Director, Office of Workers' Compensation Programs, U.S. Dept. of Labor v. Newport News Shipbuilding and Dry Dock Co.

• Decision Date: 29 October 1993
• Docket Number: No. 92-1864,92-1864
• Citation: 8 F.3d 175
• Parties: DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, UNITED STATES DEPARTMENT OF LABOR, Petitioner, v. NEWPORT NEWS SHIPBUILDING AND DRY DOCK COMPANY, Respondent, v. Jackie H. HARCUM, Claimant.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 175

8 F.3d 175

1994 A.M.C. 1811

DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, UNITED

STATES DEPARTMENT OF LABOR, Petitioner, v. NEWPORT NEWS SHIPBUILDING AND DRY DOCK COMPANY, Respondent, v. Jackie H. HARCUM, Claimant.

No. 92-1864.

United States Court of Appeals Fourth Circuit.

Argued Feb. 5, 1993.

Decided Oct. 29, 1993.

LuAnn Blanche Kressley, Office of the Sol., U.S. Dept. of Labor, Washington, DC, argued (Marshall J. Breger, Sol. of Labor, Carol A. De Deo, Associate Sol., Janet R. Dunlop, Counsel for Longshore, Office of the Sol., on brief), for petitioner.

James Melvin Mesnard, Seyfarth, Shaw, Fair-Weather & Geraldson, Washington, DC, argued, for respondent.

Before ERVIN, Chief Judge, NIEMEYER, Circuit Judge, and WARD, Senior United States District Judge for the Middle District of North Carolina, sitting by designation.

OPINION

ERVIN, Chief Judge:

Jackie Harcum ("Claimant"), a former employee of Newport News Shipbuilding & Dry Dock Company ("Newport News"), suffers from a work-related, disabling back injury. As an employee covered under the Longshore and Harbor Workers' Compensation Act ("LHWCA"), 33 U.S.C. §§ 901-950, the Claimant filed a request for compensation benefits, which was partially granted and denied. On appeal, the Director of the Office of Workers' Compensation Programs in the United States Department of Labor ("Director") challenges the Benefits Review Board ("Board") as to its construction of the LHWCA on two grounds. First, the Director asserts that the Board improperly determined that the Claimant's disability shifted from the status of temporary total disability to that of permanent partial disability on May 6, 1988. In addition, the Director challenges the Board's application of a provision of the LHWCA to lessen substantially Newport News's obligation to pay benefits and to shift responsibility for compensation to a special fund organized under the LHWCA. Because we believe the Director lacks standing to raise the first issue, we decline to address it. Finding, however, that the Board erred in implicating the special fund and that the Director is the proper party to redress improper uses of the fund, we reverse the Board's decision to limit Newport News's obligation to pay benefits.

I

The Claimant worked for Newport News as a machine installer from February 26, 1963 until May 6, 1988. During his tenure with Newport News, the Claimant suffered a series of back injuries. According to his medical records, the Claimant sustained a lumbar strain on June 3, 1965, and a more severe lumbosacral strain on February 8, 1966. At the time of this second injury, an x-ray of the Claimant's back revealed a sacral arch defect. The Claimant again experienced a lumbar strain on February 7, 1977, and was unable to work from February 27, 1977 through March 28, 1977 as a result.

After two more related injuries in 1981 and 1983, the Claimant's physician referred him to a neurosurgeon. The neurosurgeon diagnosed the Claimant with a herniated disc in the cervical spine area and performed a hemilaminectomy on January 24, 1984 to remove the disc. The Claimant responded well to the surgery and was able to return to work on March 5, 1984. On October 24, 1984, the Claimant suffered the injury that serves as the subject of this appeal. While bending down in the bilge area of a steam barge, the Claimant was struck in the lower back by a piece of falling grating. After a month of unabated leg and back pain, the Claimant returned to the neurosurgeon. Tests revealed another herniated disc, this time in the lumbar spine area, and on January 11, 1985, the neurosurgeon removed the disc. On March 15, 1985, additional surgery was performed to free a pinched nerve root and remove retained fragments of disc material.

After a protracted recovery, the Claimant returned to light-duty work at Newport News on October 4, 1985, but immediately experienced back pain and was "passed out" of service temporarily to recuperate. Newport News paid the Claimant benefits under the LHWCA for temporary total and temporary partial disability until the Claimant again returned to Newport News's light duty facility in April 1987. On November 4, 1987, the Claimant's neurosurgeon formulated restrictions by which he could return to his regular department. The doctor rated the Claimant as having an eighteen-percent whole body impairment and restricted his lifting to thirty pounds. The Claimant also was to alternate regularly between sitting and standing and to refrain from ladder climbing.

The Claimant returned to his regular department in January 1988, but was unable to perform the necessary tasks. Therefore, on May 6, 1988, the Claimant was passed out of the shipyard once again. Newport News officials informed the Claimant that they would look for another job for him in the shipyard within his restrictions. The Claimant suggests that, based upon this reassurance, he did not look for a job outside of the shipyard at the time he was passed out. In August 1988, however, Newport News's supervisor of employee relations at the shipyard arranged a meeting with the Claimant. At the meeting, the Claimant was told that the shipyard had no work to offer him within his restrictions and that he was being referred to a rehabilitation counselor.

The Claimant met with the rehabilitation counselor for the first time on September 20, 1988, and the two began developing a job placement and rehabilitation program for the Claimant. The Claimant then started his search for a new job. After following several leads supplied by the rehabilitation counselor the Claimant was able to secure a job with the Hampton Sheet Metal Company ("Hampton Sheet Metal") on February 16, 1989. The Claimant still works at Hampton Sheet Metal in a job that is comfortably within his disability restrictions. At the time of the hearing on this matter before the Administrative Law Judge ("ALJ"), the Claimant was earning $5.00 per hour and working forty hours per week. Subsequent to the Claimant's employment by Hampton Sheet Metal, Newport News requested that the rehabilitation counselor conduct a labor survey of the available jobs for which the Claimant may have qualified during the period of May 6, 1988 to February 15, 1989. The completed survey listed eleven job possibilities.

The Claimant filed a request for compensation benefits under the LHWCA, and a hearing was held before an ALJ on October 20, 1989. In addition to the above facts, the parties presented medical opinions of three doctors. A doctor opined, at Newport News's behest, that

[i]t is obvious that Mr. Harcum's current low back condition was not caused by any one injury. Rather, it is clear that Mr. Harcum's current low back condition is the result of cumulative and repeated lumbar injuries. Each injury aggravated Mr. Harcum's low back problems and made him more susceptible to further back injuries, and each injury increased the severity of the subsequent injuries. This clearly constitutes a pre-existing permanent partial disability, and a cautious employer would not have hired Mr. Harcum with this manifest condition.

Additionally, Mr. Harcum's cervical spine condition also substantially contributes to his current level of disability. As a result of shoulder injuries in 1981 and 1983, surgery was performed on Mr. Harcum's cervical spine. As I noted previously, this equates to a five percent (5%) whole body impairment. I agree with Dr. Peach's statement in his December 1, 1987 letter. Dr. Peach indicated that Mr. Harcum's level of whole body impairment is a result of two surgical procedures: the 1984 surgery on Mr. Harcum's cervical spine and the 1985 surgery on his lumbar spine. The cervical and lumbar injuries, and the surgery they necessitated, clearly combined to create a greater impairment than would otherwise have occurred. This condition was manifest in Mr. Harcum's clinical record, and a cautious employer would not have hired him with this condition.

Dr. Peach, the Claimant's neurosurgeon, indicated, in a December 1, 1987 letter, that the Claimant's permanent partial disability was due in part to both surgical procedures involving the Claimant's cervical and lumbar spinal areas. Another doctor opined that "[i]t is clear that Mr. Harcum had a pre-existing partial impairment or disability that was materially increased by the second injury and disc herniation."

After disposing of two issues not raised on this appeal, the ALJ addressed whether the Claimant was entitled to a temporary total disability award from May 6, 1988 until February 16, 1989. Citing Stevens v. Lockheed Shipbuilding Co., 22 BRBS 155, 157-59 (1989), the ALJ established the date of maximum medical improvement as the onset of permanent partial disability. As the parties had stipulated that date to be December 7, 1987, several months before the Claimant was passed out of the shipyard permanently, the ALJ determined that, for the purpose of benefit payments, permanent partial disability began when the Claimant was passed out or on May 6, 1988. Alternatively, the ALJ held that Newport News had shown successfully the availability of suitable alternate jobs that the Claimant was capable of performing from May 6, 1988 to February 15, 1989. Therefore, the Claimant's disability ceased to be a total disability on May 6, 1988, when the Claimant regained wage-earning capacity.

The ALJ concluded that, from May 6, 1988, the Claimant should have received compensation based on a permanent partial disability rather than a temporary total disability. Based on the improper classification, the Claimant had received $101.34 per week in excess benefits during the period from May 6, 1988 to February 16, 1989. The ALJ held that Newport News was entitled to a credit against future benefit payments owed to the Claimant in the amount of $101.34 per week for approximately forty weeks, the period of the overpayment.

The ALJ addressed, as the final issue,...