Newport News Shipbld v. Stilley , 243 F.3d 179 ( 2001 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
NEWPORT NEWS SHIPBUILDING AND 
DRY DOCK COMPANY,
Petitioner,
v.
MARIE STILLEY, Widow of Lyman  No. 00-1155
Stilley; DIRECTOR, OFFICE OF
WORKERS’ COMPENSATION PROGRAMS,
UNITED STATES DEPARTMENT OF
LABOR,
Respondents.

On Petition for Review of an Order
of the Benefits Review Board.
(99-456, 99-456A)
Argued: November 1, 2000
Decided: March 12, 2001
Before MICHAEL, MOTZ, and KING, Circuit Judges.
Petition for review denied by published opinion. Judge Michael wrote
the opinion, in which Judge Motz and Judge King joined.
COUNSEL
ARGUED: Lawrence Philip Postol, SEYFARTH, SHAW, FAIR-
WEATHER & GERALDSON, Washington, D.C., for Petitioner.
Andrew David Auerbach, UNITED STATES DEPARTMENT OF
2 NEWPORT NEWS SHIPBUILDING v. STILLEY
LABOR, Washington, D.C., for Respondent Director; Gary Richard
West, PATTEN, WORNOM, HATTEN & DIAMONSTEIN, New-
port News, Virginia, for Respondent Stilley. ON BRIEF: Henry L.
Solano, Solicitor of Labor, Carol A. De Deo, Associate Solicitor,
Mark Reinhalter, Senior Attorney, UNITED STATES DEPART-
MENT OF LABOR, Washington, D.C., for Respondent Director.
OPINION
MICHAEL, Circuit Judge:
Lyman Stilley’s disability and (in part) his death were caused by
mesothelioma, an asbestos-related lung disease. His widow was
awarded benefits under the Longshore and Harbor Workers’ Compen-
sation Act (LHWCA) against Newport News Shipbuilding and Dry
Dock Company (Newport News) because of Stilley’s exposure to
injurious doses of asbestos as a company employee. Newport News
disclaimed liability because Stilley had also been exposed to asbestos
at subsequent, non-maritime employment with the National Aeronau-
tics and Space Administration (NASA). The ALJ nevertheless
assigned full LHWCA liability to Newport News under the "last mari-
time employer rule," and the Benefits Review Board affirmed. Under
this rule the last employer covered by the LHWCA who causes or
contributes to an occupational injury is fully liable for compensation
benefits. Newport News petitions for review, asking that we reject or
substantially modify the last maritime employer rule. Because the
present rule is consistent with the Act and passes constitutional mus-
ter, we deny the employer’s petition.
I.
Lyman Stilley worked for Newport News as an electrician’s helper
for about nine months in the 1950s. During his employment at New-
port News, Stilley was exposed to airborne asbestos dust and fibers
in sufficient quantity and duration to cause asbestos-related lung dis-
ease. After leaving Newport News, Stilley worked for nearly thirty
years (until 1987) as an electronics technician at NASA, where he
was exposed to asbestos for sustained periods, again in sufficient
NEWPORT NEWS SHIPBUILDING v. STILLEY 3
quantity to cause lung disease. In 1994 Stilley was diagnosed with
mesothelioma, an asbestos-related lung disease. After the diagnosis
Stilley had two options for seeking workers’ compensation benefits.
He could file for benefits against Newport News under the LHWCA
or he could seek benefits against NASA under the Federal Employee
Compensation Act (FECA).
Stilley chose to file for disability benefits against Newport News
under the LHWCA. He died shortly thereafter, on May 14, 1996, in
part because of mesothelioma. After Stilley’s death his widow pur-
sued the basic compensation claim and also filed for death benefits.
In the LHWCA proceedings Newport News stipulated that while Stil-
ley worked for the company he was exposed to asbestos in sufficient
quantity and duration to cause mesothelioma, and the ALJ awarded
benefits to the widow. Newport News argued that it should not be lia-
ble for the benefits because Stilley was exposed to asbestos at his later
employment with NASA. Both the ALJ at the hearing and the Board
on appeal applied the "last maritime employer rule" to hold that New-
port News was fully liable because it was the last maritime employer
to expose Stilley to asbestos in sufficient quantity and duration to
cause his disease. Newport News now petitions for review of the
Board’s decision, arguing that the last maritime employer rule is
unreasonable and unconstitutional.
II.
A.
Whether the Board erred in affirming the use of the last maritime
employer rule is a question of law. We accord no deference to the
Board’s legal interpretation of the LHWCA because the Board does
not serve a policy making role. See Norfolk Shipbuilding & Drydock
Corp. v. Hord, 193 F.3d 797, 800 (4th Cir. 1999). However, "[a]bsent
a clear congressional intent to the contrary, we afford deference to a
reasonable construction of the Act by the Director because of his
policy-making authority with regard to the Act." Universal Mar.
Corp. v. Moore, 126 F.3d 256, 268 (4th Cir. 1997). The Director has
concluded that the last maritime employer rule should be applied in
the administration of claims under the LHWCA. Newport News does
not argue that application of the last maritime employer rule violates
4 NEWPORT NEWS SHIPBUILDING v. STILLEY
clear congressional intent. Rather, Newport News argues that the Act
does not reasonably allow for application of the rule. Because the
Director’s longstanding administrative construction appears to be rea-
sonable, we must disagree with the company.
B.
The LHWCA establishes a workers’ compensation system for
workers injured or killed while employed on the navigable waters of
the United States, including any adjoining pier or land areas used to
load, unload, build, or repair ships. See 33 U.S.C. § 903(a). "[T]he
general policy of the Act [is] to encourage the prompt and efficient
administration of compensation claims." Rodriguez v. Compass Ship-
ping Co., 451 U.S. 596, 612 (1981). In keeping with this policy, the
Director has adopted the last maritime employer rule, which is under
challenge in this proceeding. Because the last maritime employer rule
is an extension of the last employer rule, we begin with a discussion
of the last employer rule.
A number of circuits have affirmed the use of the last employer
rule to govern the assignment of LHWCA liability when there are
multiple employers or insurance carriers in occupational disease
cases. See Norfolk Shipbuilding & Drydock Corp. v. Faulk, 228 F.3d
378, 384 (4th Cir. 2000); Liberty Mut. Ins. Co. v. Commercial Union
Ins. Co., 978 F.2d 750, 752 (1st Cir. 1992); Avondale Indus., Inc. v.
Dir., OWCP, 977 F.2d 186, 190 (5th Cir. 1992); Port of Portland v.
Dir., OWCP, 932 F.2d 836, 840 (9th Cir. 1991); Jacksonville Ship-
yards, Inc. v. Dir., OWCP, 851 F.2d 1314, 1317 n.2 (11th Cir. 1988);
Travelers Ins. Co. v. Cardillo, 225 F.2d 137, 145 (2d Cir. 1955). The
last employer rule is this: "the employer during the last employment
in which the claimant was exposed to injurious stimuli, prior to the
date upon which the claimant became aware of the fact that he was
suffering from an occupation disease . . . [is] liable for the full amount
of the [LHWCA] award." Cardillo, 225 F.2d at 145. Let us assume,
for example, that a claimant, who is disabled by asbestos-related lung
disease, worked for maritime employer A for thirty years installing
asbestos and next worked for maritime employer B for thirty days
where he also installed asbestos. Employer B is fully liable for the
claimant’s LHWCA benefits if the claimant did not learn of his dis-
ease until after he began working for employer B. The last employer
NEWPORT NEWS SHIPBUILDING v. STILLEY 5
rule therefore imposes full liability on the final maritime employer
even though prior maritime employers might have contributed to the
claimant’s disease or injury.
When the Second Circuit endorsed the last employer rule nearly
fifty years ago in Cardillo, the court looked to one of Congress’s
overriding purposes in establishing a workers’ compensation system
for longshoremen: the prompt and simplified processing of claims.
See Cardillo, 225 F.2d at 145. Because longshoremen typically work
for numerous employers over the course of a career, allowing
employers to apportion liability would greatly complicate the claims
process. Under an apportionment scheme many benefit awards would
be substantially delayed as employers resorted to expert testimony
and scientific evidence in an effort to prove that other employers
should share a percentage of liability. In the face of this prospect the
congressional goal of streamlined claims administration carried the
day, and the last employer rule was approved.
The last employer rule for LHWCA liability does not take into
account a case like Lyman Stilley’s. Newport News is not contending
that it should be excused from liability because of the conduct of a
subsequent maritime (LHWCA-covered) employer. Rather, Newport
News is contending that it should be excused because of the conduct
of a subsequent, non-maritime employer. The question, therefore, is
whether the LHWCA reasonably allows for holding the last maritime
employer fully liable for a claimant’s injury even though a subse-
quent, non-maritime employer also contributed to the injury. The "last
maritime employer" rule holds the maritime employer fully liable in
such circumstances. The one circuit to squarely consider the question
held that the LHWCA totally supports application of the last maritime
employer rule. See Todd Shipyards v. Black, 717 F.2d 1280, 1286-87
(9th Cir. 1983). But cf. Bath Iron Works v. Brown, 194 F.3d 1, 7 (1st
Cir. 1999) (criticizing the last maritime employer rule in dicta).
The last maritime employer rule is justified by the same congres-
sional purpose that brought about the last employer rule, specifically,
the prompt and simplified processing of compensation claims. If we
were to reject the last maritime employer rule, the potential problems
that prompted the last employer rule decades ago would now ripen
into real ones. LHWCA benefit awards would be delayed in occupa-
6 NEWPORT NEWS SHIPBUILDING v. STILLEY
tional disease claims while maritime employers attempted to prove
that subsequent, non-maritime employers were responsible for a per-
centage of the liability. Indeed, attempting to apportion liability
would present difficult problems of proof for both parties, the
employer and the injured worker. These problems would be particu-
larly acute in cases of asbestos-related disease, which often develops
over a long latency period. As one of Newport News’s medical
experts in this case acknowledged, "In patients with multiple expo-
sures, it is not possible by historical means to ascertain which expo-
sure resulted in the mesothelioma." We agree with the Director that
rejection of the last maritime employer rule would bring intractable
problems to claims administration. Without the rule the claims pro-
cess would surely become more complicated, protracted, and expen-
sive.
Newport News does not mount any serious challenge to the Direc-
tor’s case for simplified claims administration. Instead, the company
devotes much of its brief to pressing the argument that the last mari-
time employer rule is inequitable.
Newport News begins by claiming that the last maritime employer
rule "takes away the fundamental fairness of the last employer rule."
Decisions subsequent to Cardillo have suggested that while the last
employer rule is rather arbitrary, it is fair because "all [maritime]
employers will be the last employer a proportional share of the time."
Cordero v. Triple A Mach. Shop, 580 F.2d 1331, 1336 (9th Cir.
1978). If this is borne out in practice, the rule would result in an equi-
table distribution of LHWCA liability over the long run. Newport
News points out that this same logic cannot be applied to the last mar-
itime employer rule. Under this rule the subsequent, non-maritime
employer will never be the last employer for purposes of LHWCA
liability. Newport News therefore argues that the last maritime
employer rule unfairly holds maritime employers fully liable for
occupational disease caused in part by later, non-maritime employers.
It argues that because of this unfairness, the last employer should be
fully responsible for the injury, thereby relieving the prior maritime
employers of LHWCA liability. As a general matter, this argument is
unconvincing because it hinges on the unsubstantiated proposition
that claimants exposed to injurious stimuli while working first for
LHWCA-covered employers and later for non-covered employers
NEWPORT NEWS SHIPBUILDING v. STILLEY 7
usually file claims only under the LHWCA. If a claimant was also
exposed at subsequent, non-maritime employment, that claimant
might well pursue state or FECA benefits first. (FECA and LHWCA
generally provide equal compensation benefits to claimants in equal
pay categories. Compare 33 U.S.C. § 908 with 5 U.S.C. §§ 8105-
8107.) If the claimant sought state or FECA benefits and later decided
to file a LHWCA claim, the earlier maritime employer would receive
a credit for any state or FECA award. See 33 U.S.C. § 903(e).
Accordingly, any inequity to maritime employers under the last mari-
time employer rule only arises when the claimant seeks a remedy first
under the LHWCA.
Newport News anticipates this point and suggests that we modify
the last maritime employer rule in one of two ways. The company
suggests that either (1) a claimant should not be allowed to pursue
LHWCA benefits if he has a compensation remedy against his subse-
quent, non-maritime employer or (2) a claimant should be required to
proceed first against the subsequent employer. The first proposal
would hold the last employer, one covered by some other compensa-
tion system, solely liable for the claimant’s injury. This proposal is
contrary to the express requirements of the LHWCA. It overlooks the
simple detail that when an employee suffers a compensable injury on
a maritime job, he is entitled to benefits under the LHWCA. See 33
U.S.C. § 903(a). Nothing in the Act limits the injured worker to his
remedy under some other system that covers his subsequent, non-
maritime employment. Moreover, limiting the employee to his
chances under some other scheme is inconsistent with the LHWCA’s
goal of adequate compensation for longshoremen. State workers’
compensation programs vary widely with respect to benefit levels.
See U.S. Chamber of Commerce, Analysis of Workers’ Compensation
Laws (1997). Thus, under Newport News’s proposal, a claimant could
be denied compensation under the LHWCA and left to accept lower
benefits under a state workers’ compensation scheme. Because the
"dominant intent of Congress [in enacting the LHWCA was] to help
longshoremen," a claimant should not be denied compensation under
the LHWCA simply because he is entitled to some relief under an
alternative scheme. Reed v. The Yaka, 373 U.S. 410, 415 (1963).
Newport News’s second proposal — that claimants should be
forced to seek benefits against the subsequent employer before filing
8 NEWPORT NEWS SHIPBUILDING v. STILLEY
for LHWCA benefits — must also be rejected. Such a rule would cer-
tainly benefit maritime employers because they are entitled to a credit
under the LHWCA for any workers’ compensation benefits paid to
the claimant under any other system. See 33 U.S.C. § 903(e). The
company’s second proposal would have some advantages. Forcing
injured workers to pursue benefits from subsequent, non-maritime
employers first would result in some rough distribution of liability.
And, because of the LHWCA’s credit provision, the claimant would
receive benefits that totaled those available under the LHWCA. Still,
nothing in the Act requires an injured worker to pursue other compen-
sation remedies first. In addition, such a rule would be sure to gener-
ate disputes in LHWCA claims proceedings over whether a claimant
might have an alternative remedy against a subsequent employer. This
result would frustrate the LHWCA’s overriding purpose of providing
a prompt and uncomplicated claims process.
Newport News also argues that the last maritime employer rule is
inequitable because it makes maritime employers liable for exposure
caused by subsequent employers. This argument is flawed. The last
maritime employer is only liable under the LHWCA if conditions at
its own work site contributed to the worker’s disease. Maritime
employers can avoid liability entirely if they do not expose their
employees to disease causing conditions. See Faulk, 228 F.3d at 387-
88. A maritime employer can, in other words, avoid LHWCA liability
in a given case by proving that the employee’s disease or injury
resulted exclusively from exposure during work for another employer.
For all of the foregoing reasons, we conclude that the Director’s
adoption of the last maritime employer rule is a reasonable adminis-
trative measure that is consistent with the purposes of the LHWCA.
The rule serves Congress’s overriding goal of providing injured long-
shoremen with prompt compensation in streamlined proceedings.
C.
Finally, Newport News asserts that the last maritime rule is uncon-
stitutional. The company says that the rule violates the Equal Protec-
tion and Due Process Clauses, but concedes that our review is for
rational basis. See Kimel v. Fla. Bd. of Regents, 528 U.S. 62, 83-84
(2000) (analyzing equal protection claim under rational basis review);
NEWPORT NEWS SHIPBUILDING v. STILLEY 9
Gen. Motors Corp. v. Romein, 503 U.S. 181, 191 (1992) (same for
due process claim). A rule requiring the final maritime employer to
pay compensation benefits under the LHWCA when conditions at its
work site contributed to an employee’s disease is a rational rule
because it provides a prompt and simple remedy, one that is consis-
tent with congressional purpose. Newport News also argues that the
last maritime employer rule violates the Takings Clause. Because the
rule is a rational measure that assigns "the costs of the employees’
disabilities to those who have profited from the fruits of their labor,"
it does not violate the Takings Clause. Usery v. Turner Elkhorn Min-
ing Co., 428 U.S. 1, 18 (1976).
III.
Lyman Stilley’s widow qualifies for benefits under the LHWCA
because the medical evidence established that Mr. Stilley’s exposure
to asbestos at Newport News was sufficient to cause his meso-
thelioma. It is reasonable to assign full LHWCA liability to Newport
News under the last maritime employer rule even though Mr. Stilley
was also exposed to asbestos with a later, non-maritime employer.
The rule is also constitutional. Accordingly, the company’s petition
for review is denied.
PETITION DENIED