FILED
NOT FOR PUBLICATION
DEC 01 2016
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
ARI NAVALO, No. 14-73181
Petitioner, BRB No. 14-0095
v. MEMORANDUM*
COCHISE CONSULTANCY, INC. and
ACE AMERICAN INSURANCE CO. and
DIRECTOR, OFFICE OF WORKERS’
COMPENSATION PROGRAMS,
UNITED STATES DEPARTMENT OF
LABOR,
Respondents.
On Petition for Review of an Order of the
Benefits Review Board
Argued and Submitted October 21, 2016
San Francisco, California
Before: KLEINFELD and M. SMITH, Circuit Judges, and KORMAN,** District
Judge.
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The Honorable Edward R. Korman, Senior District Judge for the U.S.
District Court for the Eastern District of New York, sitting by designation.
Petitioner Ari Navalo was injured while working for Respondent Cochise
Consultancy under a contract covered by the Longshore Act (later references to
Cochise include its insurance carrier, Respondent Ace American Insurance). An
Administrative Law Judge awarded Navalo compensation under the Act. For each
period of disability, the ALJ found Navalo’s average weekly wage, and then stated
that Navalo was entitled to two-thirds of the difference between that wage and his
stipulated pre-disability wage. Although, for two periods of disability, that calculation
would output a figure exceeding the Longshore Act’s maximum cap on compensation,
see 33 U.S.C. § 906(b)(1), the ALJ did not expressly state that the cap applied. The
ALJ also did not award a specific amount of compensation. Rather, it ordered the
district director—a Department of Labor functionary with only ministerial
authority—to calculate one based on the ALJ’s findings and conclusions.
The district director initially failed to apply § 906(b)(1), and calculated that
Cochise owed more than the maximum allowed by the Longshore Act. When Cochise
paid at the maximum rate notwithstanding that error, Navalo complained to the district
director, who issued an amended calculation that applied § 906(b)(1). Navalo
maintained that the initial calculations were final and binding, and asked for an order
finding Cochise in default. The district director denied that request, and on appeal, the
Benefits Review Board affirmed. Navalo petitions for review of the BRB’s decision.
2
At the threshold, Navalo has it wrong when he frames this case in terms of
Cochise’s failure to timely appeal the ALJ’s decision to the BRB. This case does not
come to us (nor did it to the BRB) as an attack on the ALJ’s now-final compensation
order. Rather, we are reviewing the district director’s refusal to issue a default order.
Once the ALJ’s ruling disposes of all the outstanding legal issues, the district
director’s role is “purely ministerial and administrative.” Cornelius v. Drummond
Coal Co., 9 Black Lung Rep. 1-40 (Ben. Rev. Bd. 1986). So if the ALJ decided the
question of § 906(b)(1)’s applicability, that ends the case—the ALJ’s now-final ruling
would control, and inconsistent action by the district director would be ultra vires.
We can safely say that the ALJ did not rule § 906(b)(1) inapplicable. Navalo
argues that the ALJ did so sub silentio when it awarded two-thirds of his lost wages
without expressly stating that compensation was limited by § 906(b)(1). But “[w]e
presume that ALJs know the law and apply it in making their decisions.” Lockwood
v. Commissioner of Social Security, 616 F.3d 1068, 1072 n.3 (9th Cir. 2010). The law
is, as the Supreme Court has held, that § 906(b)(1)—fixing the maximum
compensation rate—“applies globally, to all disability claims.” Roberts v. Sea-Land
Servs., Inc., 132 S. Ct. 1350, 1358 (2012). Prudence and common sense caution
against reading an ALJ decision to say the opposite unless that is clearly its intended
meaning. The ALJ gave no indication that it was ruling § 906(b)(1) inapplicable;
3
indeed, it only referenced the cap at all to note that Navalo had appeared to agree to
its application. By contrast, in Hoffman v. Celebrezze, 405 F.2d 833 (8th Cir. 1969),
on which the dissent relies to “illustrate[]” the principle that finality may protect even
clearly erroneous judgments, the district court expressly entered an order, from which
no appeal was taken, that the plaintiff be paid “past due benefits at six per cent
interest,” despite the fact that the Social Security Act did not permit interest payments.
Id. at 834.
We need not parse the ALJ’s order further, because any other construction
requires us to deny the petition. Obviously, if the ALJ ruled that § 906(b)(1) does
apply, then the district director and the parties were bound by that finding, not by the
district director’s initial mistaken calculations. And if the ALJ made no ruling one
way or another, the district director’s own application of § 906(b)(1) would still have
been proper as a purely ministerial act. Calculating compensation is a legal
determination as much as a mathematical one. What the BRB describes as
“calculating” compensation is the process of identifying and applying the provisions
of the Longshore Act that spell out the controlling arithmetic. What gives the job its
ministerial cast is the fact that the law—and thus the arithmetic—is inarguably clear.
In many cases that clarity will stem from the ALJ’s express determination. But the law
4
is no less clear here, and the district director’s application no less ministerial, because
§ 906(b)(1)’s applicability was settled by the Supreme Court instead.
PETITION DENIED.
5
FILED
Navalo v. Cochise Consultancy, Inc. No. 14-73181
DEC 01 2016
KLEINFELD, Senior Circuit Judge, dissenting MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
I would grant the petition for review because once the compensation order
became final, the district director lacked the authority to amend it. The ALJ
instructed Cochise to pay Navalo two-thirds of $2,114.56 per week, an amount
greater than the statutory maximum. The ALJ did not say that this award was
capped by § 906(b)(1).
The ALJ ruled that “Employer owes Claimant two-thirds of the difference,”
and found that the difference was $2,114.56. She further ruled that “[a]ll
calculations of disability payments are to be based on the Claimant’s stipulated
average wage of $2,594.56.” As is apparently customary, she ended her order with
the language “The district director shall make all calculations necessary to carry
out this order.”
The ALJ erred. She evidently overlooked the statutory cap, even though it
had been brought to her attention and she had noted in the descriptive portion of
her decision that the claimant agreed that the maximum compensation rate was
1
$1,047.16 per week. Her decision is not ambiguous, though. The district director
had nothing to do but determine what two-thirds of $2,114.56 was, and the
employer had nothing to do, under her order, but pay that amount, $1,409.71.
Had Cochise appealed the error, and the calculation based on the ALJ’s
error, doubtless Cochise would have prevailed and the error would have been
corrected.1 But Cochise did not appeal. Instead, it paid the statutory maximum
and not the amount ordered. The error was brought to light only when Navalo
complained that he was not getting the amount ordered. I do not agree with the
majority view that the error in the award was “purely ministerial and
administrative.” The ALJ made an error of law. The only ministerial
administrative aspect was doing the arithmetic to put a dollar amount on the
fraction, two-thirds of $2,114.56.
Judges make errors from time to time, and they are corrected by motions to
reconsider, motions to amend, appeals, and other devices.2 Parties may not move
for relief from an erroneous final judgment when a judge’s error “involved a
1
33 U.S.C. § 921(a); 20 C.F.R. § 802.205(a).
2
See Restatement (Second) of Judgments § 71 cmt. e (Am. Law Inst. 1982).
2
fundamental misconception of law and the motion was not made until after the
time for appeal had run.”3
Hoffman v. Celebrezze illustrates this principle.4 There, the district court
entered an order requiring the government to pay the plaintiff increased social
security benefits as well as 6% interest on all past due benefits.5 The government
did not appeal, but later moved under Federal Rule of Civil Procedure 60 to delete
the interest payment provision from the order because the Social Security Act did
not permit interest payments.6 The district court granted the motion, but the Eighth
Circuit reversed, reasoning that “[i]f the Government is of the view that error was
committed in awarding interest in the final judgment . . . the normal and
appropriate method of attack is a timely appeal.”7 A party could not invoke Rule
60(b) to “extend[] the time for appeal which had already expired.”8 The Hoffman
3
11 Charles Alan Wright, Arthur R. Miller, & Mary Kay Kane, Federal
Practice and Procedure § 2858.1 (4th ed. 2012).
4
405 F.2d 833 (8th Cir. 1969).
5
Id. at 834.
6
Id.
7
Id. at 837.
8
Id.
3
opinion recognized that the interest in finality requires courts to uphold even
erroneous awards when the time to appeal has expired.
In this case, Cochise also could not correct this error by defying a judicial
order.9 Nor did the district director have authority to correct the ALJ’s error,
because only the Benefits Review Board is authorized to fix legal errors.10 This
rule is similar to traditional civil litigation where a judge only, and not a clerk, has
the authority to amend a judgment or grant relief from an erroneous judgment.11
The finality of a judgment is especially important in a disability case,
because a party may plan for the future (rent an apartment, etc.) based on an
expected income stream. Navalo would receive nearly $19,000 more per year if
the district director had not meddled ultra vires with the order. Because of the
9
See Zapon v. U.S. Dep’t. of Justice, 53 F.3d 283, 285 (9th Cir. 1995).
10
33 U.S.C. § 921(b)(3).
11
Fed R. Civ. P. 59; 60. Both rules authorize “the court,” rather than the
clerk, to alter a judgment. See also Moro v. Shell Oil Co., 91 F.3d 872, 876 (7th
Cir. 1996) (“Rule 59(e) allows a party to direct the district court’s attention to
newly discovered material evidence or a manifest error of law or fact, and enables
the court to correct its own errors and thus avoid unnecessary appellate
procedures.”).
4
extent of his injuries—he was shot in the back and hit by a roadside IED while
working as rear gunner in Iraq—he will likely never reach his pre-injury earning
potential. Once an original compensation order becomes final, a disability
claimant may put a down payment on a house, allocate money for future medical
expenses, or start saving for a child’s college tuition. This reliance interest further
cautions against excusing an employer’s failure to comply with or timely appeal
the ALJ’s binding decision.
The district director exceeded his statutory authority by amending the
compensation order, and Navalo should not be punished for relying on the ALJ’s
decision once it became final.
I respectfully dissent.
5