United States Court of Appeals
For the First Circuit
No. 00-1208
BATH IRON WORKS CORPORATION,
Petitioner,
v.
DIRECTOR, OFFICE OF WORKERS COMPENSATION PROGRAMS,
UNITED STATES DEPARTMENT OF LABOR,
Respondent.
____________________
DONALD E. HUTCHINS,
Intervenor.
ON PETITION FOR REVIEW OF A DECISION
OF THE BENEFITS REVIEW BOARD
Before
Selya, Circuit Judge,
Coffin and Campbell, Senior Circuit Judges.
Stephen Hessert for petitioner.
G. William Higbee, with whom James G. Fongemie was on brief,
for intervenor.
Richard F. van Antwerp, with whom Thomas R. Kelley was on
brief, for Birmingham Fire Insurance Company.
April 5, 2001
COFFIN, Senior Circuit Judge. Donald Hutchins, an employee
for Bath Iron Works (BIW), was awarded medical benefits in 1991
because of a work-related injury stemming from exposure to
asbestos dust and other pulmonary irritants. Birmingham Fire
Insurance Company (Birmingham) was ruled to be the responsible
carrier. Four years later, Hutchins sought and obtained full
disability benefits. At that time, an Administrative Law Judge
(ALJ) found that Hutchins had been exposed to additional
irritants while BIW was self-insured and therefore shifted
responsibility for his payments to BIW. The Benefits Review
Board of the Department of Labor (the Board) upheld the
decision. The company challenges that ruling, arguing, inter
alia, that the ALJ exceeded the scope of his authority in re-
assigning the liability and that the record fails to support a
finding of new toxic exposure. We affirm the Board's decision.
I. Background
Hutchins worked as a pipefitter for BIW from 1964 until
1988, when he transferred to the company's planning office
because of breathing problems. 1 He filed a claim under the
Longshore and Harbor Workers' Compensation Act (LHWCA), 33
U.S.C. §§ 901-950, alleging a gradual injury resulting from
1 Although there is some discrepancy in the record as to the
actual date of this transfer, the date is not crucial to our
analysis and we therefore need not dwell on its accuracy.
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continuing exposure to asbestos and other toxic chemicals.
After proceedings before an ALJ and appeals to the Board, he was
found to have multiple, work-related lung diseases and was
awarded medical benefits. Although BIW had become self-insured
just after Hutchins' transfer to the planning department in
1988, there was no evidence presented during the original
proceedings that he was exposed to harmful stimuli in his new
position. As a result, Birmingham, which had insured BIW during
the most recent period of harmful exposure, was assigned full
responsibility for Hutchins' payments. See Liberty Mut. Ins.
Co. v. Commercial Union Ins. Co., 978 F.2d 750, 751 (lst Cir.
1992)(liability for the effects of an occupational disease falls
upon the "last responsible insurer").
Hutchins' health continued to deteriorate, forcing his
retirement in May 1995. Shortly thereafter, he filed a claim
seeking modification of the earlier benefits award to include
disability payments in addition to medical benefits. See 33
U.S.C. § 922 (providing for modification). Based on a
deposition of Hutchins taken in September 1995, Birmingham took
the position that Hutchins had continued to be exposed to
airborne irritants at BIW after he moved to the planning
department and that this exposure triggered the disability.
Birmingham contended that BIW, now self-insured, should inherit
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the responsibility for Hutchins' compensation as the last
responsible insurer.
Birmingham focused in particular on an incident that
occurred near the planning office blueprint room on March 15,
1995. According to Hutchins, as he passed by the room, he
inhaled a substance that nearly caused him to pass out and
required him to receive oxygen. He filled out a company
"statement of injury," and was out of work for about two weeks
following the episode. Hutchins also testified that he
experienced breathing problems in early 1995 because of "a
problem . . . with the air conditioning" that caused exhaust
fumes to come into his work area.
BIW argued, however, that the earlier ALJ decision
conclusively established that Hutchins was last exposed to
toxins during Birmingham's period of coverage. It pointed out
that Hutchins did not assert a new injury in his request for
increased benefits, but simply requested additional compensation
based on the change in his condition to total disability.
Moreover, BIW asserted that the medical reports in the record
failed to support an aggravation or new injury that would
warrant a change in liability. The company maintained that
Hutchins' disability resulted from a natural progression of his
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previously diagnosed lung diseases and that responsibility for
compensating him should remain with Birmingham.
The ALJ – not the same one who had presided over the earlier
proceedings – sided with Birmingham, finding that Hutchins had
experienced additional exposure to "injurious pulmonary stimuli
at the shipyard up to and including at least that acute
exacerbation on March 15, 1995," when BIW was self-insured.
Accordingly, the judge modified the original ruling by awarding
Hutchins permanent total disability benefits and shifting
responsibility for payments to BIW. The Board affirmed, and
this appeal followed. BIW continues to assert both procedural
and substantive challenges to the ruling.
Our review of the Board's decision is limited to legal
issues, including the question of "whether the Board adhered to
the 'substantial evidence' standard when it reviewed the ALJ's
factual findings." Bath Iron Works v. Brown, 194 F.3d 1, 3 (lst
Cir. 1999); Bath Iron Works v. White, 584 F.2d 569, 573-74 (lst
Cir. 1978).
II. Procedural Issues
Hutchins initiated the second, disability, phase of his
LHWCA case by filing a claim for compensation in August 1995.
In it, he identified the "date of injury" as May 19, 1988, the
date established in the first proceeding by the ALJ who awarded
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Hutchins medical benefits. BIW maintains that, because no new
injury was alleged, the only question before the ALJ was whether
the earlier award should be modified upward to compensate
Hutchins for the change in his condition to total disability.
In the company's view, there was no basis for reconsidering the
previous judgment that Birmingham was the insurer responsible
for Hutchins' benefits. BIW argues (1) that the company was
unfairly ambushed by the unexpected scope of the proceedings,
(2) that the ALJ lacked authority to re-allocate responsibility,
and (3) that the ALJ applied an incorrect legal standard in
determining liability. We find the company's arguments
unpersuasive on each of these issues.
Notice. We previously have taken a pragmatic view of notice
requirements under the LHWCA in light of the "liberal
construction" enjoyed by the statute. See Bath Iron Works v.
Director (Jones), 193 F.3d 27, 31 (lst Cir. 1999). In Jones, we
deemed inconsequential the lack of a new injury claim under §
913 of the LHWCA where the employee's letter seeking
modification of benefits and the modification proceedings
themselves provided timely notice that he was asserting a new
injury claim. Id.2
2We noted that Jones' request for an increased benefit
necessarily meant that he was asserting either a new injury or
aggravation of his prior injury. 193 F.3d at 31.
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Similarly here, BIW knew the salient facts from early on:
that Hutchins had completed a "statement of injury" form
following the March 15, 1995 print room episode and that
Birmingham sought to cast off responsibility for Hutchins'
payments based on new harmful exposures while BIW was self-
insured.3 The only significant gap was that BIW had no notice
of, and did not participate in, Hutchins' deposition in the
fall of 1995. Any disadvantage was subsequently remedied,
however, when BIW received a transcript of the deposition and
was able to cross-examine Hutchins at the hearing before the
ALJ. Indeed, the ALJ expressed a willingness to offer
additional access to Hutchins before closing the record if BIW
argued that it was necessary. In these circumstances, we see no
unfairness in the ALJ's and Board's consideration of whether
liability for Hutchins' payments should shift to BIW.
Scope of Authority. BIW maintains that, even if the company
received adequate notice, the ALJ lacked the authority to re-
assign liability for Hutchins' benefits in a § 22 modification
proceeding, see 33 U.S.C. § 922, whose purpose it asserts is
limited to exploring whether an employee's compensation should
3
The memorandum of the Informal Conference held on December
12, 1996, nearly a year before the administrative hearing,
states that the parties could not agree on the issue of
"responsible carrier." BIW and Birmingham were both represented
at the conference.
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be changed to reflect changes in his health or other
circumstances. The company argues that, pursuant to principles
of res judicata, the ALJ was bound by the prior administrative
determination that Birmingham was the responsible carrier. Our
Jones case, 193 F.3d at 29-31, dispenses with this assertion as
well. There, as here, the ALJ confronted a claim of new injury
in a modification proceeding, such injury was found, and the
responsible carrier consequently changed from an insurance
company to BIW as a self-insured employer. Id.
That decision was not aberrational. It is well established
that traditional notions of res judicata do not govern § 22
modification proceedings, which may be brought whenever
"'changed conditions or a mistake in a determination of fact
makes such modification desirable in order to render justice
under the act,'" O'Keeffe v. Aerojet-General Shipyards, Inc.,
404 U.S. 254, 255 (1971) (per curiam) (quoting S. Rep. No. 588,
73d Cong., 2d Sess., 3-4 (1934); H.R. Rep. No. 1244, 73d Cong.,
2d Sess., 4 (1934)); see also Banks v. Chicago Grain Trimmers
Ass'n, 390 U.S. 459, 465 (1968); Jessee v. Director, OWCP, 5
F.3d 723, 725 (4th Cir. 1993) ("[T]he 'principle of finality'
just does not apply to Longshore Act . . . claims as it does in
ordinary lawsuits."). The ALJ in considering the record of
Hutchins' medical and employment history thus had broad
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discretion to revisit issues already decided and, if
appropriate, "to correct mistakes of fact, whether demonstrated
by wholly new evidence, cumulative evidence, or merely further
reflection on the evidence initially submitted." O'Keeffe, 404
U.S. at 256. As the Board concluded:
Given the broad scope of modification proceedings, the
administrative law judge made no error in considering
all issues related to the cause, nature, and extent of
claimant's disability, which claimant asserted was the
result of a change in claimant's condition. His
authority under Section 22 necessarily includes
determining which entity should be held liable for
claimant's disability.
Board Opinion at 4.4
Standard of Liability. BIW also argues that, in shifting
responsibility from Birmingham to BIW for Hutchins' benefits,
the ALJ and Board misapplied the law governing the allocation of
liability in occupational disease cases. A brief review of the
relevant principles is a necessary prerequisite to our
discussion of BIW's contentions.
4 BIW's attempt to characterize the modification proceeding
as a back door route to retrying the case is off the mark.
Judge DiNardi, the second ALJ, relied heavily on relevant new
evidence that had not been available at the original hearing
because it concerned Hutchins' medical condition and work
environment in the years since that hearing. Cf. General
Dynamics Corp. v. Director, OWCP, 673 F.2d 23, 26 (lst Cir.
1982) (rejecting employer's request to re-open proceedings to
litigate a claim it failed to raise earlier because of a legal
misjudgment).
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The seminal case addressing the assignment of responsibility
among several potentially liable employers and insurance
carriers is the Second Circuit's Travelers Insurance Co. v.
Cardillo, 225 F.2d 137 (2d Cir. 1955). The Cardillo rule states
that
the employer during the last employment in which the
claimant was exposed to injurious stimuli, prior to
the date upon which the claimant became aware of the
fact that he was suffering from an occupational
disease arising naturally out of his employment,
should be liable for the full amount of the award . .
. and . . . the carrier who last insured the "liable"
employer during claimant's tenure of employment, prior
to the date claimant became aware of the fact that he
was suffering from an occupational disease arising
naturally out of his employment, should be held
responsible . . . .
Id. at 145. We have adopted a modified version of this "last
injurious exposure" and "last insurer" rule, holding that the
date of disability, rather than the date of awareness of
disease, is the key to determining the responsible insurer.
Liberty Mut., 978 F.2d at 756.5
The importance of the onset of disability also is reflected
in provisions of the LHWCA. Before 1984, an employee's
awareness of a relationship between "the injury or death," on
the one hand, and the employment, on the other hand, started the
5
Technically, we adopted in Liberty Mutual a revised
version only of Cardillo's last responsible insurer rule because
— as here — the parties did not dispute that BIW was the liable
employer. 978 F.2d at 754 n.4.
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running of the 30-day statutory period for filing claim notices,
and claims had to be filed within a year after awareness of "the
relationship between the injury or death and the employment."
Id. at 754; 33 U.S.C. §§ 912(a), 913(a). Under amendments
adopted in 1984, the triggering date for claims for compensation
for occupational disease now is the time when "the employee or
claimant becomes aware . . . of the relationship between the
employment, the disease, and the death or disability." 33
U.S.C. §§ 910(i); 912(a); 913(b)(2). We previously have
observed that this change meant "that Congress identified onset
of disability – not occurrence of an injury or awareness of an
occupational disease – as the critical factor in filing LHWCA
claims." Liberty Mut., 978 F.2d at 754 & n.5.
One other principle is at play. Under the so-called "two
injury" or "aggravation rule," when an employment injury
aggravates, accelerates, or combines with a pre-existing
condition to result in a disability, the entire resulting
disability is compensable by the insurer liable for the "new" or
"aggravating" injury. Foundation Constructors, Inc. v.
Director, 950 F.2d 621, 624 (9th Cir. 1991); see also Jones, 193
F.3d at 30-31. If, however, the disability resulted from the
natural progression of the prior injury and would have occurred
notwithstanding the subsequent injury, then the prior employer
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(and its insurer) are responsible. Foundation Constructors, 950
F.2d at 624. This rule is really nothing more than a variation
of the last employer rule, and is similarly "designed to
determine whether a subsequent employer bore all the liability
for disabilities caused by more than one employer," Id. at 623.
Although there is some question whether the aggravation rule
applies to occupational disease cases, compare id. at 623-24
(opining that it does not), with Jones, 193 F.3d at 31 (assuming
applicability of aggravation rule to occupational injury), it
often would be superseded in such cases in any event. Under the
"last injurious exposure rule," any exposure to harmful stimuli
during an insurer's coverage period will lead to liability if
the employee becomes disabled during that period by an exposure-
caused injury, even if the most recent exposure was not the
primary or triggering cause for the disability. See Cardillo,
225 F.2d at 145. Thus, unlike the typical two-
injury/aggravation case, in an occupational disease case like
this one involving environmental irritants, the insurer on the
risk at the time a new injury triggers disability may not defend
against liability by arguing that exposures occurring before its
coverage period inevitably would have led to the disability.6
6
As we discuss below, the "last injurious exposure rule" is
triggered by the onset of disability. Use of the aggravation
rule in the occupational disease setting could make a difference
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BIW asserts that the ALJ erred in applying the aggravation
rule in this case to find that continuing exposures resulted in
a new, compensable injury for which BIW was responsible. It
takes the view that, in occupational disease cases, only the
"last injurious exposure" rule is applicable, and that once a
"last carrier" has been designated as responsible – as
Birmingham had been in the earlier proceeding – subsequent
exposures are irrelevant in determining liability. BIW insists
that, "by definition, there cannot be another 'last' employer"
(and accompanying last carrier). Brief at 14 (emphasis in
original).
Even if BIW were correct about the inapplicability of the
aggravation rule, its argument would be flawed by the assumption
that the original ALJ's decision provided a final resolution to
the "last carrier" question. As we have discussed, the
responsible insurer is the one covering the risk at the last
time the employee was exposed to harmful stimuli "prior to the
date the claimant became disabled" by his employment-related
occupational disease. Liberty Mut., 978 F.2d at 756 (emphasis
when a first injury results in a finding of partial disability
and an employee later seeks total disability benefits based on
new exposures. Such were the circumstances in Jones. See 193
F.3d at 29 (first ALJ awarded permanent partial disability
benefits based on asbestosis and second ALJ found new,
aggravating injury from poor ventilation).
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added). The first ALJ's ruling addressed Hutchins' claim that
he had experienced an occupational injury and was entitled to
medical benefits; Hutchins continued to work until 1995, when he
first sought compensation for disability. Because disability is
"the critical factor" in assigning carrier liability, id., the
"last carrier" for purposes of disability payments may not be
the same "last carrier" responsible for medical benefits. Id.
at 753 n.3; 754-55 & n.6. Thus, if Hutchins continued to be
exposed to harmful airborne substances after BIW became self-
insured, and if his lung condition became disabling during that
time period, the "last carrier" rule would impose liability on
BIW.
The timing of Hutchins' disability was addressed in the
administrative proceedings only in the context of the employer's
eligibility for relief under § 8 of the LHWCA, 33 U.S.C. §
908(f), which limits an employer's liability for disability
benefits to 104 weeks in certain "second injury" cases.7 The ALJ
ruled that BIW qualified for such relief, finding, inter alia,
that Hutchins' earlier exposures "resulted in a permanent
partial disability and loss of pulmonary function in 1984 and
7
Benefits beyond 104 weeks are paid by a special fund,
rather than the employer, when the employee's total disability
is traceable in part to a prior injury that had caused a
permanent partial disability. 33 U.S.C. § 908(f).
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1988." That finding, however, does not determine the date of
disability for purposes of the last carrier rule. In Liberty
Mutual, we held that the date of disability fixing liability
among successive insurers under the LHWCA is "the date of
decreased earning capacity," 978 F.2d at 759; see also 33
U.S.C. § 902(10) (defining disablement under the LHWCA, in part,
as the "incapacity because of injury to earn the wages which the
employee was receiving at the time of injury in the same or any
other employment"). Although BIW now argues that Hutchins'
transfer from pipefitting work to the planning department is
evidence of diminished earning capacity, there is no support for
such an inference in the record. To the contrary, the Board
explicitly noted in its decision that Hutchins had filed his
request for modified benefits "based on a change in his
condition from having no loss in wage-earning capacity based on
a suitable job in the planning office to permanent total
disability based on his inability to continue performing this
job." Board Opinion at 4. Cf. White, 584 F.2d at 572 (employee
transferred from job as skilled pipecoverer to unskilled
position in machine shop).
In these circumstances, the inquiry required under the
"aggravation" approach for assigning carrier liability would be
superfluous. Because Hutchins' lung condition did not become
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disabling for purposes of carrier liability until 1995, while
BIW was self-insured, the shift in liability to BIW turns not on
whether any harmful exposures during its coverage period
amounted to a new or aggravating injury, but only on whether any
such exposures occurred at all. If so, BIW would be responsible
as the carrier on the risk during the last period of injurious
exposure before Hutchins became disabled by lung disease.
We thus turn to the question of whether the record supports
the administrative findings that such exposures did occur. See
White, 584 F.2d at 573 ("[I]f supported by the evidence, the
inferences drawn by the administrative law judge are
conclusive.").
III. Evidence of Continuing, Harmful Exposure
The question at the heart of this case is whether Hutchins
continued to be exposed to harmful inhalants after being
assigned to the planning office. The ALJ found that he had,
pointing in particular to the reported episode near the
blueprint room on March 15, 1995, and also crediting Hutchins'
testimony that "bad air" permeated his work area in early 1995
because of a problem with the ventilation system. The Board
described the ALJ's conclusions as follows:
Given claimant's testimony describing additional
exposure and the medical evidence depicting a highly
symptomatic condition affected by additional exposure,
the administrative law judge stated that he "simply
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cannot accept" employer's assertion that claimant was
not exposed to harmful stimuli after it became self-
insured in 1988. He concluded that claimant's
"exposure and inhalation of asbestos and other
injurious pulmonary stimuli at the shipyard up to and
including at least that acute exacerbation on March
15, 1995[,]" resulted in his economic disability
commencing May 31, 1995.
Board Opinion at 5. In concluding that the evidence of record
supported the ALJ's findings, the Board noted the judge's
reliance on the reports of Drs. Altman, Teel and McArdle, which
describe the progression of Hutchins' condition and refer to
the same post-1988 exposures to irritants that Hutchins later
addressed in his testimony. See supra at 3-4.
Although the ALJ's decision was not inevitable, we are
satisfied that the Board did not err in determining that the
decision was supported by substantial evidence. Notes from Dr.
Teel refer to Hutchins' complaint in early March 1995 of poor
ventilation in his office building, and Dr. Altman also reported
that Hutchins advised him in June 1991 that his cough was
exacerbated by conditions at work. A report in February 1992
from Dr. Teel showed that Hutchins was out of work for two weeks
in late 1991 and early 1992, and noted that he was still
"bothered by any environmental exposure to inhalants." A BIW
health record dated April 11, 1995 documents a telephone call in
which Hutchins said that "something in the building bothers him,
but he doesn't know what." That an acute episode occurred on
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March 15, 1995 is well supported by the record, which includes
reports from BIW's employee health department, the company's
injury report, and reports from Dr. Teel and one of his
associates on office visits by Hutchins on March 20 and 23.
We recognize that this evidence does not compel the
conclusion reached by the ALJ on Hutchins' continuing exposure
to irritants, and that other evidence exists to counter it.
BIW's "medical encounter form" detailing the March 15, 1995
episode, for example, reported that an investigation of the area
near the blueprint room turned up a five-gallon bucket of floor
finishing product, but it appeared "tightly sealed." Another
equivocal bit of evidence appeared in a June 1991 letter from
Dr. Altman to Dr. Teel, in which Dr. Altman observed that
Hutchins' recent increased coughing "reflects exposure either in
changing to his new office building or to the numerous pollens
that have been circulating this spring." It was the ALJ's
prerogative in the first instance, however, to draw inferences
and make credibility assessments, and we may not disturb his
judgment and the Board's endorsement of it so long as the
findings are adequately anchored in the record. See Pittman
Mech. Contractors, Inc. v. Director, OWCP, 35 F.3d 122, 127 (4th
Cir. 1994) (ALJ's findings sometimes may not be disregarded even
if other inferences might have been more reasonable); White, 584
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F.2d at 573 ("that the facts permit diverse inferences is
immaterial"). We find that the record satisfies this burden,
and consequently affirm the judgment below.
IV. Conclusion
Substantial evidence supports the finding of the ALJ,
affirmed by the Benefits Review Board, that claimant Hutchins
was exposed to harmful industrial irritants during the time BIW
was on the risk as a self-insured employer. We further conclude
that: (1) BIW had adequate notice of its potential liability,
(2) the issue of responsible carrier was properly before the
ALJ, and (3) the administrative decisions utilized appropriate
standards for assigning liability in occupational disease cases.
All prerequisites having been met, the ALJ and Board properly
shifted responsibility for Hutchins' benefits from Birmingham to
BIW.
The petition for review is denied.
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Bath Iron Works Corp. v. Director, Office of Workers Compensation Programs, United States Department of Labor
Court: Court of Appeals for the First Circuit
Date filed: 2001-04-05
Citations: 244 F.3d 222
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