Bath Iron Works Corp. v. Director, Office of Workers' Compensation Programs, U.S. Department of Labor

UNITED STATES COURT OF APPEALS
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
FOR THE FIRST CIRCUIT

No. 96-2106

BATH IRON WORKS CORPORATION,
BIRMINGHAM FIRE INSURANCE COMPANY,

Petitioners,

v.

DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS,
U.S. DEPARTMENT OF LABOR,

Respondent.

ON PETITION FOR REVIEW OF AN ORDER OF

THE BENEFITS REVIEW BOARD

Before

Selya, Circuit Judge,

Hill,* Senior Circuit Judge,

and Boudin, Circuit Judge.

Kevin M. Gillis with whom Troubh, Heisler & Piampiano was on

brief for petitioners Bath Iron Works Corporation and Birmingham Fire
Insurance Company.
Stephen Hessert with whom Norman, Hanson & DeTroy was on brief

for insurer respondent Liberty Mutual Insurance Company.
Gary A. Gabree with whom Stinson, Lupton & Weiss was on brief for

claimant respondent Alvin D. Acord.

September 10, 1997

*Of the Eleventh Circuit, sitting by designation.

BOUDIN, Circuit Judge. Alvin Acord suffered injuries

while employed by Bath Iron Works Corporation, and obtained

benefits after state workers' compensation proceedings. He

then sought and received a further award under the Longshore

Act, 33 U.S.C. 901 et seq. On this appeal, we hold that

the federal award was barred by collateral estoppel, and, for

the benefit of future litigants, we address briefly the

alternative statute of limitations defense advanced by the

petitioner insurer.

The events and procedural history are complicated, but a

condensed version will set the scene. Acord began work as a

test electrician at Bath in 1974. In 1982 he suffered upper-

body injuries and in 1983, a knee injury and knee surgery;

and in 1984 he was transferred to a desk job. He sought

disability benefits under the Maine Workers' Compensation

Act, 39 Me. Rev. Stat. Ann. 1 et seq. (1989), and, in

October 1987, was awarded 25 percent partial disability

benefits.

Between 1983 and 1987, Acord experienced a half-dozen

incidents of trauma to his knee wherein some provocation

would cause the knee to give way; one incident occurred in

June 1987, when Acord stubbed his toe and then jammed his

knee as he rose from his desk. Acord underwent further knee

surgery and returned to his desk job in November 1987, now

working only four hours a day based on his doctor's advice.

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Degenerative arthritis in his knee joints indicated that his

condition would worsen.

One year later, in November 1988, Bath's company

physician told Acord that he was being let go. The record is

murky but it was apparently Acord's own opinion that the

coming winter would aggravate his knee, and it was the

doctor's view that there would be no suitable work available

if Acord's physical restrictions increased. Acord has since

sought reemployment at Bath, without success.

Birmingham Fire Insurance Company ("Birmingham"), which

provided Bath's insurance coverage at the time of the June

1987 injury, began to pay Acord total disability benefits

when he was dismissed in November 1988. But Birmingham also

petitioned the Maine workers' compensation agency, asking it

to declare that the insurer had no continuing liability for

the June 1987 injury. In February 1989, after an evidentiary

proceeding, a Maine commissioner held that Birmingham had

proven that the June 1987 incident did not permanently

contribute to Acord's condition; this decision was affirmed

by the commission's appellate division in September 1990.

In related proceedings, Acord asked the Maine agency to

increase his previous and continuing 25 percent disability

award based on the 1983 injury; Acord urged that his

condition had worsened since 1983. After extensive

proceedings, the Maine agency ruled in June 1992 that the

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original disability payment should be increased to 50

percent, representing increased disability since 1983, and

that the payments should be made by Liberty Mutual Insurance

Company. Liberty Mutual had been Bath's insurer at the time

of the June 1983 injury.

Shortly before this new ruling, Acord in March 1992

filed for federal workers' compensation benefits under the

Longshore Act. It is not uncommon for employees connected to

maritime affairs to be covered by both federal and state

compensation statutes, and federal jurisdiction in this case

has not been disputed. In the federal proceeding, Acord took

the position that his June 1987 injury entitled him to

permanent total disability benefits because it left him

unable to fill the material handler position that he had

previously held.

Birmingham resisted Acord's federal claim on multiple

grounds: that the claim, filed almost five years after the

incident, was barred by the federal one-year statute of

limitations, 33 U.S.C. 913; that collateral estoppel

precluded Acord from claiming permanent injury based on the

June 1987 incident; and that the medical evidence failed to

support such a claim of permanent injury based on that

incident. A federal administrative law judge took evidence

on the federal claim, reserving judgment on the legal

defenses.

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In September 1993, the federal ALJ issued a decision

awarding permanent total disability benefits to Acord, and

against Birmingham, from and after Acord's last day at work

in November 1988. The decision rejected the collateral

estoppel and statute of limitations defenses, on grounds

described below, and concluded on the merits that the June

1987 incident had caused a permanent further aggravation in

Acord's knee condition.

Birmingham sought review by the Department of Labor's

Benefits Review Board, 33 U.S.C. 921(b), but the Benefits

Review Board took no action on the matter. Because the

matter had been pending before the Benefits Review Board for

more than one year and the Benefits Review Board had taken no

action on it, it became final for purposes of judicial review

in September 1996. Pub. L. 104-134, 101(d), 110 Stat.

1321-219 (1996). Birmingham then sought review in this

court. See 33 U.S.C. 921(c). Acord, needless to say,

supports the ALJ's decision.

We agree with Birmingham that the federal ALJ should

have given collateral estoppel effect to the Maine agency's

determination, in its February 1989 decision, that the June

1987 injury "had no lasting effect on Mr. Acord's condition."

The state agency finding, in turn, precludes Acord's present

claim. Only the first of these two propositions requires

much discussion.

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Often, respect for a prior judgment is mandated by the

full faith and credit clause, U.S. Const. art. IV, 1, or

its statutory counterpart, 28 U.S.C. 1738. A literal

reader might doubt that either has much to do with the

present case, because (among other reasons) the former

constrains states, not federal entities, and the latter is

directed explicitly to federal courts and says nothing about

federal agencies. But the policy arguments for similar

treatment--especially avoidance of duplicative litigation--

tend to be the same.

Without dwelling overmuch on the rationale, the Supreme

Court has instructed that "federal courts must give the

[state] agency's factfinding the same preclusive effect to

which it would be entitled in the State's courts."

University of Tennessee v. Elliott, 478 U.S. 788, 799 (1986).

Ordinarily, the state agency must have been acting in an

adjudicative capacity, United States v. Utah Constr. & Mining

Co., 384 U.S. 394, 422 (1966), but that condition is

satisfied in this case. And Maine does treat such agency

findings as a proper basis for precluding relitigation. Van

Houten v. Harco Constr., Inc., 655 A.2d 331, 333-34 (Me.

1995).

Of course, one could say that a federal court must

respect state agency factfinding but a federal agency need

not. Yet Elliott itself relied heavily upon Thomas v.

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Washington Gas Light Co., 448 U.S. 261, 281 (1980), where the

Supreme Court said that an agency finding in one state could

bind another state's agency under the full faith and credit

clause. Elliott, 478 U.S. at 798-99. And several circuit

decisions have held that a federal agency is normally bound

to respect findings by another agency acting within its

competence. West Helena Sav. & Loan Assoc. v. Federal Home

Loan Bank Bd., 553 F.2d 1175, 1180-81 (8th Cir. 1977); Safir

v. Gibson, 432 F.2d 137, 143-44 (2d Cir.) (Friendly, J.),

cert. denied, 400 U.S. 850 (1970).

Although the tendency is plainly in favor of applying

collateral estoppel in administrative contexts, the subject

is a complex one, with many variations; and it is perhaps

well not to generalize too broadly. See 18 Wright & Miller,

Federal Practice and Procedure 4475, at 762-63 & n.3

(1981). Here, no conflict exists between the tendency of the

courts and the position of the agency involved, because the

Benefits Review Board itself has declared that collateral

estoppel effect is to be given under the Longshore Act to

appropriate findings of "other state or federal

administrative tribunals." Barlow v. Western Asbestos Co.,

20 B.R.B.S. (MB) 179, 180 (1988); see also Vodanovich v.

Fishing Vessel Owners Marine Ways, Inc., 27 B.R.B.S. (MB)

286, 290-92 (1994).

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In this case, the refusal of the federal ALJ to respect

the Maine finding appears to have been based on a

misunderstanding of Supreme Court case law on another

subject.1 However, Acord seeks to defend the result on

narrower and more conventional grounds. He argues that

differences in burdens of proof, and in the substantive

standards, under the Maine and federal compensation schemes

make collateral estoppel inappropriate. These are legitimate

arguments, but they ultimately do not succeed in this case.

It is quite true that collateral estoppel effect may be

denied because of differences in burden of proof (for

example, where the victor in the first case has a greater

burden in the second). Newport News Shipbuilding & Dry Dock

Co. v. Director, OWCP, 583 F.2d 1273, 1278-79 (4th Cir.

1978), cert. denied, 440 U.S. 915 (1979). Here, Birmingham,

by seeking a judgment from Maine limiting its liability,

undertook the burden of proving, by a preponderance of

evidence, that the June 1987 incident had no permanent

effect. See Nichols v. Viner Bros., Inc., 573 A.2d 789, 790

1The ALJ said that collateral estoppel could not apply
because state workers' compensation schemes and the Longshore
Act share concurrent jurisdiction. See Sun Ship, Inc. v.

Pennsylvania, 447 U.S. 715, 722 (1980). But concurrent

jurisdiction, and even the possibility of successive awards,
do not tell one anything about collateral estoppel. See

Thomas, 448 U.S. at 280-82.

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(Me. 1990). The Maine agency concluded that this burden had

been carried.

In the federal agency proceeding, Birmingham bore no

heavier burden; if anything, it had a lighter one. Acord

himself had the burden of proving permanent injury from the

June 1987 incident, although he was aided by a conditioned

federal presumption that "the claim comes within the

provisions of this chapter." 33 U.S.C. 920(a). This

presumption merely requires an employer to provide

"substantial evidence" that the accident did not cause the

harm, and then the presumption vanishes. Brown v.

I.T.T./Continental Baking Co. & Ins. Co., 921 F.2d 289, 295

(D.C. Cir. 1990); Sprague v. Director, OWCP, 688 F.2d 862,

865-66 (1st Cir. 1982). Thus, Acord's first argument fails.

Acord next argues that the federal regime employs

different substantive standards than the Maine regime, and

points to a tradition of interpreting the Longshore Act

"liberally" in favor of claimants. Voris v. Eikel, 346 U.S.

328, 333 (1953). Certainly a difference in the legal

standards pertaining to two proceedings may defeat the use of

collateral estoppel. See Restatement (Second) of Judgments

28(3), (4) (1982); cf. Long Island College Hosp. v. NLRB, 566

F.2d 833, 842, 844-45 (2d Cir. 1977), cert. denied, 435 U.S.

996 (1978). But this is so only where the difference

undermines the rationale of the doctrine.

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Here, in the Maine proceeding, Acord's doctor, Donald

Kalvoda, as well as another treating physician, Mark Henry,

testified that Acord suffered from degenerative arthritis in

his knee which was worsening with the passage of time and

could have been temporarily exacerbated by the June 1987

injury; but both doctors said unequivocally in the state

proceeding that the June 1987 incident had no lasting effect.

The state agency so found. It is hard to see why this

factual finding should be affected by whether the pertinent

statute is broadly or narrowly construed.

Similarly, we agree with Acord that federal and Maine

law deal somewhat differently with cases where a later job-

related injury aggravates an earlier one. Federal case law

may depart from Maine's approach by making the later employer

or insurer liable for the cumulative injury, Liberty Mut.

Ins. Co. v. Commercial Union Ins. Co., 978 F.2d 750, 756 (1st

Cir. 1992), and mitigating this liability through a complex

statutory regime. 33 U.S.C. 908(f). But again, this

difference has no apparent logical bearing on the factual

question whether the June 1987 event caused permanent injury.

Our own research suggests that the most pertinent

difference between federal and Maine law may lie in a

different area. Maine case law may be more grudging in its

willingness to compensate the aggravation of an existing

condition where the aggravation appears to be part of normal

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life rather than the result of some increased risk peculiar

to the job.2 If there were any indication that this attitude

had influenced the Maine agency finding at issue in this

case, there might be reason to hesitate in giving collateral

estoppel effect to this finding.

But the expert medical evidence in the Maine proceedings

(already described) pointed directly to the conclusion

reached by the Maine agency: that the June 1987 incident

caused no permanent injury. There is no hint whatever that

the Maine agency thought that a permanent injury had occurred

in June 1987 but should be disregarded because it was not

compensable under Maine law. Whether the Maine factual

finding was right or wrong, the agency was not evidently

influenced by any difference between federal and Maine law.

The Maine finding may have been wrong, even though amply

supported by the evidence offered in that case. The federal

ALJ reached a different conclusion by crediting slightly

different deposition testimony from Dr. Kalvoda given after

the Maine proceeding; the ALJ also chose to place weight on

Acord's testimony that he had begun to suffer a different

sort of pain after the June 1987 incident. If the ALJ

2Compare Gardner v. Director, OWCP, 640 F.2d 1385, 1387,

1389 (1st Cir. 1981) (aggravation from standing on hard
surfaces compensable under Longshore Act) with Hamm v.

University of Maine, 423 A.2d 548, 550-51 (Me. 1980)

(aggravation from chopping salad not compensable under Maine
statute).

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decision were before us on the merits, it would probably be

sustained, given the deference due to the factfinder.

But the point of collateral estoppel is that the first

determination is binding not because it is right but because

it is first--and was reached after a full and fair

opportunity between the parties to litigate the issue. Acord

has given us no reason to doubt that he had that opportunity

in the Maine proceeding. And, it is by no means clear that

the Maine result was wrong: the issue, as in many medical

causation matters, was probably a close call.

At oral argument, Acord offered yet another argument

against collateral estoppel in workers' compensation matters,

saying that in Maine (as elsewhere) a change in medical

condition often allows the reopening or renewal of a prior

claim. Admittedly, this practice (evidenced here by the 1992

increase in Acord's own award to 50 percent) is a limitation

on conventional res judicata. In a civil tort action, a

court will not normally reopen a final judgment because later

events show that the injury was worse than supposed. Cf.

Restatement, supra, 73(2).

But a willingness to modify an award based on later

changes in medical condition is not the same as giving a

party two chances to litigate the same historical fact (here,

whether the June 1987 injury caused permanent damage). Such

findings of historical fact are given collateral estoppel

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effect by compensation commissions, including the Maine

commission. Van Houten, 655 A.2d at 334; Vodanovich, 27

B.R.B.S. (MB) at 290-92.3 Even assuming that Acord preserved

this final argument, it does not avail.

Historical accident has given employees like Acord the

benefit of two different compensation regimes. Apart from

limitations on duplicative recovery, occasions exist when

successive claims under federal and state law are entirely

permissible; but successive claims are still subject to

various conventional limitations, like collateral estoppel.

Overall, collateral estoppel may as easily be helpful to

claimants as to employers or insurers, and it reduces the

litigation costs for everyone.

Acord's claim is also probably barred by the Longshore

Act's one-year statute of limitations, 33 U.S.C. 913(a).

The incident giving rise to the claim occurred in June 1987;

the federal claim was filed in March 1992. The statute of

limitations defense was properly raised and it obviously

precluded Acord's claim unless the claim was rescued by the

tolling provision contained in 33 U.S.C. 913(d), which

reads as follows:

3In this very case the Maine commission's appellate
division affirmed a commissioner's rejection of a separate,
later claim by Acord for benefits deriving from the 1987
injury, explaining that "the petition [is] barred by the
doctrine of res judicata because of a prior determination

[i.e., in February 1989] that the effects of the injury

ended."

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Where recovery is denied to any person, in a
suit brought at law or in admiralty to recover
damages in respect of injury or death, on the
ground that such person was an employee and that
the defendant was an employer within the meaning of
this chapter and that such employer had secured
compensation to such employee under this chapter,
the [one-year] limitation of time prescribed . . .
shall begin to run only from the date of
termination of such suit.

The wording of this provision strongly suggests that it

has nothing to do with Acord's situation. It may be doubtful

that the Maine compensation proceeding is properly described

as "a [damage] suit brought at law or in admiralty;" but,

even assuming otherwise, "recovery" in that suit was

certainly not denied "on the ground" that the claimant "was

an employee and the defendant was an employer" covered by the

federal statute. There is thus a compelling "plain language"

argument against Acord's reliance on section 913(d).

The evident purpose of section 913(d) reinforces its

language. Worker compensation statutes were an innovation by

which employers obtained statutory immunity to tort liability

in exchange for liability without fault. Especially where

there might be some doubt whether the Longshore Act covered

the employee--often a close question--a precautionary tort

suit might be filed; the tolling provision was plainly

intended to protect the employee's compensation claim if

statutory immunity defeated the precautionary suit. See

Ayers v. Parker, 15 F. Supp. 447, 451 (D. Md. 1936). Nothing

like this happened in Acord's case.

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Congress could also have provided that the federal

statute is tolled wherever a claimant begins state

compensation proceedings addressed to the same injury, but it

did not. It is not obvious that federal courts should

enlarge an express tolling provision on policy grounds, nor

are the policy grounds very compelling: once the ground rules

are clear, it is easy enough for a claimant to file a

precautionary federal claim within one year of the injury,

even if the claimant prefers first to pursue a state remedy.

This might seem to be the end of the matter except that

the Fifth Circuit declared some years ago that section 913(d)

does toll the Longshore Act limitations period in cases

similar to Acord's. Ingalls Shipbuilding Div., Litton

Systems, Inc. v. Hollinhead, 571 F.2d 272 (5th Cir. 1978).

The court's reasoning relies heavily on the general principle

of liberal interpretation of the Longshore Act, id. at 274,

which may seem a doubtful reason for ignoring express

language. Ingalls is also at odds with several well-reasoned

district court cases,4 and has not been adopted by any other

circuit. The Benefits Review Board apparently follows

Ingalls in the Fifth Circuit, Calloway v. Zigler Shipyards,

16 B.R.B.S. (MB) 175, 177 (1984), but that is only to be

expected.

4See Dawson v. Jahncke Drydock, Inc., 33 F. Supp. 668,

669 (E.D. La. 1940); Ayers, 15 F. Supp. at 449-53; Romaniuk

v. Locke, 3 F. Supp. 529, 530 (S.D.N.Y. 1932).

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Nevertheless, Ingalls is the only circuit precedent on

the issue, and there might be a concern about fairness to

claimants if we departed from Ingalls without warning.

Accordingly, we have thought it wiser to rest our decision

here on collateral estoppel but to note as dictum our

substantial doubts about Ingalls. These doubts will not

foreclose a future panel from deciding the Ingalls issue

afresh, but their expression now should give ample notice to

future claimants to protect their federal claims by filing

within one year.

Reversed.

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