UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

NEWPORT NEWS SHIPBUILDING AND
DRY DOCK COMPANY,
Petitioner,

v.
                                                                         No. 96-2520
DAVID L. GREGORY; DIRECTOR,
OFFICE OF WORKERS' COMPENSATION
PROGRAMS, UNITED STATES
DEPARTMENT OF LABOR,
Respondents.

On Petition for Review of an Order
of the Benefits Review Board.
(95-1226)

Submitted: May 13, 1997

Decided: June 6, 1997

Before LUTTIG, MICHAEL, and MOTZ, Circuit Judges.

_________________________________________________________________

Vacated and remanded by unpublished per curiam opinion.

_________________________________________________________________

COUNSEL

James M. Mesnard, SEYFARTH, SHAW, FAIRWEATHER & GER-
ALDSON, Washington, D.C., for Petitioner. J. Davitt McAteer, Act-
ing Solicitor of Labor, Carol A. De Deo, Associate Solicitor, Janet R.
Dunlop, Luann B. Kressley, UNITED STATES DEPARTMENT OF
LABOR, Washington, D.C.; Robert J. Macbeth, Jr., RUTTER &
MONTAGNA, L.L.P., Norfolk, Virginia, for Respondents.
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

Newport News Shipbuilding & Dry Dock Company ("Newport
News") petitions for review of an order of the Department of Labor's
Benefits Review Board ("BRB"). The BRB summarily affirmed1 the
decision of an administrative law judge ("ALJ"), who granted David
L. Gregory's claim under the Longshore and Harbor Workers' Com-
pensation Act, 33 U.S.C. §§ 901 to 950 (West 1986 & Supp. 1997),
and denied Newport News' request for relief under§ 908(f) for pre-
existing disability.

Newport News states that we should remand the case because the
ALJ failed to make findings of fact and to explain his reasons for dis-
crediting evidence in the record contradictory to his findings, as
required by the Administrative Procedure Act, 5 U.S.C. 557(c)(3)(A)
(1994). We agree that a remand is necessary. Therefore, we vacate the
decision of the BRB and order it to remand this matter to the ALJ
with instructions.

Gregory filed a claim for permanent total disability benefits and
permanent partial disability benefits. He claimed disability beginning
March 4, 1992, due to a work-related back injury sustained on
November 8, 1989. The ALJ determined that Gregory was perma-
nently partially disabled, that he was precluded from lifting more than
_________________________________________________________________
1 The BRB never addressed the merits of the appeal. On September 12,
1996, the BRB sent the parties a notice stating that pursuant to the provi-
sions of Public Law Number 104-134, enacted on April 26, 1996, all
appeals to the BRB relating to claims under the Act were deemed to have
been affirmed if the case had been pending before the BRB for one year
by September 12, 1996. Because Gregory's appeal met these criteria, the
BRB informed the parties that the ALJ's decision had been effectively
affirmed by the BRB on September 12, 1996, for purposes of their rights
to obtain review in this court.

                    2
twenty pounds, and that he was required to limit repetitive bending,
lifting, stooping, ladder climbing, or working overhead. The ALJ
found that such limitations prevented Gregory from performing his
former employment as a painter/sandblaster. In so finding, the ALJ
stated that he found "credible and convincing" the reports of Dr.
Newby, Dr. Williamson, Dr. Porter and Dr. Blasdell. Finally, the ALJ
summarily denied § 908(f) relief, finding that Newport News' evi-
dence regarding pre-existing injury was "unconvincing."

The evidence in the record consists of numerous medical reports.
Dr. John Bobbitt, a physician at the shipyard, examined claimant on
November 8, 1989, and diagnosed an "acute L-S[lumbosacral]
strain." Gregory was then treated by his family doctor, James Newby.
On January 8, 1990, he was returned to work by Newby with a rec-
ommendation for three weeks of light duty consisting of no lifting
over twenty pounds.

Gregory returned to work on January 8, but experienced recurrent
pain and was sent home by the shipyard's medical clinic on January
9. Gregory returned on January 12 and was again sent home on Janu-
ary 16. The shipyard physician then referred Gregory to Dr. Sterling
Williamson, an orthopaedic specialist. Based on an examination and
the results of an MRI, Williamson diagnosed a "focal herniation" and
referred Gregory to Dr. I. Stanley Porter, an orthopaedic surgeon.

Porter referred Gregory to a physical therapist, Patty Healy-
Osborne, for a physical capacities evaluation. Healy-Osborne cleared
Gregory for light duty work after finding him able to lift up to twenty
pounds. She also suggested limiting Gregory's bending, stooping,
crawling, twisting, ladder climbing, and overhead working. However,
Healy-Osborne noted that Gregory was not giving sufficient effort in
the program and that he consciously tried to limit his actual ability.
On July 2, based on this evaluation and his own examinations, Porter
found Gregory able to return to light-duty work with restrictions com-
mensurate with the suggestions of Healy-Osborne. In response to an
inquiry by the shipyard's doctor, Porter noted that Gregory's problem
was likely permanent.

On July 27, 1990, Gregory was examined by Dr. Robert Neff,
another colleague of Williamson's. Neff found that Gregory was

                    3
exaggerating his pain response and engaging in voluntary limitation
of motion on exam. When Gregory continued to insist that he was dis-
abled from working, Bobbitt referred him to Dr. Steven Blasdell, a
orthopaedic surgeon, on December 12, 1991. Blasdell directed a com-
prehensive isodynamic back test, which demonstrated ten abnormal
indicators and multiple parameters indicating that Gregory's pur-
ported back pain was "non-physiological." Nonetheless, Blasdell con-
cluded that Gregory suffered from "moderate back dysfunction," and
he prescribed a course of work hardening. Blasdell placed no restric-
tions on Gregory and opined that he was able to return to his work
at the shipyard. Gregory was eventually discharged from the work
hardening program.2

Williamson performed another examination on September 23,
1993, after he obtained and reviewed a more recent MRI scan. Wil-
liamson noted a discrepancy between his own physical examination
and observations and Gregory's subjective complaints and voluntary
limitations of motion. Williamson concluded that Gregory could
return to work where lifting of no more than fifty pounds was
required. Williamson testified that the lifting restriction was merely
a precaution, rather than a necessary limitation, and that Gregory
could perform any work that he performed before the injury.

In support of its claim for § 908(f) relief, Newport News submitted
shipyard clinic records, noting a July 1, 1987,"low back strain" which
was treated with heat and analgesics, but which required no time off
from work or any type of limited duty. Further, the records show a
thoracic muscle strain following a June 21, 1988, employment injury.
As a result of this muscle strain, Gregory was assigned light duty for
one week. In addition, the record also contains reports of two doctors.
Dr. J. A. Harmon, the medical director of Newport News, reviewed
Gregory's clinical and medical records on October 11, 1990, and
determined that any disability suffered by Gregory was "clearly an
aggravation of . . . prior back problems." Similarly, on June 21, 1994,
_________________________________________________________________
2 It is unclear why Gregory was dismissed from the program. Gregory
contends that he was discharged because he was unable to read and sign
the appropriate forms. Newport News contends that Gregory was unco-
operative and exhibited lack of effort, self-limiting behavior, and poor
motivation.

                    4
Dr. James Hall reviewed Gregory's medical records and determined
that any permanent disability was caused by "the cumulative effect
. . . of chronic back injuries" which would constitute a serious and
chronic pre-existing condition which would cause any cautious
employer to refuse to hire Gregory for manual labor.

An ALJ's decision is statutorily required to include a discussion of
"findings and conclusions, and the reasons or basis therefor, on all the
material issues of fact, law, or discretion presented on the record." 5
U.S.C. § 557(c)(3)(A). Strict adherence to this statutorily-imposed
obligation is critical to the appellate review process. See See v. Wash-
ington Metro. Area Transit Auth., 36 F.3d 375, 384 (4th Cir. 1994).
When faced with evidence in the record contradicting his conclusion,
an ALJ must affirmatively reject the contradictory evidence and
explain his rationale for doing so. Id.

On the current record, we are unable to determine how the ALJ
reached his decision. Drs. Blasdell and Williamson, found credible by
the ALJ, stated that Gregory was exaggerating his symptoms and that
there was no medical basis for the imposition of any restrictions.
Although Williamson did suggest that Gregory not lift over fifty
pounds, such a precaution would not prevent Gregory from perform-
ing his previous employment, according to one description of Grego-
ry's positions.3

Further, the ALJ did not explain why he rejected the opinion of
Neff that Gregory was exaggerating his pain response and con-
sciously limiting his movement. This finding was supported by the
results of the 1991 back test, and the observations of Blasdell, Wil-
liamson, and Healy-Osborne.

The ALJ also found that Gregory was unable to lift over twenty
pounds, thereby relegating him to light work. Neither Williamson nor
_________________________________________________________________
3 There is some confusion in the record as to what manual labor Greg-
ory was required to perform. According to the Dictionary of Occupa-
tional Titles, sandblasting and painting are classified as medium duty
work requiring no lifting over fifty pounds. However, Gregory testified
that he was required to lift paint cans weighing approximately fifty to
sixty pounds.

                    5
Blasdell placed such restrictions on Gregory, so it is unclear whether
the ALJ considered all the relevant record evidence. The ALJ held
further that, although Gregory could work at some light labor jobs, he
could not return to his work as a painter/sandblaster. Presumably, the
ALJ found the requirements of Gregory's previous job to be beyond
Gregory's capacity. However, the ALJ did not explain how he
resolved the conflicting evidence regarding these determinations.

Regarding the § 908(f) issue, the ALJ's findings are similarly defi-
cient. Although he rejected Hall and Harmon's reports as "unconvinc-
ing," he does not explain why these doctors' opinions were
discredited. Section 908(f) limits the employer's liability for compen-
sation payments for permanent disabilities when the claimant had a
pre-existing permanent partial disability, and the disability which
exists after the work-related injury is not due solely to that injury, but
is a combination of both that injury and the existing permanent partial
disability, and is materially and substantially greater than the work
injury alone would cause. See Lawson v. Suwanee Fruit & S.S. Co.,
336 U.S. 198, 200 (1949).

The reports of Hall and Harmon may satisfy these criteria. Both
Hall and Harmon opined that Gregory's pre-existing multiple back
injuries were disabling and would have motivated an employer to dis-
miss or not to hire Gregory. The evidence also establishes that the
employer was aware of these injuries as they are contained in New-
port News' own clinic records. Finally, Hall and Harmon asserted that
Gregory's disability, to the extent he suffered from one, was the result
of no one injury, but rather the cumulative effect of his multiple pre-
existing back strains.4
_________________________________________________________________
4 Hall and Harmon's reports do not specifically state that Gregory's
ultimate disability is materially and substantially greater than a disability
caused by his 1989 injury alone would have been. See Director, OWCP
v. Newport News Shipbuilding, 8 F.3d 175, 186 n.9 (4th Cir. 1993) (evi-
dence of "combined" cause is insufficient to satisfy "materially and sub-
stantially" requirement). Nonetheless, the ALJ did not address this
standard and instead based his decision on his unexplained rejection of
Newport News' evidence of a chronic and serious pre-existing injury
which combined with the 1989 injury to cause Gregory's present disabil-
ity. See Dayton v. Consolidation Coal Co., 895 F.2d 173, 175 (4th Cir.
1990) (appellate court must confine itself to review of grounds upon
which ALJ relied in reaching his/her decision); see also Hobbs v. Clinch-
fied Coal Co., 45 F.3d 819, 822 (4th Cir. 1995) (ALJ has obligation to
explain reasons for crediting or rejecting evidence).

                     6
The ALJ has not told us why he rejected the § 908(f) evidence
favorable to Newport News in making his ruling, except to say that
he found some of it "unconvincing." Further, the ALJ specifically
found certain medical reports "credible" that contradicted his factual
findings regarding disability. A bare statement of conclusions does
not demonstrate a reasoned choice. Thus far, the ALJ has failed to
make specific findings of fact on material issues and failed to explain
his implicit rejection of certain evidence. See Cotter v. Harris, 642
F.2d 700, 706-08 (3d Cir. 1981).

While we express no opinion on the merits of Gregory's claim, we
vacate the BRB's decision, remand to the BRB, and instruct it further
to remand the case to the ALJ with directions to reweigh the evidence
and provide an adequate statement of the reasons for his findings. We
dispense with oral argument because the facts and legal contentions
are adequately presented in the materials before the court and argu-
ment would not aid the decisional process.

VACATED AND REMANDED

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