METROPOLITAN STEVEDORE COMPANY, PETITIONER v. JOHN RAMBO ET AL.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
Argued April 25, 1995
Decided June 12, 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. 3-10.
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. [ METROPOLITAN STEVEDORE CO. v. RAMBO, ___ U.S. ___ (1995) , 1]
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.
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 1/2% 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 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 [ METROPOLITAN STEVEDORE CO. v. RAMBO, ___ U.S. ___ (1995) , 2] 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), [ METROPOLITAN STEVEDORE CO. v. RAMBO, ___ U.S. ___ (1995) , 3] 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. ___ (1995), and now reverse.
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.
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 (1992); Demarest v. Manspeaker, 498 U.S. 184, 190 [ METROPOLITAN STEVEDORE CO. v. RAMBO, ___ U.S. ___ (1995) , 4] (1991).
Section 22 of the Act provides the only way to modify an award once it has issued. The section states:
Our interpretation is confirmed by the language of LHWCA 2(10) and 8(c)(21). Section 2(10) defines "disability" as "incapacity because of injury to earn the wages which the employee was receiving at the time of injury in the same or any other employment." 33 U.S.C. 902(10). For certain injuries the statute creates a conclusive presumption of incapacity to earn wages and sets compensation at 66 2/3% of the claimant's actual wage for a fixed number of weeks, according to a statutory schedule. See LHWCA 8(c)(1)-(20), (22), 33 U.S.C. 908(c)(1)-20, (22). When these types of scheduled injuries occur, a claimant simply proves the relevant physical injury and compensation follows for a finite period of time. See Bath Iron Works Corp. v. Director, OWCP, 506 U.S. ___, ___, n. 4 (1993) (slip op., at 3, n. 4); Potomac Electric Power Co. v. Director, OWCP, 449 U.S. 268, 269 (1980). "In all other cases," however, the statute provides "the compensation shall be 66 2/3% per centum of the difference between the average weekly wages of the employee and the employee's wage-earning capacity thereafter in the same employment or otherwise, payable during the continuance of partial disability." LHWCA 8(c)(21), 33 U.S.C. 908(c) (21). For these non-scheduled injuries, the type at issue in this case, loss of wage-earning capacity is an element of the claimant's case, for without the statutory presumption that accompanies scheduled injuries, a claimant is not "disabled" unless he proves "incapacity because of injury to earn the wages." LHWCA 2(10), 33 U.S.C. 902(10). See Bath Iron Works, supra, at ___ (slip op., at 2-3); Potomac Electric Power Co., supra, at 269-270. These two sections make it clear that compensation, as [ METROPOLITAN STEVEDORE CO. v. RAMBO, ___ U.S. ___ (1995) , 6] an initial matter, is predicated on loss of wage-earning capacity, and that such compensation should continue only "during the continuance of partial disability," LHWCA 8(c)(21), 33 U.S.C. 908(c)(21), i.e., during the continuance of the "incapacity . . . to earn the wages," LHWCA 2(10), 33 U.S.C. 902(10). Section 22 accommodates this statutory requirement by providing for modification of an award on the ground of "a change in conditions." 33 U.S.C. 922.
Rambo's insistence on what seems to us a "`narrowly technical and impractical construction'" of this phrase, O'Keeffe, supra, at 255 (quoting Luckenbach S. S. Co. v. Norton, 106 F.2d 137, 138 (CA3 1939)), does more than disregard the plain language of 22, 2(10), and 8(c)(21). It also is inconsistent with the structure and purpose of the LHWCA. Like most other workers' compensation schemes, the LHWCA does not compensate physical injury alone but the disability produced by that injury. See LHWCA 3(a), 8, 33 U.S.C. 903(a), 908; see also 1C A. Larson, Law of Workmen's Compensation 57.11 (1994). Disability under the LHWCA, defined in terms of wage-earning capacity, LHWCA 2(10), is in essence an economic, not a medical concept. Cf. 3 Larson, supra, at 81.31(e) ("[D]isability in the compensation sense has an economic as well as a medical component"). It may be ascertained for nonscheduled injuries according to the employee's actual earnings, if they "fairly and reasonably represent his wage-earning capacity," and if they do not, then with "due regard to the nature of [the employee's] injury, the degree of physical impairment, his usual employment and any other factors or circumstances in the case which may affect his capacity to earn wages in his disabled condition, including the effect of disability as it may naturally extend into the future." LHWCA 8(h), 33 U.S.C. 908(h). The fundamental purpose of the Act is to compensate employees (or their beneficiaries) for wage-earning [ METROPOLITAN STEVEDORE CO. v. RAMBO, ___ U.S. ___ (1995) , 7] capacity lost because of injury; where that wage-earning capacity has been reduced, restored, or improved, the basis for compensation changes and the statutory scheme allows for modification.
Given that the language of 22 and the structure of the Act itself leave little doubt as to Congress' intent, any argument based on legislative history is of minimal, if any, relevance. See Connecticut Nat. Bank v. Germain, 503 U.S. 249, 254 , (1992); Ardestani v. INS, 502 U.S. 129, 136 (1991); cf. Intercounty Constr. Corp. v. Walter, 422 U.S. 1, 8 (1975) (construing ambiguity in application of 22's 1-year limitations period). In any event, we find Rambo's arguments that the legislative history provides support for his view lacking in force.
From congressional Reports accompanying amendments to 22 in 1934, 1938, and 1984, Reports suggesting Congress was unwilling to extend the 1-year limitations period in which a party may seek modification, Rambo would have us infer that Congress intended a narrow construction of other parts of 22, including the circumstances that would justify reopening an award. We rejected this very argument in Banks, 390 U.S., at 465 , and its logic continues to elude us. Congress' decision to maintain a 1-year limitations period has no apparent relevance to which changed conditions may justify modifying an award.
Rambo next contends that following McCormick S. S. Co. v. United States Employees' Compensation Comm'n, 64 F.2d 84 (CA9 1933), the Courts of Appeals unanimously held that "change in conditions" refers only to changes in physical conditions, so Congress's reenactment of the phrase "change in conditions" when it amended other parts of 22 as late as 1984 must be understood to endorse that approach. We have often relied on Congress's "reenact[ment of] statutory language [ METROPOLITAN STEVEDORE CO. v. RAMBO, ___ U.S. ___ (1995) , 8] that has been given a consistent judicial construction," Central Bank of Denver v. First Interstate Bank of Denver, 511 U.S. ___, ___ (1994) (slip op., at 21); see Pierce v. Underwood, 487 U.S. 552, 566 -567 (1988), in particular where Congress was aware of or made reference to that judicial construction, see Brown v. Gardner, 513 U.S. ___, ___ (1994); United States v. Calamaro, 354 U.S. 351, 359 (1957). The cases in the relevant period, however, were based on a misreading of McCormick, supra, which did not reject the idea that 22 included a change in wage-earning capacity, but merely expressed doubt that 22 "applies to a change in earnings due to economic conditions," 64 F.2d, at 85; they involved dicta not holdings, see, e.g., Pillsbury v. Alaska Packers Assn., 85 F.2d 758, 760 (CA9 1936), rev'd on other grounds, 301 U.S. 174 (1937); Burley Welding Works, Inc. v. Lawson, 141 F.2d 964, 966 (1944); General Dynamics Corp. v. Director, OWCP, 673 F.2d 23, 25, n. 6 (CA1 1982) (per curiam); and they were not uniform in their approach, see, e.g., Hole v. Miami Shipyards Corp., 640 F.2d 769, 772 (CA5 1981) ("[T]he compensation award may be modified years later to reflect . . . greater or lesser economic injury"). Under these circumstances, we are not persuaded that congressional silence in the reenactment of the phrase "change in conditions" carries any significance.
In a related argument, Rambo criticizes petitioner's reading of 22 because it sweeps away an accumulation of more than 50 years of dicta. Far from counseling hesitation, however, we think this step long overdue. "[A]ge is no antidote to clear inconsistency with a statute," Brown v. Gardner, supra, at ___ (slip op., at 7), and the dictum of Pillsbury and Burley Welding Works has not even aged with integrity, see, e.g., Fleetwood v. Newport News Shipping and Dry Dock Co., 16 BRBS 282 (1984); LaFaille v. Benefits Review Board, U.S. Dept. of Labor, 884 F.2d 54, 62 (CA2 1989); Avondale Shipyards, [ METROPOLITAN STEVEDORE CO. v. RAMBO, ___ U.S. ___ (1995) , 9] Inc. v. Guidry, 967 F.2d 1039, 1042, n. 6 (CA5 1992) (dictum). Breath spent repeating dicta does not infuse it with life. The unnecessary observations of these Courts of Appeals "are neither authoritative nor persuasive." McLaren v. Fleischer, 256 U.S. 477, 482 (1921); cf. United States v. Estate of Donnelly, 397 U.S. 286, 295 (1970).
Finally, Rambo argues that including a change in wage-earning capacity as a change in conditions under 22 will flood the OWCP and the courts with litigation because parties will request modification every time an employee's wages change or the economy takes a turn in one direction or the other. Experience in the 11 years since the Benefits Review Board decided Fleetwood, supra, suggests otherwise, but that argument is, in any case, better directed at Congress or the Director in her rulemaking capacity, see LHWCA 39(a), 33 U.S.C. 939(a); Director, OWCP v. Newport News Shipbuilding & Drydock Co., 514 U.S. ___, ___ (1995) (slip op., at 12-13), than at the courts. It is also based on a misconception of the LHWCA and our holding today. We recognize only that an award in a nonscheduled-injury case may be modified where there has been a change in wage-earning capacity. A change in actual wages is controlling only when actual wages "fairly and reasonably represent . . . wage-earning capacity." LHWCA 8(h), 33 U.S. C 908(h). Otherwise, wage-earning capacity may be determined according to the many factors identified in 8(h), including "any . . . factors or circumstances in the case which may affect [the employee's] capacity to earn wages in his disabled condition, including the effect of disability as it may naturally extend into the future." This circumspect approach does not permit a change in wage-earning capacity with every variation in actual wages or transient change in the economy. There may be cases raising difficult questions as to what constitutes a [ METROPOLITAN STEVEDORE CO. v. RAMBO, ___ U.S. ___ (1995) , 10] change in wage-earning capacity, but we need not address them here. Rambo acquired additional, marketable skills and the ALJ, recognizing that higher wages do not necessarily prove an increase in wage-earning capacity, took care to account for inflation and risk of job loss in evaluating Rambo's new "wage-earning capacity in an open labor market under normal employment conditions." App. 66.
We hold that a disability award may be modified under 22 where there is a change in the employee's wage-earning capacity, even without any change in the employee's physical condition. Because Rambo raised other arguments before the Ninth Circuit that the panel did not have the opportunity to address, we reverse and remand for proceedings consistent with this opinion.
The statutory provision that the Court construes today was enacted in 1927. Although one 1985 case reached the result the Court adopts today, Fleetwood v. Newport News Shipbuilding & Dry Dock Co., 776 F.2d 1225 (CA4), over 60 years of otherwise consistent precedent accords with respondent's interpretation of the Act. For the reasons stated by Judge Warriner in his dissent in Fleetwood, I would not change this settled view of the law without an appropriate directive from Congress. Judge Warriner correctly observed: