BRB Decision in Wheeler v. Newport News Shipbuilding and Dry Dock Company

BRB Decision in Wheeler v. Newport News Shipbuilding and Dry Dock Company

It would seem beyond peradventure that the term "compensation" in a statute such as the Longshore and Harbor Workers' Compensation Act (33 U.S.C.S. § 901 et seq.) would have a well-established meaning.  Indeed, the statute's definitional section includes the following: "'compensation' means the money allowance payable to an employee or to his dependents as provided for in this Act, and includes funeral benefits provided therein."  33 U.S.C.S. § 902(12).  Nevertheless, the question continues to be presented as to precisely which components of the various benefits provided by the LHWCA constitute "compensation" for various purposes.  In particular, whether medical benefits are "compensation" has generated considerable litigation, even producing a United States Supreme Court decision.  See Marshall v. Pletz, 317 U.S. 383, 87 L. Ed. 348, 63 S. Ct. 284 (1943) (medical care required under LHWCA section 7 (33 U.S.C.S. § 907) is not "compensation" within the meaning of section 13(a) (33 U.S.C.S. § 913(a)) and thus an employer's payment of medical expenses does not toll the limitations period for filing a claim).


 A recent decision of the Benefits Review Board addresses the meaning of the term "compensation" in the context of section 22's modification provision (33 U.S.C.S. § 922).  Wheeler v. Newport News Shipbuilding & Dry Dock Co., 43 BRBS ***, BRB No. 09-0570, Jan. 26, 2010.  The Board held that an employer's direct payments to its injured employee's medical providers did not toll section 22's one-year time limit because such payment was not a payment of "compensation."

Section 22 establishes the only procedural avenue to obtain review of a compensation case that has already been the subject of a final compensation order.  It is flexible, potent, easily invoked, and intended to secure justice under the Act.  Betty B Coal Co. v. Director, OWCP, 194 F.3d 491, 497-498 (4th Cir. 1999).  Section 22 also has its own history of generating litigation regarding its proper scope and application and has formed the battleground on which disputes going to the very nature and purpose of the LHWCA have been fought.  Three times the Supreme Court has held that the language of section 22 is to be construed expansively.  Accordingly, neither of the two bases for permitting modification of an existing compensation order, "mistake in a determination of fact" and "change in conditions," should be unduly restricted.  Thus, "mistake in determination of fact" should not be limited to particular kinds of factual errors or to cases involving new evidence or changed circumstances, O'Keeffe v. Aerojet-General Shipyards, Inc., 404 U.S. 254, 255-256, 30 L. Ed. 2d 424, 425-426, 92 S. Ct. 405, 407 (1971) ( per curiam ); Banks v. Chicago Grain Trimmers Ass'n, 390 U.S. 459, 465, 20 L. Ed. 2d 30, 36, 88 S. Ct. 1140, 1144 (1968), reh'g denied, 391 U.S. 929, 20 L. Ed. 2d 671, 88 S. Ct. 1800 (1968), and  "change in conditions" should not be limited to a single condition such as an employee's physical health but should include all the same conditions on which initial entitlement is predicated, including economic conditions.  Metropolitan Stevedore Co. v. Rambo, 515 U.S. 291, 132 L. Ed. 2d 226, 115 S. Ct. 2144, 30 BRBS 1(CRT) (Rambo I) (1995).

With respect to the time limitations on a party seeking to modify an award after the date of a denial or termination of benefits, section 22 provides in pertinent part:

Upon his own initiative, or upon the application of any party in interest ... , on the ground of a change in conditions or because of a mistake in a determination of fact by the deputy commissioner, the deputy commissioner may, at any time prior to one year after the date of the last payment of compensation, ... or at any time prior to one year after the rejection of a claim, review a compensation case ... and ... issue a new compensation order which may terminate, continue, reinstate, increase, or decrease such compensation, or award compensation.

33 U.S.C.S. § 922.

Moreover, the Supreme Court has explicitly recognized that when a worker suffers a significant physical impairment without experiencing a present loss of earnings, there is a serious tension between the statutory mandate (reflected in section 8(h)) (33 U.S.C.S. § 908(h)) to account for disability's future effects by taking a "wait-and-see" approach in determining wage-earning capacity (and thus entitlement to compensation), and section 22's prohibition against issuing any new order to pay benefits more than one year after compensation ends or an order rejecting a claim is entered.  In Metropolitan Stevedore Co. v. Rambo (Rambo II), 521 U.S. 121, 138 L. Ed. 2d 327, 117 S. Ct. 1953, 31 BRBS 54(CRT) (1997), the court reconciled that tension by reading the Act as authorizing a present nominal award subject to later modification if conditions should change.  The Court deemed it necessary to authorize nominal awards, thereby prolonging the time to file for modification because of section 22's time limits.

Thus, the stakes could not be higher in construing the term "compensation" in the context of section 22 because, as the Court noted in Rambo II, 521 U.S. at 129[, 138 L. Ed. 2d at 338, 117 S. Ct. at 1959], "a losing claimant loses for all time after one year from the denial or termination of benefits" absent a timely request for modification.  As a general matter, a party has one year from: (1) an order rejecting a claim; or (2) the date of the last payment of "compensation."  Where a claim is rejected, the one year limit does not begin to run until the decision rejecting the claim is final, including exhaustion of any appeals through the conclusion of the appellate process.  Moore v. Virginia Int'l Terminals, Inc., 35 BRBS 28 (2001).  And a denial of a request for modification is itself a "rejection of a claim" such that a new modification petition may be filed within a year of the denial of a timely prior one.  Betty B Coal Co., 194 F.3d at 498.

Notwithstanding section 2(12)'s definition (33 U.S.C.S. § 902(12)), "compensation" has been found to bear different meanings in different sections of the Act.  For example, in Lazarus v. Chevron USA, Inc., 958 F.2d 1297, 1300, 25 BRBS 145(CRT) (5th Cir. 1992), "compensation" was deemed to include medical benefits for purposes of the accelerated enforcement procedure under section 18(a) (33 U.S.C.S. § 918(a)).  Likewise, in Maryland Shipbuilding & Drydock Co. v. Jenkins, 594 F.2d 404, 407, 10 BRBS 1(CRT) (4th Cir. 1979), "compensation" was construed as including medical services for purposes of suspending a claimant's entitlement for unreasonably refusing to submit to a medical examination or treatment under section 7(d) (33 U.S.C.S. § 907(d)).  In Oilfield Safety & Machine Specialties, Inc. v. Harman Unlimited, Inc., 625 F.2d 1248, 1257, 14 BRBS 356(CRT) (5th Cir. 1980), "compensation" was interpreted as applying to payment for medical services for purposes of shifting the claimant's responsibility to pay his attorney's fee to the employer under section 28(a) (33 U.S.C.S. § 928(a)) where the only benefits recovered in the claim were medical services.  See also Newport News Shipbuilding & Dry Dock Co. v. Walker, No. 07-1604, 2008 U.S. App. LEXIS 1208 (4th Cir. Jan. 22, 2008, not cert. for publication) ("additional compensation" under section 28(b) (33 U.S.C.S. § 928(b) includes an award of medicals only).

The structure of the LHWCA supports inclusion of medical benefits as "compensation" for at least some purposes.  Section 7, entitled "medical services and supplies," is the Act's provision requiring employers to furnish medical treatment for whatever period the nature of the injury and process of recovery makes necessary.  Section 4(a), entitled "liability for compensation," makes "every employer ... liable for ... secur[ing] the payment to his employees of the compensation payable under sections [907, 908, and 909 of this title]."  33 U.S.C.S. § 904(a) (emphasis added).  Section 6(a) states that "no compensation shall be allowed for the first three days of the disability, except the benefits provided for in section 7."  33 U.S.C.S. § 906(a) (emphasis added).  Clearly then, Congress must have intended the term "compensation" to encompass the provision of medical benefits, at least in some circumstances.

Against this backdrop, the Board confronted the Wheeler case.  Stephanie Wheeler injured both knees in 1992.  Her employer paid compensation for a period of temporary total disability and then, after Wheeler underwent three knee surgeries (two to her left knee and one to her right), paid scheduled permanent partial disability compensation for a 15% rating to her right leg and 25% to her left leg.  Wheeler claimed entitlement to permanent total disability.  In a 1999 decision, an ALJ awarded PTD benefits.  The employer's appeal to the Board was unsuccessful.  While paying PTD, the employer requested modification under section 22.  In a 2002 decision, the ALJ found that the employer established the availability of suitable alternate employment and modified the award to permanent partial disability.  On reconsideration, the ALJ recognized that under Potomac Electric Power Co. v. Director, OWCP [PEPCO], 449 U.S. 268, 66 L. Ed. 2d 446, 101 S. Ct. 509, 14 BRBS 363(CRT) (1980), Wheeler was limited to the awards under the section 8(c) schedule (33 U.S.C.S. § 908(c)) that the employer previously paid for her knee injuries.  Wheeler appealed to the Board which affirmed.  37 BRBS 107 (2003).  No further appeal was taken from those orders and thus the Board's 2003 decision became final.  In 2006, Wheeler had her right knee totally replaced and in 2007, she filed a petition for modification under section 22.  In early 2008, she had her left knee replaced as well and she claimed total disability benefits.  The parties stipulated that the employer paid for the 2006 and 2008 surgeries and all other medical treatment related to her 1992 knee injury by directly paying her health care providers.  Thus, the employer paid medical expenses within one year of her modification request.  However, more than four years had elapsed following the Board's 2003 decision since the employer paid any disability compensation for the 1992 injury.  An ALJ denied Wheeler's modification claim as time barred under section 22.  He concluded that for purposes of section 22's time limits, "compensation" did not include the employer's voluntary payment to her medical providers.

In a decision issued January 26, 2010, the Board affirmed.  The Board's reasoning emphasized the fact that medical benefits can be furnished different ways:  (1) by the employer's provision of medical services in kind or direct payment to a claimant's health care providers; or (2) as reimbursement to the claimant for medical expenses and debts incurred to obtain medical treatment when the employer has failed or refused to directly provide them.  The Board noted that the Supreme Court Pletz decision observed that "in the normal case ... the insurer defrays the expense of medical care but does not pay the injured employee anything on account of such care."  317 at 391[, 87 L. Ed. at 353, 63 S. Ct. at 289].  Pletz held that an employer's furnishing of medical care to its employee was not payment of "compensation" within the meaning of section 13(a) (33 U.S.C.S. § 913(a)) and therefore the employee's claim was barred as untimely.  Relying on this distinction in the manner of an employer's furnishing of medical care, the Board reasoned that the Fifth Circuit's Lazarus decision also turned on this difference between the two methods for providing medical treatment.  The Board noted that Lazarus limited its holding that medical expenses constituted "compensation" to the circumstance where the employer reimbursed the claimant for out-of-pocket expenses borne by the claimant for medical care.  "If an employer furnishes medical services voluntarily, by paying a health care provider for its services, it does not pay 'compensation' within the meaning of the Act.  Compensation includes only money payable to an employee or his dependents, 33 U.S.C.S. § 902(12), not payments to health care providers on an employee's behalf."  Lazarus, 958 F.2d at 1301.

Although the Board did not mention it in Wheeler, the LHWCA does contain one textual hint that the term "compensation" may not encompass a monetary reimbursement for medical expenses.  Section 7(c)(1)(B)(I) (33 U.S.C.S. § 907(c)(1)(B)(I)) disqualifies a health care provider from furnishing medical care under the Act if it makes false statements "in a claim for compensation or claim for reimbursement of medical expenses."  However, a reimbursement to a health care provider under section 7 is not the same as a reimbursement to a claimant.  And section 2(12)'s definition specifies that "compensation" is money "payable to an employee or his dependents."

Although payment of medical expenses as a sufficient payment of "compensation" to preserve as timely a section 22 modification request was impliedly rejected in Greathouse v. Newport News Shipbuilding & Dry Dock Co., 146 F.3d 224, 32 BRBS 102(CRT) (4th Cir. 1998), before Wheeler no court or published Board decision has held that an employer's direct payment of medical expenses to a claimant's health care providers is not "compensation" for purposes of section 22.  While the time limitation language in section 22 closely parallels that in section 13 (33 U.S.C.S. § 913) and the Supreme Court squarely held in Pletz that "compensation" did not encompass medical expenses paid to health care providers, Wheeler demonstrates once again that the definitions in the LHWCA are "not made with watch-like precision" and must be read so as to accomplish the statutory purposes.  Cf., Lawson v. Suwannee Fruit & Steamship Co., 336 U.S. 198, 201, 93 L. Ed. 611, 615, 69 S. Ct. 503, 504 (1949) (definition of disability in section 2(10) (33 U.S.C.S. § 902(10)) does not apply to section 8(f)) (33 U.S.C.S. § 908(f)).  It remains to be seen whether a court hearing a challenge to Wheeler will view the purpose of section 22's time limits as being well-served by the Board's interpretation.

© Copyright 2010 LexisNexis. All rights reserved. This article, written by Mark A. Reinhalter, Counsel for Longshore, Office of the Solicitor, U.S. Department of Labor, Washington, D.C., will appear in an upcoming issue of Benefits Review Board Service, Longshore Reporter.