Amicus Curiae Brief — Metropolitan Stevedore Co. v. Rambo

z FILE

No. 96-272

AN 1 5 1997

In The

D

| Supreme Court, U.S.

JAN 13 19%. |

Supreme Court of the United States

October Term, 1996

7

L.JDIUN fieeUu

+

METROPOLITAN STEVEDORE COMPANY,

Petitioner,

v.

JOHN RAMBO, et al.,

Respondents.

+

On Writ Of Certiorari To The United States

Court Of Appeals For The Ninth Circuit

+

MOTION FOR LEAVE TO FILE BRIEF AMICUS

CURIAE AND BRIEF AMICUS CURIAE ON BEHALF

OF NATIONAL STEEL AND SHIPBUILDING

COMPANY IN SUPPORT OF PETITIONER

°

COCKLE LAW BRIEF PRINTING

CALL COLLECT (402) 342-2831

OR

Atvin G. KALMANSON

NATIONAL STEEL AND

SHIPBUILDING COMPANY

P.O. Box 85278

San Diego, California 92186-5278

(619) 544-3400

Roy D. Axe.rop,

Counsel of Record

Gict Wynne Porter

Litter, MENDELSON, Fastirr,

TicHy & MartHIAsOoN

A Professional Corporation

701 “B” Street, 13th Floor

San Diego, California 92101-8194

(619) 232-0441

Attorneys for Amicus Curiae

National Steel and

Shipbuilding Company

CG., (800) 225-6964

1

MOTION FOR LEAVE TO FILE BRIEF AMICUS

CURIAE AND BRIEF AMICUS CURIAE ON BEHALF

OF NATIONAL STEEL AND SHIPBUILDING

COMPANY IN SUPPORT OF PETITIONER

Pursuant to Rule 37 of the Rules of the Supreme

Court of the United States, NATIONAL STEEL AND

SHIPBUILDING COMPANY (“NASSCO”) moves for

leave to file the Brief Amicus Curiae in support of Peti-

tioner METROPOLITAN STEVEDORE COMPANY (“Peti-

tioner”). Petitioner has consented in writing to NASSCO

filing a Brief Amicus Curiae on its behalf. A letter of

consent is being filed with the Clerk of this Court with

NASSCO’s Brief Amicus Curiae. Respondent JOHN

RAMBO (“Respondent” or “Claimant”) also has con-

sented in writing to NASSCO’s filing a Brief Amicus

Curiae. A letter of consent is being filed with the Clerk of

the Court with NASSCO’s Brief Amicus Curiae. NASSCO

has been unable to obtain consent from Respondent

Director, OWCP.

NASSCO is a San Diego based shipbuilding and ship

repair company which currently employs in excess of

5,000 employees. Claims by most of those employees for

work-related injuries fall within the jurisdiction of the

California Workers’ Compensation Act, California Labor

Code § 3600 et seq., and the Longshore and Harbor

Workers’ Compensation Act (“LHWCA”), 33 U.S.C. § 901

et seq. (“LHWCA”).

NASSCO is self-insured and self-administered for

LHWCA benefits. As such, NASSCO has a strong interest

in the above-captioned case. The decision of the Court

will directly affect the liability of NASSCO, and the man-

ner in which claims of injured NASSCO employees are

administered by NASSCO, including the ability of

NASSCO to settle its LHWCA claims. NASSCO and

indeed all ship repair and shipbuilding companies that

are covered by the LHWCA have a vital stake in the

question now before the Court.

Unless the Ninth Circuit is reversed on the question

now before the Court, NASSCO will be routinely con-

fronted with LHWCA claims for nominal awards for per-

manent partial disability by injured employees who have

returned to work at wages equal to, or higher than, their

pre-injury wages. Therefore, the Ninth Circuit's decision,

if left intact, will have a significant economic impact on

NASSCO and the ship construction and ship repair

industry. Accordingly, Amicus Curiae NASSCO respect-

fully requests leave to file the attached Brief Amicus Cur-

iae in support of Petitioner.

DATED: January 10, 1997

Respectfully submitted,

NATIONAL STEEL

AND SHIPBUILDING

COMPANY

Atvin G. KALMANSON

Litter, MENDELSON, FAsTIFr,

TicHy & MATHIASON

A Professional Corporation

Roy D. AxeLrop,

Gict Wynne Porter

IV

Roy D. AxeLRop

Counsel of Record

Attorneys for Amicus Curiae

National Steel and

Shipbuilding Company

TABLE OF CONTENTS

1 STATEMENT OF INTEREST OF AMICUS

I UPUESGEeeGdscdecscecceccccescecces

Il SUMMARY OF ARGUMENT ..................

Cc eC eee ceca edecécccsccccccccecees

A.

The Ninth Circuit’s Decision Improperly Nulli-

fies the LHWCA Statute Of Limitations. .....

Conjecture That A LHWCA Claimant May

Possibly Be Laid Off Due To Lack Of Work

At Some Indefinite Time In The Future Does

Not, As A Matter Of Law, Constitute “Sub-

stantial Evidence” Sufficient To Support An

Award For Permanent Partial Disability

TE cicwcccevenscecseeecce

The Ninth Circuit’s Decision Is Inconsistent

With The Supreme Court’s Repeated Man-

date That Sympathy Is An Insufficient Basis

For Providing A Recovery Not Authorized

ee ieeeeeedescnccecccccccee:

TE SehUb beh becccccnceccccetccecess

4

10

TABLE OF AUTHORITIES

Page(s)

Cases

Baltimore and Philadelphia Steamboat Company v.

Norton, 284 U.S. 408, 52 S. Ct. 187 (1932) ......... 18

Bath Iron Works Corp. v. Director, OWCP, 506 U.S.

BS FF. Fo eer rr 8, 13

Black v. Bethlehem Steel Corp., 16 BRBS 138 (1984) .... 14

Bloomer v. Liberty Mutual Insurance Company, 445

U.S. 74, 100 S. Ct. 925 (1980) .... 2... cece eee

Bolduc v. General Dynamics Corp., 9 BRBS 851

GEIGER oc Secdcvcccnccdvedcevcestdenct sédsseesscocses 14

Bumble Bee Seafoods v. Director, OWCP, 629 F.2d

GIF Ge GIR Fi ccc nc cccccctccesecesecescceses 13

Cardillo v. Liberty Mutual Insurance Company, 330

U.S. 469, 67 S. Ct. 801 (1947) ... 2.6.66 cece eee eees 16

Consolidated Edison Company v. NLRB, 305 U.S. 197,

eee FP ere 12

Container Stevedoring Company v. Director, OWCP,

935 F.2d 1544 (9th Cir. 1991)........ 66. cece eens 15

Cordero v. Triple A Machine Shop, 580 F.2d 1331 (9th

Cir. 1978), cert. denied, 440 U.S. 911, 99 S. Ct.

GD Gc cc cb cccdccccscctcccanedccndsussesesces 16

Cross v. Potomac Electric Power Company, 606 F.2d

1324 (D.C. Cir. 1979), rev'd sub. nom., Potomac

Electric Power Company v. Director, OWCP, 449

U.S. 268, 101 S. Ct. 509 (1980) .... 2.6... eee e eee 19

Devillier v. National Steel and Shipbuilding Company,

BD GRD GED CRIT nc cc cccccceccecvccccsscccvcecece 8

Director, OWCP v. Bethlehem Steel Corp., 620 F.2d 60

Ge Ge, Bc oc cc cccncedcccccccsccsccesoscsesess 12

TABLE OF AUTHORITIES - Continued

Page(s)

Director, OWCP v. Detroit Harbor Terminals, 850

of fF f. 2 ee eT ee eee 4

Director, OWCP v. Greenwich Collieries, 512 U.S.

ee Se Oe kM i snctbasssdeviccctccvess 13

Director, OWCP v. Rasmussen, 440 U.S. 29, 99 S. Ct.

By GEN Seas Gravacse secnhecvesesondecees 17, 19, 20

Edwards v. Director, OWCP, 999 F.3d 1374 (9th Cir.

1993), cert. denied sub nom. Todd Shipyards Corp.

v. Edwards, 114 S. Ct. 1539 (1994)................. 15

Estate of Cowart v. Nicklos Drilling Company, 505

US. 469, 112 S. Ct. 2569 (1992)................... 20

Fleetwood v. Newport News Shipbuilding & Dry Dock

Company, 776 F.2d 1225 (4th Cir. 1985)............ 10

Hole v. Miami Shipyards Corp., 640 F.2d 769 (5th Cir.

PN OUREKSehenesiSeredessnccccacsdccenseveces 10, 15

Ingalls Shipbuilding, Inc. v. Asbestos Health Claim-

ants, 17 F.3d 130 (5th Cir. 1994)...........0....... 14

Kaiser Steel Corp. v. Director, OWCP, 812 F.2d 518

SE ED NS ibavdcnsadecndeéebsseekceedsceass cs 4

Kobilkin v. Pillsbury, 103 F.2d 667 (9th Cir. 1939),

aff'd, 309 U.S. 619, 60 S. Ct. 465 (1940)............. 5

Lafaille v. Benefits Review Board, 884 F.2d 54 (2d Cir.

Sd 6 SS SGONENe bans connscdeccecncecéestcocesecs 10

Lombardi v. General Dynamics Corp., 22 BRBS 323

DR Apaphabhdebethencedesedtceresaiécesinsoceses 8

Mavar v. Matson Terminals, Inc., 21 BRBS 336 (1988) ..... 4

Metropolitan Stevedore Company v. Rambo, __ U.S.

eT TT TTT Tre 10

iv

TABLE OF AUTHORITIES - Continued

Page(s)

Morrison-Knudsen Construction Company v. Director,

OWCP, 461 U.S. 624, 103 S. Ct. 2045 (1983) ..... 4, 13

New Orleans (Gulfwide) Stevedores v. Turner, 661

ROS BERS Ge Cie BIDE cc ccc cccccccccccccscccceses 8

NLRB v. O.A. Fuller Super Markets, Inc., 374 F.2d

SEP Ge GR. Tee cccccnccccccccccescccesessceste 12

O'Keeffe v. Smith, Hinchman & Grylls Associates,

Inc., 380 U.S. 359, 85 S. Ct. 1012 (1965) ........... 16

O'Leary v. Brown-Pacific-Maxon, Inc., 340 U.S. 504,

FE Ge GR, Gee Ge cv ce ccccsnccscsvcascessceccsss 16

O'Leary v. Southeast Stevedoring Company, 7 BRBS

144 (1977), aff'd, 622 F.2d 595 (9th Cir. 1980)...... 19

Owens v. Traynor, 274 F. Supp. 770 (D. Md. 1967),

aff'd, 396 F.2d 783 (4th Cir. 1968), cert. denied,

393 U.S. 962, 89 S. Ct. 401 (1968)........... 5, 14, 19

Peele v. Newport News Shipbuilding & Dry Dock

Company, 20 BRBS 133 (1987) ..............22-e005. “

Pernell v. Capitol Hill Masonry, 11 BRBS 532 (1979) ..... 8

Peter v. Hess Oil Virgin Islands Corp., 903 F.2d 935

(3rd Cir. 1990), cert. denied, 498 U.S. 1067, 111

ie 4 ff Rr ae pee 4

Petroleum Helicopters, Inc. v. Barger, 910 F.2d 276

(Sth Cir. 1990), cert. denied, 505 U.S. 1218, 112

Be Gh Be He totncvcnccavncccosescecccceeces 19

Pilkington v. Sun Shipbuilding and Dry Dock Com-

gam, O GED GS CRGGED onc csccccccssccccsecccccces 8

Pillsbury v. United Engineering Company, 342 U.S.

Ae FE Fo TT ere 6, 7

Vv

TABLE OF AUTHORITIES - Continued

Page(s)

Porras v. Todd Shipyards Corp., 17 BRBS 222 (1985),

d sub nom., Todd Shipyards Corp. v. Director,

WCP, 792 F.2d 1489 (9th Cir. 1988) ............... 9

Potomac Electric Power Company v. Director, OWCP,

449 U.S. 268, 101 S. Ct. 509 (1980)..... 14, 18, 19, 20

Rambo v. Director, OWCP, 81 F.3d 840 (9th Cir.

1996), cert. granted, __ U.S. __, 117 S.Ct. 504

Di coudd caencdthennecadéce tebeiuaeddaces passim

Randall v. Comfort Control, Inc., 725 F.2d 791 (D.C.

i iho ceecikend dkakatdenestieeddbancecece 10

Richardson v. Perales, 402 U.S. 389, 91 S. Ct. 1420

SEs Ganeudcbdnuchdhsuwienceddcetebuveteescaece 11

Smith v. Newport News Shipbuilding & Dry Dock

Company, 16 BRBS 287 (1984) ................00005. 9

Sproull v. Director, OWCP, ___ F.3d ___ 30 BRBS 49

Sy Ce PEED sehessasbacsdétcnedcencecccses 5

Todd Shipyards Corp. v. Black, 717 F.2d 1280 (9th

Cir. 1983), cert. denied, 466 U.S. 937 (1984) ..7, 17, 18

U.S. Industries/Federal Sheet Metal, Inc. v. Director,

OWCP, 455 U.S. 608, 102 S. Ct. 1312 (1982) ....... 13

Universal Camera Corp. v. NLRB, 340 U.S. 474, 71

ip See Ge Ed ou neceretcbovcacessenscwtence se: 11

White v. Bath Iron Works Corp., 7 BRBS 86 (1977),

aff'd, 584 F.2d 569 (1st Cir. 1978).................. 12

STATUTES

33 United States Code

EE SE OD, occas ccévactcsusesuctscesgeccenss 1

Ne ed eed Riva ddeawkasins 5, 14

vi

TABLE OF AUTHORITIES — Continued

Page(s)

Section SORICMISMD) ....ccccccecccccccccccccccvvess 8

Section 908(c)(21) .........ceeeeeeeeeeees 5, 13, 14, 19

Soctian GHB) 2c ccc vcccocnccesccccescccoveceses 5, 11

Deeties GED. ccocccccccctccececsencevéasveccesesape 4

Goction GISTOMA)...vcccvcccvcvesccccvcvessvcccevces 8

Dactiaw GRAM... ccccccccccccccccseccusccesevess 16

Bastia, GROEA. oc cv ccccccescccsecvccsscuesscccescues 16

Section 922... cc ccccccccccecevvccesevevvcenes passim

California Labor Code

Section 3600 ef 86q. 00... ccccceneccecessesesesceees 1

OTHER AUTHORITIES

20 Code of Federal Regulations

Bastin: GO ooo c cccccvccccccccceccccsessceconce 16

STATEMENT OF INTEREST OF AMICUS CURIAE

NASSCO is a San Diego based shipbuilding and ship

repair company which currently employs in excess of

5,000 employees. Clasms by most of those employees for

work-related injuries fall within the jurisdiciion of the

California Workers’ Compensation Act, California Labor

Code § 3600 et seq., and the Longshore and Harbor

Workers’ Compensation Act (“LHWCA”), 33 U.S.C. § 901

et seq. (“LHWCA”).

NASSCO is self-insured and self-administered for

LHWCA (and California Workers’ Compensation Act)

benefits. As such, NASSCO has a strong interest in the

above-captioned case. The decision of the Supreme Court

will directly affect the liability of NASSCO, and the man-

ner in which claims of injured NASSCO employees are

administered by NASSCO, including the ability of

NASSCO to settle its LHWCA claims. NASSCO and

indeed all ship repair and shipbuilding companies that

are covered by the LHWCA have a vital stake in the

question now before the Court.

The ship repair and ship construction industry is by

nature engaged in a cyclical business. Ship repair and

ship construction employees typically are hired when

contracts are obtained, and then laid off at the completion

of the ship repair and ship construction projects. The

employees are then rehired when new ship repair or ship

construction work is obtained. However, the Ninth Cir-

cuit’s decision will, in effect, provide LHWCA claimants

with the ability to obtain increased LHWCA benefits (i.e.,

unemployment benefits) during periods of subsequent

layoff.

Unless the Ninth Circuit is reversed on the question

now before the Court, NASSCO will be routinely con-

fronted with LHWCA claims for nominal awards for per-

manent partial disability by LHWCA claimants who have

returned to work at wages equal to or higher than their

pre-injury average weekly wages. The Ninth Circuit deci-

sion will also serve as a disincentive to LHWCA claim-

ants who have returned to work to settle claims. That will

undoubtedly result in increased costs to the shipyards for

administration, litigation and payment for LHWCA

claims for nominal awards for permanent partial disabil-

ity to employees who do not have an economic disability.

In addition, if the Ninth Circuit’s decision is

affirmed, the amount of reserves maintained for workers’

compensation by NASSCO and other self-insured ship-

yards would have to be increased accordingly. That will,

of necessity, be accompanied by a reduction in the

amount of funds available for capital improvement and

growth. Therefore, the Ninth Circuit's decision, if left

intact, will have a significant economic impact on

NASSCO in particular and on the ship construction and

ship repair industry in general.

.

II

SUMMARY OF ARGUMENT

In the case before the Court, the Ninth Circuit held in

part that a LHWCA claimant is entitled to a nominal or de

minimis award for permanent partial disability in order to

preserve the LHWCA claimant's right to seek modifica-

tion indefinitely pursuant to Section 22, 33 U.S.C. § 922.

Thus, although Congress enacted LHWCA Section 22

with a one-year statute of limitations, the Ninth Circuit

has read out of the LHWCA that statute of limitations

under the guise of construction. In so doing, the Ninth

Circuit has gone well beyond its authority and attempted

to “rewrite Congress’s words.”

In the case before the Court, the administrative law

judge (“ALJ”) as the trier of fact found that Claimant had

returned to work at wages well in excess of his pre-injury

average weekly wage, and therefore had not sustained

the economic “disability” required by the LHWCA to

support an award for permanent partial disability. How-

ever, the Ninth Circuit substituted its own view for that

of the ALJ in violation of the court of appeals’ standard of

review.

The Ninth Circuit also improperly relied on specula-

tion and surmise. Indeed, conjecture that a LHWCA

claimant (who is earning higher wages post-injury) may

possibly be laid off at some indefinite time in the future,

relied upon by the Ninth Circuit, does not constitute

substantial evidence in support of a nominal or de minimis

award for permanent partial disability.

The construction of LHWCA Section 22 by the Ninth

Circuit will result in increased litigation and administra-

tion costs and interfere with efficient administration of

the LHWCA. Although the Ninth Circuit’s rationale for

its decision, preserving indefinitely a LHWCA claimant's

right to seek modification, is a “laudable concern,” the

LHWCA does not provide for de minimis awards in order

to preserve the Section 22 statute of limitations. The

Ninth Circuit’s decision provides for a recovery not

authorized by Congress, and should therefore be

reversed.

Il

ARGUMENT

A. The Ninth Circuit’s Decision Improperly Nulli-

fies the LHWCA Statute Of Limitations.

In Morrison-Knudsen Construction Company v. Director,

OWCP, 461 U.S. 624, 636, 103 S. Ct. 2045, 2052 (1983), this

Court emphasized that the LHWCA is not a simple reme-

dial s*atute intended for the benefit of workers. Rather,

the LHWCA was designed to strike a balance between the

concerns of longshore and harbor workers on the one

hand, and their employers on the other. Id.; see Peter v.

Hess Oil Virgin Islands Corp., 903 F.2d 935, 951 (3rd Cir.

1990), cert. denied, 498 U.S. 1067, 111 S. Ct. 783 (1991) (the

LHWCA was specifically drafted to benefit not only

employees, but also employers); cf. Director, OWCP v.

Detroit Harbor Terminals, 850 F. 2d 283, 291 (6th Cir. 1988)

(“[with the 1972 Amendments], . . . Congress also made it

clear that the rights of employers and insurance carriers

would not be ignored”).

Consistent with that balance, Congress enacted as

part of the LHWCA a one-year statute of limitations for

filing initial LHWCA claims, 33 U.S.C. § 913, and also a

one-year statute of limitations for filing modification

claims. 33 U.S.C. § 922. The statute of limitations mani-

fests the Congressional intent to deny compensation in all

cases of disability arising from industrial injury unless

the claim is filed within the prescribed time period, with-

out provision for exception. Kobilkin v. Pillsbury, 103 F.2d

667 (9th Cir. 1939), aff'd, 309 U.S. 619, 60 S. Ct. 465 (1940).

In the case before the Court, the Ninth Circuit held

that a nominal or de minimis award for permanent partial

disability to a LHWCA claimant is appropriate even

when the claimant does not currently manifest an eco-

nomic disability, the threshold requirement for an

unscheduled permanent partial disability award. See 33

U.S.C. §§ 902(10), 908(c)(21); Sproull v. Director, OWCP, ___

F.3d ___, 30 BRBS 49, 50 (CRT) (9th Cir. 1996) (“permanent

partial disability benefits are intended to compensate an

injured employee for loss of wage earning capacity, which

is calculated by comparing the employee's post-injury

‘wage earning capacity’ with his pre-injury ‘average

weekly wages’ ”). The Ninth Circuit reasoned that such a

nominal award is proper in order to “preserve” the claim-

ant’s right to future LHWCA benefits in either an initial

award determination or a modification proceeding

because the claimant “may” at some indefinite time in the

future sustain an economic disability.' Rambo v. Director,

! In so ruling, the Ninth Circuit relied on LHWCA Section

8(h), 33 U.S.C. § 908(h), which allows the ALJ to consider the

effects of a disability as it may extend into the future. However,

in relying on Section 8(h), the Ninth Circuit ignored the

threshold requirements of Section 2(10), 33 U.S.C. § 902(10) and

Section 8(c)(21), 33 U.S.C. § 908(c)(21), which initially require a

finding that the claimant sustain a “disability” before the effects

of that disability as it may extend into the future can be

considered. See Owens v. Traynor, 274 F. Supp. 770 (D. Md. 1967),

aff'd, 396 F.2d 783 (4th Cir. 1968), cert. denied, 393 U.S. 962, 89 S.

Ct. 401 (1968).

OWCP, 81 F.3d 840, 843-844 (9th Cir. 1996), cert. granted,

_.. U.S. _., 117 S.Ct. S04 (1996).

The Ninth Circuit further reasoned:

While a nominal award does indefinitely extend

the period for modification, it is the only mecha-

nism available to incorporate the possible future

effects of a disability in an award determination.

Thus, it is an appropriate mechanism, especially

in a modification proceeding . . . where the

claimant has already been given an award based

on finding of permanent partial disability. [81

F.3d at 844.]

However, in so concluding, the Ninth Circuit essen-

tially read the one-year statute of limitations out of Sec-

tion 22. In Pillsbury v. United Engineering Company, 342

U.S. 197, 200, 72 S. Ct. 223, 225 (1952), this Court empha-

sized that the courts are not free, under the guise of

construction, to amend the LHWCA. The Court noted:

We are aware that [the LHWCA] is a human-

itarian act, and that it should be construed liber-

ally to effectuate its purposes; but that does not

give us the power to rewrite the statute of lim-

itations at will, and make what was intended to

be a limitation no limitation at all. Petitioner’s

construction would have the effect of extending

the limitation indefinitely . . . ; the provision

would then be one of extension rather than lim-

itation. While it might be desirable for the stat-

ute to provide as petitioners contend, the power

to change the statute is with Congress, not us.

[Id.]

The same reasoning applies no less (over forty-four

years later) to the construction of the LHWCA by the

Ninth Circuit herein. The Ninth Circuit’s construction

would have the effect of extending the Section 22 one-

year statute of limitations indefinitely. While that may be

desirable for LHWCA claimants, the courts do not have

the power to rewrite the LHWCA and make what was

intended to be a limitation no limitation at all. See Pills-

bury v. United Engineering, supra.

The Ninth Circuit’s decision, which allows nominal

awards and preserves indefinitely the right to seek mod-

ification, will also substantially increase litigation

because it will preserve indefinitely the ability of

LHWCA parties to litigate their cases. However, with the

1972 Amendments to the LHWCA, Congress increased

the compensation benefits provided to LHWCA claimants

and attempted to reduce litigation. See Bloomer v. Liberty

Mutua! Insurance Company, 445 U.S. 74, 82-83, 100 S. Ct.

925, 930 (1980). The Court should thus be “ . . . unwilling

to attribute to Congress an intention to allow creation of a

new liability irreconcilable with its general desire to

reduce litigation. ...” Id. at 86, 100 S. Ct. at 932.

Indeed, the Ninth Circuit has also previously con-

cluded that the avoidance of litigation and efficient

administration of the workers’ compensation system are

important factors which may support or undermine

adoption of a particular construction of the LHWCA. See

Todd Shipyards Corp. v. Black, 717 F. 2d 1280, 1285 (9th Cir.

1983), cert. denied, 466 U.S. 937 (1984). In the present case,

the Ninth Circuit’s construction of Section 22 of the

LHWCA would increase litigation and interfere with the

efficient administration of the LHWCA. Therefore, those

factors militate against adoption of the construction of

the LHWCA by the Ninth Circuit herein.

Furthermore, Congress could have enacted Section 22

without a statute of limitations or with a longer statute of

limitations. Congress certainly knows how to do so. In

1984, Congress extended the statute of limitations for

claims for occupational disease beyond one year. See 33

U.S.C. § 913(b)(2); Lombardi v. General Dynamics Corp., 22

BRBS 323 (1989). In 1984, Congress also amended the

LHWCA to preserve the timeliness of hearing loss claims

filed more than one year after the employee's las* expo-

sure. See 33 U.S.C. § 908(c)(13)(D); Bath Iron Works Corp. v.

Director, OWCP, 506 U.S. 153, 113 S. Ct. 692 (1993). There-

fore, the Ninth Circuit’s decision, which ignores the clear

terms of Section 22, improperly nullifies the LHWCA

Section 22 statute of limitations under the guise of con-

struction.

Implicit in the Ninth Circuit’s decision is the appar-

ent premise that a LHWCA employer is responsible or

liable indefinitely for a LHWCA claimant’s continued

employment after an industrial injury, even after the

claimant has returned to regular and continuous employ-

ment at wages well in excess of the claimant's pre-injury

average weekly wage. However, the LHWCA is a

workers’ compensation statute and not an unemployment

statute. See New Orleans (Gulfwide) Stevedores v. Turner, 661

F. 2d 1031, 1042 (5th Cir. 1981) (the LHWCA employer is

not an employment agency); Pilkington v. Sun Shipbuilding

and Dry Dock Company. 9 BRBS 473, 480 (1978) (“the

law .. . does not require that the employer actually find

some other employment for the claimant”); Pernell v. Cap-

itol Hill Masonry, 11 BRBS 532, 537 (1979) (“it is a workers’

compensation statute we are interpreting, not an unem-

ployment compensation statute”); Devillier v. National

Steel and Shipbuilding Company, 10 BRBS 649, at 658

(where post-injury employment is sufficiently regular

and continues to establish a true wage earning capacity,

the claimant “must take [his] chances on unemployment

like anyone else”). Unless the Court reverses the mis-

taken premise that the LHWCA is an unemployment

statute, the Ninth Circuit's decision will severely and

unfairly impact upon the liability of employers in the

ship repair and ship construction industry, which typ-

ically are engaged in a cyclical business.

Moreover, the Benefits Review Board (“BRB”) has

repeatedly expressed its dissatisfaction with de minimus

awards of benefits, correctly viewing them as judicially

created infringements upon the province of Congress

because they indefinitely extend the time period pro-

vided for modification in Section 22. See Mavar v. Matson

Terminals, Inc., 21 BRBS 336 (1988); Peele v. Newport News

Shipbuilding & Dry Dock Company, 20 BRBS 133 (1987);

Porras v. Todd Shipyards Corp., 17 BRBS 222 (1985), aff'd sub

nom., Todd Shipyards Corp. v. Director, OWCP, 792 F.2d 1489

(9th Cir. 1988); Smith v. Newport News Shipbuilding & Dry

Dock Company, 16 BRBS 287 (1984). The BRB’s interpreta-

tion is “reasonable and reflects the policy underlying the

statute,” see Kaiser Steel Corp. v. Director, OWCP, 812 F.2d

518, 521 (9th Cir. 1987), and thus should be accorded

weight.

10

Therefore, the Ninth Circuit’s decision, which

improperly nullifies the statute of limitations in Section

22 as enacted by Congress, should be reversed.?

B. Conjecture That A LHWCA Claimant May Pos-

sibly Be Laid Off Due To Lack Of Work At

Some Indefinite Time In The Future Does Not,

As A Matter Of Law, Constitute “Substantial

Evidence” Sufficient To Support An Award For

Permanent Partial Disability Under The

LHWCA.

As noted by this Court, the LHWCA isa”... com-

prehensive scheme to provide compensation ‘in respect of

disability or death of an employee ...'” and“... com-

pensation, as an initial matter, is predicated on loss of

wage-earning capacity... . ” Metropolitan Stevedore Com-

pany v. Rambo, __ U.S. __, 115 S. Ct. 2144, 2147-2148

(1995). Indeed, “the fundamental purpose of the LHWCA

is to compensate employees (or their beneficiaries) for

wage-earning capacity lost because of injury.” Id. at 2148.

In the present case, it is undisputed from the evi-

dence in the record that Claimant was retrained as a

crane operator after his 1980 industrial injury, and that

his post-injury wages between 1985 and 1990 were more

2 The decisions in Hole v. Miami Shipyards Corp., 640 F.2d

769 (Sth Cir. 1981), Randall v. Comfort Control, Inc., 725 F.2d 791

(D.C. Cir. 1984), Fleetwood v. Newport News Shipbuilding & Dry

Dock Company, 776 F.2d 1225, 1234, n.9 (4th Cir. 1985), and

Lafaille v. Benefits Review Board, 884 F.2d 54 (2d Cir. 1989), which

authorize or approve of de minimis awards in order to preserve

indefinitely a LHWCA claimant's right to seek modification

under Section 22, suffer from the same defects.

11

than three times his pre-injury earnings. Id. Based on that

record, the ALJ found that Claimant “no longer has a

wage-earning capacity loss,” and terminated Claimant's

disability payments. The BRB affirmed. Id. at 2147.

On remand from this Court, the Ninth Circuit noted

in part that Claimant was employed as a crane operator

and “ ... was earning more [about 300% of his pre-injury

average weekly wages] than he had before his injury.”

Rambo v. Director, OWCP, 81 F.3d at 842. The Ninth Circuit

nonetheless held that the Claimant was entitled to a

“nominal award” for permanent partial disability because

Claimant had testified in part that he did not know how

long his job as a crane operator would last. Id., 81 F.3d at

844. Relying in part on LHWCA Section 8(h), 33 U.S.C.

§ 908(h), the Ninth Circuit therefore held that the ALJ's

decision to terminate the Claimant's benefits, which was

affirmed by the BRB, was not supported by “substantial

evidence.” Id., at 843-845.

However, it is well-settled that “substantial evi-

dence” means more than a “mere scintilla.” It means such

relevant evidence that a reasonable mind might accept as

adequate to support a conclusion. Richardson v. Perales,

402 U.S. 389, 401, 91 S. Ct. 1420, 1427 (1971); Universal

Camera Corp. v. NLRB, 340 U.S. 474, 477, 71 S. Ct. 456, 459

(1951). Moreover, substantial evidence is not evidence

considered in isolation from that opposing it, but evi-

dence that survives whatever in the record fairly detracts

from its weight. Universal Camera Corp. v. NLRB, 340 U.S.

at 488, 71 S. Ct. at 464.

12

Substantial evidence also does not include specula-

tion, surmise or conjecture. Cf. Consolidated Edison Com-

pany v. NLRB, 305 U.S. 197, 230, 59 S. Ct. 206, 217 (1938)

(“mere uncorroborated hearsay or rumor does not consti-

tute substantial evidence”); see also White v. Bath Iron

Works Corp., 7 BRBS 86, 91-92 (1977), aff'd, 584 F.2d 569

(1st Cir. 1978) (AL]’s reliance on effect of the claimant's

ability to earn wages in the open labor market at “some

future date” was speculation). The evidence supporting

the decision or order under review “must do more than

merely create a suspicion of the existence of facts upon

which the order is based. ... ” NLRB v. O.A. Fuller Super

Markets, Inc., 374 F.2d 197, 200 (5th Cir. 1967); Director,

OWCP v. Bethlehem Steel Corp., 620 F.2d 60, 64 (5th Cir.

1980).

In the case before the Court, the Ninth Circuit in

effect issued a de minimis or nominal award to Claimant

based on conjecture that Claimant may, at some indefinite

time in the future, lose his job. However, that reasoning,

that Claimant “may” lose his job at some indefinite time

in the future, constitutes at best speculation and cannot

as a matter of law constitute substantial evidence which

13

supports an award for permanent partial disability.* Cf.

Morrison-Knudsen Construction Company v. Director,

OWCP, 461 US. at 624, 103 S. Ct. at 2045 (employee's

“expectation interest” in employer contributions to union

3 The Ninth Circuit's award of permanent partial disability

benefits to an LHWCA claimant who is receiving post-injury

wages well in excess of the claimant’s pre-injury wages on the

grounds that the claimant “may” lose his job at some time in the

future is also inconsistent with this Court’s mandates in

Director, OWCP v. Greenwich Collieries, 512 U.S. 267, 114 S. Ct.

2251 (1994), and U.S. Industries/Federal Sheet Metal, Inc. v.

Director, OWCP, 455 U.S. 608, 102 S. Ct. 1312 (1982). In Greenwich

Collieries, this Court emphasized in part that a LHWCA claimant

has the burden of proof, and must meet that burden of proof by

a “preponderance of evidence” without the assistance of the

“Benefit of Doubt Rule.” Thus, a claimant who is working and

receiving post-injury wages well in excess of his pre-injury

wages does not meet his burden of proof by a preponderance of

the evidence in the record considered as a whole based simply

on an unsupported claim that he may lose his job at some

indefinite time in the future. As the Court has also noted, under

Section 8(c)(21), 33 U.S.C. § 908(c)(21), it is necessary for the

LHWCA claimant to initially prove that his injury has actually

decreased his wage earning capacity. Cf. Bath Iron Works Corp. v.

Director, OWCP, 506 U.S. 153, __, 113 S. Ct. 692, 695 (1993).

Moreover, in U.S. Industries/Federal Sheet Metal, Inc. v. Director,

OWCP, 455 U.S. at 615, 102 S. Ct. at 1317, the Court emphasized

in part that the mere existence of a physical impairment is

plainly insufficient to shift the burden of proof to the employer.

That same reasoning applies no less to the claim of a LHWCA

claimant who has returned to work and is regularly and

continuously earning wages well in excess of his pre-injury

wages. The allegation that such a claimant “may” lose his job at

some indefinite time in the future is plainly insufficient to shift

the burden of proof to the employer. Indeed, the Ninth Circuit's

decision herein also imposes on the employer the “difficult job

of proving a negative.” Cf. Bumble Bee Seafoods v. Director, OWCP,

629 F.2d 1327, 1329 (9th Cir. 1980).

14

trust funds for health, welfare, pensions and training was

“at best speculative” and “unpredictable” and thus could

not be included in the definition of wages); see Bolduc v.

General Dynamics Corp., 9 BRBS 851 (1979) (mere possi-

bility that the claimant may lose his job is too speculative

a basis upon which to award permanent partial disabil-

ity).

Moreover, the Ninth Circuit’s decision authorizes

and promotes “protective awards” to LHWCA claimants

who in reality do not have a “disability,” which is the

threshold requirement for an unscheduled award under

the LHWCA. See 33 U.S.C. §§ 902(10), 908(c)(21); cf. Pot-

omac Electric Power Company v. Director, OWCP, 449 U.S.

268, 269, 101 S. Ct. 509, 510 (1980). In a similar context,

the BRB and the Fifth Circuit have held that “ .. . nothing

in the LHWCA or the governing regulations authorizes

the filing of protective [LHWCA] claims or even recog-

nizes their existence.” Ingalls Shipbuilding, Inc. v. Asbestos

Health Claimants, 17 F. 3d 130, 135 (5th Cir. 1994); Black v.

Bethlehem Steel Corp., 16 BRBS 138, 142 (1984).

Similarly, nothing in the LHWCA or the governing

regulations authorizes the issuance of “protective

awards” in order to preserve a LHWCA claimant's right

to seek modification in the future. Section 8(h) only

applies after there has been an initial determination that

the claimant has sustained a “disability” pursuant to

Sections 2(10) and 8(c)(21), 33 U.S.C. §§ 902(10),

908(c)(21). See Owens v. Traynor, 274 F. Supp. at 773 (“

‘anatomical impairment’ is not the same as ‘disabil-

ity’... [under the LHWCA|]; [Section 8(c)(21)] does not

permit the award for permanent partial disability

. 15

. unless there has been some loss of wage-earning

capacity”).

Furthermore, the finding of the ALJ in this case that

Claimant does not have a wage-earning capacity loss is

supported by substantial evidence in the record consid-

ered as a whole.* That evidence in the record included

Claimant's retraining, his reemployment as a crane oper-

ator at substantially higher wages than his pre-injury

wages and Claimant’s continued employment at higher

wages (more than 300% of his pre-injury wages) from at

least 1985 to 1990.5 Thus, the Ninth Circuit also erred in

engaging in a de novo review and reweighing the evi-

dence, and substituting its own views for that of the ALJ

as the trier of fact. See Container Stevedoring Company v.

Director, OWCP, 935 F.2d 1544, 1546 (9th Cir. 1991)

4 Hole v. Miami Shipyards Corp., 640 F.2d 769 (Sth Cir. 1981),

which used the same approach of the Ninth Circuit in allowing a

“nominal award,” is distinguishable because in Hole the ALJ, as

the trier of fact, initially found that the claimant’s post-injury

earnings did not fairly and reasonably represent the claimant's

wage-earning capacity, and that the claimant had a “disability.”

In the present case, the ALJ found otherwise.

5 In Edwards v. Director, OWCP, 999 F.2d 1374 (9th Cir. 1993),

cert. denied sub nom. Todd Shipyards Corp. v. Edwards, 114 S. Ct.

1539 (1994), the Ninth Circuit held in part that evidence that a

LHWCA claimant had worked for eleven weeks following

retraining was insufficient to show suitable alternate

employment because eleven weeks of employment did not

show that such work was realistically and regularly available.

However, in the present case, five years of post-injury

employment (at wages well in excess of Claimant’s pre-injury

wages) showed that such employment was indeed “realistically

and regularly available.”

16

(“ .. . court cannot substitute its own views for the ALJ's

views or engage in de novo review of the evidence”).®

Because the ALJ's decision is supported by substan-

tial evidence in the record considered as a whole and

because the Ninth Circuit relied on speculation and

improperly substituted its own view of the evidence for

that of the ALJ, the Ninth Circuit’s decision should be

reversed.

© Section 21(b)(3), 33 U.S.C. § 921(b)(3), mandates that the

findings of fact in the decision under review of the trier of fact

by the BRB shall be “conclusive” if supported by substantial

evidence in the record considered as a whole. See also 20 C.E.R.

§ 802.301. That same standard, required of the BRB, also applies

to a review by the court of appeals. See 33 U.S.C. § 921(c);

O'Leary v. Brown-Pacific-Maxon, Inc., 340 U.S. 504, 71 S. Ct. 470

(1951); O'Keeffe v. Smith, Hinchman & Grylls Associates, Inc., 380

U.S. 359, 85 S. Ct. 1012 (1965). Further, the findings of the BRB

may not be disturbed by the court of appeals unless they are

unsupported by substantial evidence in the record considered

as a whole; the reviewing court's function is exhausted when it

appears that there is warrant in the evidence and a reasonable

legal basis for the BRB’s award. See Cordero v. Triple A Machine

Shop, 580 F.2d 1331, 1333 (9th Cir. 1978), cert. denied, 440 U.S. 911,

99 S. Ct. 1223 (1979), citing to Cardillo v. Liberty Mutual Insurance

Company, 330 U.S. 469, 479, 67 S. Ct. 801, 807 (1947). In the

present case, the Ninth Circuit went beyond that standard of

review and drew its own inferences from the record, contrary to

the findings of the ALJ.

of 17

C. The Ninth Circuit’s Decision Is Inconsistent

With The Supreme Court’s Repeated Mandate

That Sympathy Is an Insufficient Basis For Pro-

viding A Recovery Not Authorized By Con-

gress.

The primary rationale for the Ninth Circuit's deci-

sion, to allow a “nominal” award to a LHWCA claimant

who is earning higher wages post injury than his pre-

injury average weekly wage, is that such an approach is

the “ . . . only mechanism available to incorporate the

possible future effects of a disability in an award deter-

mination.” Rambo, 81 F.3d at 844. The Ninth Circuit noted

that such an approach would indefinitely extend the

period for modification pursuant to Section 22, but rea-

soned that it was nonetheless necessary.” Rambo, 81 F.3d

at 844.

While that is a “laudable concern,” the paramount

goal of the LHWCA is to compensate for lost earning

capacity. See Todd Shipyards Corp. v. Back, 717 F.2d 1280,

1292 (9th Cir. 1983), cert. denied, 466 U.S. 937, 104 S. Ct.

1910 (1984). In Todd Shipyards v. Black, supra, the Ninth

Circuit criticized the BRB’s adoption of the Date of Last

Exposure Rule for determining average weekly wage in

occupational disease cases. The BRB had reasoned that

? The Ninth Circuit’s reasoning that such an approach is the

only mechanism available to incorporate the possible future

effects of a disability (beyond the Section 22 one-year statute of

limitations) is plainly wrong. The only mechanism available for

such an approach would be action by Congress to amend the

LHWCA. See Director, OWCP v. Rasmussen, 440 U.S. 29, 47, 99 S.

Ct. 903, 913 (1979) (the courts are not free to “ .. . rewrite

Congress’s words”).

18

the Date of Last Exposure Standard would guarantee

compensation for workers who are retired when their

injuries become manifest. Nevertheless, the Ninth Circuit

emphasized that although that was a “laudable concern,”

the paramount goal of the LHWCA is to compensate for

lost earning capacity. Todd Shipyards v. Black, 717 F.2d at

1292. That same criticism applies with equal force to the

reasoning of the Ninth Circuit in the case before the

Court.

Moreover, this Court has repeatedly emphasized that

it is not to be lightly assumed that Congress intended that

the LHWCA produce incongruous results. Baltimore and

Philadelphia Steamboat Company v. Norton, 284 U.S. 408,

412-413, 52 S. Ct. 187, 188 (1932); Potomac Electric Power

Company v. Director, OWCP (“PEPCO”), 449 U.S. 268, 283,

101 S. Ct. 509, 517 (1980). In PEPCO, supra, the Court

emphasized that compelling language in the LHWCA

could not be ignored or rewritten because it led to seem-

ingly unjust results and further that sympathy is an insuf-

ficient basis for approving a recovery that Congress has

not authorized. PEPCO, 449 U.S. at 283. Those same

admonitions apply herein.

Section 22 is clear on its face and requires that a

modification claim be filed within one year of the date of

rejection of a claim or the date of the last payment of

compensation. 33 U.S.C. § 922. Furthermore, in a “non-

scheduled” permanent partial disability case, the

LHWCA claimant is only entitled to a compensation

award based on “66?/3 percent” of the difference between

the claimant’s average weekly wage at the time of injury

and his wage earning capacity thereafter in the same

employment or otherwise during the continuance of such

er te ee ee

19

disability. 33 U.S.C. § 908(c)(21); cf. Potomac Electric Power

Company v. Director, OWCP, 449 U.S. at 270-271, 101 S. Ct.

at 510-511; Owens v. Traynor, 274 F. Supp. at 770.

The Ninth Circuit would rewrite the LHWCA statu-

tory scheme enacted by Congress and nonetheless allow a

“nominal award” to a LHWCA claimant even when there

is no present economic disability. The Ninth Circuit's

reasoning, that such an approach is “ . . . the only mecha-

nism available to incorporate the possible future effects of

a disability in an award determination” is an attempt to

rewrite the LHWCA. Rambo, 81 F.3d at 844. However, this

Court has repeatedly admonished that the courts are not

free to rewrite the LHWCA. See e.g. Director, OWCP v.

Rasmussen, 440 U.S. at 47, 99 S. Ct. at 913 (the courts are

not free to “ . . . rewrite Congress’s words”).

On previous occasions, the courts and the BRB have

attempted to rewrite the LHWCA in order to avoid harsh

and incongruous results or otherwise obviate forfeiture

provisions in the LHWCA which might create a trap for

the unwary. See e.g. Cross v. Potomac Electric Power Com-

pany, 606 F.2d 1324 (D.C. Cir. 1979), rev'd sub. nom., Pot-

omac Electric Power Company v. Director, OWCP, 449 U.S.

268, 101 S. Ct. 509 (1980); O’Leary v. Southeast Stevedoring

Company, 7 BRBS 144 (1977), aff'd, 622 F.2d 595 (9th Cir.

1980); Petroleum Helicopters, Inc. v. Barger, 910 F.2d 276

(5th Cir. 1990), cert. denied, 505 U.S. 1218, 112 S. Ct. 3026

(1992).

However, in such cases, this Court has emphasized

the “ . . . basic and unexceptional rule that courts must

give effect to the clear meaning of statutes as written.”

20

Estate of Cowart v. Nicklos Drilling Company, 505 U.S. 469,

476, 112 S. Ct. 2589, 2594 (1992); Potomac Electric Power

Company v. Director, OWCP, 449 U.S. at 283, 101 S. Ct. at

517; Director OWCP v. Rasmussen, 440 U.S. at 47, 99 S. Ct.

at 913. “[I]t is the duty of the courts to enforce the

judgment of the legislature, however much [the courts]

might question its wisdom or fairness.” PEPCO, 505 U.S.

at 482, 112 S. Ct. at 2598. Indeed, “[i]f the effects of the

{[LHWCA| are to be alleviated, that is within the province

of the legislature. It is Congress that has the authority to

change the statute, not the courts.” PEPCO, 112 S. Ct. at

2598.

In the present case, the Ninth Circuit has ignored the

clear statutory language and attempted to alleviate the

effects of the LHWCA Section 22 one-year statute of

limitations. However, in so doing, the Ninth Circuit has

ignored this Court’s repeated mandate and gone well

beyond its authority. The Ninth Circuit has also ignored

this Court’s admonition that “sympathy is an insufficient

basis for providing a recovery not authorized by Con-

gress.” PEPCO, 449 U.S. at 283. The Ninth Circuit’s deci-

sion attempts to provide a recovery not authorized by

Congress and should therefore be reversed.

IV

CONCLUSION

Amicus Curiae NASSCO respectfully submits that the

decision of the Ninth Circuit is founded upon an incor-

rect interpretation of the LHWCA. Had it been the inten-

tion of Congress to allow “nominal awards” in order to

preserve a LHWCA claimant's right to seek Section 22

ee ee EE

21

modification indefinitely, Congress certainly could have

done so. However, Congress has not done so. Section 22

is clear on its face, and the Ninth Circuit does not have

the authority to rewrite the LHWCA under the guise of

construction.

Amicus Curiae NASSCO respectfully maintains that

the Ninth Circuit's grant of a nominal compensation

award for permanent partial disability to Claimant, sim-

ply in order to preserve the Claimant's right to seek

modification under Section 22 indefinitely, is not sup-

ported by substantial evidence in the record considered

as a whole and is not in accordance with law. NASSCO

prays that the Court reverse the decision of the Ninth

Circuit.

DATED: January 10, 1997 Respectfully submitted,

NATIONAL STEEL AND

SHIPBUILDING COMPANY

ALVIN G. KALMANSON

LittLer, MENDELSON,

Fastirr, TicHy &

MATHIASON

A Professional Corporation

Roy D. AxeLRop

Counsel of Record

Gict WYNNE Porter

Attorneys for Amicus Curiae

National Steel and

Shipbuilding Company