Petitioners Reply Brief — Morrison-Knudsen Constr. Co. v. Director, Office of Workers' Compensation Programs

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IN THE CLERK

Supreme Court of the United

OCTOBER TERM, 1982

MORRISON-KNUDSEN CONSTRUCTION COMPANY,

and

ARGONAUT INSURANCE COMPANY,

v. Petitioners,

DIRECTOR, OFFICE OF WORKERS’ COMPENSATION

PROGRAMS, UNITED STATES DEPARTMENT OF LABOR,

and

SONIA HILYER, WIDOW OF JAMES H. HILYER,

Respondents.

On Writ of Certiorari to the United States Court of Appeals

for the District of Columbia Circuit

REPLY BRIEF FOR PETITIONERS

E. BARRETT PRETTYMAN, JR.*

WALTER A. SMITH, JR.

PAUL J. LARKIN, JR.

HOGAN & HARTSON

(a partnership including

professional corporations)

815 Connecticut Avenue, N.W.

Washington, D.C. 20006

(202) 331-4685

ARTHUR LARSON

Duke University School of Law

Durham, North Carolina 27706

(919) 684-3518

RICHARD W. GALIHER, JR.

GALIHER, CLARKE, MARTELL

& DONNELLY

1215 - 19th Street, N.W.

* Counsel of record Counsel for Petitioners

WILSON - Eres Printing Co., Inc. - 789-0096 - WASHINGTON. D.C. 20001

TABLE OF AUTHORITIES

ARGUMENT

II.

CONCLUSION

TABLE OF CONTENTS

RESPONDENT HILYER’S BRIEF FAILS TO

DEAL WITH TWO OF PETITIONERS’ MAIN

ARGUMENTS: THE DEVASTATING PRAC-

TICAL IMPACT OF THE DECISION BELOW,

AND THE LEGISLATIVE HISTORY IN THE

LIGHT OF THE Pepco RULE

A. The Practical Consequences of the Decision

Below in Undermining the Statute’s Pur-

pores

B. Legislative History in the Light of the Pepco

Rule

THE STATE CASES CITED BY RESPOND-

ENT ARE IRRELEVANT TO THE LHWCA

AND, IN ANY EVENT, DO NOT SUPPORT

RESPONDENT'S POSITION

TABLE OF AUTHORITIES

Cases:

Alabama Power v. Davis, 431 U.S. 581 (1977)......

Allied Structural Steel Co. v. Spannaus, 488 U.S.

234 (1978)

American Textile Mfrs. Inst. v. Donovan, 452

U.S. 490 (1981)

Andrus v. Charleston Stone Products Co., 436

US. 604 (1978) 3

Bloomer v. Liberty Mut. Ins. Co., 445 U.S. 74

(1980)

Bowen v. United States Postal Service, 51 U. 8. L. W.

4051 (U.S. Jan. 11, 1983) ————

City of Los Angeles Dep’t of Water & Power v.

Manhart, 435 U.S. 702 (1978 ———

Clifford F. MacEvoy Co. v. United States ex rel.

Calvin Tomkins Co., 322 U.S. 102 (1944)

Director v. Perini North River Ass’n, 51 U.S.L.W.

Edmonds v. Compagnie Generule Transatlantique,

Electrical Workers v. IBEW-NECA Holiday Trust

Fund, 583 S.W.2d 154 (Mo. 197999999 10

Foremost Dairies v. Industrial Accident Comm'n,

237 Cal. App. 2d Supp. 560, 47 Cal. Rptr. 173

(1965) 11

Geniz Supply Co. v. Board of Trustees of Health

E Ins. Fund, 84 Nev. 246, 483 P.2d 816 (1968) .. 10

Hite v. Evart Products Co., 34 Mich. App. 247, 191

eee 11,12

Inland Steel Co. v. NLRB, 170 F.2d 247 (7th Cir.

1948), cert. denied on this issue, 336 U.S. 960

(1949), aff'd on other grounds sub nom. Steel-

(ies eee

workers v. NLRB, 339 U.S. 382 (19500) 8,9

LaPuzza v. Prom Town House Motor Inn, Inc.,

191 Neb. 687, 217 N.W.2d 472 (1974) ................. 10

J. W. Bateson Co. v. United States ex rel. Board

of Trustees, 484 U.S. 586 (1978) ................. 3

Memphis Bank & Trust Co. v. Garner, 51 U.S.L.W.

4104 (U.S. Jan. 24, 1983) 6

National Broiler Marketing Ass’n v. United States,

436 US. 816 (1978) 7

111

TABLE OF AUTHORITIES—Continued

Page

People v. Alves, 155 Cal. App. 2d Supp. 870, 320

P.2d 623 (1957) 11

People v. Vetri, 309 N.Y. 401, 131 N. E. 2d 568

(1955) 11

Perrin v. United States, 444 U.S. 87 (1979 7

Pilisbury Co. v. Conboy, 51 U.S. L. W. 4061 (U.S.

Jan. 11, 1983) 3

Potomac Electric Power Co. v. Director, 449 US.

268 (1980) 7, 8, 10

Still v. Industrial Comm’n, 27 Ariz. App. 142, 551

P.2d 591 (1976) 12

Trustees of Colorado Corp. v. Pinkard Constr.

Co., 199 Colo. 35, 604 P.2d 683 (1979) ............... 11

United States v. Embassy Restaurant, Inc., 359

U.S. 29 (1959) 8, 9, 10, 11

United States v. Sisson, 399 U.S. 267 (1970) 7

United States ex rel. Sherman v. Carter, 353 US.

210 (1957) 11

. . Cross & Co. v. NLRB, 174 F. 2d 875 (Ist Cir.

1949) 8

IN THE

Supreme Court of the United States

OCTOBER TERM, 1982

No. 81-1891

MORRISON-KNUDSEN CONSTRUCTION COMPANY,

and

ARGONAUT INSURANCE COMPANY,

v. Petitioners,

DIRECTOR, OFFICE OF WORKERS’ COMPENSATION

PROGRAMS, UNITED STATES DEPARTMENT OF LABOR,

and

SOoNIA HILYER, WIDOW OF JAMES H. HILYER,

Respondents.

On Writ of Certiorari to the United States Court of Appeals

for the District of Columbia Circuit

REPLY BRIEF FOR PETITIONERS

I. RESPONDENT HILYER’S BRIEF FAILS TO DEAL

WITH TWO OF PETITIONERS’ MAIN ARGU-

MENTS: THE DEVASTATING PRACTICAL IM-

PACT OF THE DECISION BELOW, AND THE

LEGISLATIVE HISTORY IN THE LIGHT OF THE

Pepco Rule

The issue in this case is whether employer contributions

to union trust funds are included in employee “wages”

within the meaning of the LHWCA. The parties are

agreed that this issue is solely a matter of congressional

intent. But the remarkable thing about respondent

Hilyer’s brief is that it completely fails to consider two of

petitioners’ principal guides to that intent: the purposes

the statute was intended to serve, and the legislative his-

tory. It expressly refuses to discuss one, and it attempts

no real answer to the other.

A. The Practical Consequences of the Decision Below

in Undermining the Statute’s Purposes

Among the practical effects of the decision below dem-

onstrated in petitioners’ brief are that longshoremen’s

benefits would rise above wages (Pet. Br. at 42-43),

compensation premiums would rise above payroll (Pet.

Br. at 36-44), and swift, efficient delivery of benefits

would become impossible. Pet. Br. at 46-48. In the

amicus curiae briefs, the practical consequences argument

is the dominant theme: on the shipbuilding industry,

“catastrophic” (Ship. Br. at iv) and as to administration,

“chaotic” and “virtually impossible“ (id. at 8); on the

stevedoring industry, “disastrous,” with “employers * * *

forced into bankruptcy” (Steve. Br. at 11); on self-

insurers’ members, “intolerable hardship” (Self-Insurer’s

Br. at 25); on insurers and the economy, “distastrous.”

AIA Br. at 1. Respondent has offered three reasons for

refusing to deal with these consequences.

Respondent’s first contention is that these consequences

are “judicially irrelevant.” Hilyer Br. at 8. But far

from being irrelevant, judicial consideration of the prac-

tical effects of a statutory interpretation is a wholly legit-

imate, commonly used tool of statutory analysis, applied

to the LHWCA and other statutes alike. This Court has

repeatedly declared that it must take cognizance of how

a particular interpretation will be applied in other cases,

and that it considers pertinent whether the practical

1 Throughout this Reply Brief we use the same abbreviations as

in our Opening Brief, as well as the following: “Hilyer Br.” (Brief

of Respondent Hilyer); “U.S. Br.” (Brief for the Federal Re-

spondent on the Merits) ; “Pet. Br.” (Petitioners’ Opening Brief);

“Self-Insurers’ Br.” (Brief of Amicus Curiae National Council of

Self-Insurers on the Merits in Support of Petitioners).

consequences of a particular construction will advance or

undermine a statute’s purposes.“

To be sure, this Court has also sometimes held that,

when statutory language is so clear as to be absolutely

inescapable, unpleasant effects such as added costs are

not enough to overcome the necessity for respecting that

clear language. But the present case is about as far from

that situation as it would be possible to get. If the Long-

shoremen’s Act meaning of “wages” urged by respondent

is as plain as she contends, how could it have happened

that this meaning eluded the tens of thousands of judges,

administrators, lawyers, employers, and claimants who

have disposed of millions of cases over the past fifty-five

years on the basis of a flatly opposite meaning?“ More-

2 See, e.g., Pillsbury Co. v. Conboy, 51 U.S.L.W. 4061, 4063-65

(U.S. Jan. 11, 1983); Bloomer v. Liberty Mut. Ins. Co., 445

U.S. 74, 85-86 (1980); Edmonds v. Compagnie Generale Transat-

lantique, 443 U.S. 256, 268-271 (1979) ; Andrus v. Charleston Stone

Products Co., 486 U.S. 604, 614-616 (1978); J. W. Bateson Co. v.

United States ex rel. Board of Trustees, 434 U.S. 586, 593 (1978);

Clifford F. MacEvoy Co. v. United States ex rel. Calvin Tomkins

Co., 322 U.S. 102, 110-111 (1944).

One may well ask how respondent could achieve this upside-

down view of the “plain meaning” of the statute. One device is to

change the words of the statute. The definition begins, ‘Wages’

means the money rate at which the service rendered is recom-

pensed * .“ Obviously the operative word here is “money rate,”

which is the number of dollars and cents per hour or month or year

received by the employee — and it is on this figure that the vast

bulk of cases are now disposed of without controversy. Equally

obvious, “money rate” cannot by any amount of stretching include

employer contributions into union trust funds. To avoid this diffi-

culty, respondent reaches for the verb “recompense,” and then pro-

ceeds to argue that “recompense” is broad enough to include these

contributions. Hilyer Br. at iii, 10, 20, 21, 26. The word “recom-

pense” is the word chosen in the very heading for respondent’s

Argument I on plain language, and is the last word in that section.

But “recompensed” is only a neutral verb in the definition—it

could just as well have been “compensated” (which has the same

root), or “paid,” or “remunerated,” or any number of other

synonyms. Respondent rewrites the definition to say, in effect,

over, the consequence here is not merely an unwelcome

added cost, but the frustration of the Act itself, by put-

ting a premium on remaining away from work; by sabo-

taging one of the prime purposes of the Act — rehabilita-

tion; by making compensation uninsurable; and by sub-

stituting uncertainty, long delay, and litigation for

prompt delivery of benefits.

Respondent’s second reason for refusing to discuss

“practical consequences” appears to be the notion that

the plans on which petitioners’ calculations of impact are

based are not comparable to the plans here involved, but

are “a virtually unlimited variety of non-contract fringe

benefits and the like * * *.” Hilyer Br. at 8. Of course,

no two health and welfare “packages” are identical, but

the Atlantic and Gulf agreement used as an example (Pet.

“ ‘wages’ means the recompense. .. .” Having achieved this, re-

spondent then apparently feels no need to rely on the second half

of the definition, “board, rent, housing, lodging or similar advan-

tage received from the employer. . Indeed, respondent almost

seems to chide petitioners for even discussing this second “non-

monetary portion” of the definition. Hilyer Br. at 19.

The other textual revision undertaken by respondent is to change

the words “received from,” in the excerpt just quoted, to “paid by

the employer.” Hilyer Br. at 6. Indeed, at one point respondent

changes “received” to “paid” in the space of five lines. Hilyer Br. at

10. This is not an inconsequential change. What a beneficiary re-

ceived from a union trust fund is “received from” the trust fund.

The fact that ultimately the fund has been created by employer

contributions does not change this, since what the employee receives

often bears little or no relation to those contributions. Hilyer him-

self, for example, had acquired no pension rights, because of the

brevity of his employment, while employees with five years’ senior-

ity get pension credits for years in which no contributions had

been made based on their wages. JA at 50-51; U.S. Br. at 12.

Note, moreover, that when Congress wanted to make an excep-

tion in the definition of “wages” to the “received-from-the-employer”

rule, as it did in order to cover tips, it did so by adding an express

provision at the end of the definition. It is a fair implication, then,

that this is the only exception Congress intended to carve out of the

“received-from-the-employer” requirement.

Br. at 42-43), like the funds here involved, is basically a

“pension and welfare” fund, and is so referred to by the

Stevedores (Steve. Br. at 11), and in the agreement it-

self. JA 38. Note also that the Health and Welfare Fund

in the instant case was extremely inclusive. It covered:

“medical, dental, and/or hospital care, compensation

for injuries, and/or illness resulting from occupational

activity, * * * unemployment benefits, purchase

of insurance covering life and accidental death, acci-

dent disability benefits, hospitalization, surgical, med-

ical and sickness benefits, * * * or any other type of

health and welfare benefits * * * in the discretion of

the trustees * * *.” [JA 38.]

For good measure, the present package included a

“training fund,“ going beyond most of the longshore-

men’s plans used in our comparisons.

Thus, the additional types of fringe benefits cited by

petitioners as being potentially included (Pet. Br. at 44)

were not involved in, and are not necessary to, petition-

ers’ demonstration of the devastating impact of the deci-

sion below. But they are still intensely relevant. The rea-

son is that if the erroneous formula of the court below

stands — all of the identifiable value, in whatever form

The training fund was not, however, as broad in coverage as

Hilyer’s brief seems to contend. Notwithstanding her admission

that the training fund “did not in words specify that it was ear-

marked for the families of members” (Hilyer Br. at 3; see JA 40),

Mrs. Hilyer appears to argue that the fund was in fact so designed,

and hence that she must now purchase training that she otherwise

would have obtained from the fund. Hilyer Br. at 27. This is

simply not so. The explicit terms of the collective bargaining agree-

ment state that the training fund was designed to ensure that

adequate, trained manpower would be available for the construction

work to be performed under the agreement’s terms; the training

fund guaranteed workers’ families no benefits whatsoever. In fact,

the fund is best viewed as an employer’s investment in his entire

workforce, rather than in individual employees, with contributions

measured on a per-employee basis for convenience. See U.S. Br.

at 18 n.10.

it may appear” (Pet. App. 13a; emphasis in original)—

attempts will certainly be made to add these fringe items

and others to wage calculations, severely complicating and

delaying the benefit process. Moreover, if that formula is

applied literally, most of them might eventually have to

be actually included, thus exacerbating the already dam-

aging effect of the decision.

Finally, Hilyer incorrectly suggests that this Court

should ignore the practical effects of the decision below

simply because direct factual evidence of those effects was

not introduced at the original administrative hearing.

But neither Hilyer nor anyone else has challenged our

contention that the decision below will sabotage the Act’s

purposes; nor has Hilyer or anyone else challenged the

accurecy of the matters that we, the United States, and

amici have referenced.“ These matters are in the public

record and all are the type the Court has reguiarly taken

note of and relied upon in other cases.“

B. Legislative History in the Light of the Pepco Rule

The “Pepco rule” may be summarized as follows: when

Congress takes over intact a provision from a state act

and enacts it into federal law, and when at that time the

5 Those in the best position to challenge petitioners’ and amici’s

representations have not come forward to do so. Although the

Metropolitan Washington Council, AFL-CIO, filed a brief in opposi-

tion to the petition, it has filed no brief in support of Hilyer on the

merits. It is also noteworthy that neither the International Long-

shoremen’s Association nor any other longshoremen’s association or

union has filed an amicus brief in support of respondent.

* See, e. g., Memphis Bank & Trust Co. v. Garner, 51 U.S.L.W.

4104, 4105 n.8 (U.S. Jan. 24, 1983) (figures in United States

amicus brief); Bowen v. United States Postal Service, 51 U.S.L.W.

4051, 4057 n.4 (U.S. Jan. 11, 1983) (White, J., concurring and

dissenting) (administrative agency’s statistics). See also Allied

Structural Steel Co. v. Spannaus, 488 U.S. 234, 246-47 (1978)

(retroactive non-funded liability for pension plans “jeopardizes the

insurer’s solvency and, ultimately, the insureds’ benefits”) ; City of

Los Angeles Dep't of Water & Power v. Manhart, 435 U.S. 702,

721-728 (1978) (same).

provision had a clearly-accepted meaning, Congress must

be deemed to have intended that meaning. Potomac Elec-

tric Power Co. v. Director, 449 U.S. 268, 280 (1980);

Pet. Br. at 16-17 & n.14.

Although this principle is said in petitioners’ brief to

control this case (Pet. Br. at 16), Hilyer’s brief makes

no attempt to deal with it. Having noted that petitioners

argue that the Pepco case compels a denial of Hilyer’s

claim, the Hilyer brief simply states: “The conclusion is

in error.” Hilyer Br. at 19. There follows a sentence

that merely summarizes the case’s holding, and then the

brief moves on to other matters.

At another point in the brief, Hilyer announces her

own rule of interpretation, which is the exact opposite

of the Pepco rule. Hilyer contends that, in construing

the meaning of “wages” in the LHWCA, “[o]ne can

either read the words in their originally enacted connota-

tion, or preferably in the light of their later develop-

ment.” Hilyer Br. at 13; emphasis supplied. Then, after

noting that in recent years the term “wages” has in some

contexts come to include benefits such as employer trust-

fund contributions, Hilyer contends that It] he definition

of ‘wages’ now found in * * the LHWCA * * is flexible

enough to incorporate * * * advances in industrial wage

practices.” Id. at 32. This approach is completely at

odds with this Court’s settled principles of statutory

construction.

It is well established that “a statute ‘is not an empty

vessel into which the Supreme Court is free to pour a

vintage that [the Court] think[s] better suits present-

day tastes.’” National Broiler Marketing Ass’n v. United

States, 486 U.S. 816, 827 (1978) (quoting United States

v. Sisson, 399 U.S. 267, 297 (1970)). Rather, as this

Court has repeatedly held, words of a statute are to be

“interpreted as taking their ordinary, contemporary, com-

mon meaning * * * at the time Congress enacted the

statute * * Perrin v. United States, 444 U.S. 37, 42

(1979) (emphasis supplied); accord, Pepco, 449 U.S. at

280 (“Our task is to ascertain the congressional intent

underlying the schedule benefit provisions enacted in

1927 [the year the LHWCA was adopted]; we are not

free to incorporate into those provisions subsequent * * *

developments that we may consider sound as a matter of

policy“). “ Hence, Hilyer’s reliance on recent develop-

ments in “industrial wage practices” (see Hilyer Br. at

12-20; 32) cannot retroactively give meaning to the term

“wages” as it was adopted by Congress in 1927. This is

particularly true when Congress adopted verbatim the

language of a state act which had at the time a uni-

versally accepted meaning.

While Hilyer argues (Hilyer Br. at 20) that “Con-

gressional intent shows that fund interests should be in-

cluded in LHWCA ‘wages,’” her entire argument con-

cerning the congressional intent behind this statute is

premised upon the congressional intent behind other stat-

utes. Hilyer has not cited one syllable in the legislative

history of the LHWCA to support her interpretation.

Thus, Hilyer relies heavily (Hilyer Br. at 15, 16, 28)

upon two circuit court decisions“ interpreting the term

“wages” in the federal labor laws as support for her

interpretation of that term in the LHWCA. But this

Court has already twice rejected the application of those

decisions to other statutes. United States v. Embassy

Restaurant, Inc., 359 U.S. 29, 38 (1959) (“Nor do we

believe that holdings that various fringe benefits are

7 Cf. Director v. Perini North River Ass’n, 51 U.S.L.W. 4074,

4079 (U.S. Jan. 11, 1983) (construction of the LHWCA must take

into account “the context in which the [1927 Act was] passed”).

8 Inland Steel Co. v. NLRB, 170 F.2d 247 (7th Cir. 1948), cert.

denied on this issue, 336 U.S. 960 (1949), aff'd on other grounds

sub nom. Steelworkers v. NLRB, 339 U.S. 382 (1950); W.W. Cross

& Co. v. NLRB, 174 F.2d 875 (ist Cir. 1949).

wages under the N.L.R.A. or the Social Security Act are

apposite. We construe the priority section of the Bank-

ruptey Act, not those statutes”) (distinguishing Inland

Steel) ; Alabama Power Co. v. Davis, 431 U.S. 581, 592-

593 n.16 (1977) (“Even if pensions are ‘wages’ for the

purposes of the NLRA, that classification would not con-

trol their treatment under the very different statute at

issue in this case“) (citing Embassy Restaurant and dis-

tinguishing Inland Steel).

Similarly, Hilyer argues that Congress’ amendment of

the Davis-Bacon Act in 1964 and its enactment of certain

other statutes concerning employee trust plans should be

treated as evidence of a parallel congressional intent to

amend the LHWCA. This is an extraordinary contention.

It asks this Court to up-end the established principle that

Congress knows how to legislate with particularity (see,

e.g., American Textile Mfrs. Inst. v. Donovan, 452 U.S.

490, 510-512 (1981)), and hold, instead, that to amend

one statute is to amend them all. Moreover, Hilyer’s

argument ignores one enormous difference between Davis-

Bacon and the LHWCA which affects the calculation of

benefits under the two quite different statutes: under

Davis-Bacon, a collective wage level is fixed for an entire

area; but under the LHWCA, an individual wage must be

calculated for each of the millions of workers who will

file compensation claims. Congress should surely not be

thought to have imposed such a significant new LHWCA

administrative burden, sub silentio, through its enact-

ment of Davis-Bacon.

We urge the Court to reject the view that congres-

sional intent concerning the LHWCA can be determined

on the basis of the background and legislative history of

other statutes. Instead, if the Court bases its determina-

tion on the legislative history that matters—that of the

LHWCA itself—it will conclude that Congress never in-

tended or even contemplated the inclusion of trust-fund

benefits in LHWCA “wages.” See Pet. Br. at 19-31.

II. THE STATE CASES CITED BY RESPONDENT

ARE IRRELEVANT TO THE LHWCA AND, IN

ANY EVENT, DO NOT SUPPORT RESPONDENT'S

POSITION

As support for her construction of the word “wages”

in the LHWCA, respondent has cited several state deci-

sions interpreting other statutes. Hilyer Br. at 15, 17-18.

However, as this Court has already ruled, the term

“wages” in the LHWCA must be construed in light of

the specific purpose and legislative history of the LHWCA

itself. See Pepco, 449 U.S. at 280. Respondent’s reliance

upon state court decisions interpreting various state stat-

utes is therefore misplaced. Moreover, Hilyer has in any

event misconstrued those state court decisions.

Most of the state cases cited by Hilyer did not even

deal with the definition of “wages” in a state workers’

compensation act. Thus, in Electrical Workers v. IBEW-

NECA Holiday Trust Fund, 583 S.W.2d 154 (Mo. 1979),

the issue was whether, under the terms of a particular

collective bargaining agreement, interests in a vacation

pay trust fund were subject to garnishment. 583 S.W.2d

at 157. (Petitioners have already noted that vacation pay

is a legitimate inclusion in LHWCA “wages,” see Pet.

Br. at 8 n.6.) The issue in LaPuzza v. Prom Town House

Motor Inn, Inc., 191 Neb. 687, 217 N.W.2d 472 (1974)

was whether a contractor’s payments for social security,

unemployment insurance, health and welfare insurance,

and pension funds were part of “the cost of all labor,

materials, and equipment * * *” for which he was en-

titled to be repaid under a construction contract. 217

N.W.2d at 475. In Genix Supply Co. v. Board of Trustees

of Health & Ins. Fund, 84 Nev. 246, 438 P.2d 816 (1968),

the court held that a contractor was liable under its

surety bonds for amounts it had failed to contribute to

employee pension, health, and welfare plans, under a state

statute giving priority in such circumstances to a recov-

ery for wages. 438 P.2d at 816-817. The court noted

that this Court had ruled to the contrary in Embassy

Restaurant, but declined to apply that decision to the

state law at issue. Id. at 817.

Equally inapplicable is the decision in People v. Alves,

155 Cal. App. 2d Supp. 870, 320 P.2d 623 (1957). In

that case, a criminal prosecution, the issue was whether

an employer could be imprisoned for failing to make re-

quired contributions to employee health and welfare

funds. 320 P.2d at 624. In concluding that these contri-

butions were “wages” under the state labor code, the court

relied upon a state statute defining “wages” as “all

amounts for labor performed by employees of every de-

scription * * *.” Id. at 624-625; emphasis added. Fore-

most Dairies v. Industrial Accident Comm’n, 237 Cal.

App. 2d Supp. 560, 47 Cal. Rptr. 173 (1965) simply re-

lied upon Alves (47 Cal. Rptr. at 186-187) to hold an

employer liable under an employment agreement for cer-

tain employee medical expenses.

The statute at issue in Trustees of Colorado Corp. v.

Pinkard Constr. Co., 199 Colo. 35, 604 P.2d 683 (1979)

made subcontractors liable for “amounts lawfully due”

workmen. 604 P.2d at 684. Relying upon this Court’s

decision in United States ex rel. Sherman v. Carter, 353

U.S. 210 (1957), the court held that an employer’s pen-

sion plan contributions were covered by the statute. 604

P.2d at 684. Finally, the New York Court of Appeals in

People v. Vetri, 309 N.Y. 401, 131 N.E.2d 568 (1955)

ruled that an employee’s vacation pay was not part of his

“wages” under a state law requiring prompt payment of

wages to employees. 131 N.E.2d at 570-572.

The only decision cited by Hilyer holding that an em-

ployer’s trust fund contributions were “wages” for the

purpose of determining workers’ compensation is Hite v.

Evart Products Co., 34 Mich. App. 247, 191 N.W.2d 136

(1971). But even that decision is of questionable value,

since, prior to the Hite court’s decision, the state legisla-

ture adopted a provision specifically excluding fringe

benefits from a compensation award. 191 N.W.2d at 138

n.2. Indeed, subsequent to the Hite decision, the Arizona

Court of Appeals in Still v. ndustrial Comm’n, 27 Ariz.

App. 142, 551 P.2d 591 (1976) expressly refused to fol-

low Hite for that very reason (“no jurisdiction now au-

thorizes what Still seeks this Court to provide“), and be-

cause the logic of Hite would require “social security con-

tributions, unemployment compensation premiums, and

maybe even workmen’s compensation premiums” also to

be added. 551 P.2d at 593-594; emphasis supplied.

Thus, the most that can be said for these state cases is

that, based upon different state law provisions—none of

which even resembled the LHWCA definition of “wages”

—different state courts reached different results concern-

ing the inclusion of trust fund contributions in benefits

due employees. Only one decision (Hite) even addressed

“wages” in a workers’ compensation context, and it is

plainly lacking in precedential value. Therefore, in this

case there is not even the “recent trend” which this Court

considered and rejected in Pepco, 449 U.S. at 279-280.

Accordingly, the state court decisions cited by Hilyer are

inapposite to this case.

CONCLUSION

For the foregoing reasons and the reasons stated in

petitioners’ opening brief, the judgment of the United

States Court of Appeals for the District of Columbia

should be reversed.

Respectfully submitted,