Opinion analysis: Workers’ compensation benefit issue finally resolved

Maritime employers have received some good news, courtesy of the Court. On Tuesday, the court issued its decision in Roberts v. Sea-Land Services, Inc., a workers’ compensation case arising under the provisions of the Longshore and Harbor Workers’ Compensation Act.  This analysis will be brief, because the Court’s decision, written by Justice Sotomayor, is brief, emphatic, eminently sensible, and unanimous except for Justice Ginsburg, who concurred in part and dissented in part.

At issue in the case was the interpretation of Section 906(c) of the Longshore Act (33 U.S.C. 906(c)), and specifically the meaning of the phrase “newly awarded compensation” in Section 906(c) and within the context of the statute as a whole.  (You can read my preview of the case here and my report on the oral argument here.)

Petitioner Dana Roberts argued that an injured worker is “newly awarded compensation” when a formal compensation order is issued in his case.  By contrast, the employer and the U.S. Department of Labor (through the Director, Office of Workers’ Compensation Programs) argued that the phrase “newly awarded compensation” means the time when the injured worker is 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, and agreeing with the administrative interpretation of the U.S. Department of Labor, the Court resoundingly rejected the petitioner’s arguments, holding that “[a]n 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 petitioner’s interpretation raised other concerns as well.  For example, two workers who were paid the same weekly wage and were injured on the same day would likely end up being paid different weekly compensation benefits. And an injured worker – realizing that the maximum weekly rate increases each October 1 – could procedurally seek to delay the issuance of a compensation order in this case.  Finally, 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,” contrary to basic principles of statutory construction.

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.”

The Justices, at oral argument, had worked hard trying to “make sense” of the petitioner’s argument in light of their concerns, but were apparently unable to do so.    Thus, although the Court’s opinion acknowledged 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, the Court ultimately regarded this as an easy case:  it variously describes the petitioner’s position as “entirely superfluous,” “disrupting,” “unsound,” and  “encouraging gratuitous confrontation.”

The decision also 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 Court 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 and thereby been deprived of benefits to which they should be entitled. Rather, 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.