515 U.S. 291 (1995), 94-820, Metropolitan Stevedore Co. v. Rambo

Docket Nº:Case No. 94-820
Citation:515 U.S. 291, 115 S.Ct. 2144, 132 L.Ed.2d 226, 63 U.S.L.W. 4548
Case Date:June 12, 1995
Court:United States Supreme Court

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515 U.S. 291 (1995)

115 S.Ct. 2144, 132 L.Ed.2d 226, 63 U.S.L.W. 4548



RAMBO et al.

Case No. 94-820

United States Supreme Court

June 12, 1995

Argued April 25, 1995



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.


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. 294-303.

(a) A narrow reading of the phrase "change in conditions" is not supported bye 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. 294-298.

(b) The legislative history also does not support a narrow construction of § 22. Congress' decision to maintain a 1-year limitations period

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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 Fleet-wood 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. 298-303.

28 F.3d 86, 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, post, p. 301.

Robert Evans Babcock argued the cause and filed briefs for petitioner.

Jeffrey P. Minear argued the cause for the federal respondent in support of petitioner under this Court's Rule12.4. With him on the briefs were Solicitor General Days, Deputy Solicitor General Kneedler, Allen H. Feldman, Nathaniel I. Spiller, and Edward D. Sieger.

Thomas J. Pierry argued the cause and filed a brief for respondent Rambo.[*]

Justice Kennedy delivered the opinion of the Court.

Section 22 of the Longshore and Harbor Workers' Compensation Act (LHWCA or Act), 44 Stat. 1437, as amended, 33 U.S.C. § 922, allows for modification of a disability award

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"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.


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 (ALJ). After Rambo and petitioner stipulated that Rambo sustained a 22 ½ % 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 66 2/3% 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 preinjury earnings, though his physical condition remained unchanged. In light

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of the increased wage-earning capacity...

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