Bath Iron Works Corp. v. Director, Office of Workers' Compensation Programs, U.S. Dept. of Labor

• Decision Date: 05 June 1991
• Docket Number: No. 91-1079,91-1079
• Citation: 942 F.2d 811
• Parties: BATH IRON WORKS CORPORATION and Commercial Union Insurance Companies, Petitioners, v. DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, UNITED STATES DEPARTMENT OF LABOR, Respondent. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 811

942 F.2d 811

1992 A.M.C. 2406

BATH IRON WORKS CORPORATION and Commercial Union Insurance

Companies, Petitioners, v. DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, UNITED

STATES DEPARTMENT OF LABOR, Respondent.

No. 91-1079.

United States Court of Appeals, First Circuit.

Heard June 5, 1991.

Decided Aug. 27, 1991.

Allan M. Muir with whom Kevin M. Gillis and Richardson & Troubh, Portland, Me., were on brief, for petitioners.

Michael S. Hertzig, Atty., U.S. Dept. of Labor, Office of the Sol., with whom Robert P. Davis, Sol. of Labor, Carol A. De Deo, Associate Sol., and Janet R. Dunlop, Counsel for Longshore, Washington, D.C., were on brief, for respondent.

Ronald W. Lupton with whom Stinson, Lupton & Weiss, P.A., Bath, Me., was on brief for claimant.

Marcia J. Cleveland and McTeague, Higbee, Libner, MacAdam, Case & Watson, Topsham, Me., on brief, for Russell Harford, amicus curiae.

Before BREYER, Chief Judge, BOWNES, Senior Circuit Judge, and CAFFREY, ^* Senior District Judge.

BREYER, Chief Judge.

This appeal concerns the calculation of Longshore and Harbor Workers' Compensation Act disability benefits due a retired riveter partially disabled due to deafness. The Act provides three different systems for compensating partially disabled workers. The first applies to those suffering scheduled (i.e., particular, specifically listed) injuries. The second applies to those suffering other (unscheduled) injuries. The third applies to workers who retire before becoming disabled. The Labor Department's Benefits Review Board awarded benefits to Mr. Brown, the riveter, calculated through use of both the first and third systems. The petitioner, Brown's employer, Bath Iron Works, argues that the Board should have used the third system alone (which would have produced a smaller award). The respondent, the Director of the Labor Department's Office of Workers' Compensation, defends the Board's result, while arguing that the Board should have used the first system alone. We agree with the Director.

I. Background

A. The Three Systems

To help the reader understand the three different compensation calculation systems, we shall first describe them in a simplified way without using statutory language.

System One: Scheduled Injuries. The Act's schedule (in §§ 8(c)(1)-(20), 33 U.S.C. §§ 908(c)(1)-(20)) lists a number of specific injuries, such as loss of an arm or a leg or total or partial deafness, followed by a specific number of weeks (for example, loss of an arm, 312 weeks). The Act entitles a worker suffering one of the listed injuries to two-thirds of his average weekly wages for the listed number of weeks. Thus, for example, a worker earning $600 per week (just over $30,000 per year), who loses an arm, would receive about $400 per week (two-thirds of his average weekly wages) for 312 weeks, totalling about $125,000, spread out over six years. See 33 U.S.C. § 908(c)(1). If that worker had become completely deaf, he would receive the $400 per week (two-thirds of his average weekly wages) for 200 weeks, or about $80,000, spread over about four years. See 33 U.S.C. § 908(c)(13)(B). The schedule provides for proportionate modification of the award for partial losses.

System Two: "Unscheduled" Injuries. The Act sets forth a different method for compensating other injuries not specifically listed in section 8(c)'s schedule. In such cases, § 8(c)(21), 33 U.S.C. § 908(c)(21), says that a worker will receive two-thirds of the difference between his average weekly wages and his residual (post-injury) earning capacity (as determined by the Labor Department) for as long as the disability continues. Thus, the same $600 per week worker, who suffers, say, a slipped disk (not listed on the schedule) and who retains the capacity to earn only $150 per week, would receive benefits of $300 per week (two-thirds of the $450 difference ) for as long as the disability continues.

System Three: Injuries Suffered by Retired Workers. In 1984, Congress amended the Act to provide a special system of compensation for workers whose job-related injuries (or diseases such as asbestosis) did not become apparent until after retirement. See 33 U.S.C. §§ 902(10), 908(c)(23), 910(d)(2), 910(i). In such cases the Act begins with the principle that a disabled worker should receive two-thirds of his average weekly wages for as long as he is disabled, but it then modifies that principle in two important ways.

First, it multiplies the average weekly wage by a percentage, namely the percentage of total disability that the worker has suffered. It takes this percentage from American Medical Association tables. See 33 U.S.C. § 908(c)(23). Those tables say, for example, that a totally deaf person is 35% totally disabled. See American Medical Association Guides to the Evaluation of Permanent Impairment 170 (3d ed. 1988). If the deaf worker's average weekly wage is $600, the worker would receive, not two-thirds of his weekly wage ($400), but $400 multiplied by the percentage of total disability (35%), or $140 per week for the duration of his disability. Because System Three multiplies the average weekly wage by this percentage-of-total-disability, it is often less generous than System One. Sometimes it could turn out to be more generous, however, for it makes its smaller payments, not just for a limited number of weeks, but indefinitely as long as the worker is disabled.

Second, System Three calculates "average weekly wages" in a special way. If the disability appears during the first year after retirement, that term simply means the wages the worker earned just before retirement. See 33 U.S.C. § 910(d)(2)(A). If the disability appears after the first year, however, that term means a national average weekly wages figure that the Department of Labor calculates. See 33 U.S.C. § 910(d)(2)(B). Depending upon what the worker actually made before retiring, this System Three definition results in awards that are sometimes less generous, but sometimes more generous, than awards under System One.

B. The Statute's Structure

The key statutory language setting forth these three systems includes the following:

1. A definitional section defines "disability" (in relevant part) as

incapacity because of injury to earn the wages which the employee was receiving at the time of injury....

33 U.S.C. § 902(10). It adds a special definition of "disability" as

permanent impairment, determined ... under ... American Medical Association [guidelines], in the case of an individual whose claim is described in section 910(d)(2) [i.e., System Three].

Id. The definitions also make clear that "injury" includes both job-related accidental injuries and occupational diseases. See 33 U.S.C. § 902(2).

2. Key introductory, operative language, applicable to all three systems, says,

In case of disability partial in character but permanent in quality the compensation shall be 66 2/3 per centum of the average weekly wages ... and shall be paid to the employee, as follows:

33 U.S.C. § 908(c).

3. Immediately after this introductory language, the statute contains twenty-three numbered subparagraphs.

a. Subparagraphs (1)-(20) and (22) contain the schedule, which we have called "System One." Subparagraph (13), for example, sets forth the number of weeks compensation for hearing loss. See 33 U.S.C. §§ 908(c)(1)-(20), (22).

b. Subparagraph (21) contains what we have called "System Two." It says,

Other cases: In all other cases in the class of disability, the compensation shall be 66 2/3 per centum of the difference between the average weekly wages of the employee and the employee's wage earning capacity thereafter ... payable during the continuance of partial disability.

33 U.S.C. § 908(c)(21).

c. Subparagraph (23) contains the basic instruction for System Three. It says,

Notwithstanding paragraphs (1) through (22), with respect to a claim for permanent partial disability for which the average weekly wages are determined under section 910(d)(2) of this title, the compensation shall be 66 2/3 per centum of such average weekly wages multiplied by the percentage of permanent impairment, as determined under the [AMA guidelines], payable during the continuance of such impairment.

33 U.S.C. § 908(c)(23).

4. As the last quoted sentence makes clear, subparagraph (23) (i.e., System Three) applies only "to a claim ... for which the average weekly wages are determined under section 910(d)(2)." That subsection, 33 U.S.C. § 910(d)(2), and the definitional section referred to in that section, 33 U.S.C. § 910(i), set forth the System Three method for calculating "average weekly wages" that we have described above. See p. 813, supra. More importantly for present purposes, that section says that its calculation method shall be used

with respect to any claim based on a ... disability due to an occupational disease for which the time of injury (as determined under subsection (i) of this section) occurs

(A) within the first year after the employee has retired, ... or

(B) more than one year after the employee has retired....

33 U.S.C. § 910(d)(2). Subsection (i), which this subsection cross-references, defines "time of injury" for System Three purposes. It says,

For purposes of this section with respect to a claim for compensation for ... disability due to an occupational disease which does not immediately result in death or disability, the time of injury shall be deemed to be the date on which the employee ... becomes aware [or should have become aware] ... of the relationship between the employment, the disease, and the ... disability.

33 U.S.C. § 910(i).

All this quoted language seems complex. But, as we read it, it basically says something that is fairly simple: When the "time of injury" occurs before retirement, the Labor Department should calculate compensation under either System One (if the injury is scheduled) or System Two (if the injury is not scheduled). When the "time of injury" occurs...