Metropolitan Stevedore Co. v. Rambo

• Decision Date: 12 June 1995
• Docket Number: 94820
• Citation: 515 U.S. 291,115 S.Ct. 2144,132 L.Ed.2d 226
• Parties: METROPOLITAN STEVEDORE COMPANY, Petitioner v. John RAMBO et al
• Court: U.S. Supreme Court

515 U.S. 291

115 S.Ct. 2144

132 L.Ed.2d 226

METROPOLITAN STEVEDORE COMPANY, Petitioner

v John RAMBO et al.

No. 94-820.

Supreme Court of the United States

Argued April 25, 1995.

Decided June 12, 1995.

Syllabus ^*

Respondent Rambo received a disability award under the Longshore and Harbor Workers' Compensation Act (LHWCA) for an injury he sustained while working for petitioner as a longshore frontman. Subsequently, he acquired new skills and obtained longshore work as a crane operator, earning more than three times his preinjury earnings, though his physical condition remained unchanged. Petitioner filed an application to modify the disability award under LHWCA § 22 on the ground that there had been a "change in conditions" so that Rambo was no longer disabled. An Administrative Law Judge terminated the disability payments, and the Benefits Review Board affirmed, relying on its 1984 Fleetwood decision that a change in wage-earning capacity is a change in conditions under § 22. The Court of Appeals reversed, holding that § 22 authorizes modification only where there has been a change in an employee's physical condition.

Held: A disability award may be modified under § 22 where there is a change in an employee's wage-earning capacity, even without any change in the employee's physical condition. Pp. ____.

(a) A narrow reading of the phrase "change in conditions" is not supported by the Act's language, structure, and purpose. Section 22's use of the plural "conditions" suggests that Congress did not intend to limit the bases for modifying awards to a single condition, such as an employee's physical health. Rather, under the normal or natural reading, the applicable "conditions" are those that entitled the employee to benefits in the first place, the same conditions on which continuing entitlement is predicated. This interpretation is confirmed by the language of LHWCA §§ 2(10) and 8(c)(21), which make it clear that compensation, as an initial matter, is predicated on loss of wage-earning capacity and should continue only while the incapacity to earn wages persists. Thus, disability is in essence an economic, not a medical, concept. The Act's fundamental purpose is to compensate employees for wage-earning capacity lost because of injury; where that capacity has been reduced, restored, or improved, the basis for compensation changes and modification is permitted. Pp. ____.

(b) The legislative history also does not support a narrow construction of § 22. Congress' decision to maintain a 1-year limitations period in which to seek modification does not indicate a congressional intent to limit other parts of § 22. Nor is there any evidence that when Congress reenacted the phrase "change in conditions" as late as 1984, it was endorsing prior Court of Appeals' decisions limiting the phrase to changes in physical conditions. In addition, the dicta in those cases that Rambo claims is swept away by the Court's reading of § 22 is neither authoritative nor persuasive. Finally, experience in the 11 years since Fleetwood does not suggest that the Office of Workers Compensation Programs (OWCP) and courts will be flooded with litigation arising from modification requests based on every change in an employee's wages. Such an argument is better directed at Congress or the OWCP Director than at the courts; and it is based on a misconception of the LHWCA and the instant holding, for a change in wage-earning capacity will occur with a change in actual wages only when those wages fairly and reasonably represent such capacity. Pp. ____.

28 F.3d 86 (CA9 1994), reversed and remanded.

KENNEDY, J., delivered the opinion of the Court, in which REHNQUIST, C.J., and O'CONNOR, SCALIA, SOUTER, THOMAS, GINSBURG, and BREYER, JJ., joined. STEVENS, J., filed a dissenting opinion.

Robert E. Babcock, Portland, OR, for petitioner.

Jeffrey P. Minear, Washington, DC, for federal respondent.

Thomas J. Pierry, Wilmington, CA, for respondents.

Justice KENNEDY delivered the opinion of the Court.

Section 22 of the Longshore and Harbor Workers' Compensation Act, 44 Stat. 1437, as amended, 33 U.S.C. § 922 (LHWCA), allows for modification of a disability award "on the ground of a change in conditions or because of a mistake in a determination of fact." The question in this case is whether a party may seek modification on the ground of "change in conditions" when there has been no change in the employee's physical condition but rather an increase in the employee's wage-earning capacity due to the acquisition of new skills.

I

In 1980, respondent John Rambo injured his back and leg while working as a longshore frontman for petitioner Metropolitan Stevedore Company. Rambo filed a claim with the Department of Labor that was submitted to an Administrative Law Judge. After Rambo and petitioner stipulated that Rambo sustained a 221/2% permanent partial disability and a corresponding $120.24 decrease in his $534.38 weekly wage, the ALJ, pursuant to LHWCA § 8(c)(21) awarded Rambo 662/3% of that figure, or $80.16 per week. App. 5. Because the ALJ also found that Rambo's disability was not due solely to his work-related injury and was "materially and substantially greater than that which would have resulted from the subsequent injury alone," LHWCA § 8(f)(1), 33 U.S.C. § 908(f)(1), he limited the period of petitioner's liability to pay compensation to 104 weeks. Ibid.; App. 6. Later payments were to issue from the special fund administered by respondent Director of the Office of Workers' Compensation Programs (OWCP), LHWCA § 8(f)(2), 33 U.S.C. § 908(f)(2). Employers (or their insurance carriers) contribute to the fund based on their outstanding liabilities. See LHWCA § 44(c)(2)(B), 33 U.S.C. § 944(c)(2)(B).

After the award, Rambo began attending crane school. With the new skills so acquired, he obtained longshore work as a crane operator. He also worked in his spare time as a heavy lift truck operator. Between 1985 and 1990, Rambo's average weekly wages ranged between $1,307.81 and $1,690.50, more than three times his pre-injury earnings, though his physical condition remained unchanged. In light of the increased wage-earning capacity, petitioner, which may seek modification even when the special fund has assumed responsibility for payments, see LHWCA § 22, 33 U.S.C. § 922; 20 CFR § 702.148(b) (1994), filed an application to modify the disability award under LHWCA § 22. Petitioner asserted there had been a "change in conditions" so that respondent was no longer "disabled" under the Act. The ALJ agreed that an award may be modified based on changes in the employee's wage-earning capacity, even absent a change in physical condition. After discounting wage increases due to inflation and considering petitioner's risk of job loss and other employment prospects, the ALJ concluded Rambo "no longer has a wage-earning capacity loss" and terminated his disability payments. App. 68. The Benefits Review Board affirmed, relying on Fleetwood v. Newport News Shipping & Dry Dock Co., 16 BRBS 282 (1984), aff'd, 776 F.2d 1225 (CA4 1985), which held that "change in condition[s]" means change in wage-earning capacity, as well as change in physical condition. App. 73. A panel of the Court of Appeals for the Ninth Circuit reversed. Rambo v. Director, OWCP, 28 F.3d 86 (1994). Rejecting the Fourth Circuit's approach in Fleetwood, the Ninth Circuit held that LHWCA § 22 authorizes modification of an award only where there has been a change in the claimant's physical condition. We granted certiorari to resolve this split, 513 U.S. ----, 115 S.Ct. 787, 130 L.Ed.2d 779 (1995), and now reverse.

II

The LHWCA is a comprehensive scheme to provide compensation "in respect of disability or death of an employee . . . if the disability or death results from an injury occurring upon the navigable waters of the United States." LHWCA § 3, 33 U.S.C. § 903(a). Section 22 of the Act provides for modification of awards "on the ground of a change in conditions or because of a mistake in a determination of fact." 33 U.S.C. § 922. In Rambo's view and that of the Ninth Circuit, "change in conditions" means change in physical condition and does not include changes in other conditions relevant to the initial entitlement to benefits, such as a change in wage-earning capacity. In our view, this interpretation of "change in conditions" cannot stand in the face of the language, structure, and purpose of the Act.

A.

Neither Rambo nor the Ninth Circuit has attempted to base their position on the language of the statute, where analysis in a statutory construction case ought to begin, for "when a statute speaks with clarity to an issue, judicial inquiry into the statute's meaning, in all but the most extraordinary circumstance, is finished." Estate of Cowart v. Nicklos Drilling Co., 505 U.S. 469, 475, 112 S.Ct. 2589, 2594, 120 L.Ed.2d 379 (1992); Demarest v. Manspeaker, 498 U.S. 184, 190, 111 S.Ct. 599, 603-604, 112 L.Ed.2d 608 (1991).

Section 22 of the Act provides the only way to modify an award once it has issued. The section states:

"Upon his own initiative, or upon the application of any party in interest (including an employer or carrier which has been granted relief under section 908(f) of this title), on the ground of a change in conditions or because of a mistake in a determination of fact by the deputy commissioner, the deputy commissioner may, at any time prior to one year after the date of the last payment of compensation, . . . or at any time prior to one year after the rejection of a claim, review a compensation case . . . and . . . issue a new compensation order which may terminate, continue, reinstate, increase, or decrease such compensation, or award compensation." 33 U.S.C. § 922.

On two occasions we have construed the phrase "mistake in a determination of fact" and observed that nothing in the statutory language supports attempts to limit it to particular kinds of factual errors or to cases...