Docket Number: 10068242-2008

U.S. DEPARTMENT OF LABOR

EMPLOYMENT STANDARDS ADMINISTRATION OFFICE OF WORKERS' COMPENSATION PROGRAMS DIVISION OF ENERGY EMPLOYEES OCCUPATIONAL ILLNESS COMPENSATION FINAL ADJUDICATION BRANCH

 

Case Information

EMPLOYEE:	[Name Deleted]
CLAIMANT:	[Name Deleted]
FILE NUMBER:	[Number Deleted]
DOCKET NUMBER:	10068242-2008
DECISION DATE:	July 25, 2008

 

ORDER GRANTING REQUEST FOR RECONSIDERATION
AND FINAL DECISION

The Final Adjudication Branch (FAB) hereby grants the employee’s timely request for reconsideration of its June 6, 2008 final decision, pursuant to 20 C.F.R. § 30.319(c) (2008), and issues this new final decision concerning the employee’s claim under Part E of the Energy Employees Occupational Illness Compensation Program Act of 2000, as amended (EEOICPA), 42 U.S.C. § 7384 et seq. For the reasons stated below, the employee’s claim under Part E for the covered illness of asbestosis is accepted for the payment of medical benefits. However, a “surplus” in the amount of $74,416.46 must be absorbed before any Part E benefits may actually be paid to or on behalf of the employee. A determination as to whether the employee is entitled to any compensation for potential wage-loss and/or impairment benefits under Part E due to his covered illness of asbestosis is deferred at this time.

STATEMENT OF THE CASE

On August 13, 2007, the employee filed a Form EE-1 claiming benefits under Part E of EEOICPA and alleged that he had contracted “asbestos related lung disease” due to his employment as an electrician at the Y-12 Plant and K-25 Plant in Oak Ridge, Tennessee from 1977 to 1995. The employee also alleged that he was exposed to asbestos, radiation and toxic chemicals while working at those two facilities. Using the Oak Ridge Institute for Science and Education database, the Savannah River Resource Center verified that the employee had worked at the K-25 Plant from October 31, 1977 to August 28, 1981, and at the Y-12 Plant from August 22, 1983 to March 4, 1991. On his Form EE-1, the employee further indicated that he had filed a tort suit and a state workers’ compensation claim related to his claimed illness, and that he had received settlements or other awards.

In support of his claim, the employee submitted pulmonary function and x-ray studies and a July 27, 2005 report from Dr. Ronald R. Cherry, a Board-certified pulmonary specialist. In that report, Dr. Cherry related the employee’s belief that he had mild asthma, noted that he had smoked about one quarter pack of cigarettes a day for 10 years before he quit at age 35, and diagnosed “asbestosis” based on the results of his laboratory studies. In a follow-up note dated August 3, 2005, Dr. Cherry repeated his diagnosis of “asbestosis,” causally related that one illness to the employee’s work-related exposure to asbestos dust, and opined that the employee had a 17% permanent impairment of the whole person using the Fifth Edition of the American Medical Association’s Guides to the Evaluation of Permanent Impairment.

In a signed statement dated September 18, 2007, the employee confirmed that he and his wife had filed a tort suit for damages due to his alleged asbestos exposure in the Circuit Court for Knox County, Tennessee; he also noted that the suit was still pending and that they had received joint settlement payments as of that date amounting to $6,339.50, less attorneys fees of $2,113.14 and court costs of $708.62.[1] The employee also confirmed that he had received a settlement of his claim for state workers’ compensation benefits[2] in the amount of $91,104.02, less attorney fees of $18,220.80 and $1,281.50 of expenses, and asserted that this payment was for “the claimed condition of asbestos related lung disease and any non-malignant respiratory injury (asthma).”

Accompanying the employee’s statement was a copy of the short-form complaint against 14 defendants that he and his wife had filed in the tort suit, a settlement sheet showing that their law firm had received seven separate payments as of September 11, 2007, and an itemized list of court costs from that litigation. Also accompanying the above-noted statement was a certified copy of the March 10, 2006 “Order Approving Compromised Settlement of Workers’ Compensation Claim,” signed by Judge Donald R. Elledge of the Circuit Court for Anderson County, Tennessee, that settled the employee’s state workers’ compensation claim against his employer, and a list of expenses from that proceeding. In his March 10, 2006 Order, the Judge found that the employee had contracted “asbestos-related lung disease as a result of occupational exposure to asbestos,” and decreed that payment of $91,104.02 would exonerate the employer “from any and all further liability with regard to [state workers’ compensation] benefits which may be claimed by the [employee] or growing out of any injuries that have resulted, or may hereafter result, to [the employee] in reference to the claimed asbestos-related lung disease and any non-malignant respiratory injury. . . .”

On December 12, 2007, the Jacksonville district office issued a recommended decision to accept the employee’s Part E claim for asbestosis and to pay him medical benefits, once a combined surplus due to his receipt of payments from his tort suit and his state workers’ compensation claim in the amount of $74,416.46 was absorbed.[3] By letter postmarked on January 29, 2008, the employee’s representative filed an objection to the recommended decision and requested a review of the written record of the claim. In her submission, the employee’s representative objected to the coordination of the employee’s Part E benefits with the proceeds of the settlement of his state workers’ compensation claim, which had accounted for $71,601.72 of the $74,416.46 “surplus” found by the district office. She alleged that the employee’s settlement was “for the claimed conditions of both asbestos lung disease and any non-malignant respiratory injury” (emphasis in original) based on the “Order Approving Compromised Settlement of Workers’ Compensation Claim,” and further alleged that the employee had been diagnosed with “asthma, a non-malignant lung injury. . . .” Given these allegations, the representative argued that the recommendation to coordinate was improper because the employee “received his state workers’ compensation for a covered and non-covered illness. . . .”

As noted above, FAB issued a June 6, 2008 final decision in which it confirmed the district office’s recommendations to accept the employee’s claim for the covered illness of “asbestosis” and awarded the employee medical benefits for his accepted illness, after the combined surplus of $74,416.46 was absorbed. However, on June 30, FAB received a timely request that it reconsider its June 6, 2008 decision from the employee’s representative.[4] In her request, the representative alleged that the employee had received state workers’ compensation benefits for both his covered illness of “asbestos related lung disease and any non-malignant respiratory injury (asthma and COPD). . . .” In support of her most recent allegation, the representative submitted office notes and accompanying consultation reports dated February 26, 2004, June 30, 2004, October 29, 2004, February 28, 2005, August 22, 2005, May 1, 2006 and April 28, 2008 by Dr. Richard M. Gaddis, the employee’s attending osteopath. In his office notes, Dr. Gaddis diagnosed flare-ups of both asthma and COPD due to either burning wood in a wood stove and paint fumes; however, Dr. Gaddis did not causally relate either of these two medical conditions to the employee’s work-related exposure to asbestos at the K-25 and Y-12 Plants.

After considering the recommended decision, the timely objections to the recommended decision, the evidence submitted in support of the timely request for reconsideration and all of the evidence in the case file, FAB hereby makes the following:

FINDINGS OF FACT

1. The employee filed a claim for benefits under Part E of EEOICPA on August 13, 2007, and alleged that he had contracted “asbestos related lung disease” due to his employment.

2. The employee was employed as a DOE contractor employee at two DOE facilities, the K-25 and Y-12 Plants in Oak Ridge, Tennessee, from October 31, 1977 through August 28, 1981, and from August 22, 1983 through March 4, 1991, respectively. This is more than 250 days of covered employment, during which the potential for asbestos exposure existed.

3. The medical evidence of record establishes that the employee was first diagnosed with asbestosis due to work-related asbestos exposure by Dr. Cherry in his August 3, 2005 report, more than ten years after he was first exposed to asbestos at a DOE facility.

4. The medical evidence of record also establishes that the employee was diagnosed with asthma and COPD by Dr. Gaddis. However, Dr. Gaddis did not causally relate either the employee’s asthma or his COPD to the same work-related asbestos exposure that led to the employee’s asbestosis.

5. It is at least as likely as not that the employee’s exposure to asbestos at two DOE facilities, the K-25 and Y-12 Plants in Oak Ridge, Tennessee was a significant factor in aggravating, contributing to, or causing his asbestosis.

6. It is at least as likely as not that the employee’s exposure to asbestos was related to his employment by a DOE contractor at two DOE facilities, the K-25 and Y-12 Plants in Oak Ridge, Tennessee.

7. The employee and his wife filed a tort suit in the Circuit Court for Knox County, Tennessee, alleging that he had been exposed to asbestos while at work. As of September 11, 2007, the employee and his wife have received total recoveries from seven of the defendants of $6,339.50, and have paid out allowable attorney fees of $2,113.14 and allowable costs of suit of $708.62.

8. The employee also filed a workers’ compensation complaint in the Circuit Court for Anderson County, Tennessee seeking state workers’ compensation benefits for asbestos-related lung disease. In an “Order Approving Compromised Settlement of Workers’ Compensation Claim” dated March 10, 2006, the judge in that matter found that the employee had contracted a single illness, “asbestos-related lung disease as a result of occupational exposure to asbestos,” and decreed that payment of the settlement of $91,104.02 would relieve the employer of all future liability to the employee for “the claimed asbestos-related lung disease and any non-malignant respiratory injury.” Out of this settlement, the employee paid allowable attorney fees of $18,220.80 and allowable costs of suit of $1,281.50.

Based on the above-noted findings of fact in the employee’s Part E claim, FAB hereby makes the following:

CONCLUSIONS OF LAW

The first issue in this case is whether the employee qualifies as a “covered Part E employee” under 20 C.F.R. § 30.5(p). For this case, the relevant portion of the definition of a “covered Part E employee” is “a Department of Energy contractor employee. . .who has been determined by OWCP to have contracted a covered illness. . .through exposure at a Department of Energy facility,” and the claimed “covered illness” is “asbestos-related lung disease” or asbestosis.

DEEOIC has established criteria to allow for a presumption of causation in claims filed under Part E for asbestosis. If the evidence in the claim file is sufficient to establish that the employee was diagnosed with asbestosis, that he or she worked at least 250 aggregate days at a facility where the presence of asbestos has been confirmed, and that there was a latency period of at least 10 years between the employee’s first exposure and the first diagnosis of asbestosis, DEEOIC can accept that it was at least as likely as not that the employee’s exposure to asbestos at a DOE facility was a significant factor in aggravating, contributing to or causing his or her asbestosis.[5] See Federal (EEOICPA) Procedure Manual, Chapter E-500.17 (June 2006).

As found above, the employee is a DOE contractor employee who was employed at two DOE facilities in Oak Ridge by DOE contractors and who contracted a “covered illness,” as that term is defined in § 7385s(2) of EEOICPA. The “covered illness” that the employee contracted is asbestosis due to work-related exposure to asbestos, and this is the only “covered illness” that is supported by the medical evidence in the case file. While there is medical evidence in the file that establishes that the employee has been diagnosed with both asthma and COPD, that same medical evidence does not establish that either of these two other illnesses were contracted through the same work-related exposure of the employee to asbestos (or any other toxic substance) at a DOE facility. The employee also had more than one year of covered employment with exposure to asbestos and was first diagnosed with asbestosis more than ten years following his initial exposure to asbestos at a covered DOE facility. Therefore, he qualifies as a “covered Part E employee” under § 30.5(p) of the regulations for the condition of asbestosis, and the employee’s claim for asbestosis is accepted pursuant to § 7385s-4(c) of EEOICPA. Since he is a “covered Part E employee,” the employee is entitled to medical benefits for the “covered illness” of asbestosis pursuant to § 7385s-8 of EEOICPA, retroactive to the date he filed his claim for benefits on August 13, 2007.

The second issue in this case is whether the employee’s Part E benefits must be offset. Under § 7385 of EEOICPA and 20 C.F.R. § 30.505(b), Part E benefits must be offset to reflect payments made pursuant to a final judgment or a settlement received in litigation for the same exposure for which EEOICPA benefits are payable. As found above, the employee and his wife filed a tort suit in the Circuit Court for Knox County, Tennessee, alleging that he had been exposed to asbestos at work. Through September 11, 2007, the employee and his wife have received total joint recoveries from seven of the defendants of $6,339.50, and have paid out allowable attorney fees of $2,113.14 and allowable costs of suit of $708.62. Using the “EEOICPA Part B/E Benefits Offset Worksheet,” the employee has a “surplus” recovery from his tort action of $2,814.74; this “surplus” must be absorbed from medical benefits and any lump-sum monetary benefits payable in the future before any Part E benefits can actually be paid to or on behalf of the employee.

The third issue in this case is whether the employee’s Part E benefits also must be coordinated. Under § 7385s-11 of EEOICPA and 20 C.F.R. § 30.626, Part E benefits must be coordinated with any state workers’ compensation benefits (other than medical or vocational rehabilitation benefits) that the claimant has received for the same covered illness. As found above, the employee filed a state workers’ compensation complaint in the Circuit Court for Anderson County, Tennessee seeking workers’ compensation benefits for asbestos-related lung disease. In an “Order Approving Compromised Settlement of Workers’ Compensation Claim” dated March 10, 2006, the judge in that matter found that the employee had contracted a single illness, “asbestos-related lung disease as a result of occupational exposure to asbestos,” and decreed that payment of the settlement of $91,104.02 would relieve the employer of all liability to the employee for “the claimed asbestos-related lung disease and any non-malignant respiratory injury.”

This does not mean, however, that the above settlement was for anything other than the employee’s “covered illness” of asbestosis. The scope of the settlement is important because pursuant to 20 C.F.R. § 30.626(c)(3), DEEOIC will not coordinate a claimant’s Part E benefits with his or her state workers’ compensation benefits for the same covered illness if the state workers’ compensation benefits were received “for both a covered illness and a non-covered illness arising out of and in the course of the same work-related incident.” (emphasis added) A close reading of Sections II, III, IV and V of the March 10, 2006 Order, however, reveals that the only lung disease specifically identified by the judge as resulting from work-related asbestos exposure was the same as the employee’s covered illness—asbestosis or “asbestos-related lung disease.” This conclusion is also consistent with the medical evidence in the case file, which does not establish that the employee’s asthma and COPD are causally related to the same work-related exposure to asbestos that led to the development of his asbestosis. The mere fact that the judge in the employee’s state workers’ compensation proceeding wrote that payment of $91,104.02 would exonerate the employer “from any and all further liability with regard to [state workers’ compensation] benefits which may be claimed by the [employee] or growing out of any injuries that have resulted, or may hereafter result, to [the employee] in reference to the claimed asbestos-related lung disease and any non-malignant respiratory injury” in his March 10, 2006 Order does not mean that that the employee actually contracted both “asbestos-related lung disease as a result of occupational exposure to asbestos” and some other unidentified “non-malignant respiratory injury.”[6] Therefore, coordination of the employee’s Part E benefits for the “covered illness” of asbestosis with his $91,104.02 settlement is required. Out of this settlement, the employee paid allowable attorney fees of $18,220.80 and allowable costs of suit of $1,281.50. Using the “EEOICPA/SWC Coordination of Benefits Worksheet,” the employee has received “surplus” state workers’ compensation benefits totaling $71,601.72 after deducting allowable attorney fees and costs of suit from his gross settlement. This second “surplus” must also be absorbed from the employee’s medical benefits and any lump-sum monetary benefits payable in the future before any Part E benefits can actually be paid to or on behalf of the employee.

Accordingly, the employee is entitled to medical benefits for his asbestosis, retroactive to the date he filed his EEOICPA claim on August 13, 2007. However, a total “surplus” in the amount of $74,416.46 must be absorbed pursuant to §§ 7385 and 7385s-11(a) of EEOICPA before any Part E benefits are actually payable.

Washington, DC

Kathleen M. Graber

Hearing Representative

Final Adjudication Branch