Seaco Incorporated v. Strachan Shipping Co

UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

SEACO, INCORPORATED,
Petitioner,

v.
No. 98-1498
SONNY DICKERSON; STRACHAN
SHIPPING COMPANY,
Respondents.

On Petition for Review of an Order
of the Benefits Review Board.
(97-734)

Argued: March 5, 1999

Decided: August 23, 1999

Before WIDENER and NIEMEYER, Circuit Judges, and
BROADWATER, United States District Judge for the Northern
District of West Virginia, sitting by designation.

_________________________________________________________________

Affirmed in part and reversed and remanded in part by unpublished
per curiam opinion.

_________________________________________________________________

COUNSEL

ARGUED: Stephen Edward Darling, SINKLER & BOYD, P.A.,
Charleston, South Carolina, for Petitioner. Edward Paul Gibson,
RIESEN LAW FIRM, L.L.P., North Charleston, South Carolina, for
Respondents. ON BRIEF: Joseph D. Thompson, III, SINKLER &
BOYD, P.A., Charleston, South Carolina, for Petitioner.

_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

This case comes before the court on appeal from a decision of the
United States Department of Labor Benefits Review Board ("Board").
The Board affirmed the Administrative Law Judge's ("ALJ") decision
granting relief to Sonny Dickerson ("claimant") under the Longshore
and Harbor Workers' Compensation Act, 33 U.S.C.§ 901 et seq.
("Act"). We find that the Board's decision should be affirmed in part
and reversed and remanded in part.

The case originated as two separate claims for compensation bene-
fits under the Act, arising out of (1) an accident that occurred on April
26, 1992 while the claimant was working for Seaco Incorporated
("Seaco") and (2) an accident that occurred one year later on April 27,
1993 while the claimant was employed by Strachan Shipping Com-
pany ("Strachan").

Following a formal hearing on October 17, 1995, the ALJ issued
a Decision and Order dated January 6, 1997. The ALJ also submitted
a Supplemental Decision and Order Awarding Attorney Fees dated
March 13, 1997.

Seaco appealed the ALJ's decisions to the Board pursuant to 33
U.S.C. § 921(b). Both of the ALJ's decisions were affirmed by a
Decision and Order of the Board dated February 18, 1998.

Seaco petitioned this court for review of the Decision and Order of
the Board. This court is vested with subject matter and appellate juris-
diction pursuant to 33 U.S.C. § 921 and Rules 4(a) and 15(a) of the
Federal Rules of Appellate Procedure.

On appeal, Seaco raises several issues. Inasmuch as the issues
overlap, we will address them as follows: (1) whether the Board prop-

2
erly affirmed the ALJ's conclusion that the claimant was permanently
and totally disabled; (2) whether the Board properly affirmed the
ALJ's conclusion that the employer was not entitled to a credit for
special payments received by the claimant during his period of tempo-
rary disability; and (3) whether the Board properly affirmed the ALJ's
decision and order awarding the claimant attorney's fees.

I.

In 1975, the claimant began working on the waterfront in Charles-
ton, South Carolina. While working on the waterfront, the claimant
performed numerous longshore jobs including top man, hustler driver,
lift driver, tie on man, and latching. Prior to April 26, 1992, he was
without any physical restrictions and was fit for full duty as a long-
shoreman. As well, claimant had at most an eighth grade education.

At some point before the claimant's initial injury, he was a member
of a work gang which was permanently assigned to work for Stra-
chan. On April 26, 1992, the claimant was able to"catch" work with
Seaco because his gang had not been called to work for Strachan.1 On
that day, the claimant slipped and fell a distance of seven to eight feet
to the deck of a vessel. He landed on his back hitting the top of a turn-
buckle on the deck.

On the evening after the fall, the claimant went to a local emer-
gency room where he was treated by Dr. Weissglass. After initial
treatment, the claimant contacted Dr. Feller, his family physician.
While continually providing treatment to the claimant, Dr. Feller
referred him to Dr. Khoury, a neurosurgeon. Dr. Khoury initially
diagnosed chronic back strain and scheduled the claimant for three
weeks of physical therapy. Serial axial scans showed bulging at L3-
4 and L4-5, with central disc bulging/protrusion at L5-S1. On June
24, 1992, Dr. Khoury performed a lumbar spine CT scan and myelo-
gram. The final impression from these tests was central disc bulging
at L3-L4 and L4-L5, coupled with hypertrophy of the ligamentum
flava and mild concentric narrowing of the spinal canals. There were
_________________________________________________________________
1 On the Charleston waterfront, if a gang is not called to work, the long-
shoremen can "catch" with other gangs who need help.

3
no signs of asymmetric or foraminal impingement nor any significant
bony abnormalities in the lumbosacral spine.

In September of 1992, Seaco sent the claimant to Dr. Poletti for an
examination. Dr. Poletti diagnosed the claimant as having low back
pain with left leg pain and numbness. Dr. Poletti prescribed physical
therapy and functional rehabilitation with Dr. Warren. This treatment
provided positive results.

Seaco voluntarily paid the claimant temporary total disability bene-
fits at a rate of $699.96 per week beginning in April 1992. On
November 12, 1992, the claimant returned to work. He quickly expe-
rienced leg and back pain. He then returned to Dr. Warren for work
rehabilitation. During this period, Seaco voluntarily paid the claimant
temporary total disability benefits in the same amount.

On March 24, 1993, the claimant once again returned to work. On
April 27, 1993, the claimant caught work with a gang working for
Strachan. On that day, he fell about seven feet into the hold of a ship.
The claimant contended that he was having pain including numbness
of the right leg prior to the fall. Further, the claimant testified that his
back felt about the same after the fall.

After this second fall, the claimant went to a local emergency room
for treatment. He was diagnosed as having mild deformity of the dis-
tal tibia, with probable degenerative change and post-traumatic reac-
tion.

On May 3, 1993, the claimant was treated by an orthopaedic sur-
geon named Dr. Wagner. In his final report date May 25, 1993, Dr.
Wagner diagnosed the claimant as having chronic low back pain. Dr.
Wagner also opined that the claimant was totally and permanently
disabled.

The claimant was next examined by Dr. Schimenti, a consultant in
neurology and medical disability assessment. After a review of the
claimant's medical records, Dr. Schimenti opined that the claimant
was physically unable to return to his former employment as a long-
shoreman.

4
On August 3, 1993, by way of an OWCP-5 Work Restriction Eval-
uation Form, Dr. Poletti opined that the claimant reached maximum
medical improvement on July 13, 1993. He also indicated that the
claimant would need further vocational rehabilitation to return to
work. Dr. Poletti also placed the following restrictions on the claim-
ant's activities: lift restriction between 20 and 50 pounds; no pushing;
no pulling; no twisting; and only intermittent sitting, walking, lifting,
bending, squatting, climbing, or kneeling.

Benjamin Flowers, President of the Local 1422 of the International
Longshoreman's Association ("ILA"), testified by deposition in this
case. His testimony concerned exemptions under ILA Local 1422
work rule number 10.2 He stated that the exemption is only temporary
and is only given under special circumstances. Further, Flowers testi-
fied that there is no light duty on the waterfront for a full time long-
shoreman.

Jean Hutchinson testified on behalf of the claimant as a vocational
rehabilitation expert regarding the claimant's employability following
his injuries. Based on a physical examination and review of the claim-
ant's history, Hutchinson determined that he had an IQ of 68, was
functionally illiterate, and had very low math skills. Using these
determinations along with the claimant's physical limitations, Hutch-
inson opined that, to a reasonable degree of vocational certainty, the
claimant was physically unable to work as a longshoreman and unem-
ployable in the open job market.

Lee Woodward, who was originally retained by the carriers for the
employers, also testified as a vocational rehabilitation expert. She
_________________________________________________________________
2 ILA Local 1422 work rule number 10 provides:

(10) OLDER MEN AND MEMBERS WITH PHYSICAL AND
MEDICAL PROBLEMS CAN BE EXEMPT FROM SPECIFIC
TYPES OF WORK, PROVIDED HOWEVER, THAT SUCH
EXEMPTION CONTINUES UNTIL SUCH TIME HE LETS
THE UNION KNOW THAT HE IS ABLE TO RETURN TO
THE FULL RANGE OF WORK. Any member who is given an
exemption and is caught working at a job he has been exempted
from will pay a penalty of 30 days suspension of seniority pref-
erence and lose his exempted status.

5
opined that the claimant was employable in the Charleston, South
Carolina area based on his education, experience, and physical restric-
tions. Woodward identified numerous jobs in which the claimant
could pursue.

Lynn McCain, another vocational rehabilitation expert, testified on
behalf of Seaco. McCain was hired by Seaco to conduct a job market
survey for the claimant. McCain reviewed the records but never per-
sonally interviewed the claimant. Based on the job market surveys
and the approval from Dr. Warren, she stated that the claimant was
employable in the Charleston labor market.

Nancy Favaloro, a vocational rehabilitation specialist, also testified
in this matter. Strachan hired Favaloro to perform a vocational inter-
view of the claimant and prepare a labor market survey to determine
his employability. To a reasonable degree of professional certainty,
she testified that the claimant could compete for and perform jobs on
the Charleston waterfront. However, Favaloro conceded that the
claimant could only perform some tasks of a longshoreman. She also
identified numerous other land-based jobs that the claimant would be
fit to perform.

The ALJ in this case issued a ruling in favor of the claimant. In the
ALJ's Decision and Order, dated January 6, 1997, all of the above
referenced testimony was considered in great detail. Over a span of
thirty-one pages of single-spaced text, the ALJ addressed the testi-
mony of each medical and vocational witness and stated findings
based upon this testimony. Furthermore, the ALJ stated numerous
reasons for her decisions based upon her evaluation of the reliability
and credibility of witnesses.

II.

The ALJ's decision regarding disability will be upheld if it is sup-
ported by substantial evidence in the record considered as a whole.
Newport News Shipbuilding & Dry Dock Co. v. Tann, 841 F.2d 540,
542 (4th Cir. 1988) (citing 33 U.S.C. § 921(b)(3) (1983)). Substantial
evidence is more than a scintilla but less that a preponderance. See
See v. Washington Metropolitan Area Transit Authority, 36 F.3d 375,
380 (4th Cir. 1994). Further, substantial evidence is such that a rea-

6
sonable mind might accept as adequate to support a conclusion. See
id. at 380.

"On review, the ALJ's findings may not be disregarded on the basis
that other inferences might have been more reasonable." Tann, 841
F.2d at 543. Furthermore, review of the ALJ's inferences and credi-
bility assessments are limited in scope. Id. at 543 (see also Newport
News Shipbuilding & Dry Dock Co. v. Director, Office of Workers'
Compensation Programs, 681 F.2d 938, 941 (4th Cir. 1982)). The
Board may not reweigh the evidence or interfere with an ALJ's deter-
minations of credibility unless it is inherently incredible or patently
unreasonable. Santoro v. Maher Terminals, Inc. , 30 B.R.B.S. 171
(1996).

A.

Seaco argues that the Board erred in affirming the ALJ's conclu-
sion that the claimant was permanently and totally disabled. We find
no merit to this argument.

In general, disability claims are governed by a three tiered stan-
dard. Initially, the employee carries the burden of showing inability
to return to former employment. Newport News Shipbuilding & Dry
Dock Co. v. Tann, 841 F.2d 540, 542 (4th Cir. 1988). Next, the
employer carries the burden of showing availability of suitable alter-
nate employment if diligently sought by the claimant. Id. at 542.
Finally, if the employer carries its burden, the claimant may still
establish disability by showing diligent and unsuccessful attempts to
secure employment. Id. at 542.

Based upon the law controlling determination of disabilities and
our review of the ALJ's findings, we find substantial evidence to sup-
port the claimant's award of total disability.

The ALJ found that the claimant proved by a preponderance of the
evidence that he was disabled from returning to his prior employment
as a longshoreman. She found that Dr. Poletti's opinion as to the
claimant's physical disability and capabilities most probative of the
testimony, since he was the claimant's primary treating orthopaedic

7
surgeon who evaluated his physical limitations in detail over a sub-
stantial period of time. The ALJ also found that Dr. Schimenti's opin-
ion was consistent with Dr. Poletti's. Based upon this testimony, the
ALJ found that the claimant's back injury resulted in permanent
impairment, consisting of bulging discs and chronic back and leg
pain. Also, the ALJ found that the claimant had a six to eight percent
whole body impairment rating and that he was precluded from re-
entry into the heavy labor force as a result of this back condition. Fur-
ther, the ALJ found that the claimant had numerous physical limitations.3

Based upon the testimony of Benjamin Flowers, President of the
ILA Local 1422, the ALJ concluded that longshore work on the
Charleston, South Carolina waterfront did not offer permanent assign-
ment to specific jobs requiring sedentary, light, or medium duty work.
The ALJ found that any light work situations would be for temporary
periods only. Further, the ALJ found that this testimony was consis-
tent with the following: first, the claimant's understanding that he had
to be one hundred percent physically fit to return to work on the
waterfront; second, Dr. Poletti's statement that there was no "good
option" for longshoremen "as far as light duty status;" third, Dr. Wag-
ner's understanding from his years of practice that longshoremen had
to be able to do all the jobs on the waterfront; and fourth, vocational
expert Woodward's understanding that "technically" speaking there
was no light duty on the waterfront.

Next, the ALJ concluded that the employers failed to meet their
burden of proof to show suitable alternate employment for the claim-
ant. Several vocational experts testified before the ALJ. The ALJ
reviewed and analyzed in detail the testimony of Ms. Hutchinson, Ms.
Woodward, Ms. McCain, and Ms. Favaloro in her Decision and
Order. Among this evidence, the ALJ gave much deference to the
opinion of Ms. Hutchinson. Ms. Hutchinson opined that the claimant
_________________________________________________________________
3 These limitations were as follows: no pushing, pulling, or twisting;
intermittent squatting, climbing, kneeling for no more than three hours
per day; intermittent crawling; continuous standing for no more than
fours hours per day; intermittent sitting for no more than six hours per
day; intermittent walking, lifting and bending for no more than four
hours per day; driving a motor vehicle for no more than one to three
hours per day; and lifting no more than 20 to 50 pounds. J.A. at 109.

8
was unemployable and that job placement, occupational retraining,
and vocational rehabilitation services were precluded. This was due
to his illiteracy, low level of intelligence, work experience in an area
in which he could no longer compete, inability to progress to jobs in
which he had transferable skills, significant physical limitations, and
ongoing pain. Furthermore, the ALJ specifically discredited much of
the testimony of the other vocational experts. She found their various
opinions to present limited probative value.

In light of the foregoing, we conclude that the ALJ's findings were
based upon substantial evidence in the record considered as a whole.
The claimant carried the burden of showing inability to return to his
former employment, and the employers did not meet the burden of
showing available suitable employment. Therefore, we affirm the
ALJ's conclusion that the claimant was permanently and totally dis-
abled.

B.

Seaco also argues that the Board erred in affirming the ALJ's con-
clusion that the employer was not entitled to a credit for special pay-
ments received by the claimant during his period of temporary
disability. The special payments were of two different types: vaca-
tion/holiday payments and container royalty payments.4
_________________________________________________________________
4 Containers are large metal boxes created to hold numerous amounts
of cargo. The containers can be carried on ships, railcars, and special
trucks.

Before containerization, cargo was loaded onto ships piece by piece.
Container technology drastically reduced the need for longshoremen,
since the cargo could be loaded and unloaded quickly with less man
power.

In general, container royalties are paid by employers into a trust to
supplement longshoremen's incomes. The royalties are paid to the trust
on a "per container" basis. The trustees dictate how the royalty payments
are dispersed to the employees.

Historically, employees who work 700 hours in one year are entitled
to container royalty payments. Further, a disabled employee can earn
hours for credit towards container royalty payments for each day that
worker receives compensation benefits. See Universal Maritime Service
Corp. v. Wright, 155 F.3d 311, 317 (4th Cir. 1998).

9
The heart of this issue is whether the special payments received by
the claimant constitute wages under the Act. See Universal Maritime
Service Corp. v. Wright, 155 F.3d 311, 317 (4th Cir. 1998). Vacation,
holiday, and container royalty payments are wages under the Act if
they are earned through work but not if they are earned with disability
credit. Id. at 328. Therefore, if the claimant received wages after his
injury, Seaco is entitled to a credit against future compensation to the
extent that the claimant received payments from the fund despite any
disability.

As to the vacation/holiday payments, we find that the Board prop-
erly affirmed the ALJ's finding that Seaco failed to sufficiently
develop the record on this issue. Santoro v. Maher Terminal, Inc., 30
B.R.B.S. 171 (1996). Although, in its brief, Seaco makes a blanket
statement that such evidence exists, there is no reference to the
record. A review of the record, as done by the Board in its decision,
unequivocally reveals that it does not contain any evidence that the
claimant received vacation/holiday payments during his period of dis-
ability. Therefore, Seaco is not entitled to a credit for vacation and
holiday payments received by the claimant.

As to the container royalty payments, we find that the Board prop-
erly affirmed the ALJ's determination that Seaco was not entitled to
payments received by the claimant for container royalties. The perti-
nent evidence revealed that the claimant received $11,858.44 in con-
tainer royalty payments in 1993. However, this amount represents
payment for hours actually earned pre-injury in 1992, pursuant to the
union contract. "If wages are earned before but received after an
injury, they are only a `measure of pre-injury earning capacity not of
postinjury earning capacity.'" Wright, 155 F.3d at 329 (citing Eagle
Marine Servs. v. Director, OWCP, 115 F.3d 735, 737 (9th Cir.
1997)). Therefore, they cannot fairly and reasonably represent a wage
earning capacity under the Act. Id. at 329. Thus, the claimant's
receipt of container royalty payments for work done in 1992 consti-
tutes only pre-injury earnings. This fact, coupled with the lack of evi-
dence regarding any further container royalty payments, compels us
to find that the employer is not entitled to a credit for container roy-
alty payments received by the claimant.

10
In sum, the Board properly upheld the ALJ'S findings as well
founded, rational, supported by substantial evidence, and in accor-
dance with law.

C.

The petitioner argues that the Board erred in affirming the ALJ's
decision and order awarding the claimant attorney's fees. The ALJ
awarded the claimant attorney's fees at an hourly rate of $300.00 per
hour for the services of E. Paul Gibson. We find this rate excessive.

In the Supplemental Decision and Order Awarding Attorney Fees,
the ALJ found the amount of $28,774.55 owed to claimant's counsel
in fees and costs. The award was based on the hourly rate set forth
above. Also, the ALJ approved lower hourly rates for the services of
an associate attorney and for the services of two paralegals.

Our review of the Board's decision is limited in scope. An agen-
cy's interpretation of its own regulations is entitled to substantial def-
erence from the Courts. See Stinson v. United States, 508 U.S. 36, 45
(1993); United States v. Boynton, 63 F.3d 337, 342 (4th Cir. 1995).

The applicable regulation, 20 C.F.R. § 702.132(a) provides that any
fee approved must be "reasonably commensurate with the necessary
work done and shall take into account the quality of the representa-
tion, the complexity of the legal issues involved, and the amount of
benefits awarded ...." Furthermore, it is well established that a fee
award should be consistent with those charged in the geographical
area involved in the claim. Morris v. California Stevedore and Ballast
Company, 10 B.R.B.S. 375 (1979); Thompson v. McDonnell Douglas
Corporation, 17 B.R.B.S. 6 (1984); Parrot v. Seattle Joint Port Labor
Relations Committee of the Pacific Maritime Association, 22 B.R.B.S.
434 (1989).

We find the rate of $300.00 per hour for the services of Mr. Gibson
to be excessive. We come to this decision after taking into account the
relatively non-complex nature of the claims and the claimant's failure
to provide precedent of the Board awarding a $300.00 per hour fee.
The Fourth Circuit has recently approved attorney's fees of $195.00

11
per hour in this type of case. Mitchell v. Clark Maryland Terminals,
No. 97-1887, 1998 WL 406860 (4th Cir. July 15, 1998) (unpub-
lished). Therefore, we find that the hourly fees awarded by the ALJ
in this case excessive and not commensurate with the rate the Board
has previously awarded in the geographic region in similar cases.
With respect to the fees awarded for associate and paralegal services,
we find the ALJ's decision supported by evidence and will leave this
undisturbed.

Also, Seaco argues that the ALJ approved the fee petition without
a review of the time record. More specifically, Seaco points to dupli-
cation of efforts, clerical tasks, and costs as unsupported charges. The
ALJ addressed these concerns in the supplemental order. We find that
the awards were properly addressed and within the discretion of the
ALJ to grant to the claimant.

Finally, Seaco argues that the ALJ's award of fees was premature.
We find no merit to this argument. A fee award is within the ALJ's
power while an appeal is pending. However, the award is not enforce-
able until the compensation order becomes final. See Lewis v. Bethle-
hem Steel Corp., 19 B.R.B.S. 90 (1986). Therefore, the ALJ's fee
award was not premature.

III.

In conclusion, we hold that, with respect to the question of total
disability and Seaco's credits for claimant receiving special payments,
the ALJ's findings are supported by substantial evidence in the record
considered as a whole and must be affirmed. However, with respect
to the ALJ's findings in regard to attorney's fees, we hold that the
matter should be reversed and remanded for further hearing regarding
an hourly fee which is commensurate with the rate the Board has pre-
viously awarded in the geographical region in similar cases. In all
other regards, the ALJ's fee award shall be affirmed.

AFFIRMED IN PART AND REVERSED
AND REMANDED IN PART

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