USCA1 Opinion

UNITED STATES COURT OF APPEALS

FOR THE FIRST CIRCUIT
____________________

No. 96-2055

MICHAEL D. WOOD,

Petitioner,

v.

UNITED STATES DEPARTMENT OF LABOR,

BATH IRON WORKS CORPORATION,

Respondents.

____________________

ON PETITION FOR REVIEW OF AN ORDER OF

THE BENEFITS REVIEW BOARD

____________________

Before

Boudin, Circuit Judge,

_____________

Bownes, Senior Circuit Judge,

____________________

and Stahl, Circuit Judge.

_____________

____________________

Gary A. Gabree with

_______________

whom Stinson, Lupton, Weiss & Gabree, P

____________________________________

was on brief for petitioner.

Richard F. van Antwerp
_______________________

with whom

Thomas R. Kelly and Robins

________________
______

Kriger & McCallum were on brief for respondents.

_________________

____________________

May 8, 1997
____________________

BOUDIN,

Circuit Judge.
______________

The

dispute

in

this

case

concerns Michael Wood's claim for partial disability payments

from

his former

employer, Bath

Iron Works,

Inc. ("Bath").

His benefits were terminated on the ground that Wood had been

offered

his pre-injury

wages

and more

by

Bath in

capacity at Bath's shipyard in Bath, Maine, but

new

had declined

the job offer because he had relocated to another state.

The

problem posed is obvious; the solution is not.

The

underlying facts are

in January 1988,

Wood worked

Maine

installing

shipyard,

materials.

largely undisputed.

as an insulator

fiberglass

and

Starting

at the

Bath,

polyamide foam

In October 1988, he developed breathing and sinus

problems, and a skin rash, apparently as a result of exposure

to dusts and fumes in his job at Bath.

position that

did not

Bath kept him on in a

involve contact with

these materials

until December 1988, when Wood was terminated.

In May 1989, Wood

Labor's

Office of

seeking disability

filed a claim with the

Workers'

Department of

Compensation Programs

benefits under

Workers' Compensation Act ("the

("OWCP")

the Longshore and

Act"), 33 U.S.C.

Harbor

901-950.

That statute creates a familiar statutory scheme for no-fault

compensation, financed by

suffers a job

the employer,

related disability.

the claim was resolved,

In

where the

February 1990, before

Wood returned to Bath as

truck driver.

-2-2-

employee

a delivery

In March 1991, an Administrative Law

Department awarded

days in

from

total disability

December 1988, immediately

Bath,

payments

Wood

33

for

U.S.C.

about

two

908(a),

months

Judge in the Labor

payments for

following his

and

partial

thereafter

two

dismissal

disability

based

on

the

difference between the $356 weekly pay Woods had earned as an

insulator

(working

at Bath

for

and

his actual

other employers).

wages earned

33

U.S.C.

thereafter

908(c)(21).

Because the new job Wood took with Bath

in February 1990 paid

was awarded

as a delivery driver

more than his old insulator

no disability

benefits

after his

wages, he

reemployment

date.

In August

1991, Wood was again laid off by Bath, due in

part to his lack of seniority.

advised

by

Bath's

personnel

"permanent," and having

Wood

In October 1991, having been

office that

his

layoff

was

found no other suitable job in Bath,

moved to Shortsville, New York, the town in the western

part of

that

state where

he

immediate family still lived.

had grown

With his

up

and where

his

brothers' help, Wood

landed a series of auto mechanic jobs, making $300-315 weekly

on

a fairly steady basis from November 1991 through at least

April 1993.

During

this

period

in

offered reemployment by Bath.

Wood to offer him

Shortsville,

In March 1992,

a position similar to the

Wood

was

twice

Bath contacted

delivery driver

-3-3-

job he had held earlier.

But

when Wood went to Maine for

physical

examination, he

discovered that

the recall

was a

mistake, caused by a Bath hiring employee's mistaken reliance

on job type seniority rather than overall union seniority.

In February 1993, Bath recalled

he

failed

Although

to

report

Bath

to

repeated

Bath

the

for

for several

relocate soon enough

to report

days;

care

a scheduled

offer

declined, apparently

required;

Wood a second time, but

several

reasons:

for work in

physical.

times,

an

Wood

inability to

March, as

Bath

the fact that the job was only "guaranteed" for 30

and Wood's

of his

increasing ties to

Shortsville, including

then-hospitalized mother.

As

a result,

Bath

terminated Wood's seniority-based rights to future employment

pursuant to the union contract.

In

the

meantime,

Wood

had

renewed

his

claim

for

disability

benefits.

In

August

1991,

Wood

benefits for partial disability under 33 U.S.C.

the Act

defines disability as "incapacity

to earn the

time of

wages which

injury."

Id.
___

the employee was

902(10).

Wood

sought

new

908(c)(21);

because of injury

receiving at

the

claimed that

his

Shortsville earnings accurately reflected his present earning

capacity,

see id.
___ ___

908(h),

and

asked that

his

disability award be modified, as provided by 33 U.S.C.

based on the gap between his pre-injury Bath

and his lower Shortsville earnings.

-4-4-

earlier

922,

insulator wages

In October 1993,

a different

Administrative Law

Judge

rendered the decision that is now before us on appeal.

As to

the period between August

that Bath had failed

1991 and March 1993, the

to show that Wood's actual

Shortsville underrepresented

that Wood

that

earnings in

his earning capacity.

was therefore entitled to

ALJ held

He ruled

disability payments for

period based on the difference between the wages he had

earned

as a

Bath insulator

in 1988

and his

lesser actual

wages in Shortsville.

However, the ALJ also

1993

Bath had made Wood

that would

that

have paid more

found that in February

a bona fide
_________

and March

reemployment job offer

than Wood's pre-injury

wage, and

Wood declined the offer for his own personal and family

reasons.

The ALJ held that the offer established that, from

this time

forward, Wood's earning capacity

as a result

clear,

Bath job

of his

disability.

said the ALJ, that

even if

Accordingly, Wood's

Wood's

testimony had

Wood would not

it had been

was not impaired

offered as

made

have accepted the

a permanent

one.

partial disability benefits were cut off

after that date.

In

December

1993, Wood

appealed

the

portion of

the

decision

denying

benefits after

March

1993

to the

Labor

Department's Benefits Review Board, as allowed by 33 U.S.C.

921(b).

On September 12, 1996, the Review Board sent Wood a

notice pursuant to Pub. L. 104-134,

-5-5-

101(d), 110 Stat. 1321-

219 (1996), stating

affirmed for

that the decision

was to be

purposes of appeal to this court.

considered

Wood filed a

motion for reconsideration which the Review Board denied.

then filed a

U.S.C.

notice of appeal

to this court pursuant

He

to 33

921(c).

In

reviewing such

normally accepts the

supported

by

compensation

ALJ's findings of

substantial

questions de novo.
_______

(1st Cir. 1991).

decisions, this

evidence,

fact where they

and

reviews

court

are

legal

CNA Ins. Co. v. Legrow, 935 F.2d 430, 433

____________
______

our case,

however,

does

not neatly fit within these polar categories.

Our main

task

here is

policy--to

variations:

The

central issue in

to discern

cope

with

standards--an amalgam

recurring

how earning capacity should

problem

of law

with

and

many

be calculated when

the employee, after the injury, moves to a new community.

We begin with

the Act.

For some partial

disabilities

(e.g., the loss of a finger), the Act schedules a payment, 33

____

U.S.C.

as

908(c)(1)-(20),

Wood's,

the Act

but for unscheduled

requires

that

injuries such

the employee's

reduced

earning capacity be determined; the employer is then required

to pay

regularly two

employee's

pre-injury

earning capacity.

injury

earnings

conclusive.

Id.
___

thirds of

wages

Id.
___

are

the difference

and

his

post-injury

908(c)(21), 908(e).

evidence

908(h).

of

between the

capacity

reduced

Actual post-

but

are

not

-6-6-

Wood's earnings

injury wages

burden

as a insulator at

of proving

greater than

does

that the

Bath.

F.2d 1039,

not claim

The

than his pre-

employer has the

claimant's earning

his actual earnings.

v. Guidry, 967
______

Bath

in Shortsville were less

Avondale Shipyards, Inc.

________________________

1042-43 (5th Cir.

that Wood

capacity is

could

1992).

have earned

Here,

more in

Shortsville; but it

could

says that

have exceeded his own

its own offer

shows that

pre-injury wages in

Bath.

he

The

ALJ so found, at least implicitly, and Wood does not directly

dispute the finding.

But

the statute itself

capacity

is to

addressing

be

does not tell

measured.

The

us where earning
_____

closest

it

comes

the issue at all--and it is not very close--is as

follows:

The

wage-earning

employee

in

subsection

of

partial

(c)(21)

of

this

his actual

fairly

and

capacity:

capacity

cases

subsection (e) of this

by

to

earnings

of

an

injured

disability
section

or

under
under

section shall be determined

if such

reasonably represent

actual

earnings

his wage-earning

Provided, however, That if the employee

__________________
_______________

has no actual earnings or his actual earnings do

___________________________________________________

not fairly and reasonably represent his wage___________________________________________________

earning capacity, the deputy commissioner may, in
___________________________________________________
the interest of justice, fix such wage-earning
___________________________________________________
capacity as shall be reasonable, having due
_______________________________

regard

to the nature of his injury, the degree of physical

impairment, his
factors

or

affect his

usual

employment, and

circumstances in

the

capacity to earn wages

case

any

other

which may

in his disabled

condition, including the effect of disability as it

may naturally extend into the future.

33 U.S.C.

908(h) (emphasis added).

-7-7-

This

is

statutes;

question

typical

the Act's

posed,

and

thought to the issue.

in

so,

problem

presented in

language does

often

not squarely

enough Congress

the

decisions

normal

tend

to

age

of

answer the

never

gave

Sometimes the responsible agency fills

such lacunae through regulation,

in

an

case,

mark

the

out

agency's

substantial

deference, see
___

194, 202-03

(1947), and the agency's

standards to specific facts

but not so

SEC v.
___

pattern

here.

Even

individual

case

that

deserves

Chenery Corp.,
_____________

332 U.S.

application of general

is usually upheld if "reasonably

defensible."

Sure-Tan, Inc. v.
_______________

NLRB,
____

467 U.S.

883,

891

(1984).

The problem of deference in our case is more complicated

than

it

is

under

Administrative authority

the

Secretary of

the

ordinary

under the

Labor, 33

U.S.C.

assistant secretary, and redelegated

of

the OWCP.

20 C.F.R

regulatory

Act has been

statute.

assumed by

939, delegated

to an

in turn to the director