Wake Forest Law Review

Weekly Roundup: 11/6-11/10
By: Tim Day & Jonathan Hilliard

Plotnick v. Computer Sciences Corp.
             In this civil case, the plaintiffs, former executives of Computer Sciences Corporation (“CSC”), filed suit against CSC, alleging they were denied benefits under their Deferred Compensation Plan for Key Executives after an amendment to the plan changed the applicable crediting rate.  The Fourth Circuit affirmed the district court’s grant of summary judgment for CSC, holding that the denial of benefits was proper under any standard of review.

welding

By Malorie Letcavage

On June 1, 2015, the Fourth Circuit released its published opinion in the civil case Huntington Ingalls Industries, Inc. v. Eason. The appellant, Huntington Ingalls Industries, Inc. (HI), appealed the Administrative Law Judge’s decision to grant further compensation for temporary partial disability to appellee, Ricky Eason, under the Longshore and Harbor Worker’s Compensation Act (LHWCA). The Court held that since Eason was already receiving compensation for a scheduled permanent partial disability injury, to allow him to recover additional compensation because of an injury flare up would be impermissible double recovery under the act. Also, the Court held that HI and Eason had misinterpreted Potomac Electric Power Co. v. Director, Office of Workers’ Compensation Programs (PEPCO). The Fourth Circuit remanded the case to the Benefits Review Board to give an order dismissing Eason’s claim for temporary partial disability compensation.

Eason Received Compensation for His Knee Injury

Ricky Eason was injured while working as a pipe fitter at Newport News Shipping and Dry Dock Company, which was later acquired by Huntingdon Ingalls Industries, Inc. Eason was diagnosed with a torn meniscus and had to undergo surgery. Eason was completely out of work from October 2, 2008 through June 18, 2009 and received temporary total disability benefits for this time. After returning to work full-time, Eason was given a 14% lower extremity permanent impairment rating, meaning he had reached maximum medical improvement. This meant that normal healing was no longer likely to occur, and this status determined his permanent partial disability compensation.

For the seven months after the 14% rating diagnosis, Eason received his scheduled injury permanent partial disability compensation in addition to his regular weekly salary. Scheduled compensation covers specified body part injuries and pays compensation for a fixed number of weeks at two-thirds of the employee’s average weekly wage.

Eason then went back to his doctor complaining of pain in both his knees. The doctor put Eason on light duty restrictions, and continued to recommend the restriction on two subsequent visits after Eason complained of knee pain. However, Eason continued to work full-time without any light duty restrictions. Eason then brought a claim for temporary total disability or temporary partial disability under the LHWCA. This act is a federal workers’ compensation system for employees injured, disabled, or killed in the course of covered maritime employment.

Journey Between Administrative Law Judges and Benefits Review Board

The first hearing was held before Administrative Law Judge Richard Malamphy. Judge Malamphy found that the evidence did not support Eason’s claim for temporary total disability, and his disability compensation was restricted to the amount required by the schedule. Judge Malamphy also held that Eason was not entitled to additional compensation for any temporary partial loss of wage-earning capacity for the same knee injury.

On appeal, the Benefits Review Board (BRB) vacated Judge Malamphy’s decision. It instead held that the permanent partial disability benefits did not determine whether a claimant could recover for permanent total, temporary total, or temporary partial disability. The BRB remanded the case to determine if Eason’s light duty work restrictions prevented him from his usual work. If so, it would be temporary total disability and he could recover additional compensation.

On remand, Judge Sarno found that Eason could not complete his usual work during the time his doctor ordered him to light duty restrictions. Judge Sarno found that Eason was temporarily partially disabled and entitled to compensation of $845.82 per week.

HI then appealed Judge Sarno’s decision to the BRB. The BRB affirmed Judge Sarno’s findings that Eason could not do his usual work in the time period in question. It also affirmed the award of compensation. HI filed its petition for review to the Fourth Circuit.

Double Recovery Is Not Allowed

The Court had to decide if Eason, who was already receiving benefits from a scheduled permanent partial disability, could receive additional compensation when his injury flared up and became a temporary partial disability.

In Eason’s case, he was already receiving benefits from a scheduled permanent partial disability. When that changed to a temporary partial disability because his injury flared up, there was no additional loss of wage-earning capacity. Scheduled compensation takes into account all lost wages under LHWCA, so Eason could not recover for the flare up because his injury was already being accounted for and compensated. To allow Eason to recover for the injury flare up would be “impermissible double recovery” because the scheduled compensation was calculated to cover any additional flare ups.

The Fourth Circuit held that the only way to receive additional compensation after a permanent partial disability was if the circumstances warranted a reclassification of that disability to a permanent total or temporary total. However, Eason’s injury did not qualify for reclassification to a permanent total or temporary total disability. His knee injury was permanent and partial and had been classified as such ever since his diagnosis.

The Court held that Eason’s argument for compensation under LHWCA for additional temporary partial disability was unpersuasive. Such a recovery would be double recovery for the same injury. Additionally, the purpose of scheduled compensation is to provide quick compensation for certain injuries and cover employer’s liability. To allow Eason to recover again would defeat the intent of scheduled compensation. The court also rejected HI’s interpretation of LHWCA-that Eason was barred from receiving temporary total disability compensation because he was receiving scheduled disability compensation. The court found this interpretation was inconsistent with prior case law, and it undermined the purpose of the act.

Lastly, the Court found that PEPCO was not determinative for either party. In PEPCO, the court held that LHWCA did not allow employees to choose between compensation of actual loss of wage earning or the compensation associated with permanent partial disability from a scheduled injury. The court in PEPCO noted that some cases of under or overcompensating were an inevitable part of the system.The Fourth Circuit distinguished PEPCO explaining that a scheduled injury does not preclude an award of total disability, nor does it permit double recovery.

Case Remanded to Benefits Review Board

The Court granted the petition for review and remanded the case to the BRB to enter an order dismissing Eason’s claim for temporary partial disability under LHWCA.