Office of Administrative Law Judges
United States Department of Labor
MONTHLY DIGEST # 139
November - December 1998
James Guill
Associate Chief Judge for Longshore
Thomas M. Burke
Associate Chief Judge for Black Lung
Benefits Review Board
In Trimble v. Army and Air Force Exchange Service, __ B.R.B.S. __,
BRB No. 98-0198 (Oct. 14, 1998), a non-appropriated funds case, the Board held that Claimant was
injured in the course and scope of her employment when she fell on a wet, ice-covered sidewalk
adjacent to the employee-designated entrance door to Employer's facility. Although Employer did
not own the property and was not required to maintain the sidewalk, the Board found that Employer
maintained a degree of control over the property significant enough to place Claimant's accident
within the second exception to the "coming and going rule" (employer controls the
journey), which generally bars employees injured on their way to or from work from compensation.
In establishing Employer's control over the sidewalk, the Board relied on
corroborated testimony which indicated that Employer required its employees to park in the lot
behind its building and to enter through a rear door which was accessible from the lot. The lot and
the entrance were specifically designated for employees and vendors, and not for Employer's
customers, creating a risk of employment for the employees not shared with the public. Further,
although not required to do so, Employer directed staff members to shovel and salt the sidewalk
leading to the employee entrance. The Board found that the voluntary nature of this activity on the
part of Employer did not diminish its degree of control over the area.
Although the case arose in the Sixth Circuit, the Board specifically relied on
the holding of Shivers v. Navy Exchange, 144 F.3d 322, 32 B.R.B.S. 99 (CRT) (4th Cir.
1998), as this was an issue of first impression in the Sixth Circuit. The Board distinguished this
holding from its previous decisions in Cantrell v. Base Restaurant, Wright-Patterson Air Force
Base, 22 BRBS 372 (1989), and Harris v. England Air Force Base Nonappropriated Fund
Financial Management Branch, 23 B.R.B.S. 175 (1990), finding that in those cases the
employers did not exercise control over where employees parked and did not maintain responsibility
for the condition of the area where the claimant was injured.
[2.2.11 Coming and Going Rule; 60.4.3 Course/Scope of Employment]
In Callnan v. Morale, Welfare & Recreation, Dept. of the Navy, ___
B.R.B.S. ___, BRB No. 98-0249 (Nov. 4, 1998), the Board held that if the absolute defense is raised
in a Section 8(f) claim, the ALJ must first address the issue of whether a proper, timely application
for Section 8(f) was made in accordance with Section 8(f)(3) of the LHWCA and 20 C.F.R. §
702.321, before addressing the merits of the request. In this particular case, the Employer's
application presented the grounds for asserting entitlement and a fully documented application. It
set out: (i) a specific description of a preexisting condition: cyclothymic personality (i.e.,
a bipolar disorder of at least two years duration), insomnia and major depression; (ii) the reasons for
believing that claimant's permanent disability would be less were it not for the previous permanent
impairment: a doctor opined that Claimant's condition most likely resulted from her being subjected
to severe emotional and probably sexual abuse as a child and that her firing in 1984 precipitated the
development of these symptoms to create her current condition; (iii) the basis for the assertion that
the pre-existing condition relied upon was manifest to employer prior to the later injury; and (iv)
documentary medical evidence relied upon in support of its request for Section 8(f) relief.
However, on the merits, this Employer was not entitled to Section 8(f) relief
because it failed to prove the "manifest" requirement of its claim. In an effort to
establish the manifest requirement, Employer submitted hospital records which diagnosed her with
a cyclothymic personality and indicated that Claimant was receiving counseling from therapists to
help her cope with problems she was facing with her work and marriage. While these records
indicate that Claimant had some emotional problems, the ALJ rationally found that they did not
establish the existence of a serious, lasting emotional problem. Additionally, subsequent deposition
testimony supported the conclusion that Claimant did not have a diagnosed permanent psychiatric
condition prior to her work injury. In fact, one doctor testified that Claimant had a latent
dissociative identity disorder which was "triggered" by the work-related incident, and
thus, speculated that her condition may not have manifested itself if she had not experienced what
had happened on the job.
[8.7.4 Pre-Existing Disability Must Be Manifest To Employer]
In McKnight v. Carolina Shipping Co., ___ BRBS ___, BRB No. 97-618 (Nov. 18, 1998)(en banc), while granting a motion for en banc reconsideration, the
Board denied the relief requested by Claimant. Specifically, the Board rejected Claimant's assertion
that Ninth Circuit should govern in this non-Ninth Circuit case. The Board acknowledged that there
is conflicting circuit law regarding the time period during which the average weekly wage is to be
calculated in a case of latent disability due to a traumatic injury. However, the
Board held that the law espoused by the Second and Fifth Circuits, LeBlanc v. Cooper/T Smith
Stevedoring, Inc., 130 F.3d 157, 31 B.R.B.S. 195(CRT) (5th Cir. 1997); Director, OWCP
v. General Dynamics Corp. [Morales], 769 F.2d 66, 17 B.R.B.S. 130 (CRT) (2d Cir. 1985),
which states that in latent disability cases, benefits are to be based on the average weekly wage at
the time of the accident which caused the injury, better applies the language of Section 10 of the
LHWCA than does the Ninth Circuit position found in Johnson v. Director, OWCP, 911
F.2d 247, 24 B.R.B.S. 3 (CRT) (9th Cir. 1990), cert. denied, 499 U.S. 959
(1991)(time of injury was when the disability attributable to the injury became manifest, in a case
involving an injury which only manifested symptoms several years later.).
[10.1.1 Time of Injury]
In Gregory v. Norfolk Shipbuilding and Dry Dock Co., ___ BRBS
___, (BRB No. 98-0497) (Nov. 24, 1998), while working as a machinist trainee, Claimant injured
her wrist and had to undergo a series of ten surgical procedures. Later, on her own initiative,
Claimant enrolled in a resources program at a community college. The Office of Workers'
Compensation Programs subsequently approved Claimant's rehabilitation plan and assumed the
expenses of the program and provided her with a minimal maintenance allowance provided she
complied with the requirements of the program. The program required that Claimant be enrolled
full-time and maintain a 2.0 grade point average. Employer voluntarily paid Claimant temporary
total disability compensation benefits for various periods until February 10, 1995, the stipulated date
of maximum medical improvement. Claimant sought additional temporary total disability
compensation under the LHWCA from that date until the completion of her DOL-sponsored full-time vocational rehabilitation program.
The ALJ concluded that as Claimant was partially disabled, had reached
maximum medical improvement on February 10, 1995, and her impairment fell under the schedule,
pursuant to Potomac Electric Power Co. v. Director, OWCP (PEPCO), 449 U.S. 268, 14
B.R.B.S. 363 (1980)(when an injury falls within the schedule, claimant is not entitled to seek total
disability benefits unless s/he proves that there is no employment available which claimant is capable
of performing.), her exclusive remedy was permanent partial disability benefits under the schedule.
Claimant argued that Abbott v. Louisiana Insurance Guaranty Assoc., 27 B.R.B.S. 192, 202
(1993), aff'd 40 F.3d 122, 29 BRBS 22 (CRT) (5th Cir. 1994) (where alternate jobs were not
realistically available to claimant due to enrollment in rehabilitation, claimant is entitled to disability
benefits while enrolled in the program.) applied and that she was entitled to the claimed temporary
total disability because she was precluded from working while she was enrolled in the DOL-sponsored rehabilitation program. The ALJ distinguished Abbott as a non-schedule case.
On its first appeal, the Board vacated the ALJ's opinion and remanded for the
ALJ to fully consider the relevant factors noted in Abbott. The Board found that the fact
that under the instant case the disability was controlled by the schedule, is not determinative of the
total disability issue. Specifically, the Board ordered that the ALJ address: (1) whether Claimant's
enrollment in the rehab program precluded any employment; (2) whether Employer agreed to the
rehabilitation plan and continuing payment of temporary total disability benefits; (3) whether
completion of the program would benefit Claimant by increasing her wage-earning capacity; (4)
whether Claimant demonstrated full diligence in completing the program; and (5) "other
relevant factors." On this first remand, the ALJ found that the questions posed by the Board
should be answered negatively and the judge reaffirmed his prior finding that Claimant was not
entitled to the additional total disability benefits claimed.
On the second appeal, the Board affirmed the ALJ's determination that
Abbott is not applicable on the facts presented. In Abbott, following his medical
release, Claimant sought vocational counseling through the DOL and thereafter enrolled in a four-year full-time medical technology degree program. The DOL paid Claimant's tuition and required
him to attend school full-time, year-round, and maintain a minimum grade point average. Claimant
Abbott subsequently completed his four-year program, plus a one-year internship, and commenced
work as a medical technician with earnings well above a minimum wage level.
In the present case, the Board found that Claimant correctly asserted that the
ALJ ignored certain relevant evidence when he determined that there was no evidence that Employer
had agreed to her rehabilitation plan, that she had not been diligent in completing the vocational
program, and that completion of the program would not benefit Claimant's wage-earning capacity.
However, the Board found these to be harmless errors. In Abbott, the award of total
disability benefits, while Claimant was enrolled in the vocational rehabilitation program, was
predicated on the fact that the alternate work was not realistically available because the terms of the
rehabilitation program precluded Claimant from working.
In the present case, on remand, the Claimant stipulated that while still in
school, she obtained a part-time job as a cashier/operator. The Board found that, "[i]nasmuch
as claimant, in fact, thus actually obtained employment while she was enrolled in the rehabilitation
program, the [ALJ] rationally inferred that in this case claimant's rehabilitation plan did not preclude
her from working, and that, had she chosen to do so, claimant could have performed this, or a
number of other entry level jobs identified ... at any time since she entered...community
college." The Board further stated that "[i]nasmuch as application of Abbott
rests on the fact that alternate jobs were not realistically available to claimant due to his enrollment
in rehabilitation, and in the present case claimant was able to work and pursue her studies during the
relevant period, the [ALJ] properly distinguished Abbott in this case." Thus, the
Claimant was limited to the scheduled recovery as of the date of MMI.
[8.2.3.2 Disability While Undergoing Vocational Rehabilitation]
In Hudley v. Newport News Shipbuilding & Dry Dock Co., ___
B.R.B.S. ___, (BRB Nos. 98-340 and 98-340A) (Nov. 23, 1998), the Board held that Section 8(j)
of the LHWCA permits Employer to request Claimant to report his post-injury earnings periodically.
Once the inquiry is made, Claimant must complete and return the form within 30 days of receipt
regardless of whether he has any post-injury earnings. Claimant's benefits are subject to forfeiture
if earnings are knowingly omitted or understated. Moreover, Employer can recover such forfeited
compensation only "by a deduction from the compensation payable" in the future.
In the case at hand, the major issue was the length of the forfeiture period.
Claimant argued that the period should not be for over six months, citing the fact that the LHWCA
may have a claimant report earnings every six months:
(1) The employer may inform a disabled employee of his obligation to report to the
employer not less than semiannually any earnings from employment, or self
employment,...
The Board stated that, "based on the legislative history, and on the language of the Act and
the regulations, we reject claimant's six-month limitation argument, as such an interpretation is not
supported by the statute and would contravene the purpose of Section 8(j)." However, the
Board also rejected the Employer's assertion that the forfeiture period should not be limited to the
period of under-reported earnings. Again drawing on the legislative history, the Board quoted
Congress's intent as noted in the following House conference report:
An employee who fails to report earnings when requested, or omits or understates
such earnings forfeits the compensation to which he was entitled during the
period of non-compliance.
H.R. Conf. Rep. 1027, 1984 U.S.C.C.A.N. at 2783 (emphasis added by the Board). As a result,
the forfeiture period is limited to the period of understated earnings.
[8.12.1 Obligation to Report Work--Generally]
In the hearing loss case of Damiano v. Global Terminal & Container
Service, ___ B.R.B.S. ___, (BRB No. 98-0472) (Nov. 24, 1998), the Board upheld the ALJ's
finding that compliance with OSHA noise exposure standards constitutes relevant, but not
determinative, evidence of the presence or absence of injurious stimuli in workplaces which fall
under the LHWCA. Further, the Board noted approvingly the ALJ's comment that the pertinent
OSHA regulation, 29 C.F.R. § 1910.95, counsels against regarding the eight-hour time-weight
average (TWA) exposure to 90 dBA (air-weight decibels) criterion as determinative of factual
inquiries which fall outside of the OSHA context. In particular, the ALJ found that while the
regulation notes that 90 dBA is permissible exposure for an eight-hour day, it nonetheless requires
employers to adopt an effective hearing conservation program whenever it appears that any
employee may be exposed to an eight-hour TWA of 85 dBA or more. 20 C.F.R. § 1910.95(c).
The Board noted approvingly that, from this evidence, the ALJ inferred that the 90 dBA is an outer
limit, and as such, lower exposures are also cause for concern.
Further, the Board agreed with the ALJ that a finding that the OSHA standards
are dispositive on the issue of causation of hearing loss would not be reconcilable with the purposes
of the LHWCA, since such a conclusion would preclude any compensation for occupational hearing
loss so long as the standards are met, even in cases where the claimant has overwhelming medical
evidence in his favor. Also, the ALJ noted that § 1910.95 does not define "injurious
stimuli" or specify a particular noise exposure level that might constitute "injurious
stimuli" and thus Employer's noise exposure surveys cannot demonstrate the absence of a
work-related injury. Moreover, the Board agreed that this evidence is insufficient to establish that
Claimant was not exposed to loud noise at any time during his employment; rather, all it establishes
is that during the time reflected in the studies, the levels of noise in the various places Claimant
worked did not exceed that allowed by OSHA. The Board found the ALJ's findings rational.
[27.1.14 OSHA Regulations; 2.2.16 Occupational Diseases and the
Responsible Employer/Carrier; 8.13.4 Responsible Employer and Injurious
Stimuli]
The case of Ion v. Duluth, Missabe and Iron Range Railway Co., ___
BRBS ___ (BRB No. 98-0375) (Nov. 27, 1998) was appealed twice. On the first appeal the Board
held that it was within the ALJ's discretion to permit Claimant to conduct a post-hearing job search
in view of Employer's failure to inform Claimant of the jobs identified by the vocational consultant
prior to the hearing. However, the Board further held that the ALJ had violated the Employer's right
to due process by failing to provide the Employer with an opportunity to cross-examine Claimant
or respond to his post-hearing affidavit regarding his job search. Thus, on the first appeal, the Board
vacated the ALJ's findings that the Claimant conducted a diligent job search and rebutted
Employer's evidence of the availability of suitable alternate employment, and remanded the case for
the ALJ to give the Employer an opportunity to refute claimant's post-hearing affidavit. Ion v.
Duluth, Missabe & Iron Range Ry. Co., 31 B.R.B.S. 75 (1997).
On remand, the ALJ issued an order holding the record open for 60 days to
allow Employer the opportunity to submit evidence in response to Claimant's post-hearing affidavit.
Employer thereafter filed a Notice of Taking of Deposition of Employer's vocational
consultant/expert. The ALJ then issued an Order of Clarification stating that any new
vocational evidence would not be admitted into the record since such evidence would be beyond the
scope of rebuttal. Regarding this issue, the ALJ noted that evidence such as Claimant's deposition
or the depositions or affidavits of any of the employers Claimant contacted during his post-hearing
job search would be appropriate rebuttal evidence.
In attempting to rebut Claimant's assertion that he had conducted a diligent
job search, Employer submitted an affidavit signed by a paralegal from Employer's law firm.
Therein, the affiant stated that she contacted personnel at seven of the jobs to which Claimant
contended that he applied and that, for various reasons including length of time passed, these
employers no longer had applications on file and they had no memory of Claimant's applying for
the respective jobs nor whether openings had existed at that time. Employer also submitted a letter
from its vocational expert stating that the vast majority of employers do not keep applications for
more than a year and many destroy them after six months. Moreover, the vocational expert stated
that most employers would have difficulty in trying to remember someone stopping in and applying
for a position approximately one and one-half to two years later.
In his Decision and Order on Remand, the ALJ stated that the passage
of time [20 months], did not automatically destroy Employer's due process rights. Although
Employer maintained that it was unable to submit meaningful rebuttal evidence, it had not availed
itself of all the opportunities to do so in that it had not deposed Claimant nor any of the employers
he contacted, and that Employer made only cursory contacts with seven of the 12 employers
mentioned in Claimant's affidavit. Therefore, the ALJ once again found that Claimant conducted
a diligent job search and his failure to find work rebutted Employer's evidence of available job
opportunities.
On the second appeal, the Board held that the ALJ acted within his discretion
in determining that further vocational evidence which went beyond the scope of rebuttal would not
be admitted into the record. In this regard, the ALJ specifically noted that evidence such as
Claimant's deposition or the depositions or affidavits of any of the employers Claimant contacted
during the time referred to in claimant's affidavit, would be appropriate evidence and, therefore,
admissible. The Board, thus found that the Employer failed to establish that the ALJ abused his
discretion.
[27.2 Procedural Powers Generally; 19.4 Formal Hearings Comply with
APA; 23.2 Admission of Evidence]
In Mellin v. Marine World-Wide Services, ___ BRBS ___, (BRB No.
98-0425) (Nov. 30, 1998), Claimant, along with several other employees, was sent by Employer to
Baltimore to perform a rigging job on a vessel. Claimant, who was not represented by counsel,
sought workers' compensation under both the state system and the LHWCA. Subsequently, the
State Department of Labor and Industries, as administrator of Employer's state coverage, issued an
order rejecting the claim on the basis that "the injury had occurred while in the course of
employment subject to Federal (Longshore and Harbor Worker's Compensation Act)
jurisdiction." Although the order stated that "protest or request for
reconsideration" must be made within 60 days, on the advice of his stepfather that it would not
be a problem because he was covered under the LHWCA, Claimant did not challenge the rejection
of the state claim.
However, an ALJ with the Department of Labor subsequently determined that
Claimant was not covered under the LHWCA. The Board upheld the ALJ. The Board agreed that
the state's actions in denying the state claim based on a finding of federal jurisdiction should not be
imputed to Employer since Employer has no private "state carrier" and its participation
in the state fund is mandatory. State workers' compensation benefits are thus paid by the fund,
rather than under an insurance policy. The state department of labor and industries is not an insurer,
and has no identity of interest with the Employer.
Additionally, the Board found that Employer did not agree to longshore
coverage, and Employer did not take any action tantamount to stipulating to coverage, even if it
could properly do so. Moreover, the Board noted that, since federal courts are courts of limited
jurisdiction, jurisdiction that is otherwise lacking cannot be conferred by consent, collusion, laches,
waiver, or estoppel. The Board went further to note that, even if it were possible to confer
jurisdiction based on equitable principles, the doctrine of collateral estoppel would not be applicable
on the facts presented because the issue of jurisdiction under the LHWCA was not actually litigated
at the state level in this case. Equitable estoppel would be similarly unavailable since Claimant's own testimony
established that it was his stepfather, rather than Employer, who advised him incorrectly not to
appeal or pursue the state decision.
[85.1 Res Judicata, Collateral Estoppel, Full Faith and Credit, Election of Remedies--General Concepts; 85.2 Effect of Prior State Proceeding on a Subsequent Federal
Claim; 85.3 Federal/State Conflicts]
In Schaubert v. Omega Services Industries, ___ BRBS ___, (BRB No.
98-153) (Oct. 14, 1998), when a labor supply company (Omega) contracted to supply workers to
another company (Elf), that other company (Elf) was Claimant's borrowing Employer and, therefore,
it was not subject to civil action. Claimant was paid longshore benefits by the insurance carrier
(INA) of the labor supply company. When Claimant in this matter filed a third party suit against the
borrowing company (Elf), and others, Elf was dismissed. INA unsuccessfully sought to intervene
in the third party suit to recover it's compensation payments from Elf. However, Elf had already
been dismissed as a party to that suit.
Thereafter, INA filed a claim under the LHWCA seeking reimbursement of
monies it paid to Claimant. Previously, in this matter, the Board held that, as Claimant once had a
meritorious claim for benefits, the ALJ has the authority to address the issue of the responsible
Employer under the borrowed employee doctrine and this authority included addressing the ancillary
contract issues. Schaubert v. Omega Services Industries, Inc., 31 B.R.B.S. 24 (1997).
In the present remand, the Board reaffirmed its earlier ruling that the
Department of Labor does have jurisdiction over this case; it is not strictly a contract case between
an employer and an insurer. The primary issue in this case is that of the responsible employer and
that any issues related to insurance contracts are ancillary to this issue.
In the present remand, the Board held that, as between borrowing and lending
employers, reimbursement of funds paid is permissible in cases arising under the LHWCA. As to
Elf's Section 33(g) defense, the Board holds that Section 33(g) is not a basis for denying
reimbursement between the potentially liable employers or carriers in this case. The Board went on
to find INA has a Section 33(f) lien right against claimant's third-party settlement recovery absent
a contractual waiver of its rights. The Board noted "[s]ignificantly INA does not seek
reimbursement from Claimant, who has recovered both from INA and the third-party
defendants." It further noted that "[s]ince Elf [borrowing employer] recovered nothing
as a result, of the third-party litigation, and INA's claim for reimbursement was dismissed by the
court, INA cannot rely on its lien rights under Section 33(f) in seeking reimbursement in this
case."
In the contract between Omega (lending employer) and Elf (borrowing
employer), Omega agreed to supply labor to Elf for work on its offshore oil platforms. Omega
agreed "to indemnify, defend and hold harmless Elf against "any and all claims,
demands or suits" brought by an employee of Omega. As to this contract and contract issues
growing out of it, the Board found that the ALJ erred in resolving contract issues. Specifically, the
Board held that "the contract between Elf and Omega precludes INA from obtaining
reimbursement from Elf."
However, the Board went on to hold that the ALJ had the authority to construe
all the relevant contracts in order to resolve the issue of the employer and carrier liable for benefits.
The Board found that it need not address which endorsement as between Omega and its insurer INA,
is applicable since the contract between Elf (borrowing employer) and Omega is dispositive.
The Board found that Omega and its insurer were entrusted to protect and
indemnify Elf from liability for workers' compensation claims and are liable for Claimant's benefits
herein. This holding is consistent with the import of Total Marine Services, Inc. v. Director,
OWCP, 87 F.3d 774, 30 B.R.B.S. 62 (CRT), reh'genbancdenied, 99 F.3d 1137 (5th Cir. 1996), aff'gArabie v. CPS Staff Leasing, 28
B.R.B.S. 66 (1994).
INA further argued that the Louisiana Oilfied Indemnity Act (LOIA) provides
that certain indemnification provisions contained in some agreements relative to oil, gas or water
wells or drilling for minerals are invalid due to the inequity between independent contractors and
oil companies. La. Rev. Stat. Ann. § 9:2780. To invalidate a contractual clause as being
against public policy, a party must show that the contract requires "defense and /or
indemnification, for death or bodily injury to persons, where there is negligence or fault (strict
liability) on the part of the indemnitee, . . .." La. Rev. Stat. Ann. § 9:2780(A). Both the
Fifth Circuit and the Louisiana Supreme Court have held that if the indemnitee is not at fault, the
LOIA does not apply to invalidate a waiver of subrogation in its favor. The Board found that, since
there is a bar against finding Elf at fault, the LOIA (as a fault-based statute) cannot apply to this case
arising under the LHWCA, a no-fault statute.
Stevens v. Matson Terminals, ___ B.R.B.S. ___, (BRB No. 97-1581)
(August 12, 1998)[while this decision is stamped "Published" there is no record of it
having publication status prior to its receipt in November of 1998; at this writng, it has not appeared
in the BRBS Longshore Reporter].
After filing a claim under the LHWCA, Claimant subsequently sought to
withdraw the claim and file one under California workers' compensation law. The ALJ in this
matter summarily found that Claimant's desire to withdraw his claim under the LHWCA was not
for a proper purpose and therefore denied the Claimant's Motion to Withdraw. On appeal,
Employer argued that a claimant is not allowed to forum-shop and that whether filing a state claim
is a proper purpose must be decided on a case-by-case basis.
However, the Board now holds that a "claimant's decision to withdraw
his longshore claim because he chooses to pursue a claim under state law is, as a matter of law, a
proper purpose for withdrawing a longshore claim." The Board stated that it is proper for a
claimant to determine the forum in which he will seek benefits. In so holding, the Board stated that
"[i]f, prior to adjudication, claimant determines he would rather file a claim under the state law
rather than under the Act, he is within is rights to do so, . . .."
