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CHAPTER 4-400 - AUTHORITY OF THE DD

1. Purpose and Scope. This Chapter outlines the specific authority of the District Director (DD). This authority has been the subject of legal decisions rendered by the Benefits Review Board and the various Courts of Appeals. This subject has undergone frequent changes due to this litigation. Undoubtedly, there will be more changes as the issue is litigated further.

2. Delegation of Authority. Before performing the duties of a DD, it is necessary for the DD, or acting DD, to receive from the Director, OWCP, a specific Delegation of Authority letter. The DD may delegate this authority during temporary absences. The CE who receives this temporary delegation should sign his/her name "for" the District Director. The designee should not sign with a title of Acting District Director.

3. Historical Perspective. With the 1972 amendments (P. L. No.92- 576), section 19(d) of the Act withdrew from the DD the adjudicatory power to conduct hearings. This authority was given to hearing officers who are called administrative law judges. Thus, the responsibilities of the DD became ministerial as opposed to adjudicatory. However, certain specific areas have remained either under the sole responsibility of the DD or jointly shared with administrative law judges. The 1984 amendments did not alter the language of section 19(d). On July 12, 1990, the Secretary of Labor changed the title of Deputy Commissioner to District Director, 20 C.F.R. section 702.105.

4. Supervision of Medical Care. Section 7(b) of the Act gives the Secretary the authority to supervise the medical care of injured employees. Section 702.407 of the regulations provides the DD with the direct authority to supervise the medical care of injured employee. (See also PM 5-200.)

5. Agreed Settlements. Section 8(i)(1) and (2) of the Act gives the DD and administrative law judges joint authority to approve or disapprove agreed settlements. Sections 702.241 to 702.243 of the regulations further describe the authority of the DD in this area. (See also PM 3-500 for more information on settlements.)

6. Attorneys' Fees. Section 28 of the Act provides the DD with the authority to review and approve attorneys' fees for services performed at the DD level. Sections 702.131 through 702.135 of the regulations provide specific language concerning this authority. (See also PM 4-500.)

7. Informal Conferences. Sections 702.311 through 702.319 of the regulations provide specific guidelines for conducting informal conferences. It has been determined that the holding of an informal conference is discretionary on the part of the DD, Matthews v. Jeffboat, Inc., 18 BRBS 185 (1986). (See also PM 4- 200 for more information on Informal Conferences.)

8. Defaulted Payments. Under the provisions of section 18(a) of the Act the DD shall issue a supplementary order in the case of default by the EC in the payment of compensation due under an award, that is not paid within thirty days after the compensation is due and payable. (See also PM 6-202.)

9. Section 14(f) Penalty. Under the provisions of section 14(f) the DD is empowered to investigate whether compensation payable under the terms of award has been paid within ten days of the filing of the award. If it is found that the EC is in default, the DD enters a supplemental order declaring the amount of the default and assessing the EC an additional twenty percent. Section 702.350 of the regulations contains further guidance on this issue. (See also PM 8-203.)

10. Employer Reports.

a. Section 14(g). This section gives the DD the authority to impose a civil penalty in the amount of $110 for failure to submit a timely Form LS-208. (See also PM 8-301).

b. Section 30(e). This section gives the DD the authority to impose a civil penalty not to exceed $11,000 when any employer, insurance carrier or self-insured employer knowingly and willfully fails or refuses to send any report required by section 30. (See also PM 8-302).

11. Subpoenas Duces Tecum. The DD may, upon proper request,

issue a subpoena for the production of documents. Form LS-226a (Exhibit 27, PM 10-200) may be used for this purpose. This is an area of controversy in view of Maine v. Brady-Hamilton Stevedore Co., 18 BRBS 129 (1986). However, unless instructed to the contrary, the DD should continue to issue subpoenas. (See ALL ARA/ADC Memorandum, March 4, 1988.)

a. If a party fails or refuses to comply with a subpoena issued by the DD, the DD should conduct an investigation to determine the relevance of the material subpoenaed and the circumstances of the refusal.

b. If one party alleges that another party has improperly failed or refused to comply with a subpoena, the party that so fails or refuses should be given an opportunity to respond to the allegation.

c. If, after investigation, the DD determines that a party fails or refuses to comply with a duly-issued subpoena, the DD should certify the facts relevant to the refusal for the U.S. District Court for the district in which the DD’s office is located. This should be submitted to the Associate Solicitor for concurrence.

12. Agreement of the Parties. Absent an agreement by the parties in interest or a request for an order under 20 C.F.R. section 702.315, the DD is not empowered to issue a compensation order. However, the DD may issue an order without agreement in those areas reserved for the discretion of the DD such as change of physicians, attorney's fees etc. Also if there is no factual dispute, and the issue is strictly legal, a compensation order may be issued. (See LHWCA Circular No. 87-1, November 14, 1986).

13. Small Vessel Facility Certification. Section 3(d) of the Act exempts coverage of injuries incurred in certain locations by employees working at a facility which has been certified by the Secretary to be engaged in the business of building, repairing, or dismantling exclusively small vessels. The responsibility to review and investigate application for certification under section 3(d) of this process has been delegated to the DD.

a. Definitions.

(1) Small Vessel.

(a) A commercial barge which is under 900 lightship displacement tons; or

(b) A commercial tugboat, towboat, crew boat, supply boat, fishing vessel, or other work vessel which is under 1,600 tons gross.

(2) Commercial. Commercial as it applies to the term vessel means any vessel engaged in commerce but does not include military vessels or Coast Guard vessels.

(3) Affidavit. A written statement made or taken under oath before an officer of the court or a notary public or other person who has been duly authorized to so act.

(4) Site Plan. A diagram which accurately shows the physical layout of a facility, drawn to scale.

(5) Certificate of Admeasurement. A certificate prepared by the U.S. Coast Guard which gives the gross and net tonnage of a vessel.

(6) Facility. Facility means an operation of an employer at a particular contiguous geographic location.

(7) Federal Maritime Subsidy. Federal Maritime Subsidy means the construction differential subsidy (CDS) or operating differential subsidy under the Merchant Marine Act of 1936, 46 U.S.C. section 1101 et seq.

(8) Drydock. An area in a facility used for placing a vessel on blocks or other structures so that construction or repairs can be performed. (See Industry Notice No. 68, 5/1/89.)

b. Application. An application for a certificate is made to the DD who reviews it for completeness and accuracy. An application must be made by the owner of the facility. Where the owner is a partnership it shall be made by a partner and where the owner is a corporation by an officer of the corporation or the manager in charge of the facility for which an exemption is sought. A complete application must include the following information:

(1) Name, location, physical description and a site plan or aerial photograph of the facility for which an exemption is sought.

(2) Description of the nature of the business.

(3) An affidavit (signed by a partner if the facility is owned by a partnership or an officer if owned by a corporation) verifying and/or acknowledging the following:

(a) The facility is, as of the date of the application, engaged in the business of building, repairing or dismantling exclusively small commercial vessels and that it does not then, nor foreseeably will it, engage in the building, repairing or dismantling of other than small commercial vessels.

(b) The facility does not receive any Federal Maritime Subsidy.

(c) The signatory has the duty to immediately inform the DD of any change in these or other conditions likely to result in a termination of an exemption.

(d) The employer has secured appropriate compensation liability insurance under a state workers' compensation law.

(e) That any false, relevant statements relating to the application or the failure to notify the DD of any changes in circumstances likely to result in termination of the exemption will be grounds for revocation of the exemption certificate and will subject the employer to all provisions of the Act, including all duties, responsibilities and penalties, retroactive to the date of application or date of change in circumstances as appropriate.

c. Inspection of the Facility. Section 702.174(c) of the regulations gives the Director, OWCP, the authority to enter a facility at any time for the purpose of verifying information provided in an application for a certificate of exemption. This authority has been delegated to the DD.

d. Review of the Application. Within thirty days of receipt of an application, the DD is to review it for completeness and determine whether an inspection of the facility will be required. Where additional information is necessary or where an inspection will be required, the DD is to write to the applicant within thirty days of receipt of the application.

e. Transmittal to National Office. Once a complete application has been received and any necessary inspection has been made, the DD is to prepare a memorandum to the Director, DLHWC, which summarizes the facts and provides a recommendation on whether or not a certificate should be issued. The DD is not to notify the applicant of this recommendation.

f. Action by the National Office. Once a complete application is received it will be reviewed by the National Office. A certificate of exemption will be issued within thirty days or the application will be denied. A copy of the decision of the Director, DLHWC will be sent to the DD.

g. Appeal Rights. A party who is denied a certificate of exemption may respond to the denial by writing to the Director, DLHWC. The final decision of the Director, DLHWC, is not subject to review by an administrative law judge or the Benefits Review Board (see 20 C.F.R. section 702.174(b)(2)).

h. Change in Conditions. Section 702.174(a)(3)(iii) of the regulations requires an applicant for a certificate to immediately inform the DD of any change in any condition likely to result in termination of the exemption. This includes the sale of the facility to a new owner.

When the DD receives such information, it should be treated as a new application. The procedures for review of an application contained in subparagraph d, above, should be followed. If necessary, the DD should conduct an inspection of the facility. The DD should then prepare a memorandum which summarizes the changed conditions and includes a recommendation on whether or not the certificate should be rescinded. The DD is not to notify the applicant of this recommendation. The memorandum is then sent to the National Office for final action.