Court: Court of Appeals for the Fifth Circuit; January 15, 2003; Federal Appellate Court
Emilio M. Garza, Circuit Judge, reviews a judgment from the United States Department of Labor’s Benefits Review Board (BRB) regarding the liability of New Orleans Stevedores (NOS) under the Longshore and Harbor Workers’ Compensation Act (LHWCA) for compensation owed to Bertrand and Peggy Ibos. The administrative law judge (ALJ) determined that NOS is liable for benefits due to Decedent’s respiratory issues, ultimately diagnosed as mesothelioma from asbestos exposure, but is entitled to a credit for amounts Claimant received from settlements with two previous employers of Decedent, Valor and Anchor.
Decedent worked nearly fifty years in various stevedoring companies, with his last exposure to asbestos occurring at NOS. Following his death, Claimant continued his claim for disability and survivor benefits against Valor, Anchor, and NOS. After settling with Valor and Anchor, which led to their dismissal from the claim, Claimant did not reach a settlement with NOS. The ALJ ruled NOS as the responsible employer and awarded temporary total disability benefits and subsequent death benefits to Claimant, while also granting NOS a credit for the prior settlements.
On appeal, NOS and its insurer, Signal Mutual Administration, contested the ALJ's designation of NOS as the responsible employer. In a cross-appeal, Claimant challenged the credit awarded to NOS. The BRB upheld the ALJ’s decisions regarding both the responsible employer designation and the credit. NOS and Signal now seek review of the BRB’s affirmation of the ALJ’s ruling on employer responsibility, while Claimant and the Director of the Office of Workers’ Compensation Programs support the BRB’s findings. The review will focus on (1) the application of the "last exposure rule" concerning the latency of mesothelioma, and (2) the appropriateness of the credit awarded to NOS based on established legal doctrine. The BRB’s order is reviewable in the relevant United States Court of Appeals per LHWCA provisions.
The review of the Benefits Review Board (BRB) focuses on legal errors and adherence to its review scope, with factual findings evaluated for substantial evidence. Legal rulings by the BRB are assessed de novo, without deference, as it is not a policy-making agency, but interpretations by the Director of the Longshore and Harbor Workers’ Compensation Act (LHWCA) receive varying degrees of deference based on factors like thoroughness and consistency.
NOS and Signal claim the BRB misapplied the "last exposure rule" from Cardillo by inadequately addressing whether the Decedent's exposure to asbestos while employed with NOS contributed to his mesothelioma. They assert that under § 2(2) of the LHWCA, employer liability necessitates evidence that the employee’s exposure caused or contributed to the disease. They argue that medical evidence indicates the latency period for mesothelioma suggests that the disease developed prior to the Decedent's last employment with NOS, thus negating a causal link.
The response clarifies that § 2(2) does not strictly require a causal link for liability; it defines a compensable injury through two prongs: accidental injury during employment or occupational diseases arising from that employment. The Director interprets "arises naturally out of" to mean that employment conditions need only contribute to the disease's occurrence, aligning with legislative intent as articulated in Cardillo, which established that liability falls on the last employer regardless of direct causation from the final exposure.
Cardillo's legislative interpretation is endorsed, highlighting that during congressional hearings for the Longshore and Harbor Workers' Compensation Act (LHWCA), an employer representative proposed capping an employee's recovery based on the proportion of harm caused during their employment. Although this suggestion was not included in the LHWCA, it reflects congressional awareness of potential administrative challenges. The interpretation indicates that employers, particularly the last employer exposed to injurious stimuli, should bear full liability for occupational disease claims. The Board's (BRB's) failure to articulate the correct legal standard for rebuttal in such claims is noted, specifically regarding how an employer can challenge an employee's prima facie case. The BRB incorrectly held that an employer could rebut the claim by showing that exposure did not have the potential to cause the disease. Instead, the burden shifts to the employer to prove either that the exposure did not cause the disease or that the employee was covered under a subsequent employer when exposed. The ALJ's inquiry should focus solely on whether the employer proved that the exposure did not cause the mesothelioma, which was supported by substantial evidence in the record.
NOS failed to provide sufficient medical evidence to disprove that Decedent’s mesothelioma was caused by asbestos exposure, leading to the affirmation of the ALJ’s judgment that NOS did not meet its burden of disproving Claimant’s prima facie case. Claimant contends that the ALJ incorrectly applied the Nash credit doctrine, which allows for credit against liability for prior scheduled awards in cases of successive injuries. However, the BRB's application of this doctrine was deemed erroneous because Claimant did not seek compensation for successive injuries but rather settled with Valor and Anchor as an alternative to a full award against them. The Nash doctrine, which addresses aggravation of preexisting injuries, is not relevant in this situation, as the settlements did not involve aggravation of a single occupational injury. Furthermore, Congress did not intend for credits against total liability based on prior LHWCA settlements, as indicated by the absence of such provisions in § 903(e), which allows credit for recoveries under different workers' compensation laws but does not include those under the LHWCA itself. The legislative history underscores this intent following the 1984 amendment, which aimed to allow credit for state law recoveries while excluding similar provisions for LHWCA recoveries.
The court determined that an employee's non-longshore claim against a different employer does not justify crediting that employer for LHWCA settlements received from previous employers. Congress has not explicitly allowed such credits, suggesting an intention against granting them. The Director's interpretation, which states that amounts received by the Claimant from LHWCA settlements with other employers prior to determining liability for disability and death are irrelevant to NOS's obligations, is supported. The court reversed the BRB’s judgment that granted credit to NOS for these settlement receipts and affirmed the determination that NOS is the responsible employer.
In occupational disease claims, the "last exposure rule" identifies the liable party as the employer during the last employment where the claimant was exposed to harmful stimuli before acknowledging their occupational disease. This rule was adopted by the Second Circuit to simplify the liability determination process, particularly given the complexities of medical knowledge regarding these diseases. The rule states that the last employer is liable for the full award amount, and the claimant only needs to establish a prima facie case for benefits by demonstrating physical harm and potential work-related causes. The burden then shifts to the employer to rebut this presumption. Other maritime circuits have upheld this framework, rejecting arguments that would alter the last employer's liability based on latency in exposure claims.
The ALJ found that the medical evidence from Drs. Caputto, Martin, Abraham, M.D. Anderson, and Touro established that the Claimant had malignant mesothelioma due to occupational asbestos exposure. Dr. Sandler's testimony, which contested the diagnosis, was deemed unpersuasive by the ALJ, who noted Sandler's lack of expertise as a pathologist and his failure to consider substantial evidence from qualified pathologists.
Concerns raised by NOS and Signal regarding due process and the application of the last exposure rule were addressed. The ALJ's application of this rule permitted thorough factual inquiry, as all parties had the chance to present testimony, evidence, and briefs at the hearing. NOS and Signal's argument that the last exposure rule relies on outdated medical assumptions was countered by the Director's assertion that the rule remains vital for statutory administration, given the significant latency period for mesothelioma, which could implicate multiple employers over the Claimant's career.
Regarding NOS's claim for credit for compensation payments made by other liable employers, the BRB referenced Alexander v. Triple A. Machine Shop, establishing that the Nash general credit doctrine applies. However, the Ninth Circuit subsequently reversed the BRB's decision, emphasizing that denial of credit aligns with the doctrine's purposes and the relevant statute, 33 U.S.C. § 903(e). The court clarified that the aggravation rule was not relevant, thus rendering the credit doctrine inapplicable. The Melson case reinforced that the LHWCA does not permit liable employers to receive credit for compensation paid by different employers under state law. Similarly, the ITO Corp. decision indicated that § 903(e) applies only to state workers' compensation or Jones Act payments, not to recoveries under the LHWCA, highlighting that no recoupment remedy exists for overpayments when no further compensation is due.
