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Director, Office of Workers' Compensation Programs v. Hamm

May 19, 1997

DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, UNITED STATES DEPARTMENT OF LABOR, PETITIONER,

v.

CHARLES HAMM, JR., RESPONDENT.



Appeal from the United States District Court for the Western District of North Carolina, at Charlotte.

Robert D. Potter, Senior District Judge. (CR-92-153)

Before WILKINSON, Chief Judge, WIDENER, Circuit Judge, and DUFFY, United States District Judge for the District of South Carolina, sitting by designation.

WILKINSON, Chief Judge

Argued: April 9, 1997

Reversed by published opinion. Chief Judge Wilkinson wrote the opinion, in which Judge Widener and Judge Duffy joined.

OPINION

Respondent Charles Hamm is entitled to disability benefits for pneumoconiosis under both the federal Black Lung Benefits Act, 30 U.S.C. Section(s) 901-945, and the West Virginia workers' compensation statute, W. Va. Code Section(s) 23-1-1 to 23-6-1. The question before us is how to give proper effect to the Act, which is designed to supplement, but not duplicate, state benefits for pneumoconiosis.

Here the Benefits Review Board held that Hamm's federal benefits should be offset by only 20 percent of his total state benefits because only 20 percent of those benefits could be attributed to pneumoconiosis. The Director of the Office of Workers' Compensation Programs appeals, arguing that the Board erred in failing to aggregate Hamm's prior partial disability awards for pneumoconiosis in determining what portion of his West Virginia benefits were granted due to that condition. We agree. Properly accounting for those prior awards, 50 percent of Hamm's state disability benefits are attributable to pneumoconiosis, and his federal benefits should have been offset accordingly. We therefore reverse.

I.

Hamm receives lifetime benefits from West Virginia for total disability. Prior to obtaining his total disability award, Hamm received a number of permanent partial disability (PPD) awards from the state. In 1974, 1977, and 1988, he obtained PPD awards of 15, 15, and 20 percent respectively for pneumoconiosis. The second and third awards were based on increases in his total impairment due to pneumoconiosis to 30 percent and finally 50 percent. Hamm also received a 4 percent PPD award for injury to his left index finger in 1960 and a 5 percent award for a back injury in 1979.

In 1986, Hamm began receiving federal black lung benefits. After receiving his third pneumoconiosis award, Hamm applied for total disability benefits on the basis of that award and his pre-existing disabilities. In 1989, West Virginia granted his request in the form of a second injury life award (SILA). Under the West Virginia workers' compensation statute, a partially disabled employee is entitled to a second injury life award when the employee suffers further injury and the combination of previous injury, the "second" injury, and "factors such as age, education, and intelligence" combine to render the individual unemployable. See W. Va. Code Section(s) 23-3-1(d)(1); Cardwell v. State Workmen's Compensation Comm'r, 301 S.E.2d 790, 796 (W. Va. 1983). The term "injury" includes "occupational pneumoconiosis and any other occupational disease." W. Va. CodeSection(s) 23-4-1.

Upon learning of the SILA in 1992, the Department of Labor (DOL), following long-standing practice, aggregated Hamm's three pneumoconiosis awards and concluded that 50 percent of his total disability, and therefore his SILA, was attributable to pneumoconiosis. Pursuant to the offset provision of the Black Lung Benefits Act, DOL then reduced Hamm's prospective federal black lung payments by an amount equal to 50 percent of the SILA and sought reimbursement for previous overpayments. Hamm requested an administrative hearing. Relying on Bennett v. Director, Office of Workers' Compensation Programs, 18 Black Lung Rep. 1-48 (Ben. Rev. Bd. 1994), the administrative law judge held that because the SILA expressly referred only to Hamm's 20 percent PPD award for pneumoconiosis, the Director had only demonstrated that 20 percent of the SILA could be attributed to pneumoconiosis. The ALJ therefore determined that Hamm's federal benefits should be offset, but only by 20 percent of the second injury award. The Benefits Review Board affirmed the ALJ's decision.

The Director appeals, contending that the Board erred in failing to aggregate the three PPD awards in determining what portion of Hamm's second injury ...


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