Bath Iron Works Corp. v. Director

United States Court of Appeals
For the First Circuit

No. 96-2179

BATH IRON WORKS CORPORATION
and LIBERTY MUTUAL INSURANCE CO.,

Petitioners,

v.

DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS,
UNITED STATES DEPARTMENT OF LABOR,

Respondent.

PETITION FOR REVIEW OF A FINAL ORDER

OF THE BENEFITS REVIEW BOARD

Before

Boudin, Circuit Judge,

Campbell, Senior Circuit Judge,

and Bownes, Senior Circuit Judge.

Kevin M. Gillis, with whom Troubh, Heisler & Piampiano, P.A. were

on brief for petitioners.
LuAnn B. Kressley, with whom J. Davitt McAteer, Acting Solicitor

of Labor, Carol A. De Deo, Associate Solicitor for Employee Benefits,

and Janet R. Dunlop, Counsel for Longshore, were on brief for

respondent.

February 12, 1998

BOWNES, Senior Circuit Judge. The Longshore and Harbor
BOWNES, Senior Circuit Judge.

Workers' Compensation Act ("LHWCA" or "Act"), 33 U.S.C.A. 901

- 950 (West Supp. 1997), requires employers to pay compensation

to certain maritime workers for disabling injuries resulting from

their employment. An exception from total liability is provided

to employers under 8(f) of the LHWCA when the employer proves,

among other things, that a permanent partial disability existed

prior to the work-related injury. 33 U.S.C.A. 908(f). In

construing this exception, this court, along with other circuit

courts of appeals, has required the employer to come forward with

proof, which is not specifically elucidated in the statutory

language, that the pre-existing disability was "manifest to the

employer" before 8(f) relief can obtain. See Part II, infra.

In 1984 the LHWCA was amended, inter alia, to permit

claimants to receive compensation when a long-latent occupational

disease does not become apparent until after the employee has

retired. This appeal presents a novel question in the wake of

that amendment: may an employer obtain 8(f) relief when both

the claimed pre-existing disability and compensable occupational

disease do not become manifest until after the worker has retired

from employment with the responsible employer? In such

instances, of course, the employer cannot show that the pre-

existing disability was "manifest to the employer" because

employment has ceased by the time both disabilities arise.

Because the question before us is purely legal, the

facts underlying the worker's claim need only be sketched

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briefly. Phillip J. Reno voluntarily retired from Bath Iron

Works ("BIW")1 in 1985, after a total of thirty-eight years2 in

various positions. It is uncontroverted that at various stages

of his employment at BIW, Reno was exposed to asbestos. In 1989

or 1990, several years after his retirement, Reno began to

experience shortness of breath. He was diagnosed at that time

with chronic obstructive pulmonary disease (emphysema) and

interstitial lung disease. Reno had been a cigarette smoker. In

June of 1991, Reno was referred to a pulmonary specialist who

diagnosed obstructive pulmonary disease, primarily the result of

cigarette smoking, and restrictive pulmonary disease resulting

from Reno's asbestos exposure. Reno was assessed a twenty

percent whole person impairment due to the overall pulmonary

impairments. Reno filed a timely claim for workers' compensation

benefits on the basis of his partial pulmonary disability.

BIW in turn gave notice of its intent to seek relief

from the compensation liability under 8(f) of the LHWCA on the

theory that Reno's smoking-related emphysema was a permanent

partial disability which predated the work-related injury of

asbestosis. On December 3, 1993, the Administrative Law Judge

("ALJ") awarded benefits to Reno and denied BIW the 8(f)

relief. Relying on our precedent, the ALJ held that in order to

1. We refer to Petitioners BIW and Liberty Mutual Insurance
Company collectively as BIW.

2. We feel compelled to note that, contrary to BIW's description
of Reno's work history, thirty-eight years is not properly
characterized as "employ[ment] for several years." Br. of

Petitioner at 2 (emphasis added).

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obtain such relief, an employer must demonstrate that the pre-

existing disability was manifest to the employer prior to

retirement.

BIW appealed the legal basis of the 8(f) decision to

the Department of Labor's Benefits Review Board. After no

action, the ALJ's decision became the final order of the Board on

September 12, 1996. See Omnibus Consolidated Rescissions and

Appropriations Act of 1996, Pub. L. No. 104-134, 110 Stat. at

1321-219 (April 26, 1996). Our jurisdiction over the appeal is

proper under 33 U.S.C.A. 921(c). Because the issue before us

is purely a question of law, we exercise de novo review. Liberty

Mut. Ins. Co. v. Commercial Union Ins. Co., 978 F.2d 750, 757

(1st Cir. 1992).

BIW posits that Reno's emphysema is a pre-existing

permanent disability which, when combined with his occupational

disease of asbestosis, created a greater disability. Based on

this postulate, BIW points to both the plain language of 8(f),

and the substance and legislative history of the 1984 Amendments

to argue that it is entitled to relief under 8(f). In Newport

News Shipbuilding & Dry Dock Co. v. Harris, 934 F.2d 548 (4th

Cir. 1991), the Fourth Circuit examined a similar situation, and

concluded that "adherence to the [manifestation] requirement [in

instances of a long-latent occupational disease] would defeat the

real purposes of the [1984] amendments," id. at 553. In cases

such as these, the Harris court determined that "the

manifestation requirement will not be applied." Id. BIW urges

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adoption of the Harris holding,3 as a basis for overturning the

decision of the Board below.

We decline to follow the Fourth Circuit and therefore

affirm the decision of the Board. We find the manifestation

requirement a necessary prerequisite to 8(f) relief even where

the compensation claim is based on a post-retirement long-latent

occupational disease. Our analysis follows.

I.
I.

Under 8(f) of the Act, "the liability for permanent

partial and permanent total disability, and death benefits, [is

shifted] from employer to the Special Fund when the disability or

death is not due solely to the injury which is the subject of the

claim." A2 Benefits Review Board Service, Longshore Reporter

Desk Book D8.20, at 248 (Matthew Bender, 1996). In these

instances, after an initial period of employer liability, the

employee is "paid the remainder of the compensation that would be

due out of the special fund established in section 944 of" the

LHWCA. 33 U.S.C.A. 8(f)(2)(A). The Special Fund is currently

financed by assessments on all covered employers, part of which

3. Harris is the only circuit court of appeals decision to reach

this issue as of yet. In Ehrentraut v. Director, OWCP, 30 BRBS

146 (1996), the Benefits Review Board reached the question, and
decided that the pre-existing disability need only manifest
itself to someone -- not necessarily the employer -- prior to the
compensable injury, id. at 150. The Director has contested the

Board's jurisdiction to issue the opinion on the basis of Pub. L.
No. 104-134, supra, and the case is currently pending before the

Third Circuit. Director, OWCP v. Sun Ship, Inc., No. 96-3648.

Regardless, the Board's Ehrentraut decision is entitled to no

special deference here. Potomac Elec. Power Co. v. Director,

OWCP, 449 U.S. 268, 278 n.18 (1980).

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is prorated according to the extent to which that particular

employer's compensated employees make use of the Fund. 33

U.S.C.A. 944(c).

We turn initially to the words of the statute. If

these are not clear, "we next examine the legislative history,

albeit skeptically, in search of an unmistakable expression of

congressional intent." Strickland v. Commissioner, Me. Dep't of

Human Servs., 48 F.3d 12, 17 (1st Cir. 1995).

Section 8(f) currently reads, in relevant part:

Injury increasing disability:

(1) In any case in which an employee

having an existing permanent partial

disability suffers injury, the employer shall

provide compensation for such disability as
is found to be attributable to that injury
based upon the average weekly wages of the
employee at the time of the injury. If
following [certain statutorily scheduled] . .
. injur[ies] . . . , the employee is totally
and permanently disabled, and the disability
is found not to be due solely to that injury,
the employer shall provide compensation for
the applicable prescribed period of weeks
provided for in that section for the
subsequent injury, or for one hundred and
four weeks, whichever is the greater . . . .
In all other cases of total permanent
disability or of death, found not to be due
solely to that injury, of an employee having
an existing permanent partial disability, the
employer shall provide . . . compensation
payments or death benefits for one hundred
and four weeks only. If, following [a
statutorily scheduled] injury . . . , the
employee has a permanent partial disability
and the disability is found not to be due
solely to that injury, and such disability is
materially and substantially greater than
that which would have resulted from the
subsequent injury alone, the employer shall
provide compensation for the applicable
period of weeks . . . , or for one hundred

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and four weeks, whichever is the greater
. . . .

In all other cases in which the employee
has a permanent partial disability, found not
to be due solely to that injury, and such
disability is materially and substantially
greater than that which would have resulted
from the subsequent injury alone, the
employer shall provide in addition to
[statutorily mandated compensation],
compensation for one hundred and four weeks
only.

33 U.S.C.A. 908(f)(emphasis added).

Thus two categories of resulting disability are covered

under 8(f): (1) total permanent disability found to be the

result of the workplace injury (statutorily scheduled or

otherwise) combined with the existing disability; and (2) partial

permanent disability found to be the result of the workplace

injury (statutorily scheduled or otherwise) combined with the

existing disability, where the resulting disability is

"materially and substantially greater" because of the combined

effect. Reno's situation falls under the latter category. The

first sentence of the section contains the language crucial to

all requests for relief: 8(f) cases are those "in which an

employee having an existing permanent partial disability suffers

injury."

The statute, however, is silent on the meaning of

"existing permanent partial disability." See 33 U.S.C.A. 902

(definitions). At first blush then, BIW's argument makes some

sense; it is, at least, an arguable reading to suggest that

Reno's emphysema was an "existing permanent partial disability"

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by the time the asbestosis made itself known. Leaving aside the

question of when injury occurs for purposes of long-latent

occupational diseases,4 the issue turns to a large degree on how

one interprets the word "existing." For purposes of this appeal,

does it mean existing during employment, or existing before

another disability becomes apparent? The manifestation

requirement, to which we now turn, was in large measure the

result of courts' determinations on the meaning of "existing"

disability.

II.
II.

The font of the manifestation requirement can be traced

to the Supreme Court's opinion in Lawson v. Suwanee Fruit & S.S.

Co., 336 U.S. 198 (1949). There, the Court was asked to

determine the proper meaning of "disability" in the context of

8(f)'s coverage for "previous disabilit[ies]." Id. at 200.

Because the definitional portion of the LHWCA defined

"disability" in relation to an injury "arising out of and in the

course of employment," id. (quoting LHWCA 2(2)), a thorny

question of statutory interpretation emerged: must the "previous

disability" also arise out of an employment-related injury?

After a review of the Act's legislative history, id. at 201-04,

4. Our inquiry would be simplified if the statutory language
explicitly defined the time of injury in such cases. Instead,
the definition of "injury" includes "such occupational disease or
infection as arises naturally out of such employment," 33
U.S.C.A. 902(2), and as we examine infra, wage calculations for

occupational disease reference the onset of disabling effect as
the time of "injury," 33 U.S.C.A. 910(i). There is, therefore,
room for argument on the point.

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the Court answered in the negative, id. at 206. "If we read the

definition [of disability] into 8(f)(1) in a mechanical

fashion, we create obvious incongruities in the language, and we

destroy one of the major purposes of the second injury provision:

the prevention of employer discrimination against handicapped

workers." Id. at 201 (emphasis added). It was Lawson

generally, and this emphasized language in particular which the

courts of appeals have seized upon in developing the

manifestation requirement.

In 1970, the D.C. Circuit interpreted 8(f) as it then

existed,5 and formally extracted for the first time what has come

to be known as the "manifestation" requirement -- requiring the

employer to show that the pre-existing disability was manifest to

the employer before 8(f) relief can obtain. American Mut. Ins.

Co. of Boston v. Jones, 426 F.2d 1263 (D.C. Cir. 1970). Denying

8(f) relief to the employer, the court stated that "nothing in

the record gives any indication that [the claimant], up to the

time of his [work-related] injuries, showed a sufficient degree

of social maladaption due to limited intelligence that his

disability could be fairly classed as 'manifest.'" Id. at 1268.

The American Mutual court's construction of 8(f) was informed

by what it determined to be the primary purpose of the 8(f)

exception: "to remove that aspect of discrimination against the

5. At the time, the language was "combin[ation] with a previous

disability." Longshoremen's and Harbor Workers' Compensation Act

8(f)(1), 44 Stat. 1424, 1429 (1927) (emphasis added). We
examine the lack of import in the language change infra.

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disabled which would otherwise be encouraged by the very statute

intended to protect them." Id. at 1267. Thus, it was reasoned,

"discrimination . . . must rest upon knowledge of the

characteristic upon which the discriminationis to be based." Id.

It was not long before other circuit courts of appeals

adopted the same requirement. See e.g., Dillingham Corp. v.

Massey, 505 F.2d 1126, 1128 (9th Cir. 1974); Atlantic & Gulf

Stevedores, Inc. v. Director, OWCP, 542 F.2d 602, 606 (3d Cir.

1976); Duluth, M. and I. R. Ry. Co. v. United States Dep't of

Labor, 553 F.2d 1144, 1148-51 (8th Cir. 1977).

This court has required the employer to meet the

manifestation requirement since General Dynamics Corp. v.

Sacchetti, 681 F.2d 37, 39-40 (1st Cir. 1982). We required a

showing of "manifest[ation] to the employer," because we observed

that 8(f) "was designed to encourage employers to hire or

continue to employ handicapped workers by ensuring that the

employer would not have to compensate in full for a subsequently

incurred permanent disability when that disability was

attributable in part to a previously existing handicap." Id. We

have steadfastly adhered to this requirement. Director, OWCP v.

General Dynamics Corp., 980 F.2d 74, 76 (1st Cir.

1992)(Lockhart);6 Bath Iron Works Corp. v. Director, OWCP, 950

F.2d 56, 58 (1st Cir. 1991); CNA Ins. Co. v. Legrow, 935 F.2d

6. Because of the fact that the parties litigating disputes
under the LHWCA are frequently the same, courts generally use the
last name of the individual claimant for purposes of short-form
citation, regardless of whether that claimant is a party to the
appeal. We do so here.

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430, 435 (1st Cir. 1991); White v. Bath Iron Works Corp., 812

F.2d 33, 35 (1st Cir. 1987); Director, OWCP v. General Dynamics

Corp., 787 F.2d 723, 725 (1st Cir. 1986)(Fantucchio). See also

Director, OWCP v. Bath Iron Works Corp. (Johnson), 129 F.3d 45,

50 (1st Cir. 1997)(reiterating non-discrimination purpose behind

8(f)). Our current jurisprudence therefore dictates that, in

order "[t]o prove that it is entitled to Section 8(f) relief, an

employer must show that, (1) the employee had a permanent partial

disability that existed prior to the second injury; (2) the

second injury contributed to that disability; and (3) the prior

disability was 'manifest' to the employer." Lockhart, 980 F.2d

at 76.

As we have noted, we turned to what has been

consistently elucidated as the core purpose of 8(f) --

prevention of discrimination -- to inform our adoption of the

manifestation requirement. Sacchetti, 681 F.2d at 40. Indeed,

our most extensive analysis of the manifestation requirement to

date reiterated that the "crucial issue [in 8(f) relief], . . .

is the potential for discrimination against the disabled."

Lockhart, 980 F.2d at 81. We stated that "[t]he centrality of

this issue is emphasized in all our cases interpreting the

[LHWCA]." Id. The challenged standard employed by the Board in

Lockhart's case, which involved a question concerning the

permanency of the pre-existing disability, queried whether there

was "sufficient information regarding the existence of a serious

lasting problem which would motivate a cautious employer to

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consider terminating the employee." Id. at 80. We held the

standard proper because "[i]t effectuates the purpose of the

manifest requirement and Section 8(f) by making only potential

discriminators eligible for Section 8(f) relief." Id. at 82.

To date, eight other circuits besides ours apply this

requirement: the Second, Third, Fourth, Fifth, Eighth, Ninth,

Eleventh and District of Columbia. Sealand Terminals, Inc. v.

Gasparic, 7 F.3d 321, 323 (2d Cir. 1993)(per curiam); Director,

OWCP v. Universal Terminal & Stevedoring Corp., 575 F.2d 452, 455

(3d Cir. 1978); Director, OWCP v. Newport News Shipbuilding & Dry

Dock Co. (Langley), 676 F.2d 110, 114 (4th Cir. 1982); Ceres

Marine Terminal v. Director, OWCP, 118 F.3d 387, 392 (5th Cir.

1997); Duluth, 553 F.2d at 1149-51 (8th Cir. 1977); Director,

OWCP v. Cargill, Inc., 709 F.2d 616, 618-19 (9th Cir. 1983)(en

banc); C.G. Willis, Inc. v. Director, OWCP, 31 F.3d 1112, 1115

(11th Cir. 1994); C & P Tel. Co. v. Director, OWCP, 564 F.2d 503,

512-15 (D.C. Cir. 1977). Only the Sixth Circuit has rejected the

manifestation requirement, substituting instead the directive

that the pre-existing disability be manifest to someone -- not

necessarily the employer -- prior to the work-related injury.

American Ship Bldg. Co. v. Director, OWCP, 865 F.2d 727, 732 (6th

Cir. 1989).

To say that the requirement is by now well-ensconced

within the rubric of the LHWCA would be an understatement. We

must note, however, that despite the Benefits Review Board's

description of the manifestation requirement as a "well-settled

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concept," Caudill v. Sea Tac Alaska Shipbuilding, 25 BRBS 92, 99

(1991), the Supreme Court has not yet decided its validity.

III.
III.

The manifestation requirement has been properly

characterized as "a 'judicial gloss' which Congress has not

acted to erase." American Shipbuilding, 865 F.2d at 730. Nor

could we erase it if we wanted to. It is well settled that,

"[i]n a multi-panel circuit, newly constituted panels, generally

speaking, are bound by prior panel decisions on point." Metcalf &

Eddy, Inc. v. Puerto Rico Aqueduct and Sewer Auth., 991 F.2d 935,

939 n. 3 (1st Cir. 1993). We are, however, confronted with a

situation made novel by congressional amendment, and must

therefore determine whether those amendments should effectuate a

change in our traditional analysis of requests for 8(f) relief.

As an initial matter, we remain convinced that

application of the manifestation requirement to requests for

8(f) relief is the proper way to give the Section its intended

meaning. We think the LHWCA's legislative history shows that

8(f) was designed to serve a very specific and limited purpose

with regards to the operation of the compensation scheme as a

whole. Because the manifestation requirement effectuates this

limited purpose, we affirm our adherence to it.

A.
A.

The original LHWCA was passed in 1927 in response to a

series of Supreme Court decisions that invalidated prior attempts

to cover maritime workers under existing state compensation

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structures. See G. Bober & M. Wible, Compensable Injury or Death

Arising Under the Longshore and Harbor Workers' Compensation Act,

35 Loyola L. Rev. 1129, 1131 (1990). "It was held that the

matter [of maritime compensation] was outside state cognizance

and exclusively within federal maritime jurisdiction . . . ."

Calbeck v. Travelers Ins. Co., 370 U.S. 114, 117

(1962)(discussing Southern Pac. Co. v. Jensen, 244 U.S. 205

(1917)).7 Around the time the LHWCA was debated and crafted,

workers' compensation schemes had become so popular that "[b]y

1920, all but eight states had adopted Compensation Acts." A.

Larson, The Nature and Origins of Workmen's Compensation, 37

Cornell L. Q. 206, 233 (1952).

One of the major problems with state workers'

compensation schemes, however, was the effect that "non-

apportionment" of the cost of compensation had on the already

disabled worker. By holding the last employer liable for the

results of accumulated injury, it was argued, employers had a

significant incentive to discriminate against those workers

already physically disabled.8 Johnson, 129 F.3d at 50. The most

commonly reiterated example of this effect derives from the

Oklahoma experience. As stated in Lawson,

7. Justice Brennan's opinion in Calbeck provides a comprehensive

discussion of the judicial decisions and legislative maneuvering
which led to passage of the Act. 370 U.S. 117-124.

8. "Non-apportionment" is also described as the "aggravation
rule," because it holds one employer liable for the results of an
aggravating injury.

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Nease v. Hughes Stone Co., 114 Okla. 170, 244

P. 778 [(1925)], held the employer liable for
total compensation for loss of the second
eye. After the decision, Mr. Huber [of
Oklahoma] reports, "thousands of one-eyed,
one-legged, one-armed, one-handed men in the
State of Oklahoma were let out and can not
get employment coming under the workmen's
compensation law of Oklahoma. . . . Those
. . . court decisions put us in bad
shape. . . . The decision displaced between
seven and eight thousand men in less than 30
days in Oklahoma."

336 U.S. at 203-04 (quoting United States Bureau of Labor

Statistics, Bull. No. 536 at 268, 272 (1931))(first two

alterations added). As one example of the flavor of the debate,

it was stated that compensation systems without second injury

provisions, "would become an instrument of persecution . . . of

men who are physically handicapped." Id. at 203 (quoting

testimony of Joseph Parks of Massachusetts Industrial Accident

Commission, United States Bureau of Labor Statistics, Bull. No.

564 at 278 (1932)).

As originally enacted, an employer was entitled to

8(f) relief "[i]f an employee receive[d] an injury which of

itself would only cause permanent partial disability but which,

combined with a previous disability, does in fact cause permanent

total disability." 44 Stat. at 1429. The legislative history of

the Act demonstrates that Congress responded to the unintended

effect of non-apportionment by including a "second injury fund"

in the statute. See Johnson, 129 F.3d at 50 (stating that

conclusion); Ceres Marine, 118 F.3d at 389 (same). Although the

legislative history of the original Act is not voluminous, what

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does exist drives our conclusion that 8(f) was included in the

LHWCA specifically to ameliorate the effects of non-

apportionment. Discriminatory effect was certainly seriously

considered. For instance, Representative Bowling stated during a

colloquy on a potential apportionment scheme that even under such

a system, the disabled employee was likely to remain jobless. To

Provide Compensation for Employees Injured and Dependents of

Employees Killed in Certain Maritime Employments: Hearings on

H.R. 9498 Before the House Committee on the Judiciary, 69th

Cong., 1st Sess. at 74 (1926) ("Well, that sounds like 'good-by'

[sic] for the [disabled employee]").

Perhaps the most telling exchange on point occurred

during hearings over the Senate version of the bill, which would

later be enacted. Mr. E. M. Braxton of the Newport News

Shipbuilding & Dry Dock Company reiterated his concern that the

Act would require employers to "examine every man who applies for

work; and the poor dog that is suffering from some disease will

be turned away from our plant because . . . as a matter of life

and death financially we will have to turn him down." Hearings

on S.3170 Before the House Committee on the Judiciary, 69th

Cong., 1st Sess. at 196 (1926). In rebuttal, a witness in favor

of the legislation testified as follows:

The second injury proposition is as much to
the advantage of the employer and his
interests as it is for the benefit of the
employee. It protects that employer who has
hired, say, a one-eyed worker who goes and
loses his other eye and becomes a total
disability. The employer without this sort
of thing would have to pay total permanent

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disability compensation. Then, on the other
hand, this also protects the worker with one
eye from being denied employment on account
of his being an extra risk. Now by simply
taking this up in this way it is possible to
protect both the employer and to protect the
one-eyed employee also. It is one of the
best social inventions in legislation of
which I have knowledge.

Id. at 208 (testimony of Mr. Andrews). See also Lawson, 336 U.S.

at 202 (quoting same).

We think the foregoing demonstrates that the

development of the manifestation requirement rests on solid

ground. Because the legislative history of the original Act

demonstrates that 8(f) was specifically designed to reduce the

incentive for discrimination, it makes logical sense that "only

potential discriminators [are] eligible for Section 8(f) relief."

Lockhart, 980 F.2d at 82.

B.
B.

In 1972, the LHWCA was amended,9 see Longshoreman's and

9. There were, of course, other amendments to the Act prior to
1972. According to one Report generated as part of the 1984
Amendments,
[O]ther employee groups were [eventually]
covered under the Act. The District of Columbia
Workmen's Compensation Act (1928) extended coverage
to employees of private employers in Washington,
D.C. The Defense Base Act (1941) extended coverage
to employees of federal contractors at military
bases or on public works contracts performed in any
place outside the continental United States. The
Nonappropriated Fund Instrumentalities Act (1952)
applied the LHWCA to civilian employees of
nonappropriated fund instrumentalities of the Armed
Forces (such as post exchanges). In 1953, the
Outer Continental Shelf Lands Act extended coverage
to employees on the U.S. Outer Continental Shelf
involved in exploring for and developing natural
resources.

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Harbor Workers' Compensation Act Amendments of 1972, Pub. L. 92-

576, 86 Stat. 1251 (1972), "[t]he principle purpose of . . .

[which was] to . . . upgrade the benefits, extend coverage to

protect additional workers, provide a specified cause of action

for damages against third parties, and to promulgate necessary

administrative reforms," S. Rep. No. 92-1125, at 1 (1972). As

part of the 1972 Amendments, the language of 8(f) was changed,

substituting the language of "previous disability" for the

current language of "existing permanent partial disability." 86

Stat. at 1257. The Amendments also opened the door for employers

to 8(f) relief where the resulting combined disability was not

total, but partial. Id.

There is nothing in the legislative history of the 1972

Amendments to suggest that the core purpose of 8(f) was being

altered along with its language. See Duluth, 553 F.2d at 1149

(making that determination); C & P Telephone, 564 F.2d at 512

(same). To the contrary, both the Senate and House Report stated

that the chosen "method of spreading the risk among all employers

is intended by the committee to encourage the employment of

handicapped workers." S. Rep. No. 92-1125, at 7; H.R. Rep. No.

92-1441, at 8 (1972).

Since original enactment, the Act has been
amended ten times. Amendments in 1934, 1938, 1948,
1956, 1960, 1961, and 1969 revised or increased
benefits. In 1958, the Act was amended to require
employers to maintain a reasonably safe work
environment.

S. Rep. No. 97-498, at 20 (1982).

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IV.
IV.

BIW's primary argument is that the 1984 Amendments to

the Act, Pub. L. No. 98-426, 98 Stat. 1639 (1984), required

abolishing the application of the manifestation requirement to

8(f) requests in cases where an occupational disease or injury

does not appear until after employment has ceased. One of the

principles of statutory interpretation is that a "settled

construction of an important federal statute should not be

disturbed unless and until Congress so decides." Reves v. Ernst

& Young, 494 U.S. 56, 74 (1990)(Stevens, J., concurring). We

recognize that "considerations of stare decisis weigh heavily in

the area of statutory construction, where Congress is free to

change [the courts'] interpretation of its legislation."

Illinois Brick Co. v. Illinois, 431 U.S. 720, 736 (1977).

Although the Amendments added a provision permitting

such claims "if filed within two years after the employee or

claimant becomes aware, or . . . should have been aware, of the

relationship between the employment" and the disease, 98 Stat. at

1649 (codified at 33 U.S.C.A. 913(b)(2)), we can find nothing

in the text of the Amendments, nor its legislative history, to

suggest that Congress intended to alter the application of the

manifestation requirement to requests for 8(f) relief.

The Harris court seized upon, and BIW directs us to,

language in a House Report as a basis for its argument that

8(f) applies to a pre-existing disability not manifested until

after the employee has stopped working. Harris, 934 F.2d at 552.

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As part of the introductory summary of the bill, the Report

stated that the Amendments were "intended to reduce the cost of

Longshore coverage for employers in the covered industries in a

manner which will disturb, to the most limited extent possible,

the rights and benefits which the Longshore Act provides." H.R.

Rep. No. 98-570, at 3 (1983), reprinted in 1984 U.S.C.C.A.N.

2734, 2736. Thus, the Harris court deduced that an expansion of

an individual's right to file a claim should be coupled with

corresponding relief for the employer. 934 F.2d at 552. But

review of the entirety of that House Report, and other

legislative documents, demonstrates that the quoted language

cannot support the weight ascribed to it.

First, there is compelling evidence that Congress was

well aware of, and in fact endorsed, application of the

manifestation requirement to 8(f) cases. A Senate Report

states that "[a]n employer able to demonstraate [sic] actual or,

in some cases, constructive knowledge that an injured worker had

a permanent disability which pre-dated a compensable injury is

often able to shift to the Special Fund the responsibility for

paying a very substantial portion of the amounts payable to the

worker." S. Rep. No. 97-498, at 35 (1982)(emphases added); see

also S. Rep. No. 98-81, at 34 (1983)(same). We think this

language is most reasonably read as referring to the manner in

which courts of appeals had analyzed disputes concerning 8(f) -

- by requiring a showing of actual or constructive knowledge with

evidence of "manifestation." Similarly, the House and Senate

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Reports on the 1984 bill expressly recognized that "[s]ection

8(f) of the Act was designed to encourage employers to hire and

retain disabled workers by distributing much of the additional

cost of industrial injury attributable to pre-existing permanent

disabilities among all employers and carriers subject to the

Act." S. Rep. No. 97-498, at 34-35; S. Rep. No. 98-81, at 34

(same language). Thus "[t]he goals of Section 8(f) remain[ed]

valid," S.Rep.97-498, at35, aspartand parcelofthe 1984Amendments.

Ultimately fatal to BIW's position is evidence

concerning how Congress conceptualized its amendment allowing

claims for long-latent occupational diseases. Consider the

following language from the House Report:

The first change to the body which results
from exposure to a harmful physical agent or
a toxic substance often is not disabling.
Since it is the disability which should
trigger the compensation claim, the Committee
notes that unlike traumatic occurrences, the

period of time between the 'injury' and the

arising of a compensation claim in such a

long-latency occupational disease case may be
so long as to make the requirement that the
employee file a Notice of Injury within
thirty days of the 'injury' nonsensical. . .
.

To the same effect, triggering the statute
of limitations for the filing of compensation
claims on the date of 'injury' makes little
sense in the context of an occupational

disease in which the disabling condition or

the death does not follow immediately on the

"injury."

H.R. Rep. No. 98-570, at 10-11 (emphases added).

What is important here is that in crafting this

particular amendment concerning occupational disease, Congress

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conceptualized the "injury" as occurring at the time of exposure

to the causative agent, which would necessarily have to occur

during employment. At the very least, this Report language

precludes the argument that Congress was removing the

manifestation requirement in instances involving these new

occupational disease claims. Because the "injury" was conceived

as occurring during employment, 8(f) retained its regular

meaning -- applying when "an employee having an existing

permanent partial disability suffers injury." 33 U.S.C.A.

8(f)(1).

This Report language is affirmed by the amended

statutory language itself; and we must read statutes as a whole,

rather than focus on isolated phrases. Conroy v. Aniskoff, 507

U.S. 511, 515 (1993). As part of the occupational disease

amendment, there also had to be a determination made as to how to

calculate the amount of compensation paid in such cases. Because

the existing formula generally calculated compensation in

reference to "the average weekly wage . . . at the time of the

injury," 33 U.S.C.A. 910, there was concern that very long-

latent diseases would leave disabled retirees in an unfair

economic situation because wages increased over time, H.R. Rep.

No. 98-570, at 11-12. It was therefore decided that in such

instances, "the time of injury shall be deemed to be the date on

which the employee becomes aware, or . . . should have been

aware, of the relationship between the employment, the disease,

and the death or disability." 98 Stat. at 1647-48 (codified at

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33 U.S.C.A. 910(i))(emphasis added). Thus, by establishing the

time of injury at a time closer to the onset of the disabling

symptoms for purposes of wage calculation, Congress implicitly

recognized that the injury-in-fact to the physical body occurred

during the occupational exposure, but did not become disabling

until later. Although the 1984 Amendments were most certainly

designed in part to "reduce the cost of . . . coverage for

employers in the covered industries," H.R. Rep. 98-570, at 3,

quoted in Harris, 934 F.2d at 552, they did so in a multitude of

ways.10 Providing 8(f) relief to employers under facts such as

these was simply not one of them.

We point out additional authority for our ruling. Just

after the 1984 Amendments, the Department of Labor amended the

regulations interpreting the LHWCA to include, for the first

time, the manifestation requirement. 50 Fed. Reg. 401 (1985),

amended, 51 Fed. Reg. 4285 (1986)(codified at 20 C.F.R.

702.321(a) (1)(1997)). Thus, if we found that the legislative

history provided guidance less clear than it does, we would have

little trouble deferring to the Department's interpretation,

given our finding -- in Part III, supra -- that the manifestation

requirement "is based on a permissible construction of the

statute." Chevron U.S.A. Inc. v. Natural Resources Defense

Council, Inc., 467 U.S. 837, 843 (1984).

10. For example, the definition of "employee" was modified to
exclude clerical workers and others whose "work does not expose
them to traditional maritime hazards." H.R. Rep. No. 98-570, at
3; see 98 Stat. at 1639.

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The argument has also been made that, in instances such

as these, the manifestation requirement serves no useful purpose

because there is no potential for discrimination where the

employee has already retired. It is not, however, the

manifestation requirement that has an anti-discrimination

purpose, but 8(f) which has such a purpose. The requirement is

only a judicially created tool, developed in order to help

determine when the purpose of 8(f) is being served. As our

analysis demonstrates, 8(f) was designed for a very specific

reason -- to remove the discriminatory incentive created by

holding the last employer liable for the results of an

aggravating injury. The manifestation requirement ensures that

requests for 8(f) relief remain within the intended scope of

the Section. The requirement is not an additional hurdle, but

rather an integral part of 8(f). We are therefore not at

liberty to either apply or discard the requirement as different

facts are presented, especially in the absence of congressional

directive.

We do not think it is either unreasonable or unfair to

preclude access by the employer to the Special Fund under the

facts of this case. There can be little doubt that Reno was

exposed to asbestos during his working career at BIW, and BIW has

not contested that Reno's exposure to asbestos during his

employment at BIW caused his asbestosis. They are therefore

properly liable for the results of this work-related injury.

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Because they have not met their burden of establishing a right to

8(f) relief, the decision of the Board is affirmed.
affirmed.

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