Pedroza v. BRB

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

JOSE PEDROZA, 

Petitioner,

No. 05-75449

v.

BRB No. 05-0419

BRB; DIRECTOR, OFFICE OF  ORDER AND

WORKERS COMPENSATION

AMENDED

PROGRAMS; NATIONAL STEEL &

OPINION

SHIPBUILDING COMPANY,

Respondents.



On Petition for Review of an Order of the

Benefits Review Board

Argued and Submitted

October 23, 2008—Pasadena, California

Filed October 1, 2009

Amended October 20, 2010

Before: Harry Pregerson and N. Randy Smith, Circuit

Judges, and Raner C. Collins, District Judge.*

Opinion by Judge Collins;

Special Concurrence by Judge Pregerson

*The Honorable Raner C. Collins, United States District Judge for the

District of Arizona, sitting by designation.

17275

17278 PEDROZA v. BRB

COUNSEL

Joshua T. Gillelan II, Longshore Claimant’s National Law

Center, Washington, D.C. (argued), and Erica A. Dupree, for

the petitioner.

Roy D. Alexrod, Law Offices of Roy Alexrod, Solana Beach,

California, (argued) for the respondent.

PEDROZA v. BRB 17279

ORDER

The opinion filed on October 1, 2009, and reported at 583

F.3d 1139 is hereby amended. An amended opinion and spe-

cial concurrence are filed concurrently with this order.

The panel has unanimously voted to deny appellee’s peti-

tion for rehearing en banc. Judge Pregerson and Judge Smith

have voted to deny the petition, and Judge Collins has so rec-

ommended.

The full court has been advised of the petition for rehearing

en banc, and no judge has requested a vote on whether to

rehear the matter en banc. Fed. R. App. P. 35.

The petition for rehearing en banc is denied. No further

petitions for rehearing or rehearing en banc will be enter-

tained.

IT IS SO ORDERED.

OPINION

COLLINS, District Judge:

Jose Pedroza (“Pedroza”), an employee of National Steel

and Shipbuilding Company (“National Steel”), petitions this

court to review the determination of the Benefits Review

Board (“BRB or Board”) that claimant Pedroza is not entitled

to benefits under the Longshore and Harbor Worker’s Com-

pensation Act (“Longshore Act or LHWCA”), 33 U.S.C.

§ 901 et seq., because his psychological injuries were caused

by National Steel’s legitimate, adverse personnel decisions.

We have jurisdiction to review a final order of the BRB. 33

U.S.C. § 921(c).

17280 PEDROZA v. BRB

Both parties agree that substantial evidence supports the

findings of the Administrative Law Judge (“ALJ”) and the

BRB that Pedroza’s psychological injuries were a result of

legitimate personnel actions. Therefore, only one question is

before us on appeal: Are psychological injuries that result

from legitimate personnel actions compensable under the

Longshore Act? We answer this question in the negative,

therefore affirming the BRB in this decision and in Marino v.

Navy Exchange Service, 20 BRBS 166 (Ben. Rev. Bd. 1988),

and Sewell v. Noncommissioned Officers Open Mess, 32

BRBS 134 (Ben. Rev. Bd. 1998).

FACTS

Pedroza was involved in an accident, as a load handler at

the Naval Base in San Diego, California, loading and unload-

ing materials from the USS Boxer on August 24, 1999. While

Pedroza was unloading the USS Boxer, he struck a 440 volt

cable line. This caused an explosion. After the accident,

Pedroza did not seek medical attention. Though he now

claims that he suffered anxiety after the accident, Pedroza

never told his co-workers or supervisors about it.

A year after the accident, National Steel’s Transportation

Department Manager, Brian Mathiasan, wrote a letter to

Pedroza about the accident. The letter informed Pedroza that

the August 24, 1999 accident was caused by his negligence.

After reading the letter, Pedroza sought medical attention at

National Steel’s dispensary and Kaiser Permanente.

Pedroza wrote a letter to refute Mathiasan’s assessment. In

his letter, Pedroza apologized for the accident and waged a

complaint against National Steel for their disregard of his

health and well being after twenty-five years of service.

Pedroza also asserted he was unfairly treated by National

Steel for their failure to write a similar letter to the rigger who

accompanied him during the accident.

PEDROZA v. BRB 17281

On January 24, 2000, Pedroza had a meeting with his

supervisors to discuss job safety. At this meeting, Pedroza

informed his Union Safety Supervisor that his immediate

supervisor’s actions adversely affected his ability to perform

his job. During the meeting, Mathiasan informed Pedroza

about ways in which he could improve his work performance.

Mathiasan also issued a verbal warning to Pedroza, that, if he

was unable to improve his performance, he would be

demoted.

After the meeting, Pedroza’s performance improved for a

short period of time. On July 14, 2000, Mathiasan met with

Pedroza to discuss his job performance. At this meeting,

Mathiasan gave Pedroza four memos from his supervisors

regarding his poor work ethic. After the meeting, Pedroza

went on leave from work for three months.

While on leave, Pedroza sought medical attention for his

psychological problems. When Pedroza returned to work, he

was demoted because of his poor work performance and fail-

ure to fill out the proper safety forms after the 1999 accident.

National Steel felt that someone with Pedroza’s lengthy ser-

vice record was better served by being demoted than by being

fired.

A month later, Pedroza’s doctor placed him on medical

leave for five months. While on medical leave, Pedroza filed

a workers’ compensation claim for psychological injuries

caused by his stressful working conditions.

During the ALJ hearing, Pedroza provided medical evi-

dence to demonstrate that his disability was caused by his

workplace. Dr. Bayardo, an occupational psychiatrist, found

that Pedroza’s psychiatric condition and disability was pre-

dominately related to his workplace. Dr. Bayardo diagnosed

Pedroza with chronic, mild post traumatic stress disorder as

a result of the 1999 accident. National Steel refuted Dr.

Bayardo’s findings by providing three psychiatrists’ evalua-

17282 PEDROZA v. BRB

tions of Pedroza.1 Each of the psychiatrists reported Pedroza’s

depression was a result of National Steel’s disciplinary action

and reprimands.

The ALJ denied Pedroza’s workers’ compensation claim,

because the medical evidence provided by both parties sup-

ports National Steel’s contention that Pedroza’s disability was

a result of the July 2000 disciplinary action and not the

August 1999 accident. The ALJ relied on Marino to deny

Pedroza’s claim. 20 BRBS 166 (1988) (holding that an

employee’s psychological reaction to legitimate, good faith

personnel actions by the employer is not compensable

because it does not constitute a working condition that Con-

gress intended to compensate under the Longshore Act).

On appeal, Pedroza contended that (1) the ALJ erred in

failing to address whether the claimant’s condition was

caused by prolonged and cumulative stress at the workplace

and (2) the ALJ erred in finding that Pedroza’s depression and

anxiety were a result of the reprimands and demotion. The

Board agreed with Pedroza and held the ALJ erred by failing

to take into account the general working conditions that could

have led to Pedroza’s psychological injuries. The BRB relied

on Marino and Sewell. See Sewell, 32 BRBS 127 (holding that

a claimant must demonstrate that his psychological disability

was caused by stressful working conditions irrespective of

1

Dr. Steven Ornish found that Pedroza’s depression was a result of the

disciplinary action and the reprimands. Dr. Ornish found that Pedroza suf-

fered from major depression with anxiety in partial remission. Dr. Ornish

concluded that Pedroza did not experience terror or horror sufficient to

trigger Post Traumatic Stress Disorder given he finished his shift after the

accident, and never mentioned any emotional or physical problems until

a year later. Dr. Ornish evaluated Pedroza twice and concluded that

Pedroza did not make a claim that he suffered Post Traumatic Stress Dis-

order until after he visited his attorney. Another psychiatrist, Dr. Alvarez

found that Pedroza’s post traumatic stress disorder and depression was a

result of the personnel actions. Dr. Schleimer also found “it was more than

likely than not that [Pedroza’s] subjective symptomatolgy developed fol-

lowing the reprimand or personnel issues.”

PEDROZA v. BRB 17283

disciplinary and termination proceeding against the claimant

to successfully claim benefits under the Longshore Act). As

a result of applying Marino and Sewell, the BRB ordered the

ALJ to determine whether the claimant’s daily work environ-

ment, such as daily interactions with his supervisor, triggered

his psychological injuries.2

National Steel filed a motion for reconsideration en banc.

Hearing this case en banc, the Board denied the motion for

reconsideration. The Board directed the ALJ to determine if

Pedroza’s injuries were caused by the employer’s personnel

actions or general working conditions.

On remand, Pedroza presented a prima facie case that his

injuries were due in part to “general working conditions.”

However, the ALJ denied his claim, because National Steel

was able to rebut Pedroza’s claim by providing substantial,

comprehensive, and negative evidence that Pedroza’s psycho-

logical injuries were due solely to legitimate personnel actions

and not compensable.

On appeal, Pedroza contended that (1) the BRB lacked the

authority to create policy, such as the Marino doctrine and (2)

the Board’s action established a class of exemptions that frus-

trated congressional intent to hold employers strictly liable for

injuries to their employees. The Board rejected Pedroza’s

arguments. The BRB held legitimate personnel actions, such

as the reduction in force in Marino, do not constitute general

2

To determine if claimant’s injury is covered under the Act, the claim-

ant must establish a prima facie case. To establish a prima facie case, the

claimant must demonstrate he sustained a harm or pain and that the condi-

tions existed or an accident occurred at his place of employment which

could have caused the harm or pain. Duhagon v. Metro. Stevedore Co.,

169 F.3d 615 (9th Cir. 1999); see also 33 U.S.C. §§ 902(2), 920(a). An

employer can rebut the claimant’s presumption by providing substantial,

negative and comprehensive evidence that the injuries or disabilities were

not caused or exacerbated by general working conditions. Swinton v.

Kelly, 554 F.2d 1075, 1082 ( D.C. Cir. 1976).

17284 PEDROZA v. BRB

working conditions. The Board articulated that § 921(b) of the

Longshore Act gives the Board and courts the authority to

decide questions of law or fact raised in appeals. Implicit in

the statutory authorization is the ability to determine what

type of events constitute working conditions.

STANDARD OF REVIEW

We review a Benefits Review Board’s decision for errors

of law and adherence to the substantial evidence standard.

Taylor v. Dir., OWCP, 201 F.3d 1234, 1238 (9th Cir. 2000).

We review the Benefits Review Board’s interpretation of

the Longshore Act de novo, because it is a question of law.

General Construction Co. v. Castro, 401 F.3d 963, 965 (9th

Cir. 2005). The BRB is not a policymaking body and its con-

struction of the Longshore Act is not entitled to special defer-

ence. Peru v. Sharpshooter Spectrum Venture, LLC , 493 F.3d

1058, 106 (9th Cir. 2007) ( quoting M. Cutter Co. v. Carroll,

458 F.3d 991, 993 (9th Cir. 2006) (internal quotation marks

omitted). “When construing the [Longshore Act], we begin

with its plain language. We also consider whether a particular

interpretation is supported by the Act’s history, and the poli-

cies animating the Act.” Peru v. Sharpshooter Spectrum Ven-

ture, LLC., 493, F.3d 1058, 1063 (9th Cir. 2007)(internal

citations omitted).

DISCUSSION

We here determine whether psychological injuries caused

by legitimate personnel decisions are compensable under the

Longshore Act. We begin our analysis with the plain meaning

and legislative history of the relevant portions of the Long-

shore Act.

PEDROZA v. BRB 17285

I. Plain Meaning and Legislative History

1.

[1] The Longshore Act was enacted to create a federal

workers’ compensation statute for longshoremen and harbor

workers, after the Supreme Court held that state workers’

compensation statutes constitutionally could not apply to

injured maritime workers. See generally Noguiera v. New

York, N.H. & H.R. Co., 281 U.S. 128 (1930). To be entitled

to benefits under the Act, a claimant must have sustained an

injury within the meaning of the Act. 33 U.S.C. § 903(a) (pro-

viding that “[c]ompensation shall be payable under this Act in

respect of disability . . . of an employee, but only if the dis-

ability . . . results from an injury.”). Section 2(2) of the Act

provides that:

The term “injury” means accidental injury or death

arising out of and in the course of employment, and

such occupational disease or infection as arises natu-

rally out of such employment or as naturally or

unavoidably results from such accidental injury, and

includes an injury caused by the willful act of a third

person directed against an employee because of his

employment. 33 U.S.C. § 902(2).

[2] Injuries are presumed to be work related under § 920(a)

after the claimant establishes a prima facie case that the injury

not only was caused by the employment, but that it also arose

during employment. See U.S. Indus./Fed. Sheet Metal, Inc. v.

Dir., OWCP, 455 U.S. 608, 615 (1982) (stating that “[n]ot

only must the injury have been caused by the employment, it

also must have arisen during the employment.”).

[3] It is well settled that a psychological impairment,

which is work related, is presumed to be compensable under

the Act. See, e.g., Dir., OWCP v. Potomac Elec. Power Co.,

607 F.2d 1378 (D.C. Cir. 1979). Therefore, to receive the ben-

17286 PEDROZA v. BRB

efit of this § 920(a) presumption, the claimant must prove not

only that he has a psychological impairment, but that an acci-

dent occurred, or working conditions existed, which could

have caused the impairment. See id.

On appeal, Pedroza concedes that substantial evidence sup-

ports both the ALJ’s and the Board’s findings that his psycho-

logical injuries were not caused by general working

conditions, but were instead caused (if at all) by legitimate

personnel actions. We, therefore, need only address whether

psychological injuries resulting from a legitimate personnel

act are compensable under the Act.

We have previously held, in the unpublished opinion of

Turner v. Todd Pacific Shipyards Corp., 990 F.2d 1261, No.

91-70524 (9th Cir. April 8, 1993) (table), that injuries result-

ing from legitimate personnel actions do not fall within the

purview of the act. However, an unpublished decision is not

precedent for our panel. The BRB has also previously found

that psychological injuries, that arise from legitimate person-

nel actions, are not compensable. See Sewell, 32 BRBS 127;

Marino, 20 BRBS 166. Again, however, these decisions are

not binding on this panel.

2.

We hold that psychological injuries arising from legitimate

personnel decisions are not compensable under the Act. We

reach this result by analyzing the plain language of the Act in

light of the policy underlying the statute.

[4] The Longshore Act provides that “[c]ompensation shall

be payable under this Act in respect to disability . . . of an

employee, but only if the disability . . . results from an inju-

ry.” 33 U.S.C. § 903(a). In order to fall within the act the

injury must be work-related. See 33 U.S.C. § 902(2). Injuries

resulting from legitimate personnel decisions are not caused

by working conditions and they are not work related.

PEDROZA v. BRB 17287

The basic policy of the Longshore Act was to provide the

benefits of workers’ compensation to persons engaged in mar-

itime employment. See generally Nogueira, 281 U.S. 128.

The Act was designed to provide compensation for maritime

workers who were injured while working on navigable waters

in the course of their employment. It was also designed to

strike a balance between the concerns of longshoremen and

harbor workers, and their employers. Morrison-Knudsen

Const. Co. v. Dir., OWCP, 461 U.S. 624, 636 (1983).

[5] The psychological injury resulting from a legitimate

personnel action is not the type of injury that was intended to

be compensable under the Longshore Act. An interpretation

contrary to this would create a trap for the “unwary” employer

and undermine the interest of employers and employees alike.

See McCray Constr. Co. v. Dir., OWCP, 181 F.3d 1008, 1016

(9th Cir. 1999) (rejecting an interpretation of the Longshore

Act that would create a trap for the unwary employer). It

would also encourage employers to terminate employees for

poor work performance, rather than first take legitimate per-

sonnel actions to correct the employee problem. Accordingly,

we hold that legitimate personnel decisions cannot result in

compensable injury under the Act.

II. Marino-Sewell Doctrine

The BRB’s previous decisions on this matter are consistent

with our holding. We therefore approve the BRB’s Marino-

Sewell line of cases.

[6] In Marino, the BRB reversed the ALJ’s decision to

grant a claimant benefits under the Longshore Act for his

work-related psychological injuries, because the claimant’s

injuries were caused by a layoff. 20 BRBS 166 (1988). The

BRB determined layoffs or a reduction in force do not consti-

tute “working conditions” that would give rise to a compensa-

ble injury under the Longshore Act. Id. The Board reversed

the ALJ’s determination that a layoff constituted “working

17288 PEDROZA v. BRB

conditions.” On appeal, the Board directed the ALJ to con-

sider if the claimant’s injuries were caused by working condi-

tions such as “cumulative stress on the job due to supervising

a number of locations, insufficient personnel to perform the

job, working more than the required hours, and performing

the duties of his subordinates, in addition to the notification

that he was being laid off.” Id. The Board believed granting

compensation to employees for psychological injuries as a

result of a layoff, would unfairly hinder employers from mak-

ing legitimate personnel decisions. The Board believed that,

if the layoff was improper, the claimant had other remedies

outside of workers’ compensation. Id.

[7] Nine years later, the BRB addressed this issue again in

Sewell, when a claimant filed a claim alleging her stress

related psychiatric problems were caused by her poor working

conditions. Sewell, 32 BRBS 127. The claimant was

employed as a civilian bartender, and her supervisor had a

very aggressive management style. Id. The ALJ denied her

claim pursuant to Marino. Id. On appeal, the Board vacated

the ALJ’s findings and directed the ALJ to consider whether

the claimant could demonstrate that her psychological injuries

were caused by her general working conditions, irrespective

of the disciplinary and termination proceedings. On remand,

the ALJ found that the claimant could not demonstrate that

her injuries were caused by her general working conditions.

On the second appeal, the Board reversed the ALJ’s findings

because uncontroverted medical evidence showed the claim-

ant’s psychological injuries were caused by her stressful

working conditions, irrespective of the disciplinary and termi-

nation proceeding. Id.

[8] As a result of Marino and Sewell, the BRB constructed

a doctrine that allows psychological injuries to be compensa-

ble, if the claimant can demonstrate that psychological inju-

ries are caused by general working conditions and not

legitimate personnel decisions. This doctrine properly inter-

prets the Act in light of its underlying policy.

PEDROZA v. BRB 17289

III. Pedroza’s Arguments

Pedroza first argues that the Marino-Sewell doctrine is an

unreasonable interpretation of § 902(2), because the Board’s

interpretation differs from the majority of states’ workers’

compensation statutes with similar language. Pedroza con-

tends that, since state workers’ compensation allows for com-

pensation for mental or psychological disabilities without

inquiry into whether the employer engaged in a legitimate

personnel decision, the Longshore Act should follow the simi-

lar trajectory. Pedroza also notes that several state legislatures

have developed special barriers similar to Marino-Sewell, to

govern mental or psychological disabilities or injuries.3 There-

fore, absent congressional action to take similar steps, the

Longshore Act provides compensation for psychological dis-

abilities or injuries without inquiry into legitimate personnel

decisions. We disagree.

3

In California, the legislature enacted Cal. Labor Code § 3208.3(h) in

1993 to “establish a new and higher threshold of compensability for psy-

chiatric injury.” See also Cal. Labor Code § 3208.3 (c) (“No compensation

. . . shall be paid by an employer for a psychiatric injury if the injury was

substantially caused by a lawful, nondiscriminatory, good faith personnel

action.”).

In New York, the legislature in 1990 enacted a similar provision to

redefine injury. It reads “an injury which is solely mental and is based on

work-related stress if such mental injury is a direct consequence of a law-

ful personnel decision involving a disciplinary action, work evaluation,

job transfer, demotion or termination taken in good faith by the employ-

er.” See Gamble v. New York State Narcotics Control Comm’n, 400

N.Y.S.2d 599 (N.Y. App. Div. 1977).

In Oregon, the legislature in 1998 added a provision that barred com-

pensation for mental disorders unless it is a product of “conditions other

than generally inherent in every working situation or reasonable disciplin-

ary, corrective or job performance evaluation by the employer or cessation

in employment.” Pet. Br. 29. This is codification of the Marino-Sewell

doctrine. Prior to this legislation, Oregon law recognized compensability

of psychological injuries as a result of legitimate personnel decisions. See

Korter v. EBI Companies, 610 P.2d 312 (Or. Ct. App. 1980).

17290 PEDROZA v. BRB

Pedroza’s argument ignores the history of the Longshore

Act. Since its inception in 1927 and subsequent amendment

in 1972, the Longshore Act was designed to create a uniform

policy to provide workers’ compensation for longshoremen

and harbor workers. Northeast Marine Terminal Co. Inc. v.

Caputo, 432 U.S. 249, 256-59 (1977). The legislative history

of the 1972 amendments to the Longshore Act demonstrates

that Congress viewed most state workers’ compensation laws

as inadequate protection for longshoremen and harbor work-

ers. Id. at 263. Moreover, congressional inaction is not a reli-

able guide to determine legislative intent. United States v.

Craft, 535 U.S. 274, 287 (2002).

Pedroza next contends that the Marino-Sewell doctrine vio-

lates Longshore Act policy of no fault liability. Section 904(b)

states “compensation shall be irrespective of fault as a cause

for injury.” Thus, as Pedroza argues, the Marino-Sewell

inquiry to whether a personnel action was legitimate or illegit-

imate is a question of fault. Thus, as Pedroza argues, Marino-

Sewell is inconsistent with workers’ compensation laws. We

disagree.

It is true, that the basic premise of the workers’ compensa-

tion system is that an employer is protected, from full tort lia-

bility for employment related injuries even when it is at fault,

in exchange for bearing limited liability for compensation and

medical benefits as a cost of the business. However, the

Marino-Sewell doctrine does not disrupt this system. The

Marino-Sewell doctrine merely refines the type of

employment-related activities that could give rise to a work-

ers’ compensation claim. Furthermore, the distinction that the

Marino-Sewell doctrine creates between “legitimate” or “ille-

gitimate” personnel actions is not about fault, it is about

whether the employer’s actions created an environment of

poor working conditions to trigger psychological injuries.

[9] The Marino-Sewell modification strikes a balance

between the employer and the employee. The Marino prong

PEDROZA v. BRB 17291

allows the employer to take personnel actions without fear of

a workers’ compensation claim due to a psychological injury

from their actions. Meanwhile, the Sewell prong puts a limit

on the type of legitimate personnel actions in which the

employer may engage without fear of workers’ compensation

claims, because some personnel actions can facilitate poor

working conditions that could trigger compensable work

related psychological injuries such as “harassment by her

supervisor,” “verbal accusations,” and “physical harm.” Both

of these cases create a balance between employee and

employer. Marino supports the employer’s concerns while the

Sewell prong protects the employees. This is an important bal-

ance between the needs of employers and employees. See

Morrison-Knudsen Constr. Co., 461 U.S. at 635 (explaining

that the Longshore Act was designed to strike a balance

between the concerns of employers and employees).

CONCLUSION

[10] We hold that psychological injuries arising from legit-

imate personnel actions are not compensable under the Long-

shore Act. Therefore, the BRB’s development of the Marino-

Sewell doctrine is a correct interpretation of the Longshore

Act and a reflection of its underlying policy.

PETITION DENIED.

PREGERSON, Circuit Judge, concurring specially:

I write separately to emphasize that our holding concerns

legitimate personnel actions, and not employer conduct that is

in any way hostile, vindictive, malicious, mean, insensitive,

crude, or abusive.