Stevedoring Services of America v. Price
| Decision Date | 11 May 2004 |
| Docket Number | No. 02-71578.,No. 02-71207.,02-71207.,02-71578. |
| Citation | 382 F.3d 878 |
| Parties | STEVEDORING SERVICES OF AMERICA; Homeport Insurance Co., Petitioners, v. Arel PRICE; Eagle Pacific Insurance Company; Director, Office of Workers Compensation Programs, Respondents. Arel Price, Petitioner, v. Stevedoring Services of America; Homeport Insurance Co.; Eagle Pacific Insurance Company; Director, Office of Workers Compensation Programs, Respondents. |
| Court | U.S. Court of Appeals — Ninth Circuit |
John Dudrey, Williams Fredrickson, LLC, Portland, OR, for the petitioners and cross-respondents Stevedoring Services of America and Homeport Insurance Company.
Charles Robinowitz, Portland, OR, for the respondent and cross-petitioner Arel Price.
Russell A. Metz, Metz & Associates, P.S., Seattle, WA, for the respondents Stevedoring Services of America and Eagle Pacific Insurance Company.
On Petition for Review of an Order of the Benefits Review Board.
Before TROTT, FISHER and GOULD, Circuit Judges.
The opinion filed May 11, 2004, is amended as follows:
At slip op. 6000, line 17, after the citation to ITO Corp. v. Green, 185 F.3d 239, 243 (4th Cir.1999), but before the citation to Rupert v. Todd Shipyards Corp., 239 F.2d 273, 276-77 (9th Cir.1956), add a citation to "Korineck v. Gen. Dynamics Corp., 835 F.2d 42, 43-44 (2d Cir.1987)."
At slip op. 6004, line 4, insert the following footnote after the sentence that ends with "(25 hours times $48 per hour)":
Stevedoring and Homeport argue that our reasoning contradicts Sestich v. Long Beach Container Terminal, 289 F.3d 1157 (9th Cir.2002). In Sestich, we held that the employee's permanent partial disability award was to be measured based on the difference between his pre-injury average weekly wages and his post-injury wage-earning capacity, rather than the difference between a hypothetical amount the employee could be earning in a different job absent the injury and his post-injury wage-earning capacity. Id. at 1160-61. Sestich acknowledged, however, that an employee's post-injury wage-earning capacity must be adjusted for inflation and general wage increases to allow for a meaningful comparison to an employee's pre-injury average weekly wage. Id. at 1161.
The hypothetical merely takes employee B's pre-injury (before his first injury) average weekly wage of $1000 and adjusts for inflation so that a meaningful comparison can be made to his post-injury (after the first accident) wage-earning capacity of $1200. Another way to understand the inflation adjustment is as follows. Employee B's pre-injury average weekly wage is $1000. The inflation rate in the hypothetical is 192% ($48 divided by $25). Thus, employee B's inflation-adjusted pre-injury average weekly wage is $1920 (192% of $1000). Comparing this figure to his post-injury wage-capacity of $1200 reveals that at the time of the second accident employee B continues to have a diminished earning capacity as a result of the first accident.
At slip op. 6004, line 17, insert the following paragraph before the paragraph beginning with "In sum,":
Crum v. General Adjustment Bureau, 738 F.2d 474 (D.C.Cir.1984), is consistent with our conclusion here. In Crum, the court rejected the employer's argument that awarding the employee a permanent total disability award after he had already received a permanent partial disability award "would result in compensation for more than 100 percent disability." Id. at 478. The court reasoned that the permanent total disability award would be "adjusted so as to take into account the prior award" when "the benefits for a total disability are calculated by evaluating the wage-earning capacity that remains after the partial permanent disability." Id. at 480.[FN] Contrary to Stevedoring's and Homeport's argument, Crum is consistent with the result Brady-Hamilton contemplated if on remand the employee's wage-earning capacity was found to have increased: the employee would retain the full amount of both awards, because the second award would be based on the employee's residual earning capacity after the first accident.
[FN] Although we use the term "adjustment" in a different sense than the court did in Crum, we reach the same conclusion as in Crum through similar reasoning. In this case, we use "adjustment" in accordance with the parties' usage — to refer to the credit that the ALJ and Board gave to Stevedoring for ongoing payments under Price's prior permanent partial disability award.
At slip op. 6004, line 26, delete, "Without the prior disability, he would be capable of earning more than he was making at the time of the second injury." Also delete "Thus," at the beginning of the next sentence and capitalize the "t" in "the."
With these amendments, the panel has voted to deny petitioners' petition for panel rehearing and petition for rehearing en banc, filed June 2, 2004. The full court has been advised of the petition for rehearing en banc, and no judge of the court has requested a vote on whether to rehear the matter en banc. Accordingly, the petition for panel rehearing and petition for rehearing en banc is DENIED.
This case requires us to decide the proper method for calculating an injured employee's average annual earnings under the Longshore and Harbor Workers' Compensation Act ("LHWCA"), 33 U.S.C. § 901 et seq. (2001), and to what extent the LHWCA limits an employee's total disability compensation from multiple awards when the employee has received a permanent partial disability award and a subsequent permanent total disability award. We adhere to our holding in Matulic v. Director, OWCP, 154 F.3d 1052, 1058 (9th Cir.1998), that calculating an employee's average annual earnings under 33 U.S.C. § 910(a) does not excessively overcompensate him when he has worked more than 75 percent of the workdays in the year preceding his injury. Furthermore, we hold that when an increase in an employee's average weekly wage between the time of a prior permanent partial disability and subsequent permanent total disability is not caused by a change in his wage-earning capacity, permitting him to retain the full amount of both awards does not result in any "double dipping." We also hold that 33 U.S.C. § 906(b)(1) delineates the maximum compensation that an employee may receive from each disability award, not from all awards combined.
On March 27, 1979, Arel Price injured his lower back and elbow when he fell several feet from a broken ladder while working for Stevedoring Services of America ("Stevedoring"). Price was awarded permanent partial disability benefits of $196.01 per week under the LHWCA.1 SAIF Corporation, the employer's insurance carrier in 1979, is responsible for those benefits. During the year preceding the injury, Price had worked as a longshoreman and a commercial fisherman, earning an average weekly wage of $627.88. Administrative Law Judge Brissenden determined that Price's residual wage-earning capacity after the injury was $333.87 per week.2
Price returned to work in 1981 as a longshoreman after undergoing decompressive back surgery. He could no longer work as a fisherman because it was too hard on his back, and he was restricted to light jobs as a longshoreman. After another work-related accident in 1991 when a chain fell on him, Price underwent a second decompressive back surgery. Although he returned to work in 1992, Price's back got worse over the years to the point that he was taking pain medication every day on a regular basis. Upon the advice of his doctor, Price stopped working on July 2, 1998.
In October 2000, Administrative Law Judge Vittone ("ALJ") awarded Price permanent total disability benefits as of July 3, 1998. He ordered Homeport Insurance Company ("Homeport"), Stevedoring's insurance carrier in 1998, to pay compensation based on Price's 1998 average weekly wage, which the ALJ calculated to be $1156.15 under 33 U.S.C. § 910(a). The ALJ permitted Price to retain his 1979 permanent partial disability benefits but ruled that 33 U.S.C. § 908(a) limits the combined amount of Price's 1979 and 1998 awards to two-thirds of Price's 1998 average weekly wage, relying on our decision in Brady-Hamilton Stevedore Co. v. Director, OWCP, 58 F.3d 419 (9th Cir.1995).
The Benefits Review Board ("Board") determined that Price's 1998 average weekly wage was $1525.90, not $1156.15, due to an error in the ALJ's method of calculation under § 910(a).3 The Board affirmed the ALJ's decision in all other respects. Specifically, with respect to the maximum limit, the Board stated, "[C]oncurrent awards combined cannot exceed 66 2/3 percent of [a] claimant's average weekly wage at the time of the second injury." Applying this limit to Price's case, the Board concluded, "As claimant is entitled to two-thirds of his 1998 average weekly wage as compensation for his permanent total disability, Homeport's liability will be reduced by the amount of the ongoing permanent partial disability payments, as otherwise claimant would receive[ ] more than that allowed under Section 8(a)."4
In their petition for review, Stevedoring and Homeport contend that the ALJ and Board applied the wrong statutory provision to calculate Price's 1998 average weekly wage. In his cross-petition, Price argues that Homeport is not entitled to any credit for SAIF's payments to Price.5 We conclude that the ALJ and Board properly applied § 910(a) to calculate Price's 1998 average weekly wage but erred in reducing Price's 1998 award by the amount of SAIF's payments under his 1979 award.
The Board must accept the ALJ's findings of fact if they are supported by "substantial evidence." 33 U.S.C. § 921(b)(3); Container Stevedoring Co. v. Director, OWCP, 935 F.2d 1544, 1546 (9th Cir.1991). We conduct an independent review of the administrative record...
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