Opposition Brief — Todd Pacific Shipyards Corp. v. Director, Office of Workers' Compensation Programs

No. 90-1157 FEB 8.8. 1SSt!

OFFICE THE CLERK

IN THE =

Supreme Court of the United States

Octcwer Term, 1990

TODD PACIFIC SHIPYARDS CORPORATION

and

AETNA CASUALTY AND SURETY COMPANY,

Petitioners,

Vv.

DIRECTOR, OFFICE OF WORKERS'

COMPENSATION PROGRAMS,

UNITED STATES DEPARTMENT OF LABOR

and

MARGARET L. JOHNSON,

Respondent.

BRIEF IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

PAUL W. WHELAN

Counsel of Record

SCHROETER, GOLDMARK & BENDER

500 Central Building

Seattle, WA 98104

(206) 622-8000

Counsel for Respondents

February 11, 1991

aBCD Legal Printers Seattle Washington

TABLE OF CONTENTS

STATEMENT OF THE CASE

CERTIORARI SHOULD NOT BE GRANTED

A. The Opinion Below Was

nn . « 6 «© # » «

CONCLUSION. .

Page

20

ii

TABLE OF AUTHORITIES

CASES Page

Todd Shipyard Corp. v. Allen, 666

F.2d 399 (9th Cir.), cert. denied,

456 8.6. 36086 (2987). 2k eT. 82=15

Avendale Shipyards, Inc. v. Kennel, 9314

F.2d 88 (5th Cir. 1990) ;

Banner v. Nat. Steel & Shipbuilding

Co., 5 B.R.B.S. 290 (3970),

aff'd in pertinent part, 600

F.2d 1288 (9th Cir. 1979)

Barker v. Tri-State Terminals, Inc.,

3 B.R.B.S. 244 (1976)

Bath Iron Works Corp. v. Galin, 605

F.2d 583 (lst Cir. 1979)

Betts v. Arthur Snowden Co., 14 B.R.B.S.

805 (1982)

Chiarella v. Bethlehem Steel Corp., 13

B.R.B.S. 91 (1981) St i ee

Del Vacchio v. Sun Ship Building &

Drydock Co., 16 B.R.B.S. 190 (1984)

Holcomb v. Robert W. Kirk & Assoc.,

Ing,, 655 F.2da $89 (Sth Cir.)

cert. denied, 459 U.S. 1170,

igs &. Ce. O24, 74 Lb. Beas 26

1013 (1981) a ae

Ingalls Shipbuilding, Inc. v. Director,

OWCP, 898 F.2d 1088 (5th Cir.

EOGG) eee ee ee ee ee eg

16

14

19

16

16

iii

TABLE OF AUTHORITIES, continued

CASES Page

J.M. Martinac Shipbuilding v. Director,

OWCP, 900 F.2d 180 (9th Cir.

eee ins ¢ @ ws = « « « Bay 3&8

Marales v. General Dynamics Corp., 769

F.2d 66 (2d Cir. 1985) a te i ce A ae

O'Keeffe v. Smith, Hinchman & Grylls

Associates, Inc., 380 U.S. 359,

oe we Gee 204d, 13 L. EG. 2a

DT rn « @ oe 6 « « « © «© «© By 3, 29

Pillsbury v. United Engineering Co., 342

| a ca: i © |

Rubin v. United States of America, 449

ee eee s «= + 5 « « s+ « « -L6

Saif Corp./Oregon Ship v. Johnson, 908

one Owe Cer, £990). . . ks sl 2

Stancil v. Massey, 436 F.2d 274 (D.C.

ee ey ew BDSy 2S

Stevensen v. Linens of the Week, 688

P.2@ 93, 223 U.S. App. D.c.

I (1982) a aeeeee

16

Todd Shipyards Corporation v. Black,

717 F.2d 1280 (1983) , cert. denied,

466 U.S. 937 (1983) faa te Ba eee 286, 25

Tri-State Terminals, Inc. v. Jessi, 596

F.2d 752 (7th Cir. 1979) i. soe 6

iv

TABLE OF AUTHORITIES, continued

CASES

United States Dept. of Labor v. Pirini

North River Assoc., 459 U.S. 297,

103 3. Ce. 634, 74 LL. Ee. 2a

Re COON a Goa ee ae oy

STATUTES AND OTHER AUTHORITIES

> U.8.C. § Sa4 . 6 « s

oy ee Gey 2? re

5 U.S.C. § 1001

ee ee ee ae 2

33 U.S.C. § 902(10)

33 U.S.C. § 908

33 U.S.C. § 908(a)

oS |) oar

33 U.S.C. § 910(a)

33 U.S.C. § 910(b)

33 U.S.C. § 910(c)

53° O.5.0. $:900Thi. . .

Page

16

STATEMENT OF THE CASE

Respondent adopts the Administrative

Law Judge's (hereinafter ALJ) recitation of

the facts. (Appendix A, Brief of

Petitioner.) That record established the

following facts. In December, 1979, while

working as a shipscaler at Todd Shipyard,

Respondent Johnson fell, injuring her hands.

At that time her pre-injury wage was

stipulated to be $259.32. She returned to

intermittent work until she underwent

bilateral carpal tunnel surgery. The

physical impairment of her hands’7~ was

subsequently determined to be 20% by her

surgeon. Respondent returned to work,

sometimes intermittently, until she injured

her back at Todd Shipyard in August, 1980.

As to that date, her pre-injury wage was

stipulated to be $519.29. Following

treatment for her back, Respondent again

returnec to work, sometimes intermittently,

until May, 1983, the date ALJ found her to

be totally disabled on the basis of

"tendinitis and arthritis which affects her

hands."

CERTIORARI SHOULD NOT BE GRANTED

The pertinent language of the Longshore

Act, 33 U.S.C. § 910, § 902(2), § 908(a), is

unambiguous. The decision of the Court of

Appeals is well within the clear language of

the Act and its interpretation by the

courts. See, e.g., Saif Corp./Oregon Ship

v. Johnson, 908 F.2d 1434 (9th Cir. 1990);

od Shipyards Corporation v. Black, 717

F.2d 1280, cert. denied, 466 U.S. 937

(1983).

The decision of the ALJ to apply the

average weekly wage closest to the 1983

manifestation of Respondent's permanent

total disability is supported by the record.

Evaluation of evidence is within’ the

appropriate discretion of the ALJ O'Keeffe

v. Smith, Hinchman & Grylls Associates,

Inc., 380 U.S. 359, 362, 85 S. Ct. 1012, 13

L. Ed. 2a 895 (1965). Both parties

stipulated to a 1980 average weekly wage.

The fact that the amount of that wage was

given in relation to another on the job

injury is inconsequential. The stipulated

amount is the appropriate basis for the

calculation of her compensation rate for

permanent total disability.

The ALJ explanation of the basis for

his decision is in compliance with the

Administrative Procedure Act (5 U.S.C.

§§ 554, 557(c)). See, O'Keeffe, supra, at

362.

A. The Opinion Below Was Correct.

The opinions of the Court of Appeals

and the ALJ are rooted in well-established

case law interpretations of the Longshore

and Harbor Workers Compensation Act (LHWCA).

The Ninth Circuit appropriately reviewed

only the legal questions ruled on by the

Benefits Review Board (BRB).

1. The opinion below correctly

construed the Act.

The Ninth Circuit Court of Appeals is

correct in its reading of the Act.

Respondent claims that the court correctly

interpreted the Act in light of the

definition provided in § 902(2), which

defines injury as:

[ajccidental injury or death arising

out of and in the course of

employment, and such occupational

disease or infection as arises

naturally out of such employment or as

naturally or unavoidably results from

such accidental injury.

(Emphasis added. )

Petitioner on the other hand focuses on

the allegedly inappropriate interpretation

of § 910(1i). Nothing in the Court of

Appeal's opinion or in the opinion of the

ALJ indicates that § 910(i) was used to

determine the compensation rate in this

case. The ALJ decision was rendered in

July, 1984, two months before § 910(i)

became law. Furthermore, § 910(i) does not

apply to the instant case. The 1984

Amendments to the Act addressed the

inequities of occupational disease victims

such as asbestos workers whose exposure did

not result in impairment until decades

later. The issue in such cases is whether

to apply the wage rate as of the date of

exposure or the wage rate at the date of

manifestation. See, e.g., Aduddell Owens-

Corning Fiberglas, 16 B.R.B.S. 131 (1984).

Congress resolved those issues in 1984.

See, e.g., § 910(d)(2) and (i). They have

nothing, however, to do with Respondent

Margaret Johnson's case. Respondent had a

physical injury followed directly by the

occupational diseases of traumatic

tendinitis and arthritis.

The Longshore Act, 33 U.S.C. § 910,

provides for three alternative methods for

computing the appropriate compensation rate.

The ALJ has broad discretion (Banner v. Nat.

Steel & Shipbuilding Co., 5 B.R.B.S. 290

dee..

(1970), aff'd in pertinent part, 600 F.2d

1288 (9th Cir. 1979)) to reach a fair and

reasonable approximation of a claimant's

wage-earning capacity (Barker v. Tri-State

Terminals, Inc., 3 B.R.B.S. 244 (1976),

aff'd sub. num., Tri-State Terminals, Inc.

¥, s068i, 596 F.2d 752 (7th Cir. 1979)).

The scheme of the LHWCA provided the

ALJ with the discretion to award

compensation to Ms. Johnson, in its

definitions § 902(2) and in the alternative

methods of calculation in § 910(a), (b) and

(c). The ALJ applied the clear language of

these sections in making the determination

of Ms. Johnson's compensation.

As can be seen, the court below did not

rely upon the inapplicable 1984 amendments,

but, rather, applied its own previous

interpretations of the Act (see, e.g., Todd

Shipyard Corp. v. Allen, 666 F.2d 399 (9th

Cir.), cert. denied, 459 U.S. 1034 (1987);

Todd Shipyard Corp. v. Black, supra) in

deciding this case.

The language of the Act is not

ambiguous and the Board as well as the

courts have so held. See, Del Vacchio Vv.

Sun Ship Building & Drydock Co., 16 B.R.B.S.

190, 193 (1984).

Petitioner cites Del Vacchio, supra,

for the proposition that payments are based

on an average weekly wage rate at the time

of injury for which compensation is claimed.

However, “a work related aggravation of a

pre-existing injury is compensable in itself

under the Act and is considered a new

injury." Del Vacchio at 193, citing

Chiarella _v. Bethlehem Steel Corp., 13

B.R.B.S. 91 (1981). Therefore, "average

weekly wage in aggravation cases must be

based on the claimant's earnings at the time

of the aggravation." Del Vacchio, at 193.

Based on this reasoning, the Board in Del

Vacchio reversed and awarded compensation

@

based on wages at the time of the

aggravation of the injury, thus using 1978

wages rather than 1973 wages. Id. at 193.

The Ninth Circuit decision in the

instant case noted that the LHWCA

compensates occupational disability, not

physical injury. (Appendix C-7, Brief of

Petitioner. ) Section 902(10) defines

disability as "incapacity because of injury

to earn the wages which the employee was

receiving at the time of injury in the same

or any other employment." The court noted

that "[wje have interpreted the word injury

to mean the date of disability rather than

the time of the accident .. ." (Appendix

C-7, Brief of Petitioner. )

In 1979, Respondent Johnson suffered

hand injuries that eventually required

surgery. The following year Respondent

suffered a back injury. Between 1980 and

1983, Respondent worked only sporadically as

a result of both the back injury and the

carpal tunnel syndrome. By May of 1983,

however, Respondent was unable to continue

her employment as a ship scaler because of

the work related aggravation of the

arthritis and tendinitis in her hands.

Whether the arthritis and tendinitis are an

"occupational disease" or the result of an

"injury" is essentially irrelevant under the

Act. The outcome is the same. Respondent

is permanently unable to engage in

reasonably continuous employment, and is,

hence, totally and permanently disabled.

Contrary to Petitioner's assertion, it

was unnecessary for the Ninth Circuit to

expand the language of the Longshore Act to

determine the correct compensation rate.

Rather, it could apply the broad language of

the Act to one of the situations

contemplated by the statutory framework.

The court below relied upon Todd Shipyards

Corp. v. Black, supra, to draw an analogy

10

between latent injuries and occupational

disease:

Although Black involved an

occupational disease, both its

rationale and dicta indicate that its

holding should apply to the

manifestation of latent and unknown

injuries as well. Black did not

distinguish between occupational

disease and occupational injury, but

rather treated both terms similarly.

Ninth Circuit Opinion. (Appendix C-6, Brief

of Petitioner.)

Whether a compensable total disability

stems from an injury and its sequelae or

from a traumatic injury followed by a

disease process, the compensation rate may

properly be based upon the date of

disability, rather than the date of the

accident or the date of occupational

exposure. |

2. The opinion below is well within

the established case law.

The Court of Appeals correctly applied

the Act in determining Respondent's

compensation rate. Since the issue was

© |

clear, the court found it unnecessary to

indulge in the fanciful statutory

construction suggested by Petitioner.

Petitioner cites Pillsbury v. United

Engineering Co., 342 U.S. 197, 199-201

(1952) and Ingalls Shipbuilding, Inc. v.

Director, OWCP, 898 F.2d 1088, 1094 (5th

Cir. 1990) for the proposition that

inequitable results may not be avoided by an

improper construction of the Longshore Act.

In the instant case, the Ninth Circuit did

avoid an inequitable result, but by

following the plain language of the statute.

Furthermore, Pillsbury, supra, is factually

distinguishable. In Pillsbury, the

claimant's injury was "pnatent," not

"latent." Both terms are clearly defined in

the Act. Obviously, to have misapplied a

well defined term of art would have changed

the intent of Congress. The opposite is

true here. Congress established three

distinct categories for which compensation

12

could be awarded -- traumatic injury,

disease resulting from injury, and late

manifesting occupational disease.

In the case of disability resulting

from physical injury the compensation rate

can, but need not always, be based upon the

pre-injury wage. This is only logical. An

injury is a necessary cause for economic

disability but such disability is not a

necessary outcome of an injury. Congress

contemplated this by establishing a

compensation scheme based upon the loss of

wage-earning capacity rather than _ mere

physical impairment. See, 33 U.S.C. § 908.

Petitioner chooses to ignore’ the

court's reasoning. Determining the date on

which compensation should be based, the

Ninth Circuit very clearly interpreted the

word "injury" to mean the date of

disability, citing Todd Shipyards Corp. v.

Allen, 666 F.2d 399, 401-02 (9th Cir. 1982),

cert. denied, 459 U.S. 1034 (1982). In

13

Allen the statute of limitations was deemed

to begin to run when the claimant became

aware of the full character of his harm.

(Appendix C-7, Brief of Petitioner.)

The court below also cited J.M.

Martinac Shipbuilding v. Director, OWCP, 9300

F.2d 180, 183-84 (9th Cir. 1990) for the

proposition that the word injury means the

date of disability. The employer in

Martinac argued that the statute of

limitations was triggered at the point of

claimant's accident. The court held that

even where a claimant suffered temporary

disability, the statute did not begin to run

until the claimant learned his disability

was permanent. Martinac, supra. (Appendix

C-7, Brief of Petitioner.)

Finally, the Ninth Circuit cited

Stancil v. Massey, 436 F.2d 274, 278 (D.C.

Cir. 1970). The D.C. Circuit distinguished

the terms Sinjury, * "disability" and

"accident." The Ninth Circuit adopted the

14

reasoning of Stancil to the effect that

Congress:

[d]id not intend to tie injury to the

fixed point of the accident. Rather,

injury "should encompass physical harm

of a kind which is unknown to the

employee at the time of the accident,

but which is later revealed. such as

an occupational disease or a latent

wound."

(Emphasis added.) (Appendix C-8, Brief of

Petitioner.)

The Ninth Circuit concluded that

Respondent Johnson suffered an injury to her

hands in 1979, but was not "injured" in the

sense of permanent economic disability until

1983, when she could no longer work. That

holding is in line with the accepted

interpretation of the statute followed by

the Ninth Circuit in previous décisions

(Todd Shipyards v. Black, supra; Todd

Shipyards v. Allen, supra; Martinac, supra)

and by other circuit courts. Stancil v.

Massey, supra; Marales v. General Dynamics

Corp., 769 F.2d 66 (2d Cir. 1985); Bath Iron

15

Works Corp. v. Galin, 605 F.2d 583 (lst Cir.

1979). In addition, this Court has denied

certiorari in cases where. these terms and

this statute was involved. Todd Shipyards

Corp. v. Allien, supra, cert. denied, 459

U.S. 1034 (1987); Todd Shipyards Corp. v.

Blac’, supra, cert. denied, 466 U.S. 937

(1983).

The logic of the Ninth Circuit's

opinion is unassailable, to wit:

[wjere we to hold that benefits should

be based on wages at the time of a

potentially disabling accident, we

would discourage workers like Johnson

from attempting to return to work.

(Appendix C-8, Brief of Petitioner.) As is

evident from the record, Respondent Johnson

did indeed continue to work in spite of her

injuries until March 1983 when she no longer

could perform her job.

Petitioner compares the instant case

with Ingalls, supra. However, Ingalls is

distinguishable because Mr. Ingalls was

already retired. In 1984, Congress

16

estab] 1ed a different scheme for retirees

(§ 910(d) (2J), and the petitioner in Ingalls

sought an interpretation of the statute

which was inconsistent with that scheme.

Finally, Petitioner cites Rubin vy.

United States of America, 449 U.S. 424, 430

(1981) for the proposition that when the

terms of a statute are unambiguous, judicial

inquiry ends. We agree. However,

Petitioner urges ambiguity where’ none

exists. Indeed, the Act was intended by

Congress to be given a broad and liberal

interpretation. United States Dept. of

Labor v. Pirini North River Assoc., 459 U.S.

4297, 103 S. Ct. 634, 74 L. E@. 2a €65

(1983); Avendale Shipyards, Inc. v. Kennel,

914 F.2d 88 (5th Cir. 1990); Stevensen v.

Linens of the Week, 688 F.2d 9%, 223 U.S.

App. D.C. I (1982); Holcomb v. Robert W.

Kirk & Assoc., Inc., 655 F.2d 589 (5th Cir.

1981), cert. denied, 459 U.S. 1170, 103 S.

ct. 814, 74 ~=L. Ed. 2d 1013 (1981).

ae

Petitioner seeks a narrow interpretation

which conflicts with the congressional

intent to compensate future wage loss based

upon a fair assessment of actual wages or

wage-earning capacity.

3. The decision below is supported by

the evidence -- the requirements of the

Administrative Procedure Act were satisfied.

Petitioner is correct in asserting that

5 U.S.C. § 557(c) requires the ALJ to give

reasons for the basis of his findings and

conclusions. In the instant case, the ALJ

did state which factors he considered

important. In determining the amount of

claimant's average weekly wage, he relied on

the best evidence available to him.

The most recent weekly wage to which

both parties stipulated was $519.29 as of

August 11, 1980. Furthermore, both parties

stipulated the claimant was last employed

May 19, 1983. There were no disputes

between the parties as to the sporadic work

18

record in the intervening period of time

from August 1980 to May 1983.

Petitioner reads the ALJ's paragraph on

determination of average weekly wages as if

it had no context. The ALJ's determination

comes after a complete discussion and

evaluation of the evidence and concludes

that the best evidence available leads to

the determination of wages. To construe the

decision otherwise would be to take the

paragraph on wages completely out of its

logical context within the decision.

Petitioner contends that the

stipulations regarding average weekly wages

were specific with respect to the date of

injury, type of injury and dollar amount.

While it is true that the stipulations were

specific, it is irrelevant. The fact that

both parties stipulated to the quantum of

weekly wages indicates that there is no

dispute as to those amounts. The ALJ used

the stipulations to ascertain the best

19

evidence of Respondent's wage-earning

capacity.

Petitioner cites Betts v Arthur

Snowden Co., 14 B.R.B.S. 805 (1982) for the

proposition that an ALJ is not obligated to

accept all stipulations but must adequately

explain a rejection or modification of any

such stipulation. Betts does not address

the issue of an ALJ accepting stipulations.

Rather, it addresses the issue of resolving

conflicting evidence by the use of the

"resolving doubts rule." Here there was no

conflicting evidence.

In O'Keeffe v. Smith, Hinchman & Grylls

Associates, Inc., 380 U.S. 359, 362, 85 S.

Ce. 20a2: 13 4. Ba. 24° 895 11968); this

Court stated that:

[i]Jn cases decided both before and

after the passage of the

Administrative Procedure Act, 5 U.S.C.

§ 1001, et seq. (1958 ed.), the Court

has held that the foregoing statutory

provisions limit the scope of judicial

review of the Deputy Commissioner's

determination that a "particular

injury arose out of and in the course

20

of employment" .. . It matters not

that basic facts are disputed

the fact that the inference

involves an application of a statutory

term or phrase to a specific set of

facts, gives rise to no greater scope

of judicial review.

This Court thus concluded that judicial

review is not appropriate in cases such as

the instant case, unless the inferences

drawn are "irrational" or "unsupported by

substantial evidence on the record... as

a whole." Id.

The Ninth Circuit correctly analyzed

§ 910 as proving compensation for loss of

future earnings and correctly concluded that

compensation based on wages as of the date

of the earlier physical injury would be both

unjust and inconsistent with the Act.

CONCLUSION

The Ninth Circuit Court of Appeals and

the ALJ correctly applied the law to the

facts of this case. The ALJ complied with

the requirements of the Administrative

21

Procedures Act. Hence, the opinion below

should stand.

RESPECTFULLY SUBMITTED this un day of

February, 1991. OD,

> ae

PAUL W. SHELA

Counsel of Record

_-——_—

HELENE ELLEN EN |

Of Counsel

SCHROETER, GOLDMARK & BENDER

500 Central Building

810 Third Avenue

Seattle, WA 98104

206-622-8000

Counsel for Petitioners