Argument recap: Court grapples with statutory meaning of “award”

On January 11, the Court heard oral arguments in Roberts v. Sea-Land Services, a workers’ compensation case arising under the provisions of the Longshore and Harbor Workers’ Compensation Act.  At issue in the case is how to calculate the maximum weekly rate that applies to compensation for disability under the Act:  Is it the maximum rate in effect when the worker becomes entitled to benefits based on permanent total disability, or is it instead the higher rate that is in effect later, when the Administrative Law Judge enters a compensation order in the worker’s favor.

This is a close case of statutory construction.  In the argument preview, I reached the conclusion that this case could go either way because there is support in the statute for both positions.  Nothing conclusive occurred at oral argument to change my opinion, but without a doubt Joshua Gillelan, who argued the case on behalf of petitioner Dana Roberts, was challenged more vigorously by the Justices.

The answer to the question presented in this case depends on how the phrase “newly awarded compensation” as it appears in Section 906(c) of the Longshore Act is to be interpreted within the context of Section 906(c) and also within the statute as a whole.

The parties are in complete disagreement.  Mr. Roberts argues that the term “award” as used in Section 906(c) means “awarded by compensation order.”  By contrast, the federal government, which administers the Longshore Act through the Department of Labor, as well as Sea-Land Services, the employer, insists that the term “awarded” means “entitled to compensation” under the self-executing terms of the statute.

First up with his argument was Mr. Gillelan.  The Justices wasted no time in posing a number of sometimes sharply worded questions.

Justices Ginsburg and Scalia began by exploring the possibility that there could be some middle or common ground between the parties’ positions.  However, Mr. Gillelan, a former senior litigator at the U.S. Department of Labor’s Solicitor’s Office, held firm:  Section 906(c) of the Act provides explicitly that the applicable maximum rate is that in effect at the time that the claimant is “newly awarded compensation,” and that “award” occurs at the time that a compensation order is filed.  Congress used the term “award” in Section 906(c), and “award” means compensation order.  Considerable back and forth with Justice Scalia did not move Mr. Gillelan from this position.

There seemed to be considerable skepticism regarding that position, however, as the questioning clearly reflected discomfort on the part of the Justices with regard to several implications of the petitioner’s position.  The Justices expressed concern that the Act provides for voluntary payment to disabled employees by the employer.  In fact, the self-executing provisions for prompt, voluntary payment provide the primary purpose of the Act.  Even lacking detailed knowledge concerning the nuts and bolts of claims-handling procedures under the Longshore Act, the Justices were obviously bothered throughout Mr. Gillelan’s argument with the negative implications of his position for employers who comply with the provisions of the Act and make voluntary compensation payments at the time that the payments are due and payable without the necessity for a compensation order.

For example, the petitioner’s interpretation of the statute will result in two otherwise similarly situated employees being treated differently — such as by being paid at a different benefit rate simply because compensation orders are issued in different cases at different times.  Justice Scalia, Chief Justice Roberts, Justice Alito, and Justice Breyer took turns making the point that Mr. Roberts’s position simply did not “make sense.”  Furthermore, an employer that makes payments voluntarily, as directed by the statute, will find that it has paid at the incorrect rate, underpaying the disabled worker based on the maximum in effect at the time, if and when a compensation order eventually “awards” benefits in the case.

But Mr. Gillelan did not retreat.  He held his line that “newly awarded compensation” is the critical phrase, and in Section 906(c) it means “awarded by a compensation order.”  In his opinion, this is plain and unambiguous language.  He resourcefully worked at parrying the Justices’ concerns about the problems that could arise from his position, including disparate treatment, random dates, and the possibility of placing an employer into a bad faith position of threatening termination of benefits in an effort to force the issuance of a compensation order.  It was a possible but decidedly ambiguous measure of limited success on the attorney’s part when Justice Breyer announced, “Oh.  I feel slightly like an Abbott and Costello movie” – which, incidentally, was not the only reference to Abbott and Costello during this oral argument.

Justice Sotomayor did elicit just the barest hint of a concession from Mr. Gillelan with regard to the hypothetical situation in which the employer is in the position of trying to force the issuance of a compensation order to lock in an earlier maximum rate.  Mr. Gillelan did seem to concede that doing this by means of threatening to stop voluntary payments would be contrary to a primary purpose of the statute – namely, to encourage the prompt voluntary payment of compensation.  Justice Sotomayor concluded that it would be an odd statute that would require an employer to take this step.

Justice Kagan finally joined in with several sensible observations.  “I think that the way the argument has gone so far is that we’ve all been saying this can’t make sense, and you have been saying, as you have every right to say, yes, but this is what the statute says based on the ‘newly awarded’ language.”  Justice Kagan then for the first time raised a key question regarding the way that “award” is used in various provisions of the statute other than Section 906(c).  There are sections of the Act in which the term can mean “entitlement,” rather than compensation order, and consequently where the petitioner’s argument runs into problems.  This argument would resurface in the presentations of the respondents’ attorneys.

Arguing on behalf of the federal government, Assistant to the Solicitor General Joseph Palmore did not face questions that were as sharply worded as they were during Mr. Gillelan’s time at the podium, and there were no occasional indications of apparent exasperation.  The questioning largely centered on consideration of the different provisions of the statute where the word “award” appears, as well as the key point of the government’s argument that “award” does not necessarily mean compensation order, but in fact can mean “entitlement.”    The Justices also spent some time evaluating the parties’ differing interpretations in light of the overall intent of the statutory scheme.

It seemed clear to me from the conduct of the arguments and the tenor of the questioning that Justices Breyer, Sotomayor, and Scalia favor the government’s position, and that Justices Ginsburg and Kagan are at best skeptical regarding Mr. Roberts’s position.

Peter Keisler of Sidley Austin argued on behalf of respondent Sea-Land Services; that argument too was conducted in a seemingly quieter vein.  The positions of the government and Sea-Land in this case are the same:  “Award” means entitlement and “newly awarded” means first entitled.  This interpretation, they argue, provides the most coherent and consistent reading within the statute.  Among other things, it prevents an employer from finding itself in the position of not knowing what compensation rate to use to pay an injured worker until the occurrence of an event – the issuance of a compensation order – which may or may not occur at an uncertain date in the future.

We’ll await the decision.  Although Mr. Gillelan faced tougher questioning from the Justices, which often translates into skepticism about the merits of an argument, the decision in this case is by no means a sure thing either way.  The fact remains that the plaintiff’s position does have support in the statute and in the plain meaning of its text.  It may be a stretch to read the word “award” as equivalent to “entitled” under the government’s interpretation, but the worker’s position is burdened with the potential for several anomalies and inconsistencies, which clearly troubled the Justices.