Newport News Shipbld v. Winn , 326 F.3d 427 ( 2003 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
NEWPORT NEWS SHIPBUILDING AND 
DRY DOCK COMPANY,
Petitioner,
v.
HERBERT E. WINN; DIRECTOR,  No. 00-1815
OFFICE OF WORKERS’ COMPENSATION
PROGRAMS, UNITED STATES
DEPARTMENT OF LABOR,
Respondents.

On Petition for Review of an Order
of the Benefits Review Board.
(99-834)
Argued: January 22, 2001
Decided: April 14, 2003
Before WIDENER and KING, Circuit Judges, and
David A. FABER, Chief United States District Judge for the
Southern District of West Virginia, sitting by designation.
Affirmed by published opinion. Chief Judge Faber wrote the opinion,
in which Judge King joined. Judge Widener wrote a concurring opin-
ion.
COUNSEL
ARGUED: Benjamin McMullan Mason, MASON, COWARDIN &
MASON, Newport News, Virginia, for Petitioner. Geoffrey Kirk
2 NEWPORT NEWS SHIPBUILDING v. WINN
Collver, UNITED STATES DEPARTMENT OF LABOR, Washing-
ton, D.C., for Respondents. ON BRIEF: Jonathan H. Walker,
MASON, COWARDIN & MASON, Newport News, Virginia, for
Petitioner. Henry L. Solano, Solicitor of Labor, Carol A. De Deo,
Associate Solicitor, Mark Reinhalter, Senior Attorney, UNITED
STATES DEPARTMENT OF LABOR, Washington, D.C., for
Respondent Director.
OPINION
FABER, District Judge:
Newport News Shipbuilding and Dry Dock Company ("Newport
News") seeks reversal of a decision of the Benefits Review Board (the
"BRB") denying relief under section 8(f) of the Longshore and Har-
bor Workers’ Compensation Act, 33 U.S.C. §§ 901-950 ("LHWCA").
For the reasons discussed below, we affirm the decision of the BRB.
I.
In April 1997, Herbert E. Winn ("Winn") was diagnosed with
asbestosis. A pulmonary function test revealed a twenty percent per-
manent partial whole person impairment as measured by the AMA
Guides to the Evaluation of Permanent Impairment, 4th ed. His
employer, Newport News, admits that he was exposed to asbestos
during his employment, but contends that he had a preexisting lung
disease which materially and substantially contributed to his ultimate
disability.
Winn had a long history of cigarette smoking, admitting to physi-
cians that he smoked a pack of cigarettes a day for nearly forty-five
years. As early as 1979, X-rays performed on Winn during his
employment with Newport News revealed "increased bronchiovascu-
lar markings." J.A. 4. Winn retired in 1986,* several years before he
was diagnosed with asbestosis.
*Although the year varies in several documents found in the Joint
Appendix, the parties previously stipulated that it was 1986.
NEWPORT NEWS SHIPBUILDING v. WINN 3
On April 21, 1999, the Administrative Law Judge ("ALJ") filed his
original decision and order denying the employer’s § 8(f) claim. The
ALJ found that Newport News had failed to establish the existence of
a preexisting permanent partial disability, and had not presented argu-
ments that would support the contribution requirement. More than one
year later, on May 9, 2000, the BRB issued a decision and order
affirming the ALJ’s findings.
II.
Section 8(f) of the LHWCA, 33 U.S.C. § 908(f), provides in part
as follows:
In . . . cases in which the employee has a permanent partial
disability, found not to be due solely to that injury, and such
disability is materially and substantially greater than that
which would have resulted from the subsequent injury
alone, the employer shall provide . . . compensation for one
hundred and four weeks only.
After the 104-week period has passed, the Office of Workers’
Compensation Programs ("OWCP"), which administers a special fund
for that purpose, is responsible for disability payments under § 8(f).
An employer who seeks to limit liability for an employee’s perma-
nent partial disability under § 8(f) must establish three elements: (1)
that the ultimate disability is caused in part by a preexisting partial
disability; (2) that the preexisting disability was manifest to the
employer prior to the work-related injury; and (3) that the ultimate
disability materially and substantially exceeded the disability that
would have resulted from the work-related injury alone, in the
absence of the preexisting condition. See Director, OWCP v. Newport
News Shipbuilding and Dry Dock Co. (Carmines), 138 F.3d 134, 138-
39 (4th Cir. 1998). See also Director, OWCP v. Newport News Ship-
building and Dry Dock Co. (Harcum), 8 F.3d 175, 182-83 (4th Cir.
1993), aff’d on other grounds, 514 U.S. 122 (1995).
The LHWCA sets out the applicable standard of review for this
case in § 921(b)(3). When under review by the BRB, the ALJ’s fac-
4 NEWPORT NEWS SHIPBUILDING v. WINN
tual findings are deemed conclusive "if supported by substantial evi-
dence in the record considered as a whole." 33 U.S.C. § 921(b)(3).
This court has held that substantial evidence is "more than a scintilla
but less than a preponderance." Elliott v. Adm’r, Animal & Plant
Health Inspection Serv., 990 F.2d 140, 144 (4th Cir. 1993).
Additionally, as stated in Newport News Shipbuilding & Dry Dock
Co. v. Tann, 841 F.2d 540, 543 (4th Cir. 1988), the ALJ’s findings
"may not be disregarded on the basis that other inferences might have
been more reasonable." Rather, "deference must be given the fact-
finder’s inferences and credibility assessments, and we have empha-
sized the scope of review of ALJ findings is limited." Id. Legal deter-
minations are reviewed de novo. This includes the standard by which
the ALJ determines entitlement to § 8(f) relief. See Carmines, 138
F.3d at 141. We review the Board’s decision "for errors of law and
to ascertain whether the Board adhered to its statutorily-mandated
standard for reviewing the ALJ’s factual findings." Newport News
Shipbuilding & Dry Dock Co. v. Tann, 841 F.2d 540, 543 (4th Cir.
1988).
III.
In the instant case, the first and third elements under § 8(f), preex-
isting disability and contribution, respectively, are in question. The
second element, manifestation, is not required in cases where the
worker suffers from a post-retirement occupational disease, as is the
case with Winn. The ALJ discussed the evidence and found that New-
port News had not established that Winn had a preexisting disability.
J.A. at 37. However, he also found that even had a preexisting disabil-
ity been proven, Newport News had not presented evidence sufficient
to meet the contribution criteria set forth by this court in Carmines.
Id. The BRB agreed, although focusing its opinion solely on Newport
News’ failure to establish contribution.
To meet the contribution element, an employer must quantify the
type and extent of the disability the claimant would have suffered
without the preexisting condition. See Carmines, 138 F.3d 134, 139
(citing Harcum). Such a showing requires quantification of the level
of impairment that would ensue from the work-related injury alone.
"In other words, an employer must present evidence of the type and
NEWPORT NEWS SHIPBUILDING v. WINN 5
extent of disability that the claimant would suffer if not previously
disabled when injured by the same work-related injury." Id.To satisfy the contribution element in this case, Newport News
relied upon the parties’ stipulation that Winn has a twenty percent
permanent partial disability, and on the opinions of three doctors,
including Dr. James Reid, a company doctor, and Drs. Charles Don-
lan and Ricardo Guardia, neither of whom treated Winn for his condi-
tion. Reid stated that if Winn had only the work-related asbestosis, his
impairment rating would be at least ten percent less. Dr. Reid
explained his conclusion and the basis for it as follows in September
1997:
1. The Shipyard clinic read Mr. Winn’s chest x-rays on
April 9, 1979 and again on April 27, 1982 to show "Inc
BVM" — increase bronchovascular markings (Exhibit 1).
These are the x-ray findings indicative of chronic obstruc-
tive pulmonary disease ("COPD"). The Shipyard clinic
interpreted Mr. Winn’s pulmonary function tests in 1981,
1982, 1983, and 1985 to show "mild SAO" — small airways
obstruction (Exhibits 2 and 3). In a long time cigarette
smoker such as Mr. Winn, these chest x-ray findings and
pulmonary function tests were diagnostic for COPD. Thus,
by 1985, Mr. Winn was known to have COPD with approxi-
mately 10% impairment.
2. Thus, if Mr. Winn did not have COPD, and only his
alleged asbestosis, his AMA rating would be at least 10%
less.
J.A. at 9.
In December 1998, Dr. Donlan wrote to counsel for Newport News
and stated as follows:
Thank you for your recent letter regarding Mr. Wynne
[sic]. I have reviewed Dr. Reed’s [sic] report as well as my
office records. I have not treated Mr. Wynne [sic] but did
see him for a pulmonary evaluation in September 1997. I
6 NEWPORT NEWS SHIPBUILDING v. WINN
concluded that he did have pulmonary asbestosis. He did
have a history of occupational asbestosis exposure with min-
imal x-ray abnormalities, presence of bilateral crackles, and
reduction in diffusion capacity.
He did have a cough and mild shortness of breath on
exertional activities. I felt that this was likely related to
chronic bronchitis. His pulmonary function tests performed
at DePaul Hospital September 23, 1997 did show mild
obstructive impairment. Diffusion capacity was mildly
reduced to 75% of predicted.
Using AMA guidelines, I would place his impairment as
Class II, 10%. I think the majority of this impairment would
be secondary to chronic bronchitis from cigarette smoking.
I would agree with Dr. Reed [sic] that the preexisting dis-
ease of chronic bronchitis contributes to his overall impair-
ment. I would agree with Dr. Reed [sic] that had he not had
chronic bronchitis that his impairment would be less.
J.A. at 10.
In January of 1999, Dr. Donlan provided another letter in response
to an inquiry by counsel for Newport News. In this letter, Dr. Donlan
writes, "I will attempt to answer your question in regards to Mr.
Wynn’s [sic] overall impairment. I would conclude that his overall
impairment would be 4% had he had asbestosis alone." J.A. at 11. Dr.
Guardia, who saw Winn in 1988 following an auto accident, but never
treated Winn for any other condition, reviewed Winn’s record at the
clinic, as well as the reports of Drs. Donlan and Reid, and merely
agreed that "had Mr. Wynn [sic] not been a smoker, his disability
would have been much less." J.A. at 12.
The BRB concluded that the evidence of contribution fell short of
the standard for § 8(f) relief established by this court in Carmines.
Carmines was exposed to asbestos at the Newport News facility over
a thirty-year period. See Carmines, 138 F.3d at 137. He was diag-
nosed with pulmonary asbestosis in 1990 and deemed to have a
twenty-five percent to thirty percent impairment of the whole person.
See id. He also had substantial preexisting scarring of the lungs due
NEWPORT NEWS SHIPBUILDING v. WINN 7
to pleurisy. See id. at 139. Dr. Hall, a company physician for Newport
News, opined on the basis of old x-rays that Carmines’ preexisting
disability accounted for about eighteen percentage points of the total
disability, which was twenty-eight percent. See id. at 140. He con-
cluded that Carmines’ asbestosis accounted for the difference — ten
percent. See id.This court determined in Carmines that Dr. Hall’s evidence was
insufficient to meet the contribution requirement and show the claim-
ant’s total disability to be materially and substantially greater than the
disability resulting from the work-related condition alone. See Car-
mines, 138 F.3d at 134, 142 (4th Cir. 1998). The court pointed out
that Carmines’ asbestosis standing alone could account for all of his
disability. See id. at 143. In the absence of expert evaluation of the
degree of disability covered by the asbestosis separate and apart from
the impact of the preexisting condition, the court said, there was no
basis for a comparison which would reveal whether the prior injury
materially and substantially contributed to the total impairment. See
id. at 143-44. To satisfy the third requirement under § 8(f), the court
held that, "an employer must quantify the type and extent of the dis-
ability that the claimant would have suffered without the preexisting
condition." Id. at 139. It is not enough, as Dr. Hall did in Carmines,
to simply calculate the total current disability and subtract from it the
disability resulting from the preexisting condition.
As we have noted in other § 8(f) cases, competing policy goals are
always at stake in these cases. The purpose of § 8(f) is to encourage
reemployment of disabled workers and to prevent an employer from
being additionally liable when a previously disabled employee is
injured. See Lawson v. Suwanee Fruit & S.S. Co., 336 U.S. 198, 201
(1949); Carmines, 138 F.3d at 139. However, § 8(f) should not pro-
duce a windfall to employers who should be held responsible for the
work-related injuries and illnesses which befall previously disabled
employees. See Carmines, 138 F.3d at 139. Additional difficulties
result from the frequent appearances of company doctors providing
opinions for an employer who has an incentive to try to get as many
cases as possible dumped into the special fund.
In this context, the rigorous standard of Carmines makes good
sense and is supported by cases from other circuits. In Sealand Termi-
8 NEWPORT NEWS SHIPBUILDING v. WINN
nals, Inc. v. Gasparic, 7 F.3d 321, 323 (2d Cir. 1993) (per curiam),
the court held that § 8(f) relief is precluded unless the evidence estab-
lishes that the work-related injury alone would not have caused the
workers’ total disability. The United States Court of Appeals for the
First Circuit, in Director, OWCP v. Bath Iron Works Corp., 129 F.3d
45 (1st Cir. 1997), followed this court’s opinion in Harcum, and held
that, to justify § 8(f) relief, an employer must show the degree of dis-
ability attributable to the work-related injury alone, "so that this
amount may be compared to the total percentage of the partial disabil-
ity for which coverage under the LHWCA is sought." 129 F.3d at 51;
see also Two "R" Drilling Co., Inc. v. Director, OWCP, 894 F.2d 748(5th Cir. 1990).
Applying the Carmines standard here, we find the evidence insuffi-
cient to support § 8(f) relief. We agree with the BRB that Dr. Reid’s
methodology, as well as that of Dr. Guardia, fails to satisfy Carmines.
Dr. Reid concluded that Winn’s asbestosis, without the preexisting
condition, would result in an AMA rating of at least ten percent less
than the rating which results from the two conditions combined. He
thus places the degree of disability from the asbestosis alone at less
than the total disability, but gets there by using a process much like
the "subtraction" process disfavored by this court in Carmines. As the
BRB found, it appears that Dr. Reid merely subtracted the extent of
disability resulting from the preexisting disability from the extent of
the current disability. This method is legally insufficient under Car-
mines to establish that a claimant’s preexisting disability is materially
and substantially greater than the disability due to the final injury
alone.
Similarly, Dr. Guardia’s opinion, which merely states that if Winn
had not been a smoker, his disability would have been "much less"
is also legally insufficient. This opinion does not attempt to quantify
the level of impairment that would result from the work related injury
alone, as is required by Harcum. Dr. Guardia’s short opinion is simi-
lar to that of a doctor who reviews a claimant’s medical records and
then uses a "check-off" form to indicate his agreement with the
assessment of another doctor. These forms are used in many cases,
and are usually given little weight by ALJs. Further, Dr. Guardia
never treated Winn, and only examined him once several years earlier
NEWPORT NEWS SHIPBUILDING v. WINN 9
after an auto accident. The BRB and the ALJ were correct in giving
little weight to this opinion.
An ALJ may not "merely credulously accept the assertions of the
parties or their representatives, but must examine the logic of their
conclusions and evaluate the evidence upon which their conclusions
are based." Carmines, 138 F.3d at 140. The ALJ in the instant case
performed this duty when he found that the opinions of Drs. Donlan
and Guardia had a questionable basis. The ALJ correctly noted that
Dr. Guardia’s report did not mention which reports were reviewed
and did not provide a basis for the conclusion reached. J.A. at 37. In
his opinion, the ALJ set forth the full text of the doctors’ opinions,
in which Dr. Donlan and Dr. Guardia revealed that they had not
treated Winn, and had little contact with him. Id. The ALJ further
notes the discrepancy between the numbers reached by Dr. Reid and
Dr. Donlan, and that testing results from Dr. Donlan were not submit-
ted. Id. For all of these reasons, we feel that the BRB was correct in
upholding the decision of the ALJ, and finding that the employer
failed to establish the contribution element. Based upon this ruling,
the issue of preexisting permanent partial disability need not be
addressed.
Accordingly, the decision of the BRB is
AFFIRMED.
WIDENER, Circuit Judge, concurring:
I concur in the result for the sole reason that the measurement of
the disabilities of Winn by the use of the AMA standards is much the
same as that in the case of No. 00-1321, Newport News Shipbuilding
v. Randall Pounders, today decided, so that circuit precedent, accord-
ingly, would require the application of the Harcum-Carmines rule. I
respectfuly do not agree with the majority decision in its remarks with
respect to company doctors and the use of forms.
In my opinion, the case should have been decided on the reasoning
espoused by Administrative Judge Smith in the administrative deci-
sion in the Pounders case, and here, especially, is another illustration
10 NEWPORT NEWS SHIPBUILDING v. WINN
of requiring a physician to compare a known quantity (the subsequent
work-related disability), with a quantity which does not exist (the pre-
vious "permanent partial disability.").