Appendix — Newpark Shipbuilding & Repair, Inc. v. Rountree

S 3 -~ ] 71€ Office - Supreme Court, U.S

FILED

APR 19 1094

APPENDIX TO PETITION FOR] WRIT

OF CERTIORARI ALEXANDER kL. STEVas.

CL

Supreme Court of the United States

OCTOBER TERM 1983

NO.

NEWPARK SHIPBUILDING & REPAIR, INC.

and

AMERICAN HOME ASSURANCE COMPANY,

Petitioners

Vv

JAMES P. ROUNTREE AND DIRECTOR, OFFICE

OF WORKERS’ COMPENSATION PROGRAMS,

UNITED STATES DEPARTMENT OF LABOR,

Respondents

ON WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

E. D. VICKERY

RALPH F. MEYER

2200 Texas Commerce Tower

Houston, Texas 77002

713/224-8380

Attorneys for Petitioners,

Newpark Shipbuilding & Repair,

Inc. and American Home

Assurance Company

Of Counsel:

RoysTONn, RAYZOR, VICKERY & WILLIAMS

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Aipha Law Brief Co., Inc—5606 Parkersburg—Houston, Texas 77036—223-3003

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INDEX TO APPENDIX

APPENDIX A (Opinion of the Fifth Circuit,

723 F.2d 399, January 23, 1984) .......

APPENDIX B (Opinion of the Fifth Circuit,

698 F.2d 743, February 22, 1983) ......

APPENDIX C (Opinion of the Benefits Review Board,

BD BM GEE) occa cs racicsssevcces

APPENDIX D (Decision and Order of Administrative

Law Judge DiNardi) .................

APPENDIX E (33 U.S.C. §910 and § 921[c]) ..........

Page

A-1

APPENDIX A

NEWPARK SHIPBUILDING & REPAIR,

INCORPORATED and American Home

Assurance Company,

Petitioners,

¥i

James P. ROUNDTREE [sic] and Director, Office of

Workers’ Compensation Programs,

United States Department of Labor,

Respondents.

No. 81-4308.

UNITED STATES COURT OF APPEALS

Fifth Circuit

Jan. 23, 1984.

Employer appealed order of Benefits Review Board

concerning claim for workers’ compensation under Long-

shoremen’s and Harbor Workers’ Compensation Act. The

Court of Appeals, in a panel opinion, 698 F.2d 743, re-

versed and remanded. A rehearing was granted, 706 F.2d

502. The Court of Appeals, Tate, Circuit Judge, held

that order of Benefits Review Board on claim for workers’

compensation under Longshoremen’s and Harbor Work-

ers’ Compensation Act, which determined employer’s

compensation liability to injured worker but which re-

manded case to administrative law judge for further pro-

Ces iugs, was not a “final order” within contemplation of

Act and was, therefore, not subject to judicial review.

Petition for review dismissed.

A-2

Jerre S. Williams, Circuit Judge, dissented and filed

an opinion in which Clark, Chief Judge, and Brown and

Garza, Circuit Judges, joined.

E. D. Vickery, Houston, Tex., for petitioners.

Stephen Vaughan, Houston, Tex., for Roundtree.

Laurie M. Streeter, Assoc. Sol., Mark C. Walters,

Marianne Demetral Smith, Joshua T. Gillelan, II, US.

Dept. of Labor, Washington, D.C., for respondents.

Petition for Review of an Order of the Benefits Review

Board.

Before CLARK, Chief Judge, BROWN, GEE, RU-

BIN, GARZA, REAVLEY, POLITZ, TATE, JOHN-

SON, WILLIAMS, GARWOOD, JOLLY and HIGGIN-

BOTHAM, Circuit Judges.*

TATE, Circuit Judge:

The employer (“Newpark”) filed a petition in this

court to review an order of the Benefits Review Board

with regard to the claim of its disabled former employee

Roundtree for benefits under the Longshoremen’s and

Harbor Workers’ Compensation Act. 33 U.S.C. §§ 901

et seq. The Board’s order determined the method by

which the claimant Roundtree’s periodic compensation

rate was to be calculated, but it also remanded the case

to the administrative law judge for further findings and

proceedings. A motion to dismiss the appeal as being

* Judge Garza, now a senior judge of this circuit, is participating

as a member of the panel initially deciding the appeal now subject

to en banc review. 28 U.S.C. § 46(c). Judges Randall and Davis did

not participate in the consideration or decision of this case.

A-3

from a non-final adminstrative determination was denied

by a divided panel, 698 F.2d 743 (Sth Cir. 1983), which

proceeded to determine a substantive issue on its merits

and likewise remanded for further proceedings. We

granted en banc rehearing, 706 F.2d 502 (1983), pri-

marily to determine whether the Board’s determination

was a reviewable “final order”, a statutory prerequisite

under the Act for judicial review of the Board’s rulings.

§ 921(c).?

Contrary to the panel, we dismiss the present petition

for review. Applying the well-settled general rule that a

judgment or order is not final unless it ends the litigation

on the merits and leaves nothing for the trier to do but

execute the judgment, we hold that the present Board

order—which determined a central issue of liability, but

which nevertheless also remanded the administrative pro-

ceedings to the administrative law judge for further find-

ings—is not a “final order”, § 921(c), so as to be statu-

torily subject to judicial review at this time.

I.

We will detail the facts somewhat more fully below.

For present purposes, we note only that the Board’s order,

which determined the method of computing compensation

and remanded the proceedings for further findings, was

concededly not final in any “technical” sense. The panel

majority, however, found it to be reviewable at this time

on a concept of pragmatic finality, since upon the court

1. 33 U.S.C. §921(c) provides: “Any person adversely affected

or aggrieved by a final order of the Board may obtain a review of

that order in the United States court of appeals for the circuit in

which the injury occurred by filing. in such court within sixty days

following the issuance of such Board order a written petition that

the order be modified or set aside. * * *” (Emphasis added.)

A-4

panel deciding a central issue (and reversing the Board

as to it), the factual record as to this issue was now

complete, although some unresolved collateral issues also

remained for decision by the administrative proceedings

upon remand. 698 F.2d at 747 & n. 2, 748 & n. 3.

[1] The issue thus drawn is whether the Board’s order,

under such circumstances, should be deemed a “final

order” and thus subject to judicial review under § 921(c).

The required finality for reviewability of an order of the

Board follows, for the same reasons of policy, the contours

of the finality-requirement under 28 U.S.C. § 1291 for

appealability of decisions of the district courts. Simms

v. Valley Line Company, 709 F.2d 409, 413 (Sth Cir.

1983); Director, Office of Workers’ Compensation Pro-

grams v. Brodka, 643 F.2d 159, 161 (3d Cir. 1981);

National Steel and Shipbuilding Company v. Director,

Office of Workers’ Compensation Programs, 626 F.2d

106, 107-08 (9th Cir. 1980); Newport News Shipbuild-

ing and Dry Dock Company v. Director, Office of Work-

ers’ Compensation Programs, 590 F.2d 1267, 1268 (4th

Cir. 1978) (all four decisions dismissing petitions of re-

view because of non-finality of the Board’s order).

In Firestone Tire & Rubber Company v. Risjord, 449

U.S. 368, 373-74, 101 S.Ct. 669, 673, 66 L.Ed.2d 571

(1981), the Supreme Court has recently restated the

general test for finality as being a decision “that ‘ends

the litigation on the merits and leaves nothing for the

court to do but execute the judgment.’” Coopers & Ly-

brand v. Livesay, 437 U.S. 463, 467, 98 S.Ct. 2454,

2457, 57 L.Ed.2d 351 (1978), quoting Catlin v. United

States, 324 U.S. 229, 233, 65 S.Ct. 631, 633, 89 L.Ed.

911 (1945).

A-5

This finality rule is designed to avoid piecemeal trial

and appellate litigation and the delays and. costs of mul-

tiple appeals upon both parties and courts, as well as to

provide a clear test so that needless precautionary ap-

peals need not be taken lest substantive rights be lost.

“Restricting appellate review to ‘final decisions’ prevents

the debilitating effect on judicial administration caused

by piecemeal appellate disposition of what is, in practical

effect, a single controversy.” Eisen v. Carlisle & Jacquelin,

417 U.S. 156, 170, 94 S.Ct. 2140, 2149, 40 L.Ed.2d

732 (1974). “This insistence on finality and prohibition

of piecemeal review discourage undue litigiousness and

leaden-footed administration of justice * * *.” DiBella

v. United States, 369 U.S. 121, 124, 82 S.Ct. 654, 656,

7 L.Ed.2d 614 (1962). “Thereby is avoided the obstruc-

tion to just claims that would come from permitting the

harassment and cost of a succession of separate appeals

from the various rulings to which a litigation may give

rise, from its initiation to entry of judgment.” Cobbledick

v. United States, 309 U.S. 323, 325, 60 S.Ct. 540, 541,

84 L.Ed. 783 (1940), quoted with approval in Firestone,

supra, 449 U.S. at 174, 101 S.Ct. at 673. See also 15

Wright, Miller, and Cooper, Federal Practice and Pro-

cedure, §§ 3907, 3909 (1976).

Nevertheless, the Court has recognized a small number

of narrow exceptions to this general rule that appealable

finality is accorded only to a judgment or order that

completely terminates the litigation below.” Under these

2. In Huckeby v. Frozen Food Express, 555 F.2d 542, 547-49

(Sth Cir. 1977) (Clark, J.), in dismissing an appeal on non-finality

grounds, we summarized the three principal doctrinal exceptions.

We observed that the three doctrines were “united by a common

theme . . . [EJach applies only where there is ‘an order otherwise

A-6

exceptions, the requirement of finality is “given a ‘prac-

tical rather than a technical construction’ ”. Eisen, supra,

417 US. at 171, 94 S.Ct. at 2149. The exceptions arise

from considering “the competing considerations under-

lying all questions of finality—‘the inconvenience and

costs of piecemeal review on the one hand and the danger

of denying justice by delay on the other.’” Jd. See 15

Wright, Miller, and Cooper, supra, § 3907. Both the

petitioner Newpark and the panel majority, in asserting

the reviewable finality of the present Board order, es-

sentially rely upon an exception of pragmatic finality that

was recognized by Gillespie v. United States Steel Cor-

poration, 379 U.S. 148, 85 S.Ct. 308, 13 L.Ed.2d 199

(1964).

We will not here detail the facts nor attempt to analyze

the several strands of reasoning by which Gillespie, be-

cause of the competing considerations, held to be appeal-

able a technically non-final order, save to observe that

none of Gillespie’s exceptional reasons are apparent here.

As recently summarized by the Court,

In Gillespie, the Court upheld an exercise of ap-

pellate jurisdiction of what it considered a margin-

ally final order that disposed of an unsettled issue

of national significance because review of that issue

unquestionably “implemented the same policy Con-

gress sought to promote in § 1292(b) [permitting

discretionary reviewing of interlocutory rulings],” id.,

at 154, 85 S.Ct. at 312, and the arguable finality

issue had not been presented to this Court [after

certiorari was granted] until argument on the merits,

thereby ensuring that none of the policies of judicial

non-appealable, determining substantial rights of the parties which

will be irreparably lost if review is delayed until final judgment.’”

555 F.2d at 549 (emphasis the court’s).

A-7

economy served by the finality requirement would

be achieved were the case sent back with the im-

portant issue undecided. . . . If Gillespie were ex-

tended beyond the unique facts of that case, § 1291

[the finality requirement] would be stripped of all

significance.

Cooper & Lybrand, supra, 437 U.S. at 477 n. 30, 98

S.Ct. at 2462.

Il.

Newpark contends, however, that despite this limited

construction of Gillespie recently accorded by the Court

itself, that decision’s continued viability for application

to the present Board order is demonstrated by American

Export Lines, Inc. v. Alvez, 444 U.S. 274, 100 S.Ct.

1673, 64 L.Ed.2d 284 (1980). There, citing Gillespie,

the Court did not reject review of an interlocutory amend-

ment ruling in a state court action as non-final. (The

amendment in the state court action, affirmed by the

state’s high court, had permitted a harborworker’s wife

to assert a claim under general maritime law for loss of

her injured husband’s society.) The issue before the Court

in Alvez, however, is distinguishable from that before us

now.

The issue before us concerns the concept of finality

under 33 U.S.C. § 921 and 28 U.S.C. § 1291, which

afford an aggrieved party review in the court of appeal

as of right. In Alvez, the issue arose under 28 U.S.C.

§ 1257(3), where a “final” judgment of a state’s highest

court is reviewable by discretionary grant of certiorari

where a right is claimed under federal law.

In Alvez, after the court had granted certiorari, it

sua sponte noted that the jurisdictional issue, observing

’

A-8

that “were the case in the posture it stood when petition

for certiorari was granted, we might well determine that

the judgment lacked sufficient characteristics of finality

to warrant an assertion of our appellate jurdisdiction.”

446 U.S. at 277, 100 S.Ct. at 1675. However, after

certiorari had been granted, the case was tried in the

state trial court and the plaintiffs prevailed, with “no

federal question, except that which we are now asked

to resolve,” remaining in the litigation. 446 U.S. at 277-

78, 100 S.Ct. at 1675-76. The Court noted that “ ‘the

federal issue, finally decided by the highest court in the

State, will survive and require decision regardless of the

outcome of future state-court proceedings.’” 446 US. at

279, 100 S.Ct. at 1676.

Alvez is not apposite to the present issue. While the

concepts of finality for Supreme Court review of state

court judgments under 28 U.S.C. § 1257 and for court

of appeal review of district court judgments under 28

U.S.C. § 1291 are often parallel, they also diverge in

some aspects because of the Supreme Court’s different

and additional function in § 1257 review of state court

judgments to protect federal rights. 15 Wright, Miller,

and Cooper, supra, § 3909;° 16 Wright, Miller, Cooper,

3. See 14 Wright, Miller, and Cooper, supra, § 3909, p. 439:

The conflicting forces that tug the Supreme Court toward and

away from a strict interpretation of the finality requirement in

reviewing state court decisions, in short, are quite different from

the forces at wurk when it becomes a question of interpreting

the finality requirement for appeals from district court decisions.

Deference to state courts and the desirability of avoiding Su-

preme Court determination of constitutional questions may at

times suggest that finality should be denied to judgments that

might appropriately be brought to a court of appeals from a

district court. More importantly, however, the need to protect

federal rights against erosion by interlocutory state court rulings

may make it desirable to review state court decisions in situa-

A-9

and Gressman, Federal Practice and Procedure, § 4010

(1977). Thus, one of the exceptions in § 1257 review

according reviewable pragmatic finality to a technically

interlocutory state ruling is where the federal issue has

been finally determined in the state court proceeding.

Cox Broadcasting Corporation v. Cohn, 420 U.S. 469,

482-83, 95 S.Ct. 1029, 1042, 43 L.Ed.2d 328 (1975).*

Alvez accorded pragmatic finality to the state court

ruling on the federal issue partly because of the functional

purposes of review of state court judgments under § 1257

—different and distinguishable in this respect from those

according “finality” to district court judgments under

§ 1291 or to Board decisions under 33 U.S.C. § 921(c)

tions in which court of appeals review of a district court deci-

sion would rest on some basis other than the final judgment rule.

The only common thread running between decisions in these two

contexts should be that the requirement of finality is approached

pragmatically, with an eye to flexible accommodation of the quite

different interests at work in each area. For this purpose, deci-

sions in the two areas may properly be cited interchangeably.

For purposes of more explicit comparison, however, it should be

plain that decisions in one area cannot be binding precedent in

the other.

4. Cox Broadcasting Corporation v. Cohn, 420 U.S. at 82-83,

95 S.Ct. at 1040:

Lastly, there are those situations where the federal issue has

been finally decided in the state courts with further proceedings

pending in which the party seeking review here might prevail

on the merits on nonfederal grounds, thus rendering unnecessary

review of the federal issue by this Court, and where reversal of

the state court on the federal issue would be preclusive of any

further litigation on the relevant cause of action rather than

merely controlling the nature and character of, or determining

the admissibility of evidence in, the state proceedings still to

come. In these circumstances, if a refusal immediately to review

the state court decision might seriously erode federal policy, the

Court has entertained and decided the federal issue, which itself

has been finally determined by the state courts for purposes of

the state litigation.

a

A-10

—and also because of the exceptional posture of the pro-

ceeding before it: after certiorari was (improvidently)

granted, the state court judgment became (the court

found) final for § 1257 purposes. It was in that context

that Alvez relied upon the Gillespie exception to strict

finality, quoting from that decision: “‘[NJow that the

case is before us . . . the eventual costs, as all the parties

recognize, will certainly be less if we now pass on the

questions presented here rather than send the case back

with those issues undecided.’” 444 U.S. at 279, 100

S.Ct. at 1676.

Alvez thus cannot be regarded as blanket authority

for a court of appeal—to which review is sought of right

from a “final” decision—to disregard the Congressionally

mandated finality limitation upon its review powers and

to ignore the powerful reasons of policy underlying the

finality requirement, see I supra, in order to accord re-

viewable pragrmatic finality to the trier’s decision, when-

ever the reviewing court on a case-by-case basis deter-

mines that it would be more efficient to review immedi-

ately a central issue raised in review sought from a non-

final decision.°

5. Newpark urges that the decisions of the Supreme Court in

Pacific Gas and Electric Company v. State Energy Resources Con-

servation & Development Commission, US. , 103 S.Ct.

1713, 75 L.Ed.2d 752 (1983) and Abbott Laboratories v. Gardner,

387 US. 136, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967) support its

claim that the Board’s decision in the present case is reviewable.

These decisions are not apposite to the issue before us. Neither con-

cerned any issue as to “finality” of an agency decision for direct-

review purposes within a statutory framework. Both concerned an

attempt to challenge governmental action by actions requesting de-

claratory and injunctive relief, and the primary issue was whether

the controversy was “ripe” for judicial review.

The issue before us concerns finality, not ripeness. While there is

significant overlap between the two doctrines, the questions of ripe-

A-11

Il.

The issue before us arises in the following factual and

procedural context:

Roundtree claims disability benefits under the Long-

shoremen’s and Harbor Workers Compensation Act.

Roundtree, a welder, was injured on his first day of work

as an employee of Newpark. Prior to this employment,

he had worked for twenty years as an independent con-

tractor. By the time the proceedings came before the

Board, the principal (but not only) issue concerned the

determination of his weekly wages, 33 U.S.C. § 910, for

purposes of computing the periodic compensation pay-

ments he claimed to be due to him.

Newpark contended that the weekly wage basis should

be determined on the basis of § 910(b) (the prior year’s

wages of co-workers). The Board affirmed the administra-

tive law judge’s decision that, instead, the determination

of the wage basis should be based upon § 910(c) (an

alternative section applicable to “arriving at the average

annual earnings of the injured employee,” if the other

statutory methods, § 910(a) and § 910(b) “cannot rea-

sonably and fairly be applied”, which may take into con-

sideration other factors, “including the reasonable value

of the services if engaged in self-employment” during the

ness and finality in administrative law address different issues con-

cerning the preclusion of judicial review of administrative action that

depend upon the nature of the agency action for which review is

sought. See 4 Davis, Administrative Law Treatise, § 25.6 (discussing

Abott Laboratories and the ripeness doctrine) and § 26.10 (discussing

finality of agency action) (2d ed. 1983). While “ripeness” is primarily

concerned with preventing judicial review of hypothetical or abstract

problems that may not come to pass, see Davis, supra, § 25.1, the

finality requirement seeks mainly to ensure that the parties have

exhausted all avenues of administrative relief before resorting to ap-

pellate judicial review. Davis, supra, § 26.10.

A-12

preceding year). However, the Board disagreed with the

method used by the administrative law judge to determine

the annual earnings of the preceding year, vacated the

award of compensation, and remanded for further pro-

ceedings, including the determination of unresolved is-

sues, such as attorney’s fees.°

IV.

The uniform jurisprudence of this and every other cir-

cuit that has considered the issue is that a Board order,

which determines liability but which remands to the ad-

ministrative law judge to determine the award, is not a

reviewable “final order” of the Board under § 921(c).

Director, Office of Workers’ Compensation Programs v.

Brodka, 643 F.2d 159, 161 (3d Cir. 1981); National

Steel and Shipbuilding Company v. Director, Office of

Workers’ Compensation Programs, 626 F.2d 106, 107-08

6. The remand portions of the Board’s order are as follows:

Because the administrative law judge failed to fully consider

the foregoing, this case must be remanded for additional findings

of fact and conclusions of law. On remand, the administrative

law judge must determine the reasonable value of claimant’s

services when self-employed by considering the cost of hiring

another welder of skill and experience, comparable to claimant

or by using any other rational means. The administrative law

judge may open the record to take additional evidence as is

necessary.

* * * * * *

Employer contends that the administrative law judge’s award

of temporary partial disability benefits and an attorney’s fee

should be vacated if claimant receives a lower average weekly

wage. Since we have concluded that the case must be remanded

to the administrative law judge for redetermination of claimant’s

average weekly wage, consideration of these issues at this time

is not appropriate.

Claimant’s attorney seeks a fee for work performed before

this Board. Since this case must be remanded to the administra-

tive law judge, a fee for this work is not appropriate at this time.

A-13

(9th Cir. 1980); Newport News Shipbuilding and Dry

Dock Company v. Director, Office of Workers’ Compen-

sation Programs, 590 F.2d 1267, 1268 (4th Cir. 1978);

United Fruit Company v. Director, Office of Workers’

Compensation Programs, 546 F.2d 1224 (Sth Cir. 1977);

and reported and unreported decisions therein cited. As

stated in the seminal reported decision of this line of

cases, “[i]t is a well-established rule of appellate juris-

diction, however, that where liability has been decided but

the extent of damage remains undecided, there is no final

order.” Sun Shipbuilding & Dry Dock Co. v. Benefits Re-

view Board, 535 F.2d 758, 760 (3d Cir. 1976). There-

fore, in all of these decisions, petition for review of a

Board remand order under such circumstances have been

dismissed for lack of reviewable finality under § 921(c).

The panel opinion recognized that this principle ordin-

arily applied, but it felt that, weighing the competing values,

the danger of denying justice by delay outweighed the

value incorporated in the finality rule of the incon-

venience and costs of piecemeal litigation. 698 F.2d at

746-48. It felt that, by deciding the issues presented on

the appeal, “the remaining issues will not be questions

of law but merely the largely ministerial job of applying

the law to the pre-existing record,” 698 F.2d at 747, and

it distinguished the above precedents as, unlike the pres-

ent case, having “unresolved factual determinations that

appellate review could not settle.” Jd. The panel recog-

nized that, hov.zver, “some unresolved collateral issues

may remain in the instant case, as presented in this ap-

peal”, such as determining the amount of attorney’s fees

(see also note 6 supra). 698 F.2d at 748.

The panel then reached the merits of Newpark’s peti-

tion for review and, reversing the Board’s determination

A-14

that $910(c) applied, held that § 910(b) provided the

appropriate statutory methodology by which to determine

Roundtree’s average weekly wage. We note, however, that

if instead—after deciding the merits—the panel had af-

firmed the Board’s determination that § 910(c) provided

the appropriate methodology, then (as the Board heid)

the record was not factually complete. The panel’s deter-

mination that, on its deciding the legal principle of law,

the remand would be a largely ministerial function of

applying that principle to the preceding record thus de-

pended on its first deciding the merits of the appellate

proceeding, i.e., whether §910(b) applied (in which

event, in the panel’s view, the record was factually com-

plete), instead of § 910(c), as the Board had determined.‘

In essence, under this methodology, neither the court nor

the parties could know whether the record was factually

complete for purposes of reviewable “finality” until the

court had first determined the merit-issue and thereafter

decided whether the administrative record was factually

complete so as to justify review at this time.

The panel’s case-by-case methodology of determining

pragmatic finality for purposes of reviewability is thus

in fundamental conflict with the values and purposes of

the finality rule to avoid the delay and system-costs of

piecemeal and multiple appeals, and to provide a rela-

tively clear test of appealability so that needless pre-

cautionary appeals not be taken. See I supra. “Any such

ad hoc decisions [ascribing reviewable finality to techni-

7. In explaining its view that the record was factually complete,

the panel noted “we find the record to contain clear and ample evi-

dence of Roundtree’s earnings, the earnings records of his co-workers,

and all other necessary information concerning the wages of New-

park’s welders. The task of applying § 910(b) to the existing records

will be ministerial in nature.” 698 F.2d at 747, n. 2.

A-15

cally non-final decisions] disorganize practice by encourag-

ing attempts to secure or oppose appeals with a consequent

waste of time and money.” Baltimore Contractors, Inc.

v. Bodinger, 348 U.S. 176, 181, 75 S.Ct. 249, 253, 99

L.Ed. 233 (1955). As we stated in Freeman v. Califano,

574 F.2d 264, 267 (Sth Cir. 1978), where under cir-

cumstances somewhat similar to the present case we dis-

missed an appeal and rejected Gillespie pragmatic-finality

arguments,

the potential evil of here establishing a precedent for

other piecemeal appeals in other cases is real. Here

the balance appears to be struck in favor of a find-

ing of nonappealability. There is simply no signifi-

cant countervailing interest here to outweigh the

dominant and traditional policy of requiring a final

decision to avoid piecemeal appeals.®

8. From the filings of the opposing parties we may obtain some

perspective of the potential for multiplication of appellate caseload

and delay should we abandon the previous settled rule that a Board

order is non-final, and thus nonreviewable, where the Board order

determines liability or other issues of the appeal to it, but remands

to the administrative law judge for further proceedings. On February

28, 1983, there were 4,942 cases pending before the Board, with new

appeals averaging 220 per month; it is estimated approximately 40%

of these will result in Board orders remanding the cases for further

appropriate action. Director’s Petition suggesting rehearing en banc,

p. 10, filed March 22, 1983. Newpark states there were a total of

351 Board orders reported between October 30, 1980 and June 10,

1983, of which 145 resulted in remand orders; however, Newpark

argues that most of the remand orders would not be subject to

Gillespie pragmatic finality review and points out of that 1,409

decisions, rendered by the Board in the first thirteen volumes of the

Board’s decisions, only 13 published court of appeals cases involved

an issue raised as to the finality of the Board’s decision. Newpark’s

letter brief of September 28, 1983, and attached exhibits. What New-

park may overlook, however, is that—were the present non-finality

rule of Board remand orders changed—many more appeals from such

presently non-final orders might result to test their pragmatic finality,

albeit most unsuccessfully, and thus many more issues as to Gillespie

pragmatic finality might have been presented as a threshold issue in

A-16

[2] For these reasons, we therefore find, consistent with

all prior jurisprudential determinations under such cir-

cumstances,” that the present Board order, which deter-

mined the employer’s compensation liability to the injured

worker but which remanded to the administrative law

judge for further proceedings, is not a final order within

the judicial review thus sought. This indeed was the experience of the

Commonwealth Court of Pennsylvania, which entertains appeals from

the Pennsylvania workmen’s compensation administrative agency and

which experimented with, and then abandoned, allowing reviewable

pragmatic finality to board remand orders on Gillespie-type reasoning,

as detailed in Murhon v. Workmen’s Compensation Appeal Board,

51 Pa. Cmwlth. 214, 414 A.2d 161, 162-63 (1980):

Over the last ten years this Court, following Overmiller v.

D.E. Horn & Co., Inc., 191 Pa. Super. 562, 159 A.2d 245

(1960), has departed from the well established doctrine that

remand orders of the Board are interlocutory and not appealable.

In doing so we nave developed three exceptions as set forth in

American Can Co. v. Workmen’s Compensation Appeal Board,

37 Pa. Cmwlth. 169, 389 A.2d 263 (1978): the appeal to the

Board resulting in remand was untimely; the remand, based on

the record, could not produce a different result; or the Board’s

action in granting the remand was based on a clear error of law.

As explained in the decisions which developed the exceptions,

it was felt there would be a saving of litigants’ time and money

if these exceptions were allowed. Our experience has been that

the existence of the exceptions has been counterproductive. Ap-

parently the party suffering the remand now files an appeal

hoping he can convince this Court that his case fits into one

of the exceptions or that he can develop still a further exception.

Indeed it has gotten to the point, as here, that there are cross-

appeals from a remand order!

In view of this, our Court now returns to the time tested

doctrine that a remand order of the Board is interlocutory and

unappealable as a matter of right, without exception.

9. So far as we can ascertain, the only Board remand order that

has been held to have reviewable pragmatic finality was in Jngalls

Shipbuilding Division v. White, 681 F.2d 275 (Sth Cir. 1982). The

petition for judicial review in that case, see discussion in V infra,

raised issues of central importance in the administration of the Act,

with unique reasons for allowing exceptional pragmatic finality. It is

not of controlling significance, if only because its holding should be

limited to its exceptional facts. See V infra.

A-17

the contemplation of § 921(c) and is, thus, not subject

to judicial review at this time, since it did not end the

litigation on the merits and leave nothing for the trier

to do but execute the judgment.

¥;

The panel relied not only upon Gillespie, but also upon

the decision of this circuit in Ingalls Shipbuilding Division,

Litton Systems, Inc. v. White, 681 F.2d 275 (Sth Cir.

1982), which itself had relied upon Gillespie, in accord-

ing reviewable pragmatic finality to a Board’s remand

order. The issue there involved an extremely important

general question in the administration of the Longshore-

men’s Compensation Act whether an administrative law

judge had the power to approve settlements by an injured

worker (as the administrative law judge and the Board

held), or instead whether this power was vested in the

Deputy Commissioner and the Secretary (as the Director

of the Office of Workmen’s Compensation Programs

urged). The Board, affirming the power of the adminis-

trative law judge to approve a settlement, nevertheless

remanded the settlement to t’.e judge for him to approve

or disapprove it under Board-specified guidelines. The

Director filed a petition for review in this court.*®

The Ingalls panel accorded pragmatic finality to the

Board’s remand order and entertained review of it under

§ 921(c), based upon Gillespie and Gillespie-type reason-

ing. The panel pointed out the delay inherent in remand-

10. The petition also raised an important question of first im-

pression as to whether the Director had standing to petition to review

a Board order with which both employer and employee were satisfied,

as well as the then unsettled important issue of whether the Director

had standing to petition the Board for review of the administrative

law judge’s ruling as a statutory “party in interest.”

A-18

ing and the ease of deciding the issues then so as to

expedite earlier termination of the proceedings—on rea-

soning similar to that of the panel in the present case,

albeit here on issues applicable to benefits due a single

claimant rather than, as in /ngalls, on central issues of

the administration of compensation scheme. /ngalls is,

however, the only judicial decision that has held that a

Board remand order is reviewable under § 921(c), in-

sofar as we can ascertain, and in /ngalls the issue de-

cided on that appeal could ultimately have been brought

to the court for review after a final order of the Board

(although admittedly the somewhat exceptional circum-

stances (both employer and employee were satisfied with

the Board ruling) made that course somewhat unattrac-

tive and cumbersome).

A dismissal of the present petition for review for lack

of jurisdiction because the remand order is not final,

§ 921(c), could possibly rest on leaving Ingalls undis-

turbed, distinguishable and limited to its facts in its

pragmatic-finality ruling because of its exceptional cir-

cumstances and the central importance of the issues re-

quiring decision. We have decided, however, that Ingalls

should be overruled, for its value in occasionally per-

mitting reviewable pragmatic finality to Board remand

orders is outweighed by its erosion of the values of the

finality rule mandated by Congress as a prerequisite for

our appellate jurisdiction, considering also the necessary

uncertainty (as is illustrated by the present case) that

must exist in the administration of a judicially created

pragmatic-finaiity exception, where definable standards

for allowing this extra-statutory appeal of right are virtu-

ally impossible to formulate.

A-19

Conclusion

Since the remand order of the Board is not a final

order as required by 33 U.S.C. § 921(c), we lack juris-

diction to review it, and the Newpark’s petition for

review is DISMISSED.

PETITION FOR REVIEW DISMISSED.

JERRE S. WILLIAMS, Circuit Judge, with whom

CLARK, Chief Judge, BROWN and GARZA, Circuit

Judges, join, dissenting:

In this case, the Court regrettably retreats from a

justifiable flexibility in the law to a rigid rule which

disserves the interests of justice in the judicial review

of the actions of an administrative agency. We recog-

nized the importance of such flexibility in /ngalls Ship-

building Division, Litton Systems, Inc. v. White, 681

F.2d 275 (1982), and the panel opinion in this case

followed Ingalls in turning its back on absolutism in such

review. The Court overrules /ngalls and refuses to recog-

nize that in the proper case the saving of time and cost

to the litigants in judicial review should prevail over an

unduly and unnecessary stringent application of the final-

ity rule.

In this dissenting opinion I do not undertake to repeat

in full detail the reasoning which led the majority of the

panel to hold that there was a “final order” in this case.

See Newpark Shipbuilding & Repair, Inc. v. Roundtree,

698 F.2d 743, 746 (Sth Cir. 1983). Instead, I emphasize

briefly the actual factual situation in this case and relate

it to the admittedly controlling concept of “finality”.

Under § 10 of the Longshoremen’s and Harborworkers’

—

A-20

Compensation Act, 33 U.S.C. $910 there is provision

for alternative determination of the average weekly wages

as a basis of calculating benefits for injured workers.

Section 10(a) provides for calculation of benefits based

upon the injured worker’s own earnings if he has been

employed in the same job for a year. Only if 10(a) can-

not be applied is 10(b) applied. It provides for calcula-

tion of benefits based upon the wages of workers in com-

parable jobs for the past year. Only if 10(b) cannot be

applied is 10(c) applied. Its method of calculation is

based upon earnings potential of the employee rather

than actual prior wages of the employee or of employees

in comparable work.

In this case the Benefits Review Board found that

10(c) was applicable because it would not be “fair and

equitable” for 10(b) to apply even though there were

a number of welders in comparable employment whose

average wages for the past year were readily available

and were in evidence.

The sole ground which the Benefits Review Board gave

for the abandonment of the progression from 10(a) to

10(b) to 10(c) was that the comparable employees had

received a substantial wage increase during the preceding

year. The panel decision found on the merits that this

was not an adequate justification in the law for moving

from the 10(b) calculation to the 10(c) calculation

simply because it is almost universal for employees to

receive a wage increase during the year, and the progres-

sion contemplated by Congress would be totally destroyed

by the holding of the Benefits Review Board.

Why this brief description of the merits of the dispute

in view of the fact that the issue before us is whether

A-21

the decision of the Benefits Review Board is appealable

or not? The answer is to be found simply in the fact that

without an understanding of the completeness of the deci-

sion by the panel of this Court on review from the Bene-

fits Review Board can the justification for treating the

decision of the Benefits Review Board as a final order

be seen.

The critical point in this case is that the fundamental

legal decision controlling the case has been made by the

Benefits Review Board and is now on appeal to this

Court. If we do not consider this issue as being pre-

sented to us in a “final order” the case will go back to

the administrative law judge for further extensive pro-

ceedings based upon an interpretation of the statute which

the panel of this Court found to be in clear contravention

of the congressional policy. It is difficult to accept under

these circumstances the “judicial economy” in the rigid

rule which the majority here establishes.

The Supreme Court cases upon which the opinion for

the Court relies most heavily are cases which are easily

distinguishable and require the evaluation of wholly dif-

ferent considerations. They involve attempts to obtain

judicial review of preliminary matters in administrative

proceedings before the final decision on the merits is

made. It is beyond cavil that allowing appeals in those

kinds of cases promotes constant appeals to the Court,

and would fail completely a test of judicial economy.

Thus, in Firestone Tire & Rubber Co. v. Risjord, 440

U.S. 368, 101 S.Ct. 669, 66 L.Ed.2d 571 (1981), the

Court was asked to review a ruling on a motion to dis-

qualify plaintiff’s counsel in advance of trial.

The case of Coopers & Lybrand v. Livesay, 437 US.

463, 98 S.Ct. 2454, 57 L.Ed.2d 351 (1978) is cited as

A-22

limiting the sweep of the seminal case of Gillespie v.

United States Steel Corp., 379 U.S. 148, 85 S.Ct. 308,

13 L.Ed.2d 199 (1964). We relied strongly upon Gil-

lespie both in Ingalls and in the panel opinion in this

case. But Coopers v. Lybrand involved another prelimi-

nary matter—whether a class action should or should not

be certified before trial on the merits. Both of these cases

involved attempts to apply the collateral order doctrine

of Cohen v. Beneficial Industrial Loan Corp., 337 US.

541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949). That doctrine

is not here involved. Further, both Firestone and Coopers

& Lybrand are federal cases so they do not involve the

distinction properly and painstakingly drawn by the ma-

jority of the Court in American Export Lines, Inc. v.

Alvez, 444 U.S. 274, 100 S.Ct. 1673, 64 L.Ed.2d 284

(1980) recognizing a broader concept of non-finality as

nevertheless subject to federal judicial review in appeals

from state courts. This issue, too, is not here involved.

The Supreme Court has not abandoned the key state-

ment it made in Gillespie v. United States Steel Corpora-

tion, 379 U.S. 148, 152, 85 S.Ct. 308, 311, 13 L.Ed.2d

199 (1964). There the Court said that the question of

finality deserves a “practical rather than a technical con-

struction” because it would be “impossible to devise a

formula to resolve all marginal cases coming within what

might well be called the ‘twilight zone’ of finality.” While Gil-

lespie itself involved a district court decision resolving

an issue in advance of trial, the issue to be resolved was

fundamental in that it sought to review the decision by

the district court that the administratrix of decedent’s

estate could not bring suit on an unseaworthiness claim

against a shipowner but could only bring suit under the

A-23

Jones Act. The Supreme Court held that the issue was

properly reviewable, as the decision was a “final order.”

Contrary to the conclusion in the opinion of the Court,

our earlier decision in /ngalls is distinguishable from the

case sub judice only in that /ngalls went further in recog-

nizing an exception to a strict finality rule. What /ngalls

decided was an interpretation of the law as to what

agency within the administrative processes of the Long-

shoremen’s and Harborworkers’ Compensation Act had

the authority to approve a compromise settlement. That

decision clearly was not final in the sense that after it

was made it was then left to that agency to decide whether

or not to approve the compromise settlement in the case,

a discretionary decision which would clearly be subject

to additional review. In the case before us, in contrast,

the core legal issue is over once the decision is made.

As the panel opinion pointed out, all that was left was

the ministerial act of taking the figures already in the

record and calculating the average weekly wages based

upon them.

While the majority of the Court mentions the possible

additional issue of attorneys’ fees, it properly does not

draw any specific conclusions with respect to that issue

once it is mentioned. Attorneys’ fees can be part of the

core of the case, requiring that they be set before a

judgment is final. Holmes v. J. Ray McDermott & Co.,

Inc., 682 F.2d 1143 (Sth Cir. 1982). The award of at-

torneys’ fees, on the other hand, can be a collateral mat-

ter independent of the merits of the case and uniquely

separable from a cause of action. White v. New Hamp-

shire Dept. of Employment Security, 455 U.S. 445, 102

S.Ct. 1162, 1166, 1167 n. 14, 71 L.Ed.2d 325 (1982);

A-24

Obin v. Dist. No. 9, Int'l Ass'n of Machinists & Aero-

space Workers, 651 F.2d 574, 584 (8th Cir. 1981)

(“[A] judgment on the merits of an action, otherwise

final, is final for purposes of appeal notwithstanding that

a claim for attorney’s fees may remain to be decided.”)

Attorneys’ fees clearly are collateral in the case before

us.

Finally, it is not amiss to point out that the rules con-

cerning finality and judicial review of administrative rule-

making make no fetish whatsoever of a principle that

nothing more must remain to be done to have finality.

FCC v. WNCN Listeners Guild, 450 U.S. 582, 593, 101

S.Ct. 1266, 1273, 67 L.Ed.2d 521 (1981) (reviewing a

“policy statement” of an agency without even discussing

the issue of finality); Harrison v. PPG Industries, Inc.,

446 U.S. 578, 100 S.Ct. 1889, 64 L.Ed.2d 525 (1980);

Abbott Laboratories v. Gardner, 387 U.S. 136, 149, 87

S.Ct. 1507, 1515, 18 L.Ed.2d 681 (1967) (“the cases

dealing with judicial review of administrative action have

interpreted the ‘finality’ element in a pragmatic way.”)

Of course, I recognize the difference between administra-

tive rulemaking and adjudication. But what is critical is

that the rulemaking review cases accept a pragmatic ap-

proach to finality because the agency is declaring a funda-

mental governing legal rule. That is exactly the situation

we have in the case which is before us, even though that

principle or “rule” is being declared through adjudication.

Cf. Securities & Exchange Comm. v. Chenery Corp., 332

U.S. 194, 67 S.Ct. 1575, 91 L.Ed. 1995 (1947).

This is not a case then in which a preliminary matter

is being submitted to the Court for judicial review as in

Firestone and Coopers & Lybrand. In this case a con-

A-25

trolling legal principle is submitted to the Court for ju-

dicial review leaving nothing but a routine application of

that principle to be carried out on a record which is com-

plete, as the panel decided the case. Even if the deci-

sion on the legal question were the other way, the record

may be complete, and in any event is virtually so. Cer-

tainly, even under the BRB decision, less remains to be

resolved than was the circumstance in Ingalls Shipbuild-

ing where a serious decision on the merits concerning the

approval of an agreed settlement remained to be decided.

It is my view that Gillespie is the law. Ingalls Ship-

building was a proper application of Gillespie as a recog-

nized narrow exception to a requirement that there must

remain absolutely nothing to be done after the order is

issued in the review of orders of administrative agencies.

Ingalls Shipbuilding should not be overruled. It follows

then that in the case before us we have a proper situation

for application of the exception. Instead, we are com-

pelled by the Court in its decision to force the parties to

go back through the administrative process in ignorance

of what this Court will decide is the controlling law of the

case. This case does not call for nor open the door to

“piecemeal” judicial review of administrative action. It

calls for straightforward controlling judicial review of or-

ders which are for all reasonable purposes final orders

within the meaning of 33 U.S.C. § 921 and 28 U.S.C.

§ 1291.

The opinion for the Court sacrifices control by this

Court over the concept of finality. It will substantially in-

crease the expenditure of administrative and judicial

services needlessly in that narrow class of cases such as

Gillespie, Ingalls, and this case in which the Court can

A-26

readily perceive that its decision will resolve the funda-

mental legal issue about which the entire administrative

appeal revolves. There is no reason to fear misuse of such

expeditious resolution of core issues. We should not fear

a “case by case” approach, recognized and accepted by

the United States Supreme Court, when it is narrowly con-

fined as here set out. We should not abdicate our judi-

cial responsibility to dispose of pragmatically final orders

in an expeditious fashion and with saving to all persons

and agencies involved.

For these reasons I am compelled to dissent from the

opinion of the Court.

A-27

APPENDIX B

NEWPARK SHIPBUILDING & REPAIR,

INCORPORATED and American Home

Assurance Company, Petitioners,

Va

James P. ROUNDTREE [sic] and Director, Office of

Workers’ Compensation Programs, United States

Department of Labor, Respondents.

No. 81-4308.

United States Court of Appeals,

Fifth Circuit.

Feb. 22, 1983.

Employer appealed order of the benefits review board

concerning claim for workers’ compensation under Long-

shoremen’s and Harbor Workers’ Compensation Act. The

Court of Appeals, Jerre S. Williams, Circuit Judge, held

that: (1) order was “final” even though administrative

body had directed remand; (2) section of statute pro-

viding that compensation be determined by previous

year’s wages of employee was not applicable; and (3) sec-

tion of statute which called for comparison to employee

of same or most similar employment for determination of

compensation was applicable.

Reversed and remanded.

Tate, Circuit Judge, filed a dissenting opinion.

A-28

Petition for Review of an Order of the Benefits Review

Board.

Before GARZA, TATE and WILLIAMS, Circuit

Judges.

JERRE S. WILLIAMS, Circuit Judge.

This appeal arises from a claim for workers’ compen-

sation under the Longshoremen’s and Harbor Workers’

Compensation Act (LHWCA), 33 U.S.C. § 901 et seq.

The employer urges that we find jurisdiction to lie in

this appeal and that we rule on the proper statutory basis

for computing compensation benefits under the facts pre-

sented. We find that jurisdiction does lie, and that § 10

(b) of the Act, 33 U.S.C. § 910(b), is the proper statu-

tory basis by which to compute benefits in this case.

I. Background

James Roundtree has been a welder in the shipyards

since 1941, and he worked as an independent contractor

between 1954 and 1975. During the last days he worked

as an independent contractor, he charged a rate of $12.50

per hour for his services. For a variety of personal and

career-related reasons, Roundtree abandoned his work

as an independent contractor and began working as an

hourly employee for the firm now known as Newpark

Shipbuilding. Roundtree’s wage as a welder was $5.50

per hour, with available overtime and a ten cent per

hour shift differential. Other welders in the shipyard were

paid as much as $5.95 per hour at the time.

Roundtree’s first day on the job, April 22, 1975, was

an unfortunate one for him. He was working on a barge.

While welding a hole that had been fitted and tacked,

A-29

Roundtree fell off his scaffold and injured his back, re-

sulting in his disability. His claim for workers’ compensa-

tion under LHWCA came before an Administrative Law

Judge (ALJ) with the Office of Workers’ Compensation

Programs. The ALJ determined that Roundtree was en-

titled to compensation, and then considered the possible

methods for computing Roundtree’s average weekly wage

pursuant to § 10 of the Act. The ALJ first considered

§ 10(a), which looks to the employee’s wages during the

prior year, and found that subsection inapplicable be-

cause of the change in Roundtree’s employment from in-

dependent contractor to hourly employee. He then con-

sidered § 10(b), which looks to the prior year’s wages

of coworkers performing the same or similar work. The

ALJ rejected that theory, in part because the shipyard

workers had recently received a wage hike that would

not be reflected fully in a $10(b) calculation based on

twelve prior months. He therefore concluded that it would

not be reflected fully in a § 10(b) calculation based on

looked to § 10(c) for guidance. Section 10(c) points

toward the earnings potential of the employee at the time

of injury, rather than actual prior wages. Applying $10

(c), the ALJ looked at Roundtree’s earnings capacity as

an independent contractor and determined his weekly

wage to be $360.41, approximately $10.29 per hour,

based on Roundtree’s earnings of $18,741.20 in the pre-

ceeding year. He then ordered compensation accordingly

as provided in § 8(b).

Both Roundtree and his employer appealed to the

Benefits Review Board (BRB). The employer argued that

§ 10(b) rather than § 10(c) should control. Roundtree

cross-appealed to call for application of § 10(a), but

apparently switched his view during the BRB proceed-

A-30

ings and agreed with the ALJ’s application of § 10(c).

The BRB affirmed the use of § 10(c) for determining

the weekly wage, but ruled that the ALJ had erred in

using the gross earnings of an independent contractor for

determining the amount of Roundtree’s weekly wage. The

BRB suggested that the net earnings of an independent

contractor, after business expense deductions, might be

an appropriate wage determination. In any event the

BRB remanded for a redetermination of Roundtree’s

weekly wage under § 10(c).

The employer appeals the BRB’s ruling to this Court,

pursuant to § 21(c) of the Act, 33 U.S.C. § 921(c). It

argues that § 10(b) rather than § 10(c) should control

this determination of average weekly wage. Further, it

argues that the appeal is ripe for review as a “final

order” because the record in this case is sufficiently com-

plete. It urges that an appellate determination of this

question will effectively terminate the litigation. Since

our authority to review an administrative ruling under

LHWCA is limited to “final orders”, 33 U.S.C. § 921

(c), we must begin by examining our jurisdiction over

the subject matter of this case.

II. Examination of Subject Matter Jurisdiction

Appellate review of BRB orders is restricted under 33

U.S.C. § 921(c) to “final orders”.’ The “final order” re-

quirement follows the contours of the finality rule ex-

1. 33 U.S.C. § 921(c) provides in part:

Any person adversely affected or aggrieved by a final order of

the Board may obtain a review of that order in the United

States court of appeals for the circuit in which the injury oc-

curred, by filing in such court within sixty days following the

issuance of such Board order a written petition praying that

the order be modified or set aside.

A-31

pressed in 28 U.S.C. § 1291. Director, Office of Workers’

Compensation Programs v. Brodka, 643 F.2d 159, 161

(3d Cir. 1981); National Steel and Shipbuilding Co. v.

Director, Office of Workers’ Compensation Programs,

626 F.2d 106, 107-08 (9th Cir. 1980). The requirement

sometimes, but not always, excludes from appellate re-

view a remand order to an administrative agency. 7d. at

108; United Fruit Co. v. Director, Office of Workers’

Compensation Programs, 546 F.2d 1224, 1225 (Sth

Cir. 1977). We believe, however, that the case before

us is properly reviewable at this time even though the ad-

ministrative body directed a remand.

Our determination of whether jurisdiction lies does

not depend on a single formula or a simple rule. “The

inquiry requires some evaluation of the competing con-

siderations underlying all questions of finality—‘the in-

convenience and costs of piecemeal review on the one

hand and the danger of denying justice by delay on the

other.’ ” Eisen v. Carlisle & Jacquelin, 417 US. 156,

171, 94 S.Ct. 2140, 2149, 40 L.Ed.2d 732 (1974),

quoting Dickinson y. Petroleum Conversion Corp., 338

U.S. 507, 511, 70 S.Ct. 322, 324, 94 L.Ed. 299 (1950).

This Circuit recently faced the question of what con-

stitutes a final administrative order in a LHWCA case.

In Ingalls Shipbuilding Division, Litton Systems, Inc. v.

White, 681 F.2d 275 (Sth Cir. 1982), White and his

employer entered into a compromise settlement of his

LHWCA workers’ compensation claim resulting from

White’s employment-based injury. An ALJ approved the

settlement agreement after a cursory examination. The

Director of the Office of Workers’ Compensation Pro-

grams appealed the order of the ALJ to the Benefits Re-

A-32

view Board, which held that the Director had standing

to challenge the settlement, and that the ALJ’s approval

of the settlement must be set aside. The BRB remanded

the claim to the ALJ, and the employer appealed to this

Circuit.

We noted first that considering the appeal would not

raise the specter of piecemeal review before the court,

id. at 279, because the record was complete, the legal

conclusions had been made, and the issue on appeal was

only whether the power of the ALJ had been exercised

properly. Reaching the merits effectively eliminated the

need for later review, while dismissal would only have

caused the same legal issue to come before us after the

agency held additional hearings based on its tentative

interpretation of its role. We therefore recognized juris-

diction.

[1] Similarly in the case before us today, the issue

presented challenges the proper legal standard, rather than

constitutes a factual dispute. The record itself is factually

complete, and application of § 10(b) can be accomplished

on the record. The only question presented is that of

ruling on the proper formula.

If we were to dismiss for lack of jurisdiction, the next

proceeding would be the ALJ’s application of § 10(c) to

the record and a pronouncement of a definite monetary

award. If applying § 10(c) is not supported in the law,

that proceeding would be a wasted one. If, however, we

were to defer our review and determine at a later date

that there is no error, we would have little effect on the

risk of piecemeal review but merely would delay the

resolution of the dispositive issue in the case. No party

has raised any other issues on appeal, and there is little

A

A-33

risk of a new appellate issue developing in the proceedings

to come.

With our decision today, the remaining issues will not

be questions of law but merely the largely ministerial

job of applying the law to the preexisting record. This

task is properly left to the sound discretion of the ad-

ministrative body. Obviously our decision would be de-

finitive guidance to the agency. Hence, we believe that

the order of the BRB is ripe for review.

We recognize that cases in this and other Circuits have

denied appellate review of pending actions from the BRB.

But these cases involved incomplete determinations or

administrative records, thus placing them in a less “final”

posture than /ngalls or the immediate case. In United

Fruit Co. v. Director, Office of Workers’ Compensation

Programs, supra, we dismissed the appeal as untimely.

The unresolved issues were more than a simple calcula-

tion of disability benefits; the ALJ had not properly ruled

on the nature and extent of the employee’s disability, or

the “possible liability of the special second injury fund.”

In Sun Shipbuilding & Dry Dock Co. v. Benefits Review

Board, United States Dep’t of Labor, 535 F.2d 758 (3d

Cir. 1976), (per curiam) the court dismissed the appeal,

because, even though liability had been decided, the extent

of disability due to the worker’s loss of hearing remained

undetermined. In Newport News Shipbuilding and Dry

Dock Co. v. Director, Office of Workers’ Compensation

Programs, 590 F.2d 1267 (4th Cir. 1978) (per curiam),

the ALJ had not made complete findings as to “the nature

of the injury, the degree of physical impairment. . . and

any other factor . . . including the effect of disability as

it may naturally extend into the future.” Jd. at 1269,

A-34

quoting 33 U.S.C. § 908(h). All these cases, unlike the

case before us, had unresolved factual determinations that

appellate review could not settle.

The Director of the Office of Workers’ Compensation

Programs (Director), respondent in this case, offers a

different argument in urging a narrow construction of the

term “final order”. He presses an analogy to attorneys’

fees cases, where courts have held that an order is not

final, hence not appealable, until the amount of awarded

attorneys’ fees is determined. Since, in the case before us,

the determination of disability is known but the dollar

amount of the award must still be set, the Director urges

that the same principles of lack of finality apply in this

case as in the attorneys’ fees cases.

In Director, Office of Workers’ Compensation Programs

v. Brodka, 643 F.2d 159 (3d Cir. 1981), the Third

Circuit held that a LHWCA case is not yet final when the

substantive claim and the availability of attorneys’ fees

are both settled but the amount of the attorneys’ fees

award is undetermined. Similarly, in Croker v. Boeing

Co. (Vertol Division), 662 F.2d 975 (3d Cir. 1981)

(en banc), the court determined that a district court

order is not final for purposes of 28 U.S.C.A. § 1291

until the amount of attorneys’ fees has been settled. This

Court has held similarly. E.g. Williams v. Ezell, 531

F.2d 1261, 1263 (Sth Cir. 1976).

We acknowledge that an order is not “final” under

28 U.S.C. § 1291 until the amount of awarded attorneys’

fees has been determined. However, we find those cases

distinguishable. In the attorneys’ fees cases, the appli-

cable legal standard is already established when the dis-

trict court rules on the award. There need be no appeal

A-35

at that time regarding what the law ought to be for the

determination. See Johnson v. Georgia Highway Express,

Inc., 488 F.2d 714 (Sth Cir. 1974) (Title VII case,

42 U.S.C. § 2000e et seq., establishing a twelve-pronged

test in awarding attorneys’ fees). But at that point, the

record would not yet contain the factual material needed

to rule on the amount of the award. The case before us,

by contrast, already contains uncontested full factual

findings.”

Furthermore, these cases usually come before an ap-

pellate court with challenges to both the merits and the

award of attorneys’ fees. To hold an order to be final

before the final award of attorneys’ fees would only lead

to two appeals, one on the merits and one on the at-

torneys’ fees, with no corresponding increase in the funda-

mental fairness to the parties. Such is not the case here.*

2. Judge Tate, in his dissent, expresses his belief that the factual

findings in the record may not be complete. Yet we find the record

to contain clear and ample evidence of Rountree’s earnings history,

the earnings records of his co-workers, and all other necessary in-

formation concerning the wages of Newpark’s welders. The task of

applying § 10(b) to the existing record will be ministerial in nature.

The case before us does not require us to determine whether the

application of § 10(c) would also be ministerial in nature, hence we

need not speculate as to whether the BRB’s order would be final,

hence reviewable, if § 10(c) rather than § 10(b) were the proper

formula.

3. We recognize that some unresolved collateral issues may remain

in the instant case as presented in this appeal. Rountree, for example,

has requested attorneys’ fees stemming from the prior hearing before

the ALJ. However, these issues are substantially unrelated to the

heart of this appeal and therefore do not bar our jurisdiction to con-

sider the central issue. ““‘When attorney’s fees are similar to costs or

collateral to an action, a lack of determination as to the amount does

not preclude the issuance of a final, appealable judgment on the

merits.” Holmes v. J. Ray McDermott & Co., Inc., 682 F.2d 1143,

1146 (Sth Cir. 1982) (citations omitted).

A-36

The Supreme Court has stated that the question of

finality deserves a “practical rather than a technical con-

struction” because it would be “impossible to devise a

formula to resolve all marginal cases coming within what

“might well be called the ‘twilight zone’ of finality.” Gil-

lespie v. United States Steel Corp., 379 U.S. 148, 152,

85 S.Ct. 308, 311, 13 L.Ed.2d 199 (1964) (exceptions

to finality rule under 28 U.S.C. § 1291). In the case

before us, the question on appeal is to determine the

proper legal standard to be applied. Our decision will

settle this question and minimize the risk of a wasted

agency hearing and a later appeal. We find that an appeal

at this stage in this case will be more efficient and will

not prejudice the parties, especially since the employee’s

workers’ compensation checks will not reflect the proper

award until the conclusion of this litigation. Accordingly,

we recognize appellate jurisdiction in this case where the

substantive legal issue is clearly posed and all that will

remain after it is decided is use of the record already

completed to calculate the wage base for the recovery.

III. Determination of the Proper Legal Standard

A. General Considerations

The substantive dispute before us is not a complex one.

We must decide which of three statutory formulas is to be

used in computing Roundtree’s weekly wage base for pur-

poses of workers’ compensation benefits under LHWCA.

Roundtree’s somewhat unusual situation, having changed

on the very day of his injury from independent con-

tractor at $12.50 per hour to hourly employee at $5.50

per hour makes the method of computation an issue of

intense concern to the parties.

A-37

{2] Our standard of review is necessarily limited,

Presley v. Tinsley Maintenance Service, 529 F.2d 433,

436 (Sth Cir. 1976), to whether the administrative find-

ings are supported by substantial evidence, Banks v.

Chicago Grain Trimmers Ass'n, 390 U.S. 459, 467, 88

S.Ct. 1140, 1145, 20 L.Ed.2d 30 (1968), in accord

with the law, Cardillo v. Liberty Mutual Ins. Co., 330

U.S. 469, 67 S.Ct. 801, 91 L.Ed. 1028 (1947), and not

arbitrary, O’Keeffe v. Smith, Hinchman & Grylls As-

sociates, Inc., 380 U.S. 359, 85 S.Ct. 1012, 13 L.Ed.2d

895 (1965) (per curiam).

The nature of our review is also restricted by the statu-

tory scheme of § 10. The statuie assumes that most work-

ers will fall into subsection (a), which looks to the actual

wages of the injured worker in the year prior to the injury

as the monetary base for determination of the amount of

compensation. Subsection (b) operates only where sub-

section (a) cannot be applied due to a fundamental

change in the nature of the injured worker’s employment.

Method (b) looks to the actual wages of other workers

in the same employment situation. The statute presumes

that either (a) or (b) will fit the circumstances of the

injured employee in most cases, but adds the “earnings

capacity” formula of subsection (c) as a general, “catch-

all” provision in case the other methods cannot be used

as, for example, where the employee has worked for sub-

stantially less than a year and there are no other em-

ployees in the particular business whose jobs are com-

parable. Our task, then, is not to choose the most attrac-

tive method, but to determine which of the formulas is

called for by the step-by-step statutory scheme.

A-38

B. Specific Determination

[3] Roundtree urges on appeal, as he has in the pro-

ceedings below, that § 10(a) of the Act controls. Basic-

ally, § 10(a) relies on the actual wages of the injured

employee during the previous year.* Roundtree was earning

between $10.50 and $12.50 per hour during the previous

year as an independent contractor.

However, we agree with both the ALJ and the BRB

that § 10(a) is not a proper formula to be applied in

this case. Roundtree had a complete change in the nature

of his employment when he voluntarily relinquished his

self-employment as independent contractor and accepted

an hourly job in the shipyard. This change was not a

simple change in employer or place of business. Job-

hoppers performing substantially the same work for dif-

ferent employers are covered by the 10(a) formula just

as are their less peripatetic coworkers. But Roundtree’s

situation is much further removed from 10(a) applica-

bility.

First of all, his prior work as an independent contractor

was not “covered employment” under workers’ compensa-

tion, since he was self-employed. Under § 10(a) he had

no employer. Further, Roundtree’s new position required

only the skills of a welder, while his work as a contractor,

4. Section 10(a) of the Act, 3: U.S.C. § 910(a), provides:

If the injured employee shall .ave worked in the employment

in which he was working at the .ime of the injury, whether for

the same or another employer, during substantially the whole of

the year immediately preceding hi: injury, his average annual

earnings shall consist of three hunclred times the average daily

wage or salary for a six-day worker and two hundred and sixty

times the average daily wage or salary for a five-day worker,

which he shall have earned in such employment during the days

when so employed.

———

ey —_

A-39

as the ALJ found, entailed “a considerable amount of

expenses involved in operating his own business such as

purchasing oxygen, welding rods, hand tools, acetylene,

a welding rig mounted to his truck, insurance coverage,

as well as various utility expenses.” Self-employment also

requires a knowledge of bookkeeping, contracts, and gov-

ernment regulations that an hourly job does not demand.

Finally, an independent contractor works on a job basis

and may well not be working a full 40 hour week every

week. These critical distinctions explain, at least in part,

why workers like Roundtree would trade a $12.50 an

hour contractor’s life for a $5.50 guaranteed wage. Since

Roundtree was not “employed” for the year prior to the

accident, he was not working in the same employment

on the day of the accident, and $ 10(a) is not applicable.

The employer contends that § 10(b) is the proper

formula. Subsection (b) determines a weekly wage by

counting the last year’s wages of coworkers performing

substantially the same work at the same place of employ-

ment as the injured worker.*® This subsection applies.

to claims in which the injured worker has had too

little time on the job to permit an accurate and fair

computation of average daily wage: for example,

the subsection would apply if a worker had been

5. Section 10(b) provides:

If the injured employee shall not have worked in such employ-

ment during substantially the whole of such year, his average

annual earnings, if a six-day worker, shall consist of three

hundred times the average daily wage or salary, and, if a five-

day worker, two hundred and sixty times the average daily wage

or salary, which an employee of the same class working sub-

stantially the whole of such immediately preceding year in the

same or in similar employment in the same or a neighboring

place shall have earned in such employment during the days

when so employed.

A-40

recently hired after having been unemployed, or out

of the work force, or in a lower paying position.

See O’Hearne v. Maryland Casualty, 177 F.2d [979]

at 982; California Ship Service Co. v. Pillsbury, 175

F.2d [873] at 876.

Duncanson-Harrelson Co. v. Director, Office of Workers’

Compensation Programs, 686 F.2d 1336, 1341-42 (9th

Cir. 1982).

[4] The record shows that the employer presented pay

records of three welders who performed comparable work

at the same site. This is an adequate statistical base for

§ 10(b) purposes, even though there were over 100 weld-

ers in the shipyard at the time. There was no attempt to

introduce any evidence that these three were not doing

comparable work and instead were picked as the lowest-

earning welders. Absent such an intent to distort the

comparable wages, even one worker’s pay record could

fulfill the statutory requirement.°

The Director counters the claim of § 10(b) applica-

bility by pointing out that § 10(b) should not be pe

when the result would fail “reasonably and fairly”

represent the worker’s earnings. The Director urges us

to uphold the application of § 10(c)."

6. The statute calls for comparison to “an employee of the same

or most similar employment.” See id. See also Andrew F. Mahony

Co. v. Marshall, 56 F.2d 74 (9th Cir. 1932).

7. Section 10(c) states:

If either of the foregoing methods of arriving at the average

annual earnings of the injured employee cannot reasonably and

fairly be applied, such average annual earnings shali be such

sum as, having regard to the previous earnings of the injured

employee in the employment in which he was working at the

time of the injury, and of other employees of the same or most

similar class working in the same or most similar employment

A-41

The Director points out that the welders in this ship-

yard received a 50 cent per hour wage increase just two

months before Roundtree’s accident. Examining ten

months of older, lower wages with only two months of

the then-current wages would diminish Roundtree’s com-

pensation base. Since the purpose of the overall statute is

to compensate the injured worker, the Director argues,

the government should take all possible steps to provide

the employee with the maximum recovery allowable under

the statute. Hence, he urges us to affirm the BRB’s use

of § 10(c).

[5] We are sympathetic to the Director’s view that

claimants should receive the maximum compensation

allowable under the statute. However, we find that an

award under § 10(c) is not allowable under the statute

in the case before us, and we hold that § 10(b) is the

applicable formula.

First, we point out that the statutory hierarchy of

compensation formulas will allow the use of § 10(c) only

when neither § 10(a) or § 10(b) can be applied “fairly

and reasonably”. The Director argues that any substantial

wage increase within the year preceding injury would

make § 10(a) or § 10(b) unfair, and that the larger the

raise and the closer to the date of injury, the more unfair

the other methods become. He believes that any worker

whose employer gave a substantial raise before the date

of injury should be able to claim a § 10(c) “catch-all”

computation, whether or not that worker has been em-

ployed there for the entire previous year.

in the same or neighboring locality, or other employment of

such employee, including the reasonable value of the services of

the employee if engaged in self-employment, shall reasonably

represent the annual earning capacity of the injured employee.

A-42

Yet such an interpretation is not in keeping with the

intent of the statute, for it would effectively eradicate

virtually all applications of methods (a) or (b). Most

employers now offer some sort of annual wage boost.

Congress, in creating this statutory scheme, did not in-

tend for § 10(a) and § 10(b) to be wiped off the books.

The “catch-all” provision of § 10(c) is properly to be

applied only in cases where it would be unrealistic to

apply the normal formulas. As legislative history de-

scribes § 10(c):

This subsection in the present law is used where the

employment itself, in which the injured employee

was engaged when injured, does not afford a full

year of work. . . . Thus, subsection (c) applies to

seasonal, intermittent, discontinuous, and like em-

ployment which affords less than a full workyear or

workweek.

Senate Rep. No. 1315, 80th Cong., 2d Sess., reprinted in

[1948] U.S. Code Cong. Serv. 1979, 1982, quoted in

Strand v. Hansen Seaway Service, Ltd., 614 F.2d 572,

575 (7th Cir. 1980).

Case law clarifies the limited nature of § 10(c). In

Todd Shipyards Corp. v. Director, Office of Workers’

Compensation Programs, 545 F.2d 1176 (9th Cir. 1976),

the court upheld the use of § 10(c) when “no evidence

was introduced which could clearly determine the claim-

ant’s average daily wage” under § 10(a) or § 10(b). Id.

at 1179 (emphasis added). The Ninth Circuit also stated

in Palacios v. Campbell Industries, 633 F.2d 840, 842

(9th Cir. 1980) that “[s]ection 10(c) applies to inter-

mittent and irregular employment, when application of

the mathematical formulas provided in section 10(a) or

10(b) would be unreasonable or unfair, or when insuf-

4

4

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3

a

2

3

4

a

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A-43

ficient evidence is presented at the hearing to permit

proper application of section 10(a) or (b).”

On occasion, some courts have recognized a general

unfairness in using §10(a) or §10(b) when those

formulas would not reflect a claimant’s earning capacity

at the time of injury. These cases usuaily involve a worker

who had been off the job for much of the preceding year,

so that a § 10(a) determination of wages while working

would lead to a significantly larger computed wage base

than the worker’s actual earnings during the prior year.

In Strand v. Hansen Seaway Service, Ltd., supra, the

Seventh Circuit found that where a cold water port is

normally closed for fixed times of year, the use of § 10

(a) or § 10(b) to determine an average weekly wage

would be unreasonable and unfair. In Duncanson-Harrel-

son Co. v. Director, Office of Workers’ Compensation

Programs, 686 F.2d 1336 (9th Cir. 1982), the Ninth

Circuit upheld the use of § 10(c). The court admitted

that use of §$ 10(c) might be error, but refused to re-

verse because the use of § 19(a) would have inflated the

worker’s wage base unfairly. See also Johnson v. Britton,

290 F.2d 355 (D.C. Cir.), cert. denied, 368 U.S. 859,

82 S.Ct. 99, 7 L.Ed.2d 56 (1961) (§ 10(a) would result

in a “highly distorted earnings figure” when the worker

worked only 180 days of the prior 52 weeks).

In Andrew F. Mahony Co. v. Marshall, 56 F.2d 74

(9th Cir. 1932), the court sanctioned the use of § 10(c)

to an intermittent employee. Winkler, the employee, had

earned $1,266.20 in the year prior to his injury, and

was awarded the maximum $25.00 weekly compensation,

based on the higher wages of a coworker. Recognizing

that $ 10(b) would provide greater compensation to

Winkler than he had earned through his prior, :atermit-

A-44

tent employment, the court allowed the use of § 10(c).

The court stated that § 10 “does not provide that every

case must be measured by subdivisions (a) or (b) if it

is possible to force the transaction into the formula which

those subdivisions prescribe and that subdivision (c) is

to be applied only to cases which cannot be measured

by (a) or (b).” Jd. at 78. However, the use of subsection

(b) in the case before us does not require forcing or

even a gentle push. It is method (c) that calls for the

push—a push that would give Roundtree the benefit of

the recent raise in the shipyard.

It is the clear intent of the statute that if one of Round-

tree’s co-workers was injured and he had worked for the

whole of the preceding year, § 10(a) would apply. When

this was pointed out to government counsel during oral

argument, counsel was forced to take the position that

any welder in the shipyard who was injured should be

able to claim a wage base calculated under § 10(c).

We cannot accept such a departure from the manifest

statutory scheme. We hold that § 10(b) is the applicable

formula by which to compute Roundiree’s wage base.

IV. Conclusion

We find that this Court has jurisdiction over the sub-

ject matter of this appeal. Further, we hold that § 10(b)

of the Longshoremen’s and Harbor Workers’ Compensa-

tion Act (LHWCA), 33 U.S.C. § 910(b), sets out the

proper formula by which to determine Roundtree’s work-

ers compensation benefits. We therefore reverse the Bene-

fits Review Board and remand for proceedings consistent

with this opinion.

REVERSED AND REMANDED.

A-45

TATE, Circuit Judge, dissenting:

With respect for my brethren of the majority, I never-

theless dissent from their holding that the present order

of remand by the Benefits Board of Review is a “final

order” and, thus, subject to judicial review at this time.

33 U.S.C. § 921(c). In a commendable effort to ex-

pedite judicial review in the present case, the majority

has adopted a principle of case-by-case determination of

“finality” that will, however, unsettle the relative certainty

that was previously attached to that concept. While the

benefits of expeditious review in the present case may be

apparent, the general rule enunciated will require, as its

consequence, many premature appeals in the future and

much additional resultant delay before the final award

or rejection of compensation claims.

In the present case, the principal (but not the only)

issue before the Administrative Law Judge and the Board

was whether the injured employees should be awarded

compensation based upon § 10(a) (the employee’s wages

during the prior year), or upon §$10(b) (prior years’

wages of coworkers), or upon § 10(c) (an alternative,

when either of the former methods “cannot reasonably

be applied” to arrive at the annual earnings of the injured

employee) of the Act, 33 U.S.C. § 910(a), (b), or (c).

Affirming the ALJ, the Board held that § 10(c) applied

to the facts of this case, but it remanded for additional

findings of fact, with leave to reopen the record to take

additional evidence, for a redetermination of the claim-

ant’s weekly wage, as well as for consideration of other

issues, such as attorney’s fees. Independent of whether

we ultimately decide whether the Board was correct in

finding § 10(c) to provide the proper method: for com-

A-46

puting the award of compensation,’ we must first decide

whether this order was “final” so as to permit us to exer-

cise appellate jurisdiction to review it.

1. Here, for instance, the majority decides that instead, § 10(b)

is the proper formula, so that more efficient non-piecemeal review

is appropriate. However, had the majority decided that the Board

correctly applied § 10(c), the result of the majority rationale would

permit (or require, see text below) two judicial reviews of the same

award—the first (the present) as to the method of calculating the

compensation benefits, and the second, if one of the parties disagreed

as to the actval dollar rate of the actual award or as to the attorney’s

fees or other remaining issues in the case.

I may add that I entertain very serious reservations as to the

correctness of the majority’s conclusion that the Board improperly

used § 10(c) under the Board’s determination that neither § 10(a)

nor § 10(b) provided a reasonable and fair method of determining

the “annual earning capacity’, § 10(c), of this particular employee,

injured on the first day of his new employment after having left

much more highly remunerative work of the same nature. Cf. also

§$ 8(h), defining “wage-earning capacity” and providing that “actual

earnings” measure if they “fairly and reasonably represent his earn-

ing capacity.”

I read § 10(c) as a Congressional grant of administrative discre-

tion, subject to review only as an abuse, to determine the annual

earning capacity of an injured employee where § 10(a) and § 10(b)

do not reasonably and fairly result in a calculation of the annual

earning capacity of the particular employee injured. See, to same

effect, 1A Benedict on Admiralty, § 74 at pp. 4-41 through 44 (7th

ed. 1982). Thus, § 10(a) and § 10(b) were not legislatively intended

to be a statutory straight jacket mechanically applied. In the present

case, had the claimant Roundtree worked for the present employer

(instead of for himself, doing the same type of work) for the pre-

ceding year, it would be obvious that his previous year’s earning

capacity and annual wages were greater than those of his present co-

employees who had worked “in the same or in similar employment

in the same or a neighboring place’, § 10(b), during the preceding

year (upon which compensation is based, rather than on the increased

pay such employees were now paid during the year of Roundtree’s

injury). In terms, § 10(b) seems addressed to an injured employee

who had not worked for the employer defendant “during substantially

the whole of such [preceding] year,” in which event his average

annual wage is calculated as if he had worked the whole rather than

only part of the year for that employer. However, since I do not

believe we have jurisdiction to review this interlocutory order of the

Board, I will comment no further as to the majority’s ruling on the

merits.

DR Det Teesside Oe

A-47

The majority notes, correctly, the settled jurisprudence

to the effect that the “final order” appealability-require-

ment of 33 U.S.C. § 921(c), with regard to Board deci-

sions, is essentially determined by the same criteria that

apply to the “final judgments” appealability-requirement

of 28 U.S.C. § 1291 with regard to district court deci-

sions.” As to the latter, the Supreme Court recently re-

iterated the test of finality as being “‘a decision by the

District Court that “ends the litigation on the merits and

leaves nothing for the court to do but execute the judg-

ment.”’” Firestone Tire & Rubber Company v. Risjord,

449 U.S. 368, 373, 101 S.Ct. 669, 673, 66 L.Ed.2d 571

(198)}). The Court emphasized several of the important

purposes served by the requirement of finality: the avoid-

ance of piecemeal appeals and of the obstruction to just

claims by permitting a succession of separate appeals

from the various rulings to which litigation may give

rise, as well as the promotion of efficient judicial ad-

ministration. 7d. As this court itself has reiterated,

[The finality] requirement has the support of con-

siderations generally applicable to good judicial ad-

ministration. It avoids the mischief of economic

waste and of delayed justice. Only in very few

situations, where intermediate rulings may carry

serious public consequences, has there been a de-

2. Particular requirements of an administrative review scheme may

sometimes impose “special considerations” on the determination of

finality that vary from the “classical jurisdictional requirements”

applied to appeals from district courts. Sun Shipbuilding and Dry

Dock Company v. Benefits Review Board, 535 F.2d 758, 760 (3d

Cir. 1976), see Weinberger v. Salfi, 426 U.S. 749, 764-67, 95 S.Ct.

2457, 2566-67, 45 L.Ed.2d 522 (1975). No such particular require-

ments or special considerations are relied upon or appear with regard

to the present clearly delineated administrative and judicial review

scheme.

A-48

parture from this requirement of finality for federal

appellate jurisdiction.

In re Corrugated Container Antitrust Litigation, 611 F.2d

86, 89 (Sth Cir. 1980).

The present Board order, although determining a cen-

tral issue of the claim—the method of calculating weekly

compensation due—, remanded the proceedings to the

Administrative Law Judge for further findings as to the

actual weekly rate to be awarded and as to attorney’s

fees. It did not end the litigation on the merits, and no

final administrative order awarding weekly compensation

and attorney’s fees would be entered until after the re-

mand.

Under such circumstances, where in effect a central

issue of liability has been determined to administrative

finality by the Board but remand is ordered to calculate

and make a specific monetary award, the decisions until

the present have uniformly refused to consider the Board

order of liability as “final” for purposes of judicial re-

viewability at that time, both in this circuit, United Fruit

Company v. Director, Office of Workers’ Compensation

Programs, 546 F.2d 1224 (Sth Cir. 1977), and in other

circuits, Director, Office of Workers’ Compensation Pro-

grams v. Brodka, 643 F.2d 159 (3d Cir. 1981); National

Steel and Shipbuilding Company v. Director, Office of

Workers’ Compensation Programs, 626 F.2d 106 (9th

Cir. 1980); Newport News Shipbuilding Corporation v.

Director, Office of Workers’ Compensation Programs, 590

F.2d 1267 (4th Cir. 1978). As stated in one of the lead

decisions applying this rule, “[i]t is a well-established rule

of appellate jurisdiction . . . that where liability has been

decided but the extent of damages remains undetermined,

A-49

there is no final order.” Sun Shipbuilding & Dry Dock

Company v. Benefits Review Board, 535 F.2d 758, 760

(3d Cir. 1976).

The virtues of this rule are apparent. It avoids dual

appeals on both liability and award, with the consequent

doubled judicial appellate delays, in favor of a single re-

view of the final administrative award. An injured worker,

whose award is vacated by the Board for recalculation as

to the properly exact amount of weekly compensation due,

does not suffer the prolonged denial of compensation that

will occur as his employer seeks judicial review of the

singled issue of liability (which, moreover, in the pre-

ponderant number of cases will be affirmed) decided by

a Board opinion that affirms liability but vacates and

remands for exact calculation. The certainty of the rule

of nonfinality in such instances permits all parties to rely

on judicial review only after administrative remand and

final calculation of the actual award, without being forced

to take a precautionary appeal to the courts lest a failure

to do so result in the loss of judicial review of the liability

issue as determined by the Board's remand order, if it is

subsequently characterized as “final” as to the liability

decision.

In failing to follow this (until now) well-settled juris-

prudential rule, the majority analyzes the facts and issues

of this particular case, and decides that because in this

particular case the appellate court decision now will

determine the proper legal standard to be applied on the

remand, and minimize the risk of a wasted agency hear-

ing and later appeal, an appeal at this stage of the pro-

ceedings in this case will be more efficient and will not

prejudice the parties (because the proper award of com-

A-50

pensation cannot be made until the conclusion of the

litigation). The majority concludes that we will “recog-

nize appellate jurisdiction in this case where [1] the sub-

stantive legal issue is clearly posed and [2] all that will

remain after it is decided is use of the record already

completed to calculate the wage base for recovery.”

Before noting some of the practical consequences to

this newly created exception from the “finality” require-

ment for reviewability of administrative orders, I point

out the tenuous authority upon which creation of this

exception is based. Unlike all of the previously cited deci-

sions, the majority does not advert to the traditional and

quite limited exceptions to the finality rule rarely per-

mitted. See, e.g., Brodka, supra, 643 F.2d at 163 & n. 9

(collatcral order final in nature and severable from merits;

irreparable injury; unresolved issues purely ministerial in

nature); 16 Wright, Miller, Cooper and Gressman, Fed-

eral Practice and Procedure, § 3942, see esp. at p. 314

(1977); 15 Wright, Miller and Cooper, Federal Practice

and Procedure, § 1910-13 (1976). Rather, the majority

purports to find in Ingalls Shipbuilding Division v. White,

681 F.2d 275 (1982), a rather free-wheeling authority

to dispense with the finality requirement in any individual

case where the spectre of piecemeal review is not raised

because in a given case the record is complete, the issue

presented is a legal standard rather than a factual dispute,

and the same legal issue (perhaps incorrectly decided

initially by the Board) would recur on the subsequent

resort to judicial review after the remand.

Ingalls, however, is a case presenting exceptional and

distinguishable facts. The sole issue there concerned

whether an administrative law judge had the power to

A-51

approve a settlement, with an important collateral ques-

tion as to the reviewability or not of a settlement so

approved, as against contentions (ultimately upheld by

us) that the judge was without authority to do so and

that the Director, Office of Workers’ Compensation Pro-

grams, did have standing to appeal the ALJ’s order ap-

proving the compromise. The Board had upheld such

power in the ALJ, but had remanded for his reconsidera-

tion of certain factors. Balancing competing considera-

tions of piecemeal review and the danger of denying

justice by delay in the decision of this crucial issue in

the administration of the compensation act, Ingalls con-

cluded that “the facts here fall within the unique situation

that is established as an exception to technical finality in

Gillespie [v. United States Steel Corp., 379 U.S. 148,

85 S.Ct. 308, 13 L.Ed.2d 199 (1964).]” 681 F.2d at

279 (emphasis added).

Ingalls did not explicitly specify the unique and ex-

ceptional facts. However, its reference to Gillespie—

where, as in Jngalls, there was a close or at least un-

resolved issue as to the appealability itself of the basic

order (in Jngalls, on whether any order of an ALJ ap-

proving a settlement was reviewable at the instance of

the Director)—would indicate to me that no blanket

exception to finality was intended whenever, in a panel’s

view, the spectre of piecemeal review was not raised by

deciding the initial appeal. That the “pragmatic finality”

exception to finality recognized by Gillespie applies only

in extremely limited and extraordinary circumstances may

be recognized by the Supreme Court’s recent characteri-

zation of that decision’s holding:

In Gillespie, the Court upheld an exercise of ap-

pellate jurisdiction of what it considered a margin-

A-52

ally final order that disposed of an unsettled issue

of national significance because review of that issue

unquestionably ‘implemented the same policy Con-

gress sought to promote in § 1292(b),’ id., at 154,

85 S.Ct. at 312, and the arguable finality issue had

not been presented to this Court until argument on

the merits, thereby ensuring that none of the policies

of judicial economy served by the finality require-

ment would be achieved were the case sent back

with the important issue undecided.

Cooper & Lybrand v. Livesay, 437 U.S. 463, 477 n. 30,

98 S.Ct. 2454, 2462 n. 30, 57 L.Ed.2d 351 (1978).

The present petition for judicial review of a Board

order presents no unusual or unique circumstances such

as are implicated in Gillespie or in the quite limited ex-

ceptions to finality previously recognized. Absent the

present decision by the majority, there was no issue of

marginal appealability that justified this court’s immediate

determination of the appealability issue and of the cor-

rectness of the underlying order. The issue decided, al-

though important, is not of such national significance to

the administration of the Act as to require its decision

on this (premature) appeal rather than by the appeal

from the final order that awards compensation and re-

solves all unsettled issues. Nor, for reasons to be set forth,

does the new general exception to finality created by the

majority avoid thwarting the purposes of the finality rule.

Rather, by importing into the finality concept a case-

by-case measure of exception, in general application the

newly created judicial exception substantially impedes

these purposes of the finality concept and must inevitably

result in multiple appeals, additional delays before final

decision, and new issues of appellate jurisdiction that

ee

A-53

will impede the decision by judicial review of the merits

of administrative orders. This may be illustrated by ref-

erence to the present proceedings.

The majority’s exception permits immediate review-

ability, despite technical non-finality, where the record

is complete as to factual matters and where only a legal

standard is at issue, immediate decision of which will

facilitate the ultimate decision after remand. With regard

to the present case, I note:

1. The majority assumes the record is complete, prob-

ably subconsciously influenced by its ultimate determina-

tion that § 10(c) does not apply and that the record now

contains all facts needed to decide under § 10(b). Ab-

sent that determination, the record is not complete, as

the Board recognized in vacating and remanding for ad-

ditional findings of fact, including the taking of evidence

if necessary, to make a proper weekly award under

§ 10(c). If we had affirmed (instead of reversed) the

Board’s determination that § 10(c) furnishes the proper

measure of weekly disability compensation, the effect of

our decision retaining appellate jurisdiction would be to

remand (as the Board ordered on June 10, 1981, some

eighteen months ago) to the Administrative Law Judge

to calculate the weekly award, following which the em-

ployer (or the claimant) would be entitled once again

to appeal this now-final order. Whether the majority had

affirmed or reversed the Board’s non-final order, however,

in either event the majority’s new exception rule builds

into the administrative compensation-awarding processes

an additional delay, in this case extending more than a

year and a half (so far), by allowing an initial appeal

as to the liability-standard, to be followed (quite pos-

A-54

sibly) by yet a second resort to the review process after,

on remand, the ALJ fixes the rate of compensation and

decides the subsidiary undecided issues, such as attorney’s

fees.

2. The employer sought judicial review of the Board’s

remand order, until now considered a non-reviewable non-

final order. Assume that instead the parties had followed

the previously accepted methodology, applying for judicial

review only after a final order, and thus had complied

with the remand and secured an expeditious administra-

tive determination of unresolved issues, including the

compensation, to be incorporated in a technically as well

as actually final order. Upon judicial review from the

true final order, the parties are faced with the possibility

that, under the majority’s new “pragmatic finality” ex-

ception, their failure to appeal the initial “final” order

(determining only the standard of liability) forecloses

subsequent review of the initial liability decision.* What

3. This type of problem is illustrated by Croker v. Boeing Co.,

662 F.2d 975 (3d Cir. 1981) (en banc). The district court entered

judgment on the merits against the defendant in October 1979,

leaving for determination only the amount of attorney’s fees. In

March 1980, the district court set the amount of attorney’s fees,

and the employees timely appealed within thirty days of the latter

order. The defendant moved to dismiss the appeal by the plaintiffs

as to certain merit-rulings in the October 1979 judgment. The de-

fendant contended that the 1979 judgment was final, since it had

decided all issues in the appeal. The court of appeals rejected this

contention, holding that the 1979 judgment was not “final” under the

general test that it did not terminate the litigation and leave nothing

to be done to enforce the judgment.

The majority, rather unsuccessfully in my view, distinguishes this

decision and numerous others to same effect by noting that the record

at the time of the initial order did not contain all the factual matter

necessary for the final determination of the amount of attorney’s fees,

so the initial order was not ‘final” and was not reviewable at that

time. I am unable to see how the present record differs—even aside

from the lack of complete evidence to decide the § 10(c) issue. In

A-55

must the parties do to avoid this possibility? Obviously,

to avoid this possibility, a party must seek initial review

of the initial Board remand-order, although it involves

considerable additional appellate delays (here, eighteen

months so far), and although the court may decide that,

after all, the appeal is premature because the order is not

“final” under the flexible finality rule envisioned by the

majority’s new exception.

3. If the previously accepted concept of “finality” for

purposes of judicial review had been followed in this

case, then on the single judicial review the courts would

be concerned only with the merits of the litigation. (If

a party appealed despite the accepted rule, the usual

practice in this court would probably result in a dismissal

by summary order of an administrative panel, since the

rule of finality previously followed was certain and was

easily administerable.) Under the new rule of appeal-

ability sanctioned by the majority, a new adjective issue

of appealability is injected into every appeal from a Board

remand-order or from an order by the Board following

an unappealed Board remand-order.* Is or was the initial

the present case also, there was not a complete factual record neces-

sary to fix the amount of attorney’s fees due, an issue that the Board

had remanded to the ALJ. This circumstance may indicate some of

the difficulty and uncertainty in determining whether there is a

“complete record” so as to permit a reviewing court to considei the

order under review as “final”’.

Perhaps some of the obvious possibilities of injustice and the

necessity for precautionary appeal could be avoided by holding that,

when an appeal is perfected, the order may be pragmatically “final”

enough to be reviewable, but that a failure to appeal at that time

will not preclude subsequent review of the technically (and actually)

“final” order. However, such flexible interpretation would thwart the

purposes of the finality concept, aside from raising fundamental issues

of judicial disregard of the legislative final-order basis of appellate

jurisdiction.

4. See note 3 supra.

A-56

order “pragmatically” final? This will involve individual

analysis in each case to determine whether where what

the Board decided was a “legal standard” (instead of the

factual application of a legal standard, a mixed law-fact

question, for example) and whether the initial record was

“complete” such that immediate judicial review of the

initial order would add to the efficiency of disposition

and would theoretically avoid the spectre of piecemeal

judicial review. To replace the former certain definition

of administrative finality, the majority substitutes a rule

that requires case-by-case analysis in each individual ap-

peal, that in many instances will result in the prolongation

of judicial review by the frequent necessity of oral argu-

ment and collegiate interchange as to the variables now

injected into this adjective issue of appealability per se—

and one as to the application of which, I predict, reason-

able appellate minds will differ. For the previously cer-

tain rule of “technical” as well as actual finality, the

majority substitutes a flexible “pragmatic” finality rule

of uncertain case-by-case application that must inevitably

encourage precautionary interlocutory appeals, and their

consequent delay, and that may in an appreciable num-

ber of cases delay the decision of the merits by injecting

a complicated threshold adjective issue of appealability.

4. And what about the claimant (such as poor Round-

tree, here), as the reviewing court entertains the initial

appeal as to the Jegal standard of liability, despite a re-

mand by the Board to calculate the weekly compensa-

tion. Here, back in June 1981, the Board vacated the

provision of the order of the Administrative Law Judge

awarding Roundtree a weekly compensation award, see

Record Excerpts, p. 43, and remanded to that judge for

him to make further findings and to take further evidence,

A-57

if necessary, in order to calculate the proper weekly

amount. We are informed that here the employer has

continued to pay the claimant weekly compensation.

However, when the Board vacates the only order that

requires an employer to pay weekly compensation, then

—in the absence of a subsequent order by the administra-

tive judge on the remand renewing the employer’s obli-

gation to pay weekly compensation—I would suppose

that, as the Director in brief suggests, it is at least argu-

able whether the employer was obliged to continue to

make compensation payments to its disabled employee

before there was an administrative order fixing their actual

amount. Should in such circumstances an employer termi-

nate weekly compensation until an order as to its weekly

amount is finally issued, the availability of interlocutory

review of the Board’s remand order (deciding the measure

of liability, but remanding for calculation of the amount

due) will add a considerable period of delay during which

the disabled employee will receive no weekly compensa-

tion (here, more than eighteen months, so far), solely

for the purpose of judicial review of the Board’s interlocu-

tory order. Only following conclusion of that interim

lengthy judicial review of the measure-of-liability portion

of the Board’s remand-order, will the proceedings finally

be remanded to the Administrative Law Judge to issue

an order awarding weekly compensation in calculated

amount—as would have occurred, absent interim judicial

review, many months earlier. I cannot believe that either

the purposes or intent of the compensation act are served

by an interpretation of the judicially-reviewable “finality”

provision of 33 U.S.C. § 921(c), that will insert such

additional interlocutory-review delays that may disrupt

for an appreciable time the continued payment of weekly

A-58

compensation to an admittedly disabled employee solely

for the purpose of affording interlocutory judicial review.

I sympathize with my brothers of the majority in their

commendable desire to decide now a central issue of this

proceeding, since the appeal is already here, because in

this case they view it to be more efficient to do so, under

the particular issue and record presented to us. I share

their general view that formal procedural rules should

be applied in the light of their function, and that a prac-

tical rather than a technical construction is often suitable

to advance the end purpose of a procedural rule. Here.

however, the very purpose of the finality rule is thwarted

by the practical construction accorded it; although it may

advance the efficient decision of this particular case, the

flexible rule of pragmatic finality adopted by the majority

will impede the efficient and expeditious decisions of

many, many appeals from administrative remand-orders

in the future. At the same time, the newly created excep-

tion to finality replaces with large elements of uncertain

administration the previously certain and efficient rule

of finality as accorded to Board orders. The need for clear

and easily administered rules as to the threshold adjective

issue of reviewability overrides any values of flexible case-

by-case administration. As has been stated in a related

context:

Although well-established rules of appealability might

at times cause an action to be determined unjustly,

slowly, and expensively, they have nonetheless the

great virtue of forestalling the delay, harassment,

expense, and duplication that could result from

multiple or ill-tinied appeals. The great value of

the final judgment rule may well be that it combines

generally effective review with guides sufficiently

A-59

clear to prevent most of the great waste that could

result from protective appeals and litigation over

appellate jurisdiction. Earnest pursuit of a “practical

approach” could quickly destroy this accomplish-

ment.

15 Wright, Miller, and Cooper, supra, § 3913 at p. 523.

I therefore must respectfully dissent from the majority’s

opinion.

A-60

APPENDIX C

BENEFITS REVIEW BOARD

U. S. DEPARTMENT OF LABOR

No. 80-158 & 80-158A

JAMES P. ROUNTREE,

Claimant-Respondent Cross Petitioner

V.

NEWPARK SHIPBUILDING & REPAIR,

INCORPORATED

and

AMERICAN HOME ASSURANCE COMPANY

Employer/Carrier-Petitioners Cross-Respondents

(Filed June 10, 1981)

DECISION and ORDER

Appeal from the Decision and Order of David W.

Di Nardi, Administrative Law Judge, United States

Department of Labor.

Stephen M. Vaughan and Sidney Ravkind (Mandell

& Wright), Houston, Texas, for the claimant.

E. D. Vickery and Thomas C. Fitzhugh, III (Roys-

ton, Rayzor, Vickery & Williams), Houston, Texas,

for the employer/carrier.

Before: SMITH, Chief Administrative Appeals

Judge, MILLER and KALARIS, Administrative

Appeals Judges.

A-61

KALARIS, Administrative Appeals Judge:

This is an appeal by Newpark Shipbuilding and Repair,

Incorporated and American Home Assurance Company

(hereinafter, employer) from the Decision and Order

(79-LHCA-973N) of Administrative Law Judge David

W. DiNardi pursuant to the provisions of the Longshore-

men’s and Harbor Workers’ Compensation Act, as amend-

ed, 33 U.S.C. § 901 et seq. (hereinafter, the Act). Claim-

ant has filed a cross-appeal. The principal issue raised in

these appeals is whether the administrative law judge

correctly calcuiated claimant’s average weekly wage.

The administrative law judge found that neither Sec-

tion 10(a), 33 U.S.C. §910(a), nor Section 10(b),

33 U.S.C. § 910(b), could be fairly or reasonably ap-

plied in calculating claimant’s average weekly wage.

Therefore, he held that claimant’s average weekly wage

should be calculated under Section 10(c), 33 U.S.C.

§$910(c). The administrative law judge found that

claimant’s gross earnings while self-employed in the year

prior to injury constituted his average annual earnings

under Section 10(c). Applying Section 10(d), 33 U.S.C.

§ 910(d), the administrative law judge divided this figure

by 52, and held that claimant’s average weekly wage

equalled $360.41. He awarded claimant temporary total

and temporary partial disability benefits based on this

figure. He also awarded claimant’s attorney an attorney’s

fee since the award of compensation was greater than

amounts voluntarily paid by employer at an average

weekly wage of $254.59."

1. Employer originally paid benefits based on an average weekly

wage of $224. On October 31, 1978, the compensation rate was

retroactively adjusted to $254.59.

A-62

Employer appeals, asserting that it complied with all

the requirements for application of Section 10(b) of the

Act and that, therefore, Section 10(b) must be applied

in calculating claimant’s average weekly wage. Employer

also contends that, if claimant’s average weekly wage is

calculated pursuant to Section 10(b), then claimant is

not entitled to any temporary partial disability benefits

because his post-injury wage-earning capacity would be

higher than his pre-injury average weekly wage. Employer

also asserts that an attorney’s fee is not properly award-

able if claimant’s average weekly wage is calculated pur-

suant to Section 10(b).

Claimant filed a cross-appeal, arguing that the admin-

istartive law judge erred in calculating claimant’s average

weekly wage. Claimant argues that, on the facts of this

case, the methodology of Section 10(a) should have been

used in the application of Section 10(c). In the alterna-

tive, claimant argues that it is appropriate to use 43

weeks as the divisor indicated in Section 10(d), rather

than the 52 weeks used by the administrative law judge.’

Oral argument was held in this case in Houston, Texas,

on August 9, 1980. Claimant appeared to change his

position at oral argument. There, he argued that Section

10(c) was properly applicable, that use of a 52-week

divisor was proper, and that the administrative law judge’s

calculation of claimant’s average weekly wage should not

be overturned.* We nevertheless address all of claimant’s

contentions on appeal.

2. Claimant also argues on appeal that the administrative law

judge’s order awarding claimant temporary total disability benefits

should be modified to provide that these benefits continue “until

further order.”

3. Claimant contended that Section 10(c) was applicable at the

hearing below.

é

3

-

a

a

a

j

A-63

Upon its review of the case, the Board is required to

affirm the decision of the administrative law judge if it

is supported by substantial evidence in the record con-

sidered as a whole, is rational, and is in accordance with

law. 33 U.S.C. § 921(b)(3); O’Keeffe v. Smith, Hinch-

man & Grylls Associates, Inc., 380 U.S. 359 (1965).

Claimant began working for employer as a _ welder-

fitter in employer’s shipyard on April 22, 1975. On his

first day of work, claimant was injured when he tripped

and fell while working on a scaffold in the hold of a

barge. As a result, claimant injured his neck and lacerated

his head, requiring 30 stitches.

Prior to his employment with employer, claimant was

self-employed as a welder. Claimant began his inde-

pendent welding business in 1954 and continued it until

March 1975 when he sold his equipment. Claimant pri-

marily worked as an independent contractor repairing

boats and barges and performing pipe work in an oilfield

for Amoco Production Company. Claimant’s hourly rate

was $10.50 from April 23, 1974, through November

1974. In December 1974, his hourly rate increased to

$12.50. When employed by employer, claimant was paid

$5.50 per hour with a $.10 shift differential. Claimant

testified that he accepted the lower pay in return for

steady employment with available overtime.

Following his April 22, 1975, injury, claimant re-

turned to work for employer at the end of August 1975.

He received a $.25 per hour raise in December 1975,

and was earning $6.40 per hour when he left employer

in August 1976. From August 1976 to March 1978,

claimant worked for a variety of other employers with

pay rates ranging from $8.50 to $10.50 per hour. Claim-

A-64

ant has not returned to work since March 29, 1978.

Although employer was paying compensation benefits for

temporary total disability voluntarily, claimant filea a

claim under the Act for temporary total and temporary

partial benefits because a dispute arose as to his average

weckly wage.

Both claimant and employer in the instant case raise a

variety of arguments involving the determination of

claimant’s average weekly wage pursuant to Section 10."

4. Section 10 provides, in pertinent part:

Except as otherwise provided in this Act, the average weekiy

wage of the injured employee at the time of the injury shall be

taken as the basis upon which to compute compensation and

shall be determined as follows:

(a) If the injured employee shall have worked in the employ-

ment in which he was working at the time of the injury, whether

for the same or another employer, during substantially the whole

of the year immediately preceding his injury, his average annual

earnings shall consist of three hundred times the average daily

wage or salary for and two hundred and sixty times the average

daily wage or salary for a five-day worker, which he shall have

earned in such employment during the days when so employed.

(b) If the injured employee shall not have worked in such

employment during substantially the whole of such year, his

average annual earnings if a six-day worker, shall consist of

three hundred times the average daily wage or daily wage or

salary and, if a five-day worker, two hundred and sixty times

the average daily wage or salary, which an employee of the

same class working substantially the whole of such immediately

preceding year in the same or in similar employment in the

same or a neighboring place shall have earned in such employ-

ment during the days when so employed.

(c) If either of the foregoing methods of arriving at the

average annual earnings of the injured employee cannot reason-

ably and fairly be applied, such average annual earnings shall

be such sum as, having regard to the previous earnings of the

injured employee in the employment in which he was working

at the time of the iniury, and of other employees of the same

or most similar class working in the same or most similar em-

ployment in the same or neighboring locality, or other employ-

ment of such employee, including the reasonable value of the

A-65

Section 10 sets forth three alternative methods for de-

termining a claimant’s average weekly wage. The intent

is to determine claimant’s earning power at the time of

the injury. Orkney v. General Dynamics Corp., 8 BRBS

543, BRB Nos. 77-877/A (1978); Barber v. Tri-State

Terminals, Inc., 3 BRBS 244, BRB Nos. 75-177/A

(1976), aff'd sub nom. Tri-State Terminals v. Jesse, 596

F.2d 752, 10 BRBS 700 (7th Cir. 1979).° All three

methods are keyed to a determination of claimant’s aver-

age annual earnings, which are then divided by 52 pur-

suant to Section 10(d) to arrive at an average weekly

wage. Sections 10(a) and 10(b) apply to an employee

working full-time in the employment in which he was

injured. Section 10(a) is used when the employee worked

“substantially the whole of the year” preceding the injury

and Section 10(b) is used when he did not work sub-

stantially the whole of the year. Section 10(c) is a

“catch-all” to be used in instances when neither of the

above two methods are reasonably and fairly applicable.

We turn first to employer’s argument that claimant’s

average weekly wage must be determined pursuant to

Section 10(b).° Employer introduced the wages of three

services of the employee if engaged in self-employment, shall

reasonably represent the annual earning capacity of the injured

employee.

(d) The average weekly wages of an employee shall be one

fifth-second part of his average annual earnings.

5. Although claimant’s work injury occurred in April 1975, the

full effects of this injury did not become apparent for some time.

Claimant finally left work in March 1978. The parties focus on

claimant’s average weekly wage at the time of the April 1975 injury.

6. Since claimant withdrew his arguments concerning applicability

of Section 10(a) at oral argument, we need not consider that section.

We note, however, that Section 10(a) is not properly applicable in

this case. The administrative law judge held that Section 10(a) was

A-66

employees who worked for employer in the same classi-

fication and who performed the same work as claimant

during his employment with employer. This evidence of

the wages of substitute employees complied with the re-

quirements for invoking Section 10(b). See Eckstein v.

General Dynamics Corp., 11 BRBS 781, BRB No. 78-

428 (1980); Lozupone v. Stephano Lozupone & Sons,

not applicable in this case because claimant did not work substantially

the whole of the year prior to injury in covered employment. His

rationale indicates that, in determining whether Section 10(a) was

applicable, the administrative law judge focused on whether claimant

was engaged in employment within the jurisdiction of the Act for

substantially the whole of the year prior to his injury. We do not

agree that claimant must be engaged in employment within the

coverage of the Act insofar as that implies that the employment must

be maritime or that the employee must work for a covered employer

during the year prior to injury. The clear language of the statute

provides a formula for computing average weekly wage where a

claimant works substantially the whole of the year for the same or

another employer. Wages earned by a claimant in employment out-

side the coverage of the Act may therefore fall within Section 10(a)

if they are earned in the same employment as at the time of injury

regardless of whether it is covered by the Act.

Nonetheless, Section 10(a) is not applicable where claimant was

self-employed in the year prior to injury. Employment as an inde-

pendent contractor necessarily involves different duties from those of

a regular employee. Section 10(a) is meant to apply to a regular five-

or six-day worker and is intended to compensate full-time employees

who work a regular working week at regular hours. The number of

hours claimant worked each day and the number of days worked each

week varied with each particular job.

Moreover, Section 10(a) does not provide a formula which ap-

proximates the earning capacity of a self-employed claimant. Indeed,

use of 10(a) would inflate claimant’s earning capacity in an arbitrary

manner without regard to the true value of his services. The rate

for hiring a person who is operating an independent business does

not necessarily reflect the value of his services. Even though claim-

ant’s time was billed at an hourly rate while he was working as an

independent contractor, this hourly rate is not indicative of the value

of his services as is the rate paid by an employer to a regular hourly

employee in circumstances contemplated by Section 10(a). Section

10(a) cannot be fairly and reasonably applied in this case.

A-67

12 BRBS 148, BRB Nos. 79-158/A (1979); Daugherty

v. Los Angeles Container Terminals, Inc., 8 BRBS 363,

BRB No. 77-616 (1978). The administrative law judge

rejected application of Section 10(b) because (1) the

Statistical sample of three out of 100 welder-fitters at

employer’s business was not adequate; and (2) the em-

ployees of employer whose wage records were entered

into evidence received a wage increase two months before

claimant’s injury. See Decision and Order, slip op. at

18-19. As employer correctly points out, the administra-

tive law judge’s first reason for rejecting the computation

of average weekly wage under Section 10(b) cannot be

upheld. Section 10(b) requires only that the wages of

one substitute employee be entered into the record; a

statistical sampling of employees is not required. See

33 U.S.C. 910(b); Orkney v. General Dynamics Corp.,

8 RBS 543, BRB Nos. 77-877/A (1978); McDonough

v. General Dynamics Corp., 8 BRBS 303, BRB No. 77-

834 (1978).

It is employer’s position that, since it introduced the

evidence required by Section 10(b), that section must

be applied. However, the clear language of Section 10(c)

provides that it is applicable where Sections 10(a) and

10(b) cannot fairly and reasonably be used. Where those

sections do not yield an average weekly wage reasonably

reflective of claimant’s earning capacity at the time of

injury, they need not be applied. See Sobolewski v. Gen-

eral Dynamics Corp., 5 BRBS 474, BRB No. 76-306

(1977), affd on other grounds sub nom. General Py-

namics Corp. v. Benefits Review Board, 565 F.2d 20%,

7 BRBS 831 (2d Cir. 1977). Section 10(b) provides

neither the framework nor the flexibility for adequate

consideration of claimant’s earnings while self-employed.

A-68

The formula contained in Section 10(b) would not rea-

sonably or accurately approximate claimant’s earning

capacity in the year prior to injury when working as an

independent contractor. Use of Section 10(b) results in

an artificial wage rate totally unrepresentative of claim-

ant’s value as a self-employed worker. Claimant’s earn-

ings as an independent contractor include variables which

cannot be given full consideration within the framework

of Section 10(b). Therefore, Section 10(b) cannot be

fairly and reasonably applied.

Application of Section 10(b) here must be rejected

for an additional reason. The administrative law judge

concluded that Section 10(b) could not be reasonably

or fairly applied, in part, because of a recent wage in-

crease received by the three fellow workers whose wage

records were entered into evidence. The record reveals

that there was a yard-wide increase in wages some two

months before claimant began working. It is readily

apparent that calculation of average weekly wage under

Section 10(b) would spread the wage increase received

two months before claimant’s injury over a 12-month

period, thereby diluting the amount of the increase. There-

fore, the administrative law judge’s decision that Section

10(b) cannot be fairly and reasonably applied is sup-

ported by substantial evidence, is rational, and is in ac-

cordance with law. 33 U.S.C. § 921(b)(3); O'Keeffe,

supra. See generally Eckstein, supra; Lozupone, supra;

Voraiff v. Triple A Machine Shop, 1 BRBS 465, BRB

No. 74-205 (1975).

We turn then to the proper calculation of claimant’s

average weekly wage under Section 10(c). Section 10(c),

33 U.S.C. § 910(c), explicitly provides for consideration

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of “the reasonable value of the services of the employee

if engaged in self-employment.’ Cluimant urges on ap-

peal that either the methodology of Section 10(a) or a

43 week divisor be applied to claimant’s gross earnings

in self-employment. While we agree that claimant’s earn-

ings in self-employment may be the basis for determina-

tion of his average weekly wage, we cannot agree that

either method urged by claimant on appeal reasonably

approximates the value of claimant’s services. Use of the

methodology of Section 10(a) under Section 10(c) is

neither supported by law nor would it reasonably reflect

claimant’s earning capacity any more than would direct

application of Section 10(a). Insofar as claimant’s con-

tention that his gross earnings be divided by the number

of weeks actually worked, 43, is concerned, there is no

support for use of a lesser divisor than 52 weeks. If

claimant’s gross earnings in self-employment are accepted

as claimant’s average annual earnings, then use of the

52 week divisor is required by Section 10(d). See Eck-

stein; Strand v. Hansen Seaway Service Ltd., 9 BRBS

847, BRB Nos. 77-508/A (1979), aff'd in part and

rev'd in part, 614 F.2d 572, 11 BRBS 732 (7th Cir.

1979). The Board’s holding in Brown v. General Dy-

namics Corp., 7 BRBS 561, BRB Nos. 77-146/A (1978),

is not applicable in this situation. In Brown, the Board

upheld the administrative law judge’s division of average

annual earnings by 39 weeks because claimant’s wage

records beyond 39 weeks were unavailable despite em-

ployer’s assurances that they would be produced. How-

ever, in Brown, the employee had actually worked for

7. Section 10(c) is thus the only portion of Section 10 explicitly

including claimant’s earnings while self-employed. This fact supports

use of Section 10(c) where self-employment earnings are involved.

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52 weeks; thus, use of a 52 week divisor into earnings

over a 39 week period would have distorted the deter-

mination of claimant’s earning capacity. In the instant

case, claimant only worked 43 weeks. Therefore, Brown

is distinguishable and does not support use of a 43 week

divisor here.

We also cannot accept the formula urged by employer.

Employer urges us to use claimant’s gross earnings less

his income tax deductions. We are not persuaded that this

method would result in a wage figure equal to the reason-

able value of claimant’s services in approximation of his

wage-earning capacity under Section 10(c). The phrase

“reasonable value of the services of the employee”, 33

U.S.C. § 910(c), indicates that claimant’s average weekly

wage should reflect the value of the work to be performed.

There is no indication that the value of claimant’s work

equalled his wages less his income tax deductions. In-

come tax deductions are not necessarily indicative of

actual business expenditures or the costs of doing business

as an independent contractor. For example, in this case,

claimant’s deductions include such items as depreciation

allowances for equipment which, in reality, did not de-

crease his actual income. This formula may be easy to

apply; however, there is no basis for assuming that the

reasonable value of claimant’s services is equal to his

net earnings. Therefore, this method is rejected.

However, the method used by the administrative law

judge also fails to adequately approximate the reasonable

value of claimant’s services in the year prior to injury.

The administrative law judge merely used claimant’s gross

earnings in self-employment as claimant’s average annual

earnings under Section 10(c). The administrative law

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judge considered claimant’s income tax deductions, con-

cluded they were minimal and, therefore, determined that

they should not be subtracted from claimant’s gross earn-

ings. Furthermore, the administrative law judge consid-

ered claimant’s hourly rate increase from $10.50 per hour

to $12.50 per hour and found that this increase offset

the income tax deductions. He therefore determined that

claimant’s gross earnings equalled “the reasonable value

of his services.” The administrative law judge erred in

solely relying on claimant’s gross earnings in self-em-

ployment to approximate the reasonable value of claim-

ant’s services. The phrase “reasonabie value of the ser-

vices of the employee” in Section 10(c) indicates that

claimant’s average annual earnings must reflect the value

of the work he performed. The reasonable value of

claimant’s services may be determined by showing the

cost of hiring another welder of equivalent skill and ex-

perience to perform the work performed by claimant.

This is not the sole method for showing the reasonable

value of claimant’s services; any other rational manner

may be used. However, claimant’s earning capacity under

Section 10(c) should not include any portion of claim-

ant’s earnings which constitute profits, or represent in-

tangible elements such as goodwill. Thus, any amounts

included in claimant’s gross hourly wage as an inde-

pendent contractor over and above the reasonable value

of his services should be excluded.

Because the administrative law judge failed to fully

consider the foregoing, this case must be remanded for

additional findings of fact and conclusions of law. On

remand, the administrative law judge must determine

the reasonable value of claimant’s services when self-

employed by considering the cost of hiring another welder

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of skill and experience comparable to claimant or by

using any other rational means.* The administrative law

judge may open the record to take additional evidence

as is necessary.

Claimant also contends that the administrative law

judge’s order awarding temporary total disability benefits

should be modified. The administrative law judge ordered

temporary total disability benefits “throughout the con-

tinuance of such disability or until such time as a new

compensation order is obtained pursuant to the provisions

of Section 22 of the Act.” Decision and Order, slip op.

at 24. Claimant asks that the Board delete these words

and substitute the words “until further order,” contend-

ing that the wording used by the administrative law judge

is unclear and ambiguous and could be construed by

employer to permit it to unilaterally terminate benefits

when a claimant reaches maximum medical improvement.

However, in Shoemaker v. Schiavone & Sons, Inc., 11

BRBS 33, BRB No. 78-532 (1979), the Board held that,

once an order awarding compensation has been entered,

employer remains obligated to comply with the terms of

the award until a further order is issued. In the instant

case, employer must continue paying temporary total

disability benefits until a further order is issued. Should

employer unilaterally terminate compensation, claimant

can seek appropriate relief.

8. The administrative law judge apparently felt limited to claim-

ant’s actual earnings in the year prior to injury. He is not restricted

to actual earnings. However, the party asserting that actual wages

should not be used has the burden of proof in showing wage-earning

capacity. See Riddle v. Smith & Kelly Co., BRBS , BRB

No. 80-410 (April 24, 1981).

A-73

Employer contends that the administrative law judge’s

award of temporary partial disability benefits and an

attorney’s fee should be vacated if claimant receives a

lower average weekly wage. Since we have concluded

that the case must be remanded to the administrative

law judge for a redetermination of claimant’s average

weekly wage, consideration of these issues at this time

is not appropriate.

Claimant’s attorney seeks a fee for work performed

before this Board. Since this case must be remanded to

the administrative law judge, a fee for this work is not

appropriate at this time.

Accordingly, the Decision and Order of the adminis-

trative law judge regarding claimants average weekly

wage is vacated and remanded for further proceedings

consistent with this opinion.

SO ORDERED.

/s/ ISMENE M. KALARIS

Ismene M. Kalaris

Administrative Appeals Judge

I Concur:

/s/ JULIUS MILLER

Julius Miller

Administrative Appeals Judge

A-74

SMITH, Chief Administrative Appeals Judge, concur-

ring and dissenting:

I concur in my colleagues’ decision to vacate the De-

cision and Order below in part and remand for further

proceedings regarding the issue of average weekly wage.

However, as I would direct the administrative law judge

to apply Section 10(b) on remand, I must dissent in

part from the majority opinion.

The average weekly wage computation methods set

forth in Section 10 are directed towards determining the

claimant’s earning power at the time of injury. Orkney

v. General Dynamics Corp., 8 BRBS 543, 545-546

(1978); Barber v. Tri-State Terminals, Inc., 3 BRBS

244, 249 (1976), aff'd sub nom. Tri-State Terminals,

Inc. v. Jesse, 596 F.2d 752 (7th Cir. 1979). Section

10(a) applies where an injured employee has “worked

in the employment in which he was working at the time

of injury, whether for the same or another employer,

during substantially the whole of the year immediately

preceding his injury. . . .” Section 10(b) applies if the

injured employee “shall not have worked [in the em-

ployment in which he was working at the time of injury]

during substantially the whole of [the year immediately

preceding his injury. . . .” Section 10(c) applies “[ilf

either of the foregoing methods of arriving at the average

annual earnings of the injured employee cannot reason-

ably and fairly be applied. . . .” [Emphasis added.] 33

U.S.C. §§ 910(a), (b), (Cc).

Accordingly, by express statutory mandate and under

the relevant case law, Section 10(c) may not be invoked

until it has been established that neither Section 10(a)

nor Section 10(b) reasonably and fairly may be applied.

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33 U.S.C. § 910(c); see also Palacios v. Campbell In-

dustries, No. 78-3358 (9th Cir. Dec. 4, 1980).

Fer the reasons expressed in the majority opinion, I

conclude that Section 10(a) cannot be applied in the

instant case. However, Section 10(b) indicates that the

average weekly wage may be based upon the wages of

an employee of the same class as claimant who worked

substantially the whole of the year preceding claimant’s

injury in the same or similar employment. Thus, to apply

Section 10(b), the administrative law judge must have

evidence of the substitute employee’s wages. Eckstein v.

General Dynamics Corp., 11 BRBS 781 (1980); Lozu-

pone v. Stephano Lozupone & Sons, 12 BRBS 148

(1979).

Employer herein introduced evidence of the wages

of three employees who worked for employer in the same

classification as claimant and who performed the same

work as did claimant during his stint with employer.

This evidence of the wages of substitute employees com-

plies with the requirements for invoking Section 10(b).

As noted by the majority, the administrative law judge

erroneously rejected the option of calculating average

weekly wage pursuant to Section 10(b) on the ground

that a statistical sampling of employees’ wages was re-

quired.

Accordingly, the application of Section 10(b) was

herein mandated by the Act unless that method of com-

putation would not fairly and reasonably reflect claim-

ant’s earning power at the time of injury.

In my view, the formula contained in Section 10(b)

was the most fair and reasonable means of determining

A-76

the market value of claimant’s services, and thus his

earning power at the time of injury. In fact, the majority

concedes this point, in concluding that the reasonable

value of claimant’s services may be determined with

reference to the cost of having another welder of equiva-

lent skill and experience perform the work undertaken

by claimant.

Finally, I decline to accept the conclusion reached by

the administrative law judge and the majority herein

that Section 10(b) could not reasonably and fairly be

applied because of the yard-wide increase in wages grant-

ed to employees some two months before claimant began

working.

Average weekly wage is determined as of the time of

injury. 33 U.S.C. § 910; see also Leach v. Thompson's

Dairy, Inc., 13 BRBS 231, 235-236 (1981). Accordingly,

under the express provisions of the Act, claimant’s average

weekly wage must be calculated with reference to the

wage rate of similar employees at the time of claimant’s

injury. See Bethard v. Sun Shipbuilding and Dry Dock

Co., 12 BRBS 691, 695 (1980); Drake v. General Dy-

namics Corp., 11 BRBS 288, 293 (1979). Although

the mode of calculation of average weekly wage set forth

in Section 10(b) to some extent dilutes the effect of a

wage increase granted shortly before a claimant’s injury,

the calculation does recognize and include the raise. In

any event, whatever inequity results from the “dilution”

of the wage increase is statutorily mandated, and the

Board may not, by judicial construction, overrule the

express provisions of the Act.

- ate

A-77

Accordingly, for the above-stated reasons, I would

vacate the Decision and Order below in part, and remand

for application of Section 10(b).

/s/ SAMUEL J. SMITH

Samuel J. Smith, Chief

Administrative Appeals Judge

Dated this 10th day

of June 1981

SERVICE SHEET

BRB Nos. 80-158 & 80-158A

James P. Rountree

V.

Newpark Shipbuilding & Repair, Inc. and

American Home Assurance Co.

(Case No. 79-LHCA-973N) (OWCP No. 8-26253)

Copies were sent to the following:

E. D. Vickery, Esq. Certified

Thomas C, Fitzhugh, III, Esq.

Royston, Rayzor, Vickery

& Williams

One Shell Plaza

Houston, TX 77002

Stephen M. Vaughan, Esq. Certified

Mandell and Wright

21st Floor

806 Main Street

Houston, TX 77002

A-78

Miss Laurie M. Streeter

Associate Solicitor

U.S. Department of Labor

Suite N-2620, NDOL

Washington, DC 20210

Mrs. Marilyn C. Felkner

Assistant Deputy Commissioner

US DOL/ESA/OWCP

Room 2108

2320 LaBranch Street

Houston, TX 77004

Judge David Dinardi

U.S. Department of Labor

Suite 901

1001 Howard Avenue

New Orleans, LA 70113

Mr. Ralph M. Hartman

Director, Office of Workers’

Compensation Programs

U.S. Department of Labor

Suite S-3524, NDOL

Washington, DC 20210

Certified

A-79

APPENDIX D

U. S. DEPARTMENT OF LABOR

Office of Administrative Law Judges

Hebert Federal Building

Room 909, 600 South Street

New Orleans, Louisiana 70130

Reply to the Attention of: OALJ

Case No. 79-LHCA-973N

OWCP No. 8-26253

In the Matter of

JAMES P. ROUNTREE, Claimant

against

NEWPARK SHIPBUILDING AND REPAIR, INC.’

Employer

AMERICAN HOME ASSURANCE CO.

Carrier

Stephen M. Vaughan, Esq.

806 Main Street, 21st Floor

Houston, Texas 77002

For the Claimant

E. D. Vickery, Esq.

Thomas C. Fitzhugh, III, Esq.

3710 One Shell Plaza

Houston, Texas 77002

For the Employer/Carrier

Before: DAVID W. DI NARDI

Administrative Law Judge

1. Employer’s name was changed in February 1978 from Blud-

worth Shipyards, Inc. to Newpark Shipbuilding & Repair, Inc. (Tr.

119-120).

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DECISION AND ORDER

Statement of the Case

This is a claim for workmen’s compensation benefits

under the Longshoremen’s and Harbor Workers’ Com-

pensation Act (33 U.S.C. $901, et seg.), hereinafter

referred to as “the Act”. The hearing was held on June 4,

1979 in Houston, Texas, at which time all parties were

given the opportunity to present evidence, oral argu-

ments and post-hearing briefs which have been identi-

fied and introduced into the record as Claimant’s Ex-

hibit 15 and Respondents’ Exhibits 7 and 8. Application

for an attorney’s fee, submitted by Claimant’s attorney,

has been admitted into evidence as Claimant’s Exhibit

16. Objection thereto has been admitted into evidence

as Respondents’ Exhibit 8.

Upon request made by both counsel, the record herein

was left open, beyond the additional briefing timetable

established, to permit submission of additional post-hear-

ing evidence. Thereafter, the depositions of Walter A.

Hammann, III and of the Claimant were submitted for

introduction into the record. These have been identified

and admitted into evidence as Claimant’s Exhibits 20

and 21, respectively. The record herein was closed on

September 27, 1979. This decision is being rendered giv-

ing full consideration to the entire record.

Motion To Limit Any Compensation Order

To The Time Period Prior to Hearing

At the hearing Respondents’ counsel maintained (1)

that the only issue to be tried at the hearing was Claim-

ant’s average weekly wage at the time of his injury, (2)

A-81

that the Deputy Commissioner had not yet considered

the issues of temporary total or temporary partial disability,

(3) that once the average weekly wage had been de-

termined, then the claim should be remanded to the

Deputy Commissioner for consideration as to whether

there existed any temporary partial disability, that any

compensation order issued herein should be limited only

to the issue of average weekly wage and to a time period

ending at the date of hearing and (4) that the claim

would be referred to the Office of Administrative Law

Judges should the parties fail to agree with any recom-

mendation subsequently made by the Deputy Commis-

sioner. (Tr. 58-71, 81, 83, 88-91). On the other hand,

Claimant’s counsel opposed this motion, maintaining (1)

that the claim should not be tried on a piecemeal basis

(Tr. 56), (2) that the claim has been referred to the

Office of Administrative Law Judges for hearing on all

the issues and (3) that it would not be proper to limit

the hearing to the issue of average weekly wage (Tr.

55, 58, 61, 64-66, 76-79). The parties were advised

that the claim had been referred to the Office of Ad-

ministrative Law Judges for formal adjudication of all

of those issues which had been considered by the Deputy

Commissioner, as well as of any new issue the resolution

of which would not completely settle the claim by re-

mand to the Deputy Commissioner (Tr. 73-75, 20

C.F.R. § 702.336). However, the undersigned Adminis-

trative Law Judge reserved ruling on the motion until the

closing of the record herein to permit the parties to estab-

lish the procedure whereby by stipulation or otherwise

the parties would return to the Deputy Commissioner for

implementation of a compensation order limited to aver-

age weekly wage (Tr. 81). No such stipulation or agree-

ment was filed herein.

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In view of the foregoing and an analysis of pertinent

regulations, I hereby overrule Respondents’ motion and

hold that I should not issue a compensation order limi-

ted only to the issue of average weekly wage and to the

time period prior to the hearing. The bifurcated hearing

sought by the Respondents is not the procedure envisioned

by the regulations. 20 C.F.R. § 702.336. Furthermore, the

existence of a new issue on the eve of trial, the resolu-

tion of which by the Deputy Commissioner might settle

the claim, requires that the hearing not be held and the

entire file be remanded to the Deputy Commissioner (Tr.

82; 20 C.F.R. §§ 702.336 and 702.316).

Objections To Evidence As To Post-Injury Earnings

Respondents objected to any evidence by Claimant as

to any and all earnings outside of the fifty-two week

period preceding his injury (Tr. 28-29, 40-41). This ob-

jection was overruled as it was clearly relevant, material

and probative to the issue of average weekly wage and

to this claim for workmen’s compensation benefits. Post-

injury wage information is clearly admissible. Tri-State

Terminals, Inc., et al. v. Fred Jesse, et al., 596 F.2d

752, 10 BRBS 700, 705 (7th Cir. 1979). Furthermore,

the Board, in appropriate circumstances, has reversed

and remanded an average weekly wage calculated ONLY

on the basis of Claimant’s earnings for the fifty-two

weeks immediately preceding his injury. Willard D.

Hatchett v. Duncanson-Harrelson Co. and Employers

Insurance Co. of Wausau, 8 BRBS 173, BRB No. 77-487

(April 24, 1978). See also 20 C.F.R. § 702.339.

Stipulations

The parties have stipulated, and I find, as follows:

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1. The Act applies;

2. On April 22, 1975 the Employer/Employee rela-

tionship existed between Bludworth Shipyards and James

P. Rountree;

3. On April 22, 1975 the Claimant suffered an injury

to his back, which injury arose out of and in the course

of his employment with the Employer;

4. The Employer was notified of the injury on the

same date;

5. The Employer filed a notice of controversion here-

in on December 15, 1978;

6. The Employer has, voluntarily and without an

award, paid compensation benefits for the time period

April 22, 1975 to August 26, 1975 and from March 28,

1978 to the present and continuing at the weekly rate

of $149.33, based upon an average weekly wage of

$224.00. On October 31, 1978 the compensation rate

was changed retroactively, according to Respondents’

counsel, to $169.73, based upon an average weekly wage

of $254.59, these adjustments being made to include

differentials on past due amounts. Claimant has been

paid a total of $3,602.65 at the time of the hearing; and

7. Medical benefits are not an issue herein.

The principal unresolved issues in controversy are:

1. Claimant’s average weekly wage at the time of the

injury;

2. Nature and exteni of any disability; and

3. Attorney’s fees, costs, penalties and interest.

A-84

Claimant was fifty-seven years of age at the time of

the hearing, married, had a tenth grade education, and

had obtained his G.E.D. certificate in 1967. Claimant

has worked as a roustabout in the oil fields and went to

work in the shipyards in 1941 after completing eight

weeks of welding school. He commenced working for

Consolidated Steel at that time. He also spent nine years

as a roughneck or part-time welder. On March 2, 1954

Claimant purchased his own equipment and became an

independent contractor doing welding work and repairing

boats and barges for Amoco. This five-day work week

involved cutting out and redoing the bottoms and sides

of vessels, at times working with a crew supplied by

Amoco. Claimant testified that this work was his only

enjoyment and that it was continuous. From April 23,

1974 to the end of November 1974 Claimant charged

Amoco $10.50 per hour, which rate was increased to

$12.50 on December 1, 1974. Claimant gave up his

status as an independent contractor/welder because he

had to sell his business and equipment to settle a legal

separation and divorce (Tr. 25-36).

On April 22, 1975 Claimant went to work for the

Employer as a welder/fitter at the hourly rate of $5.50

plus a ten cent per hour shift differential. At this time

a first class welder was earning $5.95 plus a ten cent

shift differential. On this first day of employment Claim-

ant was in the process of welding a hole in a barge which

had been fitted and tacked. He was standing on a scaffold

and as he reached to weld he slipped and fell onto the

deck of the barge, his forehead sustaining a laceration

requiring thirty sutures to close. Claimant testified that

the welding he was doing at the time of his injury was

similar to the welding he was doing the year previous to

ia aa RA i AS ALAR PLE ANIL

A-85

his injury. Claimant returned to work the last week of

August 1, 1975 and received a twenty-five cent per hour

raise in December of 1975. Claimant’s 1974 tax return

includes billings at the same hourly rate except for the

December 1974 billings, Claimant testifying that he

missed five weeks as a result of surgery in September and

that the extra income in the early months of 1975 re-

sulted from the Dece «ber 1974 hourly increase and a

fire at Amoco requiring long hours of overtime to put a

compressor back into production. Claimant was earning

$6.40 an hour when he left the employer on August 3,

1976 (Tr. 36-41, 47, 51, 84).

Claimant went to work as a welder at Sepco, at an

hourly rate of $10.50, from Sepiember 6, 1977 to No-

vember 22, 1977, testifying there were weeks he was

not working and did not receive compensation and that

he left this work because the work was heavy and he was

afraid of heights. Claimant then went to work for Badger

America, from August 3, 1976 to December 14, 1976,

as a welder but failed to pass the “pipe test” because of

his nerves and was thereupon laid off upon completion

of the job. Claimant could not obtain work at Amoco

Chemicals (could not pass the physical), Union Carbide

and Diamond Shamrock. During this time Claimant re-

ceived unemployment compensation. He then went to

work at Ro-Has from March 19, 1977 to June 4, 1977,

work he described mostly as ground-level work installing

aluminum products such as carports and windows at a

weekly salary of $300.00 for forty-four hours. Since this

work also involved the use of ladders and Claimant was

afraid of heights as a result of his fall, Ro-Has laid off

the Claimant. From November 30, 1977 to March 29,

1978 Claimant worked at L. S. Mitchell & Sons, Tex-

A-86

arkana, Texas, work involving welding and fitting items

on ground levels at a salary of $8.50 per hour. Claimant

left this work because of his neck problems and the need

to have an operation and has not worked since this time.

Claimant testified that he did not earn as much money

at these various jobs as he would have if he had been

in good physical condition (Tr. 81-90).

Upon cross-examination, Claimant admitted that on

his pre-employment application with the Employer he

listed his previous work as a self-employed welder for

twenty years, that as an independent contractor for

Amoco he had a considerable amount of expenses in-

volved in operating his own business such as purchasing

oxygen, welding rods, hand tools, aceteylene, a welding

rig mounted to his truck, insurance coverage, as well as

various utility expenses; he sometimes used his car and

a room in his home for his business and wrote these ex-

penses off on his tax return, as well as taking deprecia-

tion on his occupational property; he also had to collect

and pay sales taxes, ad valorem taxes on his personal

business property and an occupational license tax as a

self-employed individual. Claimant’s wife kept his busi-

ness records and made out the invoices, Claimant remark-

ing that he did not know the location of copies of these

invoices or of the Amoco contracts, a contract which

lasted for one calendar year, specified the hourly rate

to be charged and requiring a thirty day advance notice

of any rate increase. Claimant stated that he voluntarily

left the Employer because he “just couldn’t do the work

anymore’ and that he took a substantial pay cut to work

at the Employer because he could depend on a five-day

work week and not worry about rainouts. He admitted

that the Employer furnished most of his welding rods,

A-87

gas oxygen and other such items. Claimant did not know

if the Employer had a category of welder/fitter below

the category at which he was hired on April 22, 1975

(Tr. 92-11).

Claimant furnished additional testimony by deposition

on September 13, 1979 (Claimant’s Exhibit 21). He

stated that there was no difference between the boat and

barge repair work he did for Amoco as an independent

contractor and the boat and barge repair work at the

Employer. There was no difference between the pipe work

or fabrication work at the two locations. About two-thirds

of Amoco’s work is on the water. Claimant’s work on

land at Amoco involved barge and boat repair work at

the dock and warehouse, similar to work at the Employer.

Offshore work involved working on the barge, welding

and laying pipe off the barge. With reference to the work

items identified by Mr. Hammann as performed by Em-

ployer’s welders/fitters, Claimant performed most of these

duties in the year before his injury while working as an

independent contractor and did not specifically itemize

the work performed because Amoco did not request such

itemization. Furthermore, the skills of cutting, fitting and

welding needed at Amoco Production were the same

skills needed to work for the Employer. Claimant ad-

mitted that a welder/fitter at the Employer must purchase

certain tools and equipment such as welding hoods, burn-

ing goggles, welding sleeves, welding gloves, measuring

tape, center punch, combination square, screwdriver, ten-

inch crescent wrench, ball-pin hammer, pliers, welding

lens and a flashlight. As an independent contractor, Claim-

ant had to furnish his own welding gas, oxygen and acety-

lene, truck and welding machine, certain small hand tools,

A-88

welding rods, stingers, torches, cutting tips and acetomatic

burning equipment (/bid., 4-24).

Upon cross-examination, Claimant stated that in the year

pre-injury he spent about twenty days working on or re-

pairing a boat or a barge, that he was working a five-day

week, that the work items enumerated by Mr. Hammann

related to ship and barge repair and construction, that

his new ship construction invoices had to contain a brief

description of the work performed, that he used no auto-

matic equipment in the year pre-injury, that he did not

need a truck at the Employer’s shipyard because the work

was at one location, that the work of a welder/fitter,

regardless of where the work is, “is theoretically the

same” because “(t)he skills for the two jobs are the same.”

He further testified that at Amoco Production, the major

part of his work was pipe work and that at the Employer’s

the majority of his work, during over a period of one

vear, was ship repair with some fabrication work in the

shop and some pipe work (J/bid., 25-45).

Upon redirect examination, Claimant stated that he has

been a welder and fitter since 1941, except for nine years

of work in the oil field, that he considered himself a first

class welder/fitter and that the job skills of fitting, cut-

ting and burning are more important than the location

where those skills are used (/bid., 46-47).

Mr. Walter A. Hammann, III, Industrial Relations

Manager, Newpark Shipbuilding and Repair, Inc., (form-

erly Bludworth Shipyards, Inc. until February 1978),

testified that he is custodian of the business records, that

Claimant and other welder/fitters worked a five-day week,

that he selected the wage records of three other welder/

fitters who were employed by the Employer on April

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22, 1975, that there was a thirty to forty cents per hour

differential between the three classifications of employees

—a helper (unskilled laborer), an apprentice (semi-

skilled helper) and a weider/fitter, someone who really

is a first class welder (Tr. 119-129).

Upon cross-examination, Mr. Hammann testified that

he did not know how many years of experience those

three workers had, that he picked nine or ten welder/

fitters at random from all of those welder/fitters who

were working there at the time of the accident and who

were making the same hourly wage and that Employer

has about one hundred welder/fitters among the two

hundred employees. Mr. Hammann did not know if any

of the welder/fitters who were not selected had twenty

years experience, remarking that Johnny Colunga has at

least fifteen years welding experience with the Employer

but that he was not included among the similar em-

ployees because he did not meet the criteria he was given

to select the welder/fitters for this controversy. Eight

hours is the regular work day, with overtime at that time

payable after forty hours but now payable after eight

: hours. Some welders work a lot of overtime but this

factor did not enter into his selection of the employees.

Mr. Hammann remarked that overtime is distributed

equally among all employees and that overtime is avail-

able on a particular job if a customer is willing to pay

for it. Employer’s hiring policy on welders with previous

experience is to give them an easy welding test to enable

them to qualify for the welder/fitter classification but a

welder must have had previous experience as a foreman

to be hired as one. Employer has no union contract and

there was a yard-wide salary increase in 1974, as well

as merit increases and a fifty cent per hour increase be-

Decciaieasinieieenieectantncee atl

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tween January 31, 1975 and February 14, 1975. Mr.

Hammann admitted that Mr. Comeaux may have been

earning $6.50 an hour and was one of the higher paid

welders in the yard. He further admitted that he did

not check the accident and injury records to see if either

of the three workers had lost any work time due to an

accident or sickness. Mr. Hammann also admitted that

Paul Rico, one of the three selected workers, was earning

$5.10 per hour for a forty hour week in April of 1974

and was earning $5.60 per hour for the week ending

February 14, 1975, reflecting a yard-wide increase at

that time. Mr. Hammann also admitted that another

worker, Haywood Comeaux, was earning $6.25 per hour

for the week ending March 14, 1975 and $6.35 per hour

for the week ending April 25, 1975 and “that during that

time Mr. Comeaux was probably one of the higher paid

persons in the yard.” Mr. Hammann admitted that the

third worker selected, J. C. Medellin, also received a

fifty cents per hour increase for the week ending Feb-

ruary 14, 1975 (Tr. 129-148).

Mr. Walter A. Hammann, III, furnished additional

testimony by deposition (Claimant’s Exhibit 20) on Sep-

tember 13, 1979. Mr. Hammann stated that he has re-

sponsibility for hiring Employer’s welders and fitters, that

they are hired on the basis of a three position welding

test and a background test, that Claimant, on the basis

of his previous work experience, was not a well qualified

welder/fitter at Employer’s shipyard because there were

few jobs related to ship building and repair, that although

there was some pipe work done at the Employer’s ship-

yard the main work involves structural fitting and welding

and that there were both new construction and repair

crews working there. He further testified that the duties

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of a welder/fitter involve cutting, welding and fitting,

that Claimant’s work as an independent contractor in-

volved the peripheral edge of ship construction and ship

repair such as outfitting of a ship as opposed to a major

aspect of ship construction and repair such as (1) put-

ting up a cofferdam, (2) hanging side shells or wing

tanks on a crawler crane, (3) replacing the knuckle or

bilge plate on a barge, (4) setting the head log cradle

and blocks on the marine railway for haul-out, (5) work-

ing on, in or around a marine railway, (6) working on,

in or around a floating dry dock, (7) building a bow or

stern section of a barge upside down, (8) pulling replace-

ment and alignment of wheel shafts or rudders, (9) re-

placing decks, hulls

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