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METROPOLITAN STEVEDORE CO. v. RAMBO ET AL. 515 U.S. 291

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OCTOBER TERM, 1994

Syllabus

METROPOLITAN STEVEDORE CO. v. RAMBO ET AL.

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

No. 94-820. 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.

Held: 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. 294-303.

(a) A narrow reading of the phrase "change in conditions" is not supported by the Act's language, structure, and purpose. Section 22's use of the plural "conditions" suggests that Congress did not intend to limit the bases for modifying awards to a single condition, such as an employee's physical health. Rather, under the normal or natural reading, the applicable "conditions" are those that entitled the employee to benefits in the first place, the same conditions on which continuing entitlement is predicated. This interpretation is confirmed by the language of LHWCA §§ 2(10) and 8(c)(21), which make it clear that compensation, as an initial matter, is predicated on loss of wage-earning capacity and should continue only while the incapacity to earn wages persists. Thus, disability is in essence an economic, not a medical, concept. The Act's fundamental purpose is to compensate employees for wage-earning capacity lost because of injury; where that capacity has been reduced, restored, or improved, the basis for compensation changes and modification is permitted. Pp. 294-298.

(b) The legislative history also does not support a narrow construction of §22. Congress' decision to maintain a I-year limitations periodcralaw


292

in which to seek modification does not indicate a congressional intent to limit other parts of § 22. Nor is there any evidence that when Congress reenacted the phrase "change in conditions" as late as 1984, it was endorsing prior Court of Appeals' decisions limiting the phrase to changes in physical conditions. In addition, the dicta in those cases that Rambo claims is swept away by the Court's reading of § 22 is neither authoritative nor persuasive. Finally, experience in the 11 years since Fleetwood does not suggest that the Office of Workers Compensation Programs (OWCP) and courts will be flooded with litigation arising from modification requests based on every change in an employee's wages. Such an argument is better directed at Congress or the OWCP Director than at the courts; and it is based on a misconception of the LHWCA and the instant holding, for a change in wage-earning capacity will occur with a change in actual wages only when those wages fairly and reasonably represent such capacity. Pp. 298-303.

28 F.3d 86, reversed and remanded.

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, post, p. 301.

Robert Evans Babcock argued the cause and filed briefs for petitioner.

Jeffrey P. Minear argued the cause for the federal respondent in support of petitioner under this Court's Rule 12.4. With him on the briefs were Solicitor General Days, Deputy Solicitor General Kneedler, Allen H. Feldman, Nathaniel 1. Spiller, and Edward D. Sieger.

Thomas J. Pierry argued the cause and filed a brief for respondent Rambo. *

JUSTICE KENNEDY delivered the opinion of the Court. Section 22 of the Longshore and Harbor Workers' Compensation Act (LHWCA or Act), 44 Stat. 1437, as amended, 33 U. S. C. § 922, allows for modification of a disability award

*Briefs of amici curiae urging reversal were filed for Industrial Indemnity Insurance Co. by Roger A. Levy; and for the National Association of Waterfront Employers et al. by Charles T. Carroll, Jr., Thomas D. Wilcox, and Franklin W Losey.cralaw


293
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