Argument preview: When is an award not an award?
on Jan 10, 2012 at 6:42 pm
At oral argument tomorrow in Roberts v. Sea-Land Services, the Court will consider the interpretation of Section 6(c) of the Longshore and Harbor Workers’ Compensation Act, which governs the calculation of benefits for disabled longshore workers. The Court’s decision could have a significant effect on the amount of benefits that those workers ultimately receive.
The Longshore and Harbor Workers’ Compensation Act is a federal workers’ compensation law covering land-based maritime workers employed on and around the navigable waters of the United States. The Act – which is administered by the Department of Labor – provides compensation for lost wages, medical care, vocational rehabilitation services, and survivor’s benefits for workers who are injured on the job. Informal dispute resolution and medical management services are available at the Department’s district offices, with any unresolved issues referred to the Department’s Office of Administrative Law Judges (ALJ); appeals from the ALJ’s decision go to the Benefits Review Board (BRB) and – if necessary – from there to the the federal courts of appeals and ultimately to the U.S. Supreme Court.
To provide compensation for injured workers, employers buy insurance from insurance carriers licensed by the DOL, or they obtain DOL approval to be self-insured. Weekly benefits are paid at the rate of two-thirds of the disabled worker’s average weekly wage (AWW), established as of the date of injury.
That weekly rate, however, is capped at 200% of the applicable National Average Weekly Wage (NAWW), which is determined as of each October 1 by the Secretary of Labor.
Under Section 6(c) of the Act, weekly benefits are increased each October 1 for employees or survivors “currently receiving” compensation for permanent total disability (PTD) or related death benefits “during such period”; based on the change in the NAWW, the benefits are also increased for those “newly awarded” compensation “during such period.”
At issue in this case is Section 6(c) of the Act, which provides that the Secretary of Labor’s determination of the NAWW applies (as relevant here) to “employees or survivors currently receiving compensation for permanent total disability or death benefits during such period, as well as those newly awarded compensation during such period.” (emphasis added)
The provision frequently comes into play in cases involving the determination of benefits for a disabled longshore worker because – as a general rule, and in this case — the average weekly wage for longshore workers is significantly higher than the NAWW.
Thus, the weekly rate at which a disabled worker is paid benefits for a permanent total disability is increased every year on October 1 and is capped at 200% of the NAWW in effect “during the period” he is “newly awarded” benefits. The question before the Court in this case is what date should be used to calculate the NAWW: is it the date that he first becomes entitled to benefits, or is it instead the later date of an ALJ’s compensation order?
Petitioner Dana Roberts was injured at work on February 24, 2002. At the time, his average weekly wage (AWW) was $2,853.08; two-thirds of that AWW is $1,902.05, which substantially exceeds the maximum weekly rate on the date of injury ($966.08). Therefore, Mr. Roberts will be paid at whatever maximum rate the Court applies.
In a compensation order dated October 12, 2006, an ALJ found (among other things) that Mr. Roberts was entitled to permanent total disability (PTD) benefits from July 12, 2005 to October 9, 2005, and permanent partial disability (PPD) benefits from October 10, 2005 and continuing. If Mr. Roberts was “newly awarded” PTD benefits during the period of his first entitlement on July 12, 2005, then, his benefits would be $1,047.16 per week, increasing to $1,073.64 on October 1, 2005, with the new NAWW and maximum. However, if he was “newly awarded” PTD benefits on the date of the ALJ’s compensation order on October 12, 2006, his weekly rate for PTD beginning back on July 12, 2005 would be $ 1,114.44.
The time line in this case is fairly typical for contested cases. Following his injury in 2002, his employer voluntarily paid benefits up until May 18, 2005, when disputes arose and the employer ceased payments. The case was referred to an ALJ, and a formal hearing was held in January 2006, followed by the ALJ’s October 2006 compensation order.
The case eventually made its way to the Ninth Circuit, which held that Mr. Roberts was “newly awarded” PTD benefits on the date that he first became entitled to those benefits, rather than the date of the ALJ’s compensation order. Mr. Roberts, by contrast, wants the date of the compensation order to control the applicable maximum.
Mr. Roberts filed a petition for certiorari, which was granted on September 27, 2011.
In his brief on the merits, Roberts argues that the text of the statute is clear: a longshore worker seeking benefits can be “newly awarded compensation” only when an order making the award is entered. A mere entitlement to compensation, he maintains, is not an “award.”
In its brief on the merits, the federal government counters that the NAWW in effect when the worker is injured should be used to calculate benefits. Unlike Roberts, the government (joined by Sea-Land Services, which echoes the government’s arguments in its own brief) characterizes the word “awarded” as ambiguous, arguing that it is used in different ways in different parts of the statute – including to mean payment required by the Act itself. And to the extent that the statute is ambiguous, it continues, the Court should defer to the interpretation advanced by the Department of Labor.
One other point worth noting is that this case involves the Longshore Act, however, which is interpreted liberally in the tradition not only of remedial statutes, but also in the maritime tradition in which – even to this day – workers are treated as “wards of the court.” In a close case of statutory construction, the disabled worker usually wins. And as a policy matter, a decision in favor of Mr. Roberts could provide employers with motivation to resolve disputes as quickly as possible, thus promoting a primary purpose of the Act: to provide prompt payment of compensation. On the other hand, this could be precisely the kind of complicated statutory scheme in which five or more Justices are perfectly willing to rely on the expertise of the administering agency and defer to that agency’s interpretation. Tomorrow’s oral argument may provide more clues as to which direction the Court will take.