Bath Iron Works Corporation v. Director, Office of Workers Compensation Programs

• Decision Date: 12 January 1993
• Docket Number: No. 91-871,91-871
• Citation: 113 S.Ct. 692,121 L.Ed.2d 619,506 U.S. 153
• Parties: BATH IRON WORKS CORPORATION, et al., Petitioners v. DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, etc., et al
• Court: U.S. Supreme Court

506 U.S. 153

113 S.Ct. 692

121 L.Ed.2d 619

BATH IRON WORKS CORPORATION, et al., Petitioners

v DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, etc., et al.

No. 91-871.

Argued Nov. 4, 1992.

Decided Jan. 12, 1993.

Syllabus ^*

Upon learning after he retired that he suffered from a work-related hearing loss, respondent Brown, a former employee of petitioner Bath Iron Works Corp., filed a timely claim for disability benefits under the Longshore and Harbor Workers' Compensation Act. In calculating Brown's benefits, the Administrative Law Judge applied a hybrid of the compensation systems set forth in §§ 8(c)(13) and 8(c)(23) of that Act, and the Benefits Review Board affirmed. Rejecting the Board's reliance on § 8(c)(23), the Court of Appeals held that hearing loss claims, whether filed by current workers or retirees, must be compensated pursuant to § 8(c)(13). Under that section, a claimant who has suffered a disabling injury of a kind specifically identified in a schedule, including hearing loss, is entitled to certain benefits regardless of whether his earning capacity had actually been impaired. In contrast, the Courts of Appeals for the Fifth and Eleventh Circuits have held that a retiree's claim for occupational hearing loss should be compensated pursuant to § 8(c)(23). Under that section, a retiree who suffers from an occupational disease that did not become disabling until after retirement—one "which does not immediately result in death or disability" in the words of the Act—receives certain benefits based on the "time of injury," which is defined as the date on which the claimant becomes aware, or reasonably should have been aware, of the relationship between the employment, the disease, and the disability. In Brown's case, as in most cases, § 8(c)(13) benefits would be more generous than § 8(c)(23) benefits.

Held: Claims for hearing loss, whether filed by current workers or retirees, are claims for a scheduled injury and must be compensated under § 8(c)(13), not § 8(c)(23). Respondent Director's undisputed characterization of occupational hearing loss as a condition that does cause immediate disability must be accepted. A worker who is exposed to excessive noise suffers the injury of such loss, which, as a scheduled injury, is presumptively disabling, simultaneously with that exposure. Thus, the loss cannot be compensated under § 8(c)(23) as "an occupational disease which does not immediately result in . . . disability." In holding that claims for occupational hearing loss should be compensated pursuant to § 8(c)(23), the Eleventh and Fifth Circuits have essentially read this key phrase out of the statute. To the extent there is any unfairness in the statutory scheme in that employers may be held liable for postretirement increases in hearing loss due to aging, they can protect themselves by giving employees audiograms at the time of retirement and thereby freezing the amount of compensable hearing loss. A lone Senator's single passing remark in the legislative history does not persuade this Court that retirees' hearing loss claims should be compensated under § 8(c)(23). Pp. ____.

942 F.2d 811 (CA1 1991), affirmed.

STEVENS, J., delivered the opinion for a unanimous Court.

Kevin M. Gillis, Portland, Me., for petitioners.

Ronald W. Lupton, Bath, Me., for respondent employee.

Christopher J. Wright, Washington, D.C., for federal respondent.

Justice STEVENS delivered the opinion of the Court.

Respondent Ernest C. Brown, a former employee of petitioner Bath Iron Works Corp., learned after he retired that he suffered from a work-related hearing loss. The parties agree that under the Longshore and Harbor Workers' Compensation Act (LHWCA or Act), 44 Stat. 1424, as amended, 33 U.S.C. § 901 et seq., respondent is entitled to disability benefits on account of his injury. They disagree, however, as to the proper method of calculating those benefits.

There are essentially three "systems" ¹ for compensating partially disabled workers under the Act, two of which are at issue in this case. The "first" system provides for compensation for partially disabled claimants who have suffered certain statutorily "scheduled" injuries, one of which is hearing loss. The "third" system provides for compensation for retirees who suffer from occupational diseases that do not become disabling until after retirement. In most, but not all, cases, benefits for scheduled injuries are more generous than those provided retirees suffering from latent occupational diseases. The question presented in this case is whether a claimant who discovers, after retirement, that he suffers from a work-related hearing loss should be compensated under the first system, because loss of hearing is a scheduled injury, or under the third system, because he did not become aware of the disabling condition until after retirement.

I

Prior to 1984, the LHWCA provided that compensation for a permanent partial disability should be determined in one of two ways. If the injury was of a kind specifically identified in the schedule set forth in § 8(c) of the Act, 33 U.S.C. §§ 908(c)(1)-(20) (1982 ed.) the injured employee was entitled to two-thirds of his average weekly wage at the time of the injury for a specific number of weeks, regardless of whether his earning capacity had actually been impaired. See Potomac Electric Power Co. v. Director, Office of Workers' Compensation Programs, 449 U.S. 268, 269-270, 101 S.Ct. 509, 510, 66 L.Ed.2d 446 (1980).² Loss of hearing was among those specified injuries.³ In all other cases, the Act authorized compensation equal to two-thirds of the difference between the employee's average weekly wage and his postinjury earning capacity. 33 U.S.C. § 908(c)(21). In those cases, unlike the scheduled-injury cases in which disability was presumed, it was necessary for the employee to prove that his injury had actually decreased his earning capacity.⁴

In early 1984, the Benefits Review Board ⁵ was confronted with a case in which the claimant had contracted asbestosis, a latent occupational disease that did not manifest itself until after his retirement. Because the disease did not qualify as a scheduled benefit, the claimant was not entitled to a presumption of disability; moreover, because it did not affect his actual earnings, he could not establish "disability" as defined in § 902(10).⁶ Therefore, the Board held, the claimant was not entitled to any compensation under the Act. Aduddell v. Owens-Corning Fiberglass, 16 BRBS 131, 134 (1984).⁷ Three weeks after the Aduddell decision, the Board followed its reasoning in a case involving a hearing loss claim filed after the claimant's retirement. Redick v. Bethlehem Steel Corp., 16 BRBS 155 (1984). Although the ALJ in Redick had made a finding of disability because "scheduled awards are conclusive presumptions of loss of wage-earning capacity and cannot be rebutted," id., at 156, the Board vacated the award of benefits, reasoning that the "voluntary retirement was prior to manifestation of the injury, and was unrelated to his hearing loss." Id., at 157.

In 1984, Congress amended the Act by adding the "third" compensation system that unquestionably provides compensation for the type of claim rejected in Aduddell and the other asbestos cases. With the 1984 Amendments, Congress authorized the payment of benefits to retirees suffering from occupational diseases that become manifest only after retirement. More precisely, a new § 10(i) addresses claims for death or disability "due to an occupational disease which does not immediately result in death or disability." 33 U.S.C. § 910(i).

As is the case under the first two compensation systems, compensation under the third system turns in large part on the "average weekly wage" used to calculate benefits. When the "time of injury"—defined as "the date on which the employee or claimant becomes aware, or . . . should have been aware, of the relationship between the employment, the disease, and the death or disability," ibid.—is within the first year of retirement, the claimant's average weekly wage is based upon the claimant's wages just prior to retirement. § 910(d)(2)(A). When the "time of injury" is more than one year after retirement, the average weekly wage is deemed to be the national average weekly wage at that time. § 910(d)(2)(B).

Once the "average weekly wage" is determined, a claimant's benefits are calculated under § 8 of the Act. For claims in which "the average weekly wages are determined under section 910(d)(2)," that is, for retirees with claims involving "an occupational disease which does not immediately result in death or disability," 33 U.S.C. § 910(i), a new § 8(c)(23) provides that compensation shall be two-thirds of the applicable average weekly wage multiplied by the percentage of permanent impairment as determined by particular medical guides specified in the statute. 33 U.S.C. § 908(c)(23). The claimant is entitled to such benefits for the duration of the impairment. Ibid.⁸

The differences between the first and third compensation systems can result in significantly differing benefits. An award to a claimant under the schedule, i.e., the first system, is based upon the degree of loss to the scheduled body part, whereas an award under the third system is based on the extent to which the "whole body" has been impaired. In most cases, this difference makes recovery under the schedule more generous than that under the retiree provisions.⁹

II

Respondent was exposed to loud noise during his employment as a riveter and chipper at petitioner's iron works from 1939 until 1947, and again from 1950 until his retirement in 1972. In 1985 he received the results of an audiogram indicating an 82.4 percent loss of hearing. As authorized by a provision in the 1984 Amendments that is not at issue in this case,¹⁰ he then filed a timely claim for benefits.

The ALJ, following Board precedent, applied a hybrid of the first and...