Settlement

In my previous blog I managed to leave off the link to the Order.  Here it is:

http://www.oalj.dol.gov/Decisions/ALJ/LHC/2013/RICHARDSON_ETHEL_L_v_HUNTINGTON_INGALLS_I_2013LHC01317_%28JUN_24_2013%29_154610_CADEC_SD.PDF

When is a settlement adequate?

On June 24, 2013, Judge Rosenow, of the Covington Office of Administrative Law Judges, issued an Order Approving Settlement in a Longshore and Harbor Workers' Compensation Act case, number 2013-LHC-01317.  Not exactly an unusual event for any day of the week.  This approval, however, was five pages long.  The District Director had disapproved the 8(i) settlement of the case.  The case was then sent to the OALJ for a formal hearing, and the parties submitted an amended settlement agreement, for $500.00 more than the old one.  They conceded that this in all probability would not have changed the District Directors mind, and, as a practical matter, did not reflect a meaningful increase at all.  The Regional Solicitor’s Office appeared to defend the District Director.

I believe as a matter of principle, that whether you support the Judge’s decision or not, the case needs to be reviewed by the Benefits Review Board, and by the Circuit Court.

The statute allows contested cases to be settled under §8(i) of the Act.  The District Director or Administrative Law judge “shall approve the settlement within thirty days unless it is found to be inadequate or procured by duress”.  If both parties are represented by counsel, then agreements shall be deemed approved unless specifically disapproved within thirty days after submission for approval.  If the District Director disapproves the settlement s/he must issue a written statement containing the reasons for disapproval.  The parties may then seek a hearing, and the Administrative Law Judge shall enter an order approving or rejecting the settlement.

The regulations, at §702.242 (6), require the parties to include “A statement explaining how the settlement amount is considered adequate” and at §702.243(f): “When presented with a settlement, the adjudicator shall review the application and determine whether, considering all of the circumstances, including, where appropriate, the probability of success if the case were formally litigated, the amount is adequate. The criteria for determining the adequacy of the settlement application shall include, but not be limited to:

            (1) The claimant's age, education and work history;

            (2) The degree of the claimant's disability or impairment;

            (3) The availability of the type of work the claimant can do;

            (4) The cost and necessity of future medical treatment (where the settlement includes medical benefits).”

The Claimant, the Employer and the Solicitor submitted letter briefs to the Judge, who also had the benefit of the settlement application.   The Claimant cites no case law in support of his client. The Employer merely cites the regulations §702.243(g), which explain the actuarial formula for commutation.  The Solicitor cites the statutory history of the section, the regulations, the Fifth Circuit case, Oceanic Butler, Inc. v. Nordahl, and three Benefits Review Board cases. 

The Judge does not discuss any of the cases cited by the Solicitor’s office.  His decision makes much of the distinction between represented and unrepresented claimants; and asserts a presumption, or deference, to represented claimants.  However, the distinction in section 8(i) has nothing to do with deference; it is merely a procedural difference.  If the claimant is unrepresented the District Director must approve, but if the claimant is represented he does not have to do this paper work.  In both cases, the presumption is in favor of settlement.  There is no difference. 

Although the Judge asks the question of the standard of review of a denial of an application, the Judge does not answer the question.  It is a question that needs to be answered.

The Employer states that were the case to go to trial, it might get another medical opinion that might show that the claimant might have been or might at the time of the opinion be able to return to her old job.  However, the regulations call for a determination of adequacy based on certain criteria at the time of the application.  If there is a medical report that states that recovery in the future is possible, that is something that the decision maker can consider.  The suggestion seems be similar to an attempt to rebut the 20(a) presumption on the grounds that the employer might have evidence to rebut it later.

The Judge does not look at the criteria listed in §243(f) and discuss them.  He should do so, if only to guide future applicants in the correct method of weighing the various indicia of adequacy in the future.  In supporting a deferential standard of review of an application he does not give any indication of what might validate a disapproval of a settlement where both sides are represented.  It might seem that he believes there is no such possibility.  However, were Congress to have wished to waive the possibility of disapproval, they could have done so by simply removing it.  Since they left the possibility open, we should have the guidance of at least the Benefits Review Board on the matter.

I urge all parties to press the Solicitor to enter an appeal, and to join in “amicus” briefs to help the Benefits Review Board in their decision.