Newport News Shipbuilding and Dry Dock Company v. Larry D. Ward Director, Office of Workers' Compensation Programs, United States Department of Labor
Docket: 00-1978
Court: Court of Appeals for the Fourth Circuit; April 10, 2003; Federal Appellate Court
Larry Ward suffered back injuries while employed as a welder at Newport News Shipbuilding and Dry Dock Company, with incidents occurring in 1987 and 1989, leading to surgeries and subsequent disability claims under the Longshore and Harbor Workers' Compensation Act (LHWCA). Newport News filed a request for relief under 33 U.S.C. § 908(f), seeking to limit its liability for Ward's permanent partial disability benefits, arguing that his pre-existing conditions had materially aggravated his work-related injuries. An Administrative Law Judge (ALJ) denied this request on July 1, 1999, a decision subsequently upheld by the Department of Labor's Benefits Review Board (BRB) on July 11, 2000. Newport News petitioned the United States Court of Appeals for the Fourth Circuit to review the BRB's decision, claiming it was erroneous. The court, however, denied the petition for review, affirming the lower findings. The proceedings involved stipulated facts, with no additional evidence presented by Ward or the Director during the ALJ hearings. Judge KING authored the majority opinion, joined by Chief Judge FABER, while Judge WIDENER dissented.
Newport News presented evidence to the Administrative Law Judge (ALJ) from two physicians, Dr. Reid and Dr. Garner, regarding Ward's back injuries. Prior to seeking relief under § 908(f), Newport News obtained a report from Dr. Reid, who treated Ward's injuries. On May 1, 1997, Dr. Reid submitted a two-page letter with six supporting exhibits (the "1997 Reid Report"), asserting that Ward's disability was significantly aggravated by a 1989 injury, and that neither injury alone would have prevented him from performing light duty work. Dr. Reid concluded that the cumulative effect of both injuries and surgeries rendered Ward unable to perform even light duty work. The report included work restriction documents and additional correspondence from Dr. Garner, who performed surgeries on Ward's back.
The ALJ, after reviewing the evidence including the 1997 Reid Report, determined that Newport News was not entitled to § 908(f) relief, as they did not quantify the disability attributable solely to the 1989 injury. The ALJ found the opinions of Drs. Reid and Garner lacked credibility and did not provide sufficient logical basis for the requested relief. Consequently, the ALJ deemed it "impossible" to make a determination under the relevant legal standard, leading to a denial of relief.
Newport News appealed this decision to the Benefits Review Board (BRB), which upheld the ALJ's ruling on July 11, 2000, citing substantial evidence supporting the conclusion that Newport News failed to provide necessary quantification of the disability from the 1989 injury alone. The BRB affirmed the ALJ's position that the evidence did not allow for proper examination of the logic and evaluation of the 1997 Reid Report.
On August 21, 2000, Newport News petitioned the Court for review of the BRB Decision, and the Court has jurisdiction under 33 U.S.C. § 921(c). In reviewing the BRB's decision, the standard requires assessing whether the BRB adhered to the statutory mandate in evaluating the ALJ's factual findings, specifically whether those findings were supported by substantial evidence in the overall record.
Substantial evidence is defined as being "more than a scintilla but less than a preponderance." The findings of an Administrative Law Judge (ALJ) must be respected, and alternative inferences cannot be used to disregard these findings. The scope of review for ALJ decisions is limited, emphasizing the importance of the fact-finder's credibility assessments.
In relation to § 908(f) claims, established precedent dictates that an employer's liability for permanent partial disability benefits is limited to two years if three specific elements are met: (1) the ultimate disability must not be solely due to the work-related injury, but also partly caused by a pre-existing disability; (2) this pre-existing disability must have been known to the employer before the injury occurred; and (3) the resulting permanent partial disability must significantly exceed what would have occurred from the work-related injury alone, referred to as the "Contribution Element."
To satisfy the Contribution Element, an employer must quantify the extent of disability the employee would have experienced if not for the pre-existing condition. The ALJ must critically evaluate the evidence and reasoning presented rather than simply accept the parties' claims. A prior case, Harcum I, established that § 908(f) relief is applicable when a combination of pre-existing disabilities and subsequent injuries results in greater impairment than the second injury alone. In that case, the review found that the ALJ had applied the wrong standard and remanded the claim for further evaluation of the Contribution Element.
On remand, Newport News presented evidence indicating that Harcum would have earned $6.00 per hour without his pre-existing disability, but only $3.80 per hour with both injuries, leading to a wage earning capacity reduction of $2.20 per hour, or thirty-six percent. Newport News sought § 908(f) relief based on this argument, but the ALJ denied the relief due to a lack of medical evidence. The BRB affirmed this decision. Upon review, the court concluded that Newport News was entitled to § 908(f) relief, noting that medical evidence is not essential for fulfilling the Contribution Element, and that the vocational evidence adequately quantified Harcum's potential earnings without the pre-existing injury.
In a subsequent case, Carmines, Newport News again sought § 908(f) relief, arguing that Carmines's pre-existing pulmonary asbestosis significantly increased his ultimate disability. Evidence from a Newport News physician indicated that Carmines's disability would have been ten percent without the pre-existing condition. However, the court rejected Newport News's method of calculation, asserting that it did not sufficiently demonstrate that the second injury alone would have resulted in a lower disability. The court emphasized that Newport News needed to provide evidence of the disability resulting solely from the second injury to qualify for § 908(f) relief, ultimately reversing the BRB's decision in favor of Newport News.
The court then indicated it would evaluate the ALJ's denial of Newport News's § 908(f) claim regarding Ward's injuries, considering whether substantial evidence supported this decision.
Newport News has met the first two criteria for § 908(f) relief, but the remaining issue is whether substantial evidence supports the ALJ's determination that Newport News did not fulfill the Contribution Element of its claim. The ALJ referenced the 1997 Reid Report, concluding it inadequately quantified the portion of Ward's 1989 injury attributable to the absence of the 1987 injury. The ALJ could not assess the logic or evidence behind the comparisons made in the report, preventing a determination of whether the 1989 injury was materially and substantially greater than it would have been without the 1987 injury.
Newport News argued that the ALJ should have analyzed the Reid Report and related evidence more thoroughly, suggesting it would have met the § 908(f) standards outlined in prior cases. However, the overall record supports the ALJ's decision. Dr. Reid claimed that neither injury alone would have disabled Ward from light duty work and that he could have returned to work if his back had been normal during the 1989 injury. Yet, the cumulative injuries did disable him. While Dr. Reid's opinions are relevant, they are general and lack substantiation. His assertion that Ward could return to light duty work is conclusory without evidentiary backing, contrasting with the detailed quantification required by precedent cases.
Newport News highlighted Dr. Reid's conclusion that Ward's 1987 injury warranted a minimum 5% permanent disability rating under the AMA Guides. However, both the BRB and ALJ found that Dr. Reid did not assess the disability level from the 1989 injury independently, failing to quantify the extent of disability absent the prior injury. Consequently, the ALJ correctly concluded that Dr. Reid's assertions did not adequately satisfy the quantification requirement of the Contribution Element.
Newport News sought § 908(f) relief by presenting evidence from Dr. Garner, the treating neurosurgeon of Mr. Ward. Key to their claim was Dr. Garner's endorsement of the 1997 Reid Report, communicated through a Transmittal Letter dated January 7, 1999. However, the ALJ assigned "no probative weight" to Dr. Garner's agreement due to the absence of a detailed explanation for his endorsement, rendering it legally insufficient under precedent established in Carmines. Furthermore, Newport News referenced a November 7, 1990, memorandum by Dr. Garner regarding Ward's 1989 injury, which indicated that Ward had reached maximum medical improvement and had a seventeen percent permanent partial disability rating. However, this memorandum did not address the degree of disability that would have arisen solely from the 1989 injury, independent of a prior 1987 injury, which is necessary for establishing a credible claim for § 908(f) relief. The ALJ concluded that Newport News failed to provide adequate evidence to support its claim, even though both Drs. Garner and Reid were deemed qualified. The ALJ's decision was upheld as it was supported by substantial evidence, leading to the denial of Newport News's petition for review regarding the BRB Decision. Consequently, the petition for review was denied.
Newport News argues that the Administrative Law Judge (ALJ) should have accepted its evidence due to a lack of contradictory evidence from the Director or Ward. However, it is established that the mere absence of contradiction does not compel acceptance of evidence, as outlined in Carmines. The employer bears the burden of proof to provide credible evidence for § 908(f) relief, often relying on company doctors, who may have inherent biases. The ALJ's role is to critically evaluate the logic and evidence behind claims rather than to accept them at face value. Additionally, the ALJ found that the documentation from Dr. Reid and Dr. Garner did not adequately support the disability claims regarding Ward, as they failed to compare the two injuries or quantify the impact of the 1989 Injury without the prior 1987 Injury. Dr. Reid's assessment of a five percent permanent partial disability was deemed not credible, particularly since there were no permanent work restrictions placed on Ward at the time of the report. In a dissenting opinion, Circuit Judge Widener expressed disagreement with the majority's dismissal of the opinions of Drs. Reid and Garner, emphasizing their qualifications and relevance in assessing Ward's medical condition.
The court is criticized for failing to recognize the Longshore and Harbor Workers Compensation Act as a federal alternative to conventional Workers Compensation laws, which are prevalent across the United States. Legal decisions in these cases typically rely on forms and written reports from medical experts and affidavits from those in the injured employee's occupation, with minimal oral testimony presented. The author argues against applying overly technical rules from previous cases (Carmines and Harcum I and II), suggesting they complicate the straightforward administrative process intended to ensure timely compensation for injured workers while safeguarding employers’ rights.
The author advocates for a more direct approach to quantifying injuries under § 908(f), proposing reliance on basic arithmetic rather than complex regulations. The critique extends to the treatment of reports from "company doctors," which should not be diminished in credibility compared to findings prepared by attorneys, referencing the precedent set in Anderson v. City of Bessemer City.
In the specific case at hand, Newport News is acknowledged to have fulfilled the first two criteria for § 908(f) relief, with the dispute centering on whether it met the third criterion regarding contribution. Newport News presented the opinions of two physicians, including Dr. Reid, who provided a report linking Ward's previous injury and surgery to an increased disability, thereby addressing the contribution element necessary for the relief sought.
Mr. Ward sustained a back injury on December 11, 1987, followed by an aggravation injury on June 16, 1989. After the initial injury, he missed three weeks of work, underwent a laminectomy for a herniated disc in March 1988, and was left with a permanently weakened back, resulting in a minimum 5% permanent disability rating per the AMA Guides. He subsequently missed an additional six months of work and returned under restrictions. The June 1989 injury occurred while pulling heavy welding lines, resulting in a second herniated disc and surgery. By November 20, 1992, he reached maximum medical improvement but was permanently removed from the Shipyard due to his back disability.
Mr. Ward's chronic back condition was serious and manifest to the Shipyard, which would likely refrain from hiring someone with his history of injuries. The disability is attributed not solely to the 1987 injury but significantly worsened by the 1989 aggravation. Although he managed to perform light duty work after the first injury, the second injury prevented his return to any work at the Shipyard.
Dr. Reid opines that the 1987 injury contributed to the 1989 injury and subsequent inability to perform light duty. Dr. Garner, Mr. Ward's treating neurosurgeon, agreed with Dr. Reid's findings but his supporting letters and memos were not considered by the Board or the ALJ. The Director failed to provide evidence regarding the contribution element of Newport News' claim under § 908(f). The Board upheld the ALJ's finding that Newport News did not prove this element, citing a lack of quantification of disability from the 1989 injury alone. Overall, the Board's decision seemed to reflect a lack of confidence in the physicians' reports, which were neither thoroughly examined nor given appropriate weight in their conclusions.
Dr. Reid, a 1963 graduate of Tulane University School of Medicine, completed his residency in internal medicine at the National Naval Medical Center and has been a full-time hospital staff member. Dr. Garner, a 1967 graduate of the University of Virginia Medical School, trained in neurological surgery, neurology, and general surgery at the University of Virginia Medical Center and is board-certified in neurological surgery. Both doctors are highly familiar with Ward's back injuries; Dr. Reid has been one of Ward's examining and treating physicians, while Dr. Garner performed two surgeries on Ward's back for the injuries in question: a laminectomy for a herniated disc at L4-L5 in March 1988 and another at L5-S1 in August 1989, with subsequent post-operative care. The document asserts that Dr. Garner is professionally qualified to provide evaluations regarding Ward's condition and can adequately assess Dr. Reid's prior reports.
The legal precedent from Director, OWCP v. Newport News Shipbuilding establishes that when assessing permanent partial disability, it must be shown that the ultimate disability significantly exceeds that resulting from a subsequent work-related injury alone. Employers must present evidence detailing the disability level that would have resulted if the employee had not had a pre-existing condition. The decisions in Harcum I and Harcum II clarify that quantification of disability does not need to adhere strictly to established medical guidelines.
The record indicates that Ward sustained a back injury at work on December 11, 1987, underwent surgery, and returned to light duty. It is also noted that he reinjured his back on June 16, 1989, worsening his pre-existing condition, necessitating a second surgery, after which he has been unable to return to shipyard work.
Dr. Reid's May 1, 1997 report indicates that Ward missed three weeks of work due to his first injury and required specific work restrictions, including no vertical ladders, no lifting over 30 pounds, and limitations on working in tight spaces and stooping. One restriction was set to expire after 14 days, while the others would expire 19 days after January 4, 1988, with a follow-up evaluation scheduled for January 21, 1988. Ward underwent a laminectomy for a herniated disc performed by Dr. Garner, resulting in relief from leg pain and post-operative care instructions. Dr. Reid noted that this injury and surgery would permanently weaken Ward's back, increasing susceptibility to further injuries and leading to a minimum 5% permanent disability rating under American Medical Association guidelines. Ward missed a total of six months of work, with ongoing restrictions reaffirmed in a September 15, 1988 report from Dr. Reid.
Ward returned to light work but sustained a second herniated disc injury on June 16, 1989, requiring a second operation by Dr. Garner. Following this surgery, Ward was assigned a 17% permanent partial disability rating, with restrictions on lifting over 40 pounds and limitations on overhead work, kneeling, squatting, and twisting. Although he returned to work on April 16, 1990, he could not find a position in the shipyard that accommodated these restrictions. Despite not being totally and permanently disabled, he is deemed employable at a rate of $102 per week. Dr. Reid’s findings are considered valid medical evidence, and the failure of the Board and ALJ to evaluate this evidence is noted, but not attributed to Newport News. Ward's disability is attributed not solely to his December 11, 1987 injury, but is materially worsened by the June 16, 1989 aggravation injury.
Mr. Ward sustained an initial back injury on December 11, 1987, which required disc surgery and left his back in a permanently weakened state, yet he was able to engage in light duty shipyard work. A subsequent injury on June 16, 1989, significantly aggravated his condition, leading to another herniated disc, a second surgery, and his current total disability. Neither injury alone would have rendered Mr. Ward unable to perform light duty work, as he had managed to do so post-1987 injury. If he had a normal back at the time of the 1989 injury, he would have similarly returned to light duty work.
The opinions of Dr. Reid and Dr. Garner, supported by contemporaneous records, were not contradicted and should have been properly evaluated by both the Board and the ALJ. The cumulative impact of both injuries and surgeries resulted in Mr. Ward being completely disabled from all shipyard work, which is a significantly greater level of disability than light duty work. Consequently, the petition for review by Newport News should be granted, requiring the Board to award relief under 33 U.S.C. § 908(f)(1).
The ALJ initially found Newport News ineligible for relief on the grounds that Ward had not reached maximum medical improvement by November 13, 1995, thus concluding his condition was not permanent. However, the Board reversed this finding, determining that Newport News had established the permanency of Ward's disability, which would qualify them for relief if they could prove the contribution element. Newport News's approach to calculating disability percentages as outlined by Dr. Reid and Dr. Garner was deemed flawed under precedent, but the rationale for requiring quantification was not clarified.
