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United States Court of Appeals,
Fifth Circuit.
No. 96-60716.
CERES MARINE TERMINAL; Ceres Gulf, Inc., Petitioners,
v.
DIRECTOR, OFFICE OF WORKER'S COMPENSATION PROGRAMS, U.S.
DEPARTMENT OF LABOR, Respondent.
July 31, 1997.
Petition for Review of an Order of the Benefits Review Board.
Before SMITH, BARKSDALE and BENAVIDES, Circuit Judges.
BENAVIDES, Circuit Judge:
Billy Allred, who injured his left shoulder and neck during
the course and scope of his employment as a longshore worker,
sought and received workers' compensation benefits under the
Longshore and Harbor Workers' Compensation Act ("LHWCA" or "the
Act"), 33 U.S.C. 901-50. Based in part on findings that Allred
suffered from pre-existing permanent partial disabilities and that
his employment injury "was not totally disabling in and of itself,"
an administrative law judge ("ALJ") awarded special fund relief to
Allred's employer, Ceres Gulf, Inc. and Ceres Marine Terminal
(collectively "Ceres"). The Benefits Review Board ("BRB") reversed
the ALJ's grant of special fund relief to Ceres and concluded that
the medical opinions relied upon by the ALJ did not establish that
the employment injury alone would not have caused the claimant's
permanent total disability. Because there was substantial evidence
in the record to support the ALJ's finding that Allred's permanent
total disability was not due solely to his employment injury, we
1

vacate the judgment of the BRB. Nonetheless, we remand the case to
the ALJ to determine whether Allred's pre-existing degenerative
cervical spine disease was manifest to Ceres prior to the
employment injury.
I. Standard of Review
The BRB does not have the statutory authority "to engage in
a de novo review of the evidence or to substitute its views for
those of the ALJ." Mijangos v. Avondale Shipyards, Inc., 948 F.2d
941, 944 (5th Cir.1991). Instead, the LHWCA requires the BRB to
accept the findings of the ALJ "unless they are not supported by
substantial evidence in the record considered as a whole or unless
they are irrational." Id. (citing 33 U.S.C. 921(b)(3)). Thus,
when we review decisions of the BRB, our "only function is to
correct errors of law and to determine if the BRB adhered to its
proper scope of review--i.e., has the Board deferred to the ALJ's
fact-finding or has it undertaken de novo review and substituted
its views for the ALJ's." Avondale Shipyards, Inc. v. Vinson, 623
F.2d 1117, 1119 n. 1 (5th Cir.1980). In conducting our review, we
must independently examine the record to determine whether the
ALJ's findings are supported by substantial evidence.1 Id.
1We have previously recognized the distinction between the
scheme of judicial review adopted by the LHWCA and the scheme
applicable in labor cases. Id. Because the labor board may
reassess the factual findings of an ALJ, we review that board's
findings for substantial evidence. Id. (citing Presley v. Tinsley
Maintenance Serv., 529 F.2d 433, 436 (5th Cir.1976); 29 U.S.C.
160(e)). We concluded from this distinction that the LHWCA "has
the effect of shifting deference away from the BRB and to the ALJ."
Id. We also explained that "[t]he only difference is what
institution, the ALJ or the Board which reviews its decision, is
entitled to the ultimate deference when there is a conflict. In
2

II. Statutory Background
The LHWCA is a federal workers' compensation statute that
fixes disability benefits for maritime workers injured on the job.
Under the traditional "aggravation rule" of workers' compensation
law, an employer is liable for a worker's entire disability even
though the disability was the result of both a current employment
injury and a pre-existing impairment. See Strachan Shipping Co. v.
Nash, 782 F.2d 513, 517 (5th Cir.1986) (en banc). Congress enacted
section 8(f) of the LHWCA, 33 U.S.C. 908(f), to diminish an
employer's incentive to discriminate against partially disabled
workers out of fear of increased liability under the aggravation
rule. Director, OWCP v. Bethlehem Steel Corp., 868 F.2d 759, 761
(5th Cir.1989).
Section 8(f) places a temporal limitation on an employer's
liability for a work-related permanent disability if the employee
had an "existing permanent partial disability" that contributed to
the current employment injury. See 33 U.S.C. 908(f); Eymard &
Sons Shipyard v. Smith, 862 F.2d 1220, 1223 (5th Cir.1989).
Payments after the employer's liability expires are then paid from
the "second injury fund" established by section 44 of the LHWCA, 33
U.S.C. 944, and financed by members of the industries covered by
the Act. Eymard & Sons Shipyard, 862 F.2d at 1223. To obtain
special fund relief under section 8(f) when an employee is
permanently totally disabled, an employer must show that (1) the
employee had a pre-existing permanent partial disability, (2) the
LHWCA cases, the ALJ wins, in labor cases, the Board wins." Id.
3

pre-existing permanent partial disability was manifest to the
employer prior to the current employment injury, and (3) the
current disability was not due solely to the employment injury.
Two "R" Drilling Co., Inc. v. Director, OWCP, 894 F.2d 748, 750
(5th Cir.1990).
This appeal raises issues related to the second and third
requirements for special fund relief.
III. The "Contribution" Requirement
To be eligible for section 8(f) relief, an employer must
establish that the claimant's current disability was not due solely
to the employment injury. See 33 U.S.C. 908(f); Two "R"
Drilling Co., 894 F.2d at 750. The purpose of this requirement is
to ensure that the employer compensates the employee for the entire
employment injury. See Bethlehem Steel Corp., 868 F.2d at 762.
Thus, if the employment injury was sufficient, by itself, to cause
the claimant's total permanent disability, the employer should be
liable for the entire compensation award and section 8(f) relief
should be denied. The aggravation rule that section 8(f) was
intended to counteract never comes into play under these
circumstances because the employer would be liable to the same
extent if an able-bodied employee suffered the same injury. See
Director, OWCP v. General Dynamics Corp., 982 F.2d 790, 798 (2d
Cir.1992) ("The section 8(f) relief provision was not intended to
create a windfall for any employer that hires a disabled worker by
limiting its liability even when the later injury itself would have
permanently and totally disabled the employee").
4

The ALJ began his analysis of the contribution requirement in
the instant case by correctly noting that the "[e]mployer has the
burden of establishing that the employment-related injury would not
have rendered the employee permanently totally disabled absent the
pre-existing disability." (citing Two "R" Drilling Co., 894 F.2d at
748). The ALJ proceeded to canvas the medical testimony of three
physicians. From that testimony, the ALJ found that "the
[e]mployer ha[d] established that the current injury was not
totally disabling in and of itself." Thus, the ALJ concluded that
Ceres was entitled to section 8(f) relief based on Allred's
"pre-existing back, arm, elbow, and shoulder disabilities."
The medical evidence relied upon by the ALJ established that
Allred's pre-existing disabilities combined with his employment
injury to produce a greater disability than would have occurred in
the absence of the pre-existing disabilities. Dr. Andrew P. Kant
testified that Allred's current disability was the result of a
combination of both a pre-existing back condition and the
employment injury. In addition, Dr. Gerald R. Litel stated that
"most" of Allred's current disability was due to his pre-existing
back injury, rather than to his current neck injury. Nonetheless,
Dr. Litel opined that it was probable that any current disability
attributable to Allred's neck was the result of a pre-existing
degenerative cervical spine disease "superimposed on and combined
with" the employment injury. Finally, Dr. Litel unequivocally
stated that Allred's pre-existing cervical spine disease combined
with the employment injury to result in disability that was
5

"materially and substantially greater" than would have occurred
from the employment injury alone.
The Director argues that such evidence is insufficient to
satisfy the contribution requirement because it does not establish
that the claimant's current disability was not due solely to the
employment injury. It is true, of course, that evidence that a
claimant's current disability was greater because of a pre-existing
disability or that the current disability was the result of a
combination of a pre-existing disability and an employment injury
does not necessarily prove that the current disability was not due
solely to the employment injury. This would be the case where the
employment injury alone renders a claimant totally disabled (i.e.,
unemployable), but a pre-existing disability nonetheless combines
with the employment injury to make the claimant's physical
condition even worse (e.g., more painful).
On the other hand, this uncontroversial proposition should
not obscure the fact that such evidence can satisfy the
contribution requirement under some circumstances. This would be
the case where a pre-existing partial disability combines with an
employment injury to increase what would otherwise have been a
partial disability into a total disability. In other words, the
existence of multiple injuries that combine to increase a
claimant's disability will satisfy the contribution requirement
when the pre-existing injuries are necessary to push the claimant
"over the hump" from partial to total disability.
We believe that it is the role of the ALJ to determine from
6

the record whether borderline evidence of the type that existed in
this case falls into the former or latter category. Although it
would be helpful if attorneys asked questions designed to elicit
the "magic words" that authorize special fund relief, we decline to
adopt a rule that would require a rote recitation of the applicable
legal standard. In the absence of such magic words, the fact
finder's inquiry must of necessity be resolved by inferences based
on such factors as the perceived severity of the pre-existing
disabilities and the current employment injury, as well as the
strength of the relationship between them.2 This court does not
have the expertise necessary to properly evaluate the complex and
frequently conflicting testimony of neurological surgeons,
orthopedists, and other medical experts on this score. Instead, we
must leave this particular fact finding decision precisely where
Congress placed it--with the ALJ. See Mijangos, 948 F.2d at 945
(explaining that when the facts in a case could support a finding
in favor of either party, the choice between reasonable inferences
is left to the ALJ).
2The evidence in this regard supported the inferences drawn by
the ALJ in the instant case. Allred suffered from numerous
pre-existing disabilities, including hypertension and diabetes, as
well as severe arm, elbow, neck and shoulder, and back injuries.
His back condition resulted in two operations, numerous visits to
a hospital emergency room, and significant periods of absence from
work. Allred's current employment injury appears relatively minor
when viewed in light of his medical record as a whole. This is
especially true given evidence in the record that suggests that
Allred's current neck injury was caused, at least in part, by the
degenerative condition created by his prior injuries. We find it
significant that Dr. Litel reviewed Allred's medical records from
before the employment injury and predicted that "[s]ignificant
disability is likely to develop in cases of this kind."
7

The cases relied upon by the Director are not to the contrary.
In several of the decisions, section 8(f) relief was denied by the
ALJ in the first instance. See Two "R" Drilling Co., 894 F.2d at
749;3 Director, OWCP v. Jaffe New York Decorating, 25 F.3d 1080,
1083 (D.C.Cir.1994); FMC Corp. v. Director, OWCP, 886 F.2d 1185,
1186 (9th Cir.1989). In the others, the ALJ applied the wrong
legal standard in granting relief. See General Dynamics Corp., 982
F.2d at 797-98; Director, OWCP v. Luccitelli, 964 F.2d 1303, 1306
(2d Cir.1992). These cases are clearly distinguishable from the
present situation in which the ALJ granted an employer special fund
relief based on an application of the correct legal standard.
The evidence in the instant case was sufficient for the ALJ to
3In Two "R" Drilling, id. at 749-50, we affirmed the BRB's
affirmance of an ALJ's denial of section 8(f) relief to an
employer. We concluded as a matter of law that the employer "did
not meet its burden of showing that the current disability [was]
not due solely to the employment injury since [it] put no medical
evidence before the ALJ which suggest[ed] that [the claimant's]
pre-existing disability in any way contributed to his current
disability." Id. at 750. In reaching this conclusion, we declined
to adopt a "common-sense" presumption that would have dispensed
with the claimant's obligation to present such evidence when the
claimant had a history of back problems prior to suffering a
totally disabling back injury. Id. We explained that such a
presumption was inappropriate because it would read the
contribution requirement out of the Act by merging the contribution
requirement with a claimant's obligation to establish a
pre-existing permanent partial disability. Id.
Two "R" Drilling simply does not apply to this case
because Ceres has presented evidence that suggested that
Allred's pre-existing disabilities in some way contributed to
his current disability. Moreover, although we refused to
presume contribution based on a history of prior injury in the
absence of such evidence, we never held that an ALJ was
precluded from taking that history into account in drawing an
inference from the evidence that the current disability was
not due solely to the employment injury.
8

have inferred that Allred's pre-existing permanent partial
disabilities combined with his employment injury to increase what
would otherwise have been a partial disability into a total
disability. This evidence was sufficient, in turn, for the ALJ to
have found that the claimant's current disability was not due
solely to the employment injury. Therefore, we conclude that the
BRB exceeded its statutory power of review by substituting its view
of the facts for those of the ALJ. Accordingly, we vacate the
decision of the BRB and reinstate this aspect of the ALJ's order.
IV. The "Manifest" Requirement
To satisfy the requirements of section 8(f), this court has
required an employer to prove that the claimant's pre-existing
permanent partial disability was "manifest" to the employer prior
to the current injury.4 See Two "R" Drilling Co., 894 F.2d at 750;
Eymard & Sons Shipyard, 862 F.2d at 1223. We explained that
"[t]his requirement serves an obvious function: a latent defect
cannot logically be said to be an "existing permanent partial
disability' and cannot be capable of causing discrimination against
the worker." Eymard & Sons Shipyard, 862 F.2d at 1223.
We have previously recognized that a diagnosed, pre-existing
disability of which the employer has actual knowledge is manifest.
Id. In addition, most courts have recognized that an employer's
4Although section 8(f) does not explicitly require an
employer's manifest knowledge of a pre-existing disability, courts
have added this requirement to further the policy behind special
fund relief. See Director, OWCP v. Newport News Shipbuilding and
Dry Dock Co., 8 F.3d 175, 182 n. 5 (4th Cir.1993), aff'd 514 U.S.
122, 115 S.Ct. 1278, 131 L.Ed.2d 160 (1995).
9

constructive knowledge of a pre-existing permanent partial
disability is sufficient to satisfy the manifest requirement. See,
e.g., Bunge Corp. v. Director, OWCP, 951 F.2d 1109, 1111 (9th
Cir.1991) ("If the condition is readily discoverable from the
employee's medical record in the possession of the employer,
knowledge of the condition is imputed to the employer"); Director,
OWCP v. Berkstresser, 921 F.2d 306, 310 (D.C.Cir.1990) ("When the
evidence shows that such a "disability' was objectively apparent,
the "manifest' requirement has been met"). Although this court has
not expressly adopted an objective standard for determining whether
an employer has satisfied the manifest requirement, we have
"assumed that there may be instances where although a diagnosis as
such is not expressly stated in the medical records[,] nevertheless
sufficient unambiguous, objective, and obvious indication of a
disability is reflected by the factual information contained in the
available records so that the disability should be considered
manifest even though actually unknown to the employer." Eymard &
Sons Shipyard, 862 F.2d at 1224. The Director does not dispute
that an objective inquiry is appropriate to determine whether the
manifest requirement has been met.
It is undisputed that although the ALJ relied on a
pre-existing degenerative cervical spine disease as one basis for
finding contribution, his discussion of the manifest requirement
lacks any mention of the condition.5 Both parties urge this court
5The ALJ explicitly found that Allred's hypertension and
injuries to his arm, elbow, and back were manifest to Ceres prior
to the employment injury.
10

to independently review the record and correct this error without
a remand. The Director argues that the record is devoid of any
medical evidence to support a finding that Allred's degenerative
cervical spine disease was objectively determinable to Ceres prior
to the current employment injury. In contrast, Ceres argues that
the ALJ made an implicit finding that Allred's degenerative
cervical spine disease was manifest prior to the employment injury
and that such a finding is supported by substantial evidence in the
record. We believe, however, that the same considerations that led
us to defer to the ALJ's finding with respect to the contribution
requirement would render inappropriate any decision by this court
in the first instance with respect to the manifest requirement.
Accordingly, we remand the case to the ALJ for a finding on whether
Allred's degenerative cervical spine disease was manifest to Ceres
prior to the employment injury. See Darby v. Ingalls Shipbuilding,
Inc., 99 F.3d 685, 689 (5th Cir.1996) (vacating and remanding an
ALJ's award for findings consistent with the requirements of the
LHWCA).
V. Conclusion
We hold that there was substantial evidence in the record to
support and allow the ALJ's finding that Allred's permanent total
disability was not due solely to his employment injury. The ALJ
failed, however, to determine whether Allred's pre-existing
degenerative cervical spine disease was manifest to Ceres prior to
the employment injury. Therefore, we VACATE the order of the BRB
and REMAND the case to the ALJ for the requisite finding.
11


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