Newport News Shipbuilding & Dry Dock Co. v. Director, Office of Workers' Compensation Programs , 245 F. App'x 249 ( 2007 )


Menu:
  •                              UNPUBLISHED
    UNITED STATES COURT OF APPEALS
    FOR THE FOURTH CIRCUIT
    No. 05-2418
    NEWPORT NEWS    SHIPBUILDING    AND   DRY   DOCK
    COMPANY,
    Petitioner,
    versus
    DIRECTOR, OFFICE OF WORKERS’       COMPENSATION
    PROGRAMS; WILLIE M. RICHARDSON,
    Respondents.
    On Petition for Review of an Order of the Benefits Review Board.
    (05-0151)
    Argued:   May 22, 2007                      Decided:   August 14, 2007
    Before WILLIAMS, Chief Judge, GREGORY, Circuit Judge, and Benson E.
    LEGG, Chief United States District Judge for the District of
    Maryland, sitting by designation.
    Petition for review denied; Board order affirmed by unpublished
    opinion. Judge Gregory wrote the opinion, in which Chief Judge
    Williams and Judge Legg joined.
    ARGUED: Jonathan Henry Walker, MASON, MASON, WALKER & HEDRICK,
    P.C., Newport News, Virginia, for Petitioner. Matthew W. Boyle,
    UNITED STATES DEPARTMENT OF LABOR, Washington, D.C.; Matthew Harley
    Kraft, RUTTER & MILLS, L.L.P., Norfolk, Virginia, for Respondents.
    ON BRIEF: Howard M. Radzely, Solicitor of Labor, Allen H. Feldman,
    Associate Solicitor, Mark A. Reinhalter, Counsel for Longshore,
    UNITED STATES DEPARTMENT OF LABOR, Washington, D.C., for Respondent
    Director, Office of Workers’ Compensation Programs. Jennifer W.
    Vincent, PATTEN, WORNOM, HATTEN & DIAMONSTEIN, L.C., Newport News,
    Virginia, for Respondent Willie M. Richardson.
    Unpublished opinions are not binding precedent in this circuit.
    2
    GREGORY, Circuit Judge:
    Newport News Shipbuilding and Dry Dock Company (“Newport
    News”) contests a benefits award granted, under the Longshore and
    Harbor Workers’ Compensation Act, 
    33 U.S.C. §§ 901-950
    , (“the
    Act”),   to   Willie    M.   Richardson   by   the   Workers’   Compensation
    Benefits Review Board (“Board”).          Newport News argues that the
    Board should not have approved the Administrative Law Judge’s
    (“ALJ”) award of benefits for Richardson’s chronic obstructive
    pulmonary disorder (“COPD”) because Section 33(g) of the Act
    prohibits benefits for a person who has previously settled, without
    employer approval, with a third party for injuries related to the
    same disability.       Newport News claims that Richardson’s unapproved
    settlement for asbestosis in 1999 should bar his current claim for
    COPD benefits because he suffers from only one lung-impairing
    disability. For the reasons stated below, we deny the petition and
    affirm the award of benefits.
    I.
    Richardson worked at Newport News as a welder from 1968 until
    late 1998.    Throughout his career, he was exposed to fumes and dust
    from the several different types of welding metals.             He also used
    asbestos material to protect himself while welding until the early
    eighties.     For four years of his career, he welded in a shipyard
    that was filled with toxic fumes from a banned paint that was
    3
    applied to and then removed from a ship.             Throughout the eighties
    and nineties, Richardson had difficulty breathing when performing
    light activity, but in late 1998 his dyspnea increased to the point
    where he had to leave work.            Richardson also has a history of
    childhood asthma.
    Richardson applied for          disability benefits on February 16,
    1995.   In his first application, he claimed that he suffered from
    asbestos-related lung disease contracted from his inhaling asbestos
    fibers at work.          No action was taken on his application.              On
    February    9,   1999,    Richardson    filed   a    second   application    for
    benefits, claiming that he suffered from COPD, a condition that he
    contracted by inhaling welding dust and paint fumes at work.                 Also
    in 1999 Richardson negotiated settlements of $112 and $6,500, from
    Forty-Eight Insulations and Babcock & Wilcox respectively, for
    asbestos-related illness.           Richardson did not receive written
    approval from Newport News before reaching those settlements.
    Richardson’s        two   disability   claims    were    consolidated   for
    hearing on July 18, 2000.              At the hearing, the ALJ granted
    Richardson’s motion to amend his claim to seek benefits related
    only to his COPD and ask for medical monitoring related to asbestos
    exposure.    Richardson’s doctors had determined that he did not
    suffer from asbestosis, but they wanted to make sure that it would
    not develop in the future.         After the hearing, the ALJ allowed the
    parties to conduct more depositions of experts and enter them into
    4
    evidence.      In an order dated January 30, 2003, the ALJ ruled that
    Section 33(g) of the Act barred Richardson from recovery because he
    suffered from a lung disability that included asbestosis, the very
    disability that was the subject of the earlier, unapproved third-
    party settlements:
    I find that the preponderance of the evidence establishes
    that the Claimant suffers from asbestosis, asbestos
    related pleural plaques, and has both restrictive and
    obstructive lung impairment. . . . I also find that all
    of these conditions contribute at least to some degree to
    the Claimant’s impaired lung functioning and combine with
    his pre-existing asthma. The result is that the Claimant
    suffers from a single disability caused by his
    simultaneous exposure to asbestos fibers, smoke, dust,
    and fumes while welding.
    J.A. 885.      Upon finding his claim barred, Richardson appealed to
    the Board.
    The   Board   reversed   the   order   of   the   ALJ   based   on   its
    interpretation of Chavez v. Todd Shipyards Corp., 
    139 F.3d 1309
    (9th Cir. 1998).        In Chavez the Ninth Circuit deferred to the
    Benefits Review Board Director’s understanding of the third-party
    settlement rule, which provided that a claimant who has settled
    with a third party on the basis of injuries produced by one
    disability will not be barred from collecting benefits from the
    employer on the basis of a second, separate disability.                 
    Id. at 1312
    .     The Board instructed the ALJ in its order:
    If, after reviewing the medical evidence in light of
    Chavez, the administrative law judge again finds that the
    claimant is disabled by both asbestosis and COPD, Section
    33(g) cannot bar the claim because, under the aggravation
    rule, COPD is considered to be the disabling, compensable
    5
    condition and therefore not the same disability for which
    claimant settled his third party claims.
    J.A. 893.   With this instruction, the ALJ reviewed the evidence,
    found that Richardson suffered from COPD as well as asbestosis, and
    awarded him permanent partial disability benefits.      (J.A. 912.)
    Newport News asks us to reverse the Board’s affirmation of the
    ALJ’s second order.
    II.
    This Court reviews the Board’s conclusions of law de novo.
    Newport News Shipbuilding & Dry Dock Co. v. Tann, 
    841 F.2d 540
    , 542
    (4th Cir. 1988).   We will uphold the ALJ’s findings of fact if they
    are supported by substantial evidence.   
    Id. at 543
    .   Therefore, in
    evaluating Newport News’s appeal, we must confront two questions.
    We must first ask if the Board interpreted the Act correctly.    Then
    we must decide if substantial evidence supports the ALJ’s findings
    of fact.
    A.
    The Act states that employers shall be liable to claimants for
    “compensation for either disability or death resulting from an
    injury occurring in the course of maritime employment.”     Brown &
    Root, Inc. v. Sain, 
    162 F.3d 813
    , 816 (4th Cir. 1998); see 
    33 U.S.C. § 903
    (a). The Act defines disability as “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.”    
    33 U.S.C. §
                                    6
    902(10).    It defines injury as “accidental injury or death arising
    out of and in the course of employment, and such occupational
    disease or infection as arises naturally out of such employment or
    as naturally or unavoidably results from such accidental injury.”
    
    33 U.S.C. § 902
    (2). The Supreme Court has defined “person entitled
    to compensation” in Section 33(g) as a person who would be eligible
    for benefits whether or not he or she is currently receiving
    benefits.    Estate of Cowart v. Nicklos Drilling Co., 
    505 U.S. 469
    ,
    477 (1992).
    Section 33(g) of the Act requires claimants to secure written
    approval from their employers when they negotiate settlements with
    third   parties   and   when   the   basis   for   the   settlement   is   the
    disability for which the employer might be liable under the Act.
    If claimants do not get this written approval, then they can
    receive no compensation for the disability at issue.            The section
    provides in relevant part:
    (1) If the person entitled to compensation . . . enters
    into a settlement with a third person . . . for an amount
    less than the compensation to which the person . . .
    would be entitled under this chapter, the employer shall
    be liable for compensation as determined under subsection
    (f) of this section only if written approval of the
    settlement is obtained from the employer and the
    employer’s carrier, before the settlement is executed,
    and by the person entitled to compensation. . . .
    (2) If no written approval of the settlement is obtained
    and filed as required in paragraph (1), or if the
    employee fails to notify the employer of any settlement
    obtained from or judgment rendered against a third
    person, all rights to compensation and medical benefits
    under this chapter shall be terminated, regardless of
    7
    whether the employer or the employer’s insurer has made
    payments or acknowledged entitlement to benefits under
    this chapter.
    
    33 U.S.C. § 933
    (g).      The    point    of   this    “written   approval
    requirement [is to] prevent[] the claimant from acting unilaterally
    to the detriment of the employer by accepting less in settlement
    than it might be entitled to and thus reducing the employer’s
    offset.”      I.T.O. Corp. v. Sellman, 
    954 F.2d 239
    , 242 (4th Cir.
    1992).
    The Board instructed the ALJ to follow the reasoning of Chavez
    v. Todd Shipyards Corp., 
    139 F.3d. 1309
     (9th Cir. 1309).                    Chavez
    held that “apportionments of the employer’s credit relative to
    third party settlements is unavailable where settlement proceeds
    are for injuries different from that upon which the compensation
    claim is based.”           
    Id. at 1312
    .   In other words, if the claimant has
    two disabilities and has only settled with the third party for
    injuries related to one of the disabilities, then the employer
    still is liable for benefits based on the second disability.
    This Court has approved this rationale.                In Brown & Root, we
    ruled     that       the   claimant,     Sain,    was   a   “person   entitled   to
    compensation” twice for two distinct disabilities, even though they
    both arose from the same source:                 “Although both asbestosis and
    mesothelioma are caused by exposure to asbestos, they are distinct
    diseases giving rise to distinct disabilities (albeit with similar
    symptoms) for which Sain could, and apparently did, bring separate
    8
    LHWCA claims.”   Brown & Root, 
    162 F.3d at 817
    .     We found that Sain
    could collect compensation for his mesothelioma despite having
    settled with third parties for his asbestosis.       
    Id. at 818
    .
    The Board has interpreted the law correctly in this case.
    Congress designed Section 33(g) to prevent injured employees from
    recovering double damages for their disabilities from both their
    employers and third parties. The section protects an employer from
    having to pay for an injury for which someone else has already
    paid, at least in part.       If an employee suffers from distinct
    injuries creating distinct disabilities, then Section 33(g) will
    only protect the employer from having to provide benefits for the
    specific disability that was the basis for the settlement obtained
    without the employer’s approval.        Because we have followed the
    rationale of both the Board and Chavez in Brown & Root, then the
    Board was correct to instruct the ALJ that Newport News could only
    invoke Section 33(g) protection if asbestosis was Richardson’s only
    disability.    Newport News should not be protected if Richardson
    also suffers from COPD or a distinct pulmonary disability.
    Newport News asks us to reverse the Board and the ALJ because
    Richardson suffers only from one disability linked to several
    causes. The company argues that the term disability is an economic
    construct that defines an inability to earn wages and is only
    tangentially related to the underlying injury.       It believes that
    the   Court   should   understand   Richardson’s   disability   as   his
    9
    inability to work at Newport News because of lung ailments, all of
    which are related in part to asbestos and for which Richardson was
    already compensated in an unapproved settlement.
    Newport News’s argument cannot stand in the face of our
    precedent.    In Brown & Root, we recognized that the concept of
    disability is inextricably linked to the injury that causes it. We
    also recognized that one claimant can suffer two disabilities, even
    if those disabilities affect the same organ system and have similar
    symptoms.    If Richardson suffers from both asbestosis and COPD,
    then he can be compensated for the COPD.
    B.
    Whether the ALJ’s findings that Richardson suffered from both
    asbestosis and COPD are supported by substantial evidence is a more
    difficult question.    After taking evidence in a hearing and in
    post-hearing depositions, the ALJ originally concluded (despite
    Richardson’s withdrawal of his claim for asbestosis): “I find that
    the preponderance of the evidence establishes that the Claimant
    suffers from asbestos, asbestos related pleural plaques, and has
    both restrictive and obstructive lung impairment.”    The ALJ then
    ruled that “all of these conditions contribute at least to some
    degree to the Claimant’s impaired lung functioning and combine with
    his pre-existing asthma.   The result is that the Claimant suffers
    from a single disability caused by his simultaneous exposure to
    asbestos fibers, smoke, dust, and fumes while welding.”   J.A. 885.
    10
    After the Board reversed the order, the ALJ made new findings
    of fact.      One of those findings included “that Claimant has
    established by a preponderance of the evidence that his obstructive
    lung disability is causally linked to his working conditions.”
    J.A. 907.     The ALJ maintained that Richardson had proven that he
    was disabled by asbestosis, pleural plagues, and restrictive and
    obstructive lung impairment, but understood the lung impairment to
    be distinct from the asbestosis, and ruled that Richardson’s COPD
    claim was not barred by Section 33(g).           J.A. 911-12.
    During the hearing, the ALJ heard evidence about Richardson’s
    condition from several doctors and lung specialists and received
    several medical records into evidence.                Dr. James P. Baker, a
    pulmonologist who treated Richardson throughout 1999, testified
    that Richardson suffered from shortness of breath related to
    “significant exposure to a number of volatile materials, plus
    asbestos.”    J.A. 56, 60.       Baker could not diagnose Richardson with
    asbestosis but admitted that he had lung abnormalities.                  His final
    diagnosis    was   that   “Mr.    Richardson    has    both    restrictive    and
    obstructive abnormality in his lung function.”                J.A. 73.    He also
    diagnosed him with bronchiectasis, “a condition which occurs when
    part of the airway passage is damaged by something.”                
    Id.
    Dr.    Joseph   C.   Ross,    who   is   board   certified    in     internal
    medicine and pulmonary disease, testified as an expert for Newport
    News.     Ross had never examined Richardson, but he reviewed his
    11
    medical records.      Ross concluded that Richardson had “pretty mild”
    lung impairment.        J.A. 157.        He disagreed that Richardson had
    either restrictive or obstructive lung disease but admitted that he
    had    restricted    air    flow   and   obstructive    airways.    On    cross-
    examination, Dr. Ross admitted that he was not a specialist in
    occupational lung disease and that he had last treated patients in
    1989. Richardson also admitted into evidence a letter from Newport
    News to Ross that instructed Ross as to the opinion that Newport
    News hoped he would espouse during this case.
    The ALJ also received medical reports from several different
    doctors.    One such report, from Dr. James V. Scutero and dated
    February 28, 1995, stated that Richardson had mildly decreased
    vital capacity and no evidence of asbestosis.                 Records from Dr.
    Baker in 1999 were consistent with his testimony that Richardson
    suffered from both restrictive and obstructive lung disorders.                In
    1998 letters to Richardson’s primary physician, Dr. George G.
    Childs, a pulmonary specialist, concluded that Richardson “has
    severe obstructive lung disease with a mild restriction.”                  J.A.
    202.    Dr. Eric J. Freeman, a lung x-ray B reader who specializes in
    diagnosing lung conditions only by reading the x-rays, in 2000
    diagnosed Richardson with “a mild restrictive lung defect of
    unknown etiology.”         J.A. 223.     Dr. Carlos F. Acosta, Richardson’s
    primary    care     physician,     diagnosed   him     with   “severe    chronic
    obstructive pulmonary disease.”           J.A. 247.    In 1998, Dr. Steven M.
    12
    Zimmet diagnoses Richardson with asbestosis, but several other
    doctors disputed that diagnosis.
    The   evidence   demonstrates      that   Richardson   has    trouble
    breathing because he has something wrong with his lungs.           The ALJ
    was in the best position to judge the credibility of all of the
    expert witnesses and medical records, and after sifting through all
    of the evidence and agendas, he gave the most weight to the
    diagnoses of asbestosis, restrictive lung disease, and obstructive
    lung disease.   With only the doctor for Newport News, Dr. Ross, who
    had never even seen Richardson, disputing that Richardson had lung
    injuries besides the asbestosis, there appears to be substantial
    evidence to support the ALJ’s finding that Richardson suffered from
    COPD, in addition to asbestosis, pleural plaques, and restrictive
    lung disease.
    III.
    We conclude that the Board interpreted the law correctly when
    it determined that Section 33(g) prohibits benefits               only for
    Richardson’s    asbestos   disability    and   not   for    the   separate
    disability of COPD.    We also conclude that substantial evidence
    supports the ALJ’s finding that Richardson suffers from COPD in
    addition to asbestosis and is thus eligible for compensation.          For
    these reasons, we affirm the Board’s decision affirming the ALJ’s
    13
    award of permanent partial disability benefits and deny Newport
    News’s petition for review.
    PETITION FOR REVIEW DENIED;
    BOARD ORDER AFFIRMED
    14