by Judge BERZON; Dissent by Judge O'SCANNLAI...
Case Date:September 04, 2012
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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Page 820

697 F.3d 820 (9th Cir. 2012)

Arel PRICE, Petitioner,

v.

STEVEDORING SERVICES OF AMERICA, INC.; Eagle Pacific Insurance Company; Homeport Insurance Co.; Director, Office of Workers Compensation Programs, Respondents.

No. 08-71719.

United States Court of Appeals, Ninth Circuit

September 4, 2012

Argued and Submitted Sept. 22, 2011.

Submission Vacated Sept. 29, 2011.

Resubmitted Aug. 27, 2012.

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Charles Robinowitz, Attorney, Portland, OR, for the petitioner Arel Price.

Russell A. Metz, Attorney, Metz & Assocs. P.S., Seattle, WA, John Randall Dudrey, Attorney, Williams Fredrickson, LLC, Portland, OR, Matthew W. Boyle and Mark A. Reinhalter, Counsel, LABR-U.S. Dep't of Labor, Office of the Solicitor, Washington, DC, for the respondents Stevedoring Services of America, Inc., et al.

On Petition for Review of an Order of the Office of Workers' Compensation Programs. OWCP No. 07-0567.

Before: ALEX KOZINSKI, Chief Judge, MARY M. SCHROEDER, STEPHEN REINHARDT, DIARMUID F. O'SCANNLAIN, SIDNEY R. THOMAS, BARRY G. SILVERMAN, WILLIAM A. FLETCHER, RONALD M. GOULD, MARSHA S. BERZON, CARLOS T. BEA, and MARY H. MURGUIA, Circuit Judges.

Opinion by Judge BERZON; Dissent by Judge O'SCANNLAIN.

OPINION

BERZON, Circuit Judge:

We consider whether a claimant under the Longshore and Harbor Workers' Compensation Act (" LHWCA," " Longshore Act," or " Act" ), 33 U.S.C. § 901 et seq., (1) is entitled to the maximum compensation rate from the fiscal year in which he becomes disabled or from the fiscal year in which he receives a formal compensation award; (2) receives interest on past due compensation at the rate defined in 28 U.S.C. § 1961 instead of the rate set forth in 26 U.S.C. § 6621; 1 and, (3) if interest is to be awarded at the § 1961 rate, whether it should be simple or compound. In the course of resolving these issues, we also consider the proper level of deference that should be accorded to the litigating position of the Director of the Office of Workers' Compensation Programs (" Director" ).

I. BACKGROUND

A. Statutory Scheme

The Longshore Act is a " ‘ comprehensive scheme’ " to provide compensation for the disability or death of employees resulting from injuries occurring upon the navigable waters of the United States. Roberts v. Sea-Land Servs., Inc., __ U.S. __, 132 S.Ct. 1350, 1354, 182 L.Ed.2d 341 (2012) (quoting Metro. Stevedore Co. v. Rambo, 515 U.S. 291, 294, 115 S.Ct. 2144, 132 L.Ed.2d 226 (1995)); see also 33 U.S.C. § 903(a). Although the Department of Labor is charged with administering the Act, Chesapeake & Ohio Ry. Co. v. Schwalb, 493 U.S. 40, 45, 110 S.Ct. 381, 107 L.Ed.2d 278 (1989); 33 U.S.C. §§ 902, 939, the statute provides for a " split-function regime," in which duties are divided between

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two " sub-agencies," Ingalls Shipbldg. v. Dir., OWCP, 519 U.S. 248, 268, 117 S.Ct. 796, 136 L.Ed.2d 736 (1997). " By statute and by regulation, the adjudicative and enforcement/litigation functions of the Department of Labor with respect to the LHWCA are divided between the ALJ[ ]s [Administrative Law Judges] and the Benefits Review Board on the one hand, and the Director on the other." Id. at 269, 117 S.Ct. 796 (internal citations omitted); see also Dir., OWCP v. Newport News Shipbldg. & Dry Dock Co., 514 U.S. 122, 125, 115 S.Ct. 1278, 131 L.Ed.2d 160 (1995).

When seeking compensation under the Act, a worker must file a claim with a district director, a designee of the Director. 33 U.S.C. § 919(a); 20 C.F.R. §§ 701.301(a)(7), 702.105, 702.136. With respect to benefits, the LHWCA establishes a maximum limit on compensation for disability. 33 U.S.C. § 906(b)(1). Compensation is capped at twice the applicable national average weekly wage. Id. The Act requires that compensation " be paid periodically, promptly, and directly to the person entitled thereto, without an award, except where liability to pay compensation is controverted by the employer." Id. § 914(a).

An employer controverting the right to compensation must file a formal notice with the district director. Id. § 914(d). Employers who do not do so become liable for an additional ten percent of " any installment of compensation payable without an award [that] is not paid within fourteen days after it becomes due." Id. § 914(e). In addition to and separate from any penalty due under § 914, claimants are entitled under our case law to receive interest on past due payments, regardless of whether employers have controverted liability. See Matulic v. Dir., OWCP, 154 F.3d 1052, 1059 (9th Cir.1998).

District directors are authorized by the Director to resolve disputes with respect to claims and generally do so through informal discussions. 20 C.F.R. §§ 702.311, 801.2. If parties are unable to reach a resolution through this informal process, a district director will transfer the case to an ALJ for formal adjudication. Id. § 702.316; see also 33 U.S.C. § 919(d). The ALJ will then issue a compensation order rejecting a claim or making an award. 33 U.S.C. § 919(e). Parties can appeal an ALJ's order to the Benefits Review Board (" Board" or " BRB" ), id. § 921(b)(3), and " [a]ny person adversely affected or aggrieved by a final order of the Board may obtain a review of that order in the United States court of appeals," id. § 921(c).

B. Factual and Procedural History

Arel Price was injured in 1991 while employed as a longshoreman by Stevedoring Services of America, Inc. After undergoing surgery for his injury, he returned to work and continued to work until 1998, when he stopped working upon his physician's advice.

After informal negotiations preceding adjudication by an ALJ, Stevedoring provided Price with weekly workers' compensation payments of $676.89 from his date of injury until January 1992. The maximum weekly compensation rate at the time of Price's injury was $699.96 per week. Price also received a lump sum payment for the period from January to November 1992.

The parties disagreed, however, as to whether the amount Stevedoring paid Price in benefits was correct, or whether the proper rate was higher. As a result, the case was referred to an ALJ, who issued a formal compensation award in 2000. Upon eventual appeal, we remanded the case for reconsideration of the national

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average weekly wage used to calculate Price's disability payments. Stevedoring Servs. of Am., Inc. v. Price, ---Fed.Appx. ----, ---- - ----, Nos. 02-71207 & 02-71578, 2004 WL 1064126, at *2-3 (9th Cir. May 11, 2004).

On remand, the ALJ revised the applicable national average weekly wage and awarded Price compensation at the 1991 fiscal year maximum, declining to apply the maximum compensation rate from fiscal year 2000, when Price received his formal compensation order. In addition, the ALJ awarded Price interest on past due payments at the rate set forth in 28 U.S.C. § 1961; the ALJ rejected Price's argument that interest should be awarded at the higher rate set forth in 26 U.S.C. § 6621(a). The ALJ also refused to award Price compound interest at the § 1961 rate, requiring only simple interest instead. 2 Price appealed each of these holdings to the BRB, which affirmed the ALJ's order in its entirety.

Price then petitioned this court for review of the Board's decision, challenging the maximum rate of compensation, the rate of interest on his past due compensation, and the award of simple rather than compound interest. Price named the Director, who had not been involved in the adjudicatory proceedings before the Board, as one of the respondents. See generally Ingalls, 519 U.S. at 269, 117 S.Ct. 796 (holding that the Director may be named as a respondent in litigation before the courts of appeals). The Director filed a brief urging us to affirm the BRB's decision. A three-judge panel affirmed the Board's order as to all three issues, see Price v. Stevedoring Servs. of Am., 627 F.3d 1145 (9th Cir.2010), and Price petitioned for en banc review of the panel's decision. We granted the petition, in large part to address the degree of deference due the Director's litigating positions. See id. at 1150-51 (O'Scannlain, J., concurring).

II. DISCUSSION

A. Standard of Review

1. Chevron deference

Two administrative entities have weighed in on the issues here: the Board, through its order, and the Director, through his litigating position before this court. Because the Board is not a policymaking entity, we accord no special deference to its interpretation of the Longshore Act. See Matson Terminals, Inc. v. Berg, 279 F.3d 694, 696 (9th Cir.2002) (citing Potomac Elec. Power Co. v. Dir., OWCP, 449 U.S. 268, 279 n. 18, 101 S.Ct. 509, 66 L.Ed.2d 446 (1980)); see also Martin v. Occupational Safety and Health Review Comm'n, 499 U.S. 144, 154-55, 111 S.Ct. 1171, 113 L.Ed.2d 117 (1991). The Director, by contrast, is a policymaking entity under the Act; he has the " power to resolve legal ambiguities in the statute." Newport News, 514 U.S. at 134, 115 S.Ct. 1278. But having that authority does not mean that any reasonable statutory construction by the Director is entitled to what has become known as Chevron deference. See generally Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). Although we have previously extended Chevron deference to the Director's litigating positions interpreting the Act, see, e.g., Gilliland v. E.J. Bartells Co., Inc., 270 F.3d 1259, 1262 (9th Cir.2001);

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Mallott & Peterson v. Dir., OWCP, 98 F.3d 1170, 1172 (9th Cir.1996), we now overrule our precedent to that effect.

" [O]ur...

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