How Long Is A Company Responsible For Paying Disability Compensation

The Parties

Mr. Anderson worked as a dockman for Yusen Terminals. Yusen Terminals operates marine cargo terminals in both Los Angeles and Oakland, California.

The Facts

Mr. Anderson sustained multiple injuries when he was struck by a utility truck rig on October 26, 2005.

Employment Conditions

The injuries

Mr. Anderson sustained multiple injuries, more specifically to his hands, wrists, knees, right leg, and right ankle. However, the employer disputed the remaining alleged injuries, feeling that the accident did not result in injuries to Mr. Anderson’s head, psyche, neck, back, shoulders, ears, and internal system.

The employer’s actions

Yusen Terminals voluntarily paid compensation to Mr. Anderson for temporary total, permanent total, and permanent partial disability for various periods.  Yusen Terminals also filed an application for relief under Section 8(f) of the Act, on April 9, 2007. The district director denied this application for relief on April 20, 2007.  Later, Yusen Terminals filed an amended Section 8(f) application (to settle the matter) on December 9, 2009. And that one was denied by the district director on December 16, 2009. Yusen Terminals filed several notices of controversion (opposition), and the case was then referred to an administrative law judge in 2011.

Results of the Initial Hearing

The parties stipulated that Mr. Anderson reached maximum medical improvement on February 23, 2009, and that he has a post-injury wage-earning capacity of at least $536.54. They also agreed that Yusen Terminals would pay Mr. Anderson continuing permanent partial disability benefits at the rate of $950 per week starting on January 1, 2012.

In an Amended Order issued on March 13, 2012, the administrative law judge approved both the parties’ joint stipulations and their separate Section 8(i) settlement. He placed the matter on his June 11, 2012 calendar call to resolve the pending Section 8(f) claim; later, the hearing was rescheduled for September 17, 2012.  By letter dated September 14, 2012, Yusen Terminals advised the administrative law judge that it was withdrawing the Section 8(f) issue and asked for the case to be remanded (returned) to the district director. Yusen Terminals did not provide an explanation for this withdrawal.  In an Order of Remand issued on September 18, 2012, the administrative law judge found that Yusen Terminals had withdrawn its claim for Section 8(f) relief. The administrative law judge then remanded the case to the district director.

On June 12, 2014, Yusen Terminals filed a Pre-Hearing Statement with the district director seeking an order of forfeiture of compensation. This was based on Mr. Anderson’s failure to complete a requested report of earnings.  On July 2, 2014, the district director referred the case to the Office of Administrative Law Judges (the OALJ), enclosing Yusen Terminals’ pre-hearing statement, its previously-filed Section 8(f) request, and the prior denial letters.  The case was scheduled for calendar call before a second administrative law judge on May 4, 2015.  Yusen Terminals and the Director later agreed that the Section 8(f) issue could be resolved on the record, so the scheduled hearing was vacated and a briefing schedule was set.  On May 6, 2015, the case was reassigned to a different administrative law judge.  And then Yusen Terminals and the Director filed briefs regarding Yusen Terminals’ entitlement to Section 8(f) relief.

In a Decision and Order issued on September 14, 2015, the administrative law judge denied Yusen Terminals’ request for Section 8(f) relief.  Noting that the parties had resolved all issues other than the applicability of Section 8(f) by stipulation without the Director’s participation, the administrative law judge stated that he was required to first make findings based on the record evidence. This was regarding Mr. Anderson’s entitlement to permanent partial disability benefits in order to determine whether Yusen Terminals was entitled to Section 8(f) relief.

The administrative law judge determined that Mr. Anderson reached maximum medical improvement on June 15, 2010, and that his October 26, 2005 work accident resulted in permanent partial disability to his right knee and right ankle, for which he was entitled to a scheduled award of 34.56 weeks of compensation.  Because Section 8(f) requires an employer like Yusen Terminals to pay at least 104 weeks of compensation for a scheduled disability before liability is shifted to the Special Fund, and Mr. Anderson was found entitled to scheduled benefits for fewer than 104 weeks, the administrative law judge concluded that Yusen Terminals was not entitled to Section 8(f) relief.

The Appeal

On appeal, Yusen Terminals challenged the administrative law judge’s finding that, because Mr. Anderson’s October 26, 2005 work accident resulted in only scheduled disability to his right knee and ankle, liability should not have shifted according to Section 8(f) to the Special Fund (the “Special Fund’” pays disability compensation to injured employees or their survivors in certain circumstances).  In a consolidated brief, the Director responded and urged affirmation of the administrative law judge’s denial of Section 8(f) relief, and, in support of his own cross-appeal, contended that the administrative law judge should not have considered Yusen Terminals’ Section 8(f) request because Yusen Terminals waived its right to claim entitlement to that type of relief.  In a consolidated brief, Yusen Terminals replied, reiterating its prior arguments, and responding to the Director’s cross-appeal, by urging that the Board decline to consider the Director’s waiver argument or, alternatively, that the Board reject the Director’s argument.  The Director also filed a reply brief regarding the waiver issue.

The Ruling on Appeal

The administrative appeals judges determined that, by withdrawing its request for Section 8(f) relief, Yusen Terminals thereby failed to litigate the Section 8(f) issue with the claim for permanent disability benefits, and so it waived any entitlement to that relief.

The administrative appeals judges also determined that the issues in this case should not bifurcated (split into two separate hearings), and thereby affirmed the administrative law judge’s denial of Section 8(f) relief.

The Takeaway

This one was particularly interesting as the case bounced around from administrative law judge to administrative law judge. In addition, the employer made a costly error by withdrawing its request for Section 8(f) relief, for once it did that, it could not take that decision back.