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                                 BRB No. 99-1087
                                         

MARILEE JUSTICE                         )
(Widow of JAMES E.  JUSTICE)            )
                                        )
          Claimant-Respondent           )    DATE ISSUED:   07/19/2000

                                        )
     v.                                 )
                                        )
NEWPORT NEWS SHIPBUILDING               )
AND DRY DOCK COMPANY                    )
                                        )
          Self-Insured                  )
          Employer-Petitioner           )    DECISION and ORDER

     Appeal of the Decision and Order Awarding Benefits and the Decision and
     Order Denying Motion for Reconsideration of Daniel A. Sarno, Jr., 
     Administrative Law Judge, United States Department of Labor.     

     Gary R. West (Patten, Wornom & Watkins, L.C.), Newport News, Virginia,
     for claimant.

     Lawrence P. Postol (Seyfarth, Shaw, Fairweather & Geraldson),
     Washington, D.C., for self-insured employer.

     Before: SMITH and BROWN, Administrative Appeals Judges, and NELSON,
     Acting Administrative Appeals Judge.

     PER CURIAM:

     Employer appeals the Decision and Order Awarding Benefits and the Decision and
Order Denying Motion for Reconsideration (98-LHC-2467) 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 administrative law judge's findings
of fact and conclusions of law if they are rational, supported by substantial
evidence, and in accordance with law.  33 U.S.C. §921(b)(3); O'Keeffe v. 
Smith, Hinchman & Grylls Associates, Inc., 380  U.S. 359 (1965).

     The parties entered into the following relevant stipulations, which the
administrative law judge accepted:

     1.  James Justice (decedent) worked for employer from June 15, 1942 to
     April 29, 1944, June 18, 1946 to September 5, 1946, and August  21, 1947
     to January 13, 1949.

     2.  Decedent was exposed to airborne asbestos dust and fibers while
     working for employer in sufficient quantities and for sufficient
     duration to cause asbestos related lung disease, including mesothelioma.

     3.  Decedent's mesothelioma was caused, at least in part, by his
     exposure to asbestos during his employment with employer.

Following his employment with employer, decedent worked for the National
Aeronautics and Space Administration (NASA) as a sheet metal mechanic and engineer
technician from 1949 until 1985. Relevant to the responsible employer issue, the
parties attempted to stipulate that decedent was exposed to airborne asbestos dust
and fibers during and in the course of his employment for NASA in sufficient
quantities and of sufficient duration to cause asbestos related lung disease,
including mesothelioma, and that his mesothelioma was caused, at least in part, by
this exposure with NASA.  The administrative law judge  rejected this stipulation,
finding that the parties cannot bind an entity which is not a party to the action. 
The administrative law judge awarded decedent permanent partial disability
benefits pursuant to Section 8(c)(23) of the Act, 33 U.S.C. §908(c)(23), for
a stipulated 75 percent impairment from September 23, 1997 until the date of death,
January 5, 1998, and his widow (claimant) death benefits thereafter, 33 U.S.C.
§909, payable by employer as the last employer covered by the Act.  Employer's
application for relief pursuant to Section 8(f) of the Act, 33 U.S.C. §908(f),
was denied.

     Employer filed a motion for reconsideration, stating that the purpose of the
stipulation was not to bind NASA, but so that the court of appeals could have a
"complete record" before it on the inevitable appeal following Board review.[1]   In lieu of the stipulation, employer sought to
introduce into the record the October 1997 affidavit of the decedent describing his
exposure to asbestos with NASA.  The administrative law judge denied employer's
motion  to reopen the record for receipt of this affidavit, stating that he is not
required to accept evidence in lieu of a rejected stipulation in this instance as
admission of the evidence would not change the outcome, as exposure at NASA cannot
alter employer's liability under the Act.

     On appeal, employer contends that the administrative law judge erred in
rejecting the parties' stipulation regarding decedent's exposure to asbestos at
NASA.  Employer  contends alternatively that the administrative law judge's refusal
to admit its evidence on reconsideration in place of the stipulation is erroneous. 
Employer finally avers that the "last covered employer" rule is an invalid
extension of the last employer rule, and that the rule  violates its rights to
equal protection and due process under the Constitution.  Employer contends that
claimant would not be harmed by the rejection of the "last covered employer" rule,
as claimant has a remedy under the Federal Employees' Compensation Act (FECA) as
decedent was a federal employee, or under the Virginia workers' compensation
scheme, if he was not.  Claimant responds, urging affirmance of the administrative
law judge's decision.

     Employer first contends the administrative law judge erred in rejecting the
parties' stipulation regarding decedent's exposure to asbestos at NASA, and,
alternatively, that he erred in rejecting the evidence offered in lieu of the
stipulation.  Generally, an administrative law judge may not reject a stipulation
without giving the parties notice that he will not accept it and an opportunity to
present evidence in support of their positions on the issue in question. See,
e.g., Dodd v. Newport News Shipbuilding & Dry Dock Co., 22 BRBS 245 (1989). 
The basis for the administrative law judge's rejection of the stipulation regarding
injurious exposure is that NASA is not a party to the claim and the parties have
no right to bind NASA through their stipulations.  

     We reverse the administrative law judge's rejection of the parties'
stipulation concerning decedent's exposure to injurious asbestos at NASA.  As
employer contends, had the administrative law judge accepted the stipulation, it
would not be binding on NASA in any subsequent proceedings simply because NASA was
not a party to the stipulation.  See generally Zenith Radio Corp. v. Hazeltine
Research, Inc., 395 U.S. 100 (1969); Rice v.  Glad Hands, Inc., 750 F.2d
434 (5th Cir. 1985).  Furthermore, the stipulation could not be given collateral
estoppel effect in any subsequent proceedings, as NASA was not a party to the
proceedings under the Act and as the issue was not actually litigated. Dunn v. 
Lockheed Martin Corp., 33 BRBS 204 (1999).  Moreover, the stipulation provides
employer with an element of its defense to the claim that it is the responsible
employer.  It arguably needs this evidence to establish that subsequent exposure
to asbestos could have caused decedent's disability and death. See n.1,
supra.  Thus, acceptance of the stipulation could only have the effect of
absolving employer of liability under the Act, had the administrative law judge
accepted employer's legal contention regarding the responsible employer, and as
claimant agreed to this stipulation, the administrative law judge should have
accepted it.

     The attempted stipulation in this case is in contrast to that presented in a
case where the private parties attempt to bind the Special Fund to their
stipulations without the agreement of the Director, Office of Workers' Compensation
Programs.  The Board has held that the private parties may not bind the Special
Fund by stipulations to which the Director  has not agreed. See Brady v.  J.
Young & Co., 17 BRBS 46 (1985), aff'd on recon., 18 BRBS 167 (1985). 
The stipulations affecting the Special Fund may be accepted if there is evidence
of record to support them. See McDougall v.  E.P. Paup Co., 21 BRBS 204
(1988), aff'd in pert.  part sub nom. E.P. Paup Co.  v.  Director, OWCP, 999
F.2d 1341, 27 BRBS 41(CRT) (9th Cir.  1993).  In the case where the private parties
attempt to bind the Special Fund by stipulation, acceptance of the stipulation
without question could affect the liability under the
Act of a non-party to the stipulation.  In the present case, however,
the non-party's liability is not at issue, as NASA cannot be held liable under the
Act.  As the stipulation is relevant to employer's defense of the claim, and as no
harm can accrue to NASA from its acceptance, we reverse the administrative law
judge's rejection of the stipulation.[2] 

     Nevertheless, we affirm the administrative law judge's conclusion that
employer is liable for the benefits awarded as the last employer covered by the Act
to expose decedent to injurious stimuli.  We note employer's concession that
current law virtually compels  this result, but we will nonetheless address
employer's specific contentions, as they challenge the reasoning underlying this
precedent.  Under the "last covered employer rule," liability for the entire
disabling condition or the death is imposed on the last employer covered under the
Longshore Act to expose the employee to injurious stimuli in sufficient quantities
to have the potential to cause the employee's occupational disease. Todd Shipyards
Corp. v. Black, 717 F.2d 1280, 16 BRBS 13(CRT) (9th Cir.  1983), cert. denied, 466 U.S. 937 (1984). 
 In affirming the Board's holding to this effect in Black,  the United States Court of Appeals for the Ninth
Circuit first discussed the rule of allocating liability between and among covered employers as set forth in
Travelers Ins. Co. v. Cardillo, 225 F.2d 137 (2d Cir.), cert. denied, 350 U.S. 913 (1955),[3]  and as discussed by the Ninth Circuit in Cordero v. Triple A Machine
Shop, 580 F.2d 1331, 8 BRBS 744 (9th Cir. 1978), cert. denied, 440 U.S. 911 (1979).  The
Black court restated the principle that the Cardillo rule "apportions liability in a fundamentally
equitable manner because  all employers will be the last employer a proportionate share of the time.'"
Black, 717 F.2d at  1285, 16 BRBS at 16(CRT), quoting Cordero, 580 F.2d at 1336, 8 BRBS at
747.   In Black,  Todd Shipyards exposed the claimant to injurious asbestos in the 1940's, and the claimant
subsequently was exposed to asbestos in non-covered employment with Boeing.  In extending full liability to the
last employer covered by the Act, the Ninth Circuit stated:

     Congress did not intend that a company covered by the LHWCA should
     escape its legal responsibilities because a subsequent employer not
     covered by the Act also contributed to the occupational disease.  On the
     contrary, the LHWCA and similar workmen's compensation statutes have
     been clearly and consistently interpreted to impose liability on the
     last employer covered by the applicable statute.  To accept
     Todd's position would be to deny LHWCA compensation to many workers who
     were subjected to injurious stimuli but later worked at other
     non-covered jobs.  Such a result would be contrary to the express
     purposes of the Act.

Black, 717 F.2d at 1285, 16 BRBS at 16-17(CRT) (emphasis in original).  In
this regard, the court found the decision of the United States Court of Appeals for
the Fifth Circuit in Fulks v. Avondale Shipyards, Inc., 637 F.2d 1008, 12
BRBS 975 (5th Cir. 1981), cert. denied, 454 U.S. 1080 (1981), illustrative,
as it establishes that later exposure during non-covered work does not absolve the
covered employer of liability.  In Fulks, claimant was exposed to injurious
sandblasting over the course of 16 years of employment at Avondale, only two months
of which was on navigable waters and thus covered under the Act.  Nonetheless, the
court held that the Longshore Act applied and Avondale was liable for benefits
under it.  Rejecting employer's attempt to distinguish Fulks because
claimant worked for only one employer, the Black court held that the key to
the Fifth Circuit's decision is that employer was liable even though the employee's
prolonged and final exposure was in non-covered work, finding this reasoning also
applies in cases involving two employers where the first is covered and a
subsequent employer is not.

     The Black court further noted that the last covered employer rule was
endorsed in state proceedings where the last employer is located in a different
state.  The court also stated that the case before it did not present the situation
where the claimant's injury resulted solely from the subsequent exposure at Boeing,
and that therefore Todd Shipyards was liable as it exposed the claimant to
sufficient quantities of asbestos to cause his disease. Black, 717 F.2d at
1286, 16 BRBS at 17(CRT).  Finally, in a footnote, the court rejected the
contention that Todd Shipyards should not be liable because the claimant might have
a remedy against Boeing under state law.  The court stated that "[t]his argument
ignores the fact that the LHWCA establishes a discrete compensation system
independent of similar state programs," and moreover, that the claimant  is not
guaranteed a recovery under state law.  Accepting the employer's view, the court
stated, could result in the claimant's not receiving benefits under either law.
Id., 717 F.2d at 1286 n.5, 16 BRBS at 17 n.5(CRT).  The Board recently
applied Black in Stilley v. Newport New Shipbuilding & Dry Dock Co.,
33 BRBS 224 (2000), to affirm summarily a finding that the employer was fully
liable to the claimant as the last covered employer notwithstanding the claimant's
subsequent exposure to asbestos with a non-covered employer (also NASA).[4] 

     Employer's first argument against the "last covered employer" rule is that the
reasons for allocating full liability to the last employer, i.e., that each
employer will be the last a relatively equal number of times, is not present
because the maritime industry as a whole will bear a disproportionate burden in
relation to all industries. This contention is without merit for the reasons
discussed by the Ninth Circuit in Black, as set forth above. Black, 
717 F.2d at 1285, 16 BRBS at 16(CRT). 

     Secondly, employer contends that this type of liability allocation has been
rejected for traumatic injuries.  Employer states that in Marsala v.  Triple A
South, 14 BRBS 39 (1981), the Board recognized, in the context of a subsequent
traumatic injury, that an employer cannot be held liable for the "negligent or
intentional conduct of a third party," for "[t]o hold otherwise would be to require
employers to compensate employees for injuries over which the employer had no
control ...." 14 BRBS at 42, 43.  Employer contends that this reasoning should
apply in the instant case, because otherwise it is being held liable for a non-covered employer's "behavior."  This contention is a red herring.  Employer is
ignoring the fact, in this case, that it stipulated to exposure to asbestos in
sufficient quantities to cause decedent's mesothelioma, and that the mesothelioma
was caused at least in part by the exposure with employer.  Thus, even if decedent
had not been exposed at NASA, the exposure at employer, alone, would be sufficient
to establish its liability.  As in Black, this case does not present the
facts wherein the decedent's disease and death resulted solely from exposure
at a non-covered employer.

     Employer next contends that claimant will not endure hardship if employer is
absolved of liability because claimant has other remedies, namely the FECA, as
decedent was a federal employee at NASA, or under the Virginia workers'
compensation law if he were not.  Again, this is answered by Black, as
discussed above.  The court stated there is no guarantee of an adequate recovery,
or of any recovery, under another compensation scheme, and Congress could not have
intended the result that injured persons within the Act's coverage go uncompensated
. Black, 717 F.2d at 1286 n.5, 16 BRBS at 17  n.5(CRT).

     Finally, employer contends that the last covered employer rule violates its
Constitutional rights to equal protection and due process of law.  Employer's
argument is that the government has no rational basis for "discriminating" against
maritime employers vis-a-vis  non-maritime  employers by assigning all liability
to the last covered employer.  The Fifth Amendment of the Constitution forbids
discrimination that is  " so unjustifiable as to be violative of due process.'"
Korineck v. General Dynamics Corp., 835 F.2d 42, 20 BRBS 63, 67 n.1 (CRT)
(2d Cir. 1987), quoting Schneider v.  Rusk, 377 U.S. 163 (1964).  The Ninth
Circuit in Cordero, 580 F.2d at 1331, 8 BRBS at 744, rejected the Fifth
Amendment challenge to the last employer rule (as among various covered employers),
holding that due process and equal protection are not offended when the last
employer is fully liable so long as the exposure with the last employer bears a
rational connection to the disability. See also National Independent Coal
Operator's Ass'n v.  Brennan, 372 F.Supp.  16 (D.D.C. 1974), aff'd, 419
U.S. 955 (1974) (similar holding under Black Lung Act). Moreover, the
interpretation of the Act challenged here furthers the purpose behind the Longshore
Act, which is to ensure a remedy to those who are injured while within its
coverage.  Employer in this case is not treated differently than other covered
employers, and there exists a rational basis for treating covered employers
differently than non-covered employers. See generally Usery v.  Turner Elkhorn 
Mining Co., 428 U.S. 1 (1976); Korineck, 835 F.2d at 42, 20 BRBS at
63(CRT); Herrington v.  Savannah Machine & Shipyard Co., 17 BRBS 194 (1985).  Thus,
employer's argument that maritime employers are situated similarly to non-maritime employers is without merit,
and its equal protection argument must fail.

     Similarly, employer's argument that its property is being taken without just compensation in violation of
its due process rights is without merit.   A regulatory statute does not violate the "Taking
Clause" merely because the statute "creates burdens for some that directly
benefits others" or "requires one person to use his or her assets for the
benefit of another." Connolly v. Pension Benefit Guaranty Corp., 475
U.S. 211, 223 (1986), citing Usery, 428 U.S. at 15-16.  For example, in
Liberty Mutual Ins. Co.  v.  Whitehouse, 868 F.Supp. 425 (D.R.I. 1994), the district court upheld the
constitutionality of a provision of the Rhode Island workers' compensation statute requiring cost-of-living
adjustments (COLA)  to workers who were totally disabled for more than 52 weeks, based on relevant factors
enunciated by the Supreme Court in Connolly.   The COLA amendment did not result
in any appropriation of the carrier's assets for the state's own use, but
from a public program to promote the common good.  This rationale applies
to the instant case.  Another Connolly factor relates to the economic
impact on the employer.  In the Rhode Island case, the court found the
impact mitigated by the fact that only totally disabled workers were
entitled to COLAs, by other amendments beneficial to employers, and by
carriers' ability to recoup the cost through the rate making process.  In
Connolly, a payment required by an employer under  the statute in
question was found mitigated by a number of provisions in that statute that
reduce any one employer's liability.  Likewise, in this case, the rationale
behind the general responsible employer rule, that all employers will be the
last a proportionate number of times, mitigates any one employer's liability
under the last covered employer rule.

     In sum, we find no merit to employer's contentions.  Employer attempts to turn
the responsible employer rule from a rule involving the assessment of liability
among employers into one governing claimant's entitlement under the Act.  This
approach was rejected long ago, see Fulks, 637 F.2d at 1012, 12 BRBS at 978,
and employer offers no persuasive argument to depart from this precedent.  The
administrative law judge's finding that employer is liable for the benefits awarded
as the last employer covered by the Act to expose decedent to injurious stimuli is
thus affirmed, as it is fully supported by law. Black, 717 F.2d at 1284-1287, 16 BRBS at 16-18(CRT); Stilley, 33 BRBS at 225-226; Hughes v.
Bethlehem Steel Corp., 17 BRBS 153 (1985).    

     Accordingly, the administrative law judge's rejection of the parties'
stipulation regarding decedent's exposure to asbestos at NASA is reversed.  In all
other respects, the administrative law judge's decision is affirmed.

     SO ORDERED.


     
                                                                   
                         ROY P. SMITH
                         Administrative Appeals Judge



                                                                   
                         JAMES F. BROWN
                         Administrative Appeals Judge



                                                                   
                         MALCOLM D. NELSON, Acting
                         Administrative Appeals Judge

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Footnotes.


1) 1See Green v. Newport News Shipbuilding & Dry Dock Co., 13 BRBS 562 (1981), vacated mem., 688 F.2d 833 (4th Cir. 1982), wherein the Fourth Circuit declined to reach the legal issue concerning the validity of the "last covered employer rule" as there were no facts in the record to show subsequent injurious exposure. Back to Text
2) 2Thus, we need not address employer's alternative contention regarding the administrative law judge's refusal to admit decedent's affidavit into evidence upon employer's motion for reconsideration. Back to Text
3) 3The last employer rule imposes full liability on the last employer to expose the employee to injurious stimuli prior to the employee's awareness that he is suffering from an occupational disease. Travelers Ins. Co. v. Cardillo, 225 F.2d 137 (2d Cir.), cert. denied, 350 U.S. 913 (1955). Back to Text
4) 4We note the recent opinion of the United States Court of Appeals for the First Circuit in Bath Iron Works Corp. v. Brown, 194 F.3d 1, 33 BRBS 162(CRT) (1st Cir. 1999), wherein the court, in dicta, was not unsympathetic to the position espoused by employer in the instant case. The court, however, decided the case on other grounds, and we note, moreover, that the court did not discuss the Ninth Circuit's decision in Black, but merely noted its contrary holding. The court did discuss Fulks, and found its reasoning sound, as in both Fulks, and the case before the court, the claimant worked for the same employer, but in both covered and uncovered employment. Back to Text

NOTE: This is an UNPUBLISHED LHCA Document.

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