Bath Iron Works Corp. v. United States Department of Labor

United States Court of Appeals
For the First Circuit

No. 02-2073

BATH IRON WORKS CORP.;
ONEBEACON f/k/a COMMERCIAL UNION YORK INSURANCE CO.,

Petitioners,

v.

UNITED STATES DEPARTMENT OF LABOR,

Respondent,

GERTRUDE L. KNIGHT,

Intervenor, Claimant.

PETITION FOR REVIEW OF A DECISION AND ORDER OF THE

UNITED STATES DEPARTMENT OF LABOR BENEFITS REVIEW BOARD

Before

Selya, Circuit Judge,
Stahl, Senior Circuit Judge,
and Lipez, Circuit Judge.

Richard F. Van Antwerp, with whom Thomas R. Kelly and
Robinson, Kriger & McCallum were on brief, for petitioners.

G. William Higbee, with whom James G. Fongemie and McTeague,
Higbee, Case, Cohen, Whitney & Toker, PA were on brief, for
intervenor-claimant.

July 17, 2003
 LIPEZ, Circuit Judge. Petitioners Bath Iron Works

Corporation and OneBeacon (collectively, "BIW") seek review of an

unpublished decision and order of the United States Department of

Labor Benefits Review Board ("BRB" or "Board") which upheld the

determination of an Administrative Law Judge ("ALJ") that

intervenor-claimant Gertrude L. Knight is entitled to workers'

compensation benefits under the Longshore and Harbor Workers'

Compensation Act, 33 U.S.C. §§ 901–950, for the death of her

husband William due to asbestos-induced cancer. BIW insists that

both the ALJ and the Board erred when they concluded that Knight's

claim for benefits had been timely presented. After a careful

review of the record, we affirm the Board's decision and deny the

petition for review.

I.

William R. Knight worked at BIW's shipyard in Bath,

Maine, from September 1941 through January 1986.1 While William's

job responsibilities varied over the decades, his duties for much

of his tenure included the cutting, handling, and installation of

asbestos insulation. Even when he was not directly working with

asbestos, he labored in close proximity to other employees who

were. In 1979, however, he ceased working with asbestos-based

1
Due to temporary layoffs, military service, and other
interruptions, William's employment was not continuous.

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products. Seven years later, in 1986, William retired from BIW at

the age of sixty-one.

William enjoyed a normal retirement until ten years later

when, in early 1996, he fell ill with pain in his abdomen. In

April of that year he went to see his family physician who

documented William's weight loss, loss of appetite, night sweats,

and a questionable CT scan. The family physician, in turn,

referred William to a surgeon for further evaluation and a series

of tests. First, an MRI of the liver uncovered a suspicious mass.

Next, an esophagogastroduodenoscopy showed nothing remarkable in

the esophagus, stomach, or duodenum. A subsequent chest x-ray

showed no abnormality of the lungs. A laparoscopy conducted on May

31, however, uncovered widespread carcinomatosis throughout the

abdominal area. This untreatable cancer led to a rapid decline in

William's health, and he died less than three months later. His

death certificate listed as the cause of death "adenocarcinoma,

primary unknown" of "3 mos." duration.

Three years later, in October 1999, William's widow

Gertrude filed a claim for compensation under the Longshore and

Harbor Workers' Compensation Act, 33 U.S.C. §§ 901–950 (the "Act").

She sought death and funeral benefits, see id. § 909, as well as

compensation for William's unpaid medical expenses, see id. § 907.

BIW controverted the claim, and the matter was eventually referred

to an ALJ for adjudication. A hearing was held in November 2000,

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at which only Gertrude testified. At the hearing and in written

submissions to the ALJ, BIW argued that Gertrude's claim was

untimely since it was filed over three years after William's death,

in contravention of the two-year statute of limitations for death

benefits due to occupational disease. See id. § 913(b)(2).

Gertrude responded by averring that she first learned of a causal

link between William's death, asbestos, and his employment in

August 1999; therefore, she argued, she had complied with the

statute of limitations. See id. (indicating that claim is timely

if filed "within two years after the employee or claimant becomes

aware, or in the exercise of reasonable diligence or by reason of

medical advice should have been aware, of the relationship between

the employment, the disease, and the death or disability").

In May 2001, the ALJ issued a detailed decision and order

rejecting BIW's argument on the statute of limitations defense and

awarding benefits to Gertrude.2 After reciting the facts as he

found them, he concluded that Gertrude "had no reason to believe,

much less suspect, that there existed a relationship between her

husband's disease, his death, and his employment" until August

1999. He also concluded that there was "no basis for finding that

. . . [Gertrude] 'should have been aware' that her husband's death

was the result of his exposure to asbestos at the shipyard." He

2
The decision and order resolved several other issues not
contested on appeal.

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awarded death benefits to Gertrude totaling $391.22 per week,

reimbursement for William's funeral and unpaid medical expenses,

interest, and attorneys' fees.

On appeal, the BRB affirmed. In its unpublished, per

curiam decision, the Board concluded that the ALJ had "thoroughly

weighed the evidence of record, and rationally relied on claimant's

credible testimony, in finding that she did not become aware of the

relationship between her husband's disease, death, and employment,

until 1999." It indicated that under the Act, "it is presumed that

claimant's notice of injury and claim for benefits were timely

filed," and that the burden was on BIW to demonstrate that the

claim was untimely. See 33 U.S.C. § 920(b). After briefly

surveying the facts as found by the ALJ, the Board concluded that

the ALJ's decision was "supported by substantial evidence," and

therefore affirmed. This petition for review ensued.

II.

The only issue in this appeal is the propriety of the

ALJ's application of the Act's relevant statute of limitations,

which provides in pertinent part:

[A] claim for compensation for death or
disability due to an occupational disease
which does not immediately result in such
death or disability shall be timely if filed
within two years after the employee or
claimant becomes aware, or in the exercise of
reasonable diligence or by reason of medical
advice should have been aware, of the
relationship between the employment, the
disease, and the death or disability . . . .

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33 U.S.C. § 913(b)(2). This subsection creates a "discovery rule"

of accrual, deferring the commencement of the statute of

limitations until an employee or claimant has or should have an

awareness "of the relationship between the employment, the disease,

and the death or disability." Id.

BIW focuses on one phrase in the statute: "in the

exercise of reasonable diligence or by reason of medical advice

should have been aware . . . ." BIW concedes that the ALJ made

sufficient factual findings to support his conclusion that Gertrude

could not have been aware "by reason of medical advice" of any

relationship between William's death and work-related asbestos

exposure. BIW maintains, however, that the ALJ failed to make

detailed factual findings concerning Gertrude's "exercise of

reasonable diligence." This failure, according to BIW, constitutes

legal error mandating reversal. Moreover, BIW insists that

Gertrude "should have suspected enough about the asbestos-

relatedness of her husband's death to have conducted an

investigation and filed a claim shortly after his death." BIW

urges us to rule "as a matter of law" that "no reasonable fact

finder" could have concluded otherwise, and that the Board

therefore erred when it affirmed the decision of the ALJ. See id.

§ 921(b)(3) ("The findings of fact in the decision under review by

the Board shall be conclusive if supported by substantial evidence

in the record considered as a whole.").

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 The scope of our review of the Board's affirmance is

constrained by our precedent. "We examine the record for material

errors of law or for impermissible departure from the familiar

'substantial evidence' rubric in connection with the Board's

assessment of the hearing officer's factual findings." Barker v.

U.S. Dept. of Labor, 138 F.3d 431, 434 (1st Cir. 1998); see Bath

Iron Works v. Brown, 194 F.3d 1, 3 (1st Cir. 1999) (indicating that

we "review[] the BRB's decision on legal issues de novo and

determine[] whether the Board adhered to the 'substantial evidence'

standard when it reviewed the ALJ's factual findings"); Bath Iron

Works v. White, 584 F.2d 569, 573–74 (1st Cir. 1978); see also Sun

Shipbuilding & Dry Dock Co. v. McCabe, 593 F.2d 234, 237 (3d Cir.

1979) ("Case law has established . . . that this court is to review

the decisions of the Benefits Review Board for errors of law, and

to make certain that the BRB adhered to [the substantial evidence]

provision [of 33 U.S.C. § 921(b)(3)]." ).

The Board held that the ALJ applied the correct legal

standard in ruling on the statute of limitations question. This

presents a pure question of law that we, like the Board, will

review de novo. See Old Ben Coal Co. v. Dir., Office of Workers'

Comp. Programs, 292 F.3d 533, 538 (7th Cir. 2002) ("[A] failure by

the ALJ to apply the correct legal standard presents a question of

law which we review de novo."). Our review of the ALJ's

application of the correct standard is another matter. Courts

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reviewing the application of subsection (a) of 33 U.S.C. § 913 have

indicated that it is a fact-bound determination subject to

deferential review.3 For example, the Fourth Circuit in Newport

News Shipbldg. & Dry Dock Co. v. Parker, 935 F.2d 20 (4th Cir.

1991), affirmed the BRB's reversal of an ALJ's finding that the

claimant should have been aware of his latent disability. The

Fourth Circuit held that "there was no substantial evidence to

support the ALJ's decision." Id. at 27.

Other courts have also used the "substantial evidence"

standard in reviewing § 913(a) determinations. See, e.g., Paducah

Marine Ways v. Thompson, 82 F.3d 130, 135 (6th Cir. 1996) ("The

section 913(a) statute of limitations begins to run only when the

claimant is aware or reasonably should be aware both that the

injury is work-related, and that the injury will impair the

claimant's wage-earning capacity. The ALJ's finding [regarding the

same] . . . is supported by substantial evidence in the record as

3
Subsection (a) applies to injuries or death not resulting
from occupational disease, and provides in pertinent part:

Except as otherwise provided in this section, the right
to compensation for disability or death under this
chapter shall be barred unless a claim therefore is filed
within one year after the injury or death. . . . The time
for filing a claim shall not begin to run until the
employee or beneficiary is aware, or by the exercise of
reasonable diligence should have been aware, of the
relationship between the injury or death and the
employment.

33 U.S.C. § 913(a).

-8-
a whole."); Duluth, Missabe & Iron Range Ry. Co. v. Dir., Office of

Workers' Comp. Programs, 43 F.3d 1206, 1208 (8th Cir. 1994) ("[T]he

ALJ's calculation of . . . the relevant awareness date was

supported by substantial evidence in the record as a whole."). We

have previously indicated that a finding of compliance with section

912's notice provision is reviewable only under the "substantial

evidence" standard. See Bath Iron Works v. Galen, 605 F.2d 583,

586 (1st Cir. 1979) (reviewing ALJ's finding that claimant's

"unawareness of his injury was reasonable" for substantial

evidence).4 Finally, we note that the Supreme Court of California,

in interpreting its state workers' compensation statute, has long

held that "whether an employee should have known in the exercise of

reasonable diligence that his disability was the result of his

employment [is] a question of fact." Chambers v. Workmen's Comp.

Appeals Bd., 446 P.2d 531, 533 (Cal. 1968) (citing Pac. Indem. Co.

v. Indus. Accident Comm'n, 214 P.2d 530, 532 (Cal. 1950)).

4
The pertinent portion of section 912 has remained unchanged
since Galen:

Notice of an injury or death . . . shall be given within
thirty days after the date of such injury or death, or
thirty days after the employee or beneficiary is aware,
or in the exercise of reasonable diligence or by reason
of medical advice should have been aware, of a
relationship between the injury or death and the
employment.

33 U.S.C. § 912(a).

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 We see no reason to treat 33 U.S.C. § 913(b)(2) any

differently than these comparable statutes. An ALJ's ultimate

conclusion of when a claimant "becomes aware, or in the exercise of

reasonable diligence or by reason of medical advice should have

been aware, of the relationship between the employment, the

disease, and the death or disability," 33 U.S.C. § 913(b)(2), does

not present a pure question of law amenable to de novo appellate

review. Rather, this fact-intensive determination is one that a

reviewing tribunal should disturb only if unsupported by

"substantial evidence."

In reviewing for substantial evidence, we assess the

record as a whole, and we will affirm so long as we are satisfied

that the record contains "such relevant evidence as a reasonable

mind might accept as adequate to support a conclusion." Sprague v.

Dir., Office of Workers' Comp. Programs, U.S. Dept. of Labor, 688

F.2d 862, 865 (1st Cir. 1982). This benchmark is notoriously

difficult to overcome on appellate review. While "substantial

evidence" is "more than a scintilla," it certainly does not

approach the preponderance-of-the-evidence standard normally found

in civil cases. Id. Rather, we will accept the findings and

inferences drawn by the ALJ, whatever they may be, unless they are

"irrational." Barker, 138 F.3d at 434; see also Bath Iron Works

Corp. v. Dir., Office of Workers' Comp. Programs, U.S. Dept. of

Labor, 109 F.3d 53, 56 (1st Cir. 1997) ("[I]t is immaterial that

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the facts permit diverse inferences as long as those drawn by the

ALJ are supported by evidence."). We have also recognized that it

is the ALJ's unique prerogative in the first instance 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." Bath Iron Works

Corp. v. Dir., Office of Workers Comp. Programs, 244 F.3d 222, 231

(1st Cir. 2001).

Finally, we note that the Board, citing Shaller v. Cramp

Shipbuilding & Dry Dock Co., 23 B.R.B.S. 140 (1989), states that

pursuant to 33 U.S.C. § 920(b), "it is presumed that a claimant's

notice of injury and claim for benefits were timely filed." In a

similar vein, the ALJ, citing § 920(b) and Fortier v. General

Dynamics Corp., 15 B.R.B.S. 4 (1982), appeal dismissed sub nom,

Insurance Co. of North America v. Benefits Review Board, 729 F.2d

1441 (2d Cir. 1983), stated that "[i]t is well-settled that the

Employer has the burden of establishing that the claim was not

timely filed," and that this presumption places the burden on the

employer to prove otherwise. We note that § 920(b) only references

the sufficiency of the notice of claim, and does not mention the

timeliness of the actual filing of the claim. However, § 920(a)

explicitly creates a presumption that a claim for compensation

"comes within the provisions of this chapter." 33 U.S.C. § 920(a).

Moreover, "[i]t is well established that the Act 'must be liberally

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construed in conformance with its purpose and in a way which avoids

harsh and incongruous results.'" Stevenson v. Linens of the Week,

688 F.2d 93, 98 (D.C. Cir. 1982) (quoting Voris v. Eikel, 346 U.S.

328, 333 (1953)). Lastly, we note that at no point over the course

of this litigation has BIW argued against this presumption and the

attendant burden of proof. We therefore conclude that § 920(b)

does create a presumption of timeliness under § 913(b)(2), and that

the burden is on the employer to demonstrate noncompliance with the

requirements of § 913(b)(2). See Fortier 15 B.R.B.S. at 7 ("At the

outset, it is presumed that the claim was timely filed."); cf. Am.

Jur. 2d Evidence § 160 (2003) ("The defendant has the burden of

proof with regard to counterclaims and most affirmative

defenses."). With these principles in mind, we turn to the ALJ's

decision in this case.

III.

The ALJ found that Gertrude "first gained an awareness of

the relationship between her husband's employment, his disease, and

his death" in late August or early September 1999. In August 1999,

Dr. Douglas Pohl, at the behest of Gertrude's attorney, examined

William's medical records and his pathology specimens taken back in

1996. Dr. Pohl concluded that William had died of mesothelioma, a

relatively rare form of cancer found almost exclusively in persons

who have had long-term exposure to asbestos. According to the ALJ,

Gertrude credibly testified at the hearing that she first realized

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that there was a connection between her husband's death, asbestos,

and her husband's job after reading Dr. Pohl's medical report.5

She also testified that back in 1996, none of William's doctors had

told her that William's cancer was asbestos-related, nor does the

record indicate that William himself had been apprised of the

provenance of his cancer. Gertrude testified that she merely

thought that her husband had some sort of "cancer of the abdomen"

of unknown genesis. In light of this evidence, the ALJ concluded

that Gertrude "had no reason to believe, much less suspect, that

there existed a relationship between her husband's disease, his

death, and his employment" until August 1999. Therefore, according

to the ALJ, her claim filed in October of that year was timely.

BIW argues before us, as it did before the BRB, that the

ALJ failed to engage in an extended discussion demonstrating that

Gertrude's lack of awareness followed "the exercise of reasonable

diligence." 33 U.S.C. § 913(b)(2). This failure, BIW insists,

means that the ALJ was unaware of the proper legal standard he had

to apply. Moreover, BIW maintains a reasonable fact-finder would

have to conclude that Gertrude, if she had exercised reasonable

diligence, would have become aware of the relationship between her

husband's death and work-related asbestos exposure within months of

5
It is unclear from the record whether Gertrude first learned
of the contents of Dr. Pohl's report in August or September 1999.
Since the doctor's report was dated August 27, 1999, we assume that
Gertrude learned of its contents at that time.

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his death. We reject both of these positions, addressing them in

reverse order.

As explained above, the ALJ indicated that Gertrude had

"no reason to believe, much less suspect" any interrelationship

existed. BIW points us to facts which, it claims, fatally

undermine this conclusion. Gertrude testified that she was aware

that some of her husband's colleagues at BIW and their widows had

brought claims for benefits because of asbestos-related problems.

She also testified that William had come home many times covered in

white powder which she knew to be asbestos. As the ALJ noted,

however, there was "no evidence . . . that [Gertrude] was aware of

the specific nature of the health risks posed by asbestos in

general or that asbestos causes mesothelioma."

BIW also points to a June 6, 1996, telephone call between

Gertrude's daughter-in-law and William's family doctor. According

to the doctor's telephone logs, he apparently informed the

daughter-in-law of operative findings and pathology reports

indicating that William was suffering from "diffuse infiltrating,

poorly differentiated malignant tumor, likely carcinomatosis, but

to be considered also as anaplastic mesothelioma." As the ALJ

noted, however, there was no evidence that the substance of this

conversation was ever communicated to Gertrude, and Gertrude

herself testified credibly that she did not recall having any such

discussion with her daughter-in-law. Moreover, even assuming that

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such a conversation took place, there was no evidence that the

diagnosis of "anaplastic mesothelioma" would have had any meaning

for Gertrude beyond what she already knew — i.e., "cancer of the

abdomen."

The ALJ's finding that Gertrude had "no reason to

believe, much less suspect" that William's malady had anything to

do with asbestos is further supported by the ALJ's observation that

prior to his death, William had not worked at BIW for ten years and

had not been exposed to asbestos in almost twenty, and that William

had "enjoyed a normal retirement." In sum, the ALJ did not

irrationally conclude that prior to August 1999 Gertrude had no

reason to suspect that William's death was related to his on-the-

job asbestos exposure. The burden was on BIW to demonstrate to the

contrary, and, according to the ALJ, BIW failed to do so. We

conclude that this finding is supported by substantial evidence.6

In light of this finding, it is unsurprising that the ALJ

did not comment further on Gertrude's "diligence" (or perceived

6
BIW makes much of the fact that Gertrude testified that she
initially sought the advice of an attorney because of financial
considerations ("Well, I thought if I could get any benefits, I
could use them."). We fail to see how Gertrude's motivation plays
any role in the determination of when the statute of limitations
began to run under 33 U.S.C. § 913(b)(2). At best, Gertrude's
testimony regarding any financial considerations might (and we
stress, might) have impugned her credibility. According to the
ALJ, however, Gertrude was a credible witness. It is not for this
court (or the BRB) to second-guess this credibility determination.
Bath Iron Works Corp. v. Dir., Office of Workers Comp. Programs,
244 F.3d 222, 231 (1st Cir. 2001).

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lack thereof). When the ALJ concluded that Gertrude had "no reason

to believe, much less suspect" any interrelationship, the ALJ

disposed of both the subjective (aware) and objective (should have

been aware) components of the § 913(b)(2) inquiry. BIW is correct

when it states that the "reasonable diligence" requirement of the

statute means the sort of inquiry a reasonable person would have

conducted in light of the surrounding facts and circumstances.

See, e.g., Love v. Owens-Corning Fiberglass Co., 27 B.R.B.S. 148

(1993). This requirement, in effect, imputes to the claimant an

awareness of what she could have learned if she had undertaken a

reasonably diligent inquiry. However, if, as the ALJ found,

Gertrude had "no reason to believe, much less suspect" (emphasis

added) that William's cancer was anything other than fortuitous,

then she certainly had no reason (or obligation) to begin a due-

diligence investigation. See Jasinskas v. Bethlehem Steel Corp.,

735 F.2d 1, 5 (1st Cir. 1984) (noting that "generalized suspicions

unsupported by medical interpretations do not establish sufficient

'awareness' to set limitations period running when condition

involves complex medical causality"); cf. United States v. Kubrick,

444 U.S. 111, 122 (1979) (imposing duty of inquiry on potential

claimant under Federal Tort Claims Act, 28 U.S.C. § 2401(b), once

he is in "possession of the critical facts that he has been hurt

and who has inflicted the injury") (emphasis added). The ALJ did

not have to elaborate further on the reasonable diligence issue in

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light of his conclusion that Gertrude had no reason to suspect

before August of 1999 that William's death was related to his on-

the-job asbestos exposure. We therefore reject BIW's contention

that the ALJ had somehow erred in his application of 33 U.S.C. §

913(b)(2).

IV.

In light of applicable precedent which greatly constrains

the scope of our review, we decline to disturb the judgment of the

Benefits Review Board. For the foregoing reasons, BIW's petition

for review must be DENIED.

SO ORDERED.

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