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RECENT SIGNIFICANT DECISIONS

Longshore & Harbor Workers' Compensation Act

Office of Administrative Law Judges
United States Department of Labor

MONTHLY DIGEST # 136
May 1998 - June 1998

James Guill
Associate Chief Judge for Longshore

Thomas M. Burke
Associate Chief Judge for Black Lung


   A. Circuit Courts of Appeals

   In Avondale Industries v. Director, OWCP, ___F. 3d ___, Case No. 97-60569 (5th Cir. Mar. 31, 1998), a case involving the calculation of wage earning capacity, the Fifth Circuit upheld an ALJ who averaged the hourly wages of five jobs which Employer found to be suitable employment for Claimant. The circuit court was unpersuaded by Employer's arguments that allowing averaging would cause employers in the future to rely on only one possible suitable employment prospect. ("We think it unlikely that an employer would risk having to pay permanent total disability benefits by showing only one job available. Rather, the presumption that the employee is permanently and totally disabled would seem to encourage the employer to find as many alternate jobs as possible.") The court added that averaging ensures that the post-injury wage earning capacity reflects each job that is available.

[8.2.4, partial disability/suitable alternate employment]

   In McNutt v. Superior Marine, Inc., ___ F.3d ___, Case No.97-70180 (9th Cir. Apr. 7, 1998), the Ninth Circuit held that, although a $100 per diem amount paid to Claimant while working in Scotland was an "advantage" under Section 2(13) of the LHWCA, it is not a "wage" under that section because it is not subject to withholding under the Internal Revenue Code.

[2.13, wages]

   In Todd Shipyards Corporation v. Director, OWCP, ___ F.3d ___, Case No. 96-70954 (9th Cir. Apr. 1, 1998), where Claimant was disabled from both asbestosis and hypertension, Employer is not entitled credit for Claimant's asbestos related third party suit. [This is not a case involving third party settlements.]. In upholding the ALJ, the Ninth Circuit noted that the ALJ had relied on two related legal theories to reach his holding that Employer was not entitled to a "set-off" for any prospective third party proceeds received by claimant. These two legal theories were the aggravation rule and the credit doctrine.

   Under the aggravation rule, an employer is required to pay compensation for the totality of a claimant's disability regardless of the cause of the original disability with which the work-related disability combined such as where a claimant is disabled due to both his asbestosis and his hypertension.

   Finding the position of the Director to be rational, the Ninth Circuit adopted the Director's interpretation that Section 33 of the LHWCA mandates that an employer is entitled to credit from third party proceeds only when the injury for which benefits are paid under the LHWCA is the sole and same injury that gives rise to the third party recovery.

[ 33.6, employer credit for net recovery by "person entitled to compensation" ]

   In Hall v. Consolidated Employment Systems, Inc., ___ F.3d ___, Case No. 96-60754 (5th Cir. April 24, 1998), while there was some evidence that Claimant's job position would have potentially led to permanent employment, there was countervailing evidence of a greater quantum that his employment was intermittent and discontinuous. The Fifth Circuit concluded that the ALJ s factual findings to use Section 10(c) rather than Section 10(b) to determine his average weekly wage were supported by sufficient evidence. While Claimant's foreman admitted that he promised to hire claimant on a permanent basis, evidence was presented that the foreman did not have authority to do so. The evidence additionally demonstrated that Claimant's employment was inherently unpredictable. [Employer's high turnover rate is borne out by the fact that Employer was required to issue between 5,000 and 6,000 W-2 tax forms even though its weekly work force consisted of only 350 to 400 to its workers who were employed on a contract-to-contract basis.]

   The court stated that an ALJ, when evaluating a claimant's earning capacity at the time of injury, may exclude earnings at the time of injury from his calculations if those earnings are not helpful in gauging Claimant's true earning capacity. However, the Fifth Circuit held, "[O]ur affirmance of the ALJ on this point is based more [on] our standard of review, than on our belief that the ALJ acted wisely by excluding those earnings." Stating that it will be an exceedingly rare case where the claimant's earnings at the time of injury are wholly disregarded as irrelevant, unhelpful, or unreliable, the Fifth Circuit noted that the ALJ's decision "comes dangerously close to reversible error."

[ 10.1, average weekly wage in general; 10.4.2, judicial deference regarding application of Section 10(c); 10.4.4, calculation of annual earning capacity under Section 10(c); 10.4.4, calculation of annual earning capacity under Section 10(c) ]

   In Nelson v. American Dredging Company, ___ F.3d ___, Case No. 96-3724 (3d Cir. May 11, 1998), the Third Circuit held that the ALJ was correct in refusing to enforce a "settlement agreement" where, at most, there was only an "agreement in principle" to settle. The circuit court found that the parties never complied with the applicable regulations which describe in detail the procedures for, and the necessary content of, settlement applications under the LHWCA.

   Moreover, the Third Circuit found coverage under the LHWCA for a worker who: (1) drove a bulldozer on a beach moving a sand dredging pipeline up and down the beach in order to strategically deposit the sand; (2) waded in water to adjust valves and add sections to the pipeline; and (3) moved the sand from where it was pumped in those waters adjacent to the beach to the shore and then graded the sand on the beach with his bulldozer.

   In determining whether an employee of a beach dredging company has situs, one must determine whether the beach on which he was injured qualifies as an adjoining area customarily used by at least one maritime employer to unload its vessel. The circuit court found that an unimproved beach falls within the plain meaning of the word "area."

   The word "customarily" in Section 3(a) modifies the phrase "adjoining area . . . used by an employer," not simply the phrase "adjoining area." Thus one must look to whether an employer customarily uses a beach for loading, unloading . . . rather than whether the beach "customarily is used" for "loading, unloading, . . .." In this regard, the circuit court looked to the specific operations of Employer. It noted that Employer was in the business of dredging channels and reclaiming beaches. The geographical area in question was an area contiguous to navigable waters. It and similar beaches were customarily used by this employer to unload its hopper dredge vessel.

   The Third Circuit found that Claimant had status under the LHWCA as he was directly and intimately involved in unloading the hopper vessel of sand and was "a vital part of the unloading process." Sand was the cargo and "it literally was unloaded' as much as it would have been had it been bagged and removed from the vessel by a crane and cargo nets."

[ 1.6.2, situs--"over land"; 1.7.1, status; 8.10.1, § 8(i) settlements--generally ]

   In Shivers v. Navy Exchange, ___ F.3rd ___, Case No. 96-2578)(4th Cir. May 18, 1998), a parking lot maintained by Employer for its employees was considered part of Employer's premises for purposes of the LHWCA's course-of-employment requirement. Although the Navy Exchange did not actually own the parking lot property, it did direct its employees to park there and had an active hand in controlling the lot. It exercised significant control over where its employees parked. Therefore, the lot bears a sufficient connection to the Navy Exchange's workplace such that the parking lot should be considered part of its premises for purposes of recovery under the LHWCA.

[1.6.2, situs--"over land"; 2.2.9, course of employment]

   B. Benefits Review Board

   In Porter v. Kwajalein Services, Inc., ___ B.R.B.S. ___, BRB No. 97-212 (Apr. 9, 1998), Claimant filed a pro se Motion for Reconsideration of the Board's previous decision in this case, Porter v. Kwajalein Services, Inc., 31 B.R.B.S. 112 (1997). In affirming its earlier decision, the Board stated that Claimant's motion before the ALJ to rescind a settlement cannot be construed as a notice of appeal to the Board as it was directed to the ALJ. The motion did not evince an intent to seek Board review, but requested further review before the ALJ. The Board further stated that it is not in the interest of justice to consider the motion to the ALJ as notice of appeal to the Board in light of the strong policy favoring the finality of settlements.

   The Board further denied Claimant's request that it review his file before the OWCP as it is without authority to do so: "Our scope of review is not de novo but is limited to review of the evidence in the formal record before the [ALJ]." The Board denied Claimant's remaining requests to provide him with legal assistance and to appoint him a guardian to state that it was "without authority to do so. See 33 U.S.C. §§ 911, 939(c)(1); 20 C.F.R. § 702.136(b)."

[ 8.10.8, finality of settlement; 8.10.8.2, setting aside settlements; 21.1, composition and authority of BRB ]

   In Zea v. West State, Incorporated, ___ B.R.B.S. ___, BRB No. 97-931 (Apr. 9, 1998), it is Employer's burden to produce substantial evidence to establish that a disability was due to a subsequent event and not to the natural and unavoidable result of Claimant's previous work injury. It is not Claimant's burden to affirmatively establish that his injury arose from the previous injury since Claimant has the benefit of the Section 20(a) presumption. The Board further held that lay evidence is not sufficient to establish an aggravation.

[ 2.2.1, § 2(2) vis-a-vis § 20(a) presumption; 2.2.2, arising out of employment; 2.2.6, aggravation/combination; 2.2.7, natural progression; 2.2.8, intervening event/cause vis-a-vis natural progression; 20.2.1, prima facie case ]

   In Mowl v. Ingalls Shipbuilding, Inc., ___ B.R.B.S. ___, BRB No. 97-960 (Apr. 14, 1998), Claimant's continued employment prolonged her exposure to noise which resulted in a work-related aggravation of hearing loss. Therefore, Claimant sustained a new injury and was entitled to file a claim for this injury. As Claimant is entitled to be compensated for the entire disability resulting from the combination of her current loss and her pre-existing hearing loss, the Board found that the ALJ properly resolved this claim consistent with the aggravation rule and affirmed the ALJ's conclusion that Employer is liable for the entire stipulated hearing loss.

   The Board concluded that an employer does not have "knowledge" of an injury for purposes of Section 14(e) until it knows of the full extent of the injury on which the claim is based; in other words, an employer must have knowledge of the same injury or aggravation for which compensation is to be paid. Thus, where a claimant's claim is based upon aggravation of a prior condition, the employer must receive notice or have knowledge of the aggravation before Section 14(e) applies. In Mowl, the full extent of Claimant's compensable injury was not known to Employer until Claimant put it on notice of her intent to seek compensation for the cumulative hearing loss injury. On these facts, "knowledge of the injury" in Section 14(b) means knowledge of the cumulative compensable hearing loss.

[ 14.3.1, employer knowledge ]

   In Daul v. Petroleum Communications, Inc., ___ B.R.B.S. ___, BRB No. 97-1055 (Apr. 28, 1998), the Board upheld an ALJ's finding that Claimant, who was employed as a communication consultant/salesman for Petroleum Communications (a seller of cellular communications--air time and equipment--in the Gulf of Mexico), was excluded from coverage by operation of the "vendor exclusion" set out in Section 2(3)(D) of the LHWCA. All three criteria for vendor exclusion were met: (1) Employer, as a seller of cellular goods and air time, is a vendor; (2) by assisting in the installation of new equipment aboard the vessel where the injury took place, Claimant was temporarily doing business on the premises of a maritime employer who owned the barge; and (3) the work performed by Claimant aboard the barge was not work normally performed by the maritime employers' employees.

   Thus, while Claimant met the requirements of situs and status, the ALJ correctly found that Claimant lacked coverage because of the vendor exclusion. Specifically the ALJ found that: (1) Employer was a "vendor," not a "provider of services" as Claimant had argued (ninety-five per cent of Employer's revenue was derived from selling air time, an intangible product.); (2) while Claimant spent little time selling tangible goods, his specific duties entailed the representation of his company in a "public relations" capacity, which resulted in the sale of air time and thus was "selling" Employer's product. "Selling goods" is distinguishable from "providing services," such as manual labor.

[ 1.11.10, exclusions to coverage--employees of suppliers, transporters, or vendors ]

   In Wilson v. Norfolk & Western RR Company, ___ B.R.B.S. ___, BRB No. 97-1102 (Apr. 29, 1998), the ALJ properly denied Employer's Motion to Dismiss claim on grounds of res judicata, collateral estoppel and election of remedies where Claimant previously filed a FELA claim which the parties settled prior to the filing of the LHWCA claim. The Board found that issue and claim preclusion can only be given effect when the legal standards are the same in both the previous and current jurisdictions. The Board stated that it is well-established that re-litigation of an issue or claim will only be precluded in a second case where the parties had a full and fair opportunity to litigate the claim or issue.

   The Board found that the Full Faith and Credit Act does not bar the LHCWA claim here since it applies only to judicial proceedings and "the Virginia dismissal order in the instant case does not appear to constitute a final judgment for purposes of the full faith and credit doctrine" since the court never specifically adopted the terms of the settlement as its findings. Since the Fourth Circuit has also stated that one must look to the intent of the parties when a party invokes a previous consent judgment as preclusion, the Board also addressed the issue of intent. The Board stated that "[w]hile the terms of the settlement indicate that claimant released employer from all claims which he may for personal injuries, know or unknown (sic), as a result of the November 13, 1985 (sic). . . there is no evidence in the record of intent to preclude a claim under the Act." The Board further stated that "assuming such an intent existed, the settlement could not preclude Claimant's claim under the Act, as Section 15(b) of the Act, 33 U.S.C. § 915(b), invalidates any agreement which waives a claimant's right to compensation under the Act."

   The Board also concluded that the doctrine of election of remedies does not bar the claim since there is no risk of double recovery in that the LHWCA does not preempt state acts; rather, it is structured so that amounts received under another system are credited against the amount obtained under the LHWCA.

   Finally, the Board held that since payments received by Claimant from the Railroad Retirement Act do not require that a disability be work-related, these payments are indeed retirement benefits paid to employees who have retired from their railroad employment either voluntary or involuntarily and are not subject to a Section 3(e) credit.

[ 85, res judicata, collateral estoppel, full faith and credit, election of remedies ]

   In Green v. I.T.O. Corporation of Baltimore, ___ B.R.B.S. ___ BRB No. 97-1072 (May 5, 1998), the Board expanded on the holding in Frye v. Potomac Electric Power Co., 21 B.R.B.S. 194 (1988) (where Claimant suffers two distinct injuries arising from a single accident, one compensable under the schedule and one compensable under § 8(c)(21), he may be entitled to receive compensation under both the schedule and § 8(c)(21) provided any loss in wage-earning capacity due to the scheduled injury is eliminated from the § 8(c)(21) award). In Green, the Board found that "[t]here is no danger of double recovery, however, if claimant's shoulder injury

[§ 8(c)(21) injury] alone could cause the entire loss in wage-earning capacity; claimant is entitled to benefits for the full loss in wage-earning capacity due to his shoulder impairment irrespective of the effect of his ankle injury [scheduled injury] on his loss in wage-earning capacity." Slip op. at 6.

   The Board reasoned that "[i]t was not the combined effects of the disabling shoulder injury and the "equally" partially disabling ankle injury which caused the loss in wage-earning capacity; rather each injury on its own resulted in disability unaffected by the other. Consequently, as the loss in wage-earning capacity due to claimant's ankle injury does not affect the degree of disability due to the shoulder injury alone, claimant would not be receiving a double recovery for the same disability if he were fully compensated under both Section 8(c)(21) and the schedule at Section 8(c)(4)." Id.

[ 8.4, conflicts between applicable sections ]

   In Jackson v. Strachan Shipping Company, ___ B.R.B.S. ___, BRB No. 97-1157 (May 12, 1998), the ALJ incorrectly held that the Section 20(d) presumption ("that the injury was not occasioned by the wilful intention of the injured employee to injure or kill himself or another") was rebutted where Claimant willfully engaged in driving, contrary to the restrictions imposed by his doctor, and his driving led to the injury. The Board pointed out that the Section 20(a) presumption applies to the Section 2(2) requirement that the injury arose out of Claimant's employment and the Section 20(d) presumption complements the Section 3(c) inquiry into whether the injury was occasioned by Claimant's willful intention to injure himself. Section 20(a) cannot be rebutted by attributing disability to an intervening event caused by the claimant's own affirmative conduct, unless there is a second accident or event occurring subsequent to the work injury. In the instant case there was no second injury and the Board has explicitly rejected the suggestion that the duty of care required of Claimant to guard against a subsequent injury applies to the initial work injury.

   As to the Section 20(d) presumption, while the ALJ found that Claimant's injuries were caused by his deliberate disregard of the doctor's instructions, at no time did the ALJ make a finding that the injuries were caused by his willful intent, the clear language specified in Section 3(c). "Willful intent" to injure oneself requires a strict standard of proof. The statute provides compensation regardless of how negligent or inadvisable one's conduct may be, provided that there is no intention on the part of the employee to harm or injure himself or another. The duty of using due care is applicable only in intervening cause cases and applies only to guarding against re-injury following an initial work-related injury and has no relevance to the inquiry into whether an employer presented substantial evidence that a claimant willfully intended to injure himself.

[ 3.2.2, wilful intention ]

   In Bailey v. Pepperidge Farm, Inc., ___ B.R.B.S. ___, BRB No. 97-1156 (May 19, 1998), the Board found that the district director erred in awarding Section 14(f) assessments based on Employer's failure to pay Claimant annual adjustments pursuant to Section 10(f) in accordance with Holliday v. Todd Shipyards Corp., 654 F.2d 415, 13 B.R.B.S. 741 (5th Cir. 1981) (the rate paid for permanent total disability should include all intervening Section 10(f) adjustments occurring during periods of prior, temporary total disability), overruled en banc in Phillips v. Marine Concrete Structures, Inc., 895 F.2d 1033, 23 B.R.B.S. 36 (CRT)(5th Cir. 1990). The Board noted that in Brandt v. Stidham Tire Co., 785 F.2d 329, at 332, 18 B.R.B.S. 73 (CRT), at 78( CRT), the District of Columbia Circuit stated, "In sum, we accept the Holliday ruling as the proper reading of the statute in this circuit at least until the precedent is overruled in the Fifth Circuit . . .." The Board then reasoned that Holliday no longer applied to cases arising under the District of Columbia Workers' Compensation Act and Claimant is entitled to annual adjustments pursuant to Section 10(f) at a rate including only those adjustments occurring after she became permanently totally disabled.

   The Board also noted that ordinarily an employer may not collaterally attack an underlying compensation awarded through an appeal of a Section 14 penalty but that, in this case, it was apparent that Employer had no earlier opportunity to challenge the basis underlying the district director's Section 14(f) assessment, i.e. the computation of the Section 10(f) adjustment pursuant to Holliday. The ALJ did not specifically order the calculation of Section 10(f) adjustments pursuant to Brandt/Holliday, and the district director did not issue any compensation orders concerning Section 10(f) prior to the assessment of the Section 14(f) penalty.

[ 10.7.1, annual increase; 60.1, District of Columbia Workers' Compensation Act ]

   In Diggles v. Bethlehem Steel Corp., ___ B.R.B.S. ___, BRB No. 97-1168 (May 22, 1998), the Board held that there is no requirement under the LHWCA that a specific statement be made within a settlement agreement that it is made pursuant to Section 8(i). In the instant case, Claimant alleged that a stipulated, and ALJ approved, agreement could be modified because it was not a Section 8(i) settlement. However, the language of the agreement provided for a complete discharge of Employer's obligations and contained additional language indigenous to a Section 8(i) agreement. The agreement referred to the fact that the agreement was not made under duress, financial or otherwise, that Claimant believed that it was in her best interest, and that Employer would be completely discharged from all future liability for disability compensation.

   Claimant, on appeal for the first time, argued that the application was deficient because it did not contain a recent medical report, an itemized statement of medical expenses, nor a sufficient explanation of the adequacy of the amount. However, the Board noted that such deficiencies do not provide a basis for modifying a final order approving settlement. It held that the "validity of the agreement underlying a Section 8(i) settlement order is not subject to an attack in modification proceedings under Section 22, but rather raises legal issues which must be timely appealed under Section 21 of the Act, 33 U.S.C. § 921." The Board's position is perplexing since it would allow a party to a Section 8(i) settlement to generally appeal that signed, judicially approved settlement agreement within 30 days. Thus, in the Board's view, a Section 8(i) settlement is not final once filed unless the 30 day period runs.

[ 8.10.3, structure of settlement; 8.10.8, finality of settlement; 8.10.8.2, setting aside settlements]

   In Lombardi v. Universal Maritime Service Corp., ___ B.R.B.S. ___ BRB Nos. 97-1169 and 98-0193 (May 22, 1998), the Board noted that it previously held that an employer may attempt to modify a total disability award pursuant to Section 22 by offering evidence establishing the availability of suitable alternate employment. In the instant case, the Board concluded that such evidence must demonstrate that there was, in fact, a change in Claimant's economic condition from the time of the award to the time modification was sought. The Board noted that, at the initial hearing in this matter, Employer's counsel made a tactical decision not to argue that Claimant was capable of performing suitable alternate employment and unequivocally declined the opportunity to hold the record open for submission of evidence regarding such employment. Employer cannot seek for the first time, on modification, to present evidence of suitable alternate employment in support of its allegation of a change in Claimant's condition.

[ 22.1, modification generally ]

   In Parks v. Newport News Shipbuilding, ___ BRBS ___, BRB Nos. 97-1192 and 97-1192A (May 27, 1998), the Board found that the ALJ did not err in allowing Claimant to enter additional evidence after her case was completed. Employer's due process rights were not violated since the ALJ agreed to allow Employer the opportunity to depose the three doctors who submitted identical affidavits composed by Claimant's counsel and signed under oath by the three physicians. Employer, however, made no effort to supplement the record. The Board further noted that the evidence submitted by the claimant was material and relevant to the issue in dispute, namely whether the decedent had asbestosis.

   The Board held that the ALJ's interpretation of the CAP/NIOSH (Committee of the College of American Pathologists and the National Institute for Occupational Safety and Health) criteria was supported by evidence. Specifically, the ALJ found that interpretation of the phrase "associated with" contained in the CAP/NIOSH report can reasonably mean that asbestos bodies need only be present on the same tissue slide, or in the same histologic section as the fibrosis in order to be considered "associated with" the fibrosis and thus arrive at a diagnosis of asbestosis. (Employer's expert required that the asbestosis bodies be imbedded in the fibrous tissue, or immediately adjacent to the fibrous tissue in order for the asbestos bodies to be "associated with" the fibrosis).

   The ALJ found that sufficient doubt had been cast upon Employer's expert's interpretation of the CAP/NIOSH criteria by other physicians and that no physician other than Employer's expert directly disputed the diagnostic criteria under CAP/NIOSH employed by Claimant's physicians and adopted by the ALJ. Thus, the ALJ concluded that the decedent had asbestosis and that there was a causal nexus between the decedent's asbestos exposure and his death.

[ 23.2, admission of evidence; 23.5, ALJ can accept or reject medical testimony ]

   In Griffin v. Newport News Shipbuilding & Dry Dock Company, ___ B.R.B.S. ___, BRB No. 97-1266 (May 27, 1998), the Board affirmed the ALJ's finding that (in the Fourth Circuit) a parking lot owned by Employer, but located across a public road from the shipyard, is not a covered situs under the Fourth Circuit's decision in Sidwell v. Express Container Services, Inc., 71 F.3d 1134, 29 B.R.B.S. 138 (CRT) (4th Cir. 1995), cert. denied, 116 S. Ct. 2570 (1996). The Board analogized to the decision in Kerby v. Southeastern Public Service Authority, 31 B.R.B.S. 6 (1997), aff'd mem., 135 F.3d 770 (4th Cir. 1998) (table) (the claimants were injured at a power plant owned by an employer, which provided electricity in part for employer's shipyard, did not satisfy the situs requirement.). In Kerby, the location of the power plant wherein Claimants were injured was separated from Employer's shipyard by fences which surrounded each property, by privately owned railroad tracks which ran between the two properties, and by the personnel practices of Employer's shipyard that did not provide for unrestricted access between the two properties. In the instant case, the Board noted that the parking lot is physically separated from the shipyard by a public street as well as a security fence and concluded that it must be deemed to be a separate and distinct piece of property rather than part of the overall shipyard facility.

[ 1.6.2, situs--"over land" ]

   In Rice v. Newport News Shipbuilding & Dry Dock Company, ___ BRBS ___, BRB Nos. 97-1239 (June 4, 1998) the issue presented was the time frame in which an employer must request Section 8(f) relief after the "permanency of claimant's condition is known or is an issue in dispute." The Board upheld the ALJ's determination that the petition was timely filed where it was filed prior to the time that the permanency of Claimant's condition became an issue before the district director. While the Section 8(f) petition was filed five years after the claim was filed, at no point during the five year period was the permanency of Claimant's condition at issue. Employer is not required to monitor Claimant's condition to determine the point at which his disability has become permanent. The fact that the parties ultimately stipulated that Claimant is entitled to permanent disability benefits for a period which begins prior to the date of the filing of the Section 8(f) petition does not indicate that the permanency of Claimant's condition actually was at issue prior to the filing of the Section 8(f) petition.

[8.7.9.2 timeliness of employer's claim for § 8(f) relief; 8.9.7.3 filing for § 8(f) relief]



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