Roberts v Sealand and the History of the LHWCA

Awards and the Supreme Court – Roberts on its first anniversary.  The history of disfigurement.

On March 20, 2012, Justice Sotomayor delivered the opinion of the Court in Roberts v. Sea-Land Services, Inc.   Whatever we may think of the result of the case, the reasoning – to which eight justices gave their assent – is hardly what one might have hoped.  The question is the meaning of a word: “awarded”, as in “newly awarded compensation”.  The opinion decides that in section 6(c) of the Longshore and Harbor Workers' Compensation Act, at least, it means: “first becomes disabled”.  One of the Court’s examples seems to me historically inaccurate, and indeed, seems to suggest the opposite of its views.

 Lord Mansfield once remarked: “Most of the disputes of the world arise from words.” Morgan v. Jones (1773).  An older adage, “Radix malorum est cupiditas” reminds us that most cases are about money.  And so it is with this case.

Injured workers under the Longshore and Harbor Workers' Compensation Act are entitled to two thirds of their average weekly wage until they reach maximum medical improvement.  The average weekly wage is calculated at the time of their disability – which is the time they can no longer earn wages.  This compensation rate is limited further, for successful workers, who earn high wages.  The Act discriminates against high wage earners by limiting their compensation rate, (“shall not exceed”), to a maximum of two hundred per cent of the national average weekly wage for the fiscal year in which the worker is “newly awarded compensation”.  Mr. Roberts’s average weekly wage was $2,853.08.  His compensation rate would be $1,902.05.  The maximum rate in 2002, the fiscal year of his disability, was $966.08.  That is, his compensation was statutorily reduced to the level of a worker earning $1,494.12 a week.  For the privilege of being a successful worker, he takes a notional pay cut of $1,358.96 resulting in an actual compensation cut of $935.97, nearly 50%.  However, the statute does not apply the national average weekly at the time of disability.  It applies it at the time the worker is “newly awarded compensation”.  Mr. Roberts was duly paid compensation at the $966.08 rate by his employer “without an award”, to use the language of the statute, §914(a).  The employer later contested the case, and after it lost at trial before an Administrative Law Judge, Mr. Roberts was awarded compensation in fiscal year 2007, (when the maximum rate was $1,114.44), at the rate of fiscal year 2002. 

Mr. Roberts felt that since he was newly awarded compensation in fiscal year 2007, he was entitled to the maximum rate of that year.  But the Administrative Law Judge did not agree, and nor did the Benefits Review Board.  The Administrative Law Judge and the Board were bound by the Board’s previous decision in Reposky.  So the case went to the Ninth Circuit, which affirmed the Board’s decision.  The Supreme Court granted certiorari to resolve a split in the Circuits, a split that became a little wider when the Eleventh Circuit decided the Boroski case.

One of the arguments that “award” does not mean “formal order” derived from section 8(c)(20) of the Act as amended.  The Ninth Circuit wrote:

“In other sections, however, the LHWCA uses the terms “award” and “awarded” to refer to an employee’s entitlement to compensation under the Act, even in the absence of a formal order. Section 8, for example, defines “awards” for specific types of injuries. See, e.g., id. § 908(c)(22) (defining the “award” for loss of certain body parts). Section 8(c)(20) also provides that “[p]roper and equitable compensation not to exceed $7,500 shall be awarded for serious disfigurement of the face, head, or neck or of other normally exposed areas likely to handicap the employee in securing or maintaining employment.” Id. § 908(c)(20) (emphasis added). By use of the term “awarded,” Congress could not have meant “assigned by formal order in the course of adjudication,” given that employers are obligated to pay such compensation regardless of whether an employee files an administrative claim. Section 908 thus uses the terms “award” and “awarded” to refer to an employee’s entitlement to compensation under the Act generally, separate and apart from any formal order of compensation.”

The Supreme Court wrote:

“For example, §908(c)(20) provides that “[p]roper and equitable compensation not to exceed $7,500 shall be awarded for serious disfigurement.” Roberts argues that§908(c)(20) “necessarily contemplates administrative action to fix the amount of the liability and direct its payment.” Reply Brief for Petitioner 11. In Roberts’ view, no disfigured employee may receive benefits without invoking the administrative claims process. That argument, however, runs counter to §908’s preface, which directs that “[c]ompensation for disability shall be paid to the employee,” and to §914(a), which requires the payment of compensation “without an award.” It is also belied by employers’ practice of paying §908(c)(20) benefits voluntarily. See, e.g., Williams-McDowell v. Newport News Shipbuilding & Dry Dock Co., No. 99–0627 etc., 2000 WL 35928576, *1 (BRB, Mar. 15, 2000) (per curiam); Evans v. Bergeron Barges, Inc., No. 98–1641, 1999 WL 35135283, *1 (BRB, Sept. 3, 1999) (per curiam). In light of the LHWCA’s interest in prompt payment and settled practice, “awarded” in §908(c)(20) can only be better read, as in§906(c), to refer to a disfigured employee’s entitlement to benefits.”

This is most interesting.  The provision for disfigurement goes back to the 1927 Act, which read, “Disfigurement: The deputy commissioner shall award proper and equitable compensation for serious facial or head disfigurement, not to exceed $3,500.” 

The section was amended in 1972.  The House Report No. 92-1441 of September 25, 1972 reads in part: “This section amends paragraph (20) of section 8(c) of the Act, which directs that an award be made for serious facial or head disfigurement.  Such an award cannot exceed $3,500.  The amendment directs that such compensation shall be awarded also for serious disfigurement of the neck, or other normally exposed areas likely to handicap the employee in securing or maintaining employment.”

With the greatest respect to the Ninth Circuit, it appears that in 1927 the term “awarded” as used in §8(c)(20) did indeed mean a formal order.  Quite possibly it was because the Deputy Commissioner had to exercise discretion in setting the amount.  Quite possibly the amendment removed the Deputy Commissioner from the section in 1972 because “Hearing Officers” were to replace Deputy Commissioners.  Certainly the House Report does not suggest that they are changing the meaning of word they had used since 1927 by moving the section to the passive voice.

The Supreme Courts remarked that: “In Roberts’ view, no disfigured employee may receive benefits without invoking the administrative claims process. That argument, however, runs counter to §908’s preface, which directs that “[c]ompensation for disability shall be paid to the employee,” and to §914(a), which requires the payment of compensation “without an award” .”  It appears to have been the view of Congress as well. 

The Court continues: “It is also belied by employers’ practice of paying §908(c)(20) benefits voluntarily”.  I search in vain for a canon of statutory construction that a word means what one party decides it will mean.