Newport News Shipbuilding & Dry Dock Co. v. Director, Office of Workers' Compensation Programs

UNPUBLISHED

UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 05-2418

NEWPORT NEWS SHIPBUILDING AND DRY DOCK
COMPANY,

Petitioner,

versus

DIRECTOR, OFFICE OF WORKERS’ COMPENSATION
PROGRAMS; WILLIE M. RICHARDSON,

Respondents.

On Petition for Review of an Order of the Benefits Review Board.
(05-0151)

Argued: May 22, 2007 Decided: August 14, 2007

Before WILLIAMS, Chief Judge, GREGORY, Circuit Judge, and Benson E.
LEGG, Chief United States District Judge for the District of
Maryland, sitting by designation.

Petition for review denied; Board order affirmed by unpublished
opinion. Judge Gregory wrote the opinion, in which Chief Judge
Williams and Judge Legg joined.

ARGUED: Jonathan Henry Walker, MASON, MASON, WALKER & HEDRICK,
P.C., Newport News, Virginia, for Petitioner. Matthew W. Boyle,
UNITED STATES DEPARTMENT OF LABOR, Washington, D.C.; Matthew Harley
Kraft, RUTTER & MILLS, L.L.P., Norfolk, Virginia, for Respondents.
ON BRIEF: Howard M. Radzely, Solicitor of Labor, Allen H. Feldman,
Associate Solicitor, Mark A. Reinhalter, Counsel for Longshore,
UNITED STATES DEPARTMENT OF LABOR, Washington, D.C., for Respondent
Director, Office of Workers’ Compensation Programs. Jennifer W.
Vincent, PATTEN, WORNOM, HATTEN & DIAMONSTEIN, L.C., Newport News,
Virginia, for Respondent Willie M. Richardson.

Unpublished opinions are not binding precedent in this circuit.

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GREGORY, Circuit Judge:

Newport News Shipbuilding and Dry Dock Company (“Newport

News”) contests a benefits award granted, under the Longshore and

Harbor Workers’ Compensation Act, 33 U.S.C. §§ 901-950, (“the

Act”), to Willie M. Richardson by the Workers’ Compensation

Benefits Review Board (“Board”). Newport News argues that the

Board should not have approved the Administrative Law Judge’s

(“ALJ”) award of benefits for Richardson’s chronic obstructive

pulmonary disorder (“COPD”) because Section 33(g) of the Act

prohibits benefits for a person who has previously settled, without

employer approval, with a third party for injuries related to the

same disability. Newport News claims that Richardson’s unapproved

settlement for asbestosis in 1999 should bar his current claim for

COPD benefits because he suffers from only one lung-impairing

disability. For the reasons stated below, we deny the petition and

affirm the award of benefits.

I.

Richardson worked at Newport News as a welder from 1968 until

late 1998. Throughout his career, he was exposed to fumes and dust

from the several different types of welding metals. He also used

asbestos material to protect himself while welding until the early

eighties. For four years of his career, he welded in a shipyard

that was filled with toxic fumes from a banned paint that was

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applied to and then removed from a ship. Throughout the eighties

and nineties, Richardson had difficulty breathing when performing

light activity, but in late 1998 his dyspnea increased to the point

where he had to leave work. Richardson also has a history of

childhood asthma.

Richardson applied for disability benefits on February 16,

1995. In his first application, he claimed that he suffered from

asbestos-related lung disease contracted from his inhaling asbestos

fibers at work. No action was taken on his application. On

February 9, 1999, Richardson filed a second application for

benefits, claiming that he suffered from COPD, a condition that he

contracted by inhaling welding dust and paint fumes at work. Also

in 1999 Richardson negotiated settlements of $112 and $6,500, from

Forty-Eight Insulations and Babcock & Wilcox respectively, for

asbestos-related illness. Richardson did not receive written

approval from Newport News before reaching those settlements.

Richardson’s two disability claims were consolidated for

hearing on July 18, 2000. At the hearing, the ALJ granted

Richardson’s motion to amend his claim to seek benefits related

only to his COPD and ask for medical monitoring related to asbestos

exposure. Richardson’s doctors had determined that he did not

suffer from asbestosis, but they wanted to make sure that it would

not develop in the future. After the hearing, the ALJ allowed the

parties to conduct more depositions of experts and enter them into

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evidence. In an order dated January 30, 2003, the ALJ ruled that

Section 33(g) of the Act barred Richardson from recovery because he

suffered from a lung disability that included asbestosis, the very

disability that was the subject of the earlier, unapproved third-

party settlements:

I find that the preponderance of the evidence establishes
that the Claimant suffers from asbestosis, asbestos
related pleural plaques, and has both restrictive and
obstructive lung impairment. . . . I also find that all
of these conditions contribute at least to some degree to
the Claimant’s impaired lung functioning and combine with
his pre-existing asthma. The result is that the Claimant
suffers from a single disability caused by his
simultaneous exposure to asbestos fibers, smoke, dust,
and fumes while welding.

J.A. 885. Upon finding his claim barred, Richardson appealed to

the Board.

The Board reversed the order of the ALJ based on its

interpretation of Chavez v. Todd Shipyards Corp., 139 F.3d 1309

(9th Cir. 1998). In Chavez the Ninth Circuit deferred to the

Benefits Review Board Director’s understanding of the third-party

settlement rule, which provided that a claimant who has settled

with a third party on the basis of injuries produced by one

disability will not be barred from collecting benefits from the

employer on the basis of a second, separate disability. Id. at

1312. The Board instructed the ALJ in its order:

If, after reviewing the medical evidence in light of
Chavez, the administrative law judge again finds that the
claimant is disabled by both asbestosis and COPD, Section
33(g) cannot bar the claim because, under the aggravation
rule, COPD is considered to be the disabling, compensable

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 condition and therefore not the same disability for which
claimant settled his third party claims.

J.A. 893. With this instruction, the ALJ reviewed the evidence,

found that Richardson suffered from COPD as well as asbestosis, and

awarded him permanent partial disability benefits. (J.A. 912.)

Newport News asks us to reverse the Board’s affirmation of the

ALJ’s second order.

II.

This Court reviews the Board’s conclusions of law de novo.

Newport News Shipbuilding & Dry Dock Co. v. Tann, 841 F.2d 540, 542

(4th Cir. 1988). We will uphold the ALJ’s findings of fact if they

are supported by substantial evidence. Id. at 543. Therefore, in

evaluating Newport News’s appeal, we must confront two questions.

We must first ask if the Board interpreted the Act correctly. Then

we must decide if substantial evidence supports the ALJ’s findings

of fact.

A.

The Act states that employers shall be liable to claimants for

“compensation for either disability or death resulting from an

injury occurring in the course of maritime employment.” Brown &

Root, Inc. v. Sain, 162 F.3d 813, 816 (4th Cir. 1998); see 33

U.S.C. § 903(a). The Act defines disability as “incapacity because

of injury to earn the wages which the employee was receiving at the

time of injury in the same or any other employment.” 33 U.S.C. §

6
902(10). It defines injury as “accidental injury or death arising

out of and in the course of employment, and such occupational

disease or infection as arises naturally out of such employment or

as naturally or unavoidably results from such accidental injury.”

33 U.S.C. § 902(2). The Supreme Court has defined “person entitled

to compensation” in Section 33(g) as a person who would be eligible

for benefits whether or not he or she is currently receiving

benefits. Estate of Cowart v. Nicklos Drilling Co., 505 U.S. 469,

477 (1992).

Section 33(g) of the Act requires claimants to secure written

approval from their employers when they negotiate settlements with

third parties and when the basis for the settlement is the

disability for which the employer might be liable under the Act.

If claimants do not get this written approval, then they can

receive no compensation for the disability at issue. The section

provides in relevant part:

(1) If the person entitled to compensation . . . enters
into a settlement with a third person . . . for an amount
less than the compensation to which the person . . .
would be entitled under this chapter, the employer shall
be liable for compensation as determined under subsection
(f) of this section only if written approval of the
settlement is obtained from the employer and the
employer’s carrier, before the settlement is executed,
and by the person entitled to compensation. . . .

(2) If no written approval of the settlement is obtained
and filed as required in paragraph (1), or if the
employee fails to notify the employer of any settlement
obtained from or judgment rendered against a third
person, all rights to compensation and medical benefits
under this chapter shall be terminated, regardless of

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 whether the employer or the employer’s insurer has made
payments or acknowledged entitlement to benefits under
this chapter.

33 U.S.C. § 933(g). The point of this “written approval

requirement [is to] prevent[] the claimant from acting unilaterally

to the detriment of the employer by accepting less in settlement

than it might be entitled to and thus reducing the employer’s

offset.” I.T.O. Corp. v. Sellman, 954 F.2d 239, 242 (4th Cir.

1992).

The Board instructed the ALJ to follow the reasoning of Chavez

v. Todd Shipyards Corp., 139 F.3d. 1309 (9th Cir. 1309). Chavez

held that “apportionments of the employer’s credit relative to

third party settlements is unavailable where settlement proceeds

are for injuries different from that upon which the compensation

claim is based.” Id. at 1312. In other words, if the claimant has

two disabilities and has only settled with the third party for

injuries related to one of the disabilities, then the employer

still is liable for benefits based on the second disability.

This Court has approved this rationale. In Brown & Root, we

ruled that the claimant, Sain, was a “person entitled to

compensation” twice for two distinct disabilities, even though they

both arose from the same source: “Although both asbestosis and

mesothelioma are caused by exposure to asbestos, they are distinct

diseases giving rise to distinct disabilities (albeit with similar

symptoms) for which Sain could, and apparently did, bring separate

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LHWCA claims.” Brown & Root, 162 F.3d at 817. We found that Sain

could collect compensation for his mesothelioma despite having

settled with third parties for his asbestosis. Id. at 818.

The Board has interpreted the law correctly in this case.

Congress designed Section 33(g) to prevent injured employees from

recovering double damages for their disabilities from both their

employers and third parties. The section protects an employer from

having to pay for an injury for which someone else has already

paid, at least in part. If an employee suffers from distinct

injuries creating distinct disabilities, then Section 33(g) will

only protect the employer from having to provide benefits for the

specific disability that was the basis for the settlement obtained

without the employer’s approval. Because we have followed the

rationale of both the Board and Chavez in Brown & Root, then the

Board was correct to instruct the ALJ that Newport News could only

invoke Section 33(g) protection if asbestosis was Richardson’s only

disability. Newport News should not be protected if Richardson

also suffers from COPD or a distinct pulmonary disability.

Newport News asks us to reverse the Board and the ALJ because

Richardson suffers only from one disability linked to several

causes. The company argues that the term disability is an economic

construct that defines an inability to earn wages and is only

tangentially related to the underlying injury. It believes that

the Court should understand Richardson’s disability as his

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inability to work at Newport News because of lung ailments, all of

which are related in part to asbestos and for which Richardson was

already compensated in an unapproved settlement.

Newport News’s argument cannot stand in the face of our

precedent. In Brown & Root, we recognized that the concept of

disability is inextricably linked to the injury that causes it. We

also recognized that one claimant can suffer two disabilities, even

if those disabilities affect the same organ system and have similar

symptoms. If Richardson suffers from both asbestosis and COPD,

then he can be compensated for the COPD.

B.

Whether the ALJ’s findings that Richardson suffered from both

asbestosis and COPD are supported by substantial evidence is a more

difficult question. After taking evidence in a hearing and in

post-hearing depositions, the ALJ originally concluded (despite

Richardson’s withdrawal of his claim for asbestosis): “I find that

the preponderance of the evidence establishes that the Claimant

suffers from asbestos, asbestos related pleural plaques, and has

both restrictive and obstructive lung impairment.” The ALJ then

ruled that “all of these conditions contribute at least to some

degree to the Claimant’s impaired lung functioning and combine with

his pre-existing asthma. The result is that the Claimant suffers

from a single disability caused by his simultaneous exposure to

asbestos fibers, smoke, dust, and fumes while welding.” J.A. 885.

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 After the Board reversed the order, the ALJ made new findings

of fact. One of those findings included “that Claimant has

established by a preponderance of the evidence that his obstructive

lung disability is causally linked to his working conditions.”

J.A. 907. The ALJ maintained that Richardson had proven that he

was disabled by asbestosis, pleural plagues, and restrictive and

obstructive lung impairment, but understood the lung impairment to

be distinct from the asbestosis, and ruled that Richardson’s COPD

claim was not barred by Section 33(g). J.A. 911-12.

During the hearing, the ALJ heard evidence about Richardson’s

condition from several doctors and lung specialists and received

several medical records into evidence. Dr. James P. Baker, a

pulmonologist who treated Richardson throughout 1999, testified

that Richardson suffered from shortness of breath related to

“significant exposure to a number of volatile materials, plus

asbestos.” J.A. 56, 60. Baker could not diagnose Richardson with

asbestosis but admitted that he had lung abnormalities. His final

diagnosis was that “Mr. Richardson has both restrictive and

obstructive abnormality in his lung function.” J.A. 73. He also

diagnosed him with bronchiectasis, “a condition which occurs when

part of the airway passage is damaged by something.” Id.

Dr. Joseph C. Ross, who is board certified in internal

medicine and pulmonary disease, testified as an expert for Newport

News. Ross had never examined Richardson, but he reviewed his

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medical records. Ross concluded that Richardson had “pretty mild”

lung impairment. J.A. 157. He disagreed that Richardson had

either restrictive or obstructive lung disease but admitted that he

had restricted air flow and obstructive airways. On cross-

examination, Dr. Ross admitted that he was not a specialist in

occupational lung disease and that he had last treated patients in

1989. Richardson also admitted into evidence a letter from Newport

News to Ross that instructed Ross as to the opinion that Newport

News hoped he would espouse during this case.

The ALJ also received medical reports from several different

doctors. One such report, from Dr. James V. Scutero and dated

February 28, 1995, stated that Richardson had mildly decreased

vital capacity and no evidence of asbestosis. Records from Dr.

Baker in 1999 were consistent with his testimony that Richardson

suffered from both restrictive and obstructive lung disorders. In

1998 letters to Richardson’s primary physician, Dr. George G.

Childs, a pulmonary specialist, concluded that Richardson “has

severe obstructive lung disease with a mild restriction.” J.A.

202. Dr. Eric J. Freeman, a lung x-ray B reader who specializes in

diagnosing lung conditions only by reading the x-rays, in 2000

diagnosed Richardson with “a mild restrictive lung defect of

unknown etiology.” J.A. 223. Dr. Carlos F. Acosta, Richardson’s

primary care physician, diagnosed him with “severe chronic

obstructive pulmonary disease.” J.A. 247. In 1998, Dr. Steven M.

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Zimmet diagnoses Richardson with asbestosis, but several other

doctors disputed that diagnosis.

The evidence demonstrates that Richardson has trouble

breathing because he has something wrong with his lungs. The ALJ

was in the best position to judge the credibility of all of the

expert witnesses and medical records, and after sifting through all

of the evidence and agendas, he gave the most weight to the

diagnoses of asbestosis, restrictive lung disease, and obstructive

lung disease. With only the doctor for Newport News, Dr. Ross, who

had never even seen Richardson, disputing that Richardson had lung

injuries besides the asbestosis, there appears to be substantial

evidence to support the ALJ’s finding that Richardson suffered from

COPD, in addition to asbestosis, pleural plaques, and restrictive

lung disease.

III.

We conclude that the Board interpreted the law correctly when

it determined that Section 33(g) prohibits benefits only for

Richardson’s asbestos disability and not for the separate

disability of COPD. We also conclude that substantial evidence

supports the ALJ’s finding that Richardson suffers from COPD in

addition to asbestosis and is thus eligible for compensation. For

these reasons, we affirm the Board’s decision affirming the ALJ’s

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award of permanent partial disability benefits and deny Newport

News’s petition for review.

PETITION FOR REVIEW DENIED;
BOARD ORDER AFFIRMED

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