Bath Iron Works v. Benefits

• Court: Court of Appeals for the First Circuit
• Decided: September 11, 1997
• Docket: 96-2106
• Status: Published

Opinion

USCA1 Opinion

UNITED STATES COURT OF APPEALS
                            UNITED STATES COURT OF APPEALS

                                FOR THE FIRST CIRCUIT
                                FOR THE FIRST CIRCUIT

                                 ____________________



        No. 96-2106



                             BATH IRON WORKS CORPORATION,

                          BIRMINGHAM FIRE INSURANCE COMPANY,



                                     Petitioners,



                                          v.



                 DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS,

                              U.S. DEPARTMENT OF LABOR,



                                     Respondent.



                                 ____________________


ON PETITION FOR REVIEW OF AN ORDER OF



                              THE BENEFITS REVIEW BOARD



                                 ____________________



                                        Before



                                Selya, Circuit Judge,
                                       _____________



                             Hill,* Senior Circuit Judge,
                                    ____________________



                              and Boudin, Circuit Judge.
                                          _____________



                                 ____________________


Kevin  M. Gillis  with whom  Troubh, Heisler  & Piampiano  was  on
            ________________             ____________________________

        brief  for petitioners Bath Iron Works Corporation and Birmingham Fire

        Insurance Company.

            Stephen Hessert  with whom Norman,  Hanson & DeTroy  was on  brief
            _______________            ________________________

        for insurer respondent Liberty Mutual Insurance Company.

            Gary  A. Gabree with whom Stinson, Lupton & Weiss was on brief for
            _______________           _______________________

        claimant respondent Alvin D. Acord. 



                                 ____________________

                                  September 10, 1997

                                 ____________________



        _________________________



        *Of the Eleventh Circuit, sitting by designation.



BOUDIN, Circuit  Judge.   Alvin Acord  suffered injuries
                         ______________



            while employed by  Bath Iron Works Corporation,  and obtained



            benefits  after state workers'  compensation proceedings.  He



            then sought and received a  further award under the Longshore



            Act,  33 U.S.C.    901 et seq.   On this appeal, we hold that
                                   _______



            the federal award was barred by collateral estoppel, and, for



            the  benefit  of  future litigants,  we  address  briefly the



            alternative statute  of limitations  defense advanced  by the



            petitioner insurer.



                 The events and procedural history are complicated, but a



            condensed version will set the scene.   Acord began work as a



            test electrician at Bath in 1974.  In 1982 he suffered upper-



            body injuries  and in 1983,  a knee injury and  knee surgery;



            and  in 1984  he was transferred  to a  desk job.   He sought



            disability  benefits  under the  Maine  Workers' Compensation



            Act, 39  Me. Rev.  Stat. Ann.    1  et seq.  (1989), and,  in
                                                _______



            October  1987,  was  awarded  25  percent partial  disability



            benefits.  



                 Between  1983 and  1987, Acord experienced  a half-dozen



            incidents  of trauma  to his  knee  wherein some  provocation



            would cause  the knee to  give way; one incident  occurred in



            June 1987,  when Acord  stubbed his toe  and then  jammed his



            knee as he rose from his desk.  Acord underwent further  knee



            surgery and  returned to his  desk job in November  1987, now



            working only four  hours a day based on  his doctor's advice.


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                                         -2-



Degenerative  arthritis in his knee joints indicated that his



            condition would worsen.



                 One  year  later,  in  November  1988,   Bath's  company



            physician told Acord that he was being let go.  The record is



            murky  but it  was  apparently Acord's  own opinion  that the



            coming winter  would  aggravate  his knee,  and  it  was  the



            doctor's view that there would be no  suitable work available



            if  Acord's physical restrictions increased.  Acord has since



            sought reemployment at Bath, without success.



                 Birmingham Fire Insurance  Company ("Birmingham"), which



            provided Bath's  insurance coverage at  the time of  the June



            1987 injury,  began to  pay Acord  total disability  benefits



            when he was dismissed in  November 1988.  But Birmingham also



            petitioned the Maine workers'  compensation agency, asking it



            to  declare that the insurer  had no continuing liability for



            the June 1987 injury.  In February 1989, after an evidentiary



            proceeding, a  Maine  commissioner held  that Birmingham  had



            proven  that the  June  1987  incident  did  not  permanently



            contribute to Acord's  condition; this decision  was affirmed



            by the commission's appellate division in September 1990.



                 In  related proceedings, Acord asked the Maine agency to



            increase his  previous and  continuing 25  percent disability



            award  based  on  the  1983  injury;  Acord  urged  that  his



            condition   had  worsened  since   1983.     After  extensive



            proceedings,  the Maine agency  ruled in  June 1992  that the


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                                         -3-



original  disability  payment  should   be  increased  to  50



            percent, representing  increased disability  since 1983,  and



            that the payments should be made by Liberty Mutual  Insurance



            Company.  Liberty Mutual had  been Bath's insurer at the time



            of the June 1983 injury.



                 Shortly  before this  new ruling,  Acord  in March  1992



            filed for  federal workers'  compensation benefits  under the



            Longshore Act.  It is not uncommon for employees connected to



            maritime  affairs  to be  covered by  both federal  and state



            compensation statutes, and federal jurisdiction in  this case



            has not been disputed.  In the federal proceeding, Acord took



            the  position that  his  June  1987  injury entitled  him  to



            permanent  total disability  benefits  because  it  left  him



            unable  to fill  the  material handler  position that  he had



            previously held.



                 Birmingham  resisted Acord's  federal claim  on multiple



            grounds: that  the claim, filed  almost five years  after the



            incident,  was  barred  by the  federal  one-year  statute of



            limitations,  33  U.S.C.     913;  that  collateral  estoppel



            precluded Acord from  claiming permanent injury based  on the



            June 1987  incident; and that the medical  evidence failed to



            support  such  a claim  of  permanent  injury based  on  that



            incident.  A  federal administrative law judge  took evidence



            on  the  federal  claim,  reserving  judgment  on  the  legal



            defenses.


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                                         -4-



In September  1993, the  federal ALJ  issued a  decision



            awarding permanent total  disability benefits  to Acord,  and



            against Birmingham,  from and after Acord's last  day at work



            in  November  1988.   The  decision  rejected  the collateral



            estoppel  and  statute of  limitations  defenses, on  grounds



            described below, and  concluded on the  merits that the  June



            1987 incident had  caused a permanent further  aggravation in



            Acord's knee condition.  



                 Birmingham sought review  by the  Department of  Labor's



            Benefits Review Board,  33 U.S.C.   921(b), but  the Benefits



            Review  Board took  no action  on  the matter.   Because  the



            matter had been pending before the Benefits Review Board  for



            more than one year and the Benefits Review Board had taken no



            action on it, it became final for purposes of judicial review



            in  September 1996.   Pub.  L. 104-134,    101(d),  110 Stat.



            1321-219  (1996).    Birmingham then  sought  review  in this



            court.   See 33 U.S.C.    921(c).   Acord,  needless to  say,
                     ___



            supports the ALJ's decision.



                 We agree  with Birmingham  that the  federal ALJ  should



            have given collateral  estoppel effect to the  Maine agency's



            determination, in its  February 1989 decision, that  the June



            1987 injury "had no lasting effect on Mr. Acord's condition."



            The  state agency finding, in turn, precludes Acord's present



            claim.   Only the  first of  these two propositions  requires



            much discussion.


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                                         -5-



Often, respect for  a prior judgment is mandated  by the



            full faith and credit  clause, U.S. Const. art.  IV,   1,  or



            its  statutory  counterpart, 28  U.S.C.    1738.    A literal



            reader  might doubt  that  either  has much  to  do with  the



            present  case,  because  (among  other  reasons)  the  former



            constrains  states, not federal  entities, and the  latter is



            directed  explicitly to federal courts and says nothing about



            federal  agencies.    But the  policy  arguments  for similar



            treatment--especially avoidance  of duplicative  litigation--



            tend to be the same.



                 Without dwelling overmuch on the rationale, the  Supreme



            Court  has  instructed  that "federal  courts  must  give the



            [state] agency's  factfinding the  same preclusive effect  to



            which   it  would  be   entitled  in  the   State's  courts."



            University of Tennessee v. Elliott, 478 U.S. 788, 799 (1986).
            _______________________    _______



            Ordinarily, the  state  agency must  have been  acting in  an



            adjudicative capacity, United States v. Utah Constr. & Mining
                                   _____________    _____________________



            Co.,  384  U.S.  394,  422  (1966),  but  that  condition  is
            ___



            satisfied in  this case.   And Maine  does treat  such agency



            findings as a proper basis  for precluding relitigation.  Van
                                                                      ___



            Houten v.  Harco Constr.,  Inc.,  655 A.2d  331, 333-34  (Me.
            ______     ____________________



            1995).



                 Of  course, one  could  say that  a  federal court  must



            respect  state agency factfinding  but a federal  agency need



            not.    Yet  Elliott  itself relied  heavily  upon  Thomas v.
                         _______                                ______


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                                         -6-



Washington Gas Light Co., 448 U.S. 261, 281 (1980), where the
            ________________________



            Supreme Court said that an  agency finding in one state could



            bind another  state's agency under the full  faith and credit



            clause.   Elliott, 478 U.S.  at 798-99.  And  several circuit
                      _______



            decisions  have held that a federal  agency is normally bound



            to  respect  findings  by another  agency  acting  within its



            competence.  West  Helena Sav. & Loan Assoc.  v. Federal Home
                         _______________________________     ____________



            Loan Bank Bd., 553 F.2d  1175, 1180-81 (8th Cir. 1977); Safir
            _____________                                           _____



            v. Gibson, 432  F.2d 137,  143-44 (2d  Cir.) (Friendly,  J.),
               ______



            cert. denied, 400 U.S. 850 (1970).
            ____________



                 Although  the tendency is  plainly in favor  of applying



            collateral estoppel in  administrative contexts, the  subject



            is a  complex one,  with many variations;  and it  is perhaps



            well not to generalize too broadly.  See  18 Wright & Miller,
                                                 ___



            Federal Practice  and  Procedure    4475,  at  762-63  &  n.3
            ________________________________



            (1981).  Here, no conflict exists between the tendency of the



            courts and the position  of the agency involved, because  the



            Benefits  Review Board  itself  has declared  that collateral



            estoppel effect  is to  be given under  the Longshore  Act to



            appropriate   findings    of   "other   state    or   federal



            administrative tribunals."   Barlow v. Western  Asbestos Co.,
                                         ______    _____________________



            20  B.R.B.S. (MB)  179, 180  (1988); see  also Vodanovich  v.
                                                 _________ __________



            Fishing Vessel  Owners Marine  Ways, Inc.,  27 B.R.B.S.  (MB)
            _________________________________________



            286, 290-92 (1994).


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                                         -7-



In this case, the refusal  of the federal ALJ to respect



            the  Maine   finding  appears  to   have  been  based   on  a



            misunderstanding  of  Supreme  Court  case  law   on  another



            subject.1   However,  Acord  seeks to  defend  the result  on



            narrower  and  more  conventional grounds.    He  argues that



            differences  in  burdens  of proof,  and  in  the substantive



            standards, under  the Maine and federal  compensation schemes



            make collateral estoppel inappropriate.  These are legitimate



            arguments, but they ultimately do not succeed in this case.



                 It  is quite true that collateral estoppel effect may be



            denied  because  of  differences  in  burden  of  proof  (for



            example, where  the victor  in the first  case has  a greater



            burden in the second).   Newport News Shipbuilding & Dry Dock
                                     ____________________________________



            Co.  v. Director,  OWCP,  583 F.2d  1273,  1278-79 (4th  Cir.
            ___     _______________



            1978), cert. denied,  440 U.S. 915 (1979).  Here, Birmingham,
                   ____________



            by  seeking a  judgment from  Maine  limiting its  liability,



            undertook  the burden  of  proving,  by  a  preponderance  of



            evidence,  that the  June  1987  incident  had  no  permanent



            effect.  See Nichols v. Viner  Bros., Inc., 573 A.2d 789, 790
                     ___ _______    __________________


____________________


1The ALJ said  that collateral estoppel could  not apply

            because state workers' compensation schemes and the Longshore

            Act share  concurrent jurisdiction.   See Sun  Ship, Inc.  v.
                                                  ___ _______________

            Pennsylvania,  447  U.S.  715, 722  (1980).    But concurrent
            ____________

            jurisdiction, and  even the possibility of successive awards,

            do  not tell  one anything  about collateral  estoppel.   See
                                                                      ___

            Thomas, 448 U.S. at 280-82.
            ______



                                         -8-
                                         -8-



(Me. 1990).  The Maine  agency concluded that this burden had



            been carried.



                 In the  federal  agency proceeding,  Birmingham bore  no



            heavier burden;  if anything,  it had a  lighter one.   Acord



            himself  had the burden of proving  permanent injury from the



            June 1987 incident,  although he was  aided by a  conditioned



            federal  presumption   that  "the  claim  comes   within  the



            provisions  of this  chapter."   33  U.S.C.    920(a).   This



            presumption   merely   requires   an   employer  to   provide



            "substantial  evidence" that the  accident did not  cause the



            harm,   and  then  the   presumption  vanishes.     Brown  v.
                                                                _____



            I.T.T./Continental Baking  Co. & Ins. Co., 921  F.2d 289, 295
            _________________________________________



            (D.C. Cir.  1990); Sprague v.  Director, OWCP, 688  F.2d 862,
                               _______     ______________



            865-66 (1st Cir. 1982).  Thus, Acord's first argument fails.



                 Acord  next  argues  that  the  federal  regime  employs



            different substantive standards  than the  Maine regime,  and



            points  to  a  tradition of  interpreting  the  Longshore Act



            "liberally" in favor of claimants.   Voris v. Eikel, 346 U.S.
                                                 _____    _____



            328, 333  (1953).    Certainly  a  difference  in  the  legal



            standards pertaining to two proceedings may defeat the use of
                                                    ___



            collateral estoppel.  See Restatement (Second) of Judgments  
                                  ___ _________________________________



            28(3), (4) (1982); cf. Long Island College Hosp. v. NLRB, 566
                               ___ _________________________    ____



            F.2d 833, 842, 844-45 (2d  Cir. 1977), cert. denied, 435 U.S.
                                                   ____________



            996  (1978).   But  this  is  so  only where  the  difference



            undermines the rationale of the doctrine.


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Here, in  the Maine  proceeding, Acord's  doctor, Donald



            Kalvoda, as well  as another treating physician,  Mark Henry,



            testified that Acord suffered from degenerative  arthritis in



            his knee  which was  worsening with the  passage of  time and



            could  have been  temporarily exacerbated  by  the June  1987



            injury;  but both  doctors said  unequivocally  in the  state



            proceeding that the June 1987 incident had no lasting effect.



            The state  agency  so found.   It  is hard  to  see why  this



            factual finding should  be affected by whether  the pertinent



            statute is broadly or narrowly construed.



                 Similarly,  we agree with  Acord that federal  and Maine



            law deal  somewhat differently with cases where  a later job-



            related injury aggravates  an earlier one.   Federal case law



            may depart from Maine's approach by making the later employer



            or insurer  liable for  the cumulative  injury, Liberty  Mut.
                                                            _____________



            Ins. Co. v. Commercial Union Ins. Co., 978 F.2d 750, 756 (1st
            ________    _________________________



            Cir. 1992), and  mitigating this liability through  a complex



            statutory  regime.   33 U.S.C.     908(f).   But again,  this



            difference has  no apparent  logical bearing  on the  factual



            question whether the June 1987 event caused permanent injury.



                 Our  own  research  suggests  that  the  most  pertinent



            difference  between  federal  and  Maine law  may  lie  in  a



            different area.   Maine case law may be  more grudging in its



            willingness to  compensate  the aggravation  of  an  existing



            condition where the aggravation appears to be  part of normal


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                                         -10-



life rather than  the result of some increased  risk peculiar



            to the job.2  If there were any indication that this attitude



            had influenced  the Maine  agency  finding at  issue in  this



            case, there might be reason  to hesitate in giving collateral



            estoppel effect to this finding.



                 But the expert medical evidence in the Maine proceedings



            (already  described)  pointed   directly  to  the  conclusion



            reached by  the Maine  agency: that  the  June 1987  incident



            caused no permanent  injury.  There is no  hint whatever that



            the Maine agency thought that a permanent injury had occurred



            in June  1987 but  should be disregarded  because it  was not



            compensable  under  Maine  law.   Whether  the  Maine factual



            finding  was right  or wrong,  the agency  was not  evidently



            influenced by any difference between federal and Maine law.



                 The Maine finding may have been wrong, even though amply



            supported by the evidence offered  in that case.  The federal



            ALJ reached  a  different conclusion  by  crediting  slightly



            different deposition  testimony from Dr.  Kalvoda given after
                                                                    _____



            the Maine proceeding;  the ALJ also chose to  place weight on



            Acord's testimony  that he  had begun  to suffer  a different



            sort  of pain  after the  June  1987 incident.    If the  ALJ


____________________



                 2Compare Gardner v. Director, OWCP, 640 F.2d 1385, 1387,
                  _______ _______    ______________

            1389  (1st  Cir.  1981) (aggravation  from  standing  on hard

            surfaces  compensable  under  Longshore  Act)  with  Hamm  v.
                                                           ____  ____

            University   of  Maine,  423  A.2d  548,  550-51  (Me.  1980)
            ______________________

            (aggravation from chopping salad not compensable  under Maine

            statute).



                                         -11-
                                         -11-



decision were before  us on the merits, it  would probably be



            sustained, given the deference due to the factfinder.



                 But the  point of collateral estoppel is  that the first



            determination is binding not because  it is right but because



            it   is  first--and  was  reached  after   a  full  and  fair



            opportunity between the parties to litigate the issue.  Acord



            has given  us no reason to doubt that he had that opportunity



            in the Maine proceeding.  And,  it is by no means clear  that



            the Maine  result was  wrong: the issue,  as in  many medical



            causation matters, was probably a close call.



                 At  oral argument,  Acord  offered yet  another argument



            against collateral estoppel in workers' compensation matters,



            saying  that in  Maine  (as elsewhere)  a  change in  medical



            condition often  allows the reopening  or renewal of  a prior



            claim.  Admittedly, this practice (evidenced here by the 1992



            increase in Acord's own award  to 50 percent) is a limitation



            on  conventional res  judicata.   In a  civil tort  action, a
                             _____________



            court will not normally reopen a final judgment because later



            events show  that the  injury was worse  than supposed.   Cf.
                                                                      ___



            Restatement, supra,   73(2).
            ___________  _____



                 But a  willingness to  modify  an award  based on  later



            changes  in medical  condition is  not the  same as  giving a
            _______



            party two chances to litigate the same historical fact (here,



            whether the June  1987 injury caused permanent damage).  Such



            findings  of historical  fact  are given  collateral estoppel


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                                         -12-



effect  by  compensation  commissions,  including  the  Maine



            commission.   Van  Houten, 655  A.2d at  334; Vodanovich,  27
                          ___________                     __________



            B.R.B.S. (MB) at 290-92.3  Even assuming that Acord preserved



            this final argument, it does not avail.



                 Historical accident has  given employees like  Acord the



            benefit  of two different  compensation regimes.   Apart from



            limitations  on duplicative  recovery,  occasions exist  when



            successive  claims under federal  and state law  are entirely



            permissible;  but  successive  claims  are still  subject  to



            various conventional  limitations, like  collateral estoppel.



            Overall,  collateral estoppel  may as  easily  be helpful  to



            claimants  as to  employers or insurers,  and it  reduces the



            litigation costs for everyone. 



                 Acord's claim is  also probably barred by  the Longshore



            Act's  one-year statute of  limitations, 33 U.S.C.    913(a).



            The incident giving rise to  the claim occurred in June 1987;



            the federal  claim was filed  in March 1992.   The statute of



            limitations  defense was  properly  raised and  it  obviously



            precluded Acord's claim  unless the claim was rescued  by the



            tolling  provision contained  in 33  U.S.C.    913(d),  which



            reads as follows:



                                
            ____________________



                 3In  this very  case  the Maine  commission's  appellate

            division affirmed  a commissioner's rejection of  a separate,

            later  claim by  Acord  for benefits  deriving from  the 1987

            injury,  explaining that  "the petition  [is]  barred by  the

            doctrine of  res judicata  because of  a prior  determination
                         ____________

            [i.e.,  in February  1989]  that the  effects  of the  injury
             ____

            ended."



                                         -13-
                                         -13-



Where recovery is  denied to any person,  in a

                 suit  brought at  law or  in  admiralty to  recover

                 damages  in  respect  of injury  or  death,  on the

                 ground  that such person  was an employee  and that

                 the defendant was an employer within the meaning of

                 this  chapter and  that such  employer had  secured

                 compensation to  such employee under  this chapter,

                 the  [one-year] limitation of time prescribed . . .

                 shall   begin  to  run   only  from  the   date  of

                 termination of such suit.



                 The  wording of this provision strongly suggests that it



            has nothing to do with Acord's situation.  It may be doubtful



            that  the Maine compensation proceeding is properly described



            as "a  [damage] suit  brought at law  or in  admiralty;" but,



            even  assuming   otherwise,  "recovery"  in  that   suit  was



            certainly not denied "on the  ground" that the claimant  "was



            an employee and the defendant was an employer" covered by the



            federal statute.  There is thus a compelling "plain language"



            argument against Acord's reliance on section 913(d).



                 The evident  purpose of  section  913(d) reinforces  its



            language.  Worker compensation statutes were an innovation by



            which employers obtained statutory immunity to tort liability



            in  exchange for liability  without fault.   Especially where



            there  might be some doubt  whether the Longshore Act covered



            the  employee--often a  close question--a  precautionary tort



            suit  might be  filed;  the  tolling  provision  was  plainly



            intended  to  protect the  employee's  compensation claim  if



            statutory  immunity  defeated  the precautionary  suit.   See
                                                                      ___



            Ayers v. Parker, 15 F. Supp. 447, 451 (D. Md. 1936).  Nothing
            _____    ______



            like this happened in Acord's case.


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Congress  could  also  have provided  that  the  federal



            statute   is   tolled  wherever   a  claimant   begins  state



            compensation proceedings addressed to the same injury, but it



            did  not.   It  is  not obvious  that  federal courts  should



            enlarge an express  tolling provision on policy  grounds, nor



            are the policy grounds very compelling: once the ground rules



            are  clear, it  is  easy  enough for  a  claimant to  file  a



            precautionary  federal claim within  one year of  the injury,



            even if the claimant prefers first to pursue a state remedy.



                 This might seem  to be the end of the matter except that



            the Fifth Circuit declared some years ago that section 913(d)



            does  toll  the  Longshore Act  limitations  period  in cases



            similar  to  Acord's.    Ingalls  Shipbuilding  Div.,  Litton
                                     ____________________________________



            Systems, Inc.  v. Hollinhead, 571  F.2d 272 (5th  Cir. 1978).
            _____________     __________



            The court's reasoning relies heavily on the general principle



            of liberal interpretation of the  Longshore Act, id. at  274,
                                                             ___



            which  may  seem  a  doubtful  reason  for  ignoring  express



            language.  Ingalls is also at odds with several well-reasoned
                       _______



            district court cases,4 and has  not been adopted by any other



            circuit.    The  Benefits  Review  Board  apparently  follows



            Ingalls in the  Fifth Circuit, Calloway v.  Zigler Shipyards,
            _______                        ________     ________________



            16 B.R.B.S. (MB)  175, 177  (1984), but  that is  only to  be



            expected.



                                
            ____________________



                 4See  Dawson v. Jahncke Drydock,  Inc., 33 F. Supp. 668,
                  ___  ______    ______________________

            669 (E.D. La.  1940); Ayers, 15 F. Supp.  at 449-53; Romaniuk
                                  _____                          ________

            v. Locke, 3 F. Supp. 529, 530 (S.D.N.Y. 1932).
               _____



                                         -15-
                                         -15-



Nevertheless, Ingalls  is the only circuit  precedent on
                               _______



            the issue,  and there  might be a  concern about  fairness to



            claimants  if  we  departed  from  Ingalls  without  warning.
                                               _______



            Accordingly, we  have thought it  wiser to rest  our decision



            here  on  collateral  estoppel  but  to  note  as dictum  our



            substantial  doubts about  Ingalls.   These  doubts will  not
                                       _______



            foreclose  a future  panel from  deciding  the Ingalls  issue
                                                           _______



            afresh, but  their expression now should give ample notice to



            future  claimants to protect  their federal claims  by filing



            within one year.



                 Reversed.
                 _________


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