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                                 BRB No. 91-1635


VERNON L. SARGENT                       )
                                        )    
          Claimant                      )
                                        )
     v.                                 )
                                        )
NEWPORT NEWS SHIPBUILDING               )    DATE ISSUED:   05/03/1995
AND DRY DOCK COMPANY                    )
                                        )
          Self-Insured                  )
          Employer-Respondent           )
                                        )
DIRECTOR, OFFICE OF WORKERS'            )
COMPENSATION PROGRAMS,                  )
UNITED STATES DEPARTMENT                )
OF LABOR                                )
                                        )
          Petitioner                    )    DECISION and ORDER

     Appeal of the Decision and Order of Daniel A. Sarno, Jr., Administrative
     Law Judge, United States Department of Labor.

     Janet Palmer, Newport News, Virginia, for self-insured employer.

     Karen B. Kracov (Thomas S. Williamson, Jr., Solicitor of Labor; Carol
     DeDeo, Associate Solicitor; Janet R. Dunlop, Counsel for Longshore),
     Washington, D.C., for the Director, Office of Workers' Compensation
     Programs, United States Department of Labor.

     Before: HALL, Chief Administrative Appeals Judge, DOLDER and McGRANERY,
     Administrative Appeals Judges.

     HALL, Chief Administrative Appeals Judge:

     The Director, Office of Workers' Compensation Programs (the Director), appeals
the Decision and Order Granting Petition for Relief Under Section 8(f) (90-LHC-1565, 1566) of Administrative Law Judge Daniel A. Sarno, Jr., rendered on a claim
filed pursuant to the provisions of  the Longshore and Harbor Workers' Compensation
Act, as amended, 33 U.S.C. §901 et seq. (the Act).  We must affirm the
findings of fact and conclusions of law of the administrative law judge if they are
rational, supported by substantial evidence, and in accordance with law. O'Keeffe v. Smith, Hinchman & Grylls Associates,
Inc., 380 U.S. 359 (1965); 33 U.S.C. §921(b)(3).  

     On August 21, 1986, claimant sustained a back injury while in the course of
his employment with employer, for which employer voluntarily paid compensation for
temporary total and temporary partial disability.  33 U.S.C. §908(b), (e). 
Thereafter, on August 3, 1987, while in the course of his employment as a
shipfitter with employer, claimant sustained injuries to his back and left leg. 
Employer voluntarily paid compensation for temporary total and temporary partial
disability resulting from these injuries for various periods commencing August 4,
1987.  Employer subsequently sought relief from continuing compensation liability
for claimant's August 3, 1987, injuries pursuant to Section 8(f) of the Act, 33
U.S.C. §908(f).

     In his Decision and Order, the administrative law judge accepted the parties
stipulations regarding the nature and extent of claimant's disability and
thereafter awarded claimant temporary total disability compensation from September
19, 1988 to March 15, 1989, and permanent partial disability compensation
thereafter.  33 U.S.C. §908(b), (c)(21).  The administrative law judge further
found employer entitled to Section 8(f) relief on the grounds that claimant's
previous back injury sustained on August 21, 1986, constituted a manifest pre-existing permanent partial disability which, when combined with claimant's second
back injury, created a greater disability than that which would have resulted from
the second injury alone.

     On appeal, the Director challenges the administrative law judge's award of
Section 8(f) relief, contending that the administrative law judge erred in both
finding the pre-existing permanent partial disability and manifest requirements of
Section 8(f) to have been satisfied by employer.  Employer responds, urging
affirmance of the administrative law judge's Decision and Order.

     The only issue presented by this appeal is whether the administrative law
judge properly awarded Section 8(f) relief to employer.  Section 8(f) of the Act
shifts liability to pay compensation for permanent disability and/or death after
104 weeks from an employer to the Special Fund.  Generally, Section 8(f) relief is
applicable if employer establishes that:  1) the employee had an existing permanent
partial disability prior to the employment injury; 2) the disability was manifest
to employer prior to the employment injury; and 3) the current disability or death
is not due solely to the most recent injury. See Director, OWCP v. Newport News
Shipbuilding & Dry Dock Co. [Harcum], 8 F.3d 175, 27 BRBS 116 (CRT) (4th Cir.
1993), aff'd, 63 U.S.L.W. 4213 (March 21, 1995).  To satisfy the pre-existing permanent partial disability requirement, employer must establish that the
employee's pre-existing condition resulted in a serious, lasting physical problem
which would motivate a cautious employer to discharge the employee because of a
greatly increased risk of employment-related accident and compensation liability.
See C & P Telephone Co. v. Director, OWCP, 564 F.2d 503, 6 BRBS 399
(D.C. Cir. 1977); see also Preziosi v. Controlled Industries, Inc., 22 BRBS
468 (1989).  The mere existence of a prior injury will not establish a pre-existing
disability for Section 8(f) purposes unless it results in a serious lasting
physical problem. Smith v. Gulf Stevedoring Co., 22 BRBS 1 (1988).

     The Director initially contends that the administrative law judge erred in
determining that claimant's pre-1987 back condition constituted a pre-existing
permanent partial disability.  In the instant case, the administrative law judge,
in concluding that the condition resulting from claimant's 1986 back injury
constitutes a pre-existing permanent partial disability, initially noted that
claimant had sought medical care for the pain resulting from his 1986 injury and
that, although claimant's treating physicians were unable to identify the reason
for claimant's pain, they did not discount that claimant suffered continuing back
pain.  Next, the administrative law judge, after having inferred that the reason
for claimant's failure to seek medical attention after that time was his belief
that doctors could not help him, determined that the absence of evidence that
claimant received medical treatment subsequent to December 1986 does not establish
that claimant no longer suffered back pain. See Decision and Order at 5-6. 
The administrative law judge, however, did not evaluate or discuss the specific
medical evidence in his discussion of claimant's 1986 injury and the resulting back
pain, nor did the administrative law judge evaluate this evidence under the
relevant standard to determine whether claimant's condition constituted a serious,
lasting physical problem.  

     Decisions rendered under the Act are subject to the Administrative Procedure
Act which requires that every adjudicatory decision be accompanied by a statement
of "findings and conclusions and the reasons or basis therefor, on all material
issues of fact, law or discretion presented in the record."  5 U.S.C.
§557(C)(3)(A).  Thus, the administrative law judge must adequately detail the
rationale behind his decision and specify the evidence upon which he relied. See
Ballesteros v. Willamette Western Corp., 20 BRBS 184 (1988).  Furthermore, the
administrative law judge must independently analyze and discuss the medical
evidence; failure to do so violates the Administrative Procedure Act's requirement
for a reasoned analysis. See Williams v. Newport News Shipbuilding & Dry
Dock Co., 17 BRBS 61 (1985).  In the instant case, the administrative law
judge's failure to specifically set forth the evidence upon which he relied makes
it impossible for the Board to apply its standard of review. See Goody v. Thames
Valley Steel Corp., 28 BRBS 167 (1994).   The record in the instant case
contains conflicting medical evidence regarding whether or not claimant's pre-1987
physical condition constituted a pre-existing permanent partial disability.  As it
is the function of the administrative law judge to evaluate and weigh the
conflicting medical evidence under the appropriate legal standard, we vacate the
administrative law judge's award of relief under Section 8(f).  On remand, the
administrative law judge must consider and discuss all of the relevant medical
evidence concerning the issue of whether the back condition claimant experienced
as a result of his 1986 back injury rose to the level of a serious, lasting
physical problem sufficient to motivate a cautious employer to discharge the
employee. See C & P Telephone Co., 564 F.2d at 503, 6 BRBS at 399.

     The Director next contends that the administrative law judge erred in
determining that employer had satisfied the manifest requirement of Section 8(f). 
Medical records need not indicate the severity or precise nature of the pre-existing condition in order for the manifest requirement to be satisfied, as long
as there is sufficient, unambiguous and obvious information regarding the existence
of a serious lasting physical problem which would motivate a cautious employer to
consider terminating the employee because of the increased risk of compensation
liability. See Eymard & Sons Shipyard v. Smith, 862 F.2d 1220, 22 BRBS 11
(CRT)(5th Cir. 1989); Armstrong v. General Dynamics Corp., 22 BRBS 276
(1989); Hitt v. Newport News Shipbuilding & Dry Dock Co., 16 BRBS 353
(1984).  In the instant case, the administrative law judge found that employer had
actual knowledge of claimant's 1986 work-injury, and that medical records available
to employer indicated that claimant's 1986 back condition had not resolved.  Based
upon these findings, the administrative law judge concluded that, although employer
was not aware of the specific diagnosis of claimant's pre-existing back condition
until after the second injury, medical records were available prior to claimant's
second injury to verify the lingering nature of claimant's back condition.
See Decision and Order at 6-7.  In rendering this determination, the
administrative law judge again did not discuss the specific medical evidence of
record and evaluate it in light of the relevant legal standard. See
Smith, 862 F.2d at 1220, 22 BRBS at 11 (CRT); Armstrong, 22 BRBS at
276; Hitt, 16 BRBS at 353.  We therefore vacate the administrative law
judge's finding that employer satisfied the manifest requirement; on remand, should
the administrative law judge find the pre-existing permanent partial disability
requirement of Section 8(f) to have been met, he must reconsider this issue in
light of the relevant legal standard.[1] 

     Accordingly, the administrative law judge's Decision and Order Granting
Petition for Relief Under Section 8(f) is vacated, and the case is remanded for
further consideration consistent with this opinion.

     SO ORDERED.
                                                                        

                         BETTY JEAN HALL, Chief
                         Administrative Appeals Judge


     I concur:                                                             
       
                         NANCY S. DOLDER
                         Administrative Appeals Judge

McGRANERY, Administrative Appeals Judge, dissenting:

     I must respectfully dissent from my colleagues' decision to vacate the
administrative law judge's award of Section 8(f) relief to employer, as I would
hold that the administrative law judge properly found both the pre-existing
permanent partial disability and manifest requirements satisfied.  The
administrative law judge, after considering the medical and lay evidence, found the
presence of a pre-existing permanent partial disability.  The administrative law
judge cited the relevant case precedent and concluded that claimant's injury
resulted in a serious, lasting physical problem.  The administrative law judge
relied on evidence of claimant's continuing pain after the 1986 injury.

     The administrative law judge's finding is supported by the record, which
indicates that the ongoing back pain suffered by claimant as a result of his 1986
work-injury constitutes a serious, lasting physical problem sufficient to motivate
an employer to discharge an employee. See C & P Telephone Co. v.
Director, OWCP, 564 F.2d 503, 6 BRBS 399 (D.C. Cir. 1977).  In addition, the
administrative law judge's conclusion is supported by evidence that in the course
of the year following the first accident, employer had paid benefits to claimant
for temporary total disability for various periods of time until 11 days before
claimant's second injury, and that the work restrictions placed upon claimant had
not been lifted at the time of his second injury.  Accordingly, as there is
evidence in the record that claimant's back and leg problems were serious,
longstanding and documented, see Armand v. American Marine Corp., 21 BRBS
305 (1988), I would affirm the administrative law judge's determination that these
conditions constituted a pre-existing permanent partial disability as it is
supported by substantial evidence and accords with relevant law. See Dugan v.
Todd Shipyards, Inc., 22 BRBS 42 (1989).

     Additionally, I would affirm the administrative law judge's determination that
claimant's pre-existing permanent partial disability was manifest to employer.  Not
only were medical records available to employer prior to the second injury
documenting claimant's longstanding back problems, but employer's own payment of
compensation to claimant until shortly before claimant's second injury reflects
employer's actual knowledge of claimant's unresolved back and leg conditions
resulting from the first injury.

     Thus, for the reasons set forth above, I would affirm the administrative law
judge's award of relief to employer under Section 8(f).





                                                                        

                         REGINA C. McGRANERY
                         Administrative Appeals Judge




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Footnotes.


1)While the Director correctly states that the specific diagnosis of claimant's congenital spinal stenosis, not made until after claimant's second injury, is insufficient to meet the manifest requirement, see Caudill v. Sea Tac Alaska Shipbuilding, 25 BRBS 92 (1991), the Director's' argument is not dispositive of the manifest issue. Rather, the question to be addressed by the administrative law judge on remand is whether, notwithstanding the absence of a specific diagnosis, the medical records available prior to the second injury contained sufficient information regarding the existence of a serious, lasting physical problem. See Smith, 862 F.2d at 1220, 22 BRBS at 11 (CRT). Back to Text

NOTE: This is an UNPUBLISHED LHCA Document.

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