Pearce v. Director, Office of Workers' Compensation Programs, U.S. Dept. of Labor

• Decision Date: 31 August 1979
• Docket Number: No. 77-2074,77-2074
• Citation: 603 F.2d 763
• Parties: Gerry E. PEARCE, Petitioner, v. DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, UNITED STATES DEPARTMENT OF LABOR, and McDonnell Douglas Corporation, and Industrial Indemnity Company, Respondents.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 763

603 F.2d 763

Gerry E. PEARCE, Petitioner, v. DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, UNITED STATES DEPARTMENT OF LABOR, and McDonnell Douglas Corporation, and Industrial Indemnity Company, Respondents.

No. 77-2074.

United States Court of Appeals, Ninth Circuit.

Aug. 31, 1979.

Bruce Nangle (argued), Clayton, Mo., for petitioner.

Laurie M. Streeter, U. S. Dept. of Labor, Washington, D. C., Mark C. Walters (argued), Washington, D. C., Lee H. Cliff, San Francisco, Cal. (argued), for respondents.

On Petition for Review of an Order of the Benefits Review Board.

Before DUNIWAY and KENNEDY, Circuit Judges, and KING, ^* District Judge.

DUNIWAY, Circuit Judge:

Petitioner Gerry E. Pearce received bi-weekly workers' compensation benefits under the Longshoremen's and Harbor Workers' Compensation Act, as amended, 33 U.S.C. §§ 901 Et seq. ("the Longshoremen's Act"), as extended by the Defense Base Act, as amended, 42 U.S.C. §§ 1651 Et seq. He seeks review of a final order of the Benefits Review Board affirming a deputy commissioner's refusal to commute his bi-weekly benefits into a lump sum compensation award as permitted under § 14(j) of the Longshoremen's Act, 33 U.S.C. § 914(j).

Because the deputy commissioner who initially denied the commutation has his office in Chicago, we do not have jurisdiction to reach the merits. Because the deputy commissioner acted after the 1972 Amendments to the Longshoremen's Act had taken effect, we conclude that review of the Board's order lies in the Court of Appeals for the Seventh Circuit, not in this court. In the interest of justice, we transfer this case to the Seventh Circuit for further proceedings.

I. The Facts.

On November 14, 1970, Pearce sustained permanently and totally disabling injuries in an accident which occurred near a United States Air Force base in northeastern Thailand. As an employee covered by the Defense Base Act, See 42 U.S.C. § 1651, Pearce filed a claim for compensation with the United States Department of Labor Compensation District headquartered in Hawaii. Before the Hawaiian office had acted upon his claim, Pearce moved to Illinois. For the convenience of all concerned, the Office of Workers' Compensation Programs of the United States Department of Labor then transferred Pearce's claim to its Chicago office for investigation and resolution. Pearce does not dispute the propriety of the transfer.

A deputy commissioner whose office is located in Chicago eventually found Pearce to be permanently and totally disabled. In subsequent proceedings, the same deputy commissioner increased the amount of Pearce's benefits but rejected his application for a lump sum award in lieu of biweekly benefits. The Benefits Review Board affirmed the deputy commissioner's decision that a lump sum award would not be "in the interest of justice," the statutory standard under 33 U.S.C. § 914(j). The Board's decision is reported at 5 B.R.B.S. 573 (1977). Pearce then petitioned this court for review of the Board's decision.

II. What is the Proper Court to Hear this Case?

The Director of the Office of Workers' Compensation Programs urges us to dismiss Pearce's petition, arguing that only the Court of Appeals for the Seventh Circuit is the proper court to hear Pearce's petition. Pearce argues that § 21(c) of the Longshoremen's Act, 33 U.S.C. § 921(c) places direct review of the Board's decision in this court. The Sixth Circuit's recent decision in Home Indemnity Company v. Stillwell, 6 Cir., 1979, 597 F.2d 87, would require Pearce to petition for review in the United States District Court for the Northern District of Illinois. To resolve these questions, we must determine the extent to which certain 1972 Amendments to the Longshoremen's Act are affected by the provisions of the Defense Base Act, a statute which incorporates the Longshoremen's Act by reference.

Congress passed the Defense Base Act in order to provide workers' compensation coverage for specified classes of employees working "outside the continental United States." See § 1, 55 Stat. 622, 42 U.S.C. § 1651(a)(4). Instead of drafting a new workers' compensation scheme, Congress extended the already established Longshoremen's Act, as amended, to apply to the newly covered workers. Section 1 of the Defense Base Act, 42 U.S.C. § 1651(a), now provides:

Except as herein modified, the provisions of the Longshoremen's . . . Act, approved March 4, 1927 (44 Stat. 1424), as amended, shall apply in respect to the injury or death of any employee (covered under the Defense Base Act) . . . .

Over the years, Congress has also extended the protections and procedures of the Longshoremen's Act to various other groups of workers. See, e. g., The District of Columbia Workmen's Compensation Act, as amended, 35 D.C.Code 501 Et seq.; the War Hazards Compensation Act, as amended, 42 U.S.C. § 1701 Et seq.; the Outer Continental Shelf Lands Act, as amended, 43 U.S.C. § 1331 Et seq.; the Nonappropriated Funds Instrumentalities Act, as amended 5 U.S.C. § 8171 Et seq.; and the Federal Coal Mine Health and Safety Act, as amended, 30 U.S.C. § 801 Et seq.

To assess the effects of the 1972 Amendments to the Longshoremen's Act upon the adjudication of Defense Base Act claims we begin with the law as it stood before those amendments. Under that law, § 19 of the Longshoremen's Act, 33 U.S.C. § 919 (1970 ed.), Longshoremen's Act claims were initially investigated and decided by deputy commissioners. Because the Defense Base Act contained no special modifying provision, § 19 applied to Defense Base Act claims through that Act's general incorporation provision, § 1, 42 U.S.C. § 1651(a).

Under the Longshoremen's Act, appeals from a deputy commissioner were to be "instituted in the Federal District court for the judicial district in which the injury occurred . . . ." § 21(b), 33 U.S.C. § 921(b) (1970 ed.) (emphasis added). Because, in most, if not all, Defense Base Act cases, the injury or death would not occur within any federal judicial district, Congress provided a different method of determining what court a Defense Base Act claimant or other interested party should resort to to pursue the appeal rights set forth in the old § 21(b):

Judicial proceedings provided under section ( ) . . . 21 of the Longshoremen's . . . Act (33 U.S.C. § 921) in respect to a compensation order made pursuant to this chapter shall be instituted in the United States District court of the judicial district wherein is located the office of the deputy commissioner whose compensation order is involved if his office is located in a judicial district, and if not so located, such judicial proceedings shall be instituted in the judicial district nearest the base at which the injury or death occurs.

§ 3, 42 U.S.C. § 1653(b) (emphasis added).

It turned out that all of the deputy commissioners had offices within judicial districts, and so all appeals in Defense Base Act cases were initially heard in the district courts where the deputy commissioners in question had their offices.

Neither Act made any special provision for circuit court review; so by virtue of 28 U.S.C. § 1291, the second level of review in Longshoremen's Act cases was by appeal from the district court to the Court of Appeals for the Circuit in which the injury occurred and in Defense Base Act cases to the Court of Appeals for the Circuit in which the deputy commissioner had his office. This is because the appeal, under 28 U.S.C. § 1294, is to the Court of Appeals for the Circuit in which lies the district court from which appeal is taken.

The Longshoremen's Act Amendments of 1972 made two pertinent changes in the procedures for adjudicating compensation claims. First, section 14 of the 1972 Amendments, 86 Stat. 1251, 1261, amended § 19(d), 33 U.S.C. § 919(d), to provide that "any hearing" held under the Act shall be conducted in accordance with the adjudicatory provisions of the Administrative Procedure Act, 5 U.S.C. § 554, by a hearing examiner qualified in accordance with 5 U.S.C. § 3105. As a result, hearings formerly held and decided by deputy commissioners are now held and decided by administrative law judges. ¹

Second, § 15(a) of the 1972 Amendments, 86 Stat. 1251, 1261-1262, amended § 19(b) by replacing appeals to the "district court for the judicial district in which the injury occurred" with appeals to a newly created national Benefits Review Board. Section 21(c) was also amended to provide that:

(c) Any person adversely affected or aggrieved by a final order of the Board may obtain review of that order In the United States court of appeals for the circuit in which the injury occurred, by filing in such court within sixty days following the issuance of such Board order a written petition praying that the order be modified or set aside. . . . (emphasis added)

As we have seen, formerly, the court of appeals for the circuit where the injury occurred had provided a second level of review by hearing appeals from district court decisions under 28 U.S.C. §§ 1291 and 1294. After the amendments, the court of appeals for the circuit where the injury occurred still provided the second level of review, but by hearing petitions for review of Board decisions under amended § 21(c).

The 1972 Amendments to the Longshoremen's Act did not explicitly amend the Defense Base Act. If Defense Base Act procedures remained unaffected by the Amendments, § 3(b) of the Defense Base Act, 42 U.S.C. § 1653(b) would place jurisdiction to hear Pearce's petition in the District Court for the Northern District of Illinois because "the deputy commissioner whose compensation order is involved" had his office in Chicago. See Home Indemnity Company v. Stillwell, supra. Pearce and the respondent argue for the jurisdiction in the Courts of Appeals for the Ninth and Seventh Circuits, respectively, on the basis that § 1(a) of the Defense Base Act, 42 U.S.C. § 1651(a), incorporates by reference not only the...