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

• Decision Date: 31 July 1997
• Docket Number: No. 96-2106,96-2106
• Citation: 125 F.3d 18
• Parties: BATH IRON WORKS CORPORATION, Birmingham Fire Insurance Company, Petitioners, v. DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, U.S. DEPARTMENT OF LABOR, Respondent. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 18

125 F.3d 18

1998 A.M.C. 1808

BATH IRON WORKS CORPORATION, Birmingham Fire Insurance

Company, Petitioners, v. DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, U.S.

DEPARTMENT OF LABOR, Respondent.

No. 96-2106.

United States Court of Appeals, First Circuit.

Heard July 31, 1997.

Decided Sept. 10, 1997.

Kevin M. Gillis with whom Troubh, Heisler & Piampiano was on brief, for petitioners Bath Iron Works Corporation and Birmingham Fire Insurance Company.

Stephen Hessert with whom Norman, Hanson & DeTroy was on brief, for insurer respondent Liberty Mutual Insurance Company.

Gary A. Gabree with whom Stinson, Lupton & Weiss was on brief, for claimant respondent Alvin D. Acord.

Before SELYA, Circuit Judge, HILL, ^* Senior Circuit Judge, and BOUDIN, Circuit Judge.

BOUDIN, Circuit Judge.

Alvin Acord suffered injuries while employed by Bath Iron Works Corporation, and obtained benefits after state workers' compensation proceedings. He then sought and received a further award under the Longshore Act, 33 U.S.C. §§ 901 et seq. On this appeal, we hold that the federal award was barred by collateral estoppel, and, for the benefit of future litigants, we address briefly the alternative statute of limitations defense advanced by the petitioner insurer.

The events and procedural history are complicated, but a condensed version will set the scene. Acord began work as a test electrician at Bath in 1974. In 1982 he suffered upper-body injuries and in 1983, a knee injury and knee surgery; and in 1984 he was transferred to a desk job. He sought disability benefits under the Maine Workers' Compensation Act, 39 Me.Rev.Stat. Ann. § 1 et seq. (1989), and, in October 1987, was awarded 25 percent partial disability benefits.

Between 1983 and 1987, Acord experienced a half-dozen incidents of trauma to his knee wherein some provocation would cause the knee to give way; one incident occurred in June 1987, when Acord stubbed his toe and then jammed his knee as he rose from his desk. Acord underwent further knee surgery and returned to his desk job in November 1987, now working only four hours a day based on his doctor's advice. Degenerative arthritis in his knee joints indicated that his condition would worsen.

One year later, in November 1988, Bath's company physician told Acord that he was being let go. The record is murky but it was apparently Acord's own opinion that the coming winter would aggravate his knee, and it was the doctor's view that there would be no suitable work available if Acord's physical restrictions increased. Acord has since sought reemployment at Bath, without success.

Birmingham Fire Insurance Company ("Birmingham"), which provided Bath's insurance coverage at the time of the June 1987 injury, began to pay Acord total disability benefits when he was dismissed in November 1988. But Birmingham also petitioned the Maine workers' compensation agency, asking it to declare that the insurer had no continuing liability for the June 1987 injury. In February 1989, after an evidentiary proceeding, a Maine commissioner held that Birmingham had proven that the June 1987 incident did not permanently contribute to Acord's condition; this decision was affirmed by the commission's appellate division in September 1990.

In related proceedings, Acord asked the Maine agency to increase his previous and continuing 25 percent disability award based on the 1983 injury; Acord urged that his condition had worsened since 1983. After extensive proceedings, the Maine agency ruled in June 1992 that the original disability payment should be increased to 50 percent, representing increased disability since 1983, and that the payments should be made by Liberty Mutual Insurance Company. Liberty Mutual had been Bath's insurer at the time of the June 1983 injury.

Shortly before this new ruling, Acord in March 1992 filed for federal workers' compensation benefits under the Longshore Act. It is not uncommon for employees connected to maritime affairs to be covered by both federal and state compensation statutes, and federal jurisdiction in this case has not been disputed. In the federal proceeding, Acord took the position that his June 1987 injury entitled him to permanent total disability benefits because it left him unable to fill the material handler position that he had previously held.

Birmingham resisted Acord's federal claim on multiple grounds: that the claim, filed almost five years after the incident, was barred by the federal one-year statute of limitations, 33 U.S.C. § 913; that collateral estoppel precluded Acord from claiming permanent injury based on the June 1987 incident; and that the medical evidence failed to support such a claim of permanent injury based on that incident. A federal administrative law judge took evidence on the federal claim, reserving judgment on the legal defenses.

In September 1993, the federal ALJ issued a decision awarding permanent total disability benefits to Acord, and against Birmingham, from and after Acord's last day at work in November 1988. The decision rejected the collateral estoppel and statute of limitations defenses, on grounds described below, and concluded on the merits that the June 1987 incident had caused a permanent further aggravation in Acord's knee condition.

Birmingham sought review by the Department of Labor's Benefits Review Board, 33 U.S.C. § 921(b), but the Benefits Review Board took no action on the matter. Because the matter had been pending before the Benefits Review Board for more than one year and the Benefits Review Board had taken no action on it, it became final for purposes of judicial review in September 1996. Pub.L. 104-134, § 101(d), 110 Stat. 1321-219 (1996). Birmingham then sought review in this court. See 33 U.S.C. § 921(c). Acord, needless to say, supports the ALJ's decision.

We agree with Birmingham that the federal ALJ should have given collateral estoppel effect to the Maine agency's determination, in its February 1989 decision, that the June 1987 injury "had no lasting effect on Mr. Acord's condition." The state agency finding, in turn, precludes Acord's present claim. Only the first of these two propositions requires much discussion.

Often, respect for a prior judgment is mandated by the full faith and credit clause, U.S. Const. art. IV, § 1, or its statutory counterpart, 28 U.S.C. § 1738. A literal reader might doubt that either has much to do with the present case, because (among other reasons) the former constrains states, not federal entities, and the latter is directed explicitly to federal courts and says nothing about federal agencies. But the policy arguments for similar treatment--especially avoidance of duplicative litigation--tend to be the same.

Without dwelling overmuch on the rationale, the Supreme Court has instructed that "federal courts must give the [state] agency's factfinding the same preclusive effect to which it would be entitled in the State's courts." University of Tennessee v. Elliott, 478 U.S. 788, 799, 106 S.Ct. 3220, 3226, 92 L.Ed.2d 635 (1986). Ordinarily, the state agency must have been acting in an adjudicative capacity, United States v. Utah Constr. & Mining Co., 384 U.S. 394, 422, 86 S.Ct. 1545, 1560, 16 L.Ed.2d 642 (1966), but that condition is satisfied in this case. And Maine does treat such agency findings as a proper basis for precluding relitigation. Van Houten v. Harco Constr., Inc., 655 A.2d 331, 333-34 (Me.1995).

Of course, one could say that a federal court must respect state agency factfinding but a federal agency need not. Yet Elliott itself relied heavily upon Thomas v. Washington Gas Light Co., 448 U.S. 261, 281, 100 S.Ct. 2647, 2660-61, 65 L.Ed.2d 757 (1980), where the Supreme Court said that an agency finding in one state could bind another state's agency under the full faith and credit clause. Elliott, 478 U.S. at 798-99, 106 S.Ct. at 3226. And several circuit decisions have held that a federal agency is normally bound to respect findings by another agency acting within its competence. West Helena Sav. & Loan Assoc. v. Federal Home Loan Bank Bd., 553 F.2d 1175, 1180-81 (8th Cir.1977); Safir v. Gibson, 432 F.2d 137, 143-44 (2d Cir.) (Friendly, J.), cert. denied, 400 U.S. 850, 91 S.Ct. 57, 27 L.Ed.2d 88 (1970).

Although the tendency is plainly in favor of applying collateral estoppel in administrative contexts, the subject is a complex one, with many variations; and it is perhaps well not to generalize too broadly. See 18 Wright & Miller, Federal Practice and Procedure § 4475, at 762-63 & n.3 (1981). Here, no conflict exists between the tendency of the courts and the position of the agency involved, because the Benefits Review Board itself has declared that collateral estoppel effect is to be given under the Longshore Act to appropriate findings of "other state or federal administrative tribunals." Barlow v. Western Asbestos Co., 20 B.R.B.S. (MB) 179, 180 (1988); see also Vodanovich v. Fishing Vessel Owners Marine Ways, Inc., 27 B.R.B.S. (MB) 286, 290-92 (1994).

In this case, the refusal of the federal ALJ to respect the Maine finding appears to have been based on a misunderstanding of Supreme Court case law on another subject. ¹ However, Acord seeks to defend the result on narrower and more conventional grounds. He argues that differences in burdens of proof, and in the substantive standards, under the Maine and federal compensation schemes make collateral estoppel inappropriate. These are legitimate arguments, but they ultimately do not succeed in this case.

It is quite true that collateral estoppel effect may be denied because of differences in burden of proof (for example, where the victor in the first case has a greater burden in the second). Newport News Shipbuilding & Dry Dock Co. v. Director, OWCP, 583 F.2d 1273, 1278-79 (4th Cir.1978), cert. denied, 440 U.S. 915, 99 S.Ct. 1232, 59 L.Ed.2d 465 (1979). Here, Birmingham, by seeking a judgment from Maine limiting its liability,...