DIRECTOR, OFFICE OF WORKERS’ COMPENSATION PROGRAMS, UNITED STATES DEPARTMENT OF LABOR v. SUN SHIP, INC. (GERTRUDE EHRENTRAUT, Claimant)
NO. 96-3648
UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
July 29, 1998
1998 Decisions. Paper 175.
Before: COWEN, McKEE & ROSENN, Circuit Judges
Argued: December 1, 1997; Precedential or Non-Precedential:
Opinions of the United States Court of Appeals for the Third Circuit
1998 Decisions
7-29-1998
Director OWCP v. Sun Ship Inc
Precedential or Non-Precedential:
Docket 96-3648
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Recommended Citation
“Director OWCP v. Sun Ship Inc” (1998). 1998 Decisions. Paper 175. http://digitalcommons.law.villanova.edu/thirdcircuit_1998/175
UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
NO. 96-3648
DIRECTOR, OFFICE OF WORKERS’ COMPENSATION PROGRAMS, UNITED STATES DEPARTMENT OF LABOR, Petitioner
v.
SUN SHIP, INC.
(GERTRUDE EHRENTRAUT, Claimant)
On Appeal From the Benefits Review Board, United States Department of Labor 93-1600
Argued: December 1, 1997
Before: COWEN, McKEE & ROSENN, Circuit Judges
(Filed: July 29, 1998)
Attorneys for Petitioner
JOHN P. DOGUM, Esq. (ARGUED) Swartz, Campbell & Detweiler 1601 Market Street 34th Floor Philadelphia, PA 19103
Attorney for Respondent
OPINION OF THE COURT
McKEE, Circuit Judge
We are asked to determine if the delay of the Board of Revision and Review in reviewing a decision of an administrative law judge deprived the Board of jurisdiction under the facts of this appeal. We hold that it did, and that the Board‘s delay caused the ALJ‘s decision to become a final order that we now have jurisdiction to review. We further hold that the ALJ erred in deciding that a maritime employer is entitled to relief from the Special Fund established under
Raymound Ehrentraut worked for Sun Ship, Inc. from 1938 until his retirement in 1981. Nine years after he retired he was diagnosed with asbestosis resulting from his years of work-related asbestos exposure while at Sun Ship. The same month he was diagnosed, doctors discovered he also had a work-related pulmonary malignancy. Ehrentraut‘s asbestosis was a “pre-existing condition” that had made diagnosis of the malignancy more difficult. Ehrentraut eventually succumbed to the cancer and died on July 15, 1990. Thereafter, his wife applied to Sun Ship for death benefits under the Longshore and Harbor Workers’ Compensation Act.1
Sun Ship initially paid the requested benefits. However, in 1992, after paying benefits for 104 weeks, Sun Ship requested the Office of Workers’ Compensation Programs to provide the payments from the Special Fund established under
The Director filed a timely appeal to the Benefits Review Board on May 13, 1993. However, the Board failed to adjudicate the appeal for more than three years. Finally, on September 12, 1996, the Board issued an order in which it reversed the ALJ‘s ruling and remanded the case back to the ALJ for further proceedings. The Director filed a Petition for Review seeking a judicial determination that the ALJ‘s order had become the final decision of the Board because
II. STANDARD OF REVIEW
We exercise plenary review over both the jurisdictional issue and the substantive issue raised by this appeal because both present questions of law. Director, Office of Workers’ Compensation v. Barnes and Tucker Co., 969 F.2d 1524, 1527 (3d Cir. 1992); cf. Sea-Land Service, Inc. v. Rock, 953 F.2d 56, 59 (3d Cir. 1992). Before addressing the substance of the Director‘s petition, we must first resolve the issue of our jurisdiction.
For the reasons that follow, we conclude that we have jurisdiction to review the ALJ‘s decision as the Board‘s final order. We hold that the ALJ erred in concluding that Sun Ship is entitled to shift liability to the Special Fund that Congress created under
III. JURISDICTION
Ordinarily, the Board‘s remand to the ALJ would be an interlocutory order and we would therefore have no jurisdiction to review it. However, the
pending a review by the Benefits Review Board for more than one year shall, if not acted upon by the Board before September 12, 1996, be considered affirmed by the Benefits Review Board on that date, and shall be considered the final order of the Board for purposes of obtaining a review in the United States courts of appeals.
100 Stat. 1321-219 (emphasis added). Here, the Board issued its order on September 12, 1996. Sun Ship argues that is consistent with the requirements of the Appropriations Act. The Director responds that “before”
It is axiomatic that our interpretation of any statute begins with the language of the statute. Consumer Prod. Safety Comm‘n v. GTE Sylvania, Inc., 447 U.S. 102, 108 (1980). If the language is ambiguous, we look to legislative history to determine congressional intent. Adams Fruit Co., Inc. v. Barrett, 494 U.S. 638, 642 (1990). In addition, we will sometimes defer to a permissible interpretation of a statute by an appropriate agency. However, we will do so only when the statute does not directly speak to the issue and congressional intent cannot be gleaned from the text of the statute, or its legislative history. Only then, should the “question for the court [become] whether the agency‘s answer is based on a permissible construction of the statute.” Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 843 (1984). When legislation speaks directly to a particular issue, it is that congressional expression, not a contradictory agency interpretation, which controls. See, e.g., Rubin v. United States, 449 U.S. 424, 430 (1981).
Here, it is clear that the Board‘s decision is void if it did not comply with the Appropriations Act. We would then have jurisdiction under the Appropriations Act to review the ALJ‘s decision. However, Sun Ship argues that the Board obviously interpreted the Appropriations Act as allowing it to issue orders on September 12, 1996 because the Board issued several opinions on that day that had been pending for over a year. Sun Ship then relies upon Chevron to argue that we must defer to the Board‘s interpretation.2 However,
Sun Ship also contends that the Appropriations Act, taken as a whole, is ambiguous, and that this “ambiguity” requires us to look beyond the plain meaning of the language to determine Congress’ true intent. Sun Ship attempts to create ambiguity by referring to other provisions in the Appropriations Act that allow for action “after September 12[th],” or “beginning September 13th,” rather than “before September 12th.” For example, the statute provides that:
. . . no funds made available by this Act may be used by the Secretary of Labor after September 12, 1996 to review a decision under the [LHWCA] that has been appealed and that has been pending before the Benefits Review Board for more than 12 months, except as otherwise specified herein . . . beginning on September 13, 1996, the Benefits Review Board shall make a decision on appeal of a decision under the [LHWCA] no later than 1 year after the date the appeal to the Benefits Review Board was filed.
110 Stat. 1321. (emphasis added).
It is difficult to imagine how Congress could have more clearly established the Board‘s deadline for acting. Congress decreed that the Board must act “before September 12th.” In United States v. Locke, 471 U.S. 84, 93-96 (1985), the Court held that a statutory requirement to act “prior to December 31” plainly meant that action had to be undertaken before that date and not on it. The same is true here.3
On September 12, 1996 this case had been pending before the Benefits Review Board for more than three years. The Board failed to act before September 12, and its subsequent decision on September 12 is, therefore, a nullity under the Act. That conclusion is required by the language of the statute, and we have been directed to nothing in the legislative history that would suggest a different result. Thus, a contrary interpretation of the
IV. DISCUSSION
A. The Special Fund Under S 8(f)
The relevant text of the statute reads as follows:
In any case in which an employee having an existing permanent partial disability suffers injury, the employer shall provide compensation for such disability as is found to be attributable to that injury based upon the average weekly wages of the employee at the time of the injury. If following an injury falling within the provisions of subsection (c)(1)-(20) of this section, the employee is totally and permanently disabled, and the disability is found not to be due solely to that injury, the employer shall provide compensation for the applicable prescribed period of weeks provided for in that section for the subsequent injury, or for one hundred and four weeks, whichever is the greater . . . .
In all other 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 in addition to compensation under subsections (b) and (e) of this section, compensation for one hundred and four weeks only.
The Special Fund was established in 1927 with the enactment of the LHWCA. It was created by
The Special Fund was originally enacted . . . to fund expenditures [where] an employee received an injury which alone caused only permanent partial disability, but resulted in the employee‘s permanent disability when combined with a previous disability, the employer had to provide compensation for the disability caused by the second or subsequent injury . . . .[T]he employee would be paid the remainder of his compensation for permanent total disability out of the Special Fund . . .
Smith, The Special Fund Under The Longshore And Harbor Workers’ Compensation Act, 11 Mar. Law 71 (1986). The LHWCA was enacted “in response to a series of Supreme Court decisions that invalidated prior attempts to cover maritime workers under existing state compensation structures.” Bath Iron Works Corp. v. Director, Office of Workers’ Compensation, 136 F.3d 34, 40 (1st Cir. 1998). Those decisions resulted in a situation where the last employer was liable for injuries that became totally disabling only as a result of preexisting injuries for which the last employer had no responsibility, and over which, it had no control. The Supreme Court discussed this situation
The Court noted the problems caused by earlier decisions holding the last employer fully responsible for the effects of a second injury although total disability only resulted from the combined effect of the latter injury and a preexisting condition. In particular, the Court noted the prior decision of the Oklahoma Supreme Court in Nease v. Hughes Stone Co., 114 Okl. 170 (Okla. 1925), where the second employer had been held liable “for total compensation for loss of the second eye.” Lawson, 336 U.S. at 203. The Court noted that
[a]fter the decision . . . thousands of one-eyed, one-legged, one-armed, one-handed men in the State of Oklahoma [lost their jobs] and [could] not get employment. . . . The decision displaced between seven and eight thousand men in less than 30 days in Oklahoma.
Id. (internal quotation marks omitted). See also Bath Iron Works, 136 F.3d at 41 (quoting Lawson). At the time Lawson was decided, S 8(f) provided
that if an employee receives an injury which of itself would only cause permanent partial disability but which, combined with a previous disability, does in fact cause permanent disability, the employer shall provide
compensation only for the disability caused by the subsequent injury: Provided, however, that . . . after the cessation of the payments for the prescribed period of weeks, the employee shall be paid the remainder of the compensation that would be due for permanent total disability. . . . out of the special fund.
Id. at 200. The Court held that this “second injury provision” served a double purpose. “It protects the employer who has hired, say, a one-eyed worker who goes and loses his other eye and becomes a total disability.” Id. at 202. However, it “also protects the worker with one eye from being denied employment on account of his being an extra risk. Now, . . . it is possible to protect both the employer and to protect the one-eyed employee also.” Id. See also Bath Iron Works Corp., 136 F.3d at 40 (1st Cir. 1998). The Court concluded that the protection of the Act could not have been intended only when the first disability resulted from a covered occupation. If the Act were so limited, the employers would still be reluctant to hire workers with pre-existing injuries. The problem was not the source of the pre-existing injury, but the fact that the worker who came to an employer with a disability posed a greater risk of becoming totally disabled while working for the subsequent employer. The Court in Lawson held that Congress had to intend “previous disability” as used in the Act to include a disability in fact, whether or not it occurred under circumstances covered by the LHWCA. Thus, it was necessary to allow the employer relief from the special fund even though the pre-existing injury was not related to an occupation covered by the LHWCA.
Since Lawson, courts have interpreted the LHWCA in a manner that is consistent with the public policy of preventing discrimination against employees with pre-existing injuries. We have stated that “the underlying congressional purpose in creating the special fund was to encourage the employment of partially disabled persons.” Director, Office of Workers’ Compensation v. Universal Terminal & Stevedoring Corp., 575 F.2d 452, 456 (3d Cir. 1978).7 Moreover, the congressional committee reports for
Congress initially created only two conditions precedent to section 8(f) relief. An employee had to have a pre-existing partial disability, and that disability had to combine with a subsequent work injury to create a permanent, total disability. See
B. The Manifestation Requirement
The “manifestation requirement” arose because of the public policy against discrimination that has been read into the Act since Lawson. Courts have reasoned that an employer can not discriminate if it does not know of a pre-existing injury. Therefore, courts have required that the pre-existing injury be manifest in order to afford the employer relief from the special fund. However, courts were aware that at least two further problems could exasperate rather than ameliorate the problem that the law was trying to remedy. First, proving such knowledge is very difficult. Accordingly, courts credited the employer with knowledge of a pre-existing condition which could have been discovered in an employee‘s medical records even if the employer did not actually know.
[s]trong policy considerations dictate that only those employers who hire the handicapped with knowledge of their disabilities qualify for limited liability. . . . In view of the difficulty of proving actual knowledge . . . the test is ordinarily an objective one. Conditions that are latent rather than manifest to a prospective employer do not qualify as S 8(f) disabilities.
Atlantic & Gulf Stevedores, Inc. v. Director, Office of Workers’ Compensation, 542 F.2d 602, 608 (3d Cir. 1976). Allowing an employer to establish manifestation by way of constructive knowledge also addressed the concern that the policy of protecting employees would result in employers subjecting certain employees to exacting physical examinations for fear of not learning of a pre-existing condition and becoming ineligible for section 8(f) relief. It is the availability of knowledge, rather than actual knowledge of the condition, that is relevant to determining manifestation. See Universal Terminal & Stevedoring Corp., 575 F.2d at 456-57; cf. American Mut. Ins. Co. Of Boston v. Jones, 426 F.2d 1263 (D.C.Cir. 1970). Thus, an employer who demonstrates that it could readily have discovered the disability by looking at the employee‘s medical records is entitled to S 8(f) relief. Universal Terminal & Stevedoring Corp., 575 F.2d at 457. See, e.g., Bunge Corp. v. Director, Office of Workers’ Compensation, 951 F.2d 1109, 1111 (9th Cir. 1991) (“An employer need not have actual knowledge of an employee‘s condition. If the condition is readily discoverable from the employee‘s medical record in the possession of the employer, knowledge of the condition is imputed to the employer.“). Against this background, the vast majority of courts of appeals that have addressed the issue have agreed that an employee‘s disability must be manifest to the employer before the employer can seek relief from the special fund.8 The manifestation requirement is
Here, the Director denied Sun Ship‘s S 8(f) application because “no evidence [was] submitted to show that [Ehrentraut] had a manifest pre-existing permanent disability prior to his retirement from work in 1981. . . .” See Joint Appendix at 52; ALJ Op. at 2. However, Sun Ship raises an interesting issue of first impression in this circuit. It argues that the 1984 amendments to the LHWCA eliminated the manifestation requirement where, as here, the preexisting injury does not become manifest until after the employee retires. The ALJ accepted this argument and reversed the ruling of the Director.
We are convinced that Section 8(f) should be read literally in considering disability from post-retirement occupational diseases. Only in this way can Congress’ intent in passing the 1984 amendments be carried out. To establish entitlement to relief from the special fund for a post-retirement occupational disease, therefore, the employer need only show that there is an existing permanent partial disability combined with the same and contributed to the resulting permanent total disability. In such cases the manifestation requirement will not be applied.
ALJ Op. at 3 (internal quotation marks omitted).
C. The 1984 amendments
Until 1984, no provision of the LHWCA enabled a maritime worker to collect disability payments for post-retirement occupational diseases. Congress rectified this in 1984 by amending the LHWCA to provide workers with disability coverage for post-retirement long-latency occupational diseases.10 See
The legislative history of the 1984 amendments clearly indicates a congressional desire to expand employer liability for post-retirement occupational disease, but it does not reflect a desire to allow employers to shift liability for such disability payments to S 8(f) when an employer unwittingly hires an individual whose work-related diseases were asymptomatic, and undocumented. Moreover, relevant portions of the House and Senate Committee reports concerning the 1984 LHWCA amendments suggest a congressional intention to maintain the manifestation requirement. The Senate Report states:
Section 8(f) of the act was designed to encourage employers to hire and retain disabled workers by distributing much of the additional cost of industrial injury attributable to pre-existing permanent disabilities among all employers and carriers subject to the act. An employer able to demonstrate actual, or in some cases, constructive knowledge that an injured worker had a permanent disability which pre-dated a compensable injury is often able to shift to the Special Fund the responsibility for paying a very substantial portion of the amounts payable to the worker. . . . The goals of section 8(f) remain valid.
S. Rep. No. 98-81, at 34 (1983) (emphasis added). This report expressly reaffirms the congressional commitment to the manifestation requirement and also serves to clarify any questions concerning the purpose of S 8(f) relief.
Likewise, the House Committee report states:
Section 8(f) was intended to encourage employers to hire disabled workers and permits such employers to distribute among all employers subject to the Act, much of the cost of compensating such a worker should the worker . . . suffer a subsequent injury.
H.R. Rep. No. 98-570, pt. 1, at 20 (1983), reprinted in 1984 U.S.C.C.A.N. 2734, 2753. While this report does not address the manifestation issue, it states that special fund relief is intended to encourage employers to hire disabled workers. The ALJ based his interpretation of the 1984 amendments upon the reasoning of the Court of Appeals for the Fourth Circuit in Harris. However, we are not persuaded by the analysis in Harris.
D. Newport News Shipbuilding & Dry Dock Co. v. Harris
In Harris, the court reasoned that Congress intended to save maritime employers money when it enacted the 1984 amendments. The court looked to the legislative history of the 1984 amendments and concluded that “the amendments as a whole are intended to reduce the cost of Longshore coverage for employers in the covered industries
The ALJ concluded that, under Harris, the manifestation requirement for pre-existing disabilities does not apply when total disability comes about as a result of a long latency period post-retirement occupational disease. We disagree. First, we doubt that the employers’ increased exposure was driven by, or intended to be circumscribed by, a countervailing policy of saving employers’ money. Neither the text of the amendments, their legislative history, nor the substantial body of appellate decisions interpreting the Act suggest that we should ameliorate the greater exposure inherent in the amendments by reading the manifestation requirement out of the Act. Second, we do not understand how Congress could have sought to “disturb, to the most limited extent possible, the rights and benefits which the Longshore Act provides” as the Harris
Had Congress wanted to expand liability only on the condition that the almost universally accepted manifestation requirement be eliminated, it could certainly have said so. A departure from the longstanding requirement of manifestation should emanate from the statute‘s text, not its ethers. Sun Ship was not aware of any risk from a pre-existing injury or condition when it hired Ehrentraut, and we fail to see why it should now be entitled to relief under section 8(f). We conclude that the more cogent analysis, and the better reasoned approach, is that set forth by the Court of Appeals for the First Circuit in Bath Iron Works Corp. We will not assume that Congress intended to effect a change in such a longstanding provision of the law by relying upon inference and jurisprudential deductions. Accordingly, we find the ALJ‘s reliance upon Harris misplaced.
V. CONCLUSION
For the reasons set forth above, we conclude that Sun Ship is not entitled to shift liability to the Special Fund under S 8(f), and the decision of the ALJ will be reversed.
A True Copy: Teste:
Clerk of the United States Court of Appeals for the Third Circuit