ISSUE: 2013

Jack_crop 300dpiThis time last year I observed that, “2012 was an interesting year for those who follow jurisprudence under the Longshore Act.  Several cases were decided at the U.S. Supreme Court, several old questions received presumably final answers, and several perennial issues received new attention.”

I discussed the U.S. Supreme Court decisions in:

1)       Pacific Operators Offshore, LLP v. Valladolid, (1/12) – an Outer Continental Shelf Lands Act (OCSLA) case in which the Court ruled that an injury does not actually have to occur on the outer continental shelf of the U.S. (OCS) to be covered by the OCSLA.  The injury can occur anywhere.  The test for coverage is that there must be a substantial nexus between the injury and the employer’s extractive operations on the OCS.

2)      Dana Roberts v. Sea-Land Services, Inc.; Kemper Insurance Company; Director, Office of Workers’ Compensation Programs, (3/12) – in which the Court decided that the phrase “newly awarded compensation” in section 6(c) of the Longshore Act means the time at which the injured worker is first entitled to compensation rather than the date of a formal compensation order.  The distinction is important because the date that benefits are “newly awarded” determines the applicable maximum weekly benefit rate.

3)      Fane Lozman v. The City of Riviera Beach FL, (oral argument 10/12, decision 01/13) – in which the Court devised a new vessel status test based on whether or not, in the eyes of a reasonable observer, the floating structure is practically designed or capable of serving as a means of transportation for people or things over water.

I also mentioned several important Federal Circuit Courts of Appeals’ decisions:

1)       Keller Foundation/Case Foundation, et al. v. Joseph Tracy, et al., (09/12) – in which the Ninth Circuit held that foreign territorial waters and their adjoining ports and land areas are not “navigable waters of the United States” as that phrase is used in the Longshore Act.

2)      Price v. Stevedoring Services of America, Inc., (09/12) – in which the Ninth Circuit held that interest on past due compensation under the Longshore Act should be calculated on a compound rather than on a simple basis, and that the U.S. Department of Labor’s Benefits Review Board is no longer due so called Chevron level deference in the Ninth Circuit.

3)      Bernard D. Boroski v. Dyncorp International; Insurance Company of the State of Pennsylvania/AIG Worldsource; Director, Office of Workers’ Compensation Programs, (10/12) – in which the Eleventh Circuit, following the Supreme Court’s holding in the Roberts decision, held that the phrase “currently receiving” in section 6(c) has the same meaning as “newly awarded” i.e., based on the date of first entitlement.

4)      Ceres Gulf, Inc. v. Director, Office of Workers’ Compensation Programs; Norris Plaisance, Sr., (06/12) – in which the Fifth Circuit issued an employer friendly decision in a hearing loss case, dealing with the Aggravation Rule, the evidentiary burden for rebutting the Section 20(a) presumption of causation, and the admissibility and evaluation of expert medical testimony.

The year 2013 has not been quite as “interesting” with regard to high profile Longshore Act cases.  There was nothing at the U.S. Supreme Court; there were, however, some noteworthy cases.  For example,

1)       Gary D. Schwirse v. Director, Office of Workers’ Compensation Programs; Marine Terminals Corporation; Signal Mutual Indemnity Association, Ltd.; and ILWU-PMA Welfare Plan, (7/13) – this was a fascinating case coming out of the Ninth Circuit involving the section 3(c) defense and the section 20(c) presumption, and a very unconventional theory of causation proposed by the claimant.

Section 3(c) (33 U.S.C. 903(c)) states, “No compensation shall be payable if the injury was occasioned solely by the intoxication of the employee ….”

Section 20(c) (33 U.S.C. 920(c)) provides that in the absence of substantial evidence to the contrary it shall be presumed, “That the injury was not occasioned solely by the intoxication of the injured employee. “

So the injured worker has a presumption in his favor, and a high burden of proof for the employer to show sole cause.  But if the employer can offer substantial evidence rebutting the section 20(c) presumption, it has a section 3(c) defense to the claim if it can prove by a preponderance of the evidence that the injury was occasioned (caused) solely by the intoxication of the injured employee.

But the Schwirse case presented a truly unconventional twist on the issue of causation.  The injured worker fell over a railing onto a concrete surface while “relieving himself”.  At the hospital, testing revealed acute alcohol intoxication (.25 blood alcohol level (!)) and the presence of cannabis.  After two go arounds, the Administrative Law Judge found that the employer had rebutted the presumption and had established that intoxication was the sole cause of the injury and denied benefits.  The Benefits Review Board affirmed the denial.

The case went on appeal to the Ninth Circuit with the argument, as I understand it, that the intoxication may have caused the fall, but the injury was caused by landing on the concrete.  Therefore the section 3(c) defense did not apply since by the literal reading of the statute the “injury” must be occasioned solely by intoxication.

I know.  You can’t make this stuff up.

In the event, the case was ably defended, and the maritime community averted a sharp turn into some very bad law, which would have stood the whole notion of causation on its head, as it were.  The Ninth Circuit denied the claimant’s petition for review.

2)      Marine Repair Services, Inc.; Signal Mutual Indemnity Association, Ltd. v. Christopher E. Fifer; Director, Office of Workers’ Compensation Programs, (05/13) – in this Fourth Circuit case the issue was whether the employer had met its burden of showing Suitable Alternate Employment (SAE), which in this case meant evidence of jobs paying more than the claimant’s post injury job at his family’s restaurant.

The injured worker suffered injuries that prevented him from returning to his pre-injury job.  He eventually began working at his family’s restaurant, earning $20,800 per year.  The employer had presented a case for suitable alternate employment in jobs paying from $28,000 to $40,000 per year.

The Department of Labor’s Administrative Law Judge found that the job in the family restaurant constituted the worker’s wage earning capacity and awarded permanent partial disability benefits on that basis.  This was affirmed by the Benefits Review Board, which found that in making its case the employer “did not provide all of the job duties or assess the jobs’ suitability in terms of all of the claimant’s restrictions” for the higher paying jobs.

On appeal, the Court of Appeals carefully reviewed the record, including the claimant’s testimony, and found that the Administrative Law Judge had erred because he made findings of fact as to the claimant’s physical limitations which were unsupported by substantial evidence in the record, and that he had imposed an improper legal burden on the employer by requiring it to address limitations that were not supported in the evidentiary record.

The Court’s careful analysis of the record in this case rewarded the strong case presented by the employer.

3)      Joseph Petitt v. Sause Brothers; SeaBright Insurance Company; and Director, Office of Workers’ Compensation Programs, (09/13) – a Ninth Circuit case in which the issue was whether scheduled wage increases unrelated to the merits of a worker’s performance constitute an increase in the worker’s wage earning capacity or merely a general increase in wages.  The Administrative Law Judge and the Benefits Review Board had found that the pay increases were reflective of an increased wage earning capacity.

This was the first time that the Ninth Circuit had to decide whether so called “seniority” pay increases, “are more akin to a general wage increase than to a merit based raise in wages, and therefore should not be calculated into (the worker’s) wage earning capacity.”

The injured worker in this case could not return to his job as a welder, but did obtain a job as an electronics assembler.  In this job, the employer paid workers an automatic $ .25 per hour pay increase every three months up to a maximum pay rate.  The employer factored these increases into the worker’s wage earning capacity and lowered the ongoing permanent partial compensation rate accordingly.  The worker objected.

So, as a result of this decision, in the Ninth Circuit, “seniority” raises not accompanied by any increase in productivity, skill, or responsibility are not indicative of an increased wage earning capacity.

This case could have gone either way.  The increases did not reflect an increase in the claimant’s “suitability” for alternate employment, but they did increase the amount of money he was earning in actual alternate employment with that particular employer in that particular job.

I guess the difference might be that someone walking in off the street as a new hire would be paid the same starting pay that the claimant had started at, so there’s your wage earning capacity.

I’ve run out of space, so I’ll have to continue the calendar year 2013 discussion next time in Part Two.

ISSUE: U.S. Supreme Court

Maritime employers have received some good news, courtesy of the U.S. Supreme Court. On March 20, 2012, the court issued its decision in the case of Roberts v. Sea-Land Services, Inc., et al., a workers’ compensation case arising under the provisions of the Longshore and Harbor Workers’ Compensation Act.

The Court’s decision, written by Justice Sotomayor, is brief, emphatic, and eminently sensible.

This case interprets Section 906(c) of the Longshore Act (33 U.S.C. 906(c)); specifically it interprets the meaning of the phrase “newly awarded compensation” in Section 906(c) and within the context of the statute as a whole.

Petitioner Dana Roberts argued that an injured worker is “newly awarded compensation” at the time that a formal compensation order is issued in his case.

The Employer and the U.S. Department of Labor through the Director, Office of Workers’ Compensation Programs, argued that “newly awarded compensation” means first entitled to disability benefits under the self-executing provisions of the Act.

The distinction is important because the date that benefits are “awarded” determines the applicable maximum weekly benefit rate. The weekly maximum increases each October 1 under the Act’s cost of living provision. The later the date that benefits are awarded, the higher the weekly benefit will be.

In affirming the Ninth Circuit Court of Appeals, and agreeing with the administrative interpretation of the U.S. Department of Labor, the court resoundingly rejected the Petitioner’s arguments.

Held: “An employee is ‘newly awarded compensation’ when he first becomes disabled and thereby becomes statutorily entitled to benefits, no matter whether, or when, a compensation order issues on his behalf.”

At the oral argument in the case, the Justices had obviously been very concerned with the negative implications of the Petitioner’s position for employers who voluntarily complied with the payment provisions of the Act. For example, an employer who voluntarily paid benefits to an injured worker in accordance with the maximum rate in effect at the time of the injury would find that it had underpaid that worker when, and if, a compensation order were eventually to be issued in the case, retroactively establishing a higher maximum rate.

The Justices, at oral argument, had worked hard trying to “make sense” of the Petitioner’s argument in light of their concerns. The failure of the Petitioner’s argument to satisfy those concerns is reflected most forcefully in the court’s decision.

Justice Sotomayor variously describes the Petitioner’s position as “entirely superfluous”, “disrupting”, “unsound”, “encouraging gratuitous confrontation”, leading to “disparate treatment”, “arbitrary”, and “encouraging gamesmanship”. I think you get the idea.

While acknowledging that standing alone, “in a vacuum”, the language of Section 906(c) could go either way, when interpreted as a coherent part of the overall statutory scheme, there was only one way that this decision could have gone.

I will say that this was an interesting case in the sense that if the decision had gone the other way (i.e., been wrongly decided) there was the potential for a great deal of mischief. I had noted at the recap of the oral argument that, even lacking detailed knowledge of claims processing under the Longshore Act, the Justices’ concerns with the Petitioner’s argument were well placed.

For example, under the Petitioner’s interpretation two workers, injured on the same day and paid the same weekly wage, would likely end up being paid different weekly compensation benefits. The Justices recognized this potential for “disparate treatment” and rightly rejected such an interpretation.

Again, an injured worker, under the interpretation advanced by the Petitioner, realizing that the maximum weekly rate increases each October 1, could procedurally seek to delay the issuance of a compensation order in this case. The Court rightfully rejected the prospect of such “gamesmanship”.

There’s more. In the majority of cases, in which employers make voluntary payments and no compensation orders are ever issued, the Petitioner’s interpretation would render Section 906(c) “superfluous”. The Court will not construe a statute in this manner.

Especially damaging to the Petitioner’s case was the suggestion that an otherwise compliant employer would be forced to unnecessarily contrive to create a controversy in a case in an effort to force the issuance of a compensation order and establish an early maximum rate. Justice Sotomayor made it clear that the Court “will not read Section 906(c) to compel an employer to file a baseless notice of controversion” and that “construing any workers’ compensation regime to encourage gratuitous confrontation between employers and employees strikes us as unsound”.

In the interests of providing a thorough consideration of Petitioner’s arguments, the decision discusses the use of the term “award” in various sections of the statute. While acknowledging the presumption that “identical words used in different parts of the same act are intended to have the same meaning”, the decision recognizes that this presumption “readily yields whenever there is such variation in the connection in which the words are used as reasonably to warrant the conclusion that they were employed in different parts of the act with different intent.” In other words, the concerns expressed at oral argument were well founded; several statutory provisions would simply “make no sense” if “award” were to be read as proposed by the Petitioner.

So, for maritime employers a troublesome issue is resolved correctly.  The longstanding administrative practice of treating the time of injury as the relevant date for determining compensation benefits is affirmed and a host of intended and unintended consequences has been avoided.

One final thought: injured workers have by no means “lost” this case; injured workers have not been deprived of benefits to which they should be entitled. This decision leaves injured workers right where they have been since 1972, when amendments to the Longshore Act added the annual cost of living provision.  This decision simply confirms that disability benefits under the Longshore Act have been, and will continue to be, paid at the correct rate.

ISSUE: Outer Continental Shelf Lands Act and the U.S. Supreme Court

On January 11, 2012, the U.S. Supreme Court heard oral arguments in the case of Roberts v. Sea-Land Services, Inc. et al.  I’ve discussed the Roberts case here on the AEU Longshore blog on December 21, 2011, and on January 11, 2012, and I provided an Argument Preview and an Argument Recap that are currently posted on SCOTUSblog.com.

Remarkably, on the same day, January 11, 2012, the Supreme Court issued its decision in another Longshore case (as extended by the Outer Continental Shelf Lands Act (OCSLA)), Pacific Operators Offshore LLP v. Valladolid.  I discussed the Valladolid case on the AEU Longshore blog on March 14, 2011, while the case was still at the Ninth Circuit.

In Valladolid the issue at the Supreme Court was whether Section 1333(b) of the OCSLA contains a situs of injury provision.  In other words, must an injury occur on the outer continental shelf (OCS) to be covered.

Section 1333(b) provides:

“With respect to disability or death of an employee resulting from any injury occurring as the result of operations conducted on the outer Continental Shelf for the purpose of exploring for, developing, removing, or transporting by pipeline the natural resources, or involving rights to the natural resources, of the subsoil and seabed of the outer Continental Shelf, compensation shall be payable under the provisions of the (Longshore Act)”

Looking at this “result of operations” language, the U.S. Court of Appeals for the Fifth Circuit interpreted it narrowly to mean that to be covered under OCSLA an injury must occur on an OCS platform or the waters above the OCS (Mills v. Director, Office of Workers’ Compensation Programs, 877 F. 2nd 356 (5th Cir. 1989)).

Looking at the same language, the U.S. Court of Appeals for the Third Circuit interpreted it broadly to mean that the OCSLA covers all injuries that would not have occurred “but for” operations on the OCS (Curtis v. Shclumberger Offshore Service, Inc., 849 F. 2nd 805 (3rd Cir. 1988)).

Most recently, the U.S. Court of Appeals for the Ninth Circuit read the same language somewhere in the middle, holding that a claimant must establish a “substantial nexus between the injury and extractive operations on the shelf.”  The claimant in Valladolid, although he spent most of his working time on the OCS, was fatally injured working at his employer’s onshore facility.

This conflict among the circuits prompted the Supreme Court to grant Pacific Operators’ petition for review. 

History of this case – The U.S. Department of Labor’s Benefits Review Board (BRB) had affirmed the decision of an Administrative Law Judge (ALJ) denying survivor’s benefits based on the Mills (Fifth Circuit) situs of injury interpretation.  On appeal, the Ninth Circuit reversed and remanded the case to the Board for a reevaluation of the facts of the case using the Ninth Circuit’s “substantial nexus” test.  It is this action by the Ninth Circuit that the Supreme Court has now affirmed.  Thus, the remand to the BRB is back in process.

Aside from establishing that there is no situs of injury test in the OCSLA, thus rejecting the Fifth Circuit’s approach, and ruling out the Third Circuit’s “but for” test, the Supreme Court hasn’t helped much in interpreting the new “substantial nexus” test.  In fact, the Supreme Court concedes that the test “may not be the easiest to administer”.  The Court found that the test, “best reflects the text of Section 1333(b), which establishes neither a situs of injury nor a “but for” test.  We are confident that ALJ’s and courts will be able to determine whether an injured employee has established a significant causal link between the injury he suffered and his employer’s on-OCS extractive operations.”  The Court’s opinion, however, gives virtually no indication as to how the substantial nexus test should be applied, or even how it should be applied in the Valladolid case.

But the Court does use, in my opinion, curious language.  The Court is saying that there must be a significant causal link between the injury and the employer’s OCS operations.  The causal link is not simply between the worker’s job and the employer’s OCS operations.  I don’t yet know the significance of the phrasing, but it seems to introduce elements of risk and causation into the no-fault workers’ compensation scheme.

The Solicitor General, representing the U.S. Government in this case, had suggested a different type of test for coverage, based on the Chandris test for crewmember status under the Jones Act, but the Court rejected it.  One prong of the Chandris test requires an employment connection to a vessel that is substantial in terms of both duration and nature.  Since this was rejected by the Court, and based on the above language requiring some kind of causal link between the injury and the employer’s operations, I’m not sure were we stand right now.

Justice Scalia, joined by Justice Alito, wrote a concurring opinion in which he proposes “proximate cause” as the test for coverage rather than what he terms the even “more indeterminate standard” of “substantial nexus”.  Proximate cause is a test used in tort law, and Justice Scalia prefers to borrow it in this workers’ compensation context because at least the courts have more experience applying it to facts.   

What we have, however, is “substantial nexus” as our test for OCSLA coverage.  But we do not yet have any guidance as to how it will be applied.  It’s up to the Benefits Review Board to articulate their take on the test. 

It seems certain that all employers engaged in covered activities on the OCS have now picked up shore side OCSLA exposures.  Unfortunately, we’ll have to wait for case by case interpretations to tell us how extensive this new exposure will be.

I will keep you up to date on this case, and other OCSLA cases in which the new test is applied.  And you know what I always say.  If there’s any doubt (and there’s plenty here), get coverage.

Supreme Court

Oral argument will be held today at the U.S. Supreme Court in the case of Roberts v. Sea-Land Services, Inc. et al., which I briefly mentioned here last week.  Following is a fuller discussion of the case.  If you want to read more about the case, I also have an Argument Preview posted today at SCOTUSblog.com.

 

Roberts v. Sea-Land Services, Inc., et al.

What does section 6(c) of the Longshore and Harbor Workers’ Compensation Act mean?  What maximum weekly rate applies to compensation for disability?  Have we been applying it incorrectly ever since the 1972 Amendments added a cost of living provision?  Have virtually all disabled workers at the maximum weekly rate been underpaid? 

Do we pay the maximum in effect as of the date of first entitlement to permanent total disability (in this case 7/12/05), or do we pay the higher, later maximum as of the date of an Administrative Law Judge’s Compensation Order (in this case 10/12/06)?        

Let’s start at the beginning.

Background

The Longshore and Harbor Workers’ Compensation Act (The Act) (33 U.S.C. 901 et seq., 1927) is a federal workers’ compensation law covering land based maritime workers employed on and around the navigable waters of the United States.  In the event of a work related injury, the Act provides compensation for lost wages, medical care, vocational rehabilitation services, and survivor’s benefits.  It is administered by the U.S. Department of Labor (DOL).  Informal dispute resolution and medical management services are available at DOL district offices.  Unresolved issues, if any and when necessary, are referred for formal hearing at the DOL’s Office of Administrative Law Judges (ALJ), with appeals to DOL’s Benefits Review Board (BRB).  Appeals from BRB decisions go to the federal Courts of Appeal and ultimately to the U.S. Supreme Court.

Employers buy insurance from insurance carriers licensed by the DOL, or they obtain DOL approval to be self-insured.

Weekly benefits are paid at the rate of two-thirds of the disabled worker’s average weekly wage (AWW), established as of the date of injury. 

The weekly rate is capped at 200% of the applicable National Average Weekly Wage (NAWW), which is determined as of each October 1 by the Secretary of Labor.

According to section 6(c), weekly benefits are increased each October 1 for employees or survivors “currently receiving” compensation for permanent total disability (PTD) or related death benefits “during such period”, as well as those “newly awarded” compensation “during such period”, based on the change in the NAWW. 

Recent Changes to NAWW

 

October 1, 2001            NAWW $ 483.04           Weekly Maximum $    966.08

October 1, 2002                           498.27                                             996.54

October 1. 2003                           515.39                                          1,030.78

October 1, 2004                           523.58                                           1,047.16

October 1, 2005                           536.82                                           1,073.64

October 1, 2006                           557.22                                           1,114.44

October 1, 2007                           580.18                                           1,160.36

October 1, 2008                           600.31                                           1,200.62

October 1, 2009                           612.33                                           1,224.66

October 1, 2010                           628.42                                           1,256.84

October 1, 2011                           647.60                                           1,295.20                     

Issue

 

The question in Roberts v. Sea-Land Services, Inc., et al., 625 F.3d 1204 (9th Cir. 2010) (Docket No. 10-1399) is basic, and it is surprising that we are just now determining the correct benefit in maximum rate cases. 

This worker’s average weekly wage is so high in relation to the NAWW at all times that the issue is significant.  If, in fact, earnings in segments of the maritime industry have outpaced the NAWW to such a degree, then it is time to resolve this question.  

The Court will interpret the following language:

 

Section 906(c) – Applicability of determinations.  Determinations under subsection (b)(3) (new NAWW) with respect to a period shall apply to employees or survivors currently receiving compensation for permanent total disability or death benefits during such period, as well as those newly awarded compensation during such period (emphasis added).

So the weekly rate at which a disabled worker is paid a PTD benefit is increased each October 1 and is capped at 200% of the NAWW in effect “during the period” he is “newly awarded” benefits.  Is this the date that he first becomes entitled or is it the later date of an ALJ’s Compensation Order?   

Facts

Mr. Roberts’ date of injury is February 24, 2002.  His AWW is $2,853.08, two-thirds of which is $1,902.05, far in excess of the maximum weekly rate on the date of injury ($966.08).  Due to his high AWW, Mr. Roberts will be paid at whatever maximum rate the Court applies.

The ALJ’s Compensation Order, dated October 12, 2006, found that Mr. Roberts is entitled to:  temporary total disability (TTD) from March 11, 2002 to July 11, 2005, permanent total disability (PTD) from July 12, 2005 to October 9, 2005, and permanent partial disability (PPD) from October 10, 2005 and continuing. 

If Mr. Roberts was “newly awarded” PTD benefits during the period of his first entitlement on July 12, 2005, his benefit is $1,047.16 per week increasing to $1,073.64 on October 1, 2005, with the new NAWW and maximum.

If Mr. Roberts was “newly awarded” PTD benefits on the date of the ALJ’s Compensation Order on October 12, 2006, his weekly rate for PTD beginning back on July 12, 2005 is $ 1,114.44.  There is no increase on October 1, 2005, since he would be already above the maximum for that year based on the retroactive application of the maximum in effect on the date of the ALJ’s Order.

Note:  The time line in Mr. Roberts’ case is typical for contested cases.  Following his date of injury on February 24, 2002, his employer voluntarily paid benefits up until May 18, 2005, when disputes arose and the employer ceased payments.  The case was referred to an ALJ and a formal hearing was held in January 2006 followed by the ALJ’s Compensation Order dated October 12, 2006. 

Entitlement Determined by Ninth Circuit 

Administrative Law Judge Order                       BRB                 Ninth Circuit

 

TTD 03/11/02-07/11/05 – $   966.08/wk         affirmed            affirmed

PTD 07/12/05-09/30/05 – $   966.08/wk         affirmed            $1,047.16/wk

PTD 10/01/05-10/09/05 – $1,073.64/wk         affirmed            affirmed

PPD 10/10/05- cont.      –  $   966.08/wk         affirmed            affirmed 

Entitlement Claimed by Mr. Roberts

 

TTD 03/11/02-07/11/05    $   966.08/wk

PTD 07/12/05-09/30/05    $1,114.44/wk

PTD 10/01/05-10/09/05    $1,114.44/wk

PPD 10/10/05-cont.           $   966.08/wk       

Reminder:  the rates for TTD and PPD are subject to the maximum on the date of injury, which is $966.08, and are not increased annually.

Note that the Ninth Circuit partially reversed the BRB and increased Mr. Roberts’ rate to $1,047.16, the then current maximum on July 12, 2005, the date that he was first entitled to PTD.  But the Ninth Circuit and the Benefits Review Board both agree that Mr. Roberts was “newly awarded” PTD benefits on the date that he first became entitled to those benefits, and not as of the date of the ALJ’s Compensation Order.  Mr. Roberts wants the date of the Compensation Order to control the applicable maximum.

The amount at stake in this case is only $830.99, since Mr. Roberts’ entitlement changed from PTD to PPD on October 10, 2005, after only 3 months of PTD.  (PPD benefits based on a loss of wage earning capacity are paid at two-thirds of the difference between the worker’s AWW and his residual wage earning capacity, are capped at the maximum on the date of injury, and are not subject to annual increases.)  In the typical case, however, PTD benefits are paid for life and the difference per week based on a higher maximum rate each week for each affected disabled worker, multiplied in each case by life expectancy, would add up significantly for maritime employers.

Circuit Conflict

After the petition for writ of certiorari was granted on September 27, 2011, the Eleventh Circuit published Bernard D. Boroski v. Dyncorp International, et al., a Defense Base Act case (the Defense Base Act is an extension of the Longshore and Harbor Workers’ Compensation Act which incorporates the relevant statutory provisions).  The Eleventh Circuit reached conclusions opposite to those of the Ninth Circuit in Roberts.

Although the Eleventh Circuit viewed the statutory language as “clear and express” and based its decision on a plain reading of the terms, it conducted an elaborate forty one page analysis and concluded that the Ninth Circuit, the BRB, and the DOL have all been reading the clear and express language of section 6(c) incorrectly.  In the opinion of the Eleventh Circuit, “newly awarded compensation” occurs at the time of the Compensation Order.

The Ninth Circuit acknowledged the inconsistent use of the term “award” in the Act and interpreted it within the overall context of the statute.  It issued a 6 page decision: “newly awarded compensation in section 6 means newly entitled to compensation”. 

There is also a Fifth Circuit case that supports Mr. Roberts’ position, but the Ninth Circuit and the BRB marginalized it as lacking pertinent analysis (Lovett R. Wilkerson v. Ingalls Shipbuilding, Inc. and Director, Office of Workers’ Compensation Programs, 125 F.3d 904 (5th Cir. 1997)).

Discussion

The Act does not define “award” for purposes of section 906(c), and the term does not have a consistent meaning throughout the Act. 

For example, section 914(f), establishing a penalty for late payment of compensation, uses the term “award” to mean a Compensation Order. 

On the other hand, section 908, in discussing the different types of disability, uses “award” to mean entitlement, with or without a Compensation Order.  Similarly, section 910(h)(1) discussing the annual increase uses “awarded” as equivalent to “entitled to”.  Section 933(b), seemingly anticipating this issue, specifies that “award”, for purposes of that section only, means Compensation Order.

There are additional examples both ways.

Mr. Roberts wants to be paid retroactively the maximum weekly rate that applied on the date that the Compensation Order was eventually issued in his case.  It does not help his case that his meaning of “award” will result in workers who are injured on the same day, even with the same AWW, being paid at different rates, based on the fortuitous date that a Compensation Order is issued in each case.  It could also lead to the spectacle of workers trying to delay their Compensation Orders for as long as possible, or at least until the next October 1 and its new maximum rate.  Presumably, when survivor’s benefits are ultimately “awarded” by Compensation Order, we will have still another (higher) maximum rate to apply.

Mr. Roberts’ argument adds an extra-statutory penalty whenever an employer exercises its due process rights to contest entitlement and go to a formal hearing, even though there are already existing penalties in the Act for the late payment of compensation.  Mr. Roberts will leave an employer with two poor alternatives; 1) either seek an early Compensation Order, and if the worker is not at maximum medical improvement, be stuck with a running Order for TTD, or 2) follow what Mr. Roberts concedes are “slow-moving adjudication procedures”, go to a formal hearing when the issues are ripe, and pay retroactively a higher rate based on the maximum in effect on the date of the eventual Compensation Order.

This is the Longshore Act, however, and it is interpreted liberally in the tradition of remedial statutes, and in the maritime tradition in which workers are treated as “wards of the court” even to this day.  In a close case of statutory construction, the disabled worker usually wins.  It can also be argued that if Mr. Roberts wins then employers will be motivated to resolve disputes as quickly as possible, thus promoting a primary purpose of the Act, to provide prompt payment of compensation.

The Ninth Circuit’s reasoning is rational within the statutory context and internally consistent with the dates of injury and entitlement.  The Eleventh Circuit’s decision undeniably has support in the statute and reflects the plain meaning of words, and its discussion is thorough.  This case can go either way.