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                                 BRB No. 98-0537


GIE SIMPSON                             )
                                        )
          Claimant-Petitioner           )    DATE ISSUED:   01/05/1999
                                        )
     v.                                 )
                                        )
LOCKHEED SHIPBUILDING                   )    
COMPANY                                 )
                                        )
     and                                )
                                        )
HELMSMAN MANAGEMENT                     )
SERVICES                                )
                                        )
          Employer/Carrier-             )
          Respondents                   )    DECISION and ORDER

     Appeal of the Decision and Order After Remand of Edward C. Burch,
     Administrative Law Judge, United States Department of Labor.

     William D. Hochberg, Edmonds, Washington, for claimant.

     Russell A. Metz (Metz & Associates, P.S.), Seattle, Washington, for
     employer/ carrier.

     Before: HALL, Chief Administrative Appeals Judge, SMITH and McGRANERY,
     Administrative Appeals Judges.

     PER CURIAM:

     Claimant appeals the Decision and Order After Remand (91-LHC-2753) of
Administrative Law Judge Edward C. Burch rendered on a claim filed pursuant to the
provisions of the Longshore and Harbor Workers' Compensation Act, as amended, 33
U.S.C. §901 et seq. (the Act).  We must affirm the findings of fact and
conclusions of law of the administrative law judge which are rational, supported
by substantial evidence, and in accordance with law. O'Keeffe v. Smith, Hinchman
& Grylls Associates, Inc., 380 U.S. 359 (1965); 33 U.S.C. §921(b)(3).
     This is the second time this case is before the Board.  Claimant was employed
by employer as a scaler from 1952 to 1957, then as a painter from 1957 until his
layoff in 1984.  Claimant filed a claim for benefits under the Act on September 12,
1982 for a pulmonary impairment based on his work-related exposures to injurious
substances, including asbestos.[1]   In addition,
claimant filed a third-party action against several asbestos manufacturers, two of
which were settled prior to his layoff from employer; claimant entered into four
separate third-party settlements subsequent to the layoff.

     On October 14, 1992, the administrative law judge issued his initial Decision
and Order in the instant case, awarding claimant permanent total disability
compensation.  33 U.S.C. §908(a).  The administrative law judge also found
that employer was entitled to relief from continued compensation liability pursuant
to Section 8(f) of the Act, 33 U.S.C. §908(f).  Thereafter, on October 21,
1992, employer moved to set aside the Decision and Order for the acceptance of
additional evidence pertaining to claimant's settlements from third-party actions,
asserting, pursuant to the newly decided United States Supreme Court decision in
Estate of Cowart v. Nicklos Drilling Co., 505 U.S. 469, 26 BRBS 49
(CRT)(1992), that this evidence implicated the forfeiture provisions set forth at
Section 33(g) of the Act, 33 U.S.C. §933(g).  The administrative law judge
denied this motion, finding that by failing to raise the Section 33(g) bar issue
at the hearing, employer had waived this defense.[2]   

     On appeal, the Board affirmed the administrative law judge's finding that
claimant's pulmonary impairment was causally related to his employment with
employer and his subsequent award of permanent total disability compensation to
claimant.  However, the Board agreed with employer's position that the
administrative law judge abused his discretion in denying employer's motion to
reopen the record, holding that despite not having pursued the Section 33(g) bar
issue at the hearing, employer had timely raised this issue prior to the issuance
of the administrative law judge's Decision and Order.  Thus, the Board vacated the
administrative law judge's Order denying employer's motion to reopen the record,
and remanded the case to the administrative law judge for a determination of
whether Section 33(g) was applicable to this claim. Simpson v. Lockheed
Shipbuilding Co., BRB No. 93-1001 (April 26, 1996)(unpublished).

     In his Decision and Order After Remand, the administrative law judge
determined that there was insufficient evidence to establish that claimant's
chronic obstructive pulmonary disease was a condition distinct from his asbestos-related disease and, further, that claimant's hypertension was not work-related. 
Thus, the administrative law judge concluded that claimant has only one compensable
disability and that Section 33(g) is applicable to the instant case.  Having
accepted the parties' stipulation that claimant became a "person entitled to
compensation" within the meaning of Section 33(g)(1) of the Act, 33 U.S.C.
§933(g)(1), on September 4, 1984, the administrative law judge found that
since claimant did not obtain employer's written approval of the third-party
settlement entered into by claimant on November 19, 1984, claimant's right to
compensation and medical benefits under the Act terminated as of November 19, 1984,
pursuant to Section 33(g).  The administrative law judge denied claimant's motion
for reconsideration and his request that the record be reopened and a hearing held
for the introduction of additional evidence.

     On appeal, claimant contends that employer should not have been permitted to
raise the applicability of  Section 33(g) to this case, as employer failed to
properly raise this issue prior to the issuance of the administrative law judge's
Decision and Order.  Alternatively, claimant argues that he suffers from two
distinct respiratory impairments, asbestosis and chronic obstructive pulmonary
disease related to non-asbestos irritants.  Therefore, claimant contends, Section
33(g) cannot bar his claim for benefits under the Act as the third-party
settlements related only to claimant's asbestos-related lung disease. Employer
responds, urging affirmance of the administrative law judge's Decision and Order
After Remand.  Specifically, employer argues that the Board's previous holding that
employer had not waived the issue of the Section 33(g) bar constitutes the law of
the case and must be followed.  Employer further argues that the administrative law
judge's finding that claimant suffers from one compensable injury is rational and
supported by substantial evidence.  Claimant has filed a reply to employer's
response, reiterating its assertions that the doctrine of the law of the case is
inapplicable to the instant case.[3]  

     Claimant initially asserts that the Board's previous decision remanding the
case for a determination of the applicability of Section 33(g) was based on the
erroneous finding that employer had raised the Section 33(g) defense prior to the
issuance of the administrative law judge's initial decision, and therefore, the law
of the case doctrine should not be applied in the instant case.  For the reasons
that follow, we hold that, under the circumstances in the instant case, the law of
the case doctrine does not bar further consideration by the Board of the issue of
employer's attempt to raise the issue of the applicability of Section 33(g) to this
case. 

     The Board has held that where a party appeals a Decision and Order on remand
raising issues rejected by the Board in its prior decision, the first decision of
the Board will be adhered to unless there has been a change in the underlying
factual situation, intervening controlling authority demonstrates that the initial
decision was erroneous, or the first decision was clearly erroneous and to let it
stand would result in a manifest injustice. See generally Jones v. U.S. Steel
Corp., 25 BRBS 355 (1992); Williams v. Healy-Ball-Greenfield, 22 BRBS
234 (1989)(Brown, J., dissenting). 

     In its initial decision vacating the administrative law judge's Order denying
employer's motion to reopen, the Board stated that employer raised the issue of
offsets under Section 33(f) of the Act, 33 U.S.C. §933(f), in its pre-hearing
statement, and that employer  raised the Section 33(g) bar issue based on the
decision of the Supreme Court in Cowart,  prior to the issuance of the
administrative law judge's Decision and Order. See Simpson, slip op. at 5. 
As claimant correctly asserts, however, employer did not raise the Section 33(g)
issue until October 21, 1992, subsequent to the issuance of the administrative law
judge's Decision and Order, when employer moved to set aside that decision.[4] 

     In the instant case, the initial hearing closed on April 7, 1992.  The
Cowart decision was issued by the Supreme Court on June 22, 1992.  The
administrative law judge issued his initial decision on October 1, 1992, and it was
filed in the district director's office on October 14, 1992.  Subsequent to the
issuance of the administrative law judge's decision, employer filed its motion with
the administrative law judge to set aside his decision on October 21, 1992, raising
for the first time the issue of the applicability of Section 33(g).  Although
employer did list "Section 33 offsets" as an issue in its pre-hearing statement,
and claimant agreed that the net amounts of his third-party settlements may offset
employer's liability, see Hearing Transcript at 6-7 (Feb. 27, 1992),
employer did not specifically raise the Section 33(g) bar issue prior to the
issuance of the administrative law judge's order and, in fact, introduced no
evidence with regard to claimant's third-party settlements.  Indeed, in its
previous brief before the Board, employer conceded that it had not raised the
Section 33(g) forfeiture issue with the administrative law judge prior to its
motion. See Employer's brief at 20 (March 22, 1993).  Similarly, in its
motion to the administrative law judge to set aside his initial decision, employer
acknowledged that it did not raise the Section 33(g) defense at the hearing,
seeking to justify this decision based on the state of law in the United States
Court of Appeals for the Ninth Circuit, wherein this case arises. See O'Leary
v. Southeast Stevedoring Co., 7 BRBS 144 (1977), aff'd mem., 622 F.2d
595 (9th Cir. 1980).  In his order denying employer's motion to set aside, the
administrative law judge rejected this contention, noting the split in the Circuit
Courts of Appeals as to the applicability of the Section 33(g) defense.  The
administrative law judge further cited the well-settled principle that once closed,
a hearing record may not be reopened for the hearing of new issues or the
introduction of evidence which was readily discoverable at the time of hearing, and
ultimately concluded that employer's failure to raise the Section 33(g) issue and
preserve it for appeal prevented it from raising this issue for the first time
post-hearing.  See Order Denying Employer's Motion to Set Aside Decision and
Order and Reopen the Record at 2.  
     Pursuant to Section 702.336(b), 20 C.F.R. §702.336(b), the administrative
law judge has the discretion to consider a new issue at any time prior to the
filing of the compensation order.[5]   In a similar
case regarding an employer's attempt to raise the applicability of Section 33(g)
subsequent to the issuance of an administrative law judge's decision, the Board
held that where an employer waited more than three months after the issuance of
Cowart and until after the issuance of the administrative law judge's
adverse decision before attempting to raise the applicability of Section 33(g),
employer's failure to preserve the Section 33(g) defense for appeal was not
excusable; thus, the Board affirmed the administrative law judge's denial of
employer's motion to reopen the record.  Lewis v. Todd Pacific Shipyards
Corp., 30 BRBS 154 (1996).[6]   See also
Mowl v. Ingalls Shipbuilding, Inc., 32 BRBS 51 (1998)(where employer did not
raise the issue of Section 8(f) relief  before the administrative law judge until
after a decision was issued, the Board affirmed the administrative law judge's
refusal to address the issue on reconsideration).  Like the situation in
Lewis, employer herein had notice of the third-party settlements prior to
the hearing, yet it did not raise the Section 33(g) issue despite the fact that a
decision in Cowart was imminent; moreover, once the decision in
Cowart was issued in June 1992, three months before the issuance of the
administrative law judge's decision, employer did not take timely action to raise
the issue prior to the issuance of the administrative law judge's decision. 

     Accordingly, as the Board's prior finding that employer raised the Section
33(g) bar issue prior to the issuance of the administrative law judge's decision
was based on an erroneous finding of fact, allowing the Board's initial decision
to stand would result in a manifest injustice. See generally Jones, 25 BRBS
at 355; Williams, 22 BRBS at 234.  The administrative law judge's initial
determination that the Section 33(g) bar issue was not timely raised was proper and
in accordance with 20 C.F.R. §702.336, which permits a new issue to be raised
only prior to the issuance of the administrative law judge's decision. See
Lewis, 30 BRBS at 159.  Moreover, the administrative law judge's initial
reasoning that employer could and should have raised this issue earlier in time is
rational and supported by the record.  In fact, employer did not raise the Section
33(g) bar issue until after the administrative law judge's decision was issued. 
We therefore hold that the administrative law judge's initial refusal to reopen the
record and entertain employer's Section 33(g) arguments did not involve an abuse
of his discretionary authority.[7]   See
generally Pimpinella v. Universal Maritime Service, Inc., 27 BRBS 154, 158
(1993); Smith v. Ingalls Shipbuilding Division, Litton Systems, Inc., 22
BRBS 46, 50 (1989).  As a result, we vacate our prior decision, as well as the
administrative law judge's decision on remand, and we reinstate the administrative
law judge's original decision and award of benefits in this case.     

     Accordingly, the administrative law judge's Decision and Order After Remand
is vacated, and the administrative law judge's initial Decision and Order Awarding
Benefits and Order Denying Employer's Motion to Set Aside Decision and Order and
Reopen the Record are reinstated.[8] 

     SO ORDERED.




                                                                   
                         BETTY JEAN HALL, Chief
                         Administrative Appeals Judge




                                                                   
                         ROY P. SMITH
                         Administrative Appeals Judge




                                                                   
                         REGINA C. McGRANERY
                         Administrative Appeals Judge

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Footnotes.


1)Claimant filed three claims for compensation under the Act. OWCP Nos. 14-69256, 14-80056 and 14-78478. The first and third claims were apparently deemed identical and were consolidated. Claimant has also received an award for a work-related hearing loss. Back to Text
2)The administrative law judge construed employer's motion to be a timely Motion for Reconsideration. In denying the motion, the administrative law judge noted that employer acknowledged that, at the hearing, "it did not introduce evidence of Claimant's third party settlements, or raise the issue of forfeiture under Section 33 of the Act, or assert entitlement to a credit against prospective compensation in an amount equal to the Claimant's total third party recoveries." Order Denying Employer's Motion to Set Aside Decision and Order and Reopen the Record at 1. Back to Text
3)Employer filed with the Board a motion to dismiss claimant's appeal, which the Board denied in an Order issued on May 7, 1998. Back to Text
4)The administrative law judge's decision, signed on October 1, 1992, was received in the district director's office on October 14, 1992. Back to Text
5)Although the record may be reopened and a new issue raised pursuant to a Section 22, 33 U.S.C. §922, modification proceeding where reopening is premised on a mistaken determination of fact or change in conditions, modification is not available where, as here, the basis for reopening is premised on a subsequent change in law. See Pittston Coal Group v. Sebben, 488 U.S. 105, 12 BLR 2-89 (1988); Ryan v. Lane & Co., 28 BRBS 132 (1994). Back to Text
6)In Lewis, the Board specifically distinguished Taylor v. Plant Shipyards Corp., 30 BRBS 90 (1996), wherein the Board held that it was an abuse of discretion for the administrative law judge to refuse to consider a Section 33(g) issue raised post-hearing, but prior to the issuance of his decision. Back to Text
7)Based on our decision herein, claimant's contention that the Board's previous decision is contrary to Rule 8(c) of the Federal Rules of Civil Procedure, Fed. R. Civ. P. 8(c), is moot. Back to Text
8)In view of our holding herein, all remaining issues on appeal are moot. Back to Text

NOTE: This is an UNPUBLISHED LHCA Document.

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