Aerojet-General Shipyards, Inc., a Corporation, and the Home Indemnity Company, a Corporation v. William M. O'keeffe, Etc.

442 F.2d 508, 1971 U.S. App. LEXIS 10589, 1972 A.M.C. 36

• Court: Court of Appeals for the Fifth Circuit
• Decided: April 23, 1971
• Docket: 29265
• Status: Published

Opinions

SIMPSON, Circuit Judge:

In this case an employer, Aerojet-Gen-eral Shipyards, Inc., and its workman’s compensation insurance carrier, The Home Indemnity Company (hereinafter collectively referred to as Aerojet), both appeal the district court’s grant of summary judgment in favor of appellee William M. O’Keeffe, Deputy Commissioner, Sixth Compensation District, United States Department of Labor (O’Keeffe or the Deputy Commissioner hereinafter), entered after all parties moved for summary judgment. The judgment upheld the Deputy Commissioner’s award of compensation for permanent total disability made in favor of Everett L. Jacques, an employee of Aerojet. The award was the result of a modification of a prior order which rejected Jacques’ claim. Aerojet maintains that the district court erred in upholding the award because the Deputy Commissioner reversed his prior order on the basis of a mistake in a determination of fact in the absence of evidence that a mistake had occurred. A second question raised is whether the Deputy Commissioner properly received in evidence a medical report without requiring its author to be present at the hearing for cross-examination. Since we find merit in the first contention and reverse for that reason, we pretermit discussion of the second question presented.

The claimant, Jacques, was employed by Aerojet as a foreman in charge of sandblasting crews for approximately nine years prior to the onset of his disability. In this capacity he would supervise and inspect the sandblasting of large interior tanks of ships undergoing repair at Aerojet’s facility. This activity necessarily brought him into contact with large amounts of silica dust as well as other occupational fumes and dusts.

In August, 1964, Jacques became temporarily disabled due to a condition in his left lung which resulted in his hospitalization. During the next year he was hospitalized twice with chest pains and again in November, 1965, for swelling in his legs. Jacques’ failing health ultimately resulted in his permanent total disability.

The compensation claim involved was filed in October, 1965, under the Longshoremen’s and Harbor Workers’ Compensation Act of 1927, Title 33, U.S.C., Section 901 et seq. A hearing on the merits of the claim was held before the Deputy Commissioner, in April, 1966. At this first hearing, extensive testimony and documentary evidence was received as to the nature of Jacques’ illness and the relationship between his resulting disability and his employment.

Despite lack of a positive diagnosis by any of the several doctors who expressed an opinion, it was generally conceded that claimant was probably suffering from a collagen disease, a loose collective designation for a group of disorders involving increase and proliferation of connective and supportive tissues of several areas of the body, including the lungs and the bones, tendons, skin, et cetera as well, rather than from silicosis, the usual occupational disease associated with sandblasting.¹ Collagen diseases are not causally related to inhalation of silica or other foreign matter, so far as is known to medical science. Stedman’s Medical Dictionary lists the following as among so-called collagen diseases: serum sickness, rheumatic fever, systemic lupus erythematosus, rheumatoid arthritis, seleroderma, polyarteritis., .nodosa, and dermatomyositis.

The primary question sought to be resolved by the Deputy Commissioner at this first hearing was the degree, if any, to which the claimant’s employment caused or contributed to his disability. Although neither x-rays nor a biopsy of lung tissue indicated the presence of silicon in Jacques’ lungs, the various doctors involved offered conflicting views as to this question. Dr. Charles T. Montgomery, claimant’s personal physician and a general practitioner, testified that he believed Jacques’ exposure to industrial dusts either caused or contributed to the impairment of his health. On the other hand, Dr. A. E. Anderson, a specialist in internal medicine and chest diseases indicated that in his opinion Jacques’ exposure to industrial dusts did not cause the condition or worsen any pre-existing lung condition unrelated to his employment.

Subsequent to the first hearing but prior to the Deputy Commissioner’s decision, he referred Jacques to Dr. Philip W. Horn, a specialist in internal medicine with a subspecialty in pulmonary diseases.² Dr. Horn concluded in his report that Jacques’ disability could be directly attributable to his work and working conditions.

Despite the opinions of Drs. Montgomery and Horn that Jacques’ disability could be directly related to his employment and that his employment either caused or contributed to his disability, Deputy Commissioner O’Keeffe, on February 23, 1967, entered an order denying Jacques’ claim. His Findings of Fact found that Jacques, while working for Aerojet, had developed a collagen disease ; that he did not have silicosis; that there is no proven causal relationship between sandblasting and a collagen disease; and that “claimant’s present lung condition is not the result of exposure to environmental factors at the work site”.

No attempt was made by the claimant to have this order suspended or set aside and it became final after 30 days. Title 33, U.S.C., Section 921(a). Nevertheless, five months later, on July 24, 1967, asserting authority to act based upon possible mistake in a determination of fact, under Title 33, U.S.C., Section 922,³ O’Keeffe reopened the claim on his own initiative and appointed Dr. Gerald P. Rodnan as an impartial specialist to review all of the medical data in the case.

After Dr. Rodnan’s report was received, a second hearing was held by O’Keeffe in May, 1969. The evidence received at this hearing consisted only of the written report of Dr. Rodnan, the testimony of Dr. Horn, who had not testified at the previous hearing but whose report was considered, and some brief testimony of Jacques. Dr. Rodnan did not personally examine the claimant but based his report exclusively upon a review of the entire previous medical evidence as to this claim including the stenographic transcript of the prior hearing before the Deputy Commissioner. In contrast, Dr. Horn, appointed to examine Jacques by the Deputy Commissioner following the first hearing, continued to treat Jacques as his attending physician in the two years before the second hearing.

Soon after the second hearing O’Keeffe entered on July 3, 1969, his “Compensation Order Modification of Rejection and Award of Compensation”, containing “Modified Findings of Fact” in which he found that Jacques’ employment related exposure to silica dust and other occupational fumes and dusts materially aggravated and hastened his disabling condition. Based on this finding O’Keeffe awarded Jacques $13,980.00 (199% weeks at $70.00 per week) as compensation for permanent total disability, and $2500.00 for attorney’s fees. The latter figure included $50.00 for cost of Dr. Horn’s testimony, found to be necessary.

Upon review by the district court the above order was upheld by summary judgment in favor of the Deputy Commissioner, and the appellants brought the present appeal.

As initially indicated, our decision in this case is based on appellant’s first claim of error: that O’Keeffe’s second order modified his prior order on the ground of a mistake in the determination of fact when there was no evidence of a mistake having been made.⁴

At least twice before we have had occasion to deal with the question of the quality of proof necessary to support a modification of an order by a deputy commissioner on the ground of a mistake in a determination of fact. In Stansfield v. Lykes Bros. S. S. Co., 5 Cir. 1941, 124 F.2d 999, in discussing the reconsideration of an award on this ground, we stated:

“While we think it plain therefore, that new evidence may be fairly introduced in a proceeding to re-open on the ground of a mistake in the determination of a fact, and that this new evidence need not be ‘newly discovered’, we think it equally plain that the statute means something more than that the commissioner may change his mind whenever he pleases, and either on the same evidence or on new evidence, without a showing that there was a mistake in a determination of fact, make a new award. The general right to make a new award which is allowed under the terms of some statutes is one thing, and the right to make a new award on the limited grounds set out in the Federal statutes is quite another. Under the Federal statutes, a re-award may not be made unless there is evidence reasonably supporting the finding, on which the new award must rest, of a change of conditions, or of a mistake in the determination of a fact by the commissioner.” [Emphasis added]

Then, in the later case of Case v. Calbeck, 5 Cir., 1962, 304 F.2d 198, it was noted that:

“Section 922 does not contemplate that the evidence which formed the basis for the previous finding and order shall again be reviewed and evaluated;

to hold otherwise would be to render meaningless the provision that such order becomes final unless proceedings for review are brought within thirty-days. Thus, the review proceeding is a new proceeding, limited in scope, in which the deputy commissioner may determine from new evidence whether a new compensation order should be filed. Support for this interpretation of Section 922 is found in Tudman v. American Shipbuilding Co., 170 F.2d 842 (7th Cir., 1948); Luckenbach S. S. Corp., Inc. v. Norton, 106 F.2d 137 (3rd Cir., 1939); Bethlehem Shipbuilding Corp. v. Cardillo, 102 F.2d 299 (1st Cir., 1939); and Pillsbury v. Alaska Packers Association, 85 F.2d 758 (9th Cir., 1936).”

It is our determination that the facts in this case allow only one conclusion: the Deputy Commissioner, upon reopening the claim, evaluated essentially the same evidence which formed the basis for his previous order and simply changed his mind without any evidence of a mistake having been made. This becomes evident upon a comparison of the evidence presented at each of the two hearings involved. We have previously shown that at the first hearing the testimony was conflicting as to whether Jacques’ employment contributed to his disability, and that O’Keeffe, in his first order, found that it did not. The appel-lee urges the distinction that the original determination was bottomed upon the finding that Jacques’ condition was not “caused” by his employment whereas O’Keeffe’s later order awarding compensation was undergirded by his finding that Jacques’ disability was “materially aggravated and hastened” by his employment. This point does not bear critical analysis. The record shows that O’Keeffe in issuing the first order considered not only whether Jacques’ employment caused his underlying illness but also whether a pre-existing condition was aggravated by his employment. Dr. Montgomery's opinion offered at the first hearing was that Jacques’ employment either caused or contributed to his impairment. Dr. Anderson indicated that he did not believe Jacques’ employment either caused his condition or could have worsened any pre-existing condition. Moreover, in his letter requesting a report from Dr. Horn, O’Keeffe specifically requested Dr. Horn’s opinion “on the relationship between the claimant’s lung condition and his employment environmental exposures”. It thus becomes apparent that O’Keeffe’s conclusion in his first order, “That the claimant’s present lung condition is not the result of exposure to environmental factors at the work site”, went to the question of aggravation of pre-existing condition as well as to the question of primary cause.

We think it is equally clear that at the second hearing no new evidence was presented which showed mistake in a determination of fact. Appellee points to the testimony of Dr. Horn that he had followed Jacques’ condition for the previous two years and that he felt that Jacques’ employment certainly aggravated his underlying condition. However, Dr. Horn also indicated that his opinion had not changed since 1966, and that he would have stated the same thing had be been called as a witness at the first hearing. This is demonstrated by his 1966 report to O’Keeffe in which was indicated Dr. Horn’s belief that there was a direct relationship between Jacques’ employment and his disability.

It is appropriate next to consider Dr. Rodnan’s report, received in evidence at the second hearing over objection by Aerojet. In this report Dr. Rodnan dealt specifically with the question of the relationship between Jacques’ illness and his employment environmental conditions. Appellee asserts that Dr. Rodnan shifted the focus on Jacques’ illness from cause to aggravation and our attention is directed to Dr. Rodnan’s statement that Jacques’ employment environmental conditions “may very well have materially aggravated or hastened the disabling condition”. This carefully qualified statement standing alone added little to what O’Keeffe had already heard. It was cumulative at most. Considered in context, its probative value is thoroughly diluted by an observation made by Dr. Rod-nan in the same report. After noting that there was no convincing evidence in the record that Jacques’ condition was caused or precipitated by his employment, Dr. Rodnan stated that: “It is difficult if not impossible to determine on the basis of the available evidence whether the patient’s disabling condition was materially aggravated or hastened by his occupational environmental exposure”.

Thus, it is apparent: that following the second hearing O’Keeffe was no more enlightened than he was after the first; that the second order awarding compensation to Jacques was grounded upon the same and similar evidence to that which formed the basis of the first order and not upon any demonstrable mistake in a determination of fact. For this reason, the Deputy Commissioner’s second order was in contravention of Title 33, U.S.C., Section 922 and may not stand. The statute simply does not confer authority upon the Deputy Commissioner to receive additional but cumulative evidence and change his mind.

We come finally to appellee’s contention that Aerojet is barred from objecting to the reopening of the proceedings by failure to raise the point initially at the administrative level, citing United States v. L. A. Tucker Truck Lines, 1952, 344 U.S. 33, 37, 73 S.Ct. 67, 97 L.Ed. 54. The point is without merit. Section 922 clearly permits a reopening on the initiative of the Deputy Commissioner for further proceedings to review a compensation case. The point is not that the proceedings were reopened. It is as we have tried to make clear that no mistake in the prior determination of fact was shown. The appearance of counsel for Aerojet at the hearing, his objection to the receipt of evidence, his cross-examination of witnesses, all reflect that Aerojet opposed vigorously the proposed modification of the original order rejecting the claim.

The judgment below is set aside. We reverse and remand to the district court for entry of judgment in favor of Aero-jet and against the Deputy Commissioner on Aerojet’s Motion for Summary Judgment.

Reversed and remanded with directions.

1 . There was some speculation as to whether claimant was suffering from silicosis, although it was not affirmatively indicated by the medical evidence presented.

2 . Pursuant to the Deputy Commissioner’s authority to have the claimant examined by a government-designated specialist, Title 33, U.S.C. § 919(h).

3 . Title 33, U.S.C., Section 922, provides in part:

“§ 922. Modification of awards Upon his own initiative, or upon the application of any party in interest, on the ground of a change in conditions or because of a mistake in a determination of fact by the deputy commissioner, the deputy commissioner may, at any time prior to one year after the date of the last payment of compensation, whether or not a compensation order has been issued, or at any time prior to one year after the rejection of a claim, review a compensation case in accordance with the procedure prescribed in respect of claims in section 919 of this title, and in accordance with such section issue a new compensation order which may terminate, continue, reinstate, increase or decrease such compensation or award compensation.” [Emphasis supplied]

4 . As to the second allegation of error, that O’Keeffe erroneously received Dr. Rodnan’s report in evidence without the doctor being present and subject to cross-examination, the underlying question of whether agency action based upon hearsay medical evidence satisfies the substantial evidence test may soon be answered by the Supreme Court. See Richardson, Secretary of Health, Education and Welfare v. Perales, 400 U.S. 811, 91 S.Ct. 32, 27 L.Ed.2d 41, on certiorari from Cohen v. Perales, 5 Cir. 1969, 412 F.2d 44, rehearing denied 416 F.2d 1250, argued before the Supreme Court on January 13, 1971, 39 U.S.L.W. 3286.