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

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 1991
- **Citation:** 499 U.S. 959

## Text

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

---

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