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Riedel International Inc. v. Director

filed*fn*: December 17, 1991.

RIEDEL INTERNATIONAL, INC.; NATIONAL UNION FIRE INSURANCE COMPANY, PETITIONERS,
v.
DIRECTOR, OFFICE OF WORKERS COMPENSATION PROGRAMS; RICHARD WHITEWATER, RESPONDENTS.



Petition for Review of an Order of the Benefits Review Board. BRB No. 88-2522A.

Before: Wright, Thompson and T. G. Nelson, Circuit Judges.

MEMORANDUM

This action arises under the Longshore and Harbor Workers' Compensation Act, 33 U.S.C. § 901 et seq. ("the Act").

FACTS AND PROCEEDINGS

On March 31, 1986, while employed as a pile driver by Riedel International, Inc., claimant Richard Whitewater sustained an injury to his back when he was struck by a 700 pound load block. Whitewater returned to full duty work immediately following this injury. He first sought medical treatment from Dr. James M. Silva, a chiropractor, on April 8, 1986. By June 10, 1986 Whitewater's condition had worsened to the point that he could not lift anything or bend over. He has not returned to gainful employment since that date.

The Administrative Law Judge ("ALJ") found that Whitewater was disabled by this injury, but denied Riedel relief under section 8(f) of the Act. Section 8(f) limits, in certain circumstances, the liability of an employer for disability payments by requiring the Special Fund established under 33 U.S.C. § 944 to assume responsibility for compensation payments after 104 weeks. "By so limiting an employer's liability, Congress wished to facilitate and encourage the hiring of partially disabled people." Todd Pac. Shipyards v. Director, OWCP, 913 F.2d 1426, 1429 (9th Cir. 1990).

To obtain section 8(f) relief, an employer must establish three elements: "(1) that the employee had an existing permanent partial disability prior to the employment injury; (2) that the disability was manifest to the employer prior to the employment injury; and (3) that the current disability is not due solely to the most recent injury." Id., (citing, Director, OWCP v. Cargill, Inc., 709 F.2d 616, 619 (9th Cir. 1983) (en banc)). In the present case, the ALJ found that Riedel had established the manifest and contribution elements for relief under section 8(f), but found that Whitewater's March 31, 1986 injury was not a permanent partial disability which predated June 10, 1986, the date of the most recent injury for purposes of this case.

On appeal to the Benefits Review Board ("Board"), the Director conceded that the ALJ erred in finding that Whitewater's March 31, 1986 injury did not constitute a preexisting permanent partial disability. However, the Director cross-appealed the ALJ's finding that Whitewater's preexisting permanent disability was manifest to Riedel prior to June 10, 1986.

The Board affirmed the ALJ's denial of section 8(f) relief. It did so by reversing the ALJ's finding that Whitewater's preexisting disability was manifest to Riedel prior to June 10, 1986. We conclude the Board erred in reversing this finding and we reverse the Board's decision denying Riedel section 8(f) relief.

STANDARD OF REVIEW

The Board reviews the ALJ's decisions to determine whether factual findings are supported by "substantial evidence" and to correct any errors of law. 33 U.S.C. § 921(b)(3). This court conducts an independent review. The ALJ's findings must be upheld when they are supported by substantial evidence. Container Stevedoring Co. v. Director, OWCP, 935 F.2d 1544, 1546 (9th Cir. 1991). "Substantial evidence is 'more than a mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.'" Goldsmith v. Director, OWCP, 838 F.2d 1079, 1081 (9th Cir. 1988) (quoting Kelaita v. Director, OWCP, 799 F.2d 1308, 1312 (9th Cir. 1986)).

Discussion

Riedel first argues that the Board should not have decided that Whitewater's preexisting disability was not manifest to Riedel, because, Riedel contends, the Director did not dispute the manifest component before the ALJ.

The Board may not decide an issue not previously considered by the ALJ because the Board has no authority, under the Act, to initially determine facts. See Director, OWCP v. Cargill, Inc., 718 F.2d 886, 888 (9th Cir. 1983) (remand issue to ALJ because Board improperly considered an issue not considered by the ALJ); see also Director, OWCP v. Newport News Shipbuilding and Dry Dock Co., 676 F.2d 110, 115 (4th Cir. 1982) (improper for ...


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