Michael Dalton v. Maritime Services Corporation

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
MICHAEL DALTON,
Petitioner,
v.
MARITIME SERVICES CORPORATION;
SAIF CORPORATION; DIRECTOR,
OFFICE OF WORKERS’
COMPENSATION PROGRAM,
Respondents.
No. 15-70490
BRB Nos. 11-0868
14-0189
MEMORANDUM*
On Petition for Review of an Order of the
Benefits Review Board
Argued and Submitted June 6, 2017
Portland, Oregon
Before: GOULD and RAWLINSON, Circuit Judges, and BURNS,** District Judge.
Longshoreman Michael Dalton suffered severe injuries while working on a
ship for Maritime Services. He applied for permanent total disability benefits under
the Longshore and Harbor Workers’ Compensation Act, 33 U.S.C. § 901 et seq.
* This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
** The Honorable Larry A. Burns, United States District Judge for the
Southern District of California, sitting by designation.
FILED
AUG 11 2017
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS

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Although Maritime Services agreed to pay Dalton’s benefits, the parties couldn’t
agree on when Dalton became disabled and how much money he deserved. The ALJ
found that Dalton became disabled on March 4, 2004, and was entitled to
compensation based on an average weekly wage of about $560. The Benefits Review
Board affirmed, and Dalton appealed to this Court.
We review both of these issues of fact under the substantial evidence standard.
“Substantial evidence is such relevant evidence as a reasonable mind might accept
as adequate to support a conclusion.” Sharemaster v. U.S. Sec. & Exch. Comm'n,
847 F.3d 1059, 1073 (9th Cir. 2017). We agree there was substantial evidence to
support the disability date, but not the compensation award.1
Under the Longshore Act, an injured worker qualifies for permanent disability
on the date he reaches maximum medical improvement; that is, when “the injury has
healed to the full extent possible and normal and natural healing is no longer likely.”
SSA Terminals v. Carrion, 821 F.3d 1168, 1172 (9th Cir. 2016). The ALJ selected
March 4, 2004, because that’s the earliest date that a doctor performed a closing
examination and found that Dalton reached maximum improvement. The ALJ’s
1 Dalton argues that determining his disability date turns on a legal question
about when a medical appointment counts as treatment. We disagree. Determining
the disability “date is a question of fact that the ALJ determines from the medical
evidence.” Hawaii Stevedores, Inc. v. Ogawa, 608 F.3d 642, 653 (9th Cir. 2010).
Whether a medical appointment amounts to treatment is part of the factual enterprise
of reviewing the medical evidence to determine the disability date.

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finding conflicted with the opinion of Dalton’s primary care doctor who reviewed
the record seven years later and opined that Dalton reached maximum improvement
as early as February 2003. While a case could be made for other dates, we agree that
the ALJ’s reliance on the doctor’s examination identifying March 4, 2004, as the
maximum improvement date meets the substantial evidence standard. We therefore
deny this portion of Dalton’s petition.2
We conclude, however, that there wasn’t substantial evidence to support the
ALJ’s findings on the weekly wage. The Longshore Act’s overarching goal is to
compensate injured workers with a sum that “shall reasonably represent the annual
earning capacity of the injured employee.” 33 U.S.C. § 910(c). The Act compensates
injured workers with seasonal employment history by looking at “the previous
earnings of the injured employee in the employment in which he was working at the
time of the injury.” Id. The ALJ used Dalton’s two-year work history immediately
preceding his injury to calculate his weekly wage. That calculation was too limited
because one of those years was the worst in Maritime’s history and Dalton worked
substantially less than usual. The effect of using that aberrant year for half the
calculation unfairly lowered Dalton’s compensation.
2 Dalton argues the ALJ erred by applying the principle that a doctor can’t
retrospectively determine the maximum improvement date. We agree that’s not the
law. An ALJ may credit a doctor’s retrospective determination. See Hawaii, 608
F.3d at 653. But the error was harmless because the Board and ALJ relied on other
reasons for selecting the March 2004 date. Id. at 648.

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The purpose of the substantial evidence standard isn’t lost on us. We
recognize the importance of deferring to the fact-finder who’s attempting to apply a
malleable standard in the fairest way possible. But the Longshore Act imposes
another standard: it must be applied “in a way which avoids harsh and incongruous
results” and resolves all doubts in favor of the worker. Voris v. Eikel, 346 U.S. 328,
333 (1953). Determining Dalton’s lifetime benefits based largely on one of his
lowest years of earnings is the type of harsh result that’s inconsistent with the
“humanitarian nature” of the Act. Dyer v. Cenex Harvest States Coop., 563 F.3d
1044, 1049 (9th Cir. 2009). The ALJ correctly excluded Dalton’s first two years of
employment as aberrations; he should have done so with the last year as well.3
On remand, the ALJ shall recalculate Dalton’s compensation based on
earnings from March 21, 1999, through March 20, 2000.
PETITION DENIED IN PART, GRANTED IN PART, AND REMANDED.
3 Dalton argues the ALJ should have considered potential future earnings. But
using data “after the date of injury may, not must, be considered in the ALJ's
determination of an employee’s wages.” Rhine v. Stevedoring Servs. of Am., 596
F.3d 1161, 1164 (9th Cir. 2010).

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Dalton v. Maritime Services Corp., Case No. 15-70490
Rawlinson, Circuit Judge, concurring in part and dissenting in part:
I concur in that portion of the disposition upholding the determination that
Michael Dalton reached maximum medical improvement on March 4, 2004.
However, I respectfully dissent from that portion of the disposition reversing the
calculation of the weekly wage by the Administrative Law Judge (ALJ).
We review the findings of the ALJ under the substantial evidence standard.
See Rhine v. Stevedoring Svcs. of Am., 596 F.3d 1161, 1165 (9th Cir. 2010). This
standard of review “is extremely deferential to the factfinder.” Id. (citation and
internal quotation marks omitted).
Under 33 U.S.C. § 910(c), the ALJ has considerable “flexibility” in
determining the “reasonable average wage.” Rhine, 596 F.3d at 1165. The
analysis “is not meant to be strictly mathematical.” Id. So long as the ALJ
“give[s] regard to evidence of the employee’s annual earning capacity,” his
reasonable wage determination should be upheld. Id.
It is indisputable that the ALJ “g[a]ve regard to evidence of the employee’s
annual earning capacity.” Id. Indeed, the ALJ considered Dalton’s actual
earnings. The majority takes issue with the number of years considered by the
ALJ, but that is not our call to make. As we recognized in Rhine, even if the
methodology used by the ALJ “had flaws,” if “upon consideration of all available
FILED
AUG 11 2017
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS

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evidence, the ALJ concluded that [the data] represented the best estimate of
[Dalton’s] average wages,” we should defer to the ALJ’s finding. Id.
The fact that we would reach a different conclusion on the same evidence
does not justify setting the ALJ’s determination aside. Because I would deny the
petition in its entirety, I respectfully dissent from that portion of the disposition
granting the petition.

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