USDOL/OALJ Law Library
Recent Significant Decisions -- Monthy Digest # 144
Longshore & Harbor Workers' Compensation Act
October - November 1999
John M. Vittone
Chief Judge
Thomas M. Burke
Associate Chief Judge
I. Longshore
A. Circuit Courts of Appeals
In Conoco, Inc. v. Director, OWCP, ___ F.3d ___, 1999 WL
979694 (5th Cir. Nov. 12, 1999), the Fifth Circuit affirmed an award of benefits to claimant but noted
the Board applied the wrong legal standard to employer's § 20(a) rebuttal burden. The Board
noted "[employer], in its reliance on inconsistencies in [claimant's] testimony and discrepancies
between her testimony and medical records, failed to rule out the possibility of a causal
relationship between [claimant's] employment and her injury." (Emphasis added) The Fifth
Circuit noted that the plain language of the statute uses the phrase "substantial evidence to the
contrary," and placing this higher standard (ruling out) on the employer is contrary to
statute and case law. The Fifth Circuit ultimately held that the Board did not commit a reversible error
and "[d]espite the legal error, an objective review of the record and the ALJ's opinion lead us to
the conclusion that the legal error is harmless but just barely."
[Topic 20.3 Employer Has Burden of Rebuttal with Substantial Evidence]
The decision in Bath Iron Works v. Brown, 1999 WL 900442 (1st
Cir. Oct. 8, 1999) may be more important for its dicta than for its actual holding. The issue before the
First Circuit regarded last responsible maritime employer/carrier. Claimant worked for Bath Iron
Works from 1941 until 1984. Commercial Union provided coverage from 1963 until 1981, and
Liberty Mutual provided cover from 1981 until 1986. Liberty Mutual initially paid cover and looked to
Commercial Union for reimbursement. Commercial Union agreed to reimburse Liberty Mutual if the
First Circuit upheld the award for continuing medical benefits to claimant. .
The Director wanted to extend the last employer rule to impose liability on the
last covered maritime employer where there is later exposure at a non-covered employer. The Circuit
Court noted that
"The 'last maritime employer rule,' unlike the "last employer rule,' is driven
by the fact that there is no jurisdiction over the last employer because the last employer
is not covered by the Act.....Critics, however, have pointed out that such an extension
is contrary to the rationale for the last employer rule: a last maritime or covered
employer rule 'undercut[s] the basic rationale of the last employer rule, that each
employer will be the last employer a proportionate share of the time....Furthermore,
since the last maritime or covered employer rule holds covered employers liable for
exposures that that took place after their liability otherwise ended, 'employers are
precluded from limiting their liability by adjusting their conduct.' There is a difference
between holding employers (and their insurers) liable for injuries that took place before
an employee was hired and for those that took place after an employee left covered
employment.
Nonetheless, there are policy arguments to be made to support such an extension of an
allocation rule in those situations where, as here, the employee worked for the same
employer throughout and was simply transferred by the employer from a covered
facility, where he was exposed, to a non-covered facility. Otherwise, an employer
could seek to manipulate the system by transferring an exposed employee from a
covered to a non-covered facility.
However, the Circuit Court stated that it did not need to resolve this issue since it
upheld the finding of compensability arising out of the claimant's 1941 to 1978 employment at the
shipyard and Commercial Union conceded at oral argument that if claimant was entitled to
compensation under the LHWCA, the extent of such compensation could be based on the 1983
audiogram and thus, there is no need to either decide a last maritime or covered employer issue.
[Topic 2.2.16 Occupational Diseases and the Responsible Employer/Carrier]
In Rowe v. Newport News Shipbuilding and Dry Dock Co., ___
F.3d ___, 1999 WL 798875 (4th Cir. Oct. 7, 1999), Claimant filed a claim for additional benefits
based on a scheduled injury to his right leg. The ALJ denied additional benefits based on economic
factors and because there was no medical evidence showing claimant's disability had increased. The
Board affirmed. The Fourth Circuit affirmed the Board's decision and noted that PEPCO,
449 U.S. 268 (1980), did not allow for an accounting of economic factors in calculating disability
benefits for a scheduled injury under § 8(c) (1-20).
[Topic 8.3.1 Scheduled Awards Some General Concepts]
Claimant is the widow of a now deceased injured employee who had been
receiving permanent total disability benefits. Claimant's decedent had been estranged from claimant
since 1970 and had provided no support for his wife and their ten children. Claimant never entered into
another relationship. The ALJ found claimant was living apart from her decedent for "justifiable
cause" (pursuant to § 2(16) of the LHWCA), and that she had not severed the
"conjugal nexus" (as required by the U.S. Supreme Court in Thompson v.
Lawson, 347 U.S. 334 (1954)). The ALJ, therefore, awarded claimant benefits and the Board
and D.C. Circuit affirmed.
[Topic 2.16 Widow or Widower]
In Hill v. Director, OWCP, ___ F.3d ___, 1999 WL 1021242 (5th
Cir. Nov. 10, 1999), Claimant injured his back while working for employer on 1 October 1980.
Claimant did not receive a medical diagnosis regarding his back injury until 23 August 1983. Claimant
filed for Louisiana state workers' compensation on 21 February 1984, but the state court denied his
claim because it was filed over 3 years after the date of his injury. Claimant appealed to the state circuit
court and state supreme court and the district court's decision was ultimately affirmed by 6 November
1992. During the pendency of these state claims, on 24 June 1992, claimant filed a claim under the
LHWCA. The ALJ found that claimant should have been aware of his injury on 23 August 1983 (the
date of the Dr.'s diagnosis), but the one-year limitations period was terminated by 23 August 1984
(seven and a half years before claimant filed his LHWCA claim). The ALJ held that an untimely state
law claim for benefits cannot toll the statute of limitations for the filing of a LHWCA claim. The Board
and the Fifth Circuit affirmed.
[Topic 13.4 Section 13(d): Tolling the Statute; 13.4.2 Filing A State
Claim]
In Burton v. Stevedoring Services of America, ___ F.3d ___, 1999
WL 1044372 (9th Cir. 19 Nov. 1999), Claimant filed for compensation benefits and received an
award from the ALJ ($257.27/week) on August 9, 1993. The case languished at the Board level with
the Board reversing and remanding to the ALJ for a nominal award on September 12, 1996. The ALJ
issued a new decision with the nominal benefits ($7.71/week) on March 3, 1997. The Board affirmed
this decision on March 23, 1998. The Ninth Circuit reversed and reinstated the ALJ's original decision
of August 9, 1993. The Ninth Circuit noted that the Department of Labor Appropriations Act of 1996,
P.L. No. 104-134, 110 Stat. 1321, provided that "any ... decision pending a review by the
Benefits Review Board for more than one year shall, if not acted upon by the Board before
September 12, 1996, be considered affirmed by the Benefits Review Board on that
date, and shall be considered the final order of the Board for purpose of obtaining a review in the
United States courts of appeals ..." (Emphasis added). Because the Board reversed the ALJ's
decision on September 12, 1996, and this came over one year after the ALJ's decision, the Board's
decision of September 12, 1996 did not comply with the Appropriations Act of 1996. Therefore, the
Board's decision of September 12, 1996 was invalid and a nullity, and the ALJ's decision of August 9,
1993 was deemed affirmed and the final order of the Board "at the instant 11 September 1996
came to a close and 12 September 1996 commenced."
[Topic 21.3 Review by U.S. Courts of Appeals]
B. Benefits Review Board
In Timothy W. Clark v. Newport News Shipbuiling and Dry Dock
Co., ___ B.R.B.S. ___, BRB No. 98-1508 (Aug. 17, 1999), the Board ruled that a Section 8(i)
settlement does not cover an injury not specifically enumerated, even if the agreement includes
language designed to encompass future claims. The Board issued the ruling in Clark despite
the settlement's statement that it covered "all issues outstanding which were raised or could have
been raised between the parties." In addition, the Board concluded the settlement did not absolve
the Employer of future liability through the agreement's statement that it covers "any other injuries
caused by the Employer." Citing Cortner v. Chevron International Oil
Co., 22 B.R.B.S. 218 (1989), the Board stated a settlement is limited to "the
claims then in existence."
The settlement reached in Clark was pursuant to the
LHWCA. In the instant case, the settlementinvolved Claimant's appeal of an administrative law judge's
denial of medical benefits for a right knee impairment. The administrative law judge ruled that a
settlement reached between the Claimant and the Employer contained language that was inclusive
enough to cover the impairment to his right knee, even though the injury was not specifically mentioned.
The parties had signed a settlement on December 12, 1995, covering injuries he sustained to his back,
left knee and left groin. Although Clark had experienced pains in his right knee since 1990 or 1991, he
did not file a claim until May 9, 1996. Because the Claimant was aware of the knee injury as much as
five years before the settlement, the administrative law judge concluded the Claimant should have
known that the agreement also discharged the Employer of liability for the knee injury. Finally, the
administrative law judge based his conclusion on cases that addressed the issue of whether settlements
approved pursuant to Section 8(i) can be modified under Section 22 of the Act.
The Board rejected the administrative law judge's reasoning. It noted that the
administrative law judge incorrectly relied on cases involving the issue of whether a settlement can be
modified pursuant to Section 22. Instead, the Board said the correct issue in Clark was
whether the settlement covers an injury not specifically listed in the agreement.
Next, the Board based its decision on a prohibition against certain waivers in
Section 8(i) and on regulations implementing settlements under the Act. The Board noted that claimants
are not permitted to waive their right to compensation except through settlements approved by a district
director or an administrative law judge under Section 8(i). 33 U.S.C. Sec. 915(b). The implementing
regulations governing Section 8(i) settlements state that they must be "self-sufficient documents,
which can be evaluated without further reference to the administrative file." 20 C.F.R. Sec.
702.242(a). The regulations continue by requiring a description of the injury, its cause and the degree
of impairment. 20 C.F.R. § 702.242(b)(2). Settlements must also be adequate under the
regulations. Id. Because the Claimant had not sought medical treatment for his injury when the
settlement was adopted and approved, the Board concluded those requirements cannot be met. The
costs of treatment for the right knee injuries are unknown, and, therefore, the settlement could not be
evaluated for adequacy with regard to injuries not listed. Finally, the Board ruled the administrative law
judge incorrectly relied on information not in the settlement when he considered the Claimant's
complaints about his right knee.
[Topics 8.10 Section 8(i) Settlements, 8.10.1 Generally, 8.10.2
Persons Authorized, 8.10.3 Structure of Settlement, and 8.10.8 Section
22 Modification]
In Zeigler v. Department of the Army/NAF, ___ B.R.B.S.
___, BRB No. 99-0122 (Oct. 7, 1999), Claimant was a writer for Stars and Stripes in
Czechoslovakia, where he was bitten by a tick and developed a red, circular rash. The ALJ found that
Claimant had established the presence of early stage Lyme disease, but that Employer had rebutted the
presence of late stage Lyme disease. The ALJ held that, when all of the evidence was weighed, it
nevertheless supported a finding that Claimant had suffered a disabling work-related injury. The
Employer was responsible for medical treatments administered after the early stage disease had been
resolved. Additionally, § 7(d)(4) was found to be inapplicable, and Claimant was found to have
suffered a temporarily totally disabling psychological impairment.
Employer argued that because the ALJ had found no late stage Lyme disease, it
was not responsible for treatments administered by a Dr. Davis, who treated Claimant after a Dr.
Sanders had diagnosed no late stage Lyme disease. The Board held that although there were
conflicting diagnoses, the Claimant was entitled to choose his own course of treatment as long as such
treatment could be reasonably seen as necessary. The Employer will be held liable for treatments
sought by Claimant as the treatments represent a reasonable course. In this case, Claimant continued
to suffer from Lyme-like symptoms and some objective testing indicated the presence of disease; it was
reasonable for Claimant to continue to seek treatment. Additionally, the removal of Claimant's gall
bladder was a direct consequence of the antibiotic course prescribed by Dr. Davis, and so it is also
covered.
Employer further argued that § 7(d)(4), which allows the ALJ to suspend
compensation payments when a Claimant unreasonably refuses to submit to treatment or an
examination unless the refusal is justified by circumstances. Unreasonableness is to be judged by an
objective standard. Justification is a subjective standard to be evaluated under the totality of the
circumstances. Claimant bears the burden if Employer shows unreasonableness. Here, it was
justifiable for Claimant to refuse to submit to a second examination by Dr. Sanders when there had
been "bad rapport" between Claimant and physician and there was no reason to believe
that Dr. Sanders' initial diagnosis would be altered.
Employer also argued that a psychological impairment caused by an
"imagined condition" cannot be the basis for a finding of disability. The Board found,
however, that although there was no late stage Lyme disease present, the early stage disease was the
precipitating factor and supported a finding of temporary total disability due to psychological
impairment. The Board distinguished Hike v. Billeting Fund, 13 B.R.B.S. 1059 (1981),
which involved a completely imagined working condition. The ALJ properly determined that the
psychological condition prevented Claimant from pursuing any alternate employment after a thorough
consideration of the evidence and determination of credibility.
[Topics 7.3.1 Medical Benefits: Medical Treatment Provided by Employer:
Necessary Treatment; 7.7 Medical Benefits: Unreasonable Refusal; 2.2.4
Definitions: Injury: Physical Harm as an Injury]
In Gladney v. Ingalls Shipbuilding, Inc., ___ B.R.B.S. ___, BRB No.
98-1481 (Aug. 4, 1999), the Board considered when a claimant is to be considered a "person
entitled to benefits" for purposes of § 33(g). That section states that if a person entitled to
benefits enters into a settlement with a third party without prior approval from the employer, and the
amount of settlement is less than the person would be entitled to under the LHWCA, that person is
barred from seeking compensation under the LHWCA. Here, Claimant had settled with various
asbestos manufacturers, but had not obtained the approval of Employer in so doing; further, Claimant,
although diagnosed with asbestosis, was not disabled.
The Board held that entitlement to benefits arises when the disability arises, not at
the time a person is entitled to medical benefits, is diagnosed with an occupational disease, or at
exposure to the occupation hazard.
Medical benefits do not trigger the bar of § 33(g) because, as considered
in Harris v. Todd Pacific Shipyards Corp., 28 B.R.B.S. 254 (1994), aff'd and
modified on recon. en banc, 30 B.R.B.S. 5 (1996)(Brown and McGranery, J.J., dissenting), the
language of subsection (1) specifically mentions only compensation, while subsection (2) additionally
refers to medical benefits. The plain language of the LHWCA requires that only entitlement to
compensation, not medical benefits, triggers the bar.
Harris also applied the Supreme Court's decision in Estate of
Cowart v. Nicklos Drilling Co., 505 U.S. 469, 112 S. Ct. 2589 (1992), to occupational disease
cases and "time of injury." An employee does not sustain an injury until he is aware of the
relationship between the disease, the disability suffered, and the employment, and the impact on his
wage earning capacity or, if a voluntary retiree, his physical ability; therefore, until such awareness
arises, a person is not entitled to benefits under the Act, and is not barred by § 33(g) if a
settlement is entered without prior approval.
The Board additionally interpreted the holding of the Supreme Court in
Metropolitan Stevedore Co. v. Rambo [Rambo II], 521 U.S. 121, 31 B.R.B.S. 54
(CRT)(1997) as it applies to nominal awards and occupational diseases. Nominal awards are not
based merely upon exposure, but instead upon proof of a significant potential for diminished earning
capacity in the future. The type of injury, be it trauma or disease, is irrelevant. Here, the parties had
stipulated that Claimant had not at the time suffered any loss of wage earning capacity, nor had any
evidence of potential future loss been produced. Therefore, Claimant was not entitled to a nominal
award based merely upon exposure to asbestos, and was not therefore a "person entitled to
benefits."
The propriety of allowing Claimant to withdraw his claim without prejudice was
not challenged on appeal.
[Topics 2.2.13 Definitions: Injury: Occupational Diseases: General Concepts;
33.7.2 Compensation for Injuries Where Third Parties Are Liable: Ensuring Employer's
Rights- Written Approval of Settlement: The Supreme Court- Qualifying for Benefits;
33.7.4 Compensation for Injuries Where Third Parties Are Liable:Ensuring
Employer's Rights- Written Approval of Settlement: Medical Benefits]
In Smith v. Shell Offshore, Inc., ____ B.R.B.S. ____, BRB No. 99-
123 (Oct. 7, 1999), Claimant contended she was the illegitimate daughter of a decedent who died
during the course of his employment on February 2, 1978. Claimant filed a claim for death benefits on
May 20, 1997, within one year of her twenty-first birthday. Employer filed a motion for summary
judgement on the ground that Claimant's claim was untimely, as she should have filed her claim within
one year of her eighteenth birthday. The administrative law judge granted the motion relying on 33
U.S.C. § 913(a), which provides a one-year statute of limitations for the filing of a claim.
However, the statute of limitations does not begin to run against a minor until he or she becomes of age
pursuant to Section 13(c), 33 U.S.C. § 913(c). Since the word "minor" and the
phrase "becomes of age" are not defined in the LHWCA, the administrative law judge
relied on the LHWCA's definition of "child" to conclude that a minor "becomes of
age" under the Act when he or she turns 18.
The Board reversed the administrative law judge's decision to grant Employer's
motion for summary judgment based on findings that: 1) although the administrative law judge stated
that the use of "child" as defined in Section 2(14) results in a child becoming "of
age" at age 18, he neglected to consider that a child, under the LHWCA's definition, can be
almost any age depending on other factors; 2) treatises indicate that "child" and
"minor" are not necessarily interchangeable; and 3) Congress did not use the term
"child" in Section 13(c).
Next, the Board set out to define the terms "minor" and "of
age" as they appear in the LHWCA. The Board first recognized that under the rules of statutory
construction, when interpreting a statute, the starting point is the plain meaning of the words of the
statute. In this case, the words "minor" and the phrase "becomes of age" were
not defined by Congress. Undefined terms have been defined by using the common meaning of a term
or by relying on appropriate state law when there is no common meaning. Previously, the Board has
determined that resorting to state law is appropriate for an undefined term if that term does not have a
clear and common meaning and reasonable doubt exists as to the proper meaning. Concluding that
there was no "federal common law" and that the term "minor" is neither
defined by the LHWCA nor has a clear common meaning, the Board held that the use of state law is
appropriate to determine when an individual is entitled to file a claim under the LHWCA in her own
right.
In Spitalieri v. Universal Maritime Services, ____ B.R.B.S. ____,
BRB No. 98-743 (Oct. 7, 1999), Claimant sustained work-related injuries in an accident on April 10,
1992. At hearing, the administrative law judge found that Claimant was temporary totally disabled due
to the work injuries, and awarded benefits in November of 1993. On July 10, 1996, Employer filed a
motion for modification pursuant to Section 22 of the Act, 33 U.S.C. § 922, on the ground that
Claimant's condition had changed and he was no longer disabled. After modification proceedings, the
administrative law judge found that Claimant was no longer disabled as of August 31, 1994. He also
found that Claimant sustained a work-related hearing loss of 6.9 percent caused by the 1992 injury and
was entitled to a hearing aid at the Employer's expense.
Claimant filed a motion for reconsideration, and the administrative law judge
found that Claimant is entitled to disability benefits for the hearing loss, but that since Section 22
provides for a credit for an overpayment of benefits, those benefits were subsumed by Employer's
overpayment of temporary total disability benefits since August 31, 1994. Claimant appealed to the
Board. The Board held that the administrative law judge erred in terminating claimant's temporary total
disability benefits retroactively. The administrative law judge credited the February 21, 1996 opinion of
Dr. Sweraingen to find that Claimant was no longer disabled, yet relied on the opinion of Claimant's
treating physician that Claimant reached maximum medical improvement on August 31, 1994, to
terminate benefits. Accordingly, the Board held that February 21, 1996, was the earliest date that
compensation could be terminated. Moreover, the Board held that since the decision on modification
terminated Claimant's temporary total disability benefits and did not decrease them, and as the plain
language of Section 22 prohibits an order on modification from affecting compensation previously paid,
the termination cannot be effective prior to the date of the decision on modification.
Employer contended in its motion for reconsideration that the termination of
benefits is a "decrease" in compensation within the meaning of Section 22 such that it is
entitled to a credit for its overpayment of temporary total disability benefits against its liability for the
hearing loss. The Board explained that in the event an award of benefits is modified, Section 22
mandates that prior payments of compensation shall not be affected by the modifying order except in
two circumstances, where there has been an increase or decrease in the compensation rate awarded.
Section 22 specifically allows a credit against unpaid compensation due where the compensation rate
has been decreased. Noting that the statutory provision uses both the words "terminate"
and "decrease" in the same sentence, the Board held they must have different meanings
which must be used consistently within the same statutory provision. Accordingly, based on the plain
language of the statute, the Board held that the termination of benefits is not a "decrease"
within the meaning of Section 22 such that the order terminating compensation may be effective prior to
the date of the administrative law judge's order. The Board rejected Employer's contention that the
cases cited in the Board's initial decision, Stevedoring Services of America v. Eggert, 953
F.2d 552, 25 B.R.B.S. 92 (CRT)(9th Cir. 1992); and Parks v. Metropolitan Stevedore
Co., 26 B.R.B.S. 172 (1993), do not support this conclusion. Lastly, the Board held that
Employer was not entitled to a credit pursuant to either Section 22 or 14(j), as there was no
overpayment in the case.
[Topic 22.1 Modification Generally]
In Hansen v. Caldwell Diving Co., ____ B.R.B.S. ____, BRB No.
98-1596 (Sept. 7, 1999), Claimant, a commercial diver for Caldwell, suffered work-related injuries
while working aboard the barge COHEN 165. At the time of the accident, Claimant served as a
member of a dive team employed to facilitate the barge's mission, which was installing underwater
cable. The administrative law judge found that COHEN 165 was a vessel, the Claimant's work as a
diver furthered the mission of the vessel, and that Claimant's connection to the vessel was substantial in
nature and duration. Thus, the administrative law judge found that Claimant was a "member of a
crew" of a vessel under Section 2(3)(G) of the Act, 33 U.S.C. § 902(3)(G)(1994), and
thus not entitled to benefits under the LHWCA.
Claimant appealed to the Board arguing that the administrative law judge erred in
finding that he had a connection to COHEN 165 that was substantial in either nature or duration. The
Board affirmed the administrative law judge's finding that Claimant's connection to the COHEN 165
was substantial in nature and duration, and thus affirmed his conclusion that Claimant was a
"member of a crew" of a vessel and excluded from coverage under the LHWCA.
According to the Board, the administrative law judge correctly determined that
Claimant's work aboard COHEN 165 was substantial in nature. Even though Claimant neither assisted
in the barge's navigation while underway nor lived onboard, he worked on the barge daily for four
weeks prior to his accident preparing it for the assignment of underwater cable installation. This
preparation work included setting up and maintaining dive equipment, maintaining the compressor,
surveying the surrounding waters, and performing and assisting in underwater dives. Claimant
conceded this work was essential to the completion of the COHEN 165's mission. Further, the
administrative law judge correctly found that Claimant's work was maritime in nature, regularly exposing
him to the perils of the sea.
Additionally, this conclusion is consistent with applicable law. In Harbor
Tug & Barge Co. v. Papai, 117 S.Ct. 1535, 31 BRBS 34 (CRT)(1997), the Supreme Court
established the following test to determine whether an employee has a substantial connection to a
vessel: "for the substantial connection requirement to serve its purpose, the inquiry into the nature
of the employee's connection to the vessel must concentrate on whether the employee's duties take him
to sea." The Court held the claimant in Papai was not a seaman under this test because
he was hired for one day to paint a tugboat, and thus, his assignment was of a transitory and sporadic
connection to the vessel. On the other hand, the United States Court of Appeals for the Third Circuit
held that an employee's connection to a vessel was substantial in nature when a commercial diver's
work, namely a 10 day job to build an artificial reef, was necessary for the successful completion of the
mission of the vessel. See Foulk v. Donjon Marine Company, Inc., 144 F.3d 252 (3d Cir.
1998).
The Board also affirmed the administrative law judge's determination that
Claimant's connection to the COHEN 165 was substantial in duration. Claimant began his preparatory
work four weeks prior to his injury, and testified that the actual laying of the cable would have taken 2
to 3 weeks had he not been injured. The administrative law judge found that seven weeks to complete
the mission was of substantial duration. This conclusion is consistent applicable law. For instance, in
Chandris v. Latsis, 515 U.S. 347, 363 (1995), the Court held that "in evaluating the
employment-related connection of a maritime worker to a vessel in navigation, courts should not
employ a 'snapshot' test for seaman status, inspecting only the situation as it exists at the instant of
injury; a more enduring relationship is contemplated by the jurisprudence." In Foulk,
the court did not evaluate the employee's connection to the vessel at the moment of injury, but rather,
considered his intended relationship as if he had completed the mission uninjured. See Foulk,
144 F.3d at 259.
[Topic 1.4.1 LHWCA v. Jones Act Generally; 1.4.2 Master/member of the Crew
(seaman); 1.4.3 Vessel]
In Gacki v. Sea-Land Service, Inc., ___ B.R.B.S. ___, BRB No. 97-
1755 (Aug. 27, 1998), Claimant, while working as a mechanic for the employer, sustained multiple
serious injuries when a tire he was changing exploded. After Claimant filed a claim for permanent total
disability benefits and continuing medical benefits, the administrative law judge found that Claimant
established a prima facie case of total disability based on the medical evidence of record.
Additionally, he found that Employer failed to rebut Claimant's contention because it offered no
evidence of suitable alternate employment and because he credited Claimant's physician, Dr. Rosa,
over Employer's medical experts. Therefore, the administrative law judge awarded claimant permanent
total disability and medical benefits. Employer appealed this decision to the Board, contending
Claimant had no disability and can return to his usual work without restrictions. Employer also argued
that the ALJ's reason for discrediting its witnesses is irrational and that Dr. Rosa's opinion is not entitled
to the weight he gives it.
Under the LHWCA, a claimant has the burden of establishing the nature and
extent of his disability by establishing a prima facie case that he cannot perform his usual work due to
his injury. If the claimant meets this burden, the employer has the burden of presenting evidence of the
availability of suitable alternate employment, thereby establishing the claimant's disability is, at most,
partial. Here, Dr. Rosa stated Claimant cannot return to his usual work based on the injuries he
sustained. The remaining medical experts, including an impartial orthopedic surgeon selected by the
Department of Labor, who were aware of the serious nature of Claimant's injuries, concluded that
Claimant could return to his usual work and that he does not have any residual disability. In determining
Employer failed to overcome Claimant's prima facie case of total disability, the ALJ credited
Dr. Rosa's opinion, rejecting the opinions of the other physicians because they did not know Claimant's
usual job duties.
The Board held that it is not rational for the ALJ to reject the medical opinions of
Employer's experts as well as that of the impartial examiner on this basis. Because those physicians
determined that Claimant has no disability and no work restrictions, it is irrelevant whether they were
aware of Claimant's job duties as a mechanic. These experts believed claimant to be fully recovered
with no loss of ability, and thus, if he is determined to be restriction-free, he can do anything he could
do before the injury, and any comparison between his work requirements and his residual abilities is
immaterial. See Goins v. Noble Drilling Corp., 397 F.2d 392 (5th Cir. 1968); Howell
v. Einbinder, 350 F.2d 442 (D.C. Cir. 1965). For this reason, the Board vacated the
administrative law judge's award of benefits and his determination that Claimant established a
prima facie case of total disability, and remanded the case for further consideration. If, on
remand, the administrative law judge determines that Claimant cannot return to his usual work, then
Claimant is entitled to total disability benefits because Employer has not presented evidence of suitable
alternate employment.
In Compton v. Avondale Industries, Inc., ___ B.R.B.S. ___, BRB
No. 99-118 (Oct. 8, 1999), Claimant, a sandblaster/painter for Employer, was injured during working
hours on Employer's property. Claimant alleged that he left his work area to find a broom and that
while searching for the broom below deck, he fell through a hole that led to a ballast tank.
In contrast, Employer alleged that the Claimant had left his work area in order to
smoke marijuana and was injured by falling from a ladder as he attempted to leave the ballast tank. In
support of its contentions, Employer presented evidence that the path between Claimant's work area
and the place in which Claimant was found was obstructed, that the distance between the two areas
was 300 feet, that the area in which Claimant was located was "powerless and dark" and
that a half-smoked marijuana cigarette was found in the same compartment as Claimant. Further,
marijuana and rolling papers were discovered in Claimant's lunch box. Finally, the Employer presented
testimony that considering the size of the hole through which Claimant alleged he fell, and Claimant's
physical size and stature, Claimant's physical injuries were inconsistent with his explanation for them.
The administrative law judge found Claimant's testimony unworthy of credit and
found the marijuana-smoking theory more plausible. The administrative law judge further found that
even if the Claimant had been injured while looking for a broom, he searched in an unreasonable area.
The administrative law judge concluded that Claimant had been injured in what was described as an
"unauthorized/unsanctioned personal mission which did not benefit his employer."
Therefore, the administrative law judge concluded that Claimant was not injured while in the course of
employment and was not entitled to benefits.
The Board noted that, in order for an injury to be found to be in the course of
employment, the injury must take place at a time and place within the boundaries of the employment
and while the claimant is involved in an "activity whose purpose is related to the
employment." The Board further observed that the Section 20(a) presumption was applicable to
this issue.
In this case, the issue was whether the injuries occurred while Claimant was
engaged in an activity related to work. Claimant contended that the administrative law judge erred in
finding that the presumption in favor of coverage had been successfully rebutted by Employer's
circumstantial evidence. The Board noted that circumstantial evidence may be considered substantial
evidence and may be relied on by the administrative law judge. The Board considered the evidence
and testimony relied upon by the administrative law judge and concluded that his decision was
supported by substantial evidence. The Board noted that Claimant was acting for personal reasons,
was violating Employer's policy regarding the use of drugs and alcohol, and was participating in an
illegal activity. The Board held that "claimant's detour from his job to a remote area of the ship to
smoke marijuana was a personal frolic which served no purpose related to his employment and was
sufficient to sever the employment nexus." On this basis, the Board concluded that Claimant was
not injured in the course of his employment and affirmed the administrative law judge's denial of
benefits.
[Topic 2.2.2 Arising Out Of Employment; 20.1 Presumptions]
In Smith v. Jones Oregon Stevedoring Co., ___ B.R.B.S. ___, BRB
Nos. 99-0127 and 99-0127A (Oct. 7, 1999), Claimant's husband died of mesothelioma after having
been exposed to asbestos in the workplace. Claimant filed a longshore claim against several of her
husband's former employers and also filed civil actions against manufacturers and distributors of
asbestos. Subsequently, Claimant entered into two third-party settlements, one with the Center for
Claims Resolution (CCR) and another with Bartells Company (Bartells). She subsequently consented
to dismissal of the civil actions with prejudice. The Bartells settlement agreement contained a provision
requiring approval by the workers' compensation carrier. The CCR settlement agreement did not
contain such a provision; however, a letter from CCR counsel to Claimant's counsel states that the
agreement was conditioned upon carrier approval. All settlement funds were paid into a trust account.
Thereafter, Claimant's counsel requested written approval of the settlements from the employers, none
of whom approved the settlements. Employers contested liability pursuant to 33(g) and, during the
course of the hearing, Claimant's counsel returned the settlement funds to CCR and Bartells.
Relying on Barnes v. General Ship Service, 30 B.R.B.S. 193 (1996),
the administrative law judge concluded that Employer approval was a condition precedent to each of
the agreements, but that such condition was waived when the claimant consented to the dismissal with
prejudice of the pending civil actions. The administrative law judge also found that the settlements
were fully executed, as CCR and Bartells had paid the funds to Claimant and Claimant had consented
to the dismissal of the actions. He also concluded that neither the return of the settlement funds to CCR
and Bartells nor the lack of the approval of the settlements by the Oregon probate court relieved
Claimant of the Section 33(g) bar. As the administrative law judge found that the amount of money for
which Claimant settled the claims against CCR and Bartells was less than the amount which she could
have received under the LHWCA, and as Claimant settled the claims without the consent of
Employers, Claimant's claim for compensation was barred under Section 33(g).
On appeal Claimant alleged that the agreements were voided when Employers
withheld approval of them and that the lack of approval by the Oregon probate court made the
agreements incapable of being fully executed. Section 33(g) requires that if Claimant settles for less
compensation than he or she is entitled to under the LHWCA, Claimant must obtain written approval of
the third-party settlement prior to its execution. The Board distinguished the instant case from
Barnes, because in Barnes the court found that cover letters which provided for the
employer consent contingency did not create a condition precedent.
In the instant case, the administrative law judge specifically found that the CCR
letter containing Employer consent contingency had the effect of placing that condition upon the
settlement agreement. Also, the Bartells settlement agreement stated a contingency upon employer
consent. Further, unlike the situation in Barnes, in the instant case the proceeds of the
settlements had been returned. Although Claimant did consent to a dismissal of her civil actions with
prejudice, this dismissal had no effect upon Employers' rights or obligations. Accordingly, the Board
held that Employer did not satisfy its burden of proving that the settlement agreements into which
Claimant entered had been fully executed prior to gaining the approval of Employer in violation of
Section 33(g). The Board agreed with the administrative law judge that the Oregon statute relied upon
by the claimant was inapplicable to the instant case. Therefore, the case was remanded for
consideration of the remaining issues, including determination of the responsible operator.
[Topic 33.7 Ensuring Employer's Rights Written Approval of Settlement]
In Ricks v. Temporary Employment Services, Inc., ____ B.R.B.S.
___, BRB No. 98-1227 (June 8, 1999), a borrowed employee case, the Board addressed whether a
"lending employer" could be held liable for the workers' compensation benefits under the
LHWCA of a "borrowed employee." Ricks was employed by Temporary Employment
Services, Inc. ("TESI"), a temporary employment company that provides labor to
shipyards. While on assignment at Trinity Marine Group, Inc. ("Trinity"), Ricks hit his head
and back on the ground after tripping over a piece of steel. An ALJ held that Trinity was liable for
Claimant's temporary total disability compensation from January 11, 1993 to January 6, 1996, based
on the borrowed employee doctrine. On appeal, the Board vacated the administrative law judge's
decision with respect to Trinity's liability and ordered the administrative law judge to consider the
contractual provisions between TESI and Trinity with regard to indemnification. On remand, the
administrative law judge found that the indemnity clause between TESI and Trinity was ambiguous and
relied on the parol evidence of TESI's president, who testified that he did not believe that Trinity was
liable for Ricks' benefits based on the contract between the two; further, the administrative law judge
found that Trinity was not liable because TESI had indemnified Trinity from any claims arising in
connection with work performed at Trinity's shipyard.
On second appeal, TESI and its insurer, Maryland Casualty Company
("Maryland"), challenged the administrative law judge's finding that Trinity was not liable
for Ricks' compensation. First, the Director and Maryland argued that the administrative law judge
lacked jurisdiction to interpret the relevant contractual provisions in order to determine the responsible
employer. The Board held that the administrative law judge had jurisdiction; administrative law judges
have the authority to hear and resolve insurance issues that are necessary to the resolution of a claim
under the LHWCA. Citing Schaubert v. Omega Service Industries, Inc., 31 B.R.B.S. 24
(1997); and Barnes v. Alabama Dry Dock & Shipbuilding Corp., 27 B.R.B.S. 188 (1993).
The Board also cited Pilipovich v. CPS Staff Leasing, Inc., 31 B.R.B.S. 169 (1997), in
which the Board held that an administrative law judge should, when in the interest of judicial economy,
resolve issues of contractual indemnity and insurance between the employers and insurers. Because the
issue of carrier liability "arises out of, and is ancillary to, the responsible employer issue,"
the issue was properly before the administrative law judge.
Second, the Board addressed whether parties can contractually abrogate the
liability of a responsible employer. The Board cited Total Marine Services, in which the Fifth
Circuit held that "a borrowing employer is required to compensation benefits of its borrowed
employee, and, in the absence of a valid and enforceable indemnification agreement, the borrowing
employer is required to reimburse an injured worker's formal employer for any compensation benefits it
has paid to the injured worker." Total Marine Services, Inc. v. Director, OWCP, 87
F.3d 774, 779, 30 B.R.B.S. 62, 66 (CRT), reh'g en banc denied, 99 F.3d 1137 (5th Cir.
1996). Therefore, the Board held that TESI, as the lending employer, and Maryland, as it's insurer,
could be liable to Ricks under a contract indemnifying the Trinity, the borrowing employer.
Third, TESI argued that Trinity had not explicitly raised the issue of the indemnity
clause before the ALJ, and thus had waived its right to use it as a defense. However, the Board noted
that it had previously ruled that Trinity was not barred from using the indemnity clause as its defense to
liability because, at the original hearing before the ALJ, Trinity had maintained that TESI was
responsible for Ricks' workers' compensation benefits due to the contract between TESI and Trinity.
That Trinity did not explicitly mention the "indemnification clause" was not persuasive and
the former holding by the Board was the law of the case.
Fourth, TESI argued that the administrative law judge erred in considering the
parol testimony of TESI's president in interpreting the contract between TESI and Trinity. The
administrative law judge had found that the indemnification clause in the contract was ambiguous; the
last section of the paragraph said that TESI would indemnify Trinity for any claims "in connection
with the Work occurring prior to acceptance of the Work caused by the alleged negligence of willful act
of the Contractor." The Board noted that it previously has affirmed the admission of parol
evidence with regard to contracts ancillary to claims under the LHWCA, in which an administrative law
judge had determined that the terms of the contract were ambiguous. Citing, Sellman v.
I.T.O. Corp. of Baltimore, 24 B.R.B.S. 11 (1990) (Brown, J., dissenting on other grounds),
rev'd in part on other grounds, 954 F.2d 239, 25 B.R.B.S. 101 (CRT)(4th Cir.),
modified in part on reh'g, 967 F.2d 971, 26 B.R.B.S. 7 (CRT) (1992), cert.
denied, 507 U.S. 984 (1993).
Fifth, the Board ruled on the merits of the instant case. Noting that the parties
acknowledged that Ricks was a borrowed employee, the Board stated that the borrowing employer
would be liable unless there was a valid and enforceable agreement indemnifying the borrowing
employer. The central issue was whether Maryland's coverage of TESI extended to employees
borrowed by Trinity. Maryland argued that the indemnification clause would only apply if TESI had
acted negligently or willfully to cause Ricks' injury; however, the BRB disagreed with this contention
and found that the phrase, which ended, "caused by the alleged negligence or willful act of
[TESI]," but began with the word "including," was meant to be exemplary, not
exclusive. Given that wording, in addition to the testimony of TESI's president, the BRB held that the
parties' intention was for TESI to indemnify Trinity for any and all claims arising out of injury or death or
loss of property, which would include any claim arising out of the negligence or willful act of TESI.
Further, the Board upheld the administrative law judge's findings that: (1) the contract between TESI
and Maryland required TESI to carry workers' compensation insurance for claims under the LHWCA;
(2) TESI did in fact have a policy with the insurer for workers' compensation coverage under the
LHWCA; (3) Claimant received salary from TESI and TESI reported CL's payroll information to
Insurer to be included in the policy; and (4) the parties stipulated that the insurance policy contract
contained a waiver, which, in effect, provided that the insurer would not attempt to recover payments
from Trinity. Thus, the BRB held that the ALJ correctly determined that TESI and the Insurer were
responsible to protect and indemnify Trinity from liability for workers' compensation claims brought
under the LHCWA, and were liable for the Claimant's benefits, based on the relevant contracts, the
stipulation of the parties that the Insurer waived its right to recover payments from Trinity, and the
testimony of TESI's president. The BRB affirmed the ALJ's findings that: TESI agreed to provide
longshore workers' compensation insurance coverage which inured to the benefit of Trinity, that the
policy between Maryland and TESI extended insurance coverage to Trinity for injuries sustained by its
borrowed employees covered under the LHWCA, and that Maryland, pursuant to the policy it issued
to TESI, had waived its right to seek reimbursement from Trinity.
Finally, the Board addressed a fee petition submitted by Trinity's counsel. The
Board held that it was without statutory authority to award an attorney's fee to an employer's counsel
because it was not a "'question in respect of a claim' within the meaning of Section 19(a) of the
LHWCA and neither Section 928, nor any other provision of the LHWCA provides for an award of
any attorney's fee to an employer."