The opinion
PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
DONALD GILCHRIST,
Petitioner,
v.
NEWPORT NEWS SHIPBUILDING AND
No. 97-1402
DRY DOCK COMPANY; DIRECTOR,
OFFICE OF WORKERS' COMPENSATION
PROGRAMS, UNITED STATES
DEPARTMENT OF LABOR,
Respondents.
On Petition for Review of an Order
of the Benefits Review Board.
(94-2187, 96-659)
Argued: December 3, 1997
Decided: February 4, 1998
Before MOTZ, Circuit Judge, WILSON,
Chief United States District Judge for the
Western District of Virginia, sitting by designation, and
WILLIAMS, Senior United States District Judge for the
Eastern District of Virginia, sitting by designation.
_________________________________________________________________
Affirmed by published opinion. Senior Judge Williams wrote the
opinion, in which Judge Motz and Chief Judge Wilson joined.
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COUNSEL
ARGUED: Matthew Harley Kraft, RUTTER & MONTAGNA,
L.L.P., Norfolk, Virginia, for Petitioner. Benjamin McMullan Mason,
MASON & MASON, P.C., Newport News, Virginia, for Respon-
dents. ON BRIEF: John H. Klein, RUTTER & MONTAGNA,
L.L.P., Norfolk, Virginia, for Petitioner.
_________________________________________________________________
OPINION
WILLIAMS, Senior District Judge:
Claimant-Petitioner Donald D. Gilchrist ("Gilchrist") appeals a
decision of the Benefits Review Board ("BRB") awarding him com-
pensation under the Longshore and Harbor Workers' Compensation
Act ("LHWCA"), 33 U.S.C. § 908(3), for a ten percent permanent
partial impairment to each of his hands. Petitioner sought greater
compensation based on his loss of wage earning capacity. The BRB
affirmed the Administrative Law Judge's ("ALJ") initial Decision and
Order, as well as the ALJ's Decision and Order on modification,
finding that substantial evidence supported the ALJ's ultimate find-
ings and denial of petitioner's claim for additional compensation.
Because we agree with the ALJ and the BRB that the Supreme
Court's decision in PEPCO v. Director, OWCP, 449 U.S. 268, 14
BRBS 363 (1980), precludes consideration of economic factors in the
computation of disability under scheduled awards, we affirm the deci-
sion of the BRB.
I.
While working as a shipfitter for Newport News Shipbuilding and
Dry Dock Co. ("Employer" or "Shipyard"), Donald D. Gilchrist sus-
tained an injury to both of his hands when he slipped while climbing
up a ladder on February 5, 1984. At the hearing before the ALJ, the
parties stipulated to the following facts:
1. That the parties are subject to the jurisdiction of the
Longshore Act;
2. That on February 15, 1984, Gilchrist was in the
employ of Employer, which is self-insured;
2
3. That on said date Gilchrist, while performing duties as
a shipfitter, sustained bilateral carpal tunnel syndrome
arising out of and in the course of employment;
4. That written notice of the injury was given within
thirty (30) days;
5. That Employer furnished Gilchrist with medical ser-
vices in accordance with the provisions of Section 7 of
the Act;
6. That, at the time of injury, Gilchrist had an average
weekly wage of $374.91, which yields a compensation
rate of $249.94;
7. That Gilchrist has been paid temporary total disability
compensation from October 7, 1988 through Decem-
ber 11, 1988 and from March 13, 1989 through April
22, 1990;
8. That Gilchrist has been paid $15.25 per week in tem-
porary partial disability compensation from July 31,
1986 through October 6, 1988;
9. That Gilchrist was temporarily and totally disabled
from May 7, 1990 through June 11, 1990;
10. That Gilchrist was previously awarded compensation
for a 10% permanent disability for loss of use of his
right hand and 10% permanent disability for loss of
use of his left hand.
Petitioner is a 38 year old former employee of Newport News
Shipbuilding and Dry Dock. He began working at the Shipyard in
May 1982 as a shipfitter in the pipe fitters department. He sustained
a work related injury to both hands in February 1984 and was treated
by Dr. Gwathmey who performed surgery on Gilchrist's left hand and
assigned permanent restrictions. As a result, Gilchrist was unable to
continue working as a shipfitter. Dr. Gwathmey found that Gilchrist
3
reached maximum medical improvement on June 12, 1990 with a
10% permanent partial disability in each hand.1
Following Gilchrist's February 15, 1984 injury, Gilchrist was out
of work from October 7, 1988 through December 11, 1988; from
March 13, 1989 through April 22, 1990; and from May 7, 1990
through June 11, 1990. At the same time, Gilchrist worked at the
Shipyard under his light-duty restrictions from July 31, 1986 through
October 6, 1988; and from December 12, 1988 through December 15,
1988. After reaching his maximum medical improvement, there was
no longer any work available to him within his restrictions at the
Shipyard and Gilchrist began to work with a vocational rehabilitation
counselor from the Shipyard. In 1991 Gilchrist began to work as a
part-time security guard with The Wackenhut Corporation which paid
$4.25 per hour. Approximately six to eight months later Gilchrist left
Wackenhut for a higher paying job at Lowe's Home Center, Inc. as
a merchandise stocker. At the time of the ALJ hearing, he was
employed at Lowe's, working approximately 35 hours per week at
$6.25 per hour, yielding a weekly average of $218.75. Gilchrist con-
tinues to experience problems with his hands, including pain, numb-
ness and stiffness. He wears braces on both hands and takes
prescribed pain medication.
Gilchrist filed a claim for worker's compensation benefits under
the provisions of the LHWCA. 33 U.S.C. § 901 et seq. On December
18, 1991, District Director B.E. Voultsides entered a Compensation
Order - Award of Compensation, in which he awarded Gilchrist com-
pensation under the schedule for a ten percent permanent partial dis-
ability to each hand. A formal hearing was held before Administrative
Law Judge Malamphy in Newport News Virginia, on October 19,
1993. At the hearing Gilchrist sought a scheduled award for perma-
nent partial disability based on his loss of wage earning capacity as
opposed to an award based solely upon his physician's medical
impairment ratings.
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1 The Shipyard's medical notes of April 23, 1990 state that Gilchrist
reached maximum medical improvement on April 23, 1990 and that
there was no longer any work available to Gilchrist within his restric-
tions.
4
On March 10, 1994, Judge Malamphy issued a Decision and Order
Denying Greater Permanent Partial Disability Ratings for Either
Hand in which he denied Gilchrist's claim for disability benefits
based on economic evidence, holding that Gilchrist was limited to the
amount of benefits corresponding to his medical impairment ratings
assigned by his treating physician under Section 8(c) of the LHWCA.
Gilchrist filed a timely Notice of Appeal to the Benefits Review
Board, and a request for modification with the ALJ. The Board subse-
quently remanded the case to the ALJ for modification proceedings.
Judge Malamphy's January 31, 1996 Decision and Order Denying
Claimant's Petition for Modification of the Decision Issued on March
10, 1994 denied Gilchrist's petition for modification. Gilchrist
appealed the matter to the Board. By Order dated March 25, 1996, the
Board reinstated Gilchrist's prior appeal, BRB No. 94-2187, and con-
solidated it for purposes of decision with Gilchrist's appeal of the
Decision and Order on modification, BRB 96-0659. The Board
issued its Decision and Order, dated January 28, 1997, in which it
affirmed the ALJ's initial Decision and Order , as well as the ALJ's
Decision and Order on modification. Gilchrist filed a Petition for
Review of the Board's Decision with this Court as of March 27, 1997.2
II.
At issue in this case is whether an administrative law judge under
the LHWCA can consider loss of wage earning capacity when calcu-
lating a disability rating or is able to rely on the scheduled impairment
rating set forth in the Act under 33 U.S.C. § 908(c)(3).
This Court must uphold the Benefits Review Board's decision con-
cerning the administrative law judge's decision if the findings of the
administrative law judge are supported by substantial evidence in the
record as a whole, are rational, and are in accordance with the law.
Banks v. Chicago Grain Trimmers Ass'n, 390 U.S. 459, 467 (1968);
O'Keeffe v. Smith, Hinchman & Grylls Associates, 380 U.S. 359
(1965). On appeal, the decision of the Benefits Review Board is
reviewed for errors of law and for adherence to the statutory standard
set forth in section 921(b)(3). Such review is de novo and no defer-
_________________________________________________________________
2 Gilchrist filed an earlier appeal with this Court which was dismissed
by Order dated February 12, 1997.
5
ence is accorded the BRB's legal interpretations of the Longshore
Act. Coloma v. Director, OWCP, 897 F.2d 394, 397 (9th Cir. 1990).
In the case before this Court, the parties agree that Gilchrist has
suffered a 10% permanent partial impairment of his hands and that
Gilchrist was awarded compensation for a 10% permanent partial dis-
ability for loss of use of his right and left hands. The dispute in ques-
tion is whether in calculating a disability rating, an administrative law
judge can take into account the economic effects of that loss in
assigning claimant's disability rating. Administrative Law Judge
Malamphy held that he could not. He based his decision on Potomac
Electric Power Co. v. Director, OWCP, 449 U.S. 268, 14 BRBS 363
(1980) ("PEPCO"), where the Supreme Court held that where a
claimant is permanently partially disabled by an injury falling under
the Section 8(c) schedule, he is limited to a schedule award and can-
not seek a higher recovery under Section 8(c)(21). Gilchrist's injuries
are specifically provided for in the schedule award Section 8(c)(3)
which states under permanent partial disability,"Hand lost, two hun-
dred and forty-four weeks' compensation." Therefore, the ALJ held
that PEPCO was controlling in the case and additional compensation
beyond the 10% disability could not be awarded. The ALJ declined
to consider the economic effects of the loss of use of his right and left
hands in assigning claimant's disability rating.
As articulated in PEPCO, compensation for a permanent partial
disability must be determined in one of two ways. First, if the injury
is of a kind specifically identified in the schedule set forth in
§§ 8(c)(1)-(20) of the Act, 33 U.S.C. §§ 908(c)(1)-(20), the injured
employee is entitled to receive two-thirds of his average weekly
wages for a specific number of weeks, regardless of whether his earn-
ing capacity has actually been impaired. Second, in all other cases,
§ 8(c)(21), 33 U.S.C. § 908(c)(21), authorizes compensation equal to
two-thirds of the difference between the employee's preinjury average
weekly wages and his postinjury wage-earning capacity, during the
period of his disability. 449 U.S. 268, 268 (1980). In PEPCO the
claimant suffered a physical impairment of 5 to 20% loss of the use
of one leg, but the resulting impairment of his earning capacity was
apparently in excess of 40%. Id. at 271. Claimant's injury in that case
was covered within the scheduled award of § 8(c) but claimant moved
for a larger award measured by two-thirds of the difference between
6
his average weekly earnings before the injury and his subsequent
wage-earning capacity, multiplied by the number of weeks that his
disability continued.
The Supreme Court held in PEPCO that the plain language in the
Act provided a compensation schedule for 20 different specific inju-
ries. The additional subparagraph, § 8(c)(21) applied only to injuries
not included within the list of specific injuries. It was not intended to
provide an alternative method of compensation for the cases covered
in the preceding paragraphs. Id. at 274. The Court held that these pro-
visions were mutually exclusive and that injuries covered under the
schedule award could not be pursued instead through§ 8(c)(21) in an
effort to obtain a higher award based on economic loss.
Furthermore, the Supreme Court in PEPCO specifically rejected
the argument that the anomalous results produced by requiring resort
to the schedule permitted an alternate calculation."Unless an injury
results in a scheduled disability, the employee's compensation is
dependent upon proving a loss of wage-earning capacity; in contrast,
even though a scheduled injury may have no actual effect on an
employee's capacity to perform a particular job or to maintain a par-
ticular level of income, compensation in the schedule amount must be
paid. Conversely, the schedule may seriously under compensate some
employees . . . ." Id. at 283. The Supreme Court acknowledged the
possibility of incongruous results but found that the compelling lan-
guage of the statute produced them and could not be disregarded by
the Court. It specifically invited Congress to review the statutory
compensation schedule.
In the case before this Court, Gilchrist attempts to distinguish his
argument from that which was rejected in PEPCO by claiming that
he is not attempting to receive greater recovery under § 8(c)(21).
Instead, Gilchrist argues that the ALJ properly failed to consider loss
of wage earning capacity in translating Gilchrist's medical impair-
ment into a disability rating under the schedule.
Although PEPCO does not address specifically Gilchrist's claim,
as he is not seeking an alternative method of compensation calcula-
tion under § 8(c)(21), the substance of the opinion leads this Court to
affirm the ALJ's opinion that PEPCO precludes in spirit the calcula-
7
tion method Gilchrist advocates. A contrary ruling would permit a
claimant to benefit both from the presumptive disability period cre-
ated by the schedule and from a demonstrated lower wage earning
capacity like that required in § 8(c)(21), a result deliberately barred
by the Supreme Court in PEPCO. In Gilchrist's case, had he been
able to demonstrate no economic loss - i.e. finding alternative
employment at comparable pay, he would still, according to the dicta
in PEPCO be entitled to the same payment under the scheduled award
assuming the same impairment.3
In the seventeen years since the PEPCO decision, Congress has not
amended the statute in such a way as to correct the incongruous
results in scheduled awards. In fact, amendments were made to the
Act in 1984, changing both the means of calculation for loss of hear-
ing under § 8(c)(13) and the means for reconsideration under
§ 8(c)(21). Despite the Claimant's suggestions that the amendment to
§ 8(c)(13) demonstrates congressional intent to distinguish "disabil-
ity" from "impairment" except in situations where the statute deliber-
ately equates them, the amendments instead evidence Congress'
declination to grant recipients of scheduled awards greater relief for
demonstrated economic loss. As has been previously observed, it is
not to be lightly assumed that Congress intended that the LHWCA
produce incongruous results. Baltimore & Phila. Steamboat Co. v.
Norton, 284 U.S. 408, 412-413 (1932). In this case no other conclu-
sion is permissible, however, where the Supreme Court has clearly
spoken and the statute remains in pertinent part unmodified.
AFFIRMED
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3 The unique nature of the scheduled awards was noted by Justice
Blackmun in his dissent in PEPCO. Acknowledging that diminution in
earning ability need not be demonstrated in order to be eligible for com-
pensation under the schedule he wrote, "To this extent, the schedule is
an exception to the principle that disability is an economic concept rather
than a medical one, but it is an exception that Congress deliberately
chose to make." PEPCO at FN5.
8