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

Decision Date13 April 1982
Docket NumberNo. 81-1725,81-1725
Citation676 F.2d 110
PartiesDIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, UNITED STATES DEPARTMENT OF LABOR, Petitioner, v. NEWPORT NEWS SHIPBUILDING AND DRY DOCK COMPANY, Respondent.
CourtU.S. Court of Appeals — Fourth Circuit

Joshua T. Gillelan, II, Washington, D. C. (T. Timothy Ryan, Jr., Sol. of Labor, Donald S. Shire, Associate Sol., Marianne Demetral Smith, U. S. Dept. of Labor, Washington, D. C., on brief), for petitioner.

Junius C. McElveen, Jr., Washington, D. C. (David D. Kadue, Seyfarth, Shaw, Fairweather & Geraldson, Washington, D. C., on brief), for respondent.

Before MURNAGHAN and ERVIN, Circuit Judges, and WILLIAM W. WILKINS, United States District Judge, sitting by designation.

ERVIN, Circuit Judge:

This is an appeal by the Director of the Office of Workers' Compensation Programs (the Director) from a ruling of the Benefits Review Board (the Board) in the case of Eugene W. Langley. The main issue is whether the special fund established under section 8(f) of the Longshoremen's and Harbor Workers' Compensation Act (the Act), 33 U.S.C. § 908, should pay a portion of the compensation due to Langley for his permanent total disability because a pre-existing permanent partial disability contributed to his total disability. The Board held that the special fund should be used for part of the compensation due Langley in this case. For the reasons stated below, we reverse and remand the case for further proceedings.

I.

Eugene W. Langley was employed by the Newport News Shipbuilding and Dry Dock Company (the employer) for almost thirty-nine years as a sheet metal worker and foreman. The parties stipulated and the Administrative Law Judge (ALJ) found that Langley suffers from work-related asbestosis, that he has been permanently and totally disabled since December 4, 1979, and that his asbestosis contributes to his present disability.

In August and September 1976, Langley went to his doctor complaining of edema (swelling) in his legs and feet. The condition did not affect his work substantially and does not appear to have been considered very serious. No diagnosis or explanation for the swelling was made during these visits. The condition worsened, however, and in April 1977, Langley was hospitalized. At this time, tests were conducted and Langley was diagnosed as suffering from nephrotic syndrome, which is a serious kidney disease. During this hospitalization chest x-rays were taken and asbestosis was diagnosed. 1 Langley was released from the hospital on May 10, 1977, but was readmitted on June 26 because his kidney condition was not responding to treatment. Excess fluid remained in his body from the chest down. Shortly after he was released the second time on July 16, 1977, Langley began experiencing chest pain and shortness of breath. He was hospitalized a third time from July 22 to July 27, 1977. At this time, his excess fluid had been reduced but massive proteinuria 2 persisted. Chest x-rays and a CAT scan on July 22 revealed substantial left pleural effusion which suggested the possibility of mesothelioma, a tumor of the pleura.

After being released, Langley continued his treatment for nephrotic syndrome and returned to his regular job at the shipyard. On December 13, 1978, Dr. Tomkins, Langley's physician, wrote the Shipyard Medical Director recommending that Langley be retired on disability as soon as possible. In his letter Dr. Tomkins mentioned both the asbestosis and "chronic nephritis." Langley retired on December 19, 1978, and filed for disability benefits, giving rise to this case.

Section 8(f) of the Act provides that when an employee becomes permanently totally disabled or dies following an injury, and a pre-existing permanent partial disability contributed to the permanent total disability or death, the employer shall pay compensation for only 104 weeks, and the remainder of the compensation is paid from a special fund set up under section 44 of the Act. The chief rationale for this provision is to discourage discrimination in hiring and retaining handicapped workers. See C & P Telephone Co. v. Director, OWCP, 564 F.2d 503, 512 (D.C.Cir.1977). Section 8(f), therefore, applies if a claimant suffers from a pre-existing permanent partial disability which is manifest to the employer either at the time of initial hire or during the period when the claimant is retained, and the pre-existing disability combines with a subsequent work-related injury to render the claimant more disabled than he would have been because of the subsequent injury alone.

The ALJ found that because Langley's nephrotic syndrome was not manifest at the time of his asbestosis diagnosis, the employer was not entitled to the advantages of section 8(f) of the Act. The ALJ also found that Langley's permanent total disability was solely the result of asbestosis and that section 8(f), therefore, did not apply. A two-member majority of the Board reversed, holding that under the required "liberal application" of the requirement that the pre-existing disability be manifest, Langley's nephritis was manifest prior to the diagnosis of asbestosis. Further, the majority of the Board found that there was not substantial evidence that asbestosis was the sole cause of Langley's permanent total disability. Finally, the majority held that Langley's work-related exposure to asbestos and severe shortness of breath after the initial diagnosis of asbestosis constituted a subsequent disability under section 8(f). Thus, the majority held that section 8(f) applied regardless of whether Langley's nephritis was found to be a manifest pre-existing condition.

One Board member dissented, arguing that the majority's reversal of the ALJ's findings constituted a reweighing of the evidence, that the ALJ's findings were supported by substantial evidence, and that because the third issue of asbestosis being the pre-existing condition was not raised below, the majority exceeded its authority in ruling on that issue. The dissenter recommended remanding the case for a determination of the third issue.

II.

The employer first challenges the Director's standing to pursue this appeal arguing that the Director is not a "person aggrieved" under 33 U.S.C. § 921(c). Section 921(c) of the Act provides that

Any person adversely affected or aggrieved by a final order of the Board may obtain a review of that order in the United States Court of Appeals for the circuit in which the injury occurred ....

33 U.S.C. § 921(c). In I.T.O. Corp. of Baltimore v. Benefits Review Board, 542 F.2d 903 (4th Cir. 1976)(en banc), this court stated that to meet the statutory or constitutional standing requirements, one must have suffered "injury in fact, economic or otherwise." 542 F.2d at 907 (quoting K. Davis, Administrative Law (1970 Supp.) § 22.00-1 at 706). The court in I.T.O. Corp. thus rejected the Director's argument that he was

directly affected in his official capacity by the correctness of the Board's decision involving the proper scope of coverage of the Act with whose administration he is charged as the designee of the Secretary of Labor.

The specific issue in I.T.O. Corp. was the extent of coverage of certain amendments to the Act. Accord Director, OWCP v. Bethlehem Steel Corp., 620 F.2d 60 (5th Cir. 1980); Fusco v. Perini North River Associates, 601 F.2d 659 (2d Cir. 1979).

The Director argues here, however, that the Act established a special fund for payment of benefits in certain circumstances, that the Secretary of Labor is the custodian of that fund and that he, as Director, is the administrator of that fund. We agree that in his position as administrator of the fund, the Director has an obligation to protect it from unjustified claims, see Director, OWCP v. Donzi Marine, Inc., 586 F.2d 377 (5th Cir. 1978), 3 and certainly has more of a direct interest in this case than the Director did in I.T.O. Corp.

The United States Court of Appeals for the District of Columbia recently has held that the Director has standing to appeal because of his general administrative responsibility and his financial interest in the special fund. Director OWCP v. National Van Lines, Inc., 613 F.2d 972, 977 n.6 (D.C.Cir.1979). Additionally, the Supreme Court has granted the Director certiorari in a case in which the standing issue apparently was not raised by the parties. Director, OWCP v. Rasmussen, 436 U.S. 955, 98 S.Ct. 3068, 57 L.Ed.2d 1120 (1978).

Further, in 1977 Congress indicated its intent to allow the Director standing to protect the interests of the Secretary of Labor in the appeal of claims whether or not the Secretary had a direct financial interest. The Senate Human Resources Committee Report accompanying the 1977 amendments to the Federal Coal Mine Health & Safety Act, 30 U.S.C. §§ 901-960, stated as follows:

Some question has arisen as to whether the adjudication procedures applicable to black lung claims incorporating various sections of the amended Longshoremen's and Harbor Workers' Compensation Act confers standing upon the Secretary of Labor or his designee to appear, present evidence, file appeals or respond to appeals filed with respect to the litigation and appeal of claims. In establishing the Longshore Act procedures it was the intent of this Committee to afford the Secretary the right to advance his views in the formal claims litigation context whether or not the Secretary had a direct financial interest in the outcome of the case. The Secretary's interest as the officer charged with the responsibility for carrying forth the intent of Congress with respect to the Act should be deemed sufficient to confer standing on the Secretary or such designee of the Secretary who has the responsibility for the enforcement of the Act to actively participate in the adjudication of claims before the Administrative Law Judge, Benefits Review Board, and appropriate United States Courts.

S.Rep.No....

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