Huntington Ingalls Industries v. Ricky Eason

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 14-1698
HUNTINGTON INGALLS INDUSTRIES, INC., f/k/a Northrup Grumman
Shipbuilding, Inc.,
Petitioner,
v.
RICKY N. EASON; DIRECTOR, OFFICE OF WORKERS’ COMPENSATION
PROGRAMS, UNITED STATES DEPARTMENT OF LABOR,
Respondents.
On Petition for Review of an Order of the Benefits Review Board.
(13−0573)
Argued: March 25, 2015 Decided: June 2, 2015
Before NIEMEYER and FLOYD, Circuit Judges, and HAMILTON, Senior
Circuit Judge.
Petition granted by published opinion. Senior Judge Hamilton
wrote the opinion, in which Judge Niemeyer and Judge Floyd
joined.
ARGUED: Jonathan Henry Walker, MASON, MASON, WALKER & HEDRICK,
PC, Newport News, Virginia, for Petitioner. Matthew W. Boyle,
UNITED STATES DEPARTMENT OF LABOR, Washington, D.C.; Gregory
Edward Camden, MONTAGNA, KLEIN, CAMDEN, LLP, Norfolk, Virginia,
for Respondents. ON BRIEF: M. Patricia Smith, Solicitor of
Labor, Rae Ellen James, Associate Solicitor, Mark Reinhalter,
Counsel for Longshore, Gary K. Stearman, Counsel for Appellate
Litigation, Office of the Solicitor, UNITED STATES DEPARTMENT OF
LABOR, Washington, D.C., for Federal Respondent.
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HAMILTON, Senior Circuit Judge:
Huntington Ingalls Industries, Inc. (HI) petitions for
review of the May 16, 2014 decision of the Benefits Review Board
(BRB) upholding the August 16, 2013 decision of Administrative
Law Judge (ALJ) Daniel Sarno, Jr. (Judge Sarno) granting the
claim of Ricky Eason (Eason) for temporary partial disability
under the Longshore and Harbor Workers’ Compensation Act (LHWCA
or the Act), 33 U.S.C. §§ 901-950. 1 For the reasons that follow,
we grant the petition for review and remand the case to the BRB
to enter an order dismissing Eason’s claim for temporary partial
disability under the LHWCA.
I
A
The LHWCA establishes a federal worker’s compensation
system for employees injured, disabled, or killed in the course
of covered maritime employment. See generally id. § 907
(medical services and supplies to treat injury), id. § 908
(compensation for disability), id. § 909 (compensation for
1
Eason’s filing of his disability claim brought the
Director of the Office of Workers’ Compensation Programs (OWCP),
United States Department of Labor (the Director) into the case
as an interested party. Cf. Ingalls Shipbuilding, Inc. v. Dir.,
OWCP, 519 U.S. 248, 262–70 (1997) (holding that the Director may
appear as respondent in the courts of appeals when review is
sought of a BRB decision).
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death). Like other worker’s “compensation regimes--limited
liability for employers; certain, prompt recovery for employees-
-the LHWCA requires that employers pay [disability] benefits
voluntarily, without formal administrative proceedings.”
Roberts v. Sea-Land Servs., Inc., 132 S. Ct. 1350, 1354 (2012);
see also 33 U.S.C. § 904 (“Every employer shall be liable for
and shall secure the payment to his employees of the
compensation payable under sections 907, 908, and 909 of this
title.”).
The LHWCA defines “[d]isability,” in pertinent part, as
“incapacity because of injury to earn the wages which the
employee was receiving at the time of injury in the same or any
other employment.” 33 U.S.C. § 902(10). Four different
categories of disabilities are set forth in the LHWCA: (1)
permanent total disability; (2) temporary total disability; (3)
permanent partial disability; and (4) temporary partial
disability. Id. § 908(a)–(c), (e).
No standard is set forth in the LHWCA to determine the
degree of a disability (total or partial) or the duration of a
disability (permanent or temporary). Because disability under
the LHWCA is an economic concept, see Metro. Stevedore Co. v.
Rambo, 515 U.S. 291, 297 (1995) (“Disability under the LHWCA,
defined in terms of wage-earning capacity . . . , is in essence
an economic, not a medical, concept.”), the degree of a
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disability cannot be measured by medical condition alone,
Nardella v. Campbell Mach. Inc., 525 F.2d 46, 49 (9th Cir.
1975). Consideration must be given to the claimant’s age,
education, experience, mentality, ability to work as well as the
extent of the physical injury, and the availability of suitable
alternative employment. Fleetwood v. Newport News Shipbuilding
& Dry Dock Co., 776 F.2d 1225, 1227 n.2 (4th Cir. 1985). With
regard to duration, a claimant remains temporarily disabled
until he reaches “maximum medical improvement.” Stevens v.
Dir., OWCP, 909 F.2d 1256, 1259 (9th Cir. 1990). Maximum
medical improvement marks the time where “normal and natural
healing is no longer likely” to occur. Pac. Ship Repair &
Fabrication Inc. v. Dir., OWCP [Benge], 687 F.3d 1182, 1185 (9th
Cir. 2012) (citation and internal quotation marks omitted).
Thus, the “maximum medical improvement date ‘triggers a change
in the classification of a claimant’s disability from temporary
to permanent.’” Id. (quoting Haw. Stevedores, Inc. v. Ogawa,
608 F.3d 642, 653 (9th Cir. 2010)).
Which of the four categories of disability the claimant
falls in dictates the amount of compensation paid to him by his
employer. A permanently totally disabled employee is entitled
to weekly compensation amounting to two-thirds of his pre-injury
average weekly wage for as long as he remains permanently
totally disabled. 33 U.S.C. § 908(a); Roberts, 132 S. Ct. at
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1354. The compensation payable for a temporary total disability
remains fixed at that two-thirds figure, while weekly
compensation for a permanent total disability is annually
adjusted to reflect increases to the national average weekly
wage. 33 U.S.C. § 910(f).
The LHWCA recognizes two types of permanent partial
disability. One, commonly referred to as “unscheduled” or “non-
scheduled” compensation, is based on the employee’s actual loss
of wage-earning capacity and, like total disability, is
compensated at two-thirds of the difference between the
employee’s average weekly wage at the time of injury and his
post-injury wage-earning capacity. Id. § 908(c)(21). The
other, commonly referred to as “scheduled” compensation, covers
specified body parts, and pays a fixed number of weeks of
compensation at two-thirds of the employee’s average weekly
wage. Id. § 908(c)(1)-(17), (20). These scheduled amounts
compensate for a presumed (not actual) loss of wage-earning
capacity. Korineck v. Gen. Dynamics Corp. Elec. Boat Div., 835
F.2d 42, 43-44 (2d Cir. 1987). For example, the loss of a leg
under the schedule entitles a claimant to 288 weeks of
compensation at two-thirds of his average weekly wage. 33
U.S.C. § 908(c)(2). For a partial loss of the use of a leg,
which includes knee injuries, the number of weeks is multiplied
by the percentage of loss. Id. § 908(c)(19). Thus, a claimant
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with a 50% loss of the use of his leg would receive compensation
for 144 weeks. Notably, a claimant who is permanently partially
disabled due to a scheduled injury cannot choose to be
compensated for his actual loss of wage-earning capacity under
§ 908(c)(21), even though the compensation under § 908(c)(21)
potentially may be greater than the compensation paid under the
schedule. See Potomac Electric Power Co. [PEPCO] v. Dir., OWCP,
449 U.S. 268, 270-71 (1980) (holding that a claimant who was
permanently partially disabled due to a scheduled injury could
not choose to be compensated for his actual loss of wage-earning
capacity under § 908(c)(21) rather than being compensated for
his loss as provided by the schedule).
Compensation for temporary partial disability is “two-
thirds of the difference between the injured employee’s average
weekly wages before the injury and his wage-earning capacity
after the injury in the same or another employment.” 33 U.S.C.
§ 908(e). Under the LHWCA, temporary partial disability
compensation cannot be paid for a period longer than five years.
Id.
Once the claimant is classified in a particular disability
category, he need not necessarily remain in such category.
Benge, 687 F.3d at 1185. This is so because permanent/temporary
and total/partial are fluid concepts and not “cast in stone.”
Id. at 1186. Reclassification of a disability requires a
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showing of a “change[] [in] circumstances.” Id. at 1185; see
also 33 U.S.C. § 922 (providing that, with certain time limits,
“on the ground of a change in conditions . . . , the deputy
commissioner may . . . , whether or not a compensation order has
been issued . . . , review a compensation case . . . [and] issue
a new compensation order which may terminate, continue,
reinstate, increase, or decrease such compensation, or award
compensation”). For example, a claimant with a permanent
partial disability may become permanently totally disabled or
temporarily totally disabled if his injury worsens and renders
him permanently or temporarily totally disabled. See Benge, 687
F.3d at 1185-87 (holding that permanent partial disability
claimant became temporarily totally disabled following surgery
to treat injury). Likewise, a claimant with a permanent total
disability may be reclassified to having a permanent partial
disability if suitable alternative employment becomes available.
See Stevens, 909 F.2d at 1259-60 (holding that a permanent total
disability changes to a permanent partial disability when
suitable alternative employment becomes available to claimant).
It is also possible that a disability deemed permanent and total
or permanent and partial may improve “due to a remarkable
recovery, advances in medical science, or other reasons” such
that the claimant may be recharacterized as temporarily totally
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disabled or temporarily partially disabled. Benge, 687 F.3d at
1185.
B
On September 28, 2008, Eason injured his right knee while
employed as a pipe fitter at Newport News Shipbuilding and Dry
Dock Company (NNS) in Newport News, Virginia. 2 He went to the
medical clinic at NNS on October 1, 2008, complaining of pain in
his right knee. The injury, which was diagnosed on October 14,
2008 as a torn meniscus requiring surgery, kept Eason completely
out of work from October 2, 2008 through June 28, 2009. As a
result, HI paid Eason temporary total disability benefits for
this period.
On June 29, 2009, Eason returned to work at NNS full-time
as a pipe fitter. On September 23, 2009, Eason was evaluated at
Tidewater Physical Therapy and given a 14% lower extremity
permanent impairment rating. Sometime in October 2009, Dr.
David Hoang (Dr. Hoang), Eason’s treating orthopedic surgeon,
“signed off” on the 14% rating, and, thus, Eason reached maximum
medical improvement for purposes of determining his eligibility
for permanent partial disability compensation. (J.A. 180).
Based on the 14% lower-extremity permanent impairment rating, HI
2
At the time of Eason’s injury, NNS was owned by Northrop
Grumman Shipbuilding, Inc. (NGS). In 2011, HI purchased NNS
from NGS. For ease of reference, we will refer to NGS as HI.
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paid Eason from October 16, 2009 through May 17, 2010, and from
May 19, 2010 through July 25, 2010, 40.28 weeks of scheduled
compensation for permanent partial disability at $992.29 (two-
thirds of his pre-injury average weekly wage of $1,488.43) per
week. See 33 U.S.C. § 908(c)(2) (loss of leg provides 288 weeks
of scheduled compensation); id. § (c)(19) (permanent partial
loss “may be for proportionate loss or loss of use of the
member”). 3 Thus, for approximately seven months, Eason received
scheduled permanent partial disability compensation in addition
to his regular weekly salary for performing his duties as a pipe
fitter at NNS.
Eason continued to work full-time as a pipe fitter through
May 17, 2010. On May 18, 2010, Eason met with Dr. Hoang and
reported that “his left knee was acting up on him and his right
knee was getting stiff intermittently, especially after sitting
for awhile.” (J.A. 180). Dr. Hoang noted “mild soreness” in
the right knee and “tenderness” in the left knee, (J.A. 83), and
he put Eason on light duty restrictions for both knees. These
3
HI paid 40.28 weeks of compensation for the scheduled
injury, rather than 40.32 weeks (288 weeks x .14 = 40.32 weeks).
Although the record under review is unclear as to why the
difference exists, it may well be because HI paid an intervening
day (May 18, 2010) of compensation for temporary total
disability. In any event, the .04 difference is not at issue in
this appeal.
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light duty restrictions prevented Eason from performing his
duties as a pipe fitter.
On his June 3, 2010 visit with Dr. Hoang, Eason reported
that his left knee “still hurts” and that his right knee was
“improving.” (J.A. 83). Dr. Hoang advised Eason to “continue
with the same work restrictions.” (J.A. 84). On July, 16,
2010, Eason reported to Dr. Hoang that his right knee was “doing
well” but the left knee was “grinding.” (J.A. 84). Dr. Hoang
directed Eason to “continue with the light duty [restrictions].”
(J.A. 85). Over the next month, Eason’s condition improved, and
he returned to work full-time as a pipe fitter at NNS on August
10, 2010.
Between May 19, 2010 and August 9, 2010, NNS did not offer
Eason light-duty employment within his restrictions. In
addition, during this period, Eason did not seek suitable
alternative employment within the relevant labor market.
C
Eason brought a claim against HI for temporary total
disability or, alternatively, temporary partial disability for
the May 19, 2010 through August 9, 2010 time period. In support
of his claim, Eason argued that during this time period he “was
not at maximum medical improvement.” (J.A. 13). He posited
that he was “undergoing ongoing medical treatment” and “under
temporary [work] restrictions.” (J.A. 13). Because no suitable
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alternative employment was available, he argued he was entitled
to temporary total disability compensation. Alternatively,
Eason argued that, even if HI’s alternative employment data were
entitled to “any weight,” he was entitled to temporary partial
disability compensation because his pre-injury salary exceeded
the salary of any alternative employment available. (J.A. 13).
Eason posited that, even though he received scheduled permanent
partial disability compensation for his knee injury, such
compensation did not prevent the recovery of additional
compensation for a temporary partial disability due to a flare
up of that injury. In response, HI argued that Eason reached
maximum medical improvement in October 2009. Because Eason
reached maximum medical improvement at that time and received
permanent partial disability compensation under the schedule, HI
posited that he was not entitled to any additional temporary
compensation--either total or partial--under the Supreme Court’s
decision in PEPCO. HI stressed that Eason’s scheduled
compensation for his knee injury presumed his actual loss of
wage-earning capacity for that injury, such that any temporary
compensation (total or partial) sought for a flare up of that
injury already was covered by the payments made under the
schedule.
A hearing was held before ALJ Richard Malamphy (Judge
Malamphy). In his decision, Judge Malamphy found that Eason
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reached maximum medical improvement in October 2009. He also
found that the evidence did not support Eason’s claim of
temporary total disability. With regard to temporary partial
disability, relying on the Supreme Court’s decision in PEPCO,
Judge Malamphy ruled that Eason’s disability compensation for
his knee injury was limited to the amount required by the
schedule. He explained that “[t]he Act presumes that the
scheduled award fully compensates claimant for any loss in wage-
earning capacity” and, “[t]herefore, any temporary loss of wage
earning capacity Claimant suffered is not compensable in
addition to the scheduled award.” (J.A. 184). In other words,
Judge Malamphy held that the scheduled compensation award
compensated Eason for his knee injury and that Eason was not
entitled to additional compensation for any temporary partial
loss of wage-earning capacity for that same injury.
On appeal, the BRB vacated Judge Malamphy’s decision. The
BRB affirmed Judge Malamphy’s finding that Eason reached maximum
medical improvement in October 2009. The BRB ruled, however,
that this finding did not preclude the recovery of temporary
partial disability compensation for Eason’s knee injury.
Referring to language in PEPCO that states “that a scheduled
injury can give rise to an award for permanent total disability”
and that “once it is determined that an employee is totally
disabled the schedule becomes irrelevant,” 449 U.S. at 277 n.17,
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the BRB found that “the fact that permanent partial disability
benefits were fully paid under the schedule is not determinative
of a claimant’s entitlement thereafter to permanent total,
temporary total, or temporary partial disability benefits.”
(J.A. 188-89). Consequently, the BRB remanded the case to the
ALJ to determine whether Eason’s work restrictions from May 19,
2010 through August 19, 2010 prevented him from performing his
usual work. If they did, the BRB stated, Eason would have
established a prima facie case of temporary total disability.
See Newport News Shipbuilding & Dry Dock Co. v. Dir., OWCP, 315
F.3d 286, 292 (4th Cir. 2002) (noting that an LHWCA “claimant
must first establish a prima facie case by demonstrating an
inability to return to prior employment due to a work-related
injury”). The burden would then shift to HI to establish the
availability of suitable alternative employment that Eason was
capable of performing. See id. (outlining burden shift).
According to the BRB, HI could meet its burden by showing that
suitable alternative employment was available to Eason in the
relevant labor market. See id. at 293 (noting that an employer
meets its burden by demonstrating, inter alia, that suitable
alternative employment was available in the relevant labor
market). Thus, on remand, the BRB required the ALJ to determine
if HI met its burden, such that its obligation to pay disability
benefits would be reduced or eliminated. See id. (“Under our
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precedent, if the employer meets its burden, its obligation to
pay disability benefits is either reduced or eliminated, unless
the disabled employee shows that he diligently but
unsuccessfully sought appropriate employment.” (citation and
internal quotation marks omitted)).
On remand, the case was reassigned to Judge Sarno. Judge
Sarno found that Eason was not able to return to his usual work
from May 19, 2010 through August 9, 2010. However, Judge Sarno
found that HI had established the availability of suitable
alternative employment for 32 hours per week at $7.25 per hour.
Judge Sarno concluded that Eason was temporarily partially
disabled from May 19, 2010 through August 20, 2010 and entitled
to compensation of $845.82 per week (two-thirds of the
difference between $1,488.43 per week, Eason’s average weekly
wage at the time of the injury, and $219.70 per week, Eason’s
residual wage-earning capacity based on the national average
weekly wage in 2008, the year of Eason’s injury). 4
4
Judge Sarno noted that HI had established that Eason had a
wage-earning capacity under § 908(e) of $232.00 per week in
2010. This amount was adjusted downward to $219.70 per week in
order to account for inflation between 2008 and 2010. See
Walker v. Wash. Metro. Area Transit Auth., 793 F.2d 319, 321 n.2
(D.C. Cir. 1986) (“In order to make a fair comparison between
wages, the Board looks to the amount the post-injury job paid at
the time of the claimant’s injury. This allows the Board to
compare the wages without worrying about the effect of
inflation.”); Quan v. Marine Power & Equip. Co., 30 BRBS 124,
1996 WL 581786, at *4 (BRBS 1996) (“Sections 8(c)(21) and 8(h)
(Continued)
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HI appealed Judge Sarno’s decision to the BRB, arguing once
again that Eason was precluded from receiving any additional
compensation in addition to that received under the schedule.
The BRB found that it had already rejected that argument in its
earlier decision. It also affirmed, as unchallenged on appeal,
Judge Sarno’s findings that Eason was unable to perform his
usual work from May 19, 2010 through August 20, 2010 and that HI
had established suitable available alternative employment.
Consequently, it affirmed Judge Sarno’s award of compensation
for temporary partial disability from May 19 through August 20,
2010. 5 It is from this BRB decision that HI filed its timely
petition for review.
II
We review the BRB’s decision for errors of law and to
ascertain whether the BRB adhered to its statutorily-mandated
standard for reviewing the ALJ’s factual findings. Gilchrist v.
Newport News Shipbuilding & Dry Dock Co., 135 F.3d 915, 918 (4th
require that a claimant’s post-injury wage earning capacity be
adjusted to account for inflation to represent the wages that
the post-injury job paid at the time of claimant’s injury.”).
5
Because he returned to work on August 10, 2010, Eason
concedes that Judge Sarno (and the BRB) erroneously awarded
temporary partial disability compensation from August 10, 2010
through August 20, 2010.
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Cir. 1998). As to the BRB’s interpretation of the LHWCA, our
review is de novo because the BRB is not a policy-making agency
and, thus, its statutory interpretation is not entitled to any
special deference from us. Id. However, the Director’s
reasonable interpretation of the LHWCA is entitled to some
deference. See Norfolk Shipbuilding & Drydock Corp. v. Hord,
193 F.3d 797, 801 (4th Cir. 1999) (“We note that this is the
result advocated by the Director of the Office of Workers’
Compensation Programs, to whose reasonable interpretation of the
LHWCA we accord some deference.”).
In its petition for review, HI challenges Judge Sarno’s
award of temporary partial disability benefits from May 19, 2010
through August 20, 2010. HI argues that a claimant, like Eason,
who receives scheduled compensation for a permanent partial
disability cannot subsequently receive additional temporary
partial disability compensation because the receipt of scheduled
permanent partial disability compensation for an injury includes
any temporary partial disability compensation. Moreover, HI
reads the LHWCA and PEPCO as precluding a claimant, like Eason,
with a scheduled injury from receiving any additional temporary
disability compensation--either total or partial--for the same
injury. 6 Eason counters by arguing that receipt of scheduled
6
HI concedes that a claimant who receives scheduled
(Continued)
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permanent partial disability compensation for an injury is not
determinative of entitlement to temporary partial disability
compensation for the same injury. According to Eason, PEPCO is
not particularly helpful to HI because it only dealt with a
permanent partial disability claim and not a claim, as here, for
temporary partial disability. He suggests that his claim for
temporary partial disability is viable because his knee injury
flared up, preventing him from working as a pipe fitter from May
19, 2010 through August 9, 2010, though he apparently concedes
that suitable alternative employment was available during that
time. He also posits that his argument is supported by PEPCO
because the Court there recognized the availability of total
disability compensation for a scheduled injury.
The Director, while agreeing with the result urged by HI,
takes a middle course. He agrees with HI that a scheduled
permanent partial disability claimant cannot receive additional
temporary partial disability compensation for the injury
underlying the permanent partial disability compensation because
such temporary compensation essentially is duplicative to the
permanent partial disability compensation is not precluded from
subsequently receiving permanent total disability compensation.
See Petitioner’s Reply Br. at 2-3 (noting that scheduled
compensation is “exclusive to all other forms of compensation,
except for permanent total disability under 33 U.S.C. § 908(a)
of the Act”).
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scheduled compensation. He also agrees with HI that a claimant
who receives scheduled permanent partial disability compensation
is not precluded from subsequently receiving permanent total
disability compensation. However, the Director disagrees with
HI that a claimant who receives scheduled permanent partial
disability compensation for an injury is precluded from
receiving temporary total disability compensation for the same
injury. According to the Director, the LHWCA’s statutory
framework supports his construction of the Act and nothing in
PEPCO precludes reclassification of a scheduled permanent
partial disability to a temporary total disability. However,
because Eason’s injury has remained permanent and partial, the
Director posits that reclassification of his injury is not
warranted, and, thus, Eason is precluded from recovering any
additional disability compensation for his knee injury.
We agree with the position espoused by the Director, which
we accord some deference. Hord, 193 F.3d at 801. Eason
suffered a scheduled injury. Thus, his permanent partial
disability compensation is set by the schedule. PEPCO, 449 U.S.
at 270-71. Such scheduled compensation is presumed to cover
Eason’s actual partial loss of wage-earning capacity due to that
partial disability. See ITO Corp. of Balt. v. Green, 185 F.3d
239, 242 n.3 (4th Cir. 1999) (“The presumed effect of scheduled
disabilities on a claimant’s wage-earning capacity has been set
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by Congress within a fairly narrow range. Benefits are payable
for a specific duration regardless of the actual impact of the
disability on the claimant’s prospects of returning to longshore
(or any other) work.”); Bethlehem Steel Co. v. Cardillo, 229
F.2d 735, 736 (2d Cir. 1956) (noting that, “as to any schedule
loss, there is a conclusive presumption of loss or reduction of
wage-earning capacity”). Once Eason’s permanent partial
disability compensation is set under the schedule, he is not
entitled to receive additional disability compensation for the
same scheduled injury unless the circumstances warrant a
reclassification of that disability to permanent total or
temporary total. See, e.g., Benge, 687 F.3d at 1185-87
(permitting claimant, who received unscheduled permanent partial
disability compensation, to receive temporary total disability
compensation because subsequent surgery rendered her temporarily
totally disabled); Hord, 193 F.3d at 801-02 (allowing claimant,
who was paid permanent partial disability compensation under the
schedule to recover temporary total disability compensation); DM
& IR Ry. Co. v. Dir., OWCP, 151 F.3d 1120, 1122-23 (8th Cir.
1998) (allowing a claimant who received permanent partial
disability compensation to subsequently recover disability
compensation for permanent total disability); cf. PEPCO, 449
U.S. at 277 n.17 (“Indeed, since the § 8(c) schedule applies
only in cases of permanent partial disability, once it is
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determined that an employee is totally disabled the schedule
becomes irrelevant.”). This is so because, once a disability
becomes total, it makes no sense to apply a presumption designed
to approximate a claimant’s permanent partial disability
compensation. A permanent or temporary total disability
presumes the loss of all wage-earning capacity, while a
permanent partial disability involves only a partial loss. See
Benge, 687 F.3d at 1187 (noting that any total disability
presupposes the loss of all wage-earning capacity). Thus, an
increase in the disability compensation for the change from
permanent partial to either permanent total or temporary total
is warranted to account for the additional actual loss in wage-
earning capacity. Such a conclusion comports with the basic
purpose of the LHWCA, which is to provide compensation for the
actual loss of wage-earning capacity. See Korineck, 835 F.2d at
44 (noting that the purpose of the LHWCA is “to provide work
benefits for lost earning capacity”).
In contrast, in the case of a scheduled permanent partial
disability that allegedly changes to a temporary partial
disability because the claimant’s injury flared up, there is no
additional loss of wage-earning capacity. The claimant’s loss
of wage-earning capacity already is accounted for under the
schedule. In other words, the scheduled compensation accounts
for all the lost wages due the claimant under the LHWCA. To
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hold otherwise would allow for an impermissible double recovery.
Cf. id. (“Denying additional [scheduled] benefits to one already
receiving benefits for total permanent disability serves to
avoid double recoveries.”). Like the claimant in Korineck,
whose scheduled compensation claim was subsumed by the
compensation he already was receiving for permanent total
disability, Eason’s temporary partial disability claim is
subsumed by the compensation he received under the schedule.
Id. at 43-44.
To be sure, in the case before us, there is no record
evidence supporting a reclassification of Eason’s disability to
a permanent total or temporary total disability. His disability
has remained permanent and partial since September 2008. His
scheduled compensation is presumed to cover his actual loss of
wage-earning capacity for any flare up of his knee injury that
did not prevent him from working in some type of suitable
alternative employment. Green, 185 F.3d at 242 n.3. Since
Eason does not allege that the flare up rendered him permanently
or temporarily totally disabled, he is not entitled to any
additional disability compensation for his knee injury.
Eason’s argument that the LHWCA permits the recovery of
additional temporary partial disability compensation under the
circumstances of this case is unpersuasive. First, his
argument, if accepted, permits an impermissible double recovery.
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He was compensated for his actual loss of wage-earning capacity
due to his injury under the schedule and now he is seeking
additional compensation for the same injury. We see nothing in
LHWCA that permits such a double recovery. See Port of Portland
v. Dir., OWCP, 932 F.2d 836, 839 n.1 (9th Cir. 1991) (noting
that, under the LHWCA, “an employee may not obtain a double
recovery for a disability for which compensation has already
been paid”); cf. Strachan Shipping Co. v. Nash, 782 F.2d 513,
515 (5th Cir. 1986) (en banc) (noting that the “credit doctrine,
created by the BRB for the singular purpose of avoiding double
recoveries, provides that an employer is not liable for any
portion of an employee’s disability for which the employee has
actually received compensation under the LHWCA”). Second,
Eason’s construction of the LHWCA defeats the intent of the
schedule in the Act. The schedule is designed to provide quick
compensation for certain permanent partial disabilities and,
simultaneously, to fix the employer’s liability exposure. See
PEPCO, 449 U.S. at 282 (“The use of a schedule of fixed benefits
as an exclusive remedy in certain cases is consistent with the
employees’ interest in receiving a prompt and certain recovery
for their industrial injuries as well as with the employers’
interest in having their contingent liabilities identified as
precisely and as early as possible.”); see also Travelers Ins.
Co. v. Cardillo, 225 F.2d 137, 144 (2d Cir. 1955) (noting that
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schedule “conclusively establishe[s]” the loss of wage-earning
capacity and “its extent”). Yet, under Eason’s construction of
the LHWCA, the employer’s liability exposure is anything but
fixed. Rather, the liability exposure is subject to increase
essentially any time a scheduled claimant is placed on temporary
work restrictions. Such a construction of the LHWCA makes
little sense. 7
We also note that the Director understandably rejects HI’s
interpretation of the LHWCA because it forecloses the receipt of
temporary total disability compensation following the receipt of
scheduled disability compensation. HI’s interpretation of the
LHWCA has two flaws. First, it is inconsistent with Benge and
Hord, where the permanent partial claimants were permitted to
receive temporary total disability compensation after proper
reclassification of their respective disabilities. Benge, 687
F.3d at 1185-87; Hord, 193 F.3d at 802. Second, HI’s
interpretation runs counter to the language of the LHWCA, which
says that permanent partial disability compensation (scheduled
or unscheduled) shall be paid “in addition to” the compensation
7
Of course, nothing prevents a claimant who is receiving
scheduled permanent partial disability compensation from seeking
additional compensation to reflect a higher percentage of
permanent loss of the relevant body part due to the aggravation
of the injury that gave rise to the scheduled compensation. See
New Haven Terminal Corp. v. Lake, 337 F.3d 261, 268-69 (2d Cir.
2003) (discussing the interplay of the aggravation rule and the
credit doctrine).
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paid for a “temporary total disability.” 33 U.S.C. § 908(c).
This language contains no temporal limitation. Thus, such
additional temporary total disability compensation can be paid
before the permanent partial disability compensation (for
example, as in this case, Eason received temporary total
disability compensation for his injury before receiving
scheduled compensation for the same injury) or after (for
example, as in Benge, where the claimant received temporary
total disability compensation for her injury after receiving
unscheduled compensation for the same injury). The receipt of
such additional temporary total disability compensation ensures
that the claimant is compensated for his actual loss in wage-
earning capacity (including the loss not presumed by the
schedule) and, thus, fulfills the basic purpose of the LHWCA.
See Korineck, 835 F.2d at 44 (noting that the purpose of the
LHWCA is “to provide work benefits for lost earning capacity”).
Therefore, HI’s construction of the LHWCA is inconsistent with
the case law and thwarts the basic purpose of the LHWCA.
We realize that the schedule created by Congress allows for
overcompensation in some instances and undercompensation in
others. For example, a claimant with a scheduled injury may be
compensated even though he never misses a day of work and, thus,
incurs no actual wage loss whatsoever. At the same time, the
schedule may undercompensate a claimant whose loss of wage
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earning capacity may be greater than that compensated under the
schedule. If a claimant who loses a hand only earns 50% of his
pre-injury salary after reaching maximum medical improvement,
the claimant would not, after 9.4 years, be compensated under
the schedule as much as he would have been for an unscheduled
injury. As recognized by the Supreme Court in PEPCO, such
inequities simply are a manifestation of the system created by
Congress which we are not at liberty to disturb. See 449 U.S.
at 282-83 (noting that “requiring resort to the schedule may
produce certain incongruous results” because, on the one hand,
“even though a scheduled injury may have no actual effect on an
employee’s capacity to perform a particular job or to maintain a
prior level of income, compensation in the schedule amount must
be paid,” while on the other hand, “the schedule may seriously
undercompensate some employees”); id. at 284 (noting that the
fact that the schedule “leads to seemingly unjust results in
particular cases does not give judges a license to disregard it”
where Congress employed “compelling statutory language”); see
also Green, 185 F.3d at 242 n.3 (“Depending on one’s point of
view, this approach could reasonably be seen as either tending
to overcompensate claimants with non-scheduled disabilities, or
as under compensating those receiving payments pursuant to the
schedule. Nonetheless, despite its inevitable inequities and
the unwieldiness of its application, this aspect of the system
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apparently functions in the manner intended by Congress, as
evidenced by its being left essentially undisturbed since its
enactment in 1927.”). 8
Finally, we reject both Eason’s and HI’s interpretation of
PEPCO. 9 Eason interprets PEPCO as supporting his argument that a
claimant who is receiving scheduled compensation for a permanent
partial disability may receive additional compensation for
temporary partial disability due to the same injury. HI’s
interpretation of PEPCO is quite different. It interprets the
case as foreclosing a claimant who is receiving scheduled
compensation for an injury from ever receiving temporary (total
or partial) disability compensation for that injury.
In PEPCO, the Supreme Court addressed whether a claimant
who was permanently partially disabled due to a scheduled injury
could choose to be compensated for his actual loss of wage-
8
Of course, Eason is on the overcompensation end of the
equation. He was awarded actual partial wage loss for the May
19 through August 20, 2010 time period at a compensation rate of
$845.82 per week (two thirds of the difference between his
average weekly wage of $1,488.43 and his residual wage-earning
capacity of $219.70 per week). Thus, Eason would receive
$11,237.22 in actual partial wage loss compensation. By
contrast, Eason’s scheduled award entitled him to $40,009.13 in
compensation (40.32 weeks x $992.29 per week). Thus, his
scheduled award paid him $28,771.91 more for a presumed loss of
wage-earning capacity than he would have been entitled to for
his actual loss.
9
The BRB’s interpretation of PEPCO is in line with Eason’s
interpretation of that case.
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earning capacity under § 908(c)(21), rather than being
compensated for his presumed loss as provided by the schedule.
449 U.S. at 270. 10 The Court held that the LHWCA did not
authorize such an election, and, therefore, a claimant’s
recovery for a scheduled injury “must be limited by the
statutory schedule.” Id. at 271. The Court focused on the
language of § 908(c)(21), which calls for the payment of actual
loss of wage-earning capacity “‘[i]n all other cases’” of
permanent partial disability. Id. at 274 (quoting 33 U.S.C.
§ 908(c)(21)). The Court interpreted this language to mean all
permanent partial disability cases not specifically enumerated
in the schedule, namely § 908(c)(1) to (20). Id. Thus, the
Court held that injuries or disabilities covered by the schedule
must be compensated according to the schedule, whereas permanent
partial disabilities not covered by the schedule are subject to
compensation based on the actual loss of wage-earning capacity.
Id. at 278-82.
The Supreme Court in PEPCO rejected the argument that its
construction of the LHWCA would not fulfill the remedial
10
As noted earlier, unscheduled permanent partial
disability awards are based on the actual loss of wage-earning
capacity. 33 U.S.C. § 908(c)(21). The claimant in PEPCO sought
wage-loss compensation under § 908(c)(21) because his loss of
wage-earning capacity was over 40% and § 908(c)(21) would have
provided far more compensation than the schedule otherwise
allowed. 449 U.S. at 271.
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purposes of the Act and that it would produce anomalous results
that Congress probably did not intend. Id. at 280-84. The
Supreme Court pointed out that the LHWCA represents a compromise
between the interests of employers and employees. Id. at 282.
The Court stated that the use of fixed scheduled benefits as an
exclusive remedy “is consistent with the employees’ interest in
receiving a prompt and certain recovery for their industrial
injuries as well as with the employers’ interest in having their
contingent liabilities identified as precisely and as early as
possible.” Id. As noted above, the Court also recognized the
incongruous results which the schedule could produce by over or
undercompensating an employee for his actual loss in wage-
earning capacity. Id. at 282-84. The Court stated, however,
that this fact did not give it license to disregard the
“compelling statutory language” and that it was up to Congress
to reexamine the statute if anomalies were occurring frequently.
Id. at 284.
Eason’s interpretation of PEPCO is flawed. The Supreme
Court in PEPCO did not imply, as he posits, that a claimant who
is receiving scheduled compensation for a permanent partial
disability can receive additional compensation for temporary
partial disability due to the same injury. The Court merely
said that a scheduled injury does not preclude an award of total
disability. Id. at 277 n.17. This is not surprising since a
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total disability increases the claimant’s actual loss in wage-
earning capacity. In any event, just because the Court cited
with approval the receipt of total disability compensation
following a scheduled injury, it does not follow that the Court
would countenance the duplicative recovery that occurs when a
claimant receives temporary partial disability compensation for
an injury that the claimant already has received (or is
receiving) scheduled compensation. As we noted above, the LHWCA
does not permit such duplicative recoveries. See Port of
Portland, 932 F.2d at 839 n.1 (noting that the LHWCA is designed
to avoid double recoveries for the same injuries).
HI’s interpretation of PEPCO also is flawed. The Court in
PEPCO did not hold, as HI posits, that a claimant who is
receiving scheduled compensation for an injury is foreclosed
from receiving temporary (total or partial) disability
compensation for that injury. Rather, as noted above, the Court
simply held that a permanent partial disability claimant could
not choose between the schedule and § 908(c)(21). 449 U.S. at
278-82. Thus, the Court did not address whether the receipt of
scheduled compensation forecloses the receipt of additional
temporary disability compensation, and we read nothing in PEPCO
lending support for HI’s interpretation of the case.
In sum, the PEPCO decision is not outcome determinative for
either Eason or HI. The case addressed a discrete issue, and
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the reasons advanced by Eason and HI for an expansive reading of
the decision are not compelling. Cf. Korineck, 835 F.2d at 44
(noting the “narrow issue” decided by the PEPCO Court).
III
For the reasons stated herein, we grant the petition for
review and remand the case to the BRB to enter an order
dismissing Eason’s claim for temporary partial disability under
the LHWCA.
PETITION GRANTED
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