Delaware River Stevedores v. Difidelto, 04-4531.

• Citation: 440 F.3d 615
• Decision Date: 13 March 2006
• Docket Number: No. 04-4531.,04-4531.
• Parties: DELAWARE RIVER STEVEDORES; Liberty Mutual Ins. Co., Petitioners v. Edward DiFIDELTO; Director, Office of Workers' Compensation Programs, Respondents.
• Court: United States Courts of Appeals. United States Court of Appeals (3rd Circuit)

440 F.3d 615

DELAWARE RIVER STEVEDORES; Liberty Mutual Ins. Co., Petitioners v. Edward DiFIDELTO; Director, Office of Workers' Compensation Programs, Respondents.

No. 04-4531.

United States Court of Appeals, Third Circuit.

Argued October 26, 2005.

Filed March 13, 2006.

John E. Kawczynski (argued), Field, Womack & Kawczynski, South Amboy, NJ, for Petitioners Delaware River Stevedores, Inc. and Liberty Mutual Insurance Company and for Amicus Curiae Weeks Marine, Inc.

David M. Linker (argued), Freedman & Lorry, Philadelphia, PA, for Respondent Edward DiFidelto.

Howard M. Radzely, Solicitor of Labor, Donald S. Shire, Associate Solicitor, Mark A. Reinhalter, Counsel for Longshore, Richard A. Seid (argued), United States Department of Labor, Office of the Solicitor, Washington, DC, for Respondent Director, Office of Workers' Compensation Programs.

Before SLOVITER, FISHER, and GREENBERG, Circuit Judges.

OPINION OF THE COURT

GREENBERG, Circuit Judge.

I. INTRODUCTION

This matter comes on before this court on a petition for review of a disposition of the Benefits Review Board ("Board") awarding benefits to Edward DiFidelto under the Longshore and Harbor Workers' Compensation Act ("LHWCA"), 33 U.S.C. §§ 901-950, following his sustaining an injury compensable under the LHWCA. The sole issue in these proceedings is whether Delaware River Stevedores, Inc. ("DRS"), DiFidelto's employer, had authority under a provision of the LHWCA, 33 U.S.C. § 908(j) ("section 908(j)"), to require DiFidelto to report information regarding his earnings when it was not paying him compensation at the time of its requests.¹ Section 908(j) provides that an employer may inform a "disabled employee" of his obligation to report his earnings to the employer from employment or self-employment and further provides that if the employee fails to report or knowingly or willfully omits or understates his earnings, he forfeits his right to compensation with respect to any period during which he was required to file the report. Knowledge of the amount of an employee's earnings may be useful to an employer as those earnings may enable it to reduce or even eliminate the obligation that it otherwise would have to make payments to a disabled employee on account of a work-related injury.²

II. FACTUAL AND PROCEDURAL HISTORY

The material facts and procedural history with regard to these proceedings are not in dispute. On January 7, 2000, DiFidelto suffered a work-related injury in the course and scope of his employment with DRS entitling him to receive benefits from DRS under the LHWCA. Initially, DRS voluntarily made the payments without an adjudication or order, but on November 19, 2001, it discontinued them as it controverted its obligation to do so on the basis of a medical opinion that DiFidelto had recovered fully from his injuries. When DRS controverted DiFidelto's claim, it requested the District Director of the Office of Workers' Compensation Programs to refer the case to the Office of Administrative Law Judges. Not surprisingly, DiFidelto rejected DRS's position, and thus he prosecuted a claim for benefits under the LHWCA.

After DRS requested a hearing in the case, and at a time that it no longer was making payments to DiFidelto, it sent three Forms LS-200 to his attorney, pursuant to section 908(j), seeking information about his earnings from employment or self-employment. The Director, Office of Workers' Compensation Programs ("Director"), adopted Form LS-200 for the reporting of earnings pursuant to section 908(j). The first and second forms that DRS sent on January 25 and February 21, 2002, respectively, identified the reporting period as being from January 7, 2000, to January 21, 2002. Thereafter, on April 22, 2002, DRS sent DiFidelto's attorney a third Form LS-200 requesting information about DiFidelto's earnings between January 7, 2000, and April 22, 2002. Although DiFidelto received DRS's requests, he refused to report his earnings as he contended that he did not have a legal obligation to do so as long as DRS was not paying him compensation.

An administrative law judge ("ALJ") held a hearing in this case on July 18, 2002, following which on June 2, 2003, he issued his "Decision and Order" awarding DiFidelto benefits. In his June 2, 2003 Decision and Order, the ALJ found, inter alia, that even though DiFidelto was entitled to reinstatement of his compensation payments, he had "forfeited" his right to compensation for the period between January 8, 2000, and April 22, 2002, because he failed to report his earnings as DRS requested.

In reaching this result, the ALJ indicated that forfeiture penalties apply if an employee fails to respond or responds inaccurately to a Form LS-200 request. In considering the applicability of the section 908(j) reporting requirement, the ALJ determined that "the decisive factor is whether earnings information is sought for `periods during which an employee's earnings could affect employer's liability for compensation."' App. at 56 (quoting Plappert v. Marine Corps Exch., 31 Ben. Rev. Bd. Serv. 13, 17, aff'd, 31 Ben. Rev. Bd. Serv. 109 (1997) (en banc)). Inasmuch as DRS's LS-200 request covered a period for which DiFidelto sought and obtained compensation, the ALJ applied the forfeiture to that period and denied him compensation from January 8, 2000, to April 22, 2002.

DiFidelto then filed a timely request with the ALJ to reconsider the June 2, 2003 Decision and Order. In support for his argument against forfeiture, DiFidelto relied on the regulation implementing section 908(j), 20 C.F.R. § 702.285(a), and the legislative history of section 908(j), as set forth in a House of Representatives Conference Report. DiFidelto contended that both authorities describe a "disabled employee" within section 908(j) as an individual to whom the employer is paying compensation when it requires an earnings report. Clearly, even though DRS had paid DiFidelto compensation, it was not doing so when it sent him the LS-200 forms and thus DiFidelto, at that time, did not consider himself to be a disabled employee for purposes of section 908(j).

On June 30, 2003, the ALJ issued a "Decision and Order Granting Claimant's Request for Reconsideration." In the June 30, 2003 Decision and Order, the ALJ corrected technical deficiencies in the June 2, 2003 Decision and Order with respect to the time periods during which DiFidelto was entitled to total versus partial compensation.³ The ALJ, however, rejected DiFidelto's request that the ALJ reconsider his findings with respect to the forfeiture of benefits as the ALJ adhered to his view that, according to Plappert, the reporting obligation applies to any period during which the employee claims compensation.

On July 17, 2003, DiFidelto filed a timely appeal to the Board. DiFidelto argued again that a "disabled employee" must be receiving compensation when the employer asks for his earnings information pursuant to section 908(j). A divided three-judge panel on July 19, 2004, issued its "Decision and Order" in which it affirmed the order of the ALJ awarding compensation at a partial rate but vacated the ALJ's order on the forfeiture issue and remanded the case to the ALJ to make further findings regarding DiFidelto's compensation status at the time DRS requested that DiFidelto complete and return the LS-200 forms. The dissenting member would have reversed the ALJ outright on the forfeiture issue because, in her view, DiFidelto was not a disabled employee within section 908(j) when DRS sent him the LS-200 forms.

On July 27, 2004, the Director filed a "Motion for Reconsideration and a Motion to Hold [the DiFidelto] Appeal in Abeyance" with the Board to await its decision in Briskie v. Weeks Marine, Inc., 38 Ben. Rev. Bd. Serv. 61 (2004), another appeal then pending before it concerning the same issue involved here. DiFidelto and DRS joined in the Director's request. Before the Board ruled on the July 27, 2004 motion, it decided Briskie on August 25, 2004. In Briskie the Board concluded that section 908(j) was "somewhat ambiguous," and thus it looked to the section's implementing regulation and legislative history for guidance on the forfeiture issue. Ultimately, the Board held in Briskie that section 908(j) applied only during a period in which an employer was paying compensation.

In light of Briskie, DRS's resort to forfeiture was foreclosed in this case, and thus the Board panel upheld DiFidelto's entitlement to the entire compensation award. On October 8, 2004, the Board issued its final order in this case, styled as an "Order on Motion for Reconsideration," in which, relying on Briskie, it reversed the ALJ's Decision and Order on the forfeiture issue. On December 6, 2004, DRS timely filed a petition for review with this court.⁴

III. JURISDICTION AND STANDARD OF REVIEW

The Board had jurisdiction over DiFidelto's appeal because he timely filed his petition for review of the ALJ's decision. See 33 U.S.C. § 921(c); 20 C.F.R. §§ 702.393, 802.206(a). The Director timely filed a motion for reconsideration of the Board's July 19, 2004 order, which led to the Board's October 8, 2004 order at issue here. We have jurisdiction over DRS's petition for review as it timely filed it within 60 days of the Board's October 8, 2004 order on reconsideration. See 33 U.S.C. § 921(c); 20 C.F.R. § 802.410(a). Venue is proper in this court, as DiFidelto suffered his work-related injury in New Jersey. See 33 U.S.C. § 921(c).

Our review of a Board's decision for an error of law is plenary. Dir., OWCP v. E. Associated Coal Corp., 54 F.3d 141, 146 (3d Cir. 1995). While we offer minimal deference to the Board's statutory or regulatory interpretations, "we give judicial deference to the Director, as policymaker." Id. at 147. When we review an agency's construction of a statute, if the intent of Congress is clear, we must give effect to that intent. Chevron, U.S.A. v. Natural Resources Defense Council, Inc., ...