
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.A.            _______________            _______________________________________        was on brief for petitioner.            Richard  F. van Antwerp  with whom  Thomas R.  Kelly and Robinson,            _______________________             ________________     ________        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  a  new            capacity at Bath's shipyard in Bath, Maine, but  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  largely undisputed.  Starting            in January 1988,  Wood worked  as an insulator  at the  Bath,            Maine  shipyard,  installing  fiberglass  and  polyamide foam            materials.  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.  Bath kept him on in a            position that  did not  involve contact with  these materials            until December 1988, when Wood was terminated.                  In May 1989, Wood  filed a claim with the  Department of            Labor's  Office of  Workers'  Compensation Programs  ("OWCP")            seeking disability  benefits under  the Longshore and  Harbor            Workers' Compensation Act ("the  Act"), 33 U.S.C.    901-950.            That statute creates a familiar statutory scheme for no-fault            compensation, financed by  the employer,  where the  employee            suffers a job  related disability.  In  February 1990, before            the claim was resolved,  Wood returned to Bath as  a delivery            truck driver.                                         -2-                                         -2-                 In March 1991, an Administrative Law  Judge in the Labor            Department awarded  Wood  total disability  payments for  two            days in  December 1988, immediately  following his  dismissal            from  Bath,  33  U.S.C.     908(a),  and  partial  disability            payments  for  about  two  months  thereafter  based  on  the            difference between the $356 weekly pay Woods had earned as an            insulator  at Bath  and  his actual  wages earned  thereafter            (working  for  other employers).    33  U.S.C.    908(c)(21).            Because the new job Wood took with Bath  as a delivery driver            in February 1990 paid  more than his old insulator  wages, he            was awarded  no disability  benefits  after his  reemployment            date.                   In August  1991, Wood was again laid off by Bath, due in            part to his lack of seniority.   In October 1991, having been            advised  by  Bath's  personnel  office that  his  layoff  was            "permanent," and having  found no other suitable job in Bath,            Wood  moved to Shortsville, New York, the town in the western            part of  that  state where  he  had grown  up  and where  his            immediate family still lived.  With 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  Shortsville,  Wood  was  twice            offered reemployment by Bath.  In March 1992,  Bath contacted            Wood to offer him  a position similar to the  delivery driver                                         -3-                                         -3-            job he had held earlier.  But  when Wood went to Maine for  a            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  Wood a second time, but            he  failed  to  report  to  Bath  for  a scheduled  physical.            Although  Bath   repeated  the  offer  several   times,  Wood            declined, apparently  for several  reasons:  an  inability to            relocate soon enough  to report  for work in  March, as  Bath            required;  the fact that the job was only "guaranteed" for 30            days;  and Wood's  increasing ties to  Shortsville, including            care  of his  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  sought  new            benefits for partial disability under 33 U.S.C.   908(c)(21);            the Act  defines disability as "incapacity  because of injury            to earn the  wages which  the employee was  receiving at  the            time of  injury."   Id.    902(10).   Wood  claimed that  his                                ___            Shortsville earnings accurately reflected his present earning            capacity,  see id.     908(h),  and  asked that  his  earlier                       ___ ___            disability award be modified, as provided by 33 U.S.C.   922,            based on the gap between his pre-injury Bath  insulator wages            and his lower Shortsville earnings.                                         -4-                                         -4-                 In October 1993,  a different  Administrative Law  Judge            rendered the decision that is now before us on appeal.  As to            the period between August  1991 and March 1993, the  ALJ held            that Bath had failed  to show that Wood's actual  earnings in            Shortsville underrepresented  his earning capacity.  He ruled            that Wood  was therefore entitled to  disability payments for            that  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  found that in February  and March            1993  Bath had made Wood  a bona fide  reemployment job offer                                        _________            that would  have paid more  than Wood's pre-injury  wage, and            that  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  was not impaired            as a result  of his  disability.  Wood's  testimony had  made            clear,  said the ALJ, that  Wood would not  have accepted the            Bath job  even if  it had been  offered as  a permanent  one.            Accordingly, Wood's  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,   101(d), 110 Stat. 1321-                                         -5-                                         -5-            219 (1996), stating  that the decision  was to be  considered            affirmed for  purposes of appeal to this court.  Wood filed a            motion for reconsideration which the Review Board denied.  He            then filed a  notice of appeal  to this court pursuant  to 33            U.S.C.   921(c).                 In  reviewing such  compensation  decisions, this  court            normally accepts the  ALJ's findings of  fact where they  are            supported   by  substantial   evidence,  and   reviews  legal            questions de novo.  CNA Ins. Co. v. Legrow, 935 F.2d 430, 433                      _______   ____________    ______            (1st Cir. 1991).   The  central issue in  our case,  however,            does  not neatly fit within these polar categories.  Our main            task  here is  to discern  standards--an amalgam  of law  and            policy--to   cope  with   a  recurring   problem  with   many            variations:   how earning capacity should  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.    908(c)(1)-(20),  but for unscheduled  injuries such            as  Wood's,  the Act  requires  that  the employee's  reduced            earning capacity be determined; the employer is then required            to pay  regularly two  thirds of  the difference  between the            employee's  pre-injury  wages  and  his  post-injury  reduced            earning capacity.   Id.    908(c)(21), 908(e).   Actual post-                                ___            injury  earnings  are  evidence   of  capacity  but  are  not            conclusive.  Id.   908(h).                         ___                                         -6-                                         -6-                 Wood's earnings  in Shortsville were less  than his pre-            injury wages  as a insulator at  Bath.  The  employer has the            burden  of proving  that the  claimant's earning  capacity is            greater than  his actual earnings.   Avondale Shipyards, Inc.                                                 ________________________            v. Guidry, 967  F.2d 1039,  1042-43 (5th Cir.  1992).   Here,               ______            Bath  does  not claim  that Wood  could  have earned  more in            Shortsville; but it  says that  its own offer  shows that  he            could  have exceeded his own  pre-injury wages in  Bath.  The            ALJ so found, at least implicitly, and Wood does not directly            dispute the finding.                 But  the statute itself  does not tell  us where earning                                                            _____            capacity  is to  be  measured.    The  closest  it  comes  to            addressing  the issue at all--and it is not very close--is as            follows:                      The  wage-earning  capacity   of  an   injured                 employee  in  cases  of  partial  disability  under                 subsection  (c)(21)  of   this  section  or   under                 subsection (e) of this  section shall be determined                 by  his actual  earnings  if such  actual  earnings                 fairly  and  reasonably represent  his wage-earning                 capacity:   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  usual  employment, and  any  other                 factors  or  circumstances in  the  case  which may                 affect his  capacity to earn wages  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  a  typical  problem  presented in  an  age  of            statutes;  the Act's  language does  not squarely  answer the            question  posed,  and  often  enough Congress  never  gave  a            thought to the issue.  Sometimes the responsible agency fills            in  such lacunae through regulation,  but not so  here.  Even            so,  in  the  normal   case,  the  agency's  individual  case            decisions  tend   to  mark   out  a  pattern   that  deserves            substantial  deference, see  SEC v.  Chenery Corp.,  332 U.S.                                    ___  ___     _____________            194, 202-03  (1947), and the agency's  application of general            standards to specific facts  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   the   ordinary  regulatory   statute.            Administrative authority  under the  Act has been  assumed by            the  Secretary of  Labor, 33  U.S.C.    939, delegated  to an            assistant secretary, and redelegated  in turn to the director            of  the OWCP.  20 C.F.R
