Pedroza v. BRB

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

JOSE PEDROZA, 
Petitioner,
No. 05-75449
v.
BRB No. 05-0419
BRB; DIRECTOR, OFFICE OF  ORDER AND
WORKERS COMPENSATION
AMENDED
PROGRAMS; NATIONAL STEEL &
OPINION
SHIPBUILDING COMPANY,
Respondents.

On Petition for Review of an Order of the
Benefits Review Board

Argued and Submitted
October 23, 2008—Pasadena, California

Filed October 1, 2009
Amended October 20, 2010

Before: Harry Pregerson and N. Randy Smith, Circuit
Judges, and Raner C. Collins, District Judge.*

Opinion by Judge Collins;
Special Concurrence by Judge Pregerson

*The Honorable Raner C. Collins, United States District Judge for the
District of Arizona, sitting by designation.

17275
17278 PEDROZA v. BRB

COUNSEL

Joshua T. Gillelan II, Longshore Claimant’s National Law
Center, Washington, D.C. (argued), and Erica A. Dupree, for
the petitioner.

Roy D. Alexrod, Law Offices of Roy Alexrod, Solana Beach,
California, (argued) for the respondent.
 PEDROZA v. BRB 17279
ORDER

The opinion filed on October 1, 2009, and reported at 583
F.3d 1139 is hereby amended. An amended opinion and spe-
cial concurrence are filed concurrently with this order.

The panel has unanimously voted to deny appellee’s peti-
tion for rehearing en banc. Judge Pregerson and Judge Smith
have voted to deny the petition, and Judge Collins has so rec-
ommended.

The full court has been advised of the petition for rehearing
en banc, and no judge has requested a vote on whether to
rehear the matter en banc. Fed. R. App. P. 35.

The petition for rehearing en banc is denied. No further
petitions for rehearing or rehearing en banc will be enter-
tained.

IT IS SO ORDERED.

OPINION

COLLINS, District Judge:

Jose Pedroza (“Pedroza”), an employee of National Steel
and Shipbuilding Company (“National Steel”), petitions this
court to review the determination of the Benefits Review
Board (“BRB or Board”) that claimant Pedroza is not entitled
to benefits under the Longshore and Harbor Worker’s Com-
pensation Act (“Longshore Act or LHWCA”), 33 U.S.C.
§ 901 et seq., because his psychological injuries were caused
by National Steel’s legitimate, adverse personnel decisions.
We have jurisdiction to review a final order of the BRB. 33
U.S.C. § 921(c).
17280 PEDROZA v. BRB
Both parties agree that substantial evidence supports the
findings of the Administrative Law Judge (“ALJ”) and the
BRB that Pedroza’s psychological injuries were a result of
legitimate personnel actions. Therefore, only one question is
before us on appeal: Are psychological injuries that result
from legitimate personnel actions compensable under the
Longshore Act? We answer this question in the negative,
therefore affirming the BRB in this decision and in Marino v.
Navy Exchange Service, 20 BRBS 166 (Ben. Rev. Bd. 1988),
and Sewell v. Noncommissioned Officers Open Mess, 32
BRBS 134 (Ben. Rev. Bd. 1998).

FACTS

Pedroza was involved in an accident, as a load handler at
the Naval Base in San Diego, California, loading and unload-
ing materials from the USS Boxer on August 24, 1999. While
Pedroza was unloading the USS Boxer, he struck a 440 volt
cable line. This caused an explosion. After the accident,
Pedroza did not seek medical attention. Though he now
claims that he suffered anxiety after the accident, Pedroza
never told his co-workers or supervisors about it.

A year after the accident, National Steel’s Transportation
Department Manager, Brian Mathiasan, wrote a letter to
Pedroza about the accident. The letter informed Pedroza that
the August 24, 1999 accident was caused by his negligence.
After reading the letter, Pedroza sought medical attention at
National Steel’s dispensary and Kaiser Permanente.

Pedroza wrote a letter to refute Mathiasan’s assessment. In
his letter, Pedroza apologized for the accident and waged a
complaint against National Steel for their disregard of his
health and well being after twenty-five years of service.
Pedroza also asserted he was unfairly treated by National
Steel for their failure to write a similar letter to the rigger who
accompanied him during the accident.
 PEDROZA v. BRB 17281
On January 24, 2000, Pedroza had a meeting with his
supervisors to discuss job safety. At this meeting, Pedroza
informed his Union Safety Supervisor that his immediate
supervisor’s actions adversely affected his ability to perform
his job. During the meeting, Mathiasan informed Pedroza
about ways in which he could improve his work performance.
Mathiasan also issued a verbal warning to Pedroza, that, if he
was unable to improve his performance, he would be
demoted.

After the meeting, Pedroza’s performance improved for a
short period of time. On July 14, 2000, Mathiasan met with
Pedroza to discuss his job performance. At this meeting,
Mathiasan gave Pedroza four memos from his supervisors
regarding his poor work ethic. After the meeting, Pedroza
went on leave from work for three months.

While on leave, Pedroza sought medical attention for his
psychological problems. When Pedroza returned to work, he
was demoted because of his poor work performance and fail-
ure to fill out the proper safety forms after the 1999 accident.
National Steel felt that someone with Pedroza’s lengthy ser-
vice record was better served by being demoted than by being
fired.

A month later, Pedroza’s doctor placed him on medical
leave for five months. While on medical leave, Pedroza filed
a workers’ compensation claim for psychological injuries
caused by his stressful working conditions.

During the ALJ hearing, Pedroza provided medical evi-
dence to demonstrate that his disability was caused by his
workplace. Dr. Bayardo, an occupational psychiatrist, found
that Pedroza’s psychiatric condition and disability was pre-
dominately related to his workplace. Dr. Bayardo diagnosed
Pedroza with chronic, mild post traumatic stress disorder as
a result of the 1999 accident. National Steel refuted Dr.
Bayardo’s findings by providing three psychiatrists’ evalua-
17282 PEDROZA v. BRB
tions of Pedroza.1 Each of the psychiatrists reported Pedroza’s
depression was a result of National Steel’s disciplinary action
and reprimands.

The ALJ denied Pedroza’s workers’ compensation claim,
because the medical evidence provided by both parties sup-
ports National Steel’s contention that Pedroza’s disability was
a result of the July 2000 disciplinary action and not the
August 1999 accident. The ALJ relied on Marino to deny
Pedroza’s claim. 20 BRBS 166 (1988) (holding that an
employee’s psychological reaction to legitimate, good faith
personnel actions by the employer is not compensable
because it does not constitute a working condition that Con-
gress intended to compensate under the Longshore Act).

On appeal, Pedroza contended that (1) the ALJ erred in
failing to address whether the claimant’s condition was
caused by prolonged and cumulative stress at the workplace
and (2) the ALJ erred in finding that Pedroza’s depression and
anxiety were a result of the reprimands and demotion. The
Board agreed with Pedroza and held the ALJ erred by failing
to take into account the general working conditions that could
have led to Pedroza’s psychological injuries. The BRB relied
on Marino and Sewell. See Sewell, 32 BRBS 127 (holding that
a claimant must demonstrate that his psychological disability
was caused by stressful working conditions irrespective of
1
Dr. Steven Ornish found that Pedroza’s depression was a result of the
disciplinary action and the reprimands. Dr. Ornish found that Pedroza suf-
fered from major depression with anxiety in partial remission. Dr. Ornish
concluded that Pedroza did not experience terror or horror sufficient to
trigger Post Traumatic Stress Disorder given he finished his shift after the
accident, and never mentioned any emotional or physical problems until
a year later. Dr. Ornish evaluated Pedroza twice and concluded that
Pedroza did not make a claim that he suffered Post Traumatic Stress Dis-
order until after he visited his attorney. Another psychiatrist, Dr. Alvarez
found that Pedroza’s post traumatic stress disorder and depression was a
result of the personnel actions. Dr. Schleimer also found “it was more than
likely than not that [Pedroza’s] subjective symptomatolgy developed fol-
lowing the reprimand or personnel issues.”
 PEDROZA v. BRB 17283
disciplinary and termination proceeding against the claimant
to successfully claim benefits under the Longshore Act). As
a result of applying Marino and Sewell, the BRB ordered the
ALJ to determine whether the claimant’s daily work environ-
ment, such as daily interactions with his supervisor, triggered
his psychological injuries.2

National Steel filed a motion for reconsideration en banc.
Hearing this case en banc, the Board denied the motion for
reconsideration. The Board directed the ALJ to determine if
Pedroza’s injuries were caused by the employer’s personnel
actions or general working conditions.

On remand, Pedroza presented a prima facie case that his
injuries were due in part to “general working conditions.”
However, the ALJ denied his claim, because National Steel
was able to rebut Pedroza’s claim by providing substantial,
comprehensive, and negative evidence that Pedroza’s psycho-
logical injuries were due solely to legitimate personnel actions
and not compensable.

On appeal, Pedroza contended that (1) the BRB lacked the
authority to create policy, such as the Marino doctrine and (2)
the Board’s action established a class of exemptions that frus-
trated congressional intent to hold employers strictly liable for
injuries to their employees. The Board rejected Pedroza’s
arguments. The BRB held legitimate personnel actions, such
as the reduction in force in Marino, do not constitute general
2
To determine if claimant’s injury is covered under the Act, the claim-
ant must establish a prima facie case. To establish a prima facie case, the
claimant must demonstrate he sustained a harm or pain and that the condi-
tions existed or an accident occurred at his place of employment which
could have caused the harm or pain. Duhagon v. Metro. Stevedore Co.,
169 F.3d 615 (9th Cir. 1999); see also 33 U.S.C. §§ 902(2), 920(a). An
employer can rebut the claimant’s presumption by providing substantial,
negative and comprehensive evidence that the injuries or disabilities were
not caused or exacerbated by general working conditions. Swinton v.
Kelly, 554 F.2d 1075, 1082 ( D.C. Cir. 1976).
17284 PEDROZA v. BRB
working conditions. The Board articulated that § 921(b) of the
Longshore Act gives the Board and courts the authority to
decide questions of law or fact raised in appeals. Implicit in
the statutory authorization is the ability to determine what
type of events constitute working conditions.

STANDARD OF REVIEW

We review a Benefits Review Board’s decision for errors
of law and adherence to the substantial evidence standard.
Taylor v. Dir., OWCP, 201 F.3d 1234, 1238 (9th Cir. 2000).

We review the Benefits Review Board’s interpretation of
the Longshore Act de novo, because it is a question of law.
General Construction Co. v. Castro, 401 F.3d 963, 965 (9th
Cir. 2005). The BRB is not a policymaking body and its con-
struction of the Longshore Act is not entitled to special defer-
ence. Peru v. Sharpshooter Spectrum Venture, LLC , 493 F.3d
1058, 106 (9th Cir. 2007) ( quoting M. Cutter Co. v. Carroll,
458 F.3d 991, 993 (9th Cir. 2006) (internal quotation marks
omitted). “When construing the [Longshore Act], we begin
with its plain language. We also consider whether a particular
interpretation is supported by the Act’s history, and the poli-
cies animating the Act.” Peru v. Sharpshooter Spectrum Ven-
ture, LLC., 493, F.3d 1058, 1063 (9th Cir. 2007)(internal
citations omitted).

DISCUSSION

We here determine whether psychological injuries caused
by legitimate personnel decisions are compensable under the
Longshore Act. We begin our analysis with the plain meaning
and legislative history of the relevant portions of the Long-
shore Act.
 PEDROZA v. BRB 17285
I. Plain Meaning and Legislative History

1.

[1] The Longshore Act was enacted to create a federal
workers’ compensation statute for longshoremen and harbor
workers, after the Supreme Court held that state workers’
compensation statutes constitutionally could not apply to
injured maritime workers. See generally Noguiera v. New
York, N.H. & H.R. Co., 281 U.S. 128 (1930). To be entitled
to benefits under the Act, a claimant must have sustained an
injury within the meaning of the Act. 33 U.S.C. § 903(a) (pro-
viding that “[c]ompensation shall be payable under this Act in
respect of disability . . . of an employee, but only if the dis-
ability . . . results from an injury.”). Section 2(2) of the Act
provides that:

The term “injury” means accidental injury or death
arising out of and in the course of employment, and
such occupational disease or infection as arises natu-
rally out of such employment or as naturally or
unavoidably results from such accidental injury, and
includes an injury caused by the willful act of a third
person directed against an employee because of his
employment. 33 U.S.C. § 902(2).

[2] Injuries are presumed to be work related under § 920(a)
after the claimant establishes a prima facie case that the injury
not only was caused by the employment, but that it also arose
during employment. See U.S. Indus./Fed. Sheet Metal, Inc. v.
Dir., OWCP, 455 U.S. 608, 615 (1982) (stating that “[n]ot
only must the injury have been caused by the employment, it
also must have arisen during the employment.”).

[3] It is well settled that a psychological impairment,
which is work related, is presumed to be compensable under
the Act. See, e.g., Dir., OWCP v. Potomac Elec. Power Co.,
607 F.2d 1378 (D.C. Cir. 1979). Therefore, to receive the ben-
17286 PEDROZA v. BRB
efit of this § 920(a) presumption, the claimant must prove not
only that he has a psychological impairment, but that an acci-
dent occurred, or working conditions existed, which could
have caused the impairment. See id.

On appeal, Pedroza concedes that substantial evidence sup-
ports both the ALJ’s and the Board’s findings that his psycho-
logical injuries were not caused by general working
conditions, but were instead caused (if at all) by legitimate
personnel actions. We, therefore, need only address whether
psychological injuries resulting from a legitimate personnel
act are compensable under the Act.

We have previously held, in the unpublished opinion of
Turner v. Todd Pacific Shipyards Corp., 990 F.2d 1261, No.
91-70524 (9th Cir. April 8, 1993) (table), that injuries result-
ing from legitimate personnel actions do not fall within the
purview of the act. However, an unpublished decision is not
precedent for our panel. The BRB has also previously found
that psychological injuries, that arise from legitimate person-
nel actions, are not compensable. See Sewell, 32 BRBS 127;
Marino, 20 BRBS 166. Again, however, these decisions are
not binding on this panel.

2.

We hold that psychological injuries arising from legitimate
personnel decisions are not compensable under the Act. We
reach this result by analyzing the plain language of the Act in
light of the policy underlying the statute.

[4] The Longshore Act provides that “[c]ompensation shall
be payable under this Act in respect to disability . . . of an
employee, but only if the disability . . . results from an inju-
ry.” 33 U.S.C. § 903(a). In order to fall within the act the
injury must be work-related. See 33 U.S.C. § 902(2). Injuries
resulting from legitimate personnel decisions are not caused
by working conditions and they are not work related.
 PEDROZA v. BRB 17287
The basic policy of the Longshore Act was to provide the
benefits of workers’ compensation to persons engaged in mar-
itime employment. See generally Nogueira, 281 U.S. 128.
The Act was designed to provide compensation for maritime
workers who were injured while working on navigable waters
in the course of their employment. It was also designed to
strike a balance between the concerns of longshoremen and
harbor workers, and their employers. Morrison-Knudsen
Const. Co. v. Dir., OWCP, 461 U.S. 624, 636 (1983).

[5] The psychological injury resulting from a legitimate
personnel action is not the type of injury that was intended to
be compensable under the Longshore Act. An interpretation
contrary to this would create a trap for the “unwary” employer
and undermine the interest of employers and employees alike.
See McCray Constr. Co. v. Dir., OWCP, 181 F.3d 1008, 1016
(9th Cir. 1999) (rejecting an interpretation of the Longshore
Act that would create a trap for the unwary employer). It
would also encourage employers to terminate employees for
poor work performance, rather than first take legitimate per-
sonnel actions to correct the employee problem. Accordingly,
we hold that legitimate personnel decisions cannot result in
compensable injury under the Act.

II. Marino-Sewell Doctrine

The BRB’s previous decisions on this matter are consistent
with our holding. We therefore approve the BRB’s Marino-
Sewell line of cases.

[6] In Marino, the BRB reversed the ALJ’s decision to
grant a claimant benefits under the Longshore Act for his
work-related psychological injuries, because the claimant’s
injuries were caused by a layoff. 20 BRBS 166 (1988). The
BRB determined layoffs or a reduction in force do not consti-
tute “working conditions” that would give rise to a compensa-
ble injury under the Longshore Act. Id. The Board reversed
the ALJ’s determination that a layoff constituted “working
17288 PEDROZA v. BRB
conditions.” On appeal, the Board directed the ALJ to con-
sider if the claimant’s injuries were caused by working condi-
tions such as “cumulative stress on the job due to supervising
a number of locations, insufficient personnel to perform the
job, working more than the required hours, and performing
the duties of his subordinates, in addition to the notification
that he was being laid off.” Id. The Board believed granting
compensation to employees for psychological injuries as a
result of a layoff, would unfairly hinder employers from mak-
ing legitimate personnel decisions. The Board believed that,
if the layoff was improper, the claimant had other remedies
outside of workers’ compensation. Id.

[7] Nine years later, the BRB addressed this issue again in
Sewell, when a claimant filed a claim alleging her stress
related psychiatric problems were caused by her poor working
conditions. Sewell, 32 BRBS 127. The claimant was
employed as a civilian bartender, and her supervisor had a
very aggressive management style. Id. The ALJ denied her
claim pursuant to Marino. Id. On appeal, the Board vacated
the ALJ’s findings and directed the ALJ to consider whether
the claimant could demonstrate that her psychological injuries
were caused by her general working conditions, irrespective
of the disciplinary and termination proceedings. On remand,
the ALJ found that the claimant could not demonstrate that
her injuries were caused by her general working conditions.
On the second appeal, the Board reversed the ALJ’s findings
because uncontroverted medical evidence showed the claim-
ant’s psychological injuries were caused by her stressful
working conditions, irrespective of the disciplinary and termi-
nation proceeding. Id.

[8] As a result of Marino and Sewell, the BRB constructed
a doctrine that allows psychological injuries to be compensa-
ble, if the claimant can demonstrate that psychological inju-
ries are caused by general working conditions and not
legitimate personnel decisions. This doctrine properly inter-
prets the Act in light of its underlying policy.
 PEDROZA v. BRB 17289
III. Pedroza’s Arguments

Pedroza first argues that the Marino-Sewell doctrine is an
unreasonable interpretation of § 902(2), because the Board’s
interpretation differs from the majority of states’ workers’
compensation statutes with similar language. Pedroza con-
tends that, since state workers’ compensation allows for com-
pensation for mental or psychological disabilities without
inquiry into whether the employer engaged in a legitimate
personnel decision, the Longshore Act should follow the simi-
lar trajectory. Pedroza also notes that several state legislatures
have developed special barriers similar to Marino-Sewell, to
govern mental or psychological disabilities or injuries.3 There-
fore, absent congressional action to take similar steps, the
Longshore Act provides compensation for psychological dis-
abilities or injuries without inquiry into legitimate personnel
decisions. We disagree.
3
In California, the legislature enacted Cal. Labor Code § 3208.3(h) in
1993 to “establish a new and higher threshold of compensability for psy-
chiatric injury.” See also Cal. Labor Code § 3208.3 (c) (“No compensation
. . . shall be paid by an employer for a psychiatric injury if the injury was
substantially caused by a lawful, nondiscriminatory, good faith personnel
action.”).
In New York, the legislature in 1990 enacted a similar provision to
redefine injury. It reads “an injury which is solely mental and is based on
work-related stress if such mental injury is a direct consequence of a law-
ful personnel decision involving a disciplinary action, work evaluation,
job transfer, demotion or termination taken in good faith by the employ-
er.” See Gamble v. New York State Narcotics Control Comm’n, 400
N.Y.S.2d 599 (N.Y. App. Div. 1977).
In Oregon, the legislature in 1998 added a provision that barred com-
pensation for mental disorders unless it is a product of “conditions other
than generally inherent in every working situation or reasonable disciplin-
ary, corrective or job performance evaluation by the employer or cessation
in employment.” Pet. Br. 29. This is codification of the Marino-Sewell
doctrine. Prior to this legislation, Oregon law recognized compensability
of psychological injuries as a result of legitimate personnel decisions. See
Korter v. EBI Companies, 610 P.2d 312 (Or. Ct. App. 1980).
17290 PEDROZA v. BRB
Pedroza’s argument ignores the history of the Longshore
Act. Since its inception in 1927 and subsequent amendment
in 1972, the Longshore Act was designed to create a uniform
policy to provide workers’ compensation for longshoremen
and harbor workers. Northeast Marine Terminal Co. Inc. v.
Caputo, 432 U.S. 249, 256-59 (1977). The legislative history
of the 1972 amendments to the Longshore Act demonstrates
that Congress viewed most state workers’ compensation laws
as inadequate protection for longshoremen and harbor work-
ers. Id. at 263. Moreover, congressional inaction is not a reli-
able guide to determine legislative intent. United States v.
Craft, 535 U.S. 274, 287 (2002).

Pedroza next contends that the Marino-Sewell doctrine vio-
lates Longshore Act policy of no fault liability. Section 904(b)
states “compensation shall be irrespective of fault as a cause
for injury.” Thus, as Pedroza argues, the Marino-Sewell
inquiry to whether a personnel action was legitimate or illegit-
imate is a question of fault. Thus, as Pedroza argues, Marino-
Sewell is inconsistent with workers’ compensation laws. We
disagree.

It is true, that the basic premise of the workers’ compensa-
tion system is that an employer is protected, from full tort lia-
bility for employment related injuries even when it is at fault,
in exchange for bearing limited liability for compensation and
medical benefits as a cost of the business. However, the
Marino-Sewell doctrine does not disrupt this system. The
Marino-Sewell doctrine merely refines the type of
employment-related activities that could give rise to a work-
ers’ compensation claim. Furthermore, the distinction that the
Marino-Sewell doctrine creates between “legitimate” or “ille-
gitimate” personnel actions is not about fault, it is about
whether the employer’s actions created an environment of
poor working conditions to trigger psychological injuries.

[9] The Marino-Sewell modification strikes a balance
between the employer and the employee. The Marino prong
 PEDROZA v. BRB 17291
allows the employer to take personnel actions without fear of
a workers’ compensation claim due to a psychological injury
from their actions. Meanwhile, the Sewell prong puts a limit
on the type of legitimate personnel actions in which the
employer may engage without fear of workers’ compensation
claims, because some personnel actions can facilitate poor
working conditions that could trigger compensable work
related psychological injuries such as “harassment by her
supervisor,” “verbal accusations,” and “physical harm.” Both
of these cases create a balance between employee and
employer. Marino supports the employer’s concerns while the
Sewell prong protects the employees. This is an important bal-
ance between the needs of employers and employees. See
Morrison-Knudsen Constr. Co., 461 U.S. at 635 (explaining
that the Longshore Act was designed to strike a balance
between the concerns of employers and employees).

CONCLUSION

[10] We hold that psychological injuries arising from legit-
imate personnel actions are not compensable under the Long-
shore Act. Therefore, the BRB’s development of the Marino-
Sewell doctrine is a correct interpretation of the Longshore
Act and a reflection of its underlying policy.

PETITION DENIED.

PREGERSON, Circuit Judge, concurring specially:

I write separately to emphasize that our holding concerns
legitimate personnel actions, and not employer conduct that is
in any way hostile, vindictive, malicious, mean, insensitive,
crude, or abusive.