Ingalls Shipbuilding, Inc. v. Director, Office of Workers' Compensation Programs ( 1996 )

United States Court of Appeals,
Fifth Circuit.
Nos. 94-40778, 94-40830 to 94-40841, 94-40853 to 94-40864, 94-
40921 to 94-40929, 94-40961 to 94-40970, 94-40980 to 94-41000, 94-
41058 to 94-41062, 94-41064 to 94-41068.
INGALLS SHIPBUILDING, INC., and American Mutual Liability
Insurance Company in Liquidation by and through Mississippi
Insurance Guaranty Association, Petitioners,
v.
DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, U.S.
Department of Labor and Wilbur Boone, et al., Respondents.
April 26, 1996.
Petitions for Review of an Order of the Benefits Review Board.
Before REAVLEY, JOLLY and WIENER, Circuit Judges.
E. GRADY JOLLY, Circuit Judge:
This appeal is the latest chapter in the case of the dauntless
District Director.1 Although the District Director of the Office
of Workers' Compensation Programs was mandamused (after several
years of deliberate delay) by the district court to comply with the
Longshore and Harbor Workers' Compensation Act, 33 U.S.C. § 901 et
seq. ("LHWCA"), and to transfer for adjudication approximately
3,100 similar worker compensation claims, she only nominally
1
As we explain more fully below, two factually distinct, but
interdependent proceedings are implicated here. The first involves
the mandamus order resulting from the District Director's delay in
transferring for adjudication approximately 3,100 cases, including
Boone's. The instant appeal concerns actions taken by the District
Director after the mandamus order issued, in which the District
Director considered and granted motions to withdraw without
prejudice. The two proceedings are interrelated because the
gravamen of Ingalls' complaint regarding the District Director's
post-mandamus actions is that the earlier mandamus order removed
her authority to grant such motions.
1
complied. She transferred the cases as directed; she then
proceeded, however, to consider and grant motions to withdraw
without prejudice claims filed by Wilbur Boone ("Boone") and
seventy-four other claimants, whose claims are consolidated for
this appeal.2 The District Director acted on these motions to
withdraw notwithstanding the intent of a district court in an
earlier mandamus order that the Office of Administrative Law Judges
("OALJ")—and only the OALJ—would consider and decide these motions
to withdraw. Ingalls appealed the District Director's withdrawal
orders to the Benefit Review Board (the "Board"), contending, among
other things, that the District Director's actions violated the
prior mandamus order.
The Board, sitting en banc, dismissed the appeal. Boone v.
Ingalls Shipbuilding, Inc., 28 BRBS 119 (1994) (en banc ). The
Board held that Ingalls lacked standing under 33 U.S.C. § 921(c) to
seek review of the decision and that the issues presented by
Ingalls were not ripe for adjudication. The Board also concluded,
however, that the District Director had acted outside her authority
by approving Boone's motion to withdraw his claim; it nevertheless
held that the grant of withdrawal without prejudice was harmless.
In the Board's view, the lack of standing and ripeness, as well as
the lack of harm, rests on a single missing element: Ingalls has
suffered no injury by Boone's withdrawal. The Board reasoned that
because Boone's withdrawal abrogated Boone's claim against Ingalls,
2
Because Boone's claim is the lead case in these appeals, all
references herein are to Boone as the claimant and to the sequence
of events with respect to his claim.
2
Ingalls is not injured until and unless Boone refiles his claim.
Thus, on appeal, the central question is whether the Board
erred in finding that Ingalls suffers no present injury as a result
of the District Director's withdrawal order permitting Boone to
withdraw his claim without prejudice. We conclude that the
withdrawal order necessarily injures Ingalls because it strips
Ingalls of a valuable right conferred upon it by the mandamus
order—namely, the right to have Boone's claim transferred to and
decided by the OALJ. Consequently, we reverse the Board's
conclusions as to standing, ripeness and lack of harm, we vacate
the orders allowing Boone and the other claimants to withdraw their
claims without prejudice, and we remand for further proceedings
consistent with this opinion.
I
As we have earlier indicated, this appeal from the
administrative decision of the Board inextricably involves the
mandamus order of the district court in a separate proceeding. We
thus retrace a little of the history behind this appeal.
In 1987, Boone filed a claim against Ingalls Shipbuilding,
Inc. for worker compensation benefits alleging that a diagnosis of
pulmonary disease was related to his exposure to asbestos during
his employment. After filing this claim, Boone entered into
third-party settlements with asbestos manufacturers and
distributors. Although Boone gave notice to Ingalls of these
settlements, he failed to obtain its consent as required by the
LHWCA.
3
In 1990, Ingalls filed a Pre-Hearing Statement with the
District Director, requesting that the District Director refer to
the OALJ for an administrative hearing of Boone's case and the
cases of approximately 3,100 other claimants. Ingalls also filed
a motion for summary judgment with the OALJ asserting that under
section 933(g) of the LHWCA, Boone's third-party settlement without
its approval as his employer bars his recovery under the LHWCA.
The District Director refused for more than two years to
transfer the cases to the OALJ. In addition, she indicated no
intention of ever transferring the cases. See Ingalls
Shipbuilding, Inc. v. Asbestos Health Claimants, 17 F.3d 130, 131
(5th Cir.1994) ("Ingalls I ") (discussing the District Director's
"new and inventive rationales for deferring the referral" of the
LHWCA claims against Ingalls). Thus, Ingalls went to the federal
district court seeking relief. On January 7, 1993, it obtained a
writ of mandamus of the district court ordering the District
Director to transfer these cases.
The District Director then appealed the mandamus order to this
court. We affirmed the mandamus order, but remanded for further
explication. See id. Before our opinion issued, however, Boone
set in motion the events forming the basis for this appeal.
Specifically, on January 19, 1993, two weeks after the
mandamus order issued but before the District Director had actually
obeyed the mandamus order and transferred the cases, Boone filed
with the District Director a motion to withdraw his claim. He
stated that although he had been diagnosed with asbestos-related
4
pulmonary disease, he had sustained no compensable disability.
Approximately three weeks later, on February 12, 1993, the District
Director transferred to the OALJ all 3,094 claims, including
Boone's, as directed by the mandamus order. More than a month
after she had transferred the cases to the OALJ, on March 18, 1993,
the District Director approved the withdrawal of Boone's claim
without prejudice. Ingalls appealed that withdrawal order to the
Board.
During the pendency of Ingalls's administrative appeal of the
withdrawal order, we issued our opinion affirming the earlier
mandamus order of the district court. See Ingalls I, 17 F.3d 130.
In upholding the mandamus order, we specifically rejected the
contention that the District Director possesses discretion under
the LHWCA to delay ordering a hearing after a request for one has
been made. Id. at 134. Instead, we found that the "[District]
Director had a clear, ministerial and nondiscretionary duty
pursuant to 33 U.S.C. § 919(c) to transfer the claims in issue to
the OALJ for a hearing." Id. We further concluded that the
"mandamus order was the proper remedy to redress the [District]
Director's failure to carry out this duty." Id.
We also considered whether the District Director "should be
entitled to consider and act on motions to withdraw prior to and in
lieu of referring claims to the OALJ." Id. at 135-36. Because
"the effect of the district court's mandamus order on the
[District] Director's power to consider motions to withdraw is
unclear," we remanded "for further development and explication" by
5
the district court of the District Director's power to consider
such motions. Id. at 136.
On remand, the district court filed a memorandum opinion and
order explaining its earlier mandamus order. See Memorandum
Opinion and Order of February 27, 1995. The district court
concluded that although the mandamus order permitted claimants to
move to withdraw claims, the OALJ—and not the District Director—was
authorized to consider such motions. The District Director did not
appeal the February 27, 1995 order.
Sometime after our opinion in Ingalls I issued, the Board
heard and rejected Ingalls' administrative appeal in the case now
before us. The Board dismissed Ingalls's appeal of the withdrawal
order for lack of standing and as not being ripe for adjudication.
Boone v. Ingalls Shipbuilding, Inc., 27 BRBS 250 (1993), aff'd en
banc, 28 BRBS 119 (1994). The Board reasoned that Ingalls will
"not be adversely affected or aggrieved unless or until a new claim
is filed" by Boone. Id. Ingalls filed a motion for
reconsideration on the merits and the Board granted the motion.
Boone v. Ingalls Shipbuilding, Inc., 28 BRBS 119 (1994) (en banc ).
Upon reconsideration en banc, the Board continued to deny the
requested relief of vacating the withdrawal order. The Board held
that, because Ingalls faces no "direct or immediate hardship" as a
result of the withdrawal without prejudice, Ingalls lacked standing
under 33 U.S.C. § 921(c) and that the issues presented by Ingalls
were not ripe for adjudication. The Board also concluded that the
District Director had failed to perform her mandatory duty by not
6
transferring Boone's case to the OALJ upon request. It
nevertheless held that this failure was harmless because the
withdrawal abrogated Boone's compensation claim against Ingalls.
Ingalls now appeals the Board's decision.3
For purposes of clarity, let us now iterate what is and is not
before us: The District Director has not appealed the district
court's 1995 order clarifying the meaning of the 1993 mandamus
order; before us is only Ingalls's appeal from the administrative
decision and order of the Benefit Review Board allowing the
District Director's withdrawal order to stand.
II
Ingalls challenges the Board's holdings as to standing,4
3
Two motions are carried with this case on appeal: First,
Boone's motion to dismiss Ingalls's appeal or, alternatively, to
affirm summarily the Board's decision. We consider this motion in
our discussion of the merits of Ingalls's appeal.
Second, Ingalls's motion to strike the brief of the
Director of the Office of Workers' Compensation Programs (the
"Director") has been carried with the case. Ingalls argues
that the Director's brief should be struck because the
Director is not "affected or aggrieved" by the issues in this
case and thus has no standing under LHWCA section 921(c) to
participate in the appeal. We disagree. In Ingalls
Shipbuilding Div., Litton Systems, Inc. v. White, we rejected
the argument that the Director must demonstrate an injury to
justify his standing to appeal under section 921(c). 681 F.2d
275, 282 (5th Cir.1982), overruled on other grounds by Newpark
Shipbuilding & Repair, Inc. v. Roundtree, 723 F.2d 399, 406-07
(5th Cir.1984) (en banc). Instead, we held that under Federal
Rule of Appellate Procedure 15(a), together with the LHWCA and
regulations thereunder, the Director is the agency-respondent
and therefore entitled to respond in this court. Id. at 284.
Consequently, we deny Ingalls's motion to strike the
Director's brief.
4
Section 921(c) provides that any "person adversely affected
or aggrieved by a final order of the Board may obtain a review of
that order." 33 U.S.C. § 921(c).
7
ripeness,5 and the harmlessness of the District Director's actions.
Each of these holding rest, in the Board's view, on a single
missing element—that Ingalls suffers no present harm as a result of
Boone's withdrawal of his claim without prejudice. Ingalls will
not be injured, the Board held, unless and until Boone refiles his
claim.
Ingalls argues that it indeed has been presently injured by
the District Director's order permitting Boone to withdraw his
claim without prejudice. The District Director, Ingalls argues,
has denied it an important procedural right to have Boone's case
transferred to and decided by the OALJ, a right conferred on
Ingalls by the district court's mandamus order of January 7, 1993,
as explicated further by the district court on February 27, 1995.
The withdrawal order, Ingalls maintains, nullifies its right to
have Boone's suit transferred to the OALJ pursuant to the district
court's mandamus order. The withdrawal order, moreover, deprives
it of its "day in court" and its absolute right to have its
potential liability, and any associated motions, determined by an
administrative law judge ("ALJ").6
5
Determining ripeness for review has been described as a
two-step analysis, requiring that an issue be fit for review and
that the parties face a "direct and immediate hardship [which]
would entail more than possible financial loss" if review is
withheld. Chavez v. Directors, OWCP, 961 F.2d 1409, 1414-15 (9th
Cir.1992).
6
Ingalls also attacks the withdrawal decision on several other
bases, including LHWCA section 919(c) and its applicable
regulation, section 702.225, both of which govern hearings; LHWCA
section 933(g), governing employer defenses; and Federal Rule of
Civil Procedure 41(a)(2). Because we find that the mandamus order
controls the District Director's duties and, therefore, is
8
Because Ingalls, in order to show injury, charges that the
District Director has denied it a right conferred by the district
court's mandamus order, we examine the effect of that order in some
detail.
III
As we noted earlier, we found in Ingalls I that the "mandamus
order was the proper remedy to redress the [District] Director's
failure to carry out" its "clear, ministerial and nondiscretionary
duty ... to transfer the claims in issue to the OALJ for a
hearing." 17 F.3d at 134. We did not decide, however, whether the
District Director possessed the authority under the mandamus order
"to consider and act on" any motions for withdrawal "prior to, and
in lieu of, referring the claims to the OALJ." Id. at 135-36.
Instead, we remanded this question to the district court "for
further development and explication." Id. at 136.
On remand, the district court considered two questions:
First, whether it erred in its mandamus order in categorically
ordering the transfer of the 3,094 claims to the OALJ and, second,
whether that mandamus order permitted the District Director to
consider and decide motions to withdraw the transferred claims.
The district court answered the first question in the
negative. The court found no error in its "categoric transfer of
the claims [subject to the mandamus order] ... given the District
Director's delay in complying with the [LHWCA and] the failure of
dispositive, we need not reach the merits of Ingalls's other
arguments.
9
the claimants to move for withdrawal until after our January 7,
1993 mandamus order...." D.Ct. Memorandum and Op. at 8.
The district court then considered the effect of the mandamus
order on claimants' motions to withdraw pending claims. The court
concluded that although the mandamus order permits claimants to
withdraw their claims, it authorizes the ALJ—and not the District
Director—to consider such motions. Consideration of such motions
by the ALJ is proper, the court found, because "the administrative
scheme set up by the [LHWCA] is best suited to handle the
resolution of the parties' interests." Id. at 8-9. The LHWCA,
moreover, permits motions for withdrawal to be filed with and acted
on by the ALJ. Id. at 8-9 (stating that the "ALJ is vested with
the authority of the District Director upon transfer," including
the authority to hear and decide motions for withdrawal).
The court then explicitly considered and rejected the District
Director's authority to consider and decide motions to withdraw the
transferred claims. The court first stated that it may have been
inclined, if it had been asked, to give the District Director some
discretion to act on the claimants' motions to withdraw pending
claims. The court concluded, however, that "when an administrative
officer refuses to set the process in motion which warrants
mandamus relief, entirely different considerations are present."
Id. The court similarly refused to "order a re-transfer to the
Director for consideration of the motions to withdraw," finding
that this would not "be in the best interests of the parties." Id.
This is so "[b]ecause the referenced claims were transferred to the
10
OALJ approximately two years ago." Id.
In short, the district court found that although its mandamus
order does not bar claimants from seeking to withdraw their claims,
it authorizes only the ALJ—and not the District Director—to
consider such motions.
IV
We now must decide whether the District Director's order
permitting Boone to withdraw his claim without prejudice "adversely
affect[s] or aggrieve[s]" Ingalls to the extent that it provides
Ingalls standing, creates a "direct and immediate hardship" on
Ingalls so that the issue is ripe for adjudication, and is
"harmless" because it abrogated Boone's claim against Ingalls. As
we have noted above, each of these inquiries hinges on whether
Ingalls suffers a present injury as a result of the District
Director's withdrawal order.
In Ingalls I, we held that Ingalls was entitled to the
extraordinary remedy of mandamus in order to counter the District
Director's "inventive rationales for deferring the referral" of
approximately 3,100 claims, including Boone's. 17 F.3d at 131.
The mandamus order plainly directed the District Director to
transfer Boone's claim to the OALJ. In addition, that order, as
clarified, removed the authority of the District Director to grant
or deny any motion to withdraw; it specifically provided that the
OALJ, and only the OALJ, may consider and dispose of pending
motions for withdrawal. The order therefore created a clear,
nondiscretionary duty on the District Director to transfer Boone's
11
case to OALJ for adjudication and to refrain from considering
motions for withdrawal following the transfer to the OALJ.
The District Director violated the mandamus order when she
considered and acted upon Boone's motion to withdraw his case
without prejudice. By permitting Boone to withdraw his claim, the
District Director undermined the process that the district court
established for the resolution of Boone's claim and any motions
with respect to that claim. Instead of having Boone's claim
against it, including all motions pertaining to that claim, heard
in an adjudicative forum and decided by the OALJ, Ingalls had the
motions for withdrawal of claims against it considered by, in the
district court's words, the "administrative officer [who] refuse[d]
to set the process in motion which warrants mandamus relief."
D.Ct. Memorandum and Op. at 8. This procedure was rejected by the
district court's mandamus order. The District Director's action
thus injures Ingalls because it strips Ingalls of the valuable
procedural right to have the motions to withdraw considered in an
adjudicative forum and in a different forum from the executive
forum that had been indifferent, if not hostile, to Ingalls' rights
for two years.
In the light of this injury, we conclude that Ingalls is
"adversely affected or aggrieved" by the District Director's order
and thus has standing under section 921(c) to seek review of the
Board's decision in this court. We further find that Ingalls faces
a "direct and immediate hardship" as a result of Boone's withdrawal
of his claim and thus presents a controversy that is ripe for
12
review. Finally, we conclude that because the District Director's
action has injured Ingalls, the District Director's error in
permitting Boone to withdraw his claim cannot be harmless.7
V
In sum, we deny Ingalls's motion to strike the brief of the
Director, we deny Boone's motion to dismiss Ingalls's appeal, and
we VACATE the District Director's orders allowing Boone and the
other claimants to withdraw their claims without prejudice. We
REMAND for further proceedings not inconsistent with this opinion.
VACATED and REMANDED.
7
Although we are "limited [in reviewing Board orders] to
considering errors of law and making certain that the Board adhered
to its statutory standard of review of factual determinations," we
conclude that the Board has made an error of law in finding that
the District Director's action here is harmless. Boland Marine &
Mfg. Co. v. Rihner, 41 F.3d 997, 1002 (5th Cir.1995).
13