This morning the Supreme Court decided Roberts v. Sea-Land Services, Inc. In this employer-friendly decision, the Court held that “an 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.” The Court’s syllabus is reprinted below.
The Longshore and Harbor Workers’ Compensation Act (LHWCA) creates a comprehensive scheme to pay compensation for an eligible employee’s disability or death resulting from injury occurring upon the navigable waters of the United States. Benefits for most types of disabilities are capped at twice the national average weekly wage for the fiscal year in which an injured employee is “newly awarded compensation.” 33 U. S. C. §906(c). The LHWCA requires employers to pay benefits voluntarily, without formal administrative proceedings. Typically, employers pay benefits without contesting liability, so no compensation orders are issued. However, if an employer controverts liability, or an employee contests his employer’s actions with respect to his benefits, the dispute proceeds to the Department of Labor’s Office of Workers’ Compensation Programs (OWCP) to be resolved, if possible, through informal procedures. An informal disposition may result in a compensation order. If not resolved informally, the dispute is referred to an administrative law judge (ALJ), who conducts a hearing and issues a compensation order.In fiscal year 2002, petitioner Roberts was injured at an Alaska marine terminal while working for respondent Sea-Land Services, Inc. Sea-Land (except for six weeks in 2003) voluntarily paid Roberts benefits until fiscal year 2005. Roberts then filed an LHWCA claim, and Sea-Land controverted. In fiscal year 2007, an ALJ awarded Roberts benefits at the fiscal year 2002 statutory maximum rate. Roberts sought reconsideration, contending that the award should have been set at the higher statutory maximum rate for fiscal year 2007, when, he argued, he was “newly awarded compensation” by order of the ALJ. The ALJ denied his motion, and the Department of Labor’s Benefits Review Board affirmed, concluding that the pertinent maximum rate is determined by the date disability commences. The Ninth Circuit affirmed.Held: An 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. Pp. 518.(a) Roberts contends that the statutory term “awarded compensation” means “awarded compensation in a formal order,” while Sea-Land and the Director, OWCP, maintain that it means “statutorily entitled to compensation because of disability.” Although §906 can be interpreted either way, only Sea-Land and the Director’s interpretation makes §906 a working part of the statutory scheme. Under Roberts’ interpretation, no employee receiving voluntary payments has been “awarded compensation,” so none is subject to an identifiable maximum rate of compensation. That result is incompatible with the LHWCA’s design. Section 906(b)(1) caps compensation at twice the applicable national average weekly wage, as determined by the Secretary of Labor. Section 906(b)(3), in turn, directs the Secretary to determine that wage before each fiscal year begins, at which time it becomes the “applicable national average weekly wage” for the coming fiscal year. And §906(c), in its turn, provides that the Secretary’s determination shall apply to those “newly awarded compensation” during such fiscal year. Through a series of cross-references, the three provisions work together to cap disability benefits. By its terms, and subject to one express exception, §906(b)(1) specifies that the cap applies globally, to all disability claims. Because all three provisions interlock, the cap functions as Congress intended only if §906(c) also applies globally, to all such cases. Roberts’ interpretation would give §906(c) no application in the many cases in which no formal orders issue.Using the national average weekly wage for the fiscal year in which an employee becomes disabled coheres with the LHWCA’s administrative structure. An employer must be able to calculate the cap in order to pay benefits within 14 days of notice of an employee’s disability, see §914(b), and in order to certify to the Department of Labor whether the maximum rate is being paid. Similarly, an OWCP claims examiner must verify the compensation rate in light of the applicable cap. It is difficult to see how an employer or claims examiner can use a national average weekly wage other than the one in effect at the time an employee becomes disabled. Moreover, applying the national average weekly wage for the fiscal year in which an employee becomes disabled advances the LHWCA’s purpose to compensate disability, defined as “incapacity because of injury to earn the wages which the employee was receiving at the time of injury.” §902(10). It also avoids disparate treatment of similarly situated employees; Roberts’ reading would permit two employees who earn the same salary and suffer the same injury on the same day to receive different maximum compensation rates based on the happenstance of their obtaining orders in different fiscal years. Finally, applying the national average weekly wage for the fiscal year in which disability commences discourages gamesmanship in the claims process. If the fiscal year in which an order issues were to determine the cap, the fact that the national average wage rises each year with inflation would be unduly significant. Roberts’ rule would reward employees who receive voluntary payments with windfalls for initiating unnecessary administrative proceedings to secure a higher rate, while simultaneously punishing employers who have complied fully with their statutory obligations to make voluntary payments. Pp. 513.(b) Roberts’ counterarguments are unconvincing. First, although the LHWCA sometimes uses “award” to mean “award in a formal order,” the presumption that identical words used in different parts of the same Act are intended to have the same meaning, readily yields whenever, as here, the variation in the word’s use in the LHWCA reasonably warrants the conclusion that it was employed in different parts of the Act with different intent. See General Dynamics Land Systems, Inc. v. Cline, 540 U. S. 581, 595.Second, Roberts argues that, because this Court has refused to read the statutory phrase “person entitled to compensation” in §933(g) to mean “person awarded compensation,” Estate of Cowart v. Nicklos Drilling Co., 505 U. S. 469, 477, the converse must also be true: “awarded compensation” in §906(c) cannot mean “entitled to compensation.” But Cowart’s reasoning does not work in reverse. Cowart did not construe §906(c) or “award,” see id., at 478–479, and it did not hold that the groups of “employees entitled to compensation” and “employees awarded compensation” were mutually exclusive, see id., at 477.Finally, Roberts contends that his interpretation furthers the LHWCA’s purpose of providing employees with prompt compensation by encouraging employers to avoid delay and expedite administrative proceedings. But his remedy would also punish employers who voluntarily pay benefits at the proper rate from the time of their employees’ injuries, because they would owe benefits under the higher cap applicable in any future fiscal year when their employees chose to file claims. The more measured deterrent to employer delay is interest that accrues from the date an unpaid benefit came due. Pp. 13–18.
(Note: I originally published this post on Navigable Waters: A Maritime, Longshore and Defense Base Act Blog.)