AZ INTERN. v. Phillips

• Decision Date: 10 June 1999
• Docket Number: No. 97-70143.,97-70143.
• Citation: 179 F.3d 1187
• Parties: A-Z INTERNATIONAL, Employer and Great American Insurance Company, Insurance Carrier, Petitioners, v. Michael PHILLIPS; Director, Office Of Workers' Compensation Programs, United States Department of Labor, and Attorney General of the United States, Respondents.
• Court: U.S. Court of Appeals — Ninth Circuit

179 F.3d 1187

A-Z INTERNATIONAL, Employer and Great American Insurance Company, Insurance Carrier, Petitioners, v. Michael PHILLIPS; Director, Office Of Workers' Compensation Programs, United States Department of Labor, and Attorney General of the United States, Respondents.

No. 97-70143.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted January 25, 1999.

Decided June 10, 1999.

James P. Aleccia, Long Beach, California, for petitioners A-Z International and Great American Insurance Company.

Joshua T. Gillelan, United States Department of Labor, Washington, DC, for respondent Director, Office of Workers' Compensation Programs.

Before: BOOCHEVER, TASHIMA, and WARDLAW, Circuit Judges.

WARDLAW, Circuit Judge:

This is a petition for review of a United States Department of Labor Benefits Review Board (the "Board") Decision and Order ("Order") vacating the Supplemental Decision Certifying Facts and Recommending Sanction ("Supplemental Decision") and the Amended Supplemental Decision Certifying Facts and Recommending Sanction ("Amended Supplemental Decision") of an Administrative Law Judge ("ALJ"). In rendering these decisions, the ALJ purported to act pursuant to 33 U.S.C. § 927(b) ("section 27(b)"), which sets forth administrative contempt powers. Section 27(b) requires the ALJ to certify the facts underlying the alleged contempt to the district court. This petition presents the novel question of what actions are required of the ALJ in order to "certify the facts to the district court" within the meaning of section 27(b) so as to invoke the jurisdiction of the district court. We have jurisdiction pursuant to 33 U.S.C. § 921(c), and hereby vacate the Order, having concluded that the ALJ's actions in this case were sufficient "to certify the facts to the district court," thereby depriving the Board of jurisdiction to entertain the appeal from the Supplemental and Amended Supplemental Decisions.

I. BACKGROUND

In September 1988, Respondent Michael Phillips ("Phillips") filed a claim for benefits against his employer, A-Z International ("A-Z") and its insurer Great American Insurance Company (sometimes collectively referred to as "Employer"), alleging that he was injured on the offshore oil rig, the Hermosa, and seeking benefits under the Longshore and Harbor Workers' Compensation Act ("LHWCA" or the "Act"), 33 U.S.C. § 901 et seq., as extended by the Outer Continental Shelf Lands Act ("OCSLA"), 43 U.S.C. § 1331 et seq. In a lengthy and detailed opinion, the ALJ denied Phillips' claim, finding that Phillips was not injured on the Hermosa and therefore failed to meet OCSLA's jurisdictional "situs" requirement. See Decision and Order Denying Benefits, dated March 26, 1993, at 32 ("March 26 Order").¹ Although no appeal was taken from the March 26 Order, the parties were given the opportunity to submit closing briefs. A-Z availed itself of this opportunity and sought, inter alia, reimbursement for disability and medical benefits, as well as costs and attorneys' fees.

In the Supplemental Decision, the ALJ found that Phillips had filed a fraudulent claim in an effort to have his injury covered by the Act and determined that such conduct was sanctionable as fraud against the administrative process pursuant to section 27(b). The ALJ therefore recommended the sanction of requiring Phillips to reimburse the Employer for the amount of the total disability compensation benefits he had received while pursuing the fraudulent claim. The ALJ specifically ordered:

1. Pursuant to Section 27(b) of the Longshore Act, the findings of fact contained in the Decision and Order Denying Benefits which the undersigned issued March 26, 1993, and the findings of fact contained in this Supplemental Decision Certifying Facts and Recommending Sanction are certified.

2. Pursuant to Section 27(b) of the Longshore Act, Claimant shall pay Employer the amount of $54,180.19, which represents temporary total disability compensation benefits which Claimant received for the period of January 8, 1987, through January 3, 1989, as a sanction for Claimant's fraud against the administrative process. This sanction is a recommended sanction which cannot become due until such time as it is successfully enforced with a United States District Court.

Supplemental Decision, dated April 11, 1995, at 11-12. The ALJ did not recommend reimbursement for medical benefits or attorneys' fees and costs incurred by the Employer because the Employer had submitted no evidence documenting those sums and therefore such sums could not "be certified as facts." Id. at 11.

The Employer moved for reconsideration of the Supplemental Decision. The ALJ denied the Employer's requested relief—reopening of the proceedings so that the Employer could submit evidence to support a recommended sanction as to the medical benefits and attorneys' fees and costs—but reiterated his finding that Phillips had committed a fraud on the administrative process. The ALJ held that this fraud was sufficient to qualify as "disobedience to lawful process" within the meaning of Section 27(b). Amended Supplemental Decision, dated December 4, 1995, at 5. The ALJ therefore recommended sanctions to be considered by the district court, which included, in addition to the earlier recommendation of reimbursement of disability compensation, further reimbursement of medical benefits provided by the Employer and reasonable attorneys' fees and costs. See id. at 5-6. Distinguishing Stevedoring Services of America, Inc. v. Eggert, 953 F.2d 552 (9th Cir. 1992), the ALJ noted that the district court's jurisdiction under section 27(b) rests upon a claimant disobeying "lawful process" and that the role of the ALJ was "merely to certify those facts which indicate such disobedience," leaving the "determination as to the appropriateness of sanctions for that disobedience, and what form those sanctions should take, if any, to the district court." Amended Supplemental Decision, at 5. Again, the ALJ concluded the Amended Supplemental Decision by ordering:

1. Pursuant to Section 27(b) of the Longshore Act, the findings of fact contained in the Decision and Order Denying Benefits dated March 26, 1993, and the findings of fact contained in the Supplemental Decision Certifying Facts and Recommending Sanction, dated April 11, 1995, are certified; and

2. The Supplemental Decision Certifying Facts and Recommending Sanction dated April 11, 1995, incorporated by reference herein, is hereby amended to include the foregoing discussion.

Id. at 6-7.

Phillips appealed the Supplemental Decision and the Amended Supplemental Decision to the Board. Although the Board did not address the jurisdictional question, in an otherwise well-reasoned decision, the Board reversed the ALJ's finding that section 27(b) applied to the underlying certified facts and vacated the ALJ's certification of facts to the district court and the recommendation that Phillips be made to repay the Employer.

II. STANDARD OF REVIEW

This Court reviews Board decisions for errors of law. See Alcala v. Director, Office of Workers Compensation Programs, 141 F.3d 942, 944 (9th Cir. 1998); Metropolitan Stevedore Co. v. Brickner, 11 F.3d 887, 889 (9th Cir. 1993). We give "no special deference ... to the Board's interpretations of the LHWCA." Moyle v. Director, Office of Workers' Compensation Programs, 147 F.3d 1116, 1119 (9th Cir. 1998).

III. DISCUSSION

A. Jurisdiction

Although the Board failed to address the question of its own jurisdiction to entertain the appeal from the Supplemental Decision and Amended Supplemental Decision of the ALJ, the issue is properly before us. The question of jurisdiction may be raised at any stage of the proceedings, including for the first time on appeal. See Morongo Band of Mission Indians v. California State Bd. of Equalization, 858 F.2d 1376, 1380 (9th Cir. 1988).

On appeal to this Court, the Director and Employer initially shared the position that the Board lacked jurisdiction to entertain Phillips' appeal of the Supplemental and Amended Supplemental Decisions.² At oral argument, however, the Director disavowed the entire jurisdictional argument in his brief, contending that because the ALJ did not complete the certification process to the district court as set forth in section 27(b), the Board may have had jurisdiction to entertain the appeal.³ We disagree with the Director's tentatively expressed and, by admission at oral argument, only equivocally held, viewpoint. We hold that in the absence of any properly promulgated interpretive regulations, the actions taken by the ALJ were sufficient "to certify the facts to the district court" within the plain meaning of the statute, and thus that the Board lacked jurisdiction.

B. The Contempt Provision

Pursuant to section 27(b), the district courts may punish as contempt of court any disobedience or resistance to a lawful order or process issued in the course of administrative proceedings under the Act. See Eggert, 953 F.2d at 554. Section 27(b) provides in relevant part:

(b) If any person in proceedings before a deputy commissioner or Board disobeys or resists any lawful order or process, or misbehaves during a hearing or so near the place thereof as to obstruct the same, or neglects to produce, after having been ordered to do so, any pertinent book, paper, or document, or refuses to appear after having been subpoenaed, or upon appearing refuses to take the oath as a witness, or after having taken the oath, refuses to be examined according to law, the deputy commissioner or Board shall certify the facts to the district court having jurisdiction in the place in which he is sitting ... which shall thereupon in a summary manner hear the evidence as to the acts complained of, and, if the evidence so warrants, punish such person in the same manner and to the same extent as for a contempt committed before the court ....

33 U.S.C. § 927(b) (emphasis added).⁴ Both parties agree,...