Newport News Shipbuilding & Dry Dock Co. v. Cherry , 326 F.3d 449 ( 2003 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
NEWPORT NEWS SHIPBUILDING AND 
DRY DOCK COMPANY,
Petitioner,
v.
WESLEY E. CHERRY; DIRECTOR,  No. 00-1279
OFFICE OF WORKERS’ COMPENSATION
PROGRAMS, UNITED STATES
DEPARTMENT OF LABOR,
Respondents.

On Petition for Review of an Order
of the Benefits Review Board.
(99-472-BLA)
Argued: January 22, 2001
Decided: April 14, 2003
Before WIDENER and KING, Circuit Judges, and
David A. FABER, Chief United States District Judge for the
Southern District of West Virginia, sitting by designation.
Petition for review denied by published opinion. Judge King wrote
the opinion, in which Chief Judge Faber joined. Judge Widener wrote
a concurring and dissenting opinion.
COUNSEL
ARGUED: Benjamin McMullan Mason, MASON, COWARDIN &
MASON, Newport News, Virginia, for Petitioner. Andrew David
2 NEWPORT NEWS SHIPBUILDING v. CHERRY
Auerbach, UNITED STATES DEPARTMENT OF LABOR, Wash-
ington, D.C., for Respondents. ON BRIEF: Jonathan H. Walker,
MASON, COWARDIN & MASON, Newport News, Virginia, for
Petitioner. Henry L. Solano, Solicitor of Labor, Carol A. De Deo,
Associate Solicitor, Mark Reinhalter, Senior Attorney, UNITED
STATES DEPARTMENT OF LABOR, Washington, D.C., for
Respondent Director.
OPINION
KING, Circuit Judge:
Wesley Cherry injured his back at work on September 12, 1995.
He is receiving ongoing "permanent partial disability" benefits from
his employer, Newport News Shipbuilding & Dry Dock Company
("Newport News"), pursuant to §§ 4 and 8(c)(21) of the Longshore
and Harbor Workers’ Compensation Act, 33 U.S.C. §§ 901-950 (the
"Act" or "LHWCA"). Newport News sought relief under § 8(f) of the
LHWCA, which limits an employer’s liability to two years of benefits
when a pre-existing disability substantially aggravates a work-related
injury.1
On January 6, 1999, an Administrative Law Judge (the "ALJ")
denied the request of Newport News for relief under § 8(f). Cherry v.
Newport News Shipbldg. & Dry Dock Co., 98-LHC-41, Decision and
Order Denying 8(f) Relief (Jan. 6, 1999) (the "ALJ Decision"). The
1
Section 8(f) provides in pertinent part:
[In] cases in which the employee has a permanent partial disabil-
ity, 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 . . . compensation for one hundred and four weeks
only.
33 U.S.C. § 908(f)(1). After 104 weeks, the Office of Workers’ Compen-
sation Programs ("OWCP"), which administers a special fund established
by Congress, is responsible for disability payments if the employer is
relieved under § 8(f). §§ 908(f)(2)(A), 944.
NEWPORT NEWS SHIPBUILDING v. CHERRY 3
Benefits Review Board (the "BRB") affirmed on January 28, 2000.
Cherry v. Newport News Shipbldg. & Dry Dock Co., 99-0472, Deci-
sion and Order (Jan. 28, 2000) (the "BRB Decision"). Newport News
now petitions for our review, see 33 U.S.C. § 921(c), asserting that
the BRB Decision was in error. We disagree with Newport News, and
we conclude that the BRB correctly decided that the ALJ Decision
was supported by substantial evidence. Accordingly, we deny the
petition for review.
I.
A.
Cherry began working for Newport News in 1980. On March 26,
1987, he was working as a pipefitter when he sustained an injury to
his back while lifting heavy sections of pipe. Physicians employed by
Newport News diagnosed Cherry with a lumbar strain. Cherry was
placed on work restrictions for ten days, which limited his lifting to
less than twenty pounds during that time period.
Over five years later, on September 15, 1992, Cherry again injured
his back at work while lifting pipe. For this injury, Cherry was treated
by Dr. James Reid, a Newport News company physician. Dr. Reid
diagnosed Cherry with a lumbosacral sprain, and he placed Cherry on
work restrictions for fourteen days. Under these restrictions, Cherry
was prohibited from lifting more than thirty pounds, and he was also
limited to "minimal bending and stooping."
On September 12, 1995 — almost three years after the second back
injury incident — Cherry strained his back a third time. This time his
injuries were not temporary, and Cherry’s treating neurosurgical spe-
cialist, Dr. Alfred Magness, assigned Cherry to permanent work
restrictions.
On May 13, 1998, Dr. Reid, in response to Newport News’s
request for a medical opinion about the cause of Cherry’s disability,
reviewed Cherry’s medical records, including those relating to his
own treatment of Cherry and Cherry’s outside treatment. In his report,
Dr. Reid concluded:
4 NEWPORT NEWS SHIPBUILDING v. CHERRY
Mr. Cherry’s pre-existing condition of chronic back disabil-
ity [was] permanent and serious. . . . Mr. Cherry’s disability
is not caused by his September 12, 1995 back injury alone,
but rather his disability is materially contributed to, and
made materially and substantially worse by his pre-existing
chronic back disability[.] Mr. Cherry’s September 12, 1995
injury was rather minor. If he had had a normal back, it
would have resolved with no permanent disability.
On May 27, 1998, Newport News sent Dr. Reid’s report to Dr. Mag-
ness and gave him the option of indicating whether he agreed with it.
Dr. Magness indicated his agreement with Dr. Reid’s report by check-
ing a blank space on the transmittal letter and returning the letter to
Newport News.
B.
Newport News filed a petition for relief under § 8(f) of the
LHWCA. Under § 8(f), an employer’s liability for an employee’s per-
manent partial disability caused by a work-related injury is limited to
two years if the employer can affirmatively establish three elements:
(1) the ultimate disability is caused in part by a pre-existing partial
disability; (2) the pre-existing disability was manifest to the employer
prior to the work-related injury; and (3) the ultimate disability materi-
ally and substantially exceeded the disability that would have resulted
from the work-related injury alone, in the absence of the pre-existing
condition. See Director, OWCP v. Newport News Shipbldg. & Dry
Dock Co. (Carmines), 138 F.3d 134, 138-39 (4th Cir. 1998).
In this case, the ALJ considered the evidence proffered by Newport
News, but found that Dr. Reid’s report "does not support a conclu-
sion" that Cherry suffered from a "pre-existing disability." ALJ Deci-
sion at 6. Alternatively, the ALJ held that Newport News "offered no
evidence that [Cherry’s] ultimate injury was materially and substan-
tially worsened by the pre-existing conditions," determining that Dr.
Reid’s conclusions on the issue were "pure conjecture."2 Id. Similarly,
2
Although he did not do so, the ALJ could have questioned Dr. Reid’s
findings on additional grounds. To begin with, Dr. Reid is employed by
NEWPORT NEWS SHIPBUILDING v. CHERRY 5
the ALJ found that Dr. Magness’s indication of agreement with Dr.
Reid on the transmittal letter was "without supporting evidence and
accompanying analysis," and was of "little weight." Id. Accordingly,
the ALJ held that Newport News had failed to affirmatively establish
that it was entitled to relief under § 8(f), and he denied its request for
relief. Newport News appealed the adverse decision to the BRB,
which affirmed the ALJ in all respects.
II.
In evaluating the BRB Decision, we must determine "whether the
[BRB] observed its statutorily-mandated standard for reviewing the
ALJ’s factual findings." Newport News Shipbldg. and Dry Dock Co.
v. Stallings, 250 F.3d 868, 871 (4th Cir. 2001) (quotations and cita-
tions omitted). Pursuant to § 921(b)(3) of the LHWCA, the ALJ’s fac-
tual findings "shall be conclusive if supported by substantial evidence
in the record considered as a whole." § 921(b)(3).
We have consistently described substantial evidence as "more than
a scintilla but less than a preponderance." Newport News Shipbldg.
and Dry Dock Co. v. Faulk, 228 F.3d 378, 380-81 (4th Cir. 2000) (cit-
ing Elliott v. Adm’r, Animal & Plant Health Inspection Serv., 990
F.2d 140, 144 (4th Cir. 1993)). Furthermore, the ALJ’s findings "may
not be disregarded on the basis that other inferences might have been
more reasonable. Deference must be given the fact-finder’s inferences
and credibility assessments, and we have emphasized the scope of
review of ALJ findings is limited." Newport News Shipbldg. & Dry
Dock Co. v. Tann, 841 F.2d 540, 543 (4th Cir. 1988).
III.
There is no dispute that Cherry’s pre-existing injuries of 1987 and
1992 were manifest to Newport News, thus establishing the second
Newport News, which of course stood to benefit from § 8(f) relief. More-
over, Dr. Reid’s report is replete with clerical and medical errors, includ-
ing an error in describing Cherry’s hearing loss, as well as the proper
medical standard for hearing loss. Although the question of Cherry’s
hearing loss is not before us, the ALJ found that "Dr. Reid misstated the
standard for hearing impairment, misstated the evidence, and reached an
entirely insupportable conclusion" on that issue. ALJ Decision at 6.
6 NEWPORT NEWS SHIPBUILDING v. CHERRY
element of the three-element test. See supra Part I.B. Thus, the only
issues arising in this petition for § 8(f) relief are whether the remain-
ing two elements are satisfied, that is, (1) whether Cherry’s back inju-
ries in 1987 and 1992 constituted a pre-existing partial disability, and,
if so, (2) whether his permanent disability was materially and substan-
tially greater as a result.
The ALJ addressed these issues in alternative findings. He deter-
mined that (1) Cherry’s previous back injuries did not constitute a
pre-existing disability; and (2) that, even if Cherry had a pre-existing
condition, his 1995 injury was not thereby made materially and sub-
stantially greater. Either of these findings, if sustained, would warrant
denial of § 8(f) relief. Newport News assigns error on both issues,
contending that the ALJ’s findings are not supported by substantial
evidence.
A.
The only evidence presented to the ALJ regarding the extent of
Cherry’s earlier back injuries — and the possible contribution of
those injuries to his permanent disability — were the reports of Dr.
Reid and Dr. Magness.3 The ALJ, however, declined to credit the
medical reports. Newport News contends that the "ALJ and Board
substituted their medical opinion in place of the consistent and uncon-
tradicted medical opinions of two treating physicians." Consequently,
it maintains that there was no basis for the ALJ to rule that Newport
News had not met its burden under § 8(f).
On this record, we have no trouble concluding that the ALJ reason-
ably determined that Cherry’s temporary back injuries of 1987 and
1992 were not lasting physical problems that would constitute an "ex-
isting partial disability" under § 8(f). As then-Judge Scalia observed,
"the mere fact of past injury does not itself establish disability. There
3
Neither Cherry nor the Director submitted any evidence on this point.
The ALJ instead rendered his decision based on stipulations entered into
by the parties, as well as various exhibits submitted by Newport News.
Significantly, the parties voluntarily agreed to forgo the opportunity to
present live testimony and orally argue their respective positions before
the ALJ.
NEWPORT NEWS SHIPBUILDING v. CHERRY 7
must exist, as a result of that injury, some serious, lasting physical
problem." Director, OWCP v. Belcher Erectors, 770 F.2d 1220, 1222
(D.C. Cir. 1985).
Although Newport News has put forth evidence that Cherry’s pre-
vious back injuries were serious and permanent, inasmuch as they
caused a "weakened defective back structure," we think the ALJ was
well within his discretion to discredit this testimony as "pure conjec-
ture . . . bereft of supporting data or medical analysis." ALJ Decision
at 6. Furthermore, the medical evidence proffered by Newport News
was countered by powerful circumstantial evidence: Cherry’s previ-
ous injuries came with no permanent work restrictions, and Cherry
successfully returned to work for several years between injuries. In a
similar case, CNA Ins. Co. v. Legrow, 935 F.2d 430 (1st Cir. 1991),
the Court of Appeals for the First Circuit analyzed a § 8(f) petition
where the employee had suffered previous back injuries, but each
time eventually returned to work without any restrictions. Id. at 433.
In Legrow, the ALJ had granted the employer relief under § 8(f), but
the Board reversed for lack of substantial evidence supporting the
ALJ’s decision. Id. at 435-36. The First Circuit affirmed the Board’s
reversal of the ALJ, noting that "Legrow resumed regular physical
labor after recovering from each of his previous back injuries." Id. at
436.
Here, like the claimant in Legrow, Cherry resumed full and unre-
stricted work following both of his previous back injuries. That
Cherry was medically cleared, without any restrictions — to lift
heavy pipes — strongly suggests that he was not suffering from a par-
tial disability on September 12, 1995, when he permanently injured
his back. Thus, the ALJ’s determination that Cherry did not suffer
from a pre-existing disability is supported by substantial evidence.
B.
Since the ALJ properly found that Cherry did not have a pre-
existing disability in 1995, our resolution of Newport News’s conten-
tion that Cherry’s putative condition contributed to his permanent dis-
ability is not essential to our determination of this appeal. However,
because of an error made by the ALJ in that connection, we briefly
address the issue.
8 NEWPORT NEWS SHIPBUILDING v. CHERRY
The ALJ recognized the inescapable logic that a permanent partial
disability cannot be made worse by a pre-existing disability if there
is no pre-existing disability to begin with. In so concluding, however,
the ALJ incorrectly asserted that "the Employer has offered no evi-
dence with which I could quantify the degree of the September 12,
1995 back injury absent the pre-existing conditions." ALJ Decision at
6. This finding — although rendered irrelevant to our final decision
— was significant in light of our holding in Carmines, under which
an employer must show "quantification of the level of impairment
that would [have ensued if the claimant were] not previously dis-
abled." 138 F.3d at 139. The BRB accepted the ALJ’s conclusion that
Newport News failed to meet its quantification burden, noting that,
under Carmines, "this finding alone is sufficient to preclude entitle-
ment to Section 8(f) relief." BRB Decision at 5.
In Carmines we held that, in order to avail themselves of § 8(f)
relief, employers must present evidence quantifying the degree of per-
manent partial disability the claimant would have suffered absent the
pre-existing condition. 138 F.3d at 139, 143. The intent of § 8(f) is to
remove the disincentive to employ persons with pre-existing condi-
tions (who might be more susceptible to injuries that will ultimately
be the responsibility of the employer) by relieving the employer of
full liability for benefits when a pre-existing condition known to the
employer causes or exacerbates a subsequent, work-related permanent
disability. Id. at 138. We noted, however, that employers should not
receive a windfall under § 8(f) just because the employee happened
to have a pre-existing disability at the time of the permanent injury.
Id. at 139. Thus, we concluded, employers were only entitled to relief
to the extent the employee’s permanent disability was made materi-
ally and substantially greater by the existence of the pre-existing con-
dition. To determine whether this standard has been met, the
employer must quantify the type and extent of disability the employee
would have suffered in the absence of the previous injury, so that the
"adjudicative body will have a basis on which to determine whether
the ultimate permanent partial disability is materially and substan-
tially greater." Id. (quoting Director, OWCP v. Newport News Ship-
bldg. & Dry Dock Co. (Harcum), 8 F.3d 175, 185-86 (4th Cir. 1993)).
In this instance, Newport News in fact introduced evidence (in the
form of Dr. Reid’s letter) that "[if Cherry] had had a normal back, [his
NEWPORT NEWS SHIPBUILDING v. CHERRY 9
September 12, 1995 injury] would have resolved with no permanent
disability." Thus, according to Dr. Reid’s diagnosis, Cherry’s condi-
tion was not merely exacerbated by the alleged pre-existing condition,
it was entirely caused by that condition. In submitting its evidence
from Dr. Reid, Newport News appropriately sought to satisfy the
quantification requirement of Carmines. Therefore, the ALJ incor-
rectly concluded that Newport News had offered "no evidence [quan-
tifying] the degree of the September 12, 1995 back injury absent the
pre-existing conditions." This evidence, however, was properly
rejected by the ALJ as "pure conjecture." See Newport News Ship-
bldg. & Dry Dock Co. v. Ward, No. 00-1978 (4th Cir. Apr. 14, 2003)
(rejecting similar quantification evidence).
IV.
Pursuant to the forgoing, we deny Newport News’s petition for
review of the BRB’s decision.
PETITION FOR REVIEW DENIED
WIDENER, Circuit Judge, concurring and dissenting:
I concur in the result for the sole reason outlined below.
The Benefits Review Board, on p.4 of its decision (J.A. 32), gave
a reason to support its holding as the medical opinion relied on by
Newport News "is insufficient to establish the claimant’s hearing loss
and prior two back injuries are pre-existing permanent partial disabili-
ties, we affirm the administrative law judge’s finding that employer
did not establish this element of § 8(f) relief." That finding of the
Board is supported by its evidentiary finding that "the [physical]
restrictions expired three years before the 1995 injury and there was
no evidence that these injuries disabled claimant at all once the
restrictions expired." (J.A. 32). Thus, this decision by the Board is
supported by substantial evidence.
Accordingly, I concur in the result, as stated.
Especially, however, I do not agree with the insertion of Part III.B
of the opinion of the majority, which is acknowledged as unnecessary,
10 NEWPORT NEWS SHIPBUILDING v. CHERRY
even by the majority, and as to its inclusion in the majority opinion,
I respectfully dissent. The Harcum-Carmines rule is tangled enough,
even without further discussion.