Retirement Under LHWCAOn January 3, 2018, the United States Court of Appeals for the Fourth Circuit in Russell Moody v. Huntington Ingalls Incorporated, No. 16-1773 (4th Cir., 01/03/2018), reversed a ruling of the Benefit Review Board that had earlier overturned the finding of an Administrative Law Judge that granted benefits to a retired employee. Russell Moody, a shipyard employee, suffered a workplace injury, but did not undergo surgery until after he retired. He sought disability benefits for a two month, post-surgery recuperation during which he was not medically cleared for work.

Mr. Moody had worked for Huntington for 45 years when due to a change in his assignment to a different shift, he decided to retire. On August 1, 2011, he gave his requisite 90-notice of retirement to be effective October 31, 2011. On September 19, 2011, Mr. Moody injured his right shoulder while working in the shipyard. Even though the injury was going to require surgery, Mr. Moody continued to work for Huntington. It was not until after he retired, as scheduled, that he underwent shoulder surgery. According to his physician, he needed to remain “out of work” until February 16, 2012, and then had limitations effective through March 28, 2012, after which he would have no restrictions.

Huntington paid the cost of surgery but refused to pay Mr. Moody temporary total benefits asserting that because Mr. Moody had retired, the temporary recovery from the surgery had not caused him to lose any wages. The Administrative Law Judge nevertheless ruled in Mr. Moody’s favor and awarded temporary benefits. The judge concluded that Mr. Moody was totally incapacitated during the recovery period, noting that had Mr. Moody undergone surgery immediately after the accident, Huntington would have had to pay disability benefits to him.

The Benefits Review Board disagreed and concluded that Mr. Moody was not entitled to any disability benefits because he voluntarily retired before the onset of his workplace injury’s debilitating effects. The Board reasoned that the voluntary retirement resulted in a total loss of ability to earn wages, such that no injury would cause any further loss of economic capacity.

The Fourth Circuit reversed the Benefits Review Board’s decision indicating that while Mr. Moody’s injury did not cause him to lose any income during his recuperation, it did deprive him of the ability to work during that period. The fact that Mr. Moody had retired did not undermine the fact that but for the recuperation from surgery, he would have been capable of performing active employment, if he had chosen to do so. The Fourth Circuit stated, “to decide otherwise would not only deprive Moody of his rightful benefits, but would also confer a windfall on Huntington:  it is undisputed that Moody would have received disability benefits had he undergone surgery immediately, rather than discharging his duties in good faith, and Huntington would have had to pay for another drive.”  (p. 7.) The Court distinguished whether there was an actual economic loss from there being an incapacity to earn wages. In so doing, it stated, “because the LHWCA compensates workers for their inability to earn wages due to injury, workers are entitled to disability benefits when an injury is sufficient to preclude the possibility of working.” It felt that the LHWCA compensates the deprivation of economic choice when it is caused by workplace injury. As such, voluntary retirement is not a form of total incapacity.

LHWCA Psychological InjuryOn January 27, 2017, the Fourth Circuit Court of Appeals in Ceres Marine Terminals, Inc. v. Director, OWCP, (Samuel Jackson), No. 15-1041, affirmed the decisions of an Administrative Law Judge and the Benefits Review Board holding that a defense founded upon the precept of “zone of danger” was not applicable under the LHWCA. It further agreed with the courts below that the opinion of an independent medical examiner appointed by the District Director’s Office carries no greater weight than do other medical opinions.

This case arises out of a tragic work-related accident where Samuel Jackson, a longshoreman, was operating a fork lift when it accidentally struck and killed a co-worker. The accident was very gruesome in nature. Subsequently Mr. Jackson sought psychological care and was diagnosed with post-traumatic stress disorder (PTSD). After seeing several medical care providers for his psychological condition, the employer requested that the claimant be examined by a medical care provider of its own choosing. That provider, a psychiatrist, also diagnosed the claimant with PTSD and felt that he was being under medicated. As a result of this opinion with regard to the appropriate level of medication, the District Director’s Office appointed an independent medical examiner who, after reviewing the claimant’s injuries, felt that since the claimant did not experience a threat to himself and was never in danger of injury that PTSD was an inappropriate diagnosis. He further felt that the claimant showed significant evidence of malingering. Based upon this opinion, the employer terminated compensation, after which Mr. Jackson filed a claim under the LHWCA.

At the trial of the case, the employer asserted that the claimant could not recover for psychological injury unless he sustained a physical injury or was placed in immediate risk of harm. In so many words, the claimant did not meet the “zone of danger” test for compensability that was first enunciated in Consolidated Rail Corporation v. Gottshall, 114 S.Ct. 2396 (1994). After trial, the Administrative Law Judge rejected this test indicating that Longshore Act case law had established that a claimant can obtain benefits for a work-related psychological injury, and to carve out a negligence law-based exception would be inappropriate. The judge also rejected the employer’s assertion that the Department of Labor-appointed IME psychiatrist opinion should carry more weight than the opinions of medical care providers holding contrary opinions.

The employer appealed to the Benefit Review Board which affirmed the two findings of the Administrative Law Judge and a petition was filed with the Fourth Circuit seeking review. The Fourth Circuit affirmed the two courts below on both issues. The Court rejected the employer’s assertion that Mr. Jackson could not, under the LHWCA, recover for psychological injury unless he sustained a physical injury or was placed in immediate risk of physical harm. It considered that the employer was misapplying the holding of the Consolidated Rail case, which involved a claim that arose under the Federal Employer’s Liability Act (FELA) and addressed principles of negligence. It further explained that the LHWCA did not distinguish between psychological and physical injuries, and simply used the word injury when addressing compensability. The Court found that nowhere in the statute was there a requirement, as suggested by the employer, that psychological injuries be accompanied by actual or threatened physical harm. It felt that Congress could have easily written the statute to contain such a requirement, but did not. On review of other case law, the Court also found that actual or threatened physical harm had never been mandated as a prerequisite for coverage of a psychological injury.

In affirming that decisions of the Administrative Law Judge and BRB insofar as the weighing of an independent medical examiner’s opinion, the Court stated that the specific portion of the LHWCA, 907(e), did not address the weight to be applied to the opinion of an independent medical examiner appointed by the Department of Labor, and therefore, determined that the independent medical examiner’s opinion must be weighed along with the other medical opinions of record without added weight.

The United States Court of Appeals for the Fourth Circuit, in Lincoln v. Director OWCP (Ceres Marine Terminals, Inc.) No. 13-1594 (March 11, 2014), was recently asked to address the effect of the employer filing a notice of controversion (LS-207) on the employer’s responsibility, vel non, for the payment of the claimant’s attorney’s fees pursuant to 33 U.S.C. § 928(a). The Longshore and Harbor Workers’ Compensation Act, 33 U.S.C. § 901 et seq., provides for fee shifting in certain circumstances where the employer can be cast for the liability of the employee’s attorney’s fees. § 928(a) provides, in part:

If the employer or carrier declines to pay any compensation on or before the thirtieth day after receiving written notice of a claim for compensation having been filed from the Deputy Commissioner, on the ground that there is no liability for compensation within the provisions of this Act, and the person seeking benefits shall thereafter have utilized the services of an attorney at law in the successful prosecution of a claim, there shall be awarded . . . a reasonable attorney’s fee against the employer or carrier . . .

Lincoln filed a claim with the District Director of the Office of Workers’ Compensation Programs on May 24, 2011, alleging that he sustained binaural hearing loss as a result of his work as a longshoreman with Ceres Marine Terminals, Inc. (Ceres). On May 26, Ceres responded by filing a LS-207, notice of controversion, with the District Director’s office claiming additional information was needed before it could determine what it believed was the correct disability payment. The information Ceres sought also included whether it was the last responsible exposing employer before Lincoln’s hearing loss was discovered. The District Director’s office formally served the notice of Lincoln’s claim on Ceres on June 14. On July 7, within 30 days of receipt of notice, Ceres made a voluntary payment to Lincoln amounting to one week of permanent partial disability payment under the maximum compensation rate applicable to the date of injury.

The parties eventually settled Lincoln’s hearing loss claim, leaving the issue of attorney’s fees and the liability therefore to be decided by the District Director. On May 15, 2012, the District Director entered a compensation order finding that Ceres was not liable for Lincoln’s attorney’s fees since it had made payment of “any compensation” within 30 days of receipt of notice of the claim from the District Director’s office. This ruling was affirmed by the BRB and appealed to the Fourth Circuit.

The Fourth Circuit in citing Andrepont vs. Murphy Exploration & Production Co., 566 F .3d 415 (5th Cir. 2009), a decision obtained by this author from the Fifth Circuit, reiterated that fee shifting under § 928(a) may not occur if the employer agrees that some amount is due the claimant for work related injury and “tenders any compensation.”

Lincoln’s attorneys argued that the filing of the controversion (LS 207) contradicted the payment made by Ceres and asserted that the payment made was therefore a mere sham to avoid fee liability. The Fourth Circuit rejected this argument indicating that § 928(a) did not address the employer’s obligation for filing a notice of controversion and contained only one explicit trigger, that being the payment of “any compensation” within 30 days of the employer’s receipt of official notice of a claim. Since Ceres met this requirement, it was entitled to the protections afforded under § 928(a).

The Fifth Circuit has followed the Fourth Circuit’s lead in deciding today that an employee’s termination for misconduct will not reopen a disability claim under the Longshore and Harbor Workers’ Compensation Act (“LHWCA”).

The United States Court of Appeals for the Fifth Circuit in an unpublished opinion issued on March 19, 2013, addressed the employer’s burden under the LHWCA to show suitable alternative employment where an employee is left with a residual disability to a nonscheduled portion of his body after a work-related injury (Cox v. Dir., OWCP, et al., No. 12-60180). In rebuffing the claimant’s appeal of the denial of his benefits by the Administrative Law Judge, the court reiterated its holding in Darby v. Ingalls Shipbuilding, Inc., 99F.3d 685 (5th Cir. 1996), that an employer can discharge its burden of showing suitable employment when an injured employee is disabled from returning to his pre-injury job by offering a different but suitable job at his current place of work. The court also cited Fourth Circuit case law, Brooks v. Dir, OWCP, 2F.3d 64,65 (4th Cir. 1993), that if the claimant thereafter losses the substitute employment due to his own misconduct, any subsequent loss in his wage earning capacity is not compensable under the Act as it does not result from a work-related accident.

In this instance the employer had sent a written offer of a job suited to the claimant’s limitation to medium duty work with restrictions on lifting, pushing and pulling to both the claimant and his attorney by certified mail. Although the claimant failed to claim the certified letter, it was delivered to his attorney. When the claimant failed to report to work as required in the offer he was terminated in accordance with the employer’s policy and the applicable union contract.