Hawaii Stevedores, Inc. v. Ogawa

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

HAWAII STEVEDORES, INCORPORATED; 
SIGNAL MUTUAL INDEMNITY
ASSOCIATION, LTD., Insurance
Carrier, No. 09-73041
Petitioners,
v.  BRB No.
08-0790
LESLIE OGAWA; DIRECTOR, OPINION
OFFICE OF WORKERS COMPENSATION
PROGRAMS,
Respondents.

On Petition for Review of an Order of the
Benefits Review Board

Submitted June 10, 2010*
Pasadena, California

Filed June 22, 2010

Before: Dorothy W. Nelson and Ronald M. Gould,
Circuit Judges, and James S. Gwin, District Judge.**

Opinion by Judge Gould

*The panel unanimously finds this case suitable for decision without
oral argument. See Fed. R. App. P. 34(a)(2).
** The Honorable James S. Gwin, United States District Judge for the
Northern District of Ohio, sitting by designation.

9099
 HAWAII STEVEDORES v. OGAWA 9103
COUNSEL

James P. Aleccia, Aleccia, Conner & Socha, Long Beach,
California, for the petitioners.

Joshua T. Gillelan II, Longshore Claimants’ National Law
Center, Washington, DC, and Steven M. Birnbaum, San
Rafael, California, for the respondent.

OPINION

GOULD, Circuit Judge:

Hawaii Stevedores, Inc. petitions for review of a decision
of the Benefits Review Board (BRB) affirming an Adminis-
trative Law Judge’s (ALJ) grant of disability benefits to Les-
lie Ogawa under the Longshore and Harbor Workers’
Compensation Act (Longshore Act), 33 U.S.C. §§ 901-950.
We have jurisdiction pursuant to 33 U.S.C. § 921(c), and we
grant the petition in part, deny the petition in part, and remand
for further administrative proceedings.

I

From 1977 until November 2002, Ogawa worked as the
storeroom maintenance clerk at Hawaii Stevedores’ marina
terminal in Honolulu, Hawaii. Ogawa’s position as the sole
storeroom clerk required him to balance responsibilities
related to Hawaii Stevedores’ provision of maintenance ser-
vices to shipping lines, including ordering and delivering
parts for marina equipment, monitoring inventory, scheduling
equipment maintenance, providing design assistance on spe-
cial projects, and reviewing the time cards of other employ-
ees. Although Ogawa enjoyed his work, he also found it
stressful. He worked up to fifteen unpaid hours per week from
home to finish reports that could not be completed within the
9104 HAWAII STEVEDORES v. OGAWA
regular workday, and also experienced stress from friction
with his co-workers resulting from Ogawa’s cost-cutting
efforts. Ogawa was diagnosed with hypertension in 1987 and
he regularly reported job stress to the doctor he saw for treat-
ment of his high blood pressure.

Ogawa was admitted to the emergency room on November
13, 2002, after suffering a slow-developing left parietal stroke
that left him with mild expressive aphasia and limited fine
motor skills in his right hand and arm. The stroke had devel-
oped over the previous few days, and Ogawa later testified
that he first noticed symptoms of right arm numbness and
weakness while lifting ladders at work on Friday, November
8, 2002. When Ogawa returned to Hawaii Stevedores six
months later, it was as an assistant to the new storeroom clerk
who had replaced Ogawa after the stroke. Although he gradu-
ally built up his hours, Ogawa spoke, typed, wrote, and
walked slower than before and was not able to work at his
pre-stroke pace. In June 2003, during the course of downsiz-
ing, Hawaii Stevedores told Ogawa to choose between taking
a medical retirement or facing termination. The same week,
Ogawa filed an accident report which gave notice to Hawaii
Stevedores that Ogawa believed his stroke to be work-related.
At the end of June 2003 Ogawa chose medical retirement over
termination.

Believing that job stress caused or contributed to his high
blood pressure and stroke, Ogawa filed a disability compensa-
tion claim. The Office of Workers’ Compensation Programs
referred the claim to the Office of Administrative Law Judges
for a formal hearing. An ALJ conducted a three-day hearing
during which eight witnesses testified, including Dr. Howard
Keller, an internist who examined Ogawa at his counsel’s
request, and Dr. Jack Scaff, a cardiologist who examined
Ogawa at Hawaii Stevedores’ request. The ALJ also received
testimony from vocational rehabilitation counselor Howard
Stauber and reports from additional examining doctors,
including treating neurologist Dr. Kevin Kimata and examin-
 HAWAII STEVEDORES v. OGAWA 9105
ing clinical psychologists Dr. Brian Goodyear and Dr. Ann
Mary Palozzi.

After the hearing, the ALJ issued a forty-six page decision
concluding that Ogawa was temporarily disabled before
March 15, 2005, and was permanently and totally disabled
thereafter. The ALJ also granted Hawaii Stevedores’ request
that its liability be limited under section 8(f) of the Longshore
Act, 33 U.S.C. § 908(f), such that Hawaii Stevedores would
be responsible for 104 weeks of permanent disability pay-
ments with the federal government taking over thereafter. The
BRB affirmed the ALJ’s decision in all respects and this peti-
tion for review followed.

II

The BRB must accept the ALJ’s findings “unless they are
contrary to the law, irrational, or unsupported by substantial
evidence.” Rhine v. Stevedoring Servs. of Am., 596 F.3d 1161,
1163 (9th Cir. 2010). We, in turn, review the BRB for “errors
of law and for adherence to the statutory standard governing
the [BRB]’s review.” Id. “Where the ALJ relies on witness
credibility in reaching his [or her] decision, our court will
interfere only where the credibility determinations conflict
with the clear preponderance of the evidence, or where the
determinations are inherently incredible or patently unreason-
able.” Todd Pac. Shipyards Corp. v. Dir., Office of Workers’
Comp. Programs, 914 F.2d 1317, 1321 (9th Cir. 1990) (inter-
nal punctuation omitted). Finally, in considering petitions for
review of BRB decisions, we apply the Administrative Proce-
dure Act, including the directive that “due account shall be
taken of the rule of prejudicial error.” 5 U.S.C. § 706; see also
Nat’l Steel & Shipbuilding Co. v. Bonner, 600 F.2d 1288,
1292 (9th Cir. 1979) (applying 5 U.S.C. § 706 to a petition for
review arising under the Longshore Act). Under the rule of
prejudicial error, “we may overturn the ALJ’s decision only
if the error . . . prejudicially affected a substantial right of a
party,” which occurs only if it reasonably can be concluded
9106 HAWAII STEVEDORES v. OGAWA
that absent such error there would have been a contrary result.
See Gunderson v. U.S. Dep’t of Labor, 601 F.3d 1013, 1021
(10th Cir. 2010) (internal punctuation omitted). Stated another
way, we will not disturb the decision of an ALJ because of a
harmless error.

[1] Our circuit has in substance undertaken harmless error
review in past cases arising under the Longshore Act. See
Duncanson-Harrelson Co. v. Dir., Office of Workers’ Comp.
Programs, 686 F.2d 1336, 1341-43 (9th Cir. 1982), vacated
on other grounds, 462 U.S. 1101 (1983). We did not, how-
ever, refer to our review as “harmless error” analysis. We now
confirm that harmless error analysis applies to petitions for
review brought under the Longshore Act. We thus conform
our practice to that of at least nine other circuits. See, e.g.,
Consolidation Coal Co. v. Williams, 453 F.3d 609, 621-22 &
n.6 (4th Cir. 2006); Jericol Mining, Inc. v. Napier, 301 F.3d
703, 713 (6th Cir. 2002); Am. Stevedoring Ltd. v. Marinelli,
248 F.3d 54, 65-66 (2d Cir. 2001); Staftex Staffing v. Dir.,
Office of Worker’s Comp. Programs, 237 F.3d 404, 408 (5th
Cir. 2000); Am. Grain Trimmers, Inc. v. Office of Workers’
Comp. Programs, 181 F.3d 810, 819 (7th Cir. 1999) (en
banc); Big Horn Coal Co. v. Office of Workers’ Comp. Pro-
grams, 897 F.2d 1052, 1055 (10th Cir. 1990); Wensel v. Dir.,
Office of Workers’ Comp. Programs, 888 F.2d 14, 17 (3d Cir.
1989); Hunter v. Dir., Office of Workers’ Comp. Programs,
861 F.2d 516, 518 (8th Cir. 1988); Ala. By-Products Corp. v.
Killingsworth, 733 F.2d 1511, 1516 n.10 (11th Cir. 1984).
That a path is a beaten one, Justice Jackson long ago
observed, is a persuasive reason to follow it. See Robert H.
Jackson, Full Faith and Credit—The Lawyer’s Clause of the
Constitution, 45 Colum. L. Rev. 1, 26 (1945).

III

[2] Hawaii Stevedores, first, argues that the ALJ erred in
determining that Ogawa’s claim was not barred by his failure
to provide timely notice that his stroke was work-related.
 HAWAII STEVEDORES v. OGAWA 9107
Under the Longshore Act, an injured worker who wants to
preserve a compensation claim must give the employer notice
of the injury within “thirty days after the date of such injury”
or “thirty days after the employee or beneficiary is aware, or
in the exercise of reasonable diligence . . . should have been
aware, of a relationship between the injury or death and the
employment.” 33 U.S.C. § 912(a). The Longshore Act
excuses late notice under several circumstances, including
where the employer was not prejudiced by the failure to give
proper notice. Id. § 912(d)(2). The burden falls on the
employer to establish by substantial evidence that it was prej-
udiced by the late notice. Kashuba v. Legion Ins. Co., 139
F.3d 1273, 1275 (9th Cir. 1998). Here, the ALJ found that
Ogawa’s notice was due by May 14, 2003, but that Ogawa did
not provide notice until the first week of June 2003. The ALJ
excused the late notice, however, finding that Hawaii Steve-
dores suffered no prejudice as a result of it.

[3] The ALJ’s prejudice finding was supported by substan-
tial evidence. The ALJ noted, correctly, that Hawaii Steve-
dores makes no allegation that it lacked evidence of Ogawa’s
medical condition following the stroke, as it had access to all
of Ogawa’s medical records, his doctors, and Ogawa himself
for two depositions and five independent medical examina-
tions over nearly four years. See Jones Stevedoring Co. v.
Dir., Office of Workers’ Comp. Programs, 133 F.3d 683, 690
(9th Cir. 1997) (concluding that late notice was properly
excused where the ALJ found that the employer had “ample
opportunity” to conduct discovery and investigate workplace
conditions). Instead of providing any concrete example of
how its investigation was prejudiced by the late notice,
Hawaii Stevedores relies on a bare assumption that an imme-
diate medical exam might have provided more or different
information about Ogawa’s recovery. Such a speculative and
conjectural theory of prejudice, however, is insufficient as a
matter of law. See Kashuba, 139 F.3d at 1276 (“Evidence that
lack of timely notice did impede the employer’s ability to
determine the nature and extent of the injury or illness . . . is
9108 HAWAII STEVEDORES v. OGAWA
sufficient; a conclusory allegation of prejudice is not.”). The
ALJ’s finding that Hawaii Stevedores did not meet its burden
of demonstrating prejudice was supported by substantial evi-
dence, and Ogawa’s late notice was properly excused. See
Jones Stevedoring Co., 133 F.3d at 690.

IV

[4] Hawaii Stevedores argues, second, that the ALJ erred
in crediting Dr. Keller’s opinion that Ogawa’s stroke began at
work and was caused in part by job stress. The primary evi-
dence of Dr. Keller’s lack of credibility, according to Hawaii
Stevedores, is that Dr. Keller admitted to strengthening the
conclusions in his report after he talked with Ogawa’s attor-
ney. The revised report said with more certainty that the
stroke began while Ogawa was at work and that job stress was
a contributing cause of the stroke. At the administrative hear-
ing, Dr. Keller testified that he altered the language in his
report after learning from Ogawa’s attorney about how medi-
cal reports are used in litigation—something with which Dr.
Keller was previously unfamiliar.

[5] The ALJ found Dr. Keller credible and accepted his
testimony that he changed the language to reflect more accu-
rately his opinion but did not change the substance of his
opinion. Just as “[i]t is within the ALJ’s prerogative, as finder
of fact, to credit one witness’s testimony over that of anoth-
er,” Duhagon v. Metro. Stevedore Co., 169 F.3d 615, 618 (9th
Cir. 1999) (per curiam), the ALJ is free to credit a witness’s
testimony in the face of one party’s argument that the witness
is not credible. The ALJ’s reasons for crediting Dr. Keller’s
explanation about the changes to his report were not “inher-
ently incredible or patently unreasonable,” see Todd Pac.
Shipyards Corp., 914 F.2d at 1321 (citation omitted), and we
therefore have no basis to set the credibility determination
aside. The mere fact that an expert witness has talked with a
party’s lawyer and then altered his or her opinion language,
 HAWAII STEVEDORES v. OGAWA 9109
though it might be considered relevant, does not require a
factfinder to find that expert witness is other than credible.

V

Hawaii Stevedores contends, third, that the ALJ erred in
decertifying Dr. Scaff as an expert in cardiology. Although
Ogawa did not object to the original certification of Dr. Scaff,
Ogawa’s post-trial brief argued that Dr. Scaff should be
decertified because his testimony did not demonstrate expert
knowledge. The ALJ granted the post-trial motion and Hawaii
Stevedores now argues that it was error to do so without giv-
ing it a chance to respond in support of Dr. Scaff’s qualifica-
tions.

[6] We express no view on whether the ALJ properly
decertified Dr. Scaff because, as the BRB put it, decertifica-
tion carried “no legal effect.” The decertification decision
came only after the ALJ discussed Dr. Scaff’s report and testi-
mony in detail and supplied many reasons for finding Dr.
Scaff not credible. Hawaii Stevedores does not challenge the
ALJ’s credibility finding, so any error in decertifying Dr.
Scaff was harmless; the ALJ had already rejected his opinion
on grounds supported by substantial evidence. See, e.g., Am.
Stevedoring Ltd. v. Marinelli, 248 F.3d 54, 65-66 (2d Cir.
2001) (concluding that even if it was error to discredit a state-
ment by the employer’s expert, the error was harmless
because the ALJ discounted the expert’s opinion for several
other reasons).

VI

[7] Hawaii Stevedores argues, fourth, that the ALJ erred in
determining that Hawaii Stevedores did not submit substantial
evidence that Ogawa’s stroke did not arise in the course of his
employment. The Longshore Act creates a presumption that
a disabling injury suffered by a maritime worker is work-
related and thus compensable. 33 U.S.C. § 920(a). An
9110 HAWAII STEVEDORES v. OGAWA
employer is liable for employment conditions that cause an
injury or aggravate or accelerate a pre-existing condition
under the “aggravation rule,” which dictates that “the
employer takes the employee as he finds him.” SAIF
Corp./Or. Ship v. Johnson, 908 F.2d 1434, 1441 (9th Cir.
1990).

[8] Although the burden of persuasion remains on the dis-
ability claimant throughout the administrative process, see
Dir., Office of Workers’ Comp. Programs v. Greenwich Col-
lieries, 512 U.S. 267, 280-81 (1994), the burden of production
shifts in the course of determining whether a claimant’s injury
is work-related. The statutory presumption may be invoked by
the claimant upon a prima facie showing that (1) he or she
suffered a harm, and (2) a workplace condition could have
caused, aggravated, or accelerated the harm. See Ramey v.
Stevedoring Servs. of Am., 134 F.3d 954, 959 (9th Cir. 1998);
Amerada Hess Corp. v. Dir., Office of Worker’s Comp. Pro-
grams, 543 F.3d 755, 761 (5th Cir. 2008). If the claimant suc-
cessfully invokes the presumption at the first step, the
employer may rebut the presumption at the second step by
presenting substantial evidence that is “specific and compre-
hensive enough to sever the potential connection between the
disability and the work environment.” Ramey, 134 F.3d at 959
(citation omitted). The ALJ determines as a matter of law
whether substantial rebuttal evidence has been presented.
Bath Iron Works Corp. v. Fields, 599 F.3d 47, 54-55 (1st Cir.
2010). If the employer carries its evidentiary burden at step
two, the presumption in favor of the claimant “falls out of the
case” and the ALJ moves to the third and final step of weigh-
ing the evidence as a whole “to determine whether the claim-
ant has established the necessary causal link between the
injury and employment.” Id. at 53. This final determination is
a question of fact. Id. at 54-55.

[9] The ALJ determined that Ogawa successfully invoked
the presumption that his disability is work-related by present-
ing evidence that stressful work conditions could have aggra-
 HAWAII STEVEDORES v. OGAWA 9111
vated or accelerated the onset of the stroke. The ALJ further
determined that Hawaii Stevedores had not produced substan-
tial countervailing evidence to rebut the presumption. Hawaii
Stevedores urges that this step-two determination was error,
and we agree. The evidence marshaled by Hawaii Stevedores
to rebut the presumption that Ogawa’s stroke was work-
related included Ogawa’s delay in reporting the stroke as
work-related, the absence of a reference to right-arm weak-
ness in Ogawa’s emergency room records, Dr. Scaff’s testi-
mony that records created immediately after an injury are the
most reliable, Ogawa’s supervisor’s testimony that the store-
room maintenance clerk position is not stressful, the fact that
Ogawa enjoyed his job, and the possibility that Ogawa’s
stress may have come from stock and mutual fund losses
instead of from work.

[10] In declining to credit this evidence, the ALJ cited to
more-credible, contradictory testimony offered by Ogawa,
Ogawa’s co-workers, and Dr. Keller. This weighing of credi-
bility, however, has no proper place in determining whether
Hawaii Stevedores met its burden of production at step two.
Id. at 55 (citing St. Mary’s Honor Ctr. v. Hicks, 509 U.S. 502,
509 (1993) (“In the nature of things, the determination that a
defendant has met its burden of production [in a Title VII
case] can involve no credibility assessment.”)). Instead, at the
second step the ALJ’s task is to decide, as a legal matter,
whether the employer submitted evidence that could satisfy a
reasonable factfinder that the claimant’s injury was not work-
related. Id. The evidence submitted by Hawaii Stevedores was
sufficient to meet this standard, and it was error for the ALJ
to weigh the evidence and consider questions of credibility at
the second step.

[11] Although we conclude that the ALJ erred in mislabel-
ing the stage of the inquiry that supported her conclusion, we
also conclude that the error was harmless. Despite its occur-
ring under the auspices of determining whether Hawaii Steve-
dores submitted sufficient rebuttal evidence, the ALJ’s
9112 HAWAII STEVEDORES v. OGAWA
detailed analysis took into account all of the evidence bearing
on whether Ogawa’s stroke occurred at work, whether the
storeroom maintenance clerk position is stressful, and whether
workplace stress can accelerate a stroke. This is precisely the
inquiry required of the ALJ at step three of the burden-
shifting framework—a framework the ALJ correctly articu-
lated at the outset of her analysis. The ALJ’s ultimate conclu-
sion that the totality of the evidence showed a relationship
between stressful work conditions and Ogawa’s stroke was
supported by substantial evidence, and the ALJ’s error in mis-
labeling the conclusion a step-two conclusion rather than a
step-three conclusion was harmless. See Am. Grain Trimmers,
Inc. v. Office of Workers’ Comp. Programs, 181 F.3d 810,
819 (7th Cir. 1999) (en banc) (holding that the ALJ’s apparent
error in incorrectly describing the burden of proof was harm-
less where the ALJ had earlier “articulated exactly the right
set of standards for this case” and “had the right standard in
mind when he assessed the employer’s evidence”). Observing
the general rule in administrative law requiring prejudicial
error for relief, see 5 U.S.C. § 706, and following our
endorsement of the harmless error doctrine, we may not dis-
turb the ALJ’s determination that Ogawa’s stroke qualifies as
a compensable injury under the Longshore Act.

VII

[12] Hawaii Stevedores contends, fifth, that the ALJ erred
in determining that Ogawa was restricted to employment that
allowed for frequent breaks. A disability is classified as
“total” under the Longshore Act when “(1) a claimant demon-
strates that the work-related injury in question renders him [or
her] unable to return to prior employment, and (2) the
employer subsequently fails to establish the availability of
suitable alternative employment within the geographic area of
the claimant’s residence, which the claimant can perform con-
sidering the claimant’s limitations, age, education, and back-
ground, and with a diligent employment search on the
claimant’s part.” Gen. Constr. Co. v. Castro, 401 F.3d 963,
 HAWAII STEVEDORES v. OGAWA 9113
968-69 (9th Cir. 2005). If a claimant proves that a work-
related injury prevents him or her from returning to the former
job, the burden shifts to the employer to point to specific jobs
that the claimant can perform. Bumble Bee Seafoods v. Dir.,
Office of Workers’ Comp. Programs, 629 F.2d 1327, 1329-30
(9th Cir. 1980). Once the employer has pointed to one or
more possible positions, the ALJ makes a factual finding as
to whether the claimant is able to perform those jobs. See id.
at 1330.

[13] Here the ALJ made a finding, supported by substan-
tial evidence, that Ogawa could no longer work as the store-
room maintenance clerk. The ALJ made additional findings
that Ogawa was restricted to employment that is sedentary,
allows for frequent breaks, does not require fine motor speed
or dexterity with the right hand, and is not intellectually sti-
mulating, stressful and demanding. Hawaii Stevedores takes
issue with the restriction requiring frequent breaks because
the recommendation was vague and because the ALJ took that
restriction from the report of Dr. Palozzi, a clinical psycholo-
gist who did not purport to offer an opinion about Ogawa’s
ability to work.

[14] We are not persuaded by Hawaii Stevedores’ argu-
ment. The ALJ is expected to consider the record as a whole,
including all witness testimony and each medical report,
before entering findings. See Parsons Corp. of Cal. v. Dir.,
Office of Workers’ Comp. Programs, 619 F.2d 38, 42 (9th
Cir. 1980) (holding that an ALJ decision “must be affirmed
by this court if it is rational and supported by substantial evi-
dence on the record as a whole.” (emphasis added)); see also
Walker v. Rothschild Int’l Stevedoring Co., 526 F.2d 1137,
1139 (9th Cir. 1975) (per curiam) (endorsing ALJ decision
that “took into consideration all the testimony given at the
hearing, as well as all medical reports of other doctors submit-
ted to him”). The ALJ here arrived at the applicable work
restrictions through her considered evaluation of the opinions
of Doctors Keller, Goodyear, Palozzi, and Scaff. While Dr.
9114 HAWAII STEVEDORES v. OGAWA
Palozzi’s opinion on breaks was not labeled a “work restric-
tion,” it was labeled a “recommendation” that would help
Ogawa avert more pronounced cognitive difficulties. We con-
clude that the ALJ did not err in concurring with Dr. Palozzi’s
recommendation, and that the work restrictions, including the
requirement of breaks, were supported by substantial evi-
dence.

Because Ogawa showed that he was unable to return to his
position as the storeroom maintenance clerk, the burden shifts
to Hawaii Stevedores to “establish the availability of suitable
alternative employment.” Gen. Constr. Co., 401 F.3d at 969.
Hawaii Stevedores does not dispute the ALJ’s finding that
none of the positions identified by the Vocational Evaluation
Report accommodate all of the work restrictions the ALJ
identified. Because the work restrictions were supported by
substantial evidence, we see no error in the ALJ’s conclusion
that Ogawa is totally disabled within the meaning of the
Longshore Act. See id. at 968-69.

VIII

[15] Finally, Hawaii Stevedores and Ogawa both urge that
the ALJ erred in determining the date of Ogawa’s maximum
medical improvement (MMI), the date which triggers a
change in the classification of a claimant’s disability from
temporary to permanent. The MMI date is a question of fact
that the ALJ determines from the medical evidence. Con-
tainer Stevedoring Co. v. Dir., Office of Workers’ Comp. Pro-
grams, 935 F.2d 1544, 1551 (9th Cir. 1991).

[16] We agree with the parties that the ALJ’s determina-
tion of the MMI was not supported by substantial evidence.
Despite Dr. Keller’s testimony and Dr. Kimata’s report, both
of which indicated that Ogawa likely reached a stationary,
permanent condition within about a year after the stroke, the
ALJ set the MMI on March 14, 2005, about two and a half
years after the stroke. Although the ALJ expressed concern
 HAWAII STEVEDORES v. OGAWA 9115
that the MMI testimony and opinions were speculative and
unexplained, the ALJ did not take additional evidence on this
point. Instead, the ALJ reasoned that “Dr. Keller would have
more of a basis for his MMI date after examining the Claim-
ant” and selected the date when Dr. Keller first examined
Ogawa as the MMI date. The problem with this finding is that
no doctor expressed a view that normal and natural stroke
recovery continues to occur more than two years after a
stroke, and Dr. Keller clearly opined that Ogawa reached
MMI before Dr. Keller ever saw him. See Gen. Constr. Co.,
401 F.3d at 968 (explaining that the MMI is the date after
which normal and natural healing is no longer likely). The
record does not provide a basis for concluding that Ogawa
had continued to heal until March 14, 2005, so this finding
was not supported by substantial evidence.

[17] Nor was this error harmless. The ALJ capped Hawaii
Stevedores’ liability for Ogawa’s permanent disability bene-
fits at 104 weeks. The period of permanent disability begins
at the date of MMI. Id.; 33 U.S.C. § 908(f)(1)-(2). Until the
claimant reaches MMI, the employer remains liable for tem-
porary disability benefits, which in this case extended Hawaii
Stevedores’ temporary-benefits liability for two and a half
years following Ogawa’s stroke. See 33 U.S.C. § 908(b), (e).
Moreover, a later MMI date delays the onset of the annual
upward adjustments to Ogawa’s benefit award that apply to
permanent, but not to temporary, disability payments. 33
U.S.C. § 910(f). Because the MMI date may affect the calcu-
lation of the compensation award, we remand this issue to the
BRB so that it may be returned to the ALJ for additional fact-
finding. See Brady-Hamilton Stevedore Co. v. Dir., Office of
Workers’ Comp. Programs, 58 F.3d 419, 422 (9th Cir. 1995)
(remanding to ALJ for further factfinding on proper wage cal-
culation). On remand, the ALJ may make any adjustments to
the compensation award that prove necessary in light of the
redetermined MMI date.
9116 HAWAII STEVEDORES v. OGAWA
IX

[18] The petition for review is GRANTED IN PART on
the issue of Ogawa’s maximum medical improvement date
and DENIED IN PART with respect to all other issues. The
matter is REMANDED for further administrative proceed-
ings consistent with this opinion. Each party shall bear its
own costs on appeal.