Stevedoring Services of America v. Director, Owca

• Decision Date: 30 July 2002
• Docket Number: No. 01-70361.,No. 01-70354.,01-70354.,01-70361.
• Parties: STEVEDORING SERVICES OF AMERICA; Eagle Pacific Insurance Company, Petitioners, v. DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS; Container Stevedoring Company, Respondents. U.S. Department of Labor, Petitioner, v. Clarici Benjamin, as Administratrix of the Estate of James Benjamin; Container Stevedoring Company; Eagle Pacific Insurance Company, Respondents.
• Court: U.S. Court of Appeals — Ninth Circuit

297 F.3d 797

STEVEDORING SERVICES OF AMERICA; Eagle Pacific Insurance Company, Petitioners, v. DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS; Container Stevedoring Company, Respondents.

U.S. Department of Labor, Petitioner, v. Clarici Benjamin, as Administratrix of the Estate of James Benjamin; Container Stevedoring Company; Eagle Pacific Insurance Company, Respondents.

No. 01-70354.

No. 01-70361.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted May 17, 2002.

Filed July 30, 2002.

COPYRIGHT MATERIAL OMITTED

Roger A. Levy and Mia C. Perachiotti-Germack, Laughlin, Falbo, Levy & Moresi, San Francisco, CA, for Stevedoring Services of America and Eagle Pacific Insurance Company.

Andrew D. Auerbach and Joshua T. Gillelan II, Office of the Solicitor of Labor, Washington, DC, for the Director, Office of Workers' Compensation Programs.

Frank B. Hugg, San Francisco, CA, for Container Stevedoring Company.

On Petition for Review of an Order of the Benefits Review Board. OWCP No. BRB-00-0414/00-0414-A.

Before: HUG and BERZON, Circuit Judges and LASNIK,^* District Judge.

LASNIK, District Judge.

Stevedoring Services of America ("SSA") and Eagle Pacific Insurance Co. petition for review of a decision of the United States Department of Labor Benefits Review Board ("BRB" or the "Board"). The decision awarded permanent partial disability benefits under the Longshore and Harbor Workers' Compensation Act, 33 U.S.C. § 901 et seq. ("LHWCA" or the "Act") to James Benjamin ("Benjamin") for a 34 percent hearing loss sustained during his employment. The Director, Office of Workers' Compensation Programs ("Director") cross-appeals the decision. An Administrative Law Judge ("ALJ") found that two employers, SSA and Container Stevedoring Company ("Container") had exposed Benjamin to injurious noise levels. The ALJ then merged the claims against the two employers and found that SSA was liable under the "last employer doctrine" as explicated by the Ninth Circuit. The BRB affirmed the ALJ's decision on January 5, 2001. We have jurisdiction pursuant to 33 U.S.C. § 921(c), and we reverse and remand.

BACKGROUND

Benjamin worked as a longshoreman from 1969 to 1992. Like other workers in the stevedoring industry, Benjamin did not have a single long-term employer but was assigned through a union hall. Toward the end of his career, he realized he was developing hearing problems and consulted his doctor. On January 9, 1991 he underwent an audiogram. On February 4, 1991, a follow-up audiogram showed a 28.5 percent binaural hearing loss. Container was Benjamin's employer just before this hearing test. On the basis of this test, Benjamin filed a claim for benefits, which, as detailed below, was never independently adjudicated. Despite his hearing loss, Benjamin continued to work until April 3, 1992. On his last day of work, he was employed by SSA. Benjamin had two more hearing tests conducted, on January 12, 1994 and on September 25, 1996. The latter showed that his hearing loss had worsened to 34 percent.

Benjamin's claims for compensation under the LHWCA originally involved five employers.¹ However, on April 23, 1999, the number of employers was reduced to two, Container and SSA, because the ALJ determined that there was "no possible basis for imposing liability" on any party other than these two. The ALJ determined that the January 9, 1991 and January 12, 1994 hearing tests did not comply with statutory requirements and so could not be used to determine liability. Container was deemed to have exposed Benjamin to injurious noise prior to the February 4, 1991 audiogram and SSA conceded that it had done so as Benjamin's last employer before the September 25, 1996 audiogram.

On December 3, 1999, the ALJ issued his "Decision and Order Awarding Benefits."² The ALJ resolved two issues: (1) which of the two employers was responsible for Benjamin's hearing loss and (2) the extent to which the responsible employer's liability was mitigated because of Benjamin's pre-existing disability. The ALJ held that the audiograms conducted on February 4, 1991 and September 25, 1996, both "complied with all rules and regulations governing the measurement of hearing loss under the Act." However, he felt he was bound by the Ninth Circuit's opinions in Port of Portland v. Director, Office of Workers' Compensation Programs (Ronne), 932 F.2d 836, 841 (9th Cir.1991) and Ramey v. SSA, 134 F.3d 954, 961 (9th Cir.1998) to pick one as the "determinative audiogram." He chose the one conducted in 1996 since it "reflect[ed] the increased level of hearing loss caused by the claimant's employment after the February 4, 1991 audiogram." The ALJ also felt that precedent dictated that "the last employer before that [determinative] audiogram be liable for the claimant's entire injury." Since SSA had admitted to being that employer, it was held solely liable for the full extent of the hearing loss.

Having found SSA liable, the ALJ turned to the issue of mitigation. SSA had applied for Special Fund relief under 33 U.S.C. § 908(f). Under this provision of the LHWCA, an employer's liability may be partially mitigated because of the employee's pre-existing disability. See American Mutual Ins. Co. of Boston v. Jones, 426 F.2d 1263, 1267 (D.C.Cir.1970). The ALJ found that SSA was only liable for the extent of hearing loss measured as "the difference between the 1996 and the 1991 audiograms or 5.5 [percent]." The remainder, 28.5 percent, was to be paid by the industry's Special Fund, which spreads the costs over the entire industry.

Both the Director and SSA appealed the ALJ's decision to the BRB pursuant to 33 U.S.C. § 921(b)(3).³ The Director claimed that the facts established that Benjamin suffered two distinct hearing losses, giving rise to two claims that were to be adjudicated separately, and that Container and SSA should have been found separately liable for the impairment caused by each injury. The Director also sought a credit to the Special Fund to be assessed against Container. SSA argued that the Board should permit assessment of liability on the basis of more than one determinative audiogram. The BRB rejected their arguments and affirmed the ALJ.

STANDARD OF REVIEW

"The Board's interpretation of the LHWCA is a question of law that we review de novo." Gilliland v. E.J. Bartells Co., 270 F.3d 1259, 1261 (9th Cir.2001). The Board is required to "accept the ALJ's findings unless they are contrary to law, irrational, or unsupported by substantial evidence." Todd Shipyards Corp. v. Black, 717 F.2d 1280, 1284 (9th Cir.1983), cert. denied, 466 U.S. 937, 104 S.Ct. 1910, 80 L.Ed.2d 459 (1984). We review "Board decisions for errors of law and for adherence to the [substantial evidence] standard." Bumble Bee Seafoods v. Director, Office of Workers' Compensation Programs, 629 F.2d 1327, 1329 (9th Cir.1980). "Because the Board is not a policymaking agency, its interpretation of the LHWCA is not entitled to any special deference; the court must, however, respect the Board's interpretation of the statute where such interpretation is reasonable and reflects the policy underlying the statute." McDonald v. Director, Office of Workers' Compensation Programs, 897 F.2d 1510, 1512 (9th Cir.1990). On issues of statutory interpretation, the Director's view is to be accorded considerable weight: It is to "the position of the Director of the Office of Workers' Compensation Programs ... to whom, not the BRB, we owe Chevron deference." Alexander v. Director, Office of Workers' Compensation Programs, 273 F.3d 1267, 1269 (9th Cir.2001); see also Chevron U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837, 842-44, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984).

DISCUSSION

The "last employer rule" or "last employer doctrine" is a "judicially-created doctrine whereby full liability for an occupational disease resulting from the claimant's exposure to injurious stimuli during more than one period of employment or insurance coverage is assigned to a single employer or insurer." Ronne, 932 F.2d at 840 n. 3. In Cordero v. Triple A Mach. Shop, 580 F.2d 1331 (9th Cir.1978), the Ninth Circuit adopted the "last employer rule" in LHWCA cases as formulated by the Second Circuit in Travelers Ins. Co. v. Cardillo, 225 F.2d 137, 145 (2nd Cir.1955). The rule reads as follows:

[T]he employer during the last employment in which the claimant was exposed to injurious stimuli, prior to the date upon which the claimant became aware of the fact that he was suffering from an occupational disease arising naturally out of his employment, should be liable for the full amount of the award.

Cardillo, 225 F.2d at 145. See also Cordero, 580 F.2d at 1337. This rule facilitates administrative convenience by allowing for full recovery in a single action after a disability is discovered, as opposed to piece-meal recovery in a multitude of actions against each contributing employer. "The underlying rationale is that all employers will be the last employer a proportionate share of the time." Cordero, 580 F.2d at 1336.

Cordero's method of picking the employer on whom to place liability emphasizes the "onset of disability", i.e., Cordero places "full liability on the [employer] covering the risk at the time of the most recent injury that bears a casual [sic: causal] relation to the disability." Id. at 1337. This formulation has been refined over the years. However, liability has generally been placed on the employer with whom the claimant was employed when the injury occurred and who was the `last employer' prior to the claimant's recognition of his or her disability. In Cordero itself, the claimant was a welder who worked with various employers for over 30 years. After being exposed to injurious fumes over the years, he suffered from "pulmonary impairment" and eventually became unable to work. The liability was placed solely on "the last employer under which the claimant was exposed to the injurious welding...