Smith v. DOWCP

• Court: Court of Appeals for the Fifth Circuit
• Decided: March 30, 1998
• Docket: 96-60775
• Status: Unpublished

Opinion

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

_____________________

No. 96-60775 _____________________

COOPER T. SMITH; HOME INDEMNITY CO., INSURANCE CARRIER,

Petitioners,

v.

DIRECTOR, OFFICE OF WORKERS COMPENSATION PROGRAMS, UNITED STATES DEPARTMENT OF LABOR,

Respondent.

_________________________________________________________________

Petition for Review of an Order of the Benefits Review Board (94-3926) _________________ ________________________________________________ March 27, 1998 Before KING and JONES, Circuit Judges, and KENDALL, District Judge.*

PER CURIAM:**

Petitioners Cooper T. Smith, Inc. and Home Indemnity Company

have petitioned for review of an Order of the Benefits Review

Board denying petitioners’ request for relief pursuant to section

8(f) of the Longshore Workers’ Compensation Act, 33 U.S.C.

* District Judge for the Northern District of Texas, sitting by designation. ** Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4. § 908(f). For the reasons set forth below, we affirm the

judgment of the Benefits Review Board.

I. FACTUAL BACKGROUND

On October 28, 1984, Arthur Hudson, an employee of Cooper T.

Smith, Inc., injured himself while driving a forklift. Hudson

drove the forklift into a piece of lumber, causing the forklift

to turn suddenly. The force of the impact threw Hudson against

the forklift, and he consequently suffered injuries to his neck

and left shoulder.

On February 20, 1983, approximately a year and a half prior

to his employment-related injury, Hudson underwent a urological

evaluation which resulted in a diagnosis of hematuria (blood in

the urine). At the time of his admission to the hospital for the

urological evaluation, Hudson complained that he had been

experiencing neck pain that radiated into his left arm and hand

for the preceding two months. Hudson reported that he had

suffered a neck trauma and a bullet wound in his right shoulder

some years earlier.

Dr. Diane S. Gelfand examined Hudson on February 23, 1983,

and ordered a cervical spine x-ray, an EMG, and a bone scan. On

February 24, 1983, Dr. Milton J. Guiberteau examined the x-rays

of Hudson’s cervical spine and identified no focal abnormalities.

On February 25, 1983, Dr. Ariel Bar-Sela performed the EMG that

Dr. Gelfand had ordered and concluded that the results were

2 normal. Dr. Bar-Sela also indicated that the EMG results for

Hudson’s left shoulder were “peculiar, but certainly not

characteristic of radiculopathy,” a diseased condition of the

spinal nerve roots. Dr. Bar-Sela diagnosed Hudson with

myofascial pain syndrome but noted that he had experienced no

loss of muscle strength. Thereafter, Hudson received physical

therapy to relieve the pain in his shoulder and neck six times

between February 28, 1983 and March 7, 1983. After his physical

therapy, Hudson worked for Cooper T. Smith, Inc. without medical

treatment or restrictions until the time of his employment-

related injury.

Following his employment-related injury, a number of

physicians examined Hudson. On April 10, 1985, Hudson underwent

a new battery of x-rays of his cervical spine. Dr. J.E. Martin,

the radiologist who reviewed the results stated that they

revealed “some straightening of the usual cervical spine” and

osteophyte formation “not significantly different” than that

revealed by x-rays taken prior to Hudson’s employment-related

injury. Dr. Roland Jackson later examined Hudson and concluded

that the pain suffered by Hudson resulted from “nerve root

compression [in Hudson’s neck] due to degenerative changes

aggravated by injury.” On March 10, 1986, Dr. Antonio A. Moure

examined Hudson and diagnosed his condition as cervical

spondylosis that had been aggravated by trauma. Dr. Moure

ordered a CT scan that revealed “degenerative bone and disc

3 disease throughout the majority of the visualized cervical

spine.” He then performed an operation on Hudson’s neck--an

anterior discectomy--and eventually discharged Hudson from his

care with a permanent partial disability of approximately 20% of

his person as a whole.

Hudson was later referred to Dr. Jeffrey Tucker for

diagnosis and treatment of his shoulder pain. Dr. Tucker

recommended surgery--a subacromial decompression--on Hudson’s

left shoulder. Hudson underwent this procedure and continued

follow-up visits with Dr. Tucker. In November of 1991, Dr.

Tucker concluded that Hudson had reached his maximum medical

improvement from the surgery, and had a permanent impairment of

7% in his left arm and 4% in his person as a whole.

II. PROCEDURAL BACKGROUND

After his work-related injury, Hudson filed a claim for

worker’s compensation under the Longshore and Harbor Workers’

Compensation Act (LHWCA), 33 U.S.C. §§ 901-950. Cooper T. Smith,

Inc. and its workers’ compensation insurance carrier, Home

Indemnity Company (collectively Smith), timely filed an

application seeking relief from full liability under section 8(f)

of the LHWCA, id. § 908(f).

The first formal hearing was held before Administrative Law

Judge Quentin P. McColgin on October 26, 1989. Judge McColgin

entered an order granting Hudson benefits on January 11, 1991

4 based on his conclusion that Hudson had reached maximum medical

improvement of his neck on October 8, 1986. Because Hudson also

suffered from a shoulder injury that could only be remedied by

surgery, Judge McColgin concluded that Hudson was temporarily and

totally disabled pending maximum medical recovery from the

shoulder surgery. Because Judge McColgin made no finding of

permanent disability, he declined to address the issue of Smith’s

entitlement to partial relief from liability under section 8(f).

On February 17, 1994, after Hudson had undergone his

shoulder surgery, a second formal hearing was held before

Administrative Law Judge George P. Morin. Judge Morin concluded

that Hudson had achieved maximum medical recovery from his

shoulder surgery on November 22, 1991, and that Hudson was

permanently and totally disabled as of that date. Judge Morin

entered an order reflecting the change in Hudson’s disability

status and denying Smith’s request for relief under section 8(f).

Smith timely appealed Judge McColgin’s denial of its request

for relief under section 8(f) to the Benefits Review Board

(“BRB”) pursuant to 33 U.S.C. § 921(b)(3). Because the BRB did

not resolve the appeal within one year and it remained pending on

September 12, 1996, the opinion was considered affirmed on that

date for purposes of obtaining judicial review pursuant to Pub.

L. No. 104-134, § 101(d), 110 Stat. 1321 (Apr. 26, 1996),

reprinted in 1996 U.S.C.C.A.N. 1321 (436-37). Smith timely filed

its petition for review in this court on November 11, 1996.

5 III. STANDARD OF REVIEW

This court’s review of decisions of the BRB is fairly

narrow. “In examining the orders of the BRB our role is limited

to ‘“considering errors of law and making certain that the BRB

adhered to its statutory standard of review of factual

determinations, that is, whether the ALJ’s findings of fact are

supported by substantial evidence and consistent with the law.”’”

Boland Marine & Mfg. Co. v. Rihner, 41 F.3d 997, 1002 (5th Cir.

1995) (quoting Avondale Shipyards, Inc. v. Kennel, 914 F.2d 88,

90 (5th Cir. 1990) (quoting Miller v. Central Dispatch, Inc., 673

F.2d 773, 778 (5th Cir. Unit A 1982))). “This court may not

substitute its judgment for that of the ALJ, nor may we reweigh

or reappraise the evidence, but may only inquire into the

existence of evidence to support the ALJ’s factfindings.” Empire

United Stevedores v. Gatlin, 936 F.2d 819, 822 (5th Cir. 1991)

(citations omitted).

IV. DISCUSSION

“Under the traditional ‘aggravation rule’ of workers’

compensation law, an employer is liable for a worker’s entire

disability even though the disability was the result of both a

current employment injury and a pre-existing impairment.” Ceres

Marine Terminal v. Director, Office of Worker's Compensation

Programs, 118 F.3d 387, 389 (5th Cir. 1997); see also Strachan

Shipping Co. v. Nash, 782 F.2d 513, 517 (5th Cir. 1986) (en

6 banc). “Congress enacted section 8(f) of the LHWCA, 33 U.S.C.

§ 908(f), to diminish an employer’s incentive to discriminate

against partially disabled workers out of fear of increased

liability under the aggravation rule.” Ceres Marine Terminal,

118 F.3d at 389.

Section 8(f) places a temporal limitation on an employer’s

obligation to pay worker’s compensation benefits in circumstances

in which “an employee having an existing permanent partial

disability” suffers a subsequent employment-related injury and is

thereby left with a “disability [that] is materially and

substantially greater than that which would have resulted from

the subsequent injury alone.” 33 U.S.C. § 908(f); see also Ceres

Marine Terminal, 118 F.3d at 389. After the employer’s period of

liability expires, payments are made from a “second injury fund”

established by section 44 of the LHWCA, 33 U.S.C. § 944, and

financed by members of the industry covered by the act. See

Ceres Marine Terminal, 118 F.3d at 389.

This court has held that, in order to be entitled to section

8(f) relief from workers’ compensation liability for an

employee’s permanent total disability, an employer must

demonstrate that “(1) the employee had a pre-existing permanent

partial disability, (2) the pre-existing permanent partial

disability was manifest to the employer prior to the current

employment injury, and (3) the current disability was not due

solely to the employment injury.” Id. at 389-90; see also Two

7 “R” Drilling Co. v. Director, Office of Workers Compensation

Programs, 894 F.2d 748, 750 (5th Cir. 1990). In this case, the

ALJ concluded that Smith was not entitled to second injury fund

relief because any pre-existing permanent partial disability that

Hudson might have had was not “manifest” at the time of Hudson’s

work-related injury.1 Smith contends that this conclusion was

not supported by substantial evidence and thus that the BRB

should have reversed the ALJ’s judgment.2

In support of its contention that the ALJ erred, Smith

argues that the following facts demonstrate the manifestness of

1 The parties disagree as to whether the ALJ found that Hudson had a pre-existing permanent partial disability at the time of his employment-related injury. The ALJ did not reach the issue of whether Hudson’s current disability was due solely to the employment-related injury. As indicated, infra, we conclude that the ALJ’s determination that any pre-existing permanent partial disability that Hudson may have had was not manifest prior to his employment-related injury is supported by substantial evidence. We therefore express no opinion as to whether Hudson actually had a pre-existing permanent partial disability within the meaning of section 8(f). We likewise decline to address Smith’s argument that, as a matter of law, Hudson’s permanent total disability was not caused solely by his employment-related injury and that his pre-existing permanent partial disability contributed to his permanent total disability. 2 Smith also urges us to abandon the manifestation requirement because it merely constitutes a judicial gloss on section 8(f). Even if we were inclined to do so, no basis exists for this panel to reject application of the manifestation requirement. Other panels of this court have accepted and applied the manifestation requirement for over twenty years. See, e.g., Equitable Equip. Co. v. Hardy, 558 F.2d 1192, 1199 (5th Cir. 1977). “In this circuit one panel may not overrule the decision, right or wrong, of a prior panel in the absence of en banc reconsideration or superseding decision of the Supreme Court.” Pruitt v. Levi Strauss & Co., 932 F.2d 458, 465 (5th Cir. 1991) (internal quotation marks and citations omitted).

8 Hudson’s pre-existing permanent partial disability: (1) Hudson

experienced two months of radiating pain in his neck, shoulder,

and arm; (2) he was diagnosed with myofascial pain syndrome; and

(3) Dr. Moure testified that Hudson’s medical records prior to

his employment-related accident reflected degenerative changes in

his neck and that these changes were a contributing cause to

Hudson’s neck, shoulder, and arm pain. We conclude that the

presence of these circumstances does not establish that the ALJ’s

decision lacked substantial evidentiary support.

“We have previously recognized that a diagnosed, pre-

existing disability of which the employer has actual knowledge is

manifest.” Ceres Marine Terminal, 118 F.3d at 392. We have also

noted that many other courts have held that an employer’s

constructive knowledge of a permanent partial disability may be

sufficient to establish the manifestness of the disability.3 See

3 It is arguable that, in Ceres Marine Terminal, which addressed a factual scenario quite similar to the one at issue here, this court implicitly held that constructive knowledge may be sufficient to render a disability manifest for purposes of section 8(f). While the court did not expressly hold that an employer’s constructive knowledge was sufficient to render an employee’s disability manifest, it acknowledged that many other courts have done so and remanded for further consideration of the manifestness issue by the ALJ. See Ceres Marine Terminal, 118 F.3d at 392. The opinion provides no indication that the record contained any evidence that the employer had actual knowledge of the employee’s disability. In the absence of such evidence, it would have been unnecessary to remand the case to the ALJ for further consideration if the court had not concluded that constructive knowledge could be sufficient to render a disability manifest. However, because we conclude that Smith lacked even constructive knowledge of any disability that Hudson might have had prior to his employment-related injury, we need not determine

9 id.; Bunge Corp. v. Director, Office of Workers Compensation

Programs, 951 F.2d 1109, 1111 (9th Cir. 1991) (“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.”); Director, Office of Workers Compensation

Programs v. Berkstresser, 921 F.2d 306, 310 (D.C. Cir. 1990)

(“When the evidence shows that such a ‘disability’ was

objectively apparent, the ‘manifest’ requirement has been met.”).

Under this approach, “[t]he question is whether the condition was

discoverable by the employer based on then existing medical

records available to it.” Eymard & Sons Shipyard v. Smith, 862

F.2d 1220, 1224 (5th Cir. 1989). We have noted that “[a] clear

diagnosis in such records would, of course, meet this test.” Id.

We have also “assume[d], arguendo, that there may be instances

where although a diagnosis as such is not expressly stated in the

medical records nevertheless sufficient unambiguous, objective,

and obvious indication of a disability is reflected by the

factual information contained in the available records so that

the disability should be considered manifest even though actually

unknown to the employer.” Id.

Making the same assumption here, we believe that the ALJ

could properly conclude that Hudson’s medical records were not so

whether Ceres Marine Terminal stands for the proposition that constructive knowledge can establish manifestness or, if it does not, whether this circuit should adopt such a rule.

10 “unambiguous, objective, and obvious” in their indication of a

disability that his pre-existing permanent partial disability, if

any, was manifest to Smith prior to Hudson’s employment-related

injury. The results of the cervical spine x-ray, bone scan, and

EMG that Hudson received prior to his employment-related injury

were largely normal. Dr. Guiberteau concluded that Hudson’s x-

rays revealed no focal abnormalities. Dr. Bar-Sela concluded

that Hudson’s neuromuscular electrodiagnostic study was normal

and that the EMG results for Hudson’s shoulder were “peculiar,

but certainly not characteristic of radiculopathy.” Hudson

received just over a week of physical therapy for his shoulder

and neck pain and then returned to work without medical treatment

or restriction until the time of his employment-related injury.

Smith contends that “the unrefuted deposition testimony of

Dr. Moure that the medical records in this case reflected pre-

existing degenerative changes in [Hudson’s] neck” indicates that

Hudson had a pre-existing permanent partial disability that was

manifest to Smith prior to Hudson’s employment-related injury.

However, Dr. Moure’s report regarding the CT scan that he ordered

for Hudson indicates that Hudson’s medical records prior to his

employment-related injury did not contain “unambiguous,

objective, and obvious indication of a disability.” Eymard &

Sons Shipyard, 862 F.2d at 1224. In that report, Dr. Moure

states the following:

11 I am aware of the prior cervical spine MRI study which was interpreted as normal. Upon reexamination of the study, I still find it very difficult to identify the abnormalities observed on the cervical spine CT or the MR scan. I am at a loss to explain the reason for differences between the scan findings but the positive findings on the cervical spine CT should supersede the presumably erroneous MR study. (emphasis added).

Moreover, even if we were to assume that, based solely upon

Hudson’s medical records prior to his employment-related injury,

Dr. Moure would have diagnosed Hudson with degenerative disc

disease, the ALJ could still properly conclude that any pre-

existing permanent partial disability that Hudson might have had

was not manifest. “The fact that another physician might have

diagnosed the disease is not determinative.” See Eymard & Sons

Shipyard, 862 F.2d at 1224. We therefore conclude that

substantial evidence supports the ALJ’s finding that Hudson’s

pre-existing permanent partial disability, if any, was not

manifest to Smith prior to Hudson’s employment-related injury.

IV. CONCLUSION

For the foregoing reasons, we AFFIRM the BRB’s decision to

affirm the judgment of the ALJ.