PA Tidewater Dock v. Dir. Office Workers' Comp.

• Decision Date: 30 September 1999
• Docket Number: No. 0090-1,No. 98-6325,0090-1,98-6325
• Citation: 202 F.3d 656
• Parties: (3rd Cir. 2000) PENNSYLVANIA TIDEWATER DOCK COMPANY, PETITIONER V. DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, UNITED STATES DEPARTMENT OF LABOR; AND OTIS LEWIS, RESPONDENTS (:97-1583) Argued:
• Court: U.S. Court of Appeals — Third Circuit

Page 656

202 F.3d 656 (3rd Cir. 2000)

PENNSYLVANIA TIDEWATER DOCK COMPANY, PETITIONER

V.

DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, UNITED STATES DEPARTMENT OF LABOR; AND OTIS LEWIS, RESPONDENTS (No. 0090-1:97-1583)

No. 98-6325

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

Argued: September 30, 1999

Opinion Filed January 28, 2000

On Appeal from the United States Department of Labor Benefits Review Board

Michael D. Schaff, Esq. (Argued) Naulty, Scaricamazza & McDevitt, Ltd. Suite 1600 One Penn Center 1617 J.F.K. Boulevard Philadelphia, PA 19103 Counsel for Petitioner.

Henry L. Solano Solicitor of Labor Carol A. DE Deo Associate Solicitor Joshua T. Gillelan II Senior Attorney Andrew D. Auerbach (Argued) Staff Attorney U.S. Department of Labor 200 Constitution Ave., NW Suite S-4325 Washington, D.C. 20210 Counsel for Respondents.

Before: Nygaard, Alito, and Rosenn, Circuit Judges

Alito, Circuit Judge

Pennsylvania Tidewater Corporation ("Tidewater") petitions for review of a final order of the Benefits Review Board (the "Board") reversing an administrative law judge's ("ALJ") award of special-fund relief from workers' compensation liability under S 8(f) of the Longshore and Harbor Workers' Compensation Act (the "LHWCA"). 33 U.S.C. S 908(f) (1994). Tidewater makes two claims. It claims first that the Board applied the wrong legal standard in determining whether Tidewater was eligible for relief. Second, it claims that even if the Board correctly interpreted S 8(f), the Board departed from its proper standard of administrative review. For the reasons that follow, we hold that the Board correctly interpreted S 8(f). We conclude, however, that the Board deviated from the proper standard of administrative review. Thus, we reverse the Board and reinstate the ALJ's award of special fund relief.

I.

The LHWCA, 33 U.S.C. S 901-50 (1994), is a workers' compensation statute that fixes disability benefits for maritime workers who are injured on the job. In order to encourage maritime employers to hire workers with permanent partial disabilities, the LHWCA contains a special provision that governs the compensation of workers who were already suffering from pre-existing conditions at the time of their workplace injuries. See 33 U.S.C. S 908(f). This section, S 8(f) of the LHWCA, creates a number of special exceptions to the normal rules of workers' compensation, which provide that an employer takes an employee as he finds him. Among these exceptions is a provision that states that when an employee with a manifest, pre-existing condition suffers a workplace injury that, in combination with the pre-existing condition, causes permanent total disability, the employer is responsible for only the first 104 weeks of workers' compensation. The remaining workers' compensation is to be paid from a special fund established pursuant to 33 U.S.C. S 944. See 33 U.S.C. SS 908(f)(1), 944. The relevant language reads as follows: "in cases of total permanent disability or of death, found not to be due solely to that injury, of an employee having an existing permanent partial disability, the employer shall provide... compensation payments or death benefits for one hundred and four weeks only." 33 U.S.C. S 908(f)(1).

This Court has determined that an employer can receive special fund relief pursuant to S 8(f) only if an ALJ is satisfied that three conditions are met. First, the employee must have been suffering from a permanent partial disability at the time he was injured or sickened on the job. Second, the employee must demonstrate that the disability was manifest to the employer. Third, the employer must demonstrate that the worker's pre-existing disability contributed to the permanent total disability such that the employee's disability "is not due solely" to the workplace injury. See Director, Office of Workers' Compensation Programs v. Sun Ship Inc. ("Ehrentraut"), 150 F.3d 288, 293-95 (3d Cir. 1998). An ALJ is given the responsibility of determining whether an employer is entitled to S 8(f) relief. Only if the ALJ is satisfied that all three prongs of this test have been met may the ALJ award special fund relief.

A party aggrieved by an order of the ALJ may appeal the order to the Benefits Review Board. See 33 U.S.C. S 921(b)(3). On appeal, the Board's scope of review is limited. The Board must uphold the ALJ's findings unless the ALJ applied the wrong legal standard or the ALJ's factual conclusions were not "supported by substantial evidence in the record considered as a whole." See id. As this Court has noted, the Board may not reverse an ALJ's award of special fund relief merely because it would have reached a contrary conclusion. See, e.g., Bundens v. J.E. Brenneman Co., 46 F.3d 292, 300 (3d Cir. 1995); Elliot Coal Mining Co. v. Director, Office of Workers' Compensation Programs, 17 F.3d 616, 625-26 (3d Cir. 1994). Pursuant to S 21(c) of the LHWCA, a party that is aggrieved by a final order of the Board may appeal to the court of appeals for the region in which the workers' injury occurred. See 33 U.S.C. S 921(c).

II.

This appeal requires us to review the Board's determination that, contrary to the decision of the ALJ, Pennsylvania Tidewater Corporation is not eligible for special fund relief from its obligation under the LHWCA to provide total disability workers' compensation benefits to an injured former employee, Otis Lewis ("Lewis"). In 1985, Lewis, a longshoreman, injured his lower back in a car accident. Since the accident, he has suffered from intermittent back pain. See Appellant's Br., App. at A-33-34. In 1991, Lewis's back pain worsened and was suddenly accompanied by numbness in his feet and legs. In January 1992, Lewis visited a series of doctors for diagnosis and treatment of this condition. See id. at A-34, 130-32. One of these doctors conducted an MRI and found a bulging disk in his spine. See id. at A-130-32, 226-27. After nerve conduction velocity studies, a different doctor found nerve root irritation that was compatible with early findings of a neuropathic process. See id. at A-131-32, 215.

In April 1993, Lewis suffered the first of two work-related accidents. In this first accident, Lewis suffered injuries to his elbow, neck, and lower back. See id. at A-34-44, 264-67. After this injury, Lewis was out of work for almost six months. In November, Lewis returned briefly to the workplace. After a day and a half, however, he decided that he still was too injured to perform any work. As he was leaving the workplace, he slipped and fell, further exacerbating his back injuries. See id. at A-59-62.

After the November accident, Lewis was treated by several doctors. Under their care, most of Lewis's medical problems resolved themselves, but he continued to suffer severe back pain. Eventually, several doctors diagnosed a radiculopathy and opined that Lewis was permanently totally disabled. See id. at A-135-37, 149-51, 245.

Lewis sued for workers' compensation pursuant to the LHWCA. Lewis's employer, Tidewater, challenged his right to compensation, and in the alternative asked for special fund relief. On January 18, 1996, after reviewing Lewis's medical record, an ALJ declared Lewis to be permanently totally disabled and awarded him total disability workers' compensation benefits under the LHWCA. See id. at A-272-74. The ALJ also found that at the time of his injury, Lewis was suffering from manifest, pre-existing, permanent partial disabilities at the time of his workplace accident and found also that these disabilities were partly responsible for Lewis's permanent total disability. Thus, the ALJ awarded Tidewater special fund relief pursuant to S 8(f). See id. at A-274-76.

The Director of the Office of Workers' Compensation Programs (the "Director") appealed the ALJ's decision to the Board. On appeal, the Board vacated the award of S 8(f) relief. It remanded the case to the ALJ, asking him to cite evidence from the record supporting his conclusion that a manifest pre-existing disability was partly responsible for Lewis's permanent total disability. See id. at A-304-10. On remand, the ALJ issued a second order reconfirming his original findings. In support of his conclusion, the ALJ pointed to Lewis's medical records and also to the testimony of several doctors. See id. at A-314-19.

The Director appealed again, and once again the Board reversed the ALJ. In a final order, it concluded that the evidence cited by the ALJ did not constitute "substantial evidence" that Lewis would have been able to work after his accident if he had not already been suffering from a permanent partial disability. See id. at 334-39. Pursuant to 33 U.S.C. S 921(c), Tidewater appealed this final order to this Court. It petitions us to reverse the Board's decision and to reinstate the ALJ's award of S 8(f) relief.

III.

A.

We have appellate jurisdiction over this case pursuant to 33 U.S.C. S 921(c). We exercise plenary review over the Board's interpretation of law, and we also exercise plenary review to satisfy ourselves that the Board adhered to the statutory scope of review. See Ehrentraut, 150 F.3d at 290-91; Director, Office of Workers' Compensation Programs v. Barnes & Tucker Co., 969 F.2d 1524, 1527 (3d Cir. 1992). In determining whether the Board properly limited itself to substantial evidence review, "we must conduct an independent review of the record, parallel to that of the Board's, to determine whether the ALJ's findings are supported by substantial evidence." Janusziewicz v. Sun Shipbuilding & Drydock Co., 677 F.2d 286, 290 (3d Cir. 1982); see also Nelson v. American Dredging Co., 143 F.3d 789, 793 (3d Cir. 1998); Sea Land Service, Inc. v. Rock, 953 F.3d. 56, 59 (3d Cir. 1992).

Tidewater makes two claims. First, it claims that the Board misinterpreted the requirements of S 8(f) of the LHWCA, 33 U.S.C. S 908(f). Second, it claims that the Board departed from the substantial evidence standard of review...