United States Court of Appeals,

Fifth Circuit.

No. 95-60027.

SGS CONTROL SERVICES; CNA Insurance Company, Petitioners,

v.

DIRECTOR, OFFICE OF WORKER'S COMPENSATION PROGRAMS, U.S. DEPARTMENT

of LABOR; Francis Barrios, Respondents.

June 27, 1996.

Petition for Review of an Order of the Benefits Review Board.

Before POLITZ, Chief Judge, and DeMOSS and DENNIS, Circuit Judges.

DENNIS, Circuit Judge.

An administrat ive law judge (ALJ) found that Francis Barrios was permanently and totally

disabled due to a work-related injury covered by the Longshore and Harbor Workers' Compensation

Act (LHWCA) and awarded benefits accordingly. The Benefits Review Board (the Board) affirmed

the judgment. Petitioners, SGS Control Services (SGS) and CNA Insurance Co., seek review of both

the fin ding of permanent and total disability, and the determination of compensation rate. For the

reasons assigned, we affirm.

I. Facts and Procedural History

On January 8, 1982, claimant, Francis Barrios, injured his back in the course and scope of his

employment as a bulk cargo commodities inspector for SGS. Following conservative treatment for

back pain, Mr. Barrios was referred to a neurosurgeon, Dr. Jackson, who diagnosed ruptured discs

at L5-S1 and L4-L5, and recommended surgery. A second opinion from an orthopedic surgeon, Dr.

Kinnett supported this recommendation and, in September 1982, Dr. Kinnett perform ed a

laminectomy and fusions at L-4-L5 and L5-S1. Although Mr. Barrios briefly returned to work in

1984, his condition worsened and he underwent a second operation, a discectomy and fusion of the

affected area, performed by Dr. Jackson in March 1985.

On June 18, 1986, at Mr. Barrios' request, Dr. Jackson wrote a note stating that Mr. Barrios

had reached maximum medical improvement and discharging him to return to his previous full-t imework without restrictions. At his deposition in this matter, Dr. Jackson qualified this release, stating

that when he wrote the note he believed that Mr. Barrios would be performing light duty work, that

he would never have released him to do heavy industrial work and that the release was intended to

be a trial return to employment. Mr. Barrios continued to complain of severe pain and, on November

17, 1987, Dr. Jackson performed more imaging t est s o n him. A myelogram suggested possible

abnormalities at the L3-L4 level; a CAT Scan indicated a disc bulge at the same level and a possible

herniated nucleus pulposus that had not been detected in the 1985 tests performed. Another scan and

an MRI conducted in July 1988 revealed a bony spur encroaching into the neural foramen that was

the likely source of Mr. Barrios' pain. Dr. Jackson opined at his deposition that the spur related to

the 1985 fusion and that Mr. Barrios was disabled from performin g any work due to pai n. Dr.

Jackson was hesitant about another surgery, stating that there was a possibility that the spur would

eventually be absorbed and cease to be a problem, but, if not, surgery would be required.

On September 9, 1987, at the request of SGS, Mr. Barrios was also examined by Dr. Juneau,

an orthopedist, who was unable to find any clear objective symptoms concerning his condition. Dr.

Juneau concurred, however, with Dr. Jackson's findings that Mr. Barrios has a 25% overall disabilit y.

Dr. Juneau opined that Mr. Barrios should refr ain fro m lift ing weight in excess of 75 pounds or

engag i ng in frequent bending or stooping and should avoid activity that would place strain on his

back. Dr. Juneau's report reflects that he performed a physical examination of Mr. Barrios and

reviewed X-rays of his spine. There is no indicat io n, however, that Dr. Juneau performed or

reviewed any other imaging tests in rendering his opinion.

SGS voluntarily paid temporary total disabilit y compensation from January 13, 1982 until July

16, 1986, at which time it ceased payme nt of compensation based on Dr. Jackson's June 18 work

release. Mr. Barrio s filed a claim seeking continuing total disability compensation under the

LHWCA. Following a hearing, the ALJ awarded Mr. Barrios temporary total disability benefits from

January 8, 1982 until July 15, 1986, permanent total disabilit y benefits thereafter, based on an average

weekly wage of $986 (the figure employed by SGS in making its voluntary compensation payments),

and medical benefits. With respect to its finding of permanent total disability, the ALJ determinedthat Mr. Barrios had reached maximum medical improvement as of July 15, 1986, as his disabilit y had

been lengthy and the time of recovery was doubtful and indefinite, and found that SGS's proffered

vocational evidence was insufficient to demonstrate the avai labilit y of alternate employment. In

addition, the ALJ determined that Mr. Barrios' average weekly wage was the amount on which SGS

had based its voluntary benefits payments, rejecting SGS's argument that an economic decline in Mr.

Barrios' area of employment should be taken into account in determining his average weekly wage.

On appeal, the Bo ard affirmed the award of permanent disability benefits. SGS and its insurer

petitioned this court for review of that order pursuant to 33 U.S.C. § 921(c).

II. Discussion

Petitioners argue that the lower tribunals erred in several respects: (1) the average weekly

wage was improperly calculated because it did not take into account a reduction in earning capacity

attributable to a post-injury decline in economic conditions; (2) the ALJ improperly awarded

permanent and total disabilit y relief when Mr. Barrios sought only te mporary total disability

payments; (3) the evidence did not establish that Mr. Barrios was permanently and totally disabled;

and (4) there was an adequate showing of alternate employment.

This court reviews a de cision of the Board under the same standard the Board applies to

review a decision of the ALJ: Whether the decision is supported by substantial evidence and is in

accordance with the law. E mpire United Stevedores v. Gatlin, 936 F.2d 819, 822 (5th Cir.1991)

(citations omitted). We may not substitute o ur judgment for that of the ALJ, nor reweigh or

reappraise the evidence, but may only determine whet her evidence exists to support the ALJ's

findings. I

d. (citations omitted). All doubts are to be construed in favo r o f t he employee to

effectuate the LHWCA's remedial purposes. Id. (citation omitted).

A. Determination of Weekly Wage

Petitioners init ially challenge the ALJ's determination of the weekly compensation rate used

as a basis for establishing Mr. Barrios' compensation payments. Under the LHWCA, compensation

for permanent or total disabilit y is derived from the claimant's average weekly wage. 33 U.S.C. §§

906 and 910. The det ermination of average weekly wage is governed by 33 U.S.C. § 910, whichprovides in pertinent part:

§ 910. Determination of pay

Except as otherwise provided in this Act, the average weekly wage of the injured employee

at the time of the injury shall be taken as the basis upon which to compute compensation and

shall be determined as follows:

(a) If the injured employee shall have worked in the employment in which he was working at

the time of the injury, whether for the same or another employer, during subst antially the

whole of the year immediately preceding his injury, his average annual earnings shall consist

of three hundred times the average daily wage or salary for a six-day worker and two hundred

and sixty times the average daily wage or salary for a five-day worker, which he shall have

earned in such employment during the days when so employed.

(b) If the injured employee shall not have worked in such employment during substantially the

whole of such year, hi s average annual earnings, if a six-day worker, shall consist of three

hundred times the average daily wage or salary, and, if a five-day worker, two hundred and

sixty times the average daily wage or salary, which an employee of the same class working

in similar emp l oyment in the same or a neighboring place shall have earned in such

employment during the days when so employed.

(c) If either of the foregoing methods of arriving at the average annual earnings of the injured

employee can not reasonably and fairly be applied, such average annual earnings shall be such

sum as, having regard to the previous earnings of the injured employee in the employment in

which he was working at the time of the injury, and of other employees of the same or most

similar class working in the same or most similar employment in the same or neighboring

locality, or other employment of such employee, including the reasonable value of the services

of the employee if engaged in self-employment, shall reasonably represent the annual earning

capacity of the injured employee.

33 U.S.C. § 910(a)-(c). Once the average annual earnings are computed, they are divided by 52 to

arrive at the average weekly wage. 33 U.S.C. § 910(d).

Although conceding that Mr. Barrios' average weekly wage is susceptible of calculation under

33 U.S.C. § 910(a), petitioners argue that the ALJ should have applied § 910(c) to arr ive at the

appropriate compensation rate in order to take i nt o account an alleged economic decline in Mr.

Barrios' field of employment. In essence, petitioners' position is that § 910(a) "can not reasonably

and fairly be applied" when economic conditions in the claim ant 's field of employment suffer a

downward turn subsequent to the disabling accident. Neither the language of the Act nor the case

law interpreting it support such a reading of § 910.

The starting point for analysis of this question is the stat utory language. M etropolitan

Stevedore Company v. Rambo, --- U.S. ----,

----, 115 S.Ct. 2144, 2147, 132 L.Ed.2d 226 (1995).

Section 910 provides three methods for determi ning "the average weekly wage of the injured1 Although resort to legislative history is of marginal significance when a statute's language and

structure demonstrate congressional intent, Metropolitan Stevedore Company v. Rambo, --- U.S.

----, ----, 115 S.Ct. 2144, 2149, 132 L.Ed.2d 226 (1995), the legislative history of the 1948

amendment to § 910(c) supports the interpretation that post-injury decline in the economy alone

may not constitute the basis for finding that § 910(c), rather than subsection (a) or (b), applies to

determine a claimant's average weekly wage. A portion of the Senate Labor and Public Welfare

Committee's report states: employee at the time of the injury ...." 33 U.S.C. § 910 (emphasis added). Subsections (a) and (b)

are the basic formulae for determining average annual income; only if either provision "can not

reasonably and fairly be applied" may the ALJ turn to the method set forth in subsection (c). As this

court has recognized, "the prime objective of section 10(c) is to "arrive at a sum that reasonably

represents a claimant's annual earning capacity at the time of the injury. ' " E mpire United Stevedores

v. Gatlin, 936 F.2d 819, 823 (5th Cir.1991) (emphasis added).

There is nothing in the statute to suggest that either subsection (a) o r (b) may be deemed

inappl icable so lely on the basis of economic fluctuations in the claimant's field of employment

subsequent to the time of the injury or that such economic fluctuations should inure to the benefit of

the employer. Indeed, t he statute's language supports the opposite conclusion. Subsection (c)

provides that the claimant's earning capacity may be determined by looking to "other employment"

(including self-employment of the claimant) besides the employment in which the claimant was

injured—language recognizing that an employee's abilit y to supplement his earnings in one field

through additional work elsewhere may be crippled by his disabilit y. In addition, although the statute

provides for yearly cost-of-living adjustments that are assessed as the lesser of 5% or the percentage

by which the national weekly wage has increased in the past year, 33 U.S.C. § 910(f), it shields

compensation recipients from downward economic turns in the n at io n's employment market.

Subsection (g) states with respect to the cost-of-living adjustments that "[n]o adjustment of less than

$1 shall be made, but in no event sh all compensation or death benefits be reduced." 33 U.S.C. §

910(g). Petitioners point to nothing in the statute to support a reading of subsections (a)-(c) that so

conflicts with Co ngress' evident intent in subsections (f) and (g) to provide claimants a limited

increase in their payments based on a nationwide increase in earnings, but to prohibit a comparable

decrease. 1Subsection (c) of section 10 of the act would be amended by section 4 of the bill

so as to permit the inclusion of all earnings of the injured employee to be taken

into account in determining the employee's annual earning capacity. This

subsection in the present law is used where the employment itself, in which the

injured employee was engaged when injured, does not afford a full year of work.

It is also used where the workweek is shorter than 6 days (and would be used

where such workweek is also shorter than 5 days under the proposed amendment

to this section). Thus subsection (c) applies to seasonal, intermittent,

discontinuous, and like employment which affords less than a full workyear or

workweek. Under the present law the employee's wage for computation purposes

under subdivision (c) is limited to his actual earnings, and those of like employees,

... The measurement of an employee's capacity to earn should not be limited to his

earnings in the particular employment in which he was engaged when injured, but

should be gaged [sic] by what the employee is capable of earning in all

employments in which he was employed during the year prior to injury, otherwise

harsh results necessarily follow. The proposed change in subsection (c) seeks to

avoid such harsh results by permitting consideration of earnings of the employee

not only in the employment engaged in when injured, but all other employments in

which he worked during the year prior to injury, and is intended to be inclusive of

the reasonable value of the employee's services if self-employed during part of such

year.

S.Rep. No. 1315, 80th Cong., 2d Sess., Reprinted in (1948) U.S.Code Cong.Serv. pp.

1979, 1982-83, quoted in Tri-State Terminals v. Jesse, 596 F.2d 752, 758 n. 6 (7th

Cir.1979). Petitioners point to cases in which courts have applied subsection (c) and taken into account

post-injury wage levels to compute average annual earnings which were higher than the earnings that

would have been computed under either subsections (a) or (b). S ee National Steel & Shipbuilding,

Inc. v. Bonner, 600 F.2d 1288 (9th Cir.1979); T ri-State Terminals v. Jesse, 596 F.2d 752 (7th

Cir.1979). Neither decision supports petitioners' position. In Bonner, t he claimant was injured

shortly after starting a new, higher paying job, and neither party contested the application of § 910(c)

to her claim. The Ninth Circuit approved the ALJ's focus on the higher wages claimant earned as a

pipe fitter to determine her average annual earnings, rather than basing its decision on the wages she

earned earlier in the year as a babysitter, noting that "[t]he trier can reasonably draw an inference that

but for the injury, the worker would have continued to earn the new, higher wages." Bonner, 600

F.2d at 1293. In T

ri-State, § 910(c) applied to determine the annual average wage because the

claimants' work was "inter mit t ent and discontinuous." T ri-State, 596 F.2d at 755. The Seventh

Circuit rejected the employer's claim that in applying subsection (c), the court coul d onl y l ook at

pre-injury earnings, finding that the Board properly considered the increased post-injury earnings of2 The Supreme Court's recent decision in Metropolitan Stevedore Company v. Rambo, --- U.S.

----, 115 S.Ct. 2144, 132 L.Ed.2d 226 (1995), does not lend petitioners support. In that case, the

compensation claimant's post-injury employment income exceeded his earnings prior to injury.

The Court held that modification of a compensation award pursuant to 33 U.S.C. § 922 is not

limited to situations in which the claimant's physical condition changes, but applies as well to

situations when there is "a change in wage-earning capacity. A change in actual wages is

controlling only when actual wages "fairly and reasonably represent ... wage-earning capacity.' " -

-- U.S. at ----, 115 S.Ct. at 2150. The Court, however, expressly refrained from addressing

whether purely economic shifts constitute a change in conditions within the meaning of § 922,

observing that its "circumspect approach does not permit a change in wage-earning capacity with

every variation in actual wages or transient change in the economy. There may be cases raising

difficult questions as to what constitutes a change in wage-earning capacity, but we need not

address them here." Id. co -wo rkers in order to determine the claimants' "earning capacity"—i.e., "the potential and

opportunity to earn absent injury." Id. at 757. 2

Petitioners' position attem pts to convert into a basis for applying § 910(c) what the courts in

Bonner and Tri-State found to be proper factors to consider in determining annual average income

pursuant to that provision. However, as this court has recognized, "application of section 10(c) is

appropriate when the employee's work is inherently discontinuous or intermittent , ... and when "

" o t herwise harsh results" would follow were an employee's wages invariably calculated simply by

looking at the previous year's earnings.' " Empire United Stevedores v. Gatlin, 936 F.2d 819, 822

(5th Cir.1991) (citations omitted). Mr. Barrios' work was not discontinuous or intermittent, and no

harsh results will follow from determining his average annual wage based on his earnings during the

year preceding his injury pursuant to § 910(a). As § 910(a) can fairly and reasonably be applied to

determine Mr. Barrios' rate of compensation, the ALJ and the Board did not err in so doing.

B. Aw ard of Permanent Total Disability

Petitioners also challenge the ALJ's finding of total and permanent disabilit y on three grounds:

(1) that the ALJ erred in reaching this issue as Mr. Bar rio s sought only temporary total disability

payments; (2) that the evidence was insufficient to establish that Mr. Barrios was permanently and

totally disabled; and (3) that there was an adequate showing of alternate employment. Initially, we

note that petitioners' claim that the issue of permanent total disability was not properly presented is

belied by petitioners' defense of the case, as counsel for petitioners clearly raised the permanency of3 The transcript of the hearing conducted on August 29, 1988, reflects that counsel for

petitioners listed as an issue whether Mr. Barrios had reached maximum medical improvement and

stated during his opening statement to the ALJ that "I don't think that this man has reach [sic]

maximum medical improvement and I think that's going to be pretty clear from the deposition of

Dr. Jackson, and I don't believe that under the Fifth Circuit law that this gentleman is permanent,

that he has made a good claim for permanent and total disability." Mr. Barrios' disabilit

y as an issue at the hearing in this matter. 3 Moreover, petitioners' claim that that

they did not call a vocational expert becau se o f their belief at the hearing that a claim for total

disabilit y was not being pursued is specious, given the fact that the duration of a disabilit y is a medical

issue, not a vocational one. S ee Louisiana Insurance Guaranty Association v. Abbott, 40 F.3d 122,

125 (5th Cir.1994). Consequently, the ALJ did not err in reaching the issue of the permanency of Mr.

Barrios' disability.

Petitioners challenge the ALJ's finding that Mr. Barrios is permanently disabled. A claimant

under the LHWCA "is considered permanently disabled

... if he or she has any residual disabilit y after

reaching maximum medical improvement, the dat e o f which is to be determined solely by medical

evidence and is not dependent on economic factors." I

d. Here, the ALJ observed that "[s]ince

Claimant's condition is such that th e disability has been lengthy, the time of recovery doubtful and

indefinite, I conclude that Claimant reached maximum medical improvement as of July 15, 1986, near

the time Claimant was released to return to light duty work on a trial basis." Petitioners argue that

t his finding is wrong because the medical testimony demonstrated that Mr. Barrios has yet to reach

maximum medical improvement (and thus cannot be permanently disabled), as his bony spurs may

be absorbed in time or corrected through surgery. This court has recognized that an employee is

permanently disabled "when "his condition has continued for a lengthy period, and it appears to be

of lasting or indefinit e duration, as distinguished from one in which recovery merely awaits a normal

healing period.' " I

d. at 126 (quoting Watson v. Gulf Stevedore Corp., 400 F.2d 649, 654 (5th

Cir.1986), cert. denied, 394 U.S. 976, 89 S.Ct. 1471, 22 L.Ed.2d 755 (1969)). Substantial evidence

established that, at the time of the hearing in this matter, six and a half years had passed since Mr.

Barrios was injured, he had been unable to work for almost the entire period following his injury, and

that his condition had been declining since his doctor released him to work in 1986. We find no error4 The Board determined, however, that the ALJ erred in finding petitioners' evidence

inadequate because petitioners' vocational expert did not contact possible employers directly. in the ALJ's conclusion that under these circumstances, Mr. Barrios' disabilit y is permanent in nature.

Petitioners also claim that the ALJ erred in finding that Mr. Barrios is totally disabled as they

presented sufficient evidence of suitable alternate employment. Whereas the nature (or duration) of

a claimant's disabilit

y presents a medical question, Abbott, 40 F.3d at 125, the degree of disabilit y is

evaluated principally in economic t e rms—the availabilit y of suitable alternative employment

distinguishes partial from total disabilit y. I d., at 126-27. Once a claimant has demonstrated that he

is unable to perform his former longshore employment due to his job-related injury, he has made a

prima facie case of total disabilit y. I d. at 127. The burden then shifts to the employer to reduce or

eliminat e its compensation liabilit y by establishing that the employee is (1) capable of performing (2)

other realistically available jobs. I d. The ALJ found that the evidence petitioners introduced to show

that claimant was capable of performing light-duty work at the time of his release by Dr. Jackson was

inadequate to demonstrate that any such light duty work was available. The Board affirmed the ALJ's

finding that petitioners did not demonstrate the availabilit y of suitable employment due to their failure

to show that such employment was actually available during the short period when Mr. Barrios was

capable of performin g light duty work following his medical release by Dr. Jackson's on June 18,

1986. 4 We have reviewed the record and agree that petitioners did not present sufficient proof to

meet their burden of showing that suitable alternate employment was available to Mr. Barrios during

the period in which he was physically capable of performing light-duty work. Consequently , we

affirm the finding that Mr. Barrios is totally disabled.

III. Conclusion

Because it correctly concluded that the ALJ' s compensation order was supported by

substantial evidence in the record, and that it was in accordan ce wit h the law, the decision of the

Benefits Review Board is AFFIRMED.