Reply Brief — Prolerized New England Co. v. Benefits Review Board

No. 80-1609. MN

In the ner’

an ea. ee

Supreme Court of the United States.

Ocroser TERM, 1980.

PROLERIZED NEW ENGLAND COMPANY

AND

HARTFORD ACCIDENT & INDEMNITY COMPANY,

PETITIONERS,

v

BENEFITS REVIEW BOARD,

UNITED STATES DEPARTMENT OF LABOR,

DIRECTOR, OFFICE OF WORKERS’

COMPENSATION PROGRAMS,

UNITED STATES DEPARTMENT OF LABOR,

AND

RICHARD F. McNEIL,

RESPONDENTS.

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT

OF APPEALS FOR THE FIRST CIRCUIT.

Reply Brief in Support of Petition for Certiorari.

Of Counsel: RicHarp P. Warp,

Ropes & Gray,

Joun H. Mason,

225 Franklin Street,

Davip M. MANDEL,

Ropes & Gray,

225 Franklin Street, (617) 423-6100

Boston, Massachusetts 02110. Counsel for Petitioners

(617) 423-6100

Trmotny F, NEvILs,

SULLIVAN AND CRONIN,

One Boston Place,

Boston, Massachusetts 02108.

(617) 523-6434

ee Ry

Fy

BATEMAN & SLADE, INC. BOSTON , MASSACHUS TTS

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Boston, Massachusetts 02110.

Table of Contents.

Argument

Conclusion

Table of Authorities Cited.

CASES.

Boudloche v. Howard Trucking Co., Inc., 632 F.2d

1346 (5th Cir. 1980), cert. filed, Docket No. 80-

1563, March 14, 1981

Cargill, Inc. v. Powell, 573 F.2d 561 (9th Cir. 1977),

vacated and remanded, 444 U.S. 987 (1979)

Castro v. Hugo-Neu Proler Co., 10 BRBS 35 (1979)

Dravo Corp. v. Banks, 567 F.2d 593 (3d Cir. 1977)

Dravo Corp. v. Maxin, 545 F.2d 374 (3d Cir. 1976),

cert. denied, 433 U.S. 908 (1977)

Dravo Corp. v. OSHRC, 613 F.2d 1227 (3d Cir. 1980)

Fusco v. Perini North River Associates, 601 F.2d 659

(2d Cir. 1979), vacated and remanded, 444 U.S.

1028 (1980)

Maher Terminals, Inc. v. Farrell, 548 F.2d 476 (3d Cir.

1977)

Northeast Marine Terminal Co., Inc. v. Caputo, 432

U.S. 249 (1977)

P.C., Pfeiffer Co., Inc. v. Ford, 444 U.S. 69 (1979)

Securities and Exchange Commission v. Chenery, 318

U.S. 80 (1943), 332 U.S. 194 (1947)

Stockman v. John T. Clark & Sons, Inc., 539 F.2d 264

(1st Cir. 1976), cert. denied, 433 U.S. 908 (1977)

Walter Tantzen, Inc. v. Shaughnessy, 601 F.2d 670 (2d

Cir. 1979)

5, 6

No. 80-1609.

In the

Supreme Court of the United States.

OcrosBer TERM, 1980.

PROLERIZED NEW ENGLAND COMPANY

AND

HARTFORD ACCIDENT & INDEMNITY COMPANY,

PETITIONERS,

v.

BENEFITS REVIEW BOARD,

UNITED STATES DEPARTMENT OF LABOR,

DIRECTOR, OFFICE OF WORKERS’

COMPENSATION PROGRAMS,

UNITED STATES DEPARTMENT OF LABOR,

AND

RICHARD F. McNEIL,

RESPONDENTS.

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT

OF APPEALS FOR THE FIRST CIRCUIT.

Reply Brief in Support of Petitiou for Certiorari.

Argument.

1. On the issue of whether the First Circuit’s decision was

consistent with this Court’s decision in Securities and Ex-

change Commission v. Chenery Corp., 318 U.S. 80 (1943),

2

332 U.S. 194 (1947), and progeny, respondents state, without

any citation of authority, that

The fact that the Board’s opinion did not use the word

“substantial” in describing the extent of McNeil’s involve-

ment in the loading process does not preclude the court of

appeals from applying that quantitative term. . . .

Brief for the Federal Respondent in Opposition (hereinafter

“Dir. Br.”), p. 10. However, the problem in this case is not

one of semantics, but of substance. Certainly the fact that the

Board did not use the word “substantial” to describe McNeil’s

longshoring duties would be unimportant if it were clear that

the Board in fact applied a substantiality-of-duties test. How-

ever, as the respondents themselves recognize, Dir. Br., p. 5,

the Board in this case did not apply such a test, but rather

reasoned that under this Court’s decision in Northeast Marine

Terminal Co., Inc. v. Caputo, 432 U.S. 249 (1977), it is suffi-

cient for coverage under the Longshoremen’s and Harbor

Workers’ Compensation Act that an employee is covered for

“part” of his employment.! Since the Board based its decision

on this broad interpretation of Caputo, the First Circuit was

required under Chenery to “judge the propriety” of the

Board’s decision “solely by the grounds invoked” by the Board.

332 U.S. at 196. Contrary to respondents’ contention, the

essence of Chenery (and allocation of decision-making func-

tions between the courts and the Board) is that the court of ap-

peals may not sua sponte apply a substantiality-of-duties test

‘Indeed, it is precisely this interpretation of Caputo which the respondents

urge in this case, Dir. Br., pp. 7-9, and in Howard Trucking Co., Inc. v.

Boudloche, Dir. Br., pp. 6-10, and it is precisely this expansive assertion of

jurisdiction by the Board which makes this case worthy of this Court’s

review.

3

to “the very activity on which the Board relied in reaching its

coverage decision,” Dir. Br., p. 10, because it is the function

of the administrative law judge and the Board to determine

whether McNeil’s longshoring duties were “substantial,” and

the Board simply has not made such a determination in this

case.”

In an effort to avoid this conclusion, respondents argue that

McNeil’s duties in connection with the Shear “unquestionably

constituted a significant portion of his job.” Dir. Br., p. 10.

Although it is not this Court’s function to make such a “fac-

tual” inquiry (Dir. Br., p. 9), it should be noted that the ad-

ministrative law judge found, and the Board did not question,

that for several months prior to his injury, McNeil worked on

the night maintenance shift and was regularly assigned to the

Prolo Mill (A. 24a, 29a), and that during that period McNeil

also was responsible for changing the filters on the Shear only

on Saturday mornings (A. lla, 29a-30a). Contrary to re-

spondents’ contention, Dir. Br., p. 3, there is no evidence that

McNeil performed routine maintenance and repairs “on both

the Prolo Mill and the Shear” while he was on the night shift,

or that McNeil “regularly maintain[ed]” the Shear. Dir. Br.,

p. I.° Similarly, the record does not indicate that McNeil

* Respondents urge that the Board “did not say anything to” contradict

respondents’ contention that McNeil’s duties with respect to the Shear “con-

stituted a significant portion of his job.” However, in reviewing a decision of

the Benefits Review Board, a court of appeals is not free to draw factual in-

ferences simply because they are not inconsistent with the decisions below.

See, e.g., Walter Tantzen, Inc. v. Shaughnessy, 601 F.2d 670, 672 n.3 (2d

Cir. 1979).

*In support of this contention, respondents rely on the First Circuit’s state-

ment that “there was no evidence that McNeil’s duties with respect to the

Shear were reduced in the weeks and months before his accident.” A. 11a.

However, it is undisputed that for several months prior to his injury, McNeil

was assigned to the night maintenance shift and McNeil’s own testimony was

that during this period, it was on Saturday mornings that he worked on the

4

“was required to assist the shiploaders whenever they were

shorthanded.” Dir. Br., p. 3. The record shows only that

when the shiploader crew was shorthanded,‘ “extra men”

were assigned to assist the shiploading crew, R. 68, and that

“occasionally” McNeil was among the employees so assigned

(A. 22a, 38a).

2. Respondents correctly observe, Dir. Br., p. 9, that the

First Circuit did not hold that McNeil was covered by the Act

because he “occasionally” engaged in longshoring duties.

However, as discussed above, the decision of the Board was

predicated on such a holding and, accordingly, under the rule

of Chenery, the Board’s decision may be affirmed (if at all) on-

ly on that ground. Accordingly, as respondents recognize,

Dir. Br., pp. 7-9, the question of whether an employee who

performs longshoring duties “occasionally” is covered by the

Act is an important issue in this case.

Respondents oppose the granting of certiorari on this issue

on the ground that it has been settled by this Court’s decisions

in Caputo and P. C. Pfeiffer Co., Inc. v. Ford, 444 U.S. 69

(1979). However, there is nothing in Caputo, which involved

a longshoreman who engaged in longshoring operations on a

daily basis, to support respondents’ view. See Petition for

Shear. R. 100. For the same reason, it is not true that “When McNeil ar-

rived at work each day, he did not know to which part of his employer’s

operation he would be assigned.” Dir. Br., p. 3. Although McNeil so

testified at one point, apparently in reference to some period of time during

the course of his 2% years of employment at Prolerized prior to the time that

he was assigned to the night maintenance shift, the administrative law

judge’s specific factual finding, that during the period that McNeil was

assigned to the night maintenance shift he was regularly assigned to the Prolo

Mill, was to the contrary.

*McNeil testified that the shiploader crew needed no assistance from other

employees, and he therefore performed no duties, in connection with the

loading of “prolo” steel, R. 43, which comprises 60% of Prolerized’s

business. R. 37.

5

Writ of Certiorari, pp. 7-8. If, as respondents contend, this

Court had intended to suggest that employees are covered by

the Act if they spend or ever spent any of their time in long-

shoring activities, the Court never would have cited with ap-

proval the Third Circuit’s decision in Maher Terminals, Inc.

v. Farrell, 548 F.2d 476 (3d Cir. 1977), and the Fourth Cir-

cuit’s decision in Stockman v. John T. Clark & Sons, Inc., 539

F.2d 264 (Ist Cir. 1976), cert. denied, 433 U.S. 908 (1977),

which had adopted “primary duties” and “overall duties”

tests, respectively.

Similarly, there is nothing in this Court’s decision in Ford,

which involved the question of whether loading or unloading

cargo being transferred between land and water-based ship-

pers is a “longshoring operation” at all, to support the conten-

tion that an employee who performs longshoring operations

only “occasionally” is covered by the Act during the entire

course of his employment. Indeed, this Court’s fundamental

holding in Ford was that the Act establishes “an occupational

test,” 444 U.S. at 80 (emphasis added), and it would be irra-

tional to rule that an employee who “occasionally” engages in

longshoring duties but who spends no significant amount of

time on such duties is employed in the occupation of “long-

shoreman.”

Contrary to respondents’ contention, Dir. Br., pp. 8-9, the

Second, Third and Ninth Circuits have taken a position con-

flicting with that of respondents and the Fifth Circuit in

Boudloche v. Howard Trucking Co., Inc., 632 F.2d 1346 (5th

Cir. 1980), cert. filed, Docket No. 80-1563, March 14, 1981.

The Third Circuit in Dravo Corp. v. OSHRC, 613 F.2d 1227,

1233 n.9 (3d Cir. 1980), did not abandon its earlier decisions

in Maher Terminals, Inc. v. Farrell, supra, cited with ap-

proval in Caputo, supra, 432 U.S. at 272-273 n.34, and Dravo

_ Corp. v. Banks, 567 F.2d 593 (3d Cir. 1977). In Dravo Corp.

v. OSHRC, the Third Circuit stated only that its earlier sug-

6

gestion in Dravo Corp. v. Maxin, 545 F.2d 374 (3d Cir. 1976),

cert. denied, 433 U.S. 908 (1977) — that the “great majority”

of an employee’s work must be maritime in nature in order to

bring an employee within the scope of the Act — “may have

reflected too narrow an interpretation of the Act.” 613 F.2d

at 1233 n.9. The Third Circuit did not even suggest that it

was abandoning the “primary duties” test of Banks or Farrell.

Similarly, although the issue which this Court considered in

Cargill, Inc. v. Powell, 573 F.2d 561 (9th Cir. 1977), vacated

and remanded, 444 U.S. 987 (1979), did not involve the ques-

tion presented by this case, the Ninth Circuit in Cargill

squarely ruled that an employee who had not engaged in long-

shoring duties for several months at the time of his injury was

not covered by the Act, and that the language in Caputo relied

upon by respondents herein must be read in light of the fact

that the employee in that case spent “a part of” each workday

in longshoring activities. 573 F.2d at 563-564.5 Finally, the

Second Circuit in Fusco v. Perini North River Associates, 601

F.2d 659 (2d Cir. 1979), vacated and remanded, 444 U.S.

1028 (1980), clearly stated that coverage under the Act

depends upon en employee’s “major activities.” 601 F.2d at

668.°

3. Respondents’ assertion (Dir. Br., p.11 n.9) that the peti-

tion “does not present any question concerning the correctness

*In view of this Court’s disposition of Cargill, it had no occasion to con-

sider the Ninth Circuit’s holding on this issue.

* Respondents note, Dir. Br., p. 9 n.7, that Judge Wyzanski, who wrote

the Second Circuit's decision in Fusco, joined in the First Circuit's decision in

this case. However, the First Circuit, by applying sua sponte a

substantiality-of-duties test which was not relied upon by the Board, found it

“unnecessary” to consider the contention that “occasional” duties are suffi-

cient for coverage under the Act. In short, by failing to adhere to the scope

of review dictated by Chenery, the First Circuit eliminated the possibility

that its decision could conflict with the Second Circuit’s decision in Fusco on

this point.

7

of the court of appeals’ observation that the Shear is a physical-

ly distinct part of the employer’s operation whose sole function

is to prepare goods for shipment” is incorrect. The First Cir-

cuit’s observation in this regard was predicated on the Board’s

“foray into the record” (A. 8a), to make a factual finding with

respect to the purpose of the Shear, which petitioners contend

was improper.

Respondents’ principal defense of the Board’s “foray into

the record” is that McNeil’s testimony “was not challenged or

contradicted.” However, it was undisputed that the Shear cut

all “heavy” steel into strips of four feet or less and McNeil

himself admitted that the sheared metal was not necessarily

loaded onto ships (R. 38; A. 23a). On the basis of this

evidence, it would be proper to infer that the cutting per-

formed by the Shear serves a number of purposes, such as ac-

commodating customers’ furnaces, facilitating transportation,

and the like. Cf. Castro v. Hugo-Neu Proler Co., 10 BRBS 35

(1979).”

Respondents also seek to dismiss the problem of the Board’s

fact-finding by suggesting that the only problem was that “the

administrative law judge did not specify the machine’s pur-

pose in his decision” (Dir. Br., p. 11). However, while the

administrative law judge did not in haec verba discredit

McNeil’s testimony, it is clear that the administrative law

judge did not accept this testimony. He found that metal is

"Petitioners urged this point in the court of appeals, and respondents

therefore are mistaken in asserting (Dir. Br., p. 11) that “[e]ven now, peti-

tioners do not suggest that the Shear cut steel for some other purpose.” In-

deed, petitioners contended in the court of appeals, as they do before this

Court, that if the record with respect to this jurisdictional issue — as to

which the claimant has the burden of proof — appears inadequate to enable

review of the administrative law judge’s decision, the case should be remand-

ed to the administrative law judge for additional factual findings or further

proceedings.

8

“processed” through the Shear (A. 23a), and that all of

McNeil’s work for the months prior to his injury was related to

“the manufacturing or reprocessing phase of Employer’s

operation which was wholly separate and distinct from the

loading of vessels” (A. 30a). He distinguished a prior decision

by the Board on the ground that that case “involved ... a

shearer machine cutting scrap metal destined for export,”

whereas McNeil “was injured while employed in the manufac-

turing, or reprocessing, phase of Employer’s operation”

(A. 30a-3la). On remand, he vigorously protested the Board’s

factual findings (A. 42a, 45a-49a, 75a n.3). In these circum-

stances, respondents’ contention that “The Board’s comments

were fully consistent with the administrative law judge’s find-

ings” (Dir. Br., p. 11) is simply wrong.

Conclusion.

For the foregoing reasons and for the reasons stated in the

petition for a writ of certiorari, the petition for a writ of cer-

tiorari should be granted.

Respectfully submitted,

Of Counsel: RICHARD P. WARD,

JOHN H. MASON, ROPES & GRAY,

DAVID M. MANDEL, 225 Franklin Street,

ROPES & GRAY, Boston, Massachusetts 02110.

225 Franklin Street, (617) 423-6100

Boston, Massachusetts 02110. Counsel for Petitioners

(617) 423-6100

TIMOTHY F. NEVILS,

SULLIVAN anp CRONIN,

One Boston Place,

Boston, Massachusetts 02108.

(617) 523-6434