Hastings v. Earth Satellite Corp.
| Decision Date | 14 October 1980 |
| Docket Number | No. 78-1759,78-1759 |
| Parties | Robert HASTINGS, Petitioner, v. EARTH SATELLITE CORPORATION and Continental Casualty Company, Director, Office of Workers' Compensation Programs, U. S. Dept. of Labor, Respondents. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Petition for Review of an Order of the U.S. Dept. of Labor Benefits Review Board.
John C. Duncan, III, Washington, D. C., for respondents Earth Satellite Corp., et al.
Mary A. Sheehan, Atty., Dept. of Labor, Washington, D. C., for respondent Director, Office of Workers' Compensation Programs.
Cornelius S. Donoghue, Jr., and Gilbert T. Renaut, Attys., Dept. of Labor, Washington, D. C., entered appearances for respondent Director, Office of Workers' Compensation Programs.
William J. Donnelly, Jr., Washington, D. C., entered an appearance for respondents Earth Satellite Corp., et al.
Before McGOWAN and WILKEY, Circuit Judges, and GESELL, * United States District Judge for the District of Columbia.
Opinion for the Court filed by Circuit Judge McGOWAN.
McGOWAN, Circuit Judge:
This case presents for review an order of the United States Department of Labor's Benefits Review Board awarding compensation to petitioner Robert Hastings. At issue are complex questions of calculating benefits under the District of Columbia Workmen's Compensation Act. 1 For the reasons set forth below, we think the Board erred in certain respects in computing petitioner's benefits. We therefore reverse in part, and remand.
The facts of this case, set forth here as found by an Administrative Law Judge (ALJ), are not challenged in this petition for review. Petitioner Hastings was the secretary, treasurer, and comptroller of Earth Satellite Corp., a District of Columbia consulting firm. His annual salary was $30,000. Earth Satellite interprets aerial photography for private companies and the government. Earth Satellite, in which Hastings had invested heavily, needed an infusion of new capital early in 1971. Hastings, under great pressure to put together a financial package, found himself working an average of 60 hours per week.
Hastings suffered a stroke on April 1, 1971. After hearing conflicting medical testimony, the ALJ found that the stroke was caused by job stress.
Hastings convalesced for ten months. He returned to work on February 8, 1972, and was employed on a part-time basis for about two years. Earth Satellite paid Hastings at the same rate as his previous salary, prorated for the number of hours he worked. Although Hastings worked an average of only 50 hours per month over the two-year period, his time on the job gradually increased between 1972 and 1974. 2
In March 1974, however, Hastings experienced shortness of breath. He was hospitalized on March 14, and nearly died. A physician determined that Hastings was suffering from pulmonary emboli and phlebitis. The ALJ found, on the basis of conflicting medical evidence, that both ailments were caused by prolonged periods of sitting at work. Hastings is susceptible to a relapse of phlebitis if he sits for a prolonged period. Moreover, he continues to suffer residual effects of the stroke: fatigue, speech impairment, and reduced mental acuity. For all these reasons, Hastings' physician advised him not to resume similar work. 3
Hastings filed separate claims for the stroke and the emboli. 4 The ALJ heard evidence on both claims at the same hearing. The ALJ thought that compensation should be calculated by dividing Hastings' disabilities into three phases. The first was the period between April 1, 1971, and February 8, 1972. That was the time Hastings convalesced following his stroke. The second was the period between February 8, 1972, and March 14, 1974, when Hastings worked part-time for Earth Satellite. The third was the period after March 14, 1974, during which Hastings has been unable to work.
The Act requires the ALJ to calculate benefits by assessing both the magnitude and duration of Hastings' disability. Phase I was a period of "temporary-total" disability, according to the ALJ. Compensation for this kind of disability is set by section 8(b) of the Act, 33 U.S.C. § 908(b) (1976). 5 That section authorizes the payment of $70 6 or two-thirds of the claimant's average weekly wage, whichever is the lesser amount. Hastings' average weekly wage, based on his prior annual salary of $30,000, was about $577. The ALJ therefore awarded Hastings the statutory maximum of $70 per week of Phase I of his disability.
Phase II was characterized as a period of "permanent-partial" disability. Compensation for this kind of disability is governed by section 8(c) of the Act, 33 U.S.C. § 908(c) (1976). 7 That section authorizes payment of $70 or two-thirds of the difference between the claimant's former earning capacity and his current average weekly wage; once again, the lower amount is to be paid. Id. § 908(c)(21); see note 6 supra. The ALJ thought there was no need to determine the extent of Hastings' lost earning capacity because the $70 ceiling was clearly applicable. Accordingly, the ALJ awarded Hastings $70 per week for Phase II.
Phase III, the period following the emboli, was deemed by the ALJ to be a period of "permanent-total" disability. Compensation for this kind of disability is governed by section 8(a) of the Act, 33 U.S.C. § 908(a) (1976). 8 The statute requires paying the lesser of $210.54 9 or two-thirds of the disabled person's "average weekly wages." 10 Hastings earned $9,228.80 in the 12 months preceding the emboli. The ALJ calculated Hastings' average weekly wages simply by dividing $9,228.80 by 52: $177.48 per week. The ALJ thus awarded Hastings two-thirds of that amount $118.32 each week for life as compensation for the permanent-total disability.
The ALJ further ordered that the Phase II permanent-partial disability award (resulting from the stroke) should end at the time the Phase III permanent-total disability award (following the emboli) began. The ALJ held, finally, that Earth Satellite was liable only for 104 weeks of Phase III payments, and that the "special fund" established by the Act 11 must assume the obligation after 104 weeks.
Both Hastings and the Director, Office of Workers' Compensation Programs (the Director), appealed the ALJ's decision to the Benefits Review Board (the Board). Hastings contended that the ALJ erred in computing the salary upon which compensation should be based. The Director argued that the ALJ erred (1) in requiring the special fund to assume part of the employer's liability, and (2) in terminating the permanent-partial compensation for the stroke on the date Hastings suffered the emboli.
The Board rejected Hastings' argument, and the Director's first argument, and affirmed the ALJ in each respect. The Board did, however, accept the Director's second argument and endorsed concurrent awards for permanent-partial and permanent-total disability. The Board, accordingly, modified the ALJ's decision by requiring the employer to continue to pay $70 per week for permanent-partial disability until $24,000 had been paid, 12 notwithstanding the commencement of payments for permanent-total disability. We briefly summarize each of these decisions.
Hastings contended that the ALJ erred in determining the salary basis of payments for permanent-total disability. Hastings was earning $30,000 per year at the time of the 1971 stroke, and he argued that this figure, rather than his part-time earnings between the stroke and the emboli, should have been the basis for a permanent-total disability award.
The Board disagreed. It noted that the statute authorized payment of two-thirds of the claimant's "average weekly wages." See sections 8(a), 10 of the Act, 33 U.S.C. §§ 908(a), 910 (1976), quoted in notes 8, 10 supra. The Board held that the ALJ correctly computed average weekly wages of $177.48 by dividing Hastings' earnings for the year preceding the emboli $9,228.80 by 52. The Board thought this calculation was compelled by the language of the statute, namely, that the basis for compensation is the average weekly wage of the injured employee "at the time of the injury." Section 10(d) of the Act, 33 U.S.C. § 910(d) (1976) (emphasis added). That Hastings formerly earned a much higher salary was irrelevant, the Board held.
When a worker with a permanent-partial disability becomes totally and permanently disabled because of a combination of both disabilities, the employer at the time of the permanent-total disability is liable only for 104 weeks of compensation, id. § 8(f)(1), 33 U.S.C. § 908(f)(1) (1976), and the special fund assumes responsibility for the remaining payments, id. § 8(f)(2), 33 U.S.C. § 908(f)(2) (1976). The ALJ attributed Hastings' permanent disability to the combined impact of his earlier stroke and the subsequent, distinct attack of phlebitis and emboli. Accordingly, the ALJ ordered the special fund to pay Hastings after Earth Satellite had paid the first 104 weeks.
The Director argued, however, that because the emboli and phlebitis were directly related to the stroke, and not a separate "subsequent injury," Earth Satellite should be liable for the entire permanent-total disability. The Board rejected this argument. It noted that the ALJ had found that the phlebitis and emboli were caused or aggravated by his sedentary desk job. The ALJ had not found that the phlebitis and emboli were caused by the stroke. Section 8(f) of the Act requires payments from the special fund to avoid penalizing an employer who hires or rehires a handicapped individual. The special fund, not Earth Satellite, therefore must be liable, the Board concluded.
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