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ROBERT T. WILSON                        )    BRB No. 92-1794
                                        )
          Claimant                      )
                                        )
     v.                                 )
                                        )
GENERAL DYNAMICS CORPORATION            )
                                        )
          Self-Insured                  )
          Employer-Respondent           )
                                        )
DIRECTOR, OFFICE OF WORKERS'            )
COMPENSATION PROGRAMS,                  )
UNITED STATES DEPARTMENT                )
OF LABOR                                )
                                        )
          Petitioner                    )
                                        )
ELLEN H. CALLNAN                        )    BRB No. 92-1795
                                        )
          Claimant                      )
                                        )
     v.                                 )
                                        )
MORALE, WELFARE & RECREATION            )
DEPARTMENT, DEPARTMENT                  )
OF THE NAVY                             )
                                        )
     and                                )
                                        )
ESIS/CIGNA INSURANCE COMPANY            )    DATE ISSUED:   04/27/1995
                                        )
          Employer/Carrier-             )
          Respondents                   )
                                        )
DIRECTOR, OFFICE OF WORKERS'            )
COMPENSATION PROGRAMS,                  )
UNITED STATES DEPARTMENT                )
OF LABOR                                )
                                        )
          Petitioner                    )    DECISION and ORDER
                                         

     Appeals of the Decision and Order - Awarding Benefits and the Decision
     and Order on Modification - Awarding Benefits, of David W. Di Nardi,
     Administrative Law Judge, United States Department of Labor.

     Kevin M. Gillis (Richardson & Troubh), Portland, Maine, for employer/
     carrier.

     LuAnn Kressley (Thomas S. Williamson, Jr., Solicitor of Labor; Carol
     DeDeo, Associate Solicitor; Janet R. Dunlop, Counsel for Longshore),
     Washington, D.C., for the Director, Office of Workers' Compensation
     Programs, United States Department of Labor.

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

     PER CURIAM:

     The Director, Office of Workers' Compensation Programs (the Director) appeals
the Decision and Order - Awarding Benefits (89-LHC-844) and the Decision and Order
on Modification - Awarding Benefits (90-LHC-1746) of Administrative Law Judge David
W. Di Nardi 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), and a claim filed under the Act as extended by the
Nonappropriated Fund Instrumentalities Act, 5 U.S.C. §8171 et seq.[1]   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).  

     Claimant Wilson sought compensation under the Act for back and asbestos-related lung injuries he sustained while working for General Dynamics Corporation
(employer) as a painter from 1957 to 1990.  The district director held an informal
conference on January 16, 1991, at which employer submitted its application for
Section 8(f), 33 U.S.C. §908(f), relief.  On February 12, 1991, the district
director informed employer that its Section 8(f) application was insufficient
because it contained no medical report establishing the extent of all impairments
and the date of maximum medical improvement.  Employer was given until February 26,
1991, to correct these deficiencies but failed to do so. 


     The case was referred to the Office of Administrative Law Judges on April 9,
1991. In transferring the case, the district director noted that employer raised
Section 8(f) before him but stated it is subject to the Section 8(f)(3) defense as
employer failed to submit a timely, complete application.  The Director also
opposed employer's application by raising the Section 8(f)(3) bar in a brief
submitted to the administrative law judge although she did not appear at the formal
hearing.  In his Decision and Order, Administrative Law Judge Di Nardi awarded
claimant Wilson permanent total disability compensation commencing November 8,
1990, and held that employer was entitled to Section 8(f) relief without
specifically addressing whether its application was sufficient to satisfy the
criteria of Section 8(f)(3) and the applicable regulations.[2] 

     Claimant Callnan had previously been awarded temporary total disability
compensation for severe psychiatric problems resulting from a work-related incident
in January 1984 while working for the Morale, Welfare & Recreation Department,
Department of the Navy (employer), and sought to modify her award to one for
permanent total disability compensation.[3]  
Claimant Callnan also sought payment of several disputed medical expenses. At the
informal conference held via telephone on October 15, 1990, employer raised the
issue of Section 8(f) relief and was afforded until November 8, 1990 to submit a
completed application to the district director.  On November 7, 1990, employer
submitted its application.  By letter dated November 14, 1990, the district
director found employer's Section 8(f) application deficient because no medical
evidence had been submitted documenting a pre-existing condition, no diagnosis or
conclusion regarding a MMPI test conducted in January 1980 had been provided, and
no medical evidence had been submitted establishing the extent of all impairments
and the date of maximum medical improvement.  The district director informed
employer that it had until November 28, 1990, to correct these deficiencies and
advised that failure to do so would result in invocation of the Section 8(f)(3)
absolute defense.  Employer did not respond.  

     The case was referred to the Office of Administrative Law Judges, and a formal
hearing was held on November 14, 1991. Although the Director opposed employer's
application by raising the Section 8(f)(3) bar in a brief submitted to the
administrative law judge, she did not appear at the formal hearing.  In his
Decision and Order, Administrative Law Judge Di Nardi awarded claimant Callnan
permanent total disability compensation commencing January 26, 1985, as well as the
disputed medical expenses. In addition, the administrative law judge held that
employer was entitled to Section 8(f) relief without addressing whether its Section
8(f) petition was sufficient to satisfy the criteria of Section 8(f)(3) and the
applicable regulations.[4]   

     The Director has filed a Motion to Remand in both cases, in which she contends
that inasmuch as Judge Di Nardi awarded Section 8(f) relief without first giving
de novo consideration to whether the applications submitted by both
employers are sufficient to satisfy the criteria of Section 8(f)(3) and the
applicable regulations, the cases must be remanded to allow the administrative law
judge to determine whether employers' applications were sufficiently documented
consistent with the Board's decisions in Fullerton v. General Dynamics
Corp., 26 BRBS 133 (1992), and Tennant v. General Dynamics Corp., 26
BRBS 103 (1992).[5]   

     The Director's Motion to Remand is granted.  Citing Lukman v. Director,
OWCP, 896 F.2d 1248, 13 BLR 2-332 (10th Cir. 1990), the administrative law
judge properly determined that he had the authority to consider the applicability
of Section 8(f)(3) notwithstanding the district director's opinion that the bar
applies.  Nonetheless, in both decisions, the administrative law judge, without
reviewing the original applications, expressed agreement with employers' positions
that the statutory and regulatory requirements of the Act have been satisfied when
the district director is afforded notice that Section 8(f) relief is requested and
of the general grounds for relief.  He thus denied the Director's motion to dismiss
and considered employers' Section 8(f) applications on their merits, finding that
employers were entitled to Section 8(f) relief.

     Section 8(f)(3) of the Act provides:

     Any request, filed after September 28 1984, for apportionment of
     liability to the special fund established under section 944 of this
     title for the payment of compensation benefits, and a statement of the
     grounds therefore (sic), shall be presented to the deputy commissioner
     prior to the consideration of the claim by the deputy commissioner. 
     Failure to present such request prior to such consideration shall be an
     absolute defense to the special fund's liability for the payment of any
     benefits in connection with such claim, unless the employer could not
     have reasonably anticipated the liability of the special fund prior to
     the issuance of a compensation order.

33 U.S.C. §908(f)(3) (1988).  The accompanying regulation, Section 702.321,
20 C.F.R. §702.321, requires employer to submit a "fully documented
application" and defines the term "fully documented."   Further, it provides that
"failure to submit a fully documented application by the date established by the
district director shall be an absolute defense to the liability of the special
fund" unless such failure is excused because employer could not have reasonably
anticipated the liability of the special fund prior to the district director's
consideration of the claim.  20 C.F.R. §702.321(b)(3).  Where, as in the
present cases, the Director has properly raised the Section 8(f)(3) defense in
proceedings before the administrative law judge, the Board has held that the
administrative law judge may not consider the merits of employer's Section 8(f)
application without first fully considering whether the application is sufficient
to satisfy the criteria of Section 8(f)(3) and the applicable regulation.
Fullerton, 26 BRBS at 138; Tennant, 26 BRBS at 108; see also Cajun
Tubing Testors v. Hargrave, 951 F.2d 71, 25 BRBS 109 (CRT) (5th Cir. 1992),
aff'g 24 BRBS 248 (1991); Bath Iron Works Corp. v. Director, OWCP,
950 F.2d 56, 25 BRBS 55 (CRT) (1st Cir. 1991), aff'g Bailey v. Bath Iron Works
Corp., 24 BRBS 229 (1991); 20 C.F.R. §702.321(a), (b), (c).  The Section
8(f)(3) bar is an affirmative defense which must be raised and pleaded by the
Director. See Tennant, 26 BRBS at 107, 109; Marko v. Morris Boney
Co., 23 BRBS 353 (1990); 20 C.F.R. §702.321(b)(3).

     For the reasons set forth in Tennant, 26 BRBS at 103, we agree with the
Director that the administrative law judge erred in considering the merits of
employers' requests for Section 8(f) relief in the consolidated cases before us
without first determining de novo whether employers' applications for
Section 8(f) relief were sufficiently documented pursuant to the applicable
regulations.  We note that employers' Section 8(f) applications are not in the
record before us.  Because the regulation requires that the district director
attach a copy of the application when forwarding the case to the Office of
Administrative Law Judges and the Section 8(f) bar is an affirmative defense, the
burden is on the Director to submit employers' applications for Section 8(f) relief
into evidence. Tennant, 26 BRBS at 109.  Therefore, we vacate the
administrative law judge's denial of the Director's motions to dismiss and his
award of Section 8(f) relief to employer in the captioned cases, and remand both
cases for reconsideration of whether the employers' Section 8(f) applications were sufficient to meet the requirements of Section 8(f)(3) of the Act and Section
702.321 of the regulations.  

     Accordingly, the administrative law judge's denial of the Director's motion
to dismiss employers' Section 8(f) applications and the administrative law judge's
awards of Section 8(f) relief in the captioned cases are vacated, and both cases
are remanded for further consideration in accordance with this decision.  In all
other respects, the administrative law judge's Decision and Order -Awarding
Benefits in BRB No. 92-1794 and the Decision and Order on Modification - Awarding
Benefits in BRB No. 92-1795 are affirmed.

     SO ORDERED.


                                                                        

                         BETTY JEAN HALL, Chief
                         Administrative Appeals Judge



                                                                        

                         ROY P. SMITH
                         Administrative Appeals Judge



                                                                        

                         JAMES F. BROWN
                         Administrative Appeals Judge

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Footnotes.


1)By Order dated March 2, 1994, the Board granted the Director's Motion to consolidate her appeal in Wilson v. General Dynamics Corp., BRB No. 92-1794, with her appeal in Callnan v. Morale, Welfare & Recreation Dept., BRB No. 92-1795, for purpose of brief and decision. 20 C.F.R. §802.104. Back to Text
2)At the hearing before the administrative law judge, General Dynamics submitted a Section 8(f) application which had been submitted to the district director on September 3, 1991, subsequent to referral to the Office of Administrative Law Judges and argued that a July 22, 1991 medical report by Dr. Browning was sufficient to overcome the basis asserted by Director in raising the absolute defense. Rx. 25; Tr. 22. Back to Text
3)The parties stipulated that claimant Callnan suffered a work-related psychiatric injury and that employer paid her temporary total compensation from January 5, 1984 through January 16, 1984 and from February 14, 1984 until the date of the hearing. Back to Text
4)In addition, in both cases the administrative law judge found claimants entitled to interest, medical benefits, and attorney's fees. Back to Text
5)Employer General Dynamics has not responded to the Director's motion. Employer Morale argues that the Director's appeal in BRB No. 92-1795 should be dismissed for failure to timely file a petition for review and brief within thirty days of September 2, 1992, the date the Board granted the Director's request for an enlargement of time. Employer Morale's motion to dismiss is denied. The Director was granted a second enlargement of time to file a petition for review by Order dated March 2, 1994 and filed the Motion for Remand in the captioned cases on March 28, 1994, within the thirty days allotted. See 20 C.F.R. §802.217(a). Back to Text

NOTE: This is an UNPUBLISHED LHCA Document.

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