No. 94-820 In the Supreme Court of the United States OCTOBER TERM, 1994 METROPOLITAN STEVEDORE COMPANY, PETITIONER V. JOHN RAMBO AND DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, UNITED STATES DEPARTMENT OF LABOR ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT BRIEF FOR THE DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS DREW S. DAYS, III Solicitor General EDWIN S. KNEEDLER Deputy Solicitor General JEFFREY P. MINEAR Assistant to the Solicitor General Department of Justice Washington, D.C. 20530 (202)514-2217 THOMAS S. WILLIAMSON, JR. Solicitor of Labor ALLEN H. FELDMAN Associate Solicitor NATHANIEL I. SPILLER Counsel for Appellate Litigation EDWARD D. SIEGER Senior Appellate Attorney Department of Labor Washington, D.C. 20210 ---------------------------------------- Page Break ---------------------------------------- QUESTION PRESENTED Whether the "change in conditions" that permits modification of a disability award under Section 22 of the Longshore and Harbor Workers' Compensation Act, 33 U.S.C. 922, includes a change in an injured employee's wage-earning capacity that results from factors other than a change in the employee's physical condition. (I) ---------------------------------------- Page Break ---------------------------------------- TABLE OF CONTENTS Page Opinions below . . . . 1 Jurisdiction . . . . 2 Statutory provisions involved . . . . 2 Statement . . . . 3 Summary of argument . . . . 7 Argument: The "change in conditions" that will permit modifi- cation of an award under Section 22 of the LHWCA includes a change in an injured employee's wage- earning capacity that results from factors other than a change in the employee's physical condition . . . . 9 A. The language and purposes of the LHWCA require that the "conditions" permitting modifi- cation include non-physical conditions that are relevant to a claimant's continuing entitlement to compensation . . . . 9 B. The Director's construction is consistent with earlier interpretations of Section 22 and is entitled to deference . . . . 20 Conclusion . . . . 31 TABLE OF AUTHORITIES Cases: Alaska Packers Ass'n v. Pillsbury, 301 U.S. 174 (1937) . . . . 22 Allen v. Metropolitan Stevedore, 8 Ben. Rev. Bd. Serv. (MB) 366 (1978) . . . . 23-24 American Mut. Ins. Co. V. Jones, 426 F.2d 1263 (D.C. Cir. 1970) . . . . 13 Atlantic Coast Shipping Co. V. Golubiewski, 9 F. Supp. 315 (D. Md. 1934) . . . . 23, 24 (III) ---------------------------------------- Page Break ---------------------------------------- IV Cases-Continued: Page Avondale Shipyards, Inc. v. Guidry, 967 F.2d 1039 (5th Cir. 1992) . . . . 15, 23 Banks V. Chicago Grain Trimmers Ass'n, 390 U.S. 459 (1968) . . . . 10, 26 Bath Iron Works Corp. v. Director, OWCP, 113 S. Ct. 692 (1993) . . . . 13 Bay Ridge Operating Co. V. Lowe, 14 F. Supp. 280 (S.D.N.Y. 1936) . . . . 24 Bethlehem Shipbuilding Corp. V. Cardillo, 23 F. Supp. 400 (D. Mass. 1938), aff'd, 102 F.2d 299 (lst Cir.), cert. denied, 307 U.S. 645 (1939) . . . . 24 Boudreaux V. American Workover, Inc., 680 F.2d 1034 (5th Cir. 1982), cert. denied, 459 U.S. 1170 (1983) . . . . 25 Bowen V. Yuckert, 482 U.S. 137 (1987) . . . . 14 Brown V. Gardner, 115 S. Ct. 552 (1994) . . . . 28 Burley Welding Works, Inc. V. Lawson, 141 F.2d 964 (5th Cir. 1944) . . . . 22 Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984) . . . . 25, 26, 28 Dingess V. Director, OWCP, 12 Black Lung Rep. (MB) 1-141 (1989) . . . . 12 Director, OWCP V. Detroit Harbor Terminals, Inc., 850 F.2d 283 (6th Cir. 1988) . . . . 25 Director, OWCP V. Drummond Coal Co., 831 F.2d 240 (llth Cir. 1987) . . . . 23 Director, OWCP V. Edward Minte Co., 803 F.2d 731 (D.C. Cir. 1986) . . . . 23 Director, OWCP V. General Dynamics Corp., 980 F.2d 74 (1st Cir. 1992) . . . . 25 Director, OWCP v. General Dynamics Corp., 982 F.2d 790 (2d Cir. 1992) . . . . 25 Director, OWCP v. O'Keefe, 545 F.2d 337 (3d Cir. 1976) . . . . 25 Eastern S.S. Lines, Inc. V. Monahan, 110 F.2d 840 (lst Cir. 1940) . . . . 13, 14 Edwards V. Director, OWCP, 999 F.2d 1374 (9th Cir. 1993), cert. denied, 114 S. Ct. 1539 (1994 ). . . . 15 Estate of Cowart V. Nicklos Drilling Co., 112 S. Ct. 2589 (1992) . . . . 9, 26 ------------------------------------------------------ Page Break ---------------------------------------- IV Cases-Continued: Page Fleetwood v. Newport News Shipbuilding & Dry Dock Co,: 16 Ben. Rev. Bd. Serv. (MB) 282 (1984), aff'd, 776 F.2d 1225 (4th Cir. 1985) . . . . 5, 27 776 F.2d 1225 (4th Cir. 1985) . . . . 15, 16, 20, 21, 22, 29 Force V. Director, OWCP, 938 F.2d 981 (9th Cir. 1991) . . . . 25 Franklin County Mining Co. V. Industrial Comm'n, 153 N.E. 608 (11]. 1926) . . . . 24 Gardner V. Director, OWCP, 640 F.2d 1385 (lst Cir. 1981) . . . . 14 General Dynamics Corp. V. Director, OWCP, 673 F.2d 23 (lst Cir. 1982) . . . . 22 Heckler v. Campbell, 461 U.S. 458 (1983) . . . . 14 Hole V. Miami Shipyards Corp., 640 F.2d 769 (5th Cir. 1981) . . . . 15, 23 Independence Indem. Co. V. White, 27 S.W.2d 529 (Tex. Comm'n App, 1930) . . . . 24 Indianapolis Pump & Tire Co. V. Surface, 155 N.E. 835 (Ind. App. 1927) . . . . 24 Intercounty Constr. Corp. V. Walter, 422 U.S. 1 (1975) . . . . 10, 26 John W. McGrath Corp. V. Hughes, 289 F.2d 403 (2d Cir. 1961) . . . . 13 Jordan V. Decorative Co., 130 N.E. 634 (N.Y. 1921) . . . . 21 LaFaille V. Benefits Review Bd., 884 F.2d 54 (2d Cir. 1989) . . . . 15, 29 Louisiana Ins. Guar. Ass'n V. Abbott, 40 F.3d 122 (5th Cir. 1994) . . . .13, 14 Lucero v. Climax Molybdenum Co., 732 P.2d 642 (Colo. 1987) . . . . 23 Martin V. OSHRC, 499 U.S. 144 (1991) . . . . 26 McrCord v. Cephas, 532 F.2d 1377 (D.C. Cir. 1976) . . . . 7 McCormick S.S. Co. v. United States Employees' Compensation Comm'n, 64 F.2d 84 (9th Cir. 1933) . . . . 6, 20, 21, 26 ---------------------------------------- Page Break ---------------------------------------- VI cases-Continued: Page McDougall v. E.P. Paup Co., 21 Ben. Rev. Bd. Serv. (MB) 204 (1988), aff'd, 999 F.2d 1341 (9th Cir. 1993) . . . . 12 Mullins Coal Co. V. Director, OWCP, 484 U.S. 135 (1987) . . . . 26 New Orleans (Gulfwide) Stevedores v. Turner, 661 F.2d 1031 (5th Cir. 1981) . . . . 13 Newport News Shipbuilding & Dry Dock Co. v. Howard, 904 F.2d 206 (4th Cir. 1990) . . . . 25 O'Keeffe V. Aerojet-General Shipyards, Inc., 404 U.S. 254 (1971) . . . . 10 Owens V. Traynor, 274 F. Supp. 770 (D. Md. 1967), aff'd, 396 F.2d 783 (4th Cir.), cert. denied, 393 U.S. 962 (1968) . . . . 14 Pauley V. Beth Energy Mines, Inc., 501 U.S. 680 (1991) . . . . 26 Peabody Coal Co. v. Gossett, 819 S.W.2d 33 (Ky. 1991) . . . . 28 Pillsbury V. Alaska Packers Ass'n, 85 F.2d 758 (9th Cir. 1936), rev'd, 301 U.S. 174 (1937) . . . . 6, 21, 22, 26 Potomac Elec. Power Co. V. Director, OWCP, 449 U.S. ,268 (1980) . . . . 26 Randall V. Comfort Control, Inc., 726 F.2d 791 (D.C. Cir. 1984) . . . . 15, 29 Ray's Case, 119 A. 191 (Me. 1922) . . . . 21 Sea-Land Serv., Inc. V. Rock, 953 F.2d 56 (3d Cir. 1992) . . . . 25 See v. Washington Metro. Area Transit Auth., 36 F.3d 375 (4th Cir. 1994) . . . . 13 Skelly Oil Co. v. Thomas, 295 P. 213 (Okla. 1931 ) . . . . 24 South V. Indemnity Ins. Co. of N. Am., 146 S.E. 45 (Ga. Ct. APP, 1928) . . . . 24 Swift & Co. v. Neal, 18 N.E.2d 491 (Ind. App. 1939) . . . . 24 Vasquez V. Continental Maritime, 23 Ben. Rev. Bd. Serv. (MB) 428 (1990) . . . . 15 Verderane V. Jacksonville Shipyards, Inc., 772 F.2d 775 (llth Cir. 1985) . . . . 23 ---------------------------------------- Page Break ---------------------------------------- VII Cases-Continued: Page Welch v. Leavey, 397 F.2d 189 (5th Cir. 1968), cert. denied, 393 U.S. 1049 (1969) . . . . 14 Whitney v. Agsco Dakota, 453 N.W.2d 847 (S.D. 1990) . . . . 23 Statutes, regulations and rule: Black Lung Benefits Act, 30 U.S.C. 901 et seq. . . . . 11, 23 30 U.S.C. 932 (a) . . . . 11 30 U.S.C. 932 (g) . . . . 12 Longshore and Harbor Workers' Compensation Act, 33 U.S.C. 901 et seq. . . . . 3 2 (10),33 U.S.C. 902 (10) . . . . 2, 2, 3, 13, 21, 28 2(14),33 U.S.C. 902 (14) . . . . 11 3 (e), 33 U.S.C. 903 (e) . . . . 12 8(c) (1)-(20),33 U.S.C. 908(c) (1)-(20) . . . . 13 8(c) (21),33 U.S.C. 908(c) (21) . . . . 4, 13 8(c) (22),33 U.S.C. 908(c) (22) . . . . 13 8 (C) (23),33 U.S.C. 908(c) (23) . . . . 13 8 (f), 33 U.S.C. 908 (f) . . . . 4, 19 8 (g) ,33 U.S.C. 908(g) . . . . 18 8 (h), 33 U.S.C. 908 (h) . . . . 29 8(j), 33 U.S.C. 908 (j) . . . . 16 9 (b), 33 U.S.C. 909 (b) . . . . 11 9 (b)- (d), 33 U.S.C. 909 (b) -(d) . . . . 11 9 (d), 33 U.S.C. 909 (d) . . . . 11 19 (c) ,33 U.S.C. 919 (c) . . . . 3 19 (d), 33 U.S.C. 919 (d) . . . . 3 19 (e), 33 U.S.C. 919 (e) . . . . 3 21 (a) - (c), 33 U.S.C. 921 (a)-(c) . . . . 3 22,33 U.S.C. 922 . . . . passim 39 (a), 33 U.S.C. 939 (a) . . . . 3, 25, 26 39 (C) ,33 U.S.C. 939 (C) . . . . 18 44 (c) (2) (B) ,33 U.S.C. 944(c) (2) (B) . . . . 4 44(i) (2),33 U.S.C. 944(i) (2) . . . . 4 ---------------------------------------- Page Break ---------------------------------------- VIII Statutes, regulations and rule-Continued: Longshore and Harbor Worker's Compensation Act Amendments of 1984, Pub. L. No. 98-426, 98 Stat. 1639: 8(h), 98 Stat. 1646-1647 . . . . 17 16,98 Stat. 1650 . . . . 27 Social Security Act, 42 U.S.C. 301 et seq.: 42 U.S.C. 402 (X) . . . . 24 42 U.S.C. 423(d) (1) (A) . . . . 14 42 U.S.C. 423(d) (2) (A) (1988 & Supp. V 1993) . . . . 14 42 U.S.C. 423 (f) (2)-(4) . . . . 28 42 U.S.C. 1382c(a) (4) (B)-(D) . . . . 28 Social Security Disability Benefits Reform Act of 1984, Pub. L. No. 98-460, 98 Stat. 1794 . . . . 28 2(a), 98 Stat. 1794-1796 . . . . 28 2(c), 98 Stat. 1796-1797 . . . . 28 Ariz. Rev. Stat. Ann. 23-1044.F (Supp. 1994) . . . . 12 Ga. Code Ann. 34-9-104 (a) (Michie 1992) . . . . 12 Ky. Rev. Stat. Ann. 342.125 (Michie/Bobbs- Merrill Supp. 1994) . . . . 12 Va. Code Ann. (Michie 1991 & Supp. 1994): 65.2-101 . . . . 12 65.2-708 . . . . 12 20 C.F.R.: Section 701.202 (a) . . . . 3, 25 Section 702.105 . . . . 3 Section 702.148 (b) . . . . 4 Section 702.148(c) . . . . 17 Section 702.315 (a) . . . . 3 Section 702.316 . . . . 3 Sections 702.331 et seq . . . . . 3 Section 702.373 . . . . 3 Section 702.373 (a) . . . . 6 Section 702.373 (d) . . . . 18 Section 725.310 (a) . . . . 11 Fed. R. Civ. P. 60 (b) . . . . 11 ---------------------------------------- Page Break ---------------------------------------- IX Miscellaneous: Page Annotation, Workmen's Compensation: Statutory Phrase "Incapacity for Work" or the Like, As Including Inability To Obtain Work Following an Injury, 33 A.L.R. 115 (1924) . . . . 21 129 Cong. Rec. 571 (1983) . . . . 17 130 Cong. Rec. (1984) : p. 8327 . . . . 17, 27 pp. 25,902-25,903 . . . . 27 p. 26, 300 . . . . 27 Employment Standards Admin., U.S. Dep't of Labor, Longshore and Harbor Workers' Com- pensation Act: Annual Report on Administra- tion of the Act During Fiscal Year 1992 (1993 ) . . . . 18 Employment Standards Admin., U.S. Dep't of Labor, OWCP Annual Report to Congress FY 1993 (1994) . . . . 18, 19 43 Fed. Reg. 36,786 (1978) . . . . 11, 12 H.R. Conf. Rep. No. 1027, 98th Cong., 2d Sess. (1984) . . . . 27 H.R. Rep. No. 570, 98th Cong., 1st Sess. (1983) . . . . 17 A. Larson, The Law of Workmen's Compensation (1994) : vol. 1C . . . . 12, 13 vol. 3 . . . . 12, 15 Oversight Hearings on the Longshoremen's and Harbor Workers' Compensation Act (Part 2): Hearings Before the Subcomm. on Compensa- tion, Health and Safety of the House Comm. on Educ. and Labor, 95th Cong., 2d Sess. (1978) . . . . 16 Seventeenth Annual Report of the United States Employees' Compensation Comm'n (1933) . . . . 27 The American Heritage Dictionary of the English Language (3d ed. 1992) . . . . 10 Twenty-First Annual Report of the United States Employees' Compensation Comm'n (1937) . . . . 26-27 ---------------------------------------- Page Break ---------------------------------------- In the Supreme Court of the United States OCTOBER TERM, 1994 No. 94-820 METROPOLITAN STEVEDORE COMPANY, PETITIONER v. JOHN RAMBO AND DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, UNITED STATES DEPARTMENT OF LABOR ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT BRIEF FOR THE DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS OPINIONS BELOW The opinion of the court of appeals (Pet. App. 2a-5a) is reported at 28 F.3d 86. The decisions and orders of the Benefits Review Board (Pet. App. 6a- 10a) and administrative Law judges (Pet. App. lla- 17a; 94-1045 Pet. App. 16a-20a 1) are unreported. ___________________(footnotes) 1 The Solicitor General filed a petition for a writ of cer- tiorari on behalf of the Director, Office of Workers' Compen- sation Programs, seeking review of the same court of appeals' decision at issue here. Director, Office of Workers' Compensa- tion Programs V. John Rambo and Metropolitan Stevedore Co., No, 94-1045 (filed Dec. 12, 1994). The Court has not acted on that petition. (1) ---------------------------------------- Page Break ---------------------------------------- 2 JURISDICTION The judgment of the court of appeals was entered on June 24, 1994. The petition for rehearing filed by Metropolitan Stevedore Company was denied on August 10, 1994. Pet. App. la. The petition for rehearing filed by the Director, Office of Workers' Compensation Programs, was denied on September 14, 1994. 94-1045 Pet. App. 21a-22a. Metropolitan's petition for a writ of certiorari was filed on Novem- ber 7, 1994, and was granted on January 13, 1995. 115 S. Ct. 787. The jurisdiction of this Court rests upon 28 U.S.C. 1254 (l). STATUTORY PROVISIONS INVOLVED Section 2(10) of the Longshore and Harbor Work- ers' Compensation Act (LHWCA), 33 U.S.C. 902(10), provides in relevant part that "`[d]isability' means incapacity because of injury to earn the wages which the employee was receiving at the time of injury in the same or any other employment." Section 22 of the LHWCA, 33 U.S.C. 922, provides in relevant part: Upon his own initiative, or upon the application of any party in interest (including an employer or carrier which has been granted relief under section 908 (f) of this title), on the ground of a change in conditions or because of a mistake in a determination of fact by the deputy commis- sioner, the deputy commissioner may, at any time prior to one year after the date of the last pay- ment of compensation, * * * review a compensa- tion case (including a case under which pay- ments are made pursuant to section 944(i) of this title ) in accordance with the procedure pre- scribed in respect of claims in section 919 of this title, and in accordance with such section issue ---------------------------------------- Page Break ---------------------------------------- 3 a new compensation order which may terminate, continue, reinstate, increase, or decrease such compensation. STATEMENT 1. In 1980, respondent John Rambo injured his back and leg while working as a longshore "front- man" for petitioner Metropolitan Stevedore Company. See Pet. App. 3a, 7a, 12a. He filed a disability claim with the Department of Labor under the Longshore and Harbor Workers' Compensation Act (LHWCA), 33 U.S.C. 901 et seq. 2 The LHWCA defines "dis- ability" as "incapacity because of injury to earn the wages which the employee was receiving at the time of injury in the same or any other employment." 33 U.S.C. 902(10). In 1983, an administrative law judge (ALJ) ac- cepted a stipulation between Rambo and Metropolitan that Rambo had sustained a 221/2% permanent par- tial disability that had produced a weekly wage loss of $120.24 per week, or 22 1/2% of his average weekly wages of $534.88. 94-1045 Pet. App. 17a-18a. Under ___________________(footnotes) 2 Administration of the LHWCA is entrusted to the Secre- tary of Labor, see 33 U.S.C. 939 (a), and that task has been assigned by regulation to the Office of Workers' Compensation Programs (OWCP), see 20 C.F.R. 701.202(a). The OWCP investigates claims, and in uncontested cases a district director (formerly a deputy commissioner, see 20 C.F.R. 702.105) in OWCP may issue awards. 33 U.S.C. 919 (c) and (e); 20 C.F.R. 702.315(a). In contested cases, parties may obtain hearings before an administrative law judge (ALJ), who then issues a decision awarding or denying benefits. 33 U.S.C. 919 (d) ; 20 C.F.R. 702.316, 702.331 et seq. An ALJ decision is reviewable by the Department's Benefits Review Board, and Board decisions are reviewable in the courts of appeals. 33 U.S.C. 921 (a)- (c). Modification of compensation awards is governed by 33 U.S.C. 922 and 20 C.F.R. 702.373. ---------------------------------------- Page Break ---------------------------------------- 4 Section 8(c) (21 ) of the LHWCA, Rambo therefore received an award of $80.16 per week, which repre- sented 662/3 % of "the difference between the average weekly wages of [Rambo] and [Rambo's] wage- earning capacity thereafter in the same employment or otherwise." 33 U.S.C. 908(c) (21). See 94-1045 Pet. App. 17a-18a. Pursuant to Section 8(f) of the LHWCA, 33 U.S.C. 908(f), the ALJ also limited Metropolitan's liability for permanent disability com- pensation to 104 weeks, after which a Special Fund, which the Director of the Office of Workers' Compen- sation Programs ( OWCP) administers, became liable for the $80.16 weekly payments. 94-1045 Pet. App. 19a-20a; see 33 U.S.C. 944 (i) (2).3 2. After receiving the disability award, Rambo attended crane school and obtained longshore work as a crane operator. Pet. App. 3a, 14a. He worked in that position for four to five years and performed additional work as a heavy lift truck operator when time was available. Id. at 14a. Between 1985 and ___________________(footnotes) 3 Although the Special Fund assumed liability for Rambo's compensation after the first 104 weeks under the award, Metropolitan retains a financial interest in the outcome of this case. Under the LHWCA, an employer's required con- tribution to the Special Fund depends in part on the amount of payments made by the Fund "during the preceding calendar year which are attributable to the" employer. 33 U.S.C. 944 (c) (2) (B). In recognition of their continuing financial interest, employers "are given the authority to monitor their claims in the special fund," 20 C.F.R. 702.148 (b), and are among the "part[ies] in interest" who are permitted to seek modification of an award. 33 U.S.C. 922; see 20 C.F.R. 702.148 (b) (employer "can initiate [a] proceeding to modify an award of compensation after the special fund has assumed the liability to pay benefits"). ---------------------------------------- Page Break ---------------------------------------- 5 1990, his average weekly earnings ranged from $1,307.81 to $1,690.50, or more than three times his pre-injury earnings. Id. at 15a-16a; see also id. at 3a, His physical condition, however, remained essen- tially unchanged. See id. at 3a, 15a. In 1989, Metro- politan sought modification of the award pursuant to Section 22 of the LHWCA, 33 U.S.C. 922, argu- ing that Rambo's increased earnings represented a "change in conditions" such that he is no longer "dis- ab[led]" under the Act. Pet. App. 8a, 14a. In 1991, a second ALJ agreed with Metropolitan and terminated Rambo's disability payments. Pet. App. lla-17a. Relying on Fleetwood v. Newport News Shipbuilding & Dry Dock Co., 16 Ben. Rev. Bd. Serv. (MB) 282 (1984), aff'd, 776 F.2d 1225 (4th Cir. 1985), the ALJ reasoned that modification may be based on a change in a claimant's economic condi- tion following an award. Pet. App. 13a-14a. The ALJ recognized that higher post-injury earnings are not necessarily determinative of an employee's wage- earning capacity and that it therefore was necessary "to consider wage-earning capacity in an open labor market under normal employment conditions. " Id. at 14a. After undertaking that inquiry, the ALJ found that Rambo in fact no longer had a loss of wage- earning capacity. Id. at 14a-16a. In particular, the ALJ noted that Rambo's increased wages were not attributable solely to the effects of inflation and sal- ary increases; that Rambo was at no greater risk of losing his present job or seeking employment than anyone else; and that his present employment was not the result of a "beneficent" employer. Ibid.' ___________________(footnotes) 4 The ALJ also rejected Rambo's arguments that only the ALJ who issued the 1983 award could modify it and that the ---------------------------------------- Page Break ---------------------------------------- 6 The Benefits Review Board affirmed. Pet. App. 6a-10a. Relying on Fleetwood, the Board rejected Rambo's argument that modification could not be granted absent a showing of a change in the claim- ant's physical condition. Pet. App. 9a. The Board also noted that Rambo "has raised no error committed by the administrative law judge in weighing the evi- dence and granting modification based on [Rambo's] increase in wage-earning capacity after the original award of benefits." Id. at l0a. 3. The court of appeals reversed. Pet. App. 2a-5a. The court construed its own precedents, "supported by the clear weight of authority" (id. at 5a), to "make clear that only a change in a claimant's physi- cal condition can justify an award modification." Id. at 3a; see id at 4a (citing Pillsbury v. Alaska Pack- ers Ass'n, 85 F.2d 758, 760 (9th Cir. 1936), rev'd on other grounds, 301 U.S. 174 (1937); and McCormick S.S. Co. v. United States Employees' Compensation Comm'n, 64 F.2d 84 (9th Cir. 1933)). Thus, in the court's view, "[a] change in a claimant's wages, training, skills, or educational background is insuffi- cient." Pet. App. 3a-4a. 5 ___________________(footnotes) 1983 award, which was based on stipulated facts, could not be modified because it was a "settlement." Pet. App. 12a-13a; see 33 U.S.C. 922 (settlements not subject to modification); 20 C.F.R. 702.373 (a) (same). The Benefits Review Board agreed that the 1983 award was not a settlement, Pet. App. 9a, and did not discuss Rambo's arguments concerning the particular ALJ's authority to modify the award. The court of appeals did not reach either of those questions, and they are not at issue here. 5 The court of appeals did not address Rambo's contention (see Br. in Opp. i) that Metropolitan's application for modifi- ---------------------------------------- Page Break ---------------------------------------- 7 SUMMARY OF ARGUMENT A. Section 22 of the Longshore and Harbor Work- ers' Compensation Act (LHWCA) allows modifica- tion of a disability award on account of a "change in conditions." 33 U.S.C. 922. Section 22's plain language demonstrates that the grounds for modifi- cation are not limited to a change in only one condi- tion, such as a claimant's state of health, but also include other conditions relevant to a claimant's con- tinuing entitlement to compensation. That construc- tion is consistent with this Court's decisions, which have interpreted Section 22 broadly and have refused to read unstated limitations into the words that Con- gress chose. The structure and purposes of the LHWCA also demonstrate that Section 22 allows modification based on changes in non-physical conditions bearing on en- titlement to the award. The LHWCA provides death benefit awards to a deceased employee's survivors, based on various considerations. Those awards, how- ever, are routinely subject to modification based on changes in the relevant conditions of entitlement, ___________________(footnotes) cation should be denied because its attorney represented to Rambo, who was represented by his own counsel, that the award would be paid for life. Whether such representations amounted to an express waiver of Metropolitan's right to seek modification, and whether modification of the award (now paid by the Special Fund, which was not a party to any such representations) should be denied on the ground that it would not "render justice under the [A]ct," see McCord V. Cephas, 532 F.2d 1377, 1380-1381 (D.C. Cir. 1976), are fact-bound questions that this Court should not address in the first in- stance. If this Court reverses the judgment in this case, the court of appeals may consider those issues on remand. ---------------------------------------- Page Break ---------------------------------------- 8 such as the remarriage of a surviving spouse, an end to dependency, or the receipt of concurrent ben- efits under another statute. The same approach should be followed in the case of a disability award that is based on a reduction in the employee's wage- earning capacity. That approach, which allows mod- ification of awards to reflect changes in the em- ployee's wage-earning capabilities, ensures that dis- ability compensation will be fairly distributed based on a current measure of actual entitlement. The construction that we urge is also consistent with the LHWCA's reporting provisions, which allow employers to require disabled employees to report their earnings. The only apparent purpose of that reporting requirement is to apprise employers of a possible basis for seeking modification of an award based on a change in the claimant's wage-earning capacity. More generally, the construction that we urge advances the LHWCA's goal of rehabilitating disabled workers by creating a positive financial in- centive for employers to participate in rehabilitation programs. A contrary construction would not only impede the smooth operation of the statutory scheme, but could also be costly to the Special Fund, which the Director administers. B. Contrary to the court of appeals' view, the phrase "change in conditions" has not been uniformly construed to mean only a change in a worker's physi- cal condition. Even if it had been so construed, how- ever, the Director's interpretation should prevail. Her interpretation not only finds compelling support in the statutory language, structure and purposes, but it is also a reasonable accommodation of the LHWCA's policies that is entitled to judicial deference. The ---------------------------------------- Page Break ---------------------------------------- 9 Director's construction is consistent with other inter- pretive aids as well, such as the LHWCA's legislative history, and it promotes sound administration of the Act. Under the Director's interpretation, changes in general economic conditions are not by themselves changes in conditions for LHWCA eligibility, and a mere change in a claimant's wages does not automat- ically establish a change in a claimant's wage-earning capacity. ARGUMENT THE "CHANGE IN CONDITIONS" THAT WILL PER- MIT MODIFICATION OF AN AWARD UNDER SEC- TION 22 OF THE LHWCA INCLUDES A CHANGE IN AN INJURED EMPLOYEE'S WAGE-EARNING CAPACITY THAT RESULTS FROM FACTORS OTHER THAN A CHANGE IN THE EMPLOYEE'S PHYSICAL CONDITION A. The Language And Purposes Of The LHWCA Require That The "Conditions" Permitting Modification Include Non-Physical Conditions That Are Relevant To A Claimant's Continuing Entitlement To Compensation 1. Section 22 of the LHWCA expressly allows modification of compensation because of a "change in conditions. " 33 U.S.C. 922. Under the "normal" or "natural reading" of the Act, Estate of Cowart v. Nicklos Drilling Co., 112 S. Ct. 2589, 2595 (1992), the phrase "change in conditions" includes all condi- tions relevant to a claimant's continuing entitlement to compensation. Congress presumably used the unadorned plural term "conditions" intentionally, The plural usage indicates that modification is not limited to a change in only one condition, such as a claimant's physical state of health, but also includes ---------------------------------------- Page Break ---------------------------------------- 10 the full range of relevant circumstances. See, e.g., The American Heritage Dictionary of the English Language 393 ( 3d ed. 1992) ("condition" may mean, inter alia, a "state of health," while "conditions" means "[e]xisting circumstances"). 2. This Court's decisions construing Section 22's language show that "change in conditions" should not be confined to a change in physical condition. This Court has construed Section 22 broadly and has ac- cordingly refused to give the statutory language a "narrowly technical and impractical construction" or to read unstated limitations into it. O'Keefle v. Aerojet-General Shipyards, Inc., 404 U.S. 254, 255 (1971) (per curiam). For example, the Court has refused to construe that Section to create a limitations period for acting on a timely filed claim. Intercounty Constr. Corp. v. Walter, 422 U.S. 1 (1975). The Court has likewise refused to limit the "mistake in a determination off act" ground for modification to mis- takes that are demonstrated by new evidence rather than by the agency adjudicator's "further reflection on the evidence initially submitted." O'Keeffe, 404 U.S. at 256. It has also refused to limit that ground for modification to "clerical errors and matters con- cerning an employee's disability, not to matters con- cerning an employer's liability." Banks V. Chicago Grain Trimmers Ass'n, 390 U.S. 459, 462 (1968). The Court should similarly refuse to read unstated limitations into the "change in conditions" ground for modification. Indeed, it would be anomalous to construe Section 22 simultaneously to allow the re- opening of a final award for any reason to correct perceived factual mistakes in matters that have al- ready been litigated, but to deny corrective authority ---------------------------------------- Page Break ---------------------------------------- 11 when the litigated facts have changed and the condi- tions that once justified payment of ongoing monetary benefits can no longer sustain that award. Cf. Fed. R. Civ. P. 60(b) (allowing a court to provide relief from a judgment on a variety of grounds, including mistake and changed circumstances ). 3. More generally, the structure and purposes of the LHWCA's benefits scheme demonstrate that the changed conditions that may provide a basis for mod- ification are not limited to changes in a claimant's physical condition. For example, it is well settled that, in death benefit cases, eligibility depends on whether a deceased employee's survivor qualifies as a dependent spouse, child, or other dependent rela- tive. See 33 U.S.C. 909(b)-(d). Eligibility ends when a spouse dies or remarries, a child's age or status as a student or disabled dependent changes, or another relative is no longer dependent. 33 U.S.C. 902 (14 ), 909(b) and (d). Section 22 unquestionably requires modification of a survivor's benefits award whenever there is a change in the survivor's eligibility status-a change that (with the exception of disabled dependent status) has no connection to the surviving claimant's physical condition. See 43 Fed. Reg. 36,786 (1978 ) (comments to regulations under Black Lung Benefits Act ) .6 Similarly, payment of disability and death benefits depends in part on whether a claimant is receiving ___________________(footnotes) 6 The Black Lung Benefits Act, 30 U.S.C. 901 et seq., incor- porates a number of LHWCA provisions, including Section 22's provision for modification based on a change in conditions or a mistake in a determination of fact, See 30 U.S.C. 932 (a) (incorporation provision); 20 C.F.R. 725.310 (a) (modifica- tion provision). ---------------------------------------- Page Break ---------------------------------------- 12 concurrent benefits under another applicable law "for the same injury, disability, or death." 33 U.S.C. 903 (e) ; see also 30 U.S.C. 932(g) (Black Lung Ben- efits Act ). Accordingly, if a state decision establish- ing or modifying a claimant's entitlement to benefits under state law is rendered following an award of LHWCA benefits, it may be considered a change in conditions that supports modification of the LHWCA compensation order. McDougall v. E.P. Paup Co., 21 Ben. Rev. Bd. Serv. (MB) 204, 208 (1988), aff'd on other grounds, 999 F.2d 1341 (9th Cir. 1993); see also Dingess v. Director, OWCP, 12 Black Lung Rep. (MB) 1-141 (1989) ; 43 Fed. Reg. 36, 786 (1978) (Black Lung Benefits Act.) 7 The same principles should apply in "non-schedule" disability cases, such as this one, in which a loss of wage-earning capacity is an essential condition for entitlement to compensation and the employee's wage- earning capacity is determined on the basis of fac- tors in addition to the employee's physical condition.' ___________________(footnotes) 7 As a general matter, state workers' compensation stat- utes, like the LHWCA, base entitlement on wage-earning capacity, not just physical condition. See lC A. Larson, The Law of Workmen's Compensation 57.11 (1994). Although state laws vary, at least some of them allow modification based on non-physical factors, including a change in earning capac- ity. See 3 A. Larson, supra, 81.31 (e); Ariz. Rev. Stat. Ann. 23-1044.F (Supp. 1994) (modification based on non-physical factors, including a change in earning capacity); Ga. Code Ann. 34-9-104(a) (Michie 1992) (same) ; Ky. Rev. Stat. Ann. 342.125 (Michie/Bobbs-Merrill Supp. 1994) (same); Va. Code Ann. 65.2-101, 65.2-708 (Michie 1991 & Supp. 1994) (same). 8 A "schedule" case is one in which compensation is deter- mined by reference to a schedule or list describing parts or ---------------------------------------- Page Break ---------------------------------------- 13 Because the LHWCA defines "[d]isability" as "inca- pacity because of injury to earn the wages which the employee was receiving at the time of injury," 33 U.S.C. 902(10), courts have long recognized that " [t]he degree of disability in any case cannot be meas- ured by physical condition alone, but there must be taken into consideration the injured man's age, his industrial history, his mentality, his education, and the availability of that type of work which he can do." Eastern S.S. Lines, Inc. v. Monahan, 110 F.2d 840, 842 (1st Cir. 1940) ; accord, e.g., Louisiana Ins. Guar. Ass'n v. Abbott, 40 F.3d 122, 126 (5th Cir. 1994 ) (White, J.) ; See v. Washington Metro. Area Transit Auth., 36 F.3d 375, 381 (4th Cir. 1994); New Orleans (Gulfwide) Stevedores v. Turner, 661 F.2d 1031, 1037-1038 (5th Cir. 1981); American Mut. Ins. Co. v. Jones, 426 F.2d 1263, 1265 (D.C. Cir. 1970) ; John W. McGrath Corp. v. Hughes, 289 F.2d 403,405 (2d Cir. 1961). ___________________(footnotes) functions of the body and prescribing a fixed number of weeks of compensation for their loss (or loss of use). See 33 U.S.C. 908 (C) (1) - (20) , (22); Bath Iron Works Corp. v. Director, OWCP, 113 S. Ct. 692, 695 (1993); lC A, Larson, supra, $57.14 (c). An employee with a scheduled injury is conclu- sively presumed to be disabled, even if the injury does not actually affect his wage-earning capacity. Bath Iron Works, 113 S. Ct. at 695 n.4. In a "non-schedule" case, which involves an injury that is not specified in the "schedule" or in a provi- sion governing certain retiree claims, an employee receives compensation for two-thirds of the difference between his pre-injury average weekly wages and his post-injury wage- earning capacity. See 33 U.S.C. 908 (c) (21) ("non-schedule" provision); 33 U.S.C. 908 (c) (23) (retiree provision); Bath Iron Works, 113 S. Ct. at 695-696. ---------------------------------------- Page Break ---------------------------------------- 14 Thus, an LHWCA claimant who retains some phys- ical ability to work may nevertheless be found to be totally disabled if there is no work available that the claimant can perform, e.g., Louisiana Ins., 40 F.3d at 126-127; Eastern, 110 F.2d at 841-842, while one who has a physical impairment from an injury may not be disabled at all if available employment results in no loss of wage-earning capacity. Owens v. Traynor, 274 F. Supp. 770, 773-776 (D. Md. 1967), aff'd, 396 F.2d 783 (4th Cir. ), cert. denied, 393 U.S. 962 (1968) ; see also Gardner v. Director, OWCP, 640 F.2d 1385, 1390 (lst Cir. 1981); Welch v. Leavey, 397 F.2d 189, 191 (5th Cir. 1968), cert. denied, 393 U.S. 1049 (1969). Compare Bowen v. Yuckert, 482 U.S. 137, 140-142, 146-147 (1987 ) (discussing par- allel concepts under Social Security disability pro- grams) ; Heckler v. Campbell, 461 U.S. 458, 459-462 (1983) (same) ; see 42 U.S.C. 423(d) (1) (A) and (d) (2) (A) (1988 & Supp. V 1993) (definition of "disability" under Social Security Act providing for consideration of claimant's "age, education, and work experience" and the existence of suitable work in the national economy). The principles expressed in prior LHWCA cases, which manifestly apply in initial non-schedule benefit determinations, should also apply upon a request to modify the initial award. For example, if a disabled employee's initial award is based on a finding that he has retained some wage-earning capabilities, but his retained skills become obsolete on account of par- ticular technological advances, the change in his wage- earning capacity may justify a modification of his disability award. Conversely, if the disabled employee has enhanced his wage-earning capacity ---------------------------------------- Page Break ---------------------------------------- 15 through the acquisition of new skills-the situation presented in this case-the change may also justify a modification. As the Fourth Circuit explained, all changes in an employee's "wage-earning capabilities should be relevant when considering a modification of an award." Fleetwood v. Newport News Shipbuild- ing & Dry Dock Co., 776 F.2d 1225, 1229 (1985) ; accord Avondale Shipyards, Inc. v. Guidry, 967 F.2d 1039, 1042 n.6 (5th Cir. 1992) ; 3 A. Larson, The Law of Workmen's Compensation $81.31 (e) (1994). See also Hole v. Miami Shipyards Corp., 640 F.2d 769, 772-773 (5th Cir. 1981) ; Vasquez v. Continental Maritime, 23 Ben. Rev. Bd. Serv. (MB) 428 (1990); cf. Edwards v. Director, OWCP, 999 F.2d 1374 (9th Cir. 1993) (claimant disabled despite temporary work), cert. denied, 114 S. Ct. 1539 (1994 ).9 The Fourth Circuit's result ensures that employees with similarly impaired wage-earning capacities are treated alike: Compensation is awarded for a non- scheduled physical impairmen at an initial hearing ___________________(footnotes) 9 In some circumstances, a request for modification may be time-barred, notwithstanding a change in wage-earning ca- pacity. For example, a claimant whose compensation is termi- nated because of an increase in wage-earning capacity may be prevented from reinstating the payment of compensation if the claimant suffers a subsequent loss in wage-earning capac- ity more than one year after the termination. See 33 U.S.C. 922 (allowing modification within one year of the last pay- ment of compensation "or at any time prior to one year after the rejection of a claim"). That one-year limitation also applies, however, to the initial adjudication of claims, Fleet- wood, 776 F.2d at 1232, and may be extended by "de minimis" awards in certain cases. See LaFaville v. Benefits Review Bd., 884 F.2d 54, 62 (2d Cir. 1989); Randall V. Comfort Control, Inc., 725 F.2d 791, 800 (D.C. Cir. 1984); Hole, 640 F.2d at 772. ---------------------------------------- Page Break ---------------------------------------- 16 or on modification-only insofar as that impairment causes a continuing loss of wage-earning capacity. "Without such a modification procedure, workers who had secured new skills and employment would be receiving disability compensation when they were not disabled and an [i]nequitable distribution of lim- ited financial resources would result." Fleetwoood, 776 F.2d at 1229. See also id. at 1232; Oversight Hearings on the Longshoremen's and Harbor Work- ers' Compensation Act (Part 2): Hearings Before the Subcomm. on Compensation, Health and Safety of the House Comm. on Educ. and Labor, 95th Cong., 2d Sess. 494 (1978) (statement of Donald Elisburg, Assistant Secretary for Employment Standards, U.S. Dep't of Labor, that if a claimant arbitrarily refuses rehabilitation services after a final award, the em- ployer could seek modification on the ground of a change in condition). By contrast, the Ninth Circuit's conclusion that "only a change in a claimant's physical condition can justify an award modification" (Pet. App. 3a) ig- nores the established framework for determining non- scheduled benefit payments under the LHWCA, which calculates awards based on the claimant's actual wage- earning capabilities. Under the Ninth Circuit's rule, an employer would be obligated to pay for benefits even when they are unnecessary to compensate in- jured workers for any continuing loss of wage-earning capacity. 4. Section 8(j) of the LHWCA, 33 U.S.C. 908(j), also indicates that a non-physical change in wage- earning capacity is a "change in conditions" that permits modification. That Section allows employers to require disabled employees "to report to the em- ployer not less than semiannually any earnings from ---------------------------------------- Page Break ---------------------------------------- 17 employment or self-employment," and it provides for forfeiture of compensation by employees who fail to report. That provision, which was part of the Longshore and Harbor Workers' Compensation Act Amendments of 1984, Pub. L. No. 98-426, 8(h), 98 Stat. 1646-1647, was enacted "in response to the problem of a disabled employee receiving workers' compensation benefits while he has actually returned to gainful employment." 129 Cong. Rec. 571 (1983) (statement of Sen. Nickles) ; see also H.R. Rep. No. 570, 98th Cong., 1st Sess. 17-18 (1983) (reports "in- tended to be a device by which employers may main- tain some control over claims in payment status"). It is unlikely that Congress would have imposed that reporting requirement on all employees who earn income if no possibility of modification existed in the absence of a change in an employee's physical condi- tion. See 130 Cong. Rec. 8327 (1984) (statement of Rep. Erlenborn) ("It is anticipated that employers will utilize the procedures for modification of awards set forth in section 22 for any subsequent adjustment to benefits.") .10 ___________________(footnotes) 10 Similarly, the Director's regulations provide that "[~] n employer or insurance carrier may conduct any reasonable investigation regarding cases placed into the special fund by the employer or insurance carrier. Such investigation may include, but shall not be limited to, a semi-annual request for earnings information [,] * * * periodic medical examinations, vocational rehabilitation evaluations, and requests for any additional information needed to effectively monitor such a case." 20 C.F.R. 702.148 (c). The regulatory provision gov- erning modification of awards establishes procedures to be followed " [i] f the investigation, described in [20 C.F.R.] 702.148 (c), discloses a change in conditions and the employer or insurance carrier intends to pursue modification of the ---------------------------------------- Page Break ---------------------------------------- 18 5. The interpretation of Section 22 that we urge also advances the LHWCA's goal of rehabilitating disabled workers, see 33 U.S.C. 908(g) and 939(c), by creating a positive incentive for employers to par- ticipate in rehabilitation programs that provide dis- abled employees with new vocational skills. The LHWCA's rehabilitation programs are an important part of the overall statutory scheme, Under the inter- pretation of the Act adopted by the Director and applied by the Benefits Review Board, employers have a strong incentive to promote vocational training for disabled workers and thereby reduce their disability benefits expenditures." The court of appeals' decision in this case, by con- trast, would reduce the employers' financial motiva- tion to participate in rehabilitation efforts. Under the court of appeals' rule, an employee who does not receive rehabilitation until after the award issues ___________________(footnotes) award of compensation." 20 C.F.R. 702.373 (d). The scope of the permissible investigation, and the express recognition that the investigation may reveal a "change in conditions'? warranting modification of an award, plainly reflect the premise that the grounds for modification extend beyond changes in the employee's physical condition. The Director's interpretation is entitled to judicial deference. See pp. 25-30, infra. 11 In fiscal year 1993, LHWCA programs successfully re- habilitated 364 employees and provided assistance to 1,178 continuing participants. Employment Standards Admin., U.S. Dep't of Labor, OWCP Annual Report to Congress FY 1993, at 13, 24 (1994). A previous annual report noted that about 45% of rehabilitated employees were placed with their previ- ous employers. Employment Standards Admin., U.S. Dep't of Labor, Longshore and Harbor Workers' Compensation Act: Annual Report on Administration of the Act During Fiscal Year 1992, at 8-9 (1993). ---------------------------------------- Page Break ---------------------------------------- 19 would be entitled to retain the full award without regard to the effect of future rehabilitation on his wage-earning capacity. Thus, the court of appeals' rule would give employers a diminished incentive to assist in rehabilitating injured workers, because re- habilitation, unless completed prior to the award of compensation, would not reduce the employers' liability. The court of appeals' ruling could also impair the smooth operation of the statutory scheme by creating incentives for inappropriate delays. On the one hand, an employer would have an incentive to delay the award proceedings until the injured employee's re- habilitation is complete and could be taken into ac- count in determining the award. On the other hand, the injured employee would have an incentive to delay rehabilitation until after receipt of a compen- sation award, when rehabilitation can no longer be considered in adjusting the award. Those perverse incentives-whether they result in postponement of the compensation award or postponement of rehabili- tation-are inimical to the statutory objectives. 6. The court of appeals' rule could also be costly for the Special Fund, which the Director administers. See OWCP Annual Report to Congress FY 1993, at 43 (Fund paid more than $90.86 million in 4,672 "second injury" or Section 8(f) cases and approxi- mately $4.8 million in rehabilitation services in fiscal year 1993 ). Neither the Fund, nor an employer, should be required to pay for compensation based on a disability that has diminished or ceased to exist, as reflected in a permanent increase in wage-earning capacity, even if the claimant's physical condition has not improved. ---------------------------------------- Page Break ---------------------------------------- 20 B. The Director's Construction Is Consistent With Earlier Interpretations Of Section 22 And Is Entitled To Deference 1. In rejecting the Director's construction of Sec- tion 22, the Ninth Circuit stated that the phrase "change in conditions" has been uniformly construed "to refer exclusively to a change in [the] physical condition of the employee receiving compensation." Pet. App. 5a (emphasis added by the Ninth Circuit, quoting Fleetwood, 776 F.2d at 1235 (Warriner, J., dissenting) ). That statement is inaccurate. As the Fourth Circuit recognized, no reported court case (ex- cluding the subsequent decision in this case) "holds that modification of a compensation award cannot be granted when an employee experiences a permanent increase in wage-earning capacity. " Fleetwood, 776 F.2d at 1229. None of the cases cited by the Ninth Circuit as establishing that principle so hold, although some in- clude dicta to that effect, For example, the Ninth Circuit relied on its prior ruling in McCormick S. S'. Co. v. United States Employees' Compensation Comm'n, 64 F.2d 84 (1933), which was the first officially reported decision to construe Section 22. In that case, an employee sought to obtain increased compensation through modification because "depressed economic conditions" had resulted in decreased steve- doring work. Id. at 85. The Ninth Circuit stated that "we do not think [Section 22] applies to a change in earnings due to economic conditions." Ibid. That statement falls far short of a holding that a "change in conditions" excludes all increases in a claimant's wage-earning capacity unless they are accompanied by a change in physical condition. ---------------------------------------- Page Break ---------------------------------------- 21 As the Fourth Circuit recognized, the McCormick decision actually supports the Director's position. McCormick recognized that "[c]ompensation is awarded only for loss of earning power," 64 F.2d at 85, and it denied modification because the claimant's decrease in wages resulted from lack of work, not from a decrease in his wage-earning capacity, id. at 86. See Fleetwood, 776 F.2d at 1231. That holding is consistent with the Director's view that an inability to earn wages because of general economic conditions is not an inability "because of injury." See 33 U.S.C. 902 (10) (defining "[disability" ). At bottom, Mc- Cormick simply held that general economic conditions are not among the "conditions" that are taken into account in determining eligibility for an award.12 The Ninth Circuit was also mistaken in relying on its previous decision in Pillsbury v. Alaska Packers Ass'n, 85 F.2d 758 (1936), rev'd on other grounds, 301 U.S. 174 ( 1937). The court of appeals observed in that case that whether a claimant was an employee at the time of injury was "obviously" not susceptible to a "change in conditions." 85 F.2d at 759-760. The Director has no quarrel with that conclusion. See also Fleetwood, 776 F.2d at 1232 n.6. The ___________________(footnotes) 12 State courts have long recognized a distinction between a compensable inability to obtain work that results from limited job opportunities available to persons who are physi- cally disabled and a noncompensable inability that results from general economic conditions. See, e.g., Jordan V. Decora- tive Co., 130 N.E. 634, 635 (N.Y. 1921) (Cardozo, J.) ; Ray's Case, 119 A. 191, 192 (Me. 1922) ; Annotation, Workmen's Compensation: Statutory Phrase "Incapacity for Work" or the Like, As Including Inability To Obtain Work Following an Injury, 33 A.L.R. 115 (1924). ---------------------------------------- Page Break ---------------------------------------- 22 Pillsbury decision went on to state, however, that " change in conditions' refers to a change in the physical condition of the employee." Id. at 760. That observation was mere dictum that did not purport to decide whether an increase in wage-earning capacity could be a change in conditions.13 The Ninth Circuit's reliance on Burley Welding Works, Inc. v. Lawson, 141 F.2d 964 (5th Cir. 1944), was also misplaced. That decision held that a wage increase is not a change in conditions if it does not fairly and reasonably reflect the employee's wage- earning capacity, Id. at 966. Burley's holding is cor- rect and is consistent with the Director's view. See ibid. (quoting deputy commissioner's decision ) ; Fleet- wood, 776 F.2d at 1231. Burley's summary of prior law, however, was not accurate. It stated that "the term `change in conditions' * * * means a change in the employee's physical condition, and not other con- ditions." 141 F.2d at 966 (emphasis added). The only cases that Burley cited for that proposition were McCormick and Pillsbury, which-as we have ex- plained-contain no such holding. See Fleetwood, 776 F.2d at 1231-1232. The Ninth Circuit's reliance on General Dynamics Corp. v. Director, OWCP, 673 F.2d 23 (1st Cir. 1982), suffers from the same flaw. General Dynamics repeated the Burley dicta, 673 F.2d at 25 & n.6, but did not consider whether a ___________________(footnotes) 13 Moreover, Pillsbury has no precedential value, because this Court reversed the Ninth Circuit's decision on the ground that "the circuit court of appeals was without jurisdiction to entertain the attempted appeal." Alaska Packers Ass'n V. Pillsbury, 301 U.S. 174, 177 (1937). ---------------------------------------- Page Break ---------------------------------------- 23 "change in conditions" could include a change in wage-earning capacity.14 Other cases, not cited in the Ninth Circuit's opin- ion, contain similar statements.l5 Those cases, like the cases the Ninth Circuit cited, simply reflect a repeti- tion of dicta rather than careful analysis. Their ac- tual holdings are by and large consistent with the position the Director advocates here. For example, in Atlantic Coast Shipping Co. v. Golubiewslei, 9 F. Supp. 315 (D. Md. 1934), a district court held that im- prisonment is not a "change in conditions" under Section 22, but stated in dictum that the phrase "would seem obviously to refer to a change in the physical condition of the employ[ee] caused by the accident." Id. at 317. The court reasonably concluded that an inability to work caused by imprisonment is not a condition that bears on the statutory definition of "disability" under the LHWCA. Id. at 317-318; see also Allen v. Metropolitan Stevedore, 8 Ben. Rev. ___________________(footnotes) 14 It is questionable whether the Fifth Circuit itself would construe Burley to require a change in physical condition. That court has recently expressed approval of Fleetwood. See Avondale Shipyards, 967 F.2d at 1042 n.6; cf. Hole, 640 F.2d at 772-773. 15 See, e.g., Director, OWCP V. Drummond Coal Co., 831 F.2d 240, 244 n.9 (llth Cir. 1987) (Black Lung Benefits Act); Director, OWCP V. Edward Minte Co., 803 F.2d 731, 735 (D.C. Cir. 1986); Verderane V. Jacksonville Shipyards, Inc., 772 F.2d 775, 780 (llth Cir. 1985); Whitney v. Agsco Dakota, 453 N.W.2d 847, 851-852 (S.D. 1990) (construing pre-Fleetwood LHWCA decisions as "holding" that "change in conditions" means a change in physical condition); Lucero V. Climax Molybdenun Co., 732 P.2d 642, 647 (Colo. 1987) (same). ---------------------------------------- Page Break ---------------------------------------- 24 Bd. Serv. (MB) 366, 368 (1978) ." The court's dictum regarding the employee's physical condition, however, was entirely unnecessary to its decision." ___________________(footnotes) 16 As the district court in Golubiewski pointed out, the LHWCA contains no statutory exclusion from eligibility for benefits on the part of a person who is imprisoned. Compare 42 U.S.C. 402 (x) (limiting the payment of Social Security disability insurance benefits to persons imprisoned on the basis of a felony conviction). 17 Other cases contain similar dictum. See Bay Ridge Op- erating Co. v. Lowe, 14 F. Supp. 280, 281 (S.D.N.Y. 1936) (commitment to a mental institution); Bethlehem Shipbuild- ing Corp. v. Cardillo, 23 F. Supp. 400, 403 (D. Mass. 1938) (imprisonment), aff'd, 102 F.2d 299 (lst Cir.), cert. denied, 307 U.S. 645 (1939). The district courts in Bay Ridge, 14 F. Supp. at 281, and Golubiewski, 9 F. Supp. at 317, relied in part on state workers' compensation cases in concluding that "change in conditions" refers to a change in an injured employee's physical condition. See also Bethlehem Shipbuild- ing, 23 F. Supp. at 403 (relying on McCormick, Bay Ridge, and Golubiewski). The state cases they cite, however, con- strued statutes materially different from Section 22 of the LHWCA and are therefore not persuasive authority. See Independence Indem,. Co. V. White, 27 S.W.2d 529, 531 (Tex. Comm'n App. 1930) (state laws allowing review and modifica- tion of awards are designed to allow an increase, decrease, or termination of awards because of a change in physical condition); Skelly Oil Co. v. Thomas, 295 P. 213, 214 (Okla. 1931) (construing the term "change of condition"); South V. Indemnity Ins. Co. of N. Am., 146 S.E. 45, 46 (Ga. Ct. App. 1928) (same); Indianapolis Pump & Tire Co. V. Surface, 155 N.E. 835 (Ind. App. 1927) (same); Franklin County Mining Co. v. Industrial Comm'n, 153 N.E. 608, 610 (Ill. 1926) (state law allowing modification if "disability of the employee has subsequently recurred, increased, diminished or ended"). Cf. Swift & Co. V. Neal, 18 N.E.2d 491, 493 (Ind. App. 1939) (a 1934 state statute allowing modification "on account of a change in conditions" does not "necessarily mean that there ---------------------------------------- Page Break ---------------------------------------- 25 2. Even if the Ninth Circuit were correct that courts had "uniformly" construed Section 22 to re- quire a change in an employee's physical condition, the Director has permissibly reached a different in- terpretation. The Director acts on behalf of the Sec- retary of Labor, who is charged with administering the LHWCA, see 33 U.S.C. 939(a); 20 C.F.R. 701.202 (a), and the Director's construction of the phrase "change in conditions" is therefore entitled to defer- ence under the principles announced in Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-843 (1984 ). See, e.g., Direc- tor, OWCP v. General Dynamics Corp., 982 F.2d 790, 793-795 (2d Cir. 1992) ; Force v. Director, OWCP, 938 F.2d 981, 983 (9th Cir. 1991) ; Newport News Shipbuilding & Dry Dock Co. v. Howard, 904 F.2d 206, 208-209 (4th Cir. 1990) ; Boudreaux v. Ameri- can Workover, Inc., 680 F.2d 1034, 1046 & n.23 (5th Cir. 1982) (en bane), cert. denied, 459 U.S. 1170 ( 1983) .18 ___________________(footnotes) must be a change in the physical condition of the injured employee" ). 18 Not all courts of appeals have deferred to the Director's construction of the LHWCA. See, e.g., Sea-Land Serv., Inc. v. Rock, 953 F.2d 56, 59 (3d Cir. 1992); Director, OWCP v. Detroit Harbor Terminals, Inc., 850 F.2d 283, 287-288 (6th Cir. 1988); cf. Director, OWCP v. General Dynamics Corp., 980 F.2d 74, 78 (lst Cir. 1992) (reserving question). Courts refusing to defer have relied on the erroneous premise that "neither the Director nor the [Benefits Review] Board is the officer or agency charged with the administration of the [LHWCA]." Director, OWCP V. O'Keefe, 545 F.2d 337, 343 (3d Cir. 1976). They overlook that the Director acts pursuant to a delegation of authority from the Secretary, 20 C.F.R. 701.202 (a), who has express authority to "administer" the ---------------------------------------- Page Break ---------------------------------------- 26 As we have explained, the Director's interpretation is the most natural construction of the language of Section 22 and is consistent with the structure and purposes of the Act. The Director's interpretation should therefore prevail. See Chevron, 467 U.S. at 842-843. There is nothing in other interpretive sources, such as the legislative history, to support a contrary construction. Instead, the legislative history of the LHWCA and its amendments during the 1930s confirms that Congress drafted Section 22 to give agency adjudicators broad authority to reconsider and modify awards. See Intercounty Constr., 422 U.S. at 8-12 (discussing legislative history) ; Banks, 390 U.S. at 463-465 (same) .19 ___________________(footnotes) LHWCA and "make such rules and regulations * * * as may be necessary in the administration" of the Act. 33 U.S.C. 939 (a). Compare Pauley V. BethEnergy Mines, Inc., 501 U.S. 680, 696-697 (1991); Martin V. OSHRC, 499 U.S. 144 (1991); Mullins Coal Co. v. Director, OWCP, 484 U.S. 135,159 (1987). As an adjudicatory tribunal without administrative authority, the Benefits Review Board receives no special deference. See Estate of Cowart, 112 S. Ct. at 2595; Potomac Elec. Power Co. V. Director, OWCP, 449 U.S. 268, 278 n.18 (1980). 19 Congress amended Section 22 in 1934 and 1938. See Intercounty Constr., 422 U.S. at 8-12. During that same gen- eral time period, the Ninth Circuit decided McCormick, supra, and Pillsbury, supra, which contained dicta suggesting that a "change in conditions" was limited to the employee's physi- cal condition. See pp. 20-22, supra. There is no reason to believe that Congress intended to ratify those dicta. The amendments Congress enacted did not address the issue, and there is scant evidence that Congress was aware of the state- ments in those decisions. The United States Employees' Com- pensation Commission (USECC), which administered the LHWCA until 1946, mentioned those and numerous other cases in its annual reports to Congress. Twenty-First Annual ---------------------------------------- Page Break ---------------------------------------- 27 The legislative history of Congress's 1984 amend- ments to the LHWCA similarly provides no basis for rejecting the Director's construction. To the contrary, the legislative history indicates that Congress ex- pected Section 22 to be used to adjust the compensa- tion of disabled employees who had returned to gain- ful employment. See 130 Cong. Rec. 8327 (1984) (statement of Rep. Erlenborn). In that regard, Con- gress amended Section 22 to give employers (such as petitioner in this case) authority to seek modifica- tion of awards that are paid primarily by the Special Fund that the Director administers. See Longshore and Harbor Workers' Compensation Act Amendments of 1984, Pub. L. No. 98-426, 16, 98 Stat. 1650; H.R. Conf. Rep. No. 1027, 98th Cong., 2d Sess. 32 (1984). Furthermore, although the legislative history ac- companying the 1984 amendments shows that Con- gress intended to overrule some Board decisions, see H.R. Conf. Rep. No. 1027, supra, at 30; 130 Cong. Rec. 25,902-25,903 (1984) (statement of Rep. Mil- ler) ; id. at 26,300 (statement of Sen. Hatch), it con- tains no expression of dissatisfaction with the Board's decision in Fleetwood v. Newport News Ship- building & Dry Dock Co., 16 Ben. Rev. Bd. Serv. (MB) 282 (1984), aff'd, 776 F.2d 1225 (4th Cir. 1985 ), which approved an award modification based on changes in non-physical conditions. In light of that history, there is no plausible basis to believe that Congress ratified pre-Fleetwood dicta suggesting that ___________________(footnotes) Report of the USECC 56 (1937) (describing Pillsbury); Seventeenth Annual Report of the USECC 15 (1933) (de- scribing McCormick). But the USECC's brief summaries provide no basis to think that Congress approved of the dicta in those decisions. ---------------------------------------- Page Break ---------------------------------------- 28 a "change in conditions " is limited to a change in the employee's physical condition. See generally Brown v. Gardner, 115 S. Ct. 552, 556-557 (1994) .20 3. The Director's construction is also sound inso- far as it reflects a reasonable accommodation of the policies "committed to the agency's care." Chevron, 467 U.S. at 845. The Director's construction will not overburden the agency and courts with modification requests because, as discussed above, a change in wage-earning capacity necessary to support modifica- tion must be a change in an employee's capacity to earn wages because of injury. See 33 U.S.C. 902(10) (" ` [d]isability' means incapacity because of injury to earn the wages which the employee was receiv- ing at the time of injury" (emphasis added) ). Thus, changes in general economic conditions, as in McCormick, are not by themselves changes in the conditions causing (or eliminating) disability and therefore should not be a basis for modification. 21 ___________________(footnotes) 20 In the same year in which it enacted the LHWCA amend- ments discussed in the text, Congress enacted the Social Secu- rity Disability Benefits Reform Act of 1984, Pub. L. No. 98- 460, 98 Stat. 1794, which expressly provides for termination of disability benefits in circumstances other than those in which the individual's medical condition has improved. See 2(a) and (c), 98 Stat. 1794-1797, codified at 42 U.S.C. 423 (f) (2)-(4) and 1382c(a) (4) (B)-(D). It therefore is un- likely that Congress would have intended to foreclose that result under the LHWCA when it amended that Act in 1984. 21 The fact that state laws authorize modification for non- physical conditions, see note 7, supra, further demonstrates that courts and agencies can successfully administer broad modification provisions. Cf. Peabody Coal Co. V. Gossett, 819 S.W.2d 33, 35-36 (Ky. 1991) (discussing amended state statute) . ---------------------------------------- Page Break ---------------------------------------- 29 Similarly, "a mere change in a claimant's wages," Pet. App. 3a, is insufficient to establish a "change in conditions" under Section 22. Section 8(h) of the LHWCA clearly states that the actual, post-injury wages of an employee who has sustained a partially disabling, non-schedule disability will establish the employee's wage-earning capacity only if the wages "fairly and reasonably represent" his wage-earning capacity. 33 U.S.C. 908(h). If they do not, an agency adjudicator may, in the interest of justice, fix such wage- earning capacity as shall be reasonable, having due regard to the nature of his injury, the degree of physical impairment, his usual employment, and any other factors or circumstances in the case which may affect his capacity to earn wages in his disabled condition, including the effect of disability as it may naturally extend into the future. 33 U.S.C. 908(h). Accordingly, in determining wage- earning capacity, the adjudicator considers such f ac- tors as "the beneficence of a sympathetic employer, the claimant's earning power on the open market, * * * [and] circumstances [that] indicate a probable work injury related wage loss in the future." Ran- dall v. Comfort Control, Inc., 725 F.2d 791, 797 (D.C. Cir. 1984). An increase in wages resulting from in- flation is insufficient to establish an increase in wage- earning capacity. See, e.g., LaFaille v. Benefits Re- view Bd., 884 F.2d 54, 61 (2d Cir. 1989). As the Fourth Circuit recognized in Fleetwood, 776 F.2d at 1232, and the ALJ recognized in this case, relevant factors affecting the claimant's future earn- ings must be considered at both the initial hearing ---------------------------------------- Page Break ---------------------------------------- 30 and the modification hearing. The ALJ in this case observed that the worker's increased wages were not attributable solely to the effects of inflation and salary increases; that the worker was at no greater risk of losing his present job or in seeking new employment than anyone else; and that his present employment was not the result of a "beneficent" employer. Pet. App. 16a. The Board additionally noted that the worker had completed vocational training (id. at 8a) and that he "has raised no error committed by the administrative law judge in weighing the evidence and granting modification based on [his] increase in wage-earning capacity after the original award of benefits." Id. at 10a. Thus, nothing in the Director's position, or in the decisions of the ALJ or the Benefits Review Board, suggests that modification under Section 22 follows automatically from a finding that the claimant's ac- tual wages have increased; rather, a change in wage- earning capacity must be demonstrated to support modification. The court of appeals erred in conclud- ing otherwise and in rejecting the Director's reason- able interpretation of the LHWCA. ---------------------------------------- Page Break ---------------------------------------- 31 CONCLUSION The judgment of the court of appeals should be reversed. Respectfully submitted. THOMAS S. WILLIAMSON, JR. Solicitor of Labor ALLEN H. FELDMAN Associate Solicitor NATHANIEL L SPILLER Counsel for Appellate Litigation EDWARD D. SIEGER Senior Appellate Attorney Department of Labor DREW S. DAYS, III Solicitor General EDWIN S. KNEELER Deputy Solicitor General JEFFREY P. MINEAR Assistant to the Solicitor General FEBRUARY 1995 * U. S. *GOVERNMENT PRINTING OFFICE; 1995 387147 20044 ---------------------------------------- Page Break ---------------------------------------- No. 94-820 In the Supreme Court of the United States OCTOBER TERM, 1994 METROPOLITAN STEVEDORE COMPANY, PETITIONER V. JOHN RAMBO AND DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, UNITED STATES DEPARTMENT OF LABOR ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT REPLY BRIEF FOR THE DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS DREW S. DAYS, III Solicitor General Department of Justice Washington, D.C. 20530 (202)514-2217 THOMAS S. WILLIAMSON, JR. Solicitor of Labor Department of Labor Washington, D.C. 20210 ---------------------------------------- Page Break ---------------------------------------- TABLE OF AUTHORITIES Cases: Page Ardestani V. INS, 502 U.S. 129 (1991) . . . . 3 Banks v. Chicago Grain Trimmers Ass'n, 390 U.S. 459 (1968) . . . . 4, 5 Brown v. Gardner, 115 S. Ct. 552 (1994) . . . . 4 Central Bank v. First Interstate Bank, 114 S. Ct. 1439 (1994) . . . . 4 Chapman V. United States, 500 U.S. 453 (1991) . . . . 3 Chevron U.S.A. Inc. V. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984) . . . . 7 Connecticut Nat'1 Bank V. Germain, 112 S. Ct. 1146 (1992) . . . . 3 Director, OWCP V. General Dynamics Corp. (Ber- geron), 982 F.2d 790 (2d Cir. 1992) . . . . 7 Director, OWCP v. General Dynamics Corp. (Krot- sis), 900 F.2d 506 (2d Cir. 1990) . . . . 7 Director, OWCP V. Newport News Shipbuilding & Dry Dock Co., No. 93-1783 (Mar. 21, 1995) . . . . 7, 9, 10 Estate of Cowart V. Nicklos Drilling Co., 112 S. Ct. 2589 (1992) . . . . 2, 7, 9 Fleetwood V. Newport News Shipbuilding & Dry Dock Co. : 16 Ben. Rev. Bd. Serv. (MB) 282 (1984), aff'd, 776 F.2d 1225 (4th Cir. 1985) . . . . 9 776 F.2d 1225 (4th Cir. 1985) . . . . 4, 10 Intercounty Constr. Corp. V. Walter, 422 U.S. 1 (1975) . . . . 5 Martin V. OSHRC, 499 U.S. 144 (1991) . . . . 7, 8 McCormick S.S. Co. v. United States Employees' Compensation Comm'n, 64 F.2d 84 (9th Cir. 1933) . . . . 3 Pierce v. Underwood, 487 U.S. 552 (1988) . . . . 4, 6 United States v. Alaska, 112 S. Ct. 1606 (1992) . . . . 8 United States V. Gaubert, 499 U.S. 315 (1991) . . . . 8 (I) ---------------------------------------- Page Break ---------------------------------------- II Statutes: Page Longshore and Harbor Workers' Compensation Act, 33 U.S.C. 901 et seq.: 2 (10),33 U.S.C. 902 (10) . . . . 2, 10 8(a), 33 U.S.C. 908 (a) . . . . 10 8(c) (21),33 U.S.C. 908 (C) (21) . . . . 2, 5, 10 8(e), 33 U.S.C. 908(e) . . . . 5 8(j), 33 U. S.C. 908(j) . . . . 5 21 (c) ,33 U.S.C. 921 (c) . . . . 10 $22,33 U.S.C. 922 . . . . l, 2, 3, 4, 5, 6, 7 Occupational Safety and Health Act of 1970, 29 U.S.C. 651 et seq. . . . . 7 Miscellaneous: 130 Cong. Rec. 25,502 (1984) . . . . 6 H.R. Rep. No. 1244, 73d Cong., 2d Seas. (1934) . . . . 4 H.R. Rep. No. 1945, 75th Cong., 3d Sess. (1938 ) . . . . 5 S. Rep. No. 588, 73d Cong., 2d Sess. (1934) . . . . 4 S. Rep. No. 1988, 75th Cong., 3d Sess. (1938) . . . . 5 S. Rep. No. 81, 98th Cong., 1st Sess. (1983) . . . . 6 ---------------------------------------- Page Break ---------------------------------------- No. 94-820 In the Supreme Court of the United States OCTOBER TERM, 1994 METROPOLITAN STEVEDORE COMPANY, PETITIONER v. JOHN RAMBO AND DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, UNITED STATES DEPARTMENT OF LABOR ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT REPLY BRIEF FOR THE DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS Section 22 of the Longshore and Harbor Workers' Compensation Act (LHWCA) allows modification of a benefits award "on the ground of a change in condition s." 33 U.S.C. 922. As we explain in our opening brief, the term "change in conditions" is most naturally read-by itself, in light of this Court's decisions construing Section 22, and in con- text with other provisions of the LHWCA-to in- clude a change in any of the conditions that affect the claimant's entitlement to an LHWCA benefits award. Gov't Br. 9-12. Respondent Rambo dis- agrees, arguing, based on his reconstruction of the (1) ---------------------------------------- Page Break ---------------------------------------- 2 LHWCA's legislative history, that the term "change in conditions" refers only to a change in the claim- ant's "physical condition." Resp. Br. 12-28. He additionally contends that the Director's interpreta- tion of the LHWCA is entitled to no deference, id. at 10-11, and that the Director's approach would lead to unrestricted reopening of claims and other anomalies, id. at 29-35, 36-37. Rambo is mistaken as to each of those contentions. 1. When a court construes a statute, its starting point is the statutory language. When that lan- guage speaks clearly to the issue in question, the court's inquiry, "in all but the most extraordinary circumstance, is finished. " Estate of Cowart V. Nick- los Drilling Co., 112 S. Ct. 2589, 2594 (1992). Sec- tion 22 of the LHWCA provides for modification of a disability award "on the ground of a change in conditions." 33 U.S.C. 922. The plural term "con- ditions" does not restrict modification to a change in the employee's "physical condition." By its plain terms, it allows modification based on a change in any of those conditions that determine the claimant's statutory entitlement to benefits. As we explain in our opening brief, the LHWCA provides disability benefits on account of an injury- caused loss of wage-earning capacity. See 33 U.S.C. 902 (10) (defining disability) ; 33 U.S.C. 908(c) (21) (setting out compensation for non-schedule injur- ies ). A change in conditions that increases an in- jured employee's wage-earning capacity, whether it results from physical recuperation or from acqui- sition of new job skills, is a relevant "change in conditions" for purposes of Section 22. See Gov't Br. 14-15. Construing Section 22 according to its plain terms is fair to employers and employees; it ---------------------------------------- Page Break ---------------------------------------- 3 gives meaning to the LHWCA's reporting require- ments; it furthers the statutory goal of rehabilitat- ing disabled workers; and it avoids the perverse in- centives and costs of the court of appeals' approach, which would allow modification based only on a change in the claimant's physical condition. See Gov't Br. 15-19. Rambo argues for a contrary result based on his construction of the legislative history of the 1934, 1938, and 1984 amendments of Section 22 of the LHWCA, none of which altered the phrase "change in conditions" in that Section. See Resp. Br. 12-35. Rambo essentially asks the Court to ignore express statutory language in favor of dubious inferences from legislative reports that do not squarely address either the relevant statutory language or the legal issue presented in this case. This Court has rejected similar arguments on past occasions, explaining that when the language of a statute is clear, there is no need to examine legislative history. See, e.g., Connecticut Nat)l Bank v. Gemain, 112 S. Ct. 1146, 1149 (1992) ; Ardestani v. INS, 502 U.S. 129, 136 ( 1991). And as the Court has observed, post- enactment legislative history particularly is "an unreliable guide to legislative intent." Chapman v. United States, 500 U.S. 453, 464 n.4 (1991). Rambo's argument demonstrates the accuracy of that observation. Rambo contends that Congress's amendment of Sec- tion 22 without comment on the meaning of the term "change in conditions" amounts to implicit approval of a "clear, bright line ruling''-supposedly adopted in McCormick S.S. Co. v. United States Employees' Compensation Comm'n, 64 F.2d 84 (9th Cir. 1933), and other lower court decisions-that the parties can reopen a disability award only upon "a showing that ---------------------------------------- Page Break ---------------------------------------- 4 the claimant's `physical condition' had changed since the prior award." Resp. Br. 8. As we explain in our opening brief, McComick did not adopt Rambo's "bright line rule." Gov't Br. 20-21. See Fleetwood v. Newport News Shipbuilding & Dry Dock Co., 776 F.2d 1225, 1231 (4th Cir. 1985). The other decisions that Rambo cites contain, at most, errant or obiter dicta on the subject. See Gov't Br. 21-24. Thus, Rambo cannot demonstrate that Congress has "re- enact [cd] statutory language that has been given a consistent judicial construction. " Central Bank v. First Interstate Bank, 114 S. Ct. 1439, 1452 (1994); Pierce v. Underwood, 487 U.S. 552, 566-567 (1988). Indeed, Rambo is unable to show that Congress knew or approved of that dicta. See Brown v. Gardner, 115 S. Ct. 552,556-557 ( 1994). Congress's 1934 amendments of Section 22 are silent on the meaning of the term "change in condi- tions." The 1934 amendments extended the time for reopening an award (from any time during the term of the award until one year after the last payment of compensation) and broadened the grounds for re- opening to include a "mistake in a determination of fact" in addition to a "change in conditions." Banks v. Chicago Grain Trimmers Ass'n, 390 U.S. 459, 463- 464 (1968) (quoting S. Rep. No. 588, 73d Cong., 2d Sess. 3-4 ( 1934) ; H.R. Rep. No. 1244, 73d Cong., 2d Sess. 4 (1934)). But the amendments left the phrase "change in conditions" untouched, and the legislative reports did not discuss that phrase or any case law construing it. The legislative history pro- vides no reason to think that Congress understood that phrase to depart from its ordinary meaning, which is not limited to a change in the employee's physical condition. See Banks, 390 U.S. at 465 (construing Section 22's term "determination of ---------------------------------------- Page Break ---------------------------------------- 5 fact" based on its "ordinary meaning") ; see also Intercounty Constr. Corp. v. Walter, 422 U.S. 1, 8-11 (1975). Congress's 1938 amendment of Section 22 also pro- vides no support for Rambo's position. Congress broadened Section 22 to allow modification not only within one year from the last payment of compensa- tion, but also within one year from the denial of an award. See Intercounty Constr., 422 U.S. at 11; Banks, 390 U.S. at 464-465. But nothing in that amendment or its legislative history indicates that Congress intended to restrict the ordinary meaning of "change in conditions." See Gov't Br. 26 & n. 19. Rather, the reports accompanying those amendments suggest that Congress understood that modification was generally available based on a change in wage- earning capacity. See S. Rep. No. 1988, 75th Cong., 3d Sess. 6 (1938) (awards for partial loss of wage- earning capacity under Section 8(c) (21 ) and (e) of the LHWCA, 33 U.S.C. 908(c) (21) and (e), are "subject to readjustment from time to time over long periods" ) ; H.R. Rep. No. 1945, 75th Cong., 3d Sess. 6 (1938) (same). Congress's 1984 amendment of Section 22 is also unhelpful to Rambo's position. As we discuss in our opening brief ( Gov't Br. 27), Congress amended Sec- tion 22 to give employers, such as petitioner in this case, the opportunity to seek modification of awards that are paid primarily by the Special Fund that the Director administers. Congress enacted that amend- ment in conjunction with the addition of Section 8(j) to the LHWCA, which allows employers to re- quire disabled employees to submit reports of their earnings. 33 U.S.C. 908(j). As we explain in our opening brief, Congress's enactment of Section 8(j )'s reporting requirements reflects an understanding that ---------------------------------------- Page Break ---------------------------------------- 6 an employer could seek modification of a past award upon a showing of a change in the employee's wage- earning capacity, whether or not the employee's phys- ical condition had changed. See Gov't Br. 16-17, 27. Rambo cites congressional committee and confer- ence statements respecting the 1984 amendments, which indicate that "the basis or grounds for seeking a modification remains as under current law," Resp. Br. 23-24 (quoting S. Rep. No. 81, 98th Cong., 1st Sess. 37-38 (1983)), and that "the conferees do not intend to expand or contract the rights of an employer or carrier beyond those prevailing in a non- special fund case, " Resp. Br. 25-26 (quoting 130 Cong. Rec. 25,502 (1984)). Those statements do not support Rambo's position. As they implicitly acknowl- edge, "it is the function of the courts and not the Legislature, much less a Committee of one House of the Legislature, to say what an enacted statute means." Pierce, 487 U.S. at 566. And as we have explained, the courts have never definitively accepted Rambo's version of the "current law." See Gov't Br. 20-24. Rambo is likewise mistaken in suggesting that Congress implicitly supported his restrictive in- terpretation of the term "change in conditions" by rejecting a proposed amendment that would have allowed modification "at any time." Resp. Br. 22- 27. That failed amendment says nothing about which "conditions" bear on the question of modification within Section 22's existing time period. See gener- ally Pet. Br. 21-34. 2. Rambo argues that the Court should not give deference to the Director's construction of Section 22. Resp. Br. 10-12. The question whether the Di- rector's interpretation is entitled to deference would arise, however, only if this Court concludes that Sec- ---------------------------------------- Page Break ---------------------------------------- 7 tion 22's language is ambiguous. See, e.g., Estate of Cowart, 112 S. Ct. at 2594-2595. In that circum- stance, the Director's interpretation should receive the deference that is normally accorded to an agency official's reasonable construction of a statute that the official is charged with administering. See Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837,842-843 (1984). As the Court recently noted, the Director's au- thority to administer the LHWCA includes "the power to resolve legal ambiguities in the statute." Director, OWCP v. Newport News Shipbuilding & Dry Dock Co., No. 93-1783 (Mar. 21, 1995), slip op. 13. Rambo contends that the Director's interpreta- tion of an ambiguous statutory provision is not en- titled to deference where the Director "appears as a litigant in an adversarial proceeding." Resp. Br. 10- 11 (quoting Director, OWCP v. General Dynamics Corp. (Krotsis), 900 F.2d 506, 510 (2d Cir. 1990)). Rambo's reliance on Krotsis, however, is misplaced. The Second Circuit has overruled that decision, cor- rectly recognizing that this Court "squarely rejected" its reasoning in Martin v. OSHRC, 499 U.S. 144 (1991 ). Director, OWCP v. General Dynamics Corp. (Bergerson), 982 F.2d 790, 795 (1992). This Court ruled in Martin that the Secretary of Labor's construction of a safety standard under the Occupational Safety and Health Act was entitled to deference, even though it was advanced through an enforcement action before the Occupational Safety and Health Review Commission, because the Secre- tary's interpretation of her regulation in the admin- istrative adjudication "is agency action, not a post hoc rationalization of it," 499 U.S. at 157. The ---------------------------------------- Page Break ---------------------------------------- 8 Court explained that "the Secretary's litigation posi- tion before the Commission is as much an exercise of delegated lawmaking powers as is the Secretary's promulgation of a workplace health and safety standard." Ibid. As the Court's decision in Martin indicates, the Director's interpretation of an ambiguous provision of the LHWCA is entitled to deference, regardless of whether she has announced her interpretation through rulemaking or in the course of an adminis- trative adjudication, because it reflects the responsi- ble agency official's determination of a matter that Congress has left to the official's charge. The Direc- tor necessarily construes ambiguous terms of the LHWCA in the course of administering the benefits program. Like other agency officials, the Director has discretion in choosing how best to administer the statute, and she can announce official interpretations through rulemaking, participation in an administra- tive adjudication, or other more informal means. See United States v. Alaska, 112 S. Ct. 1606, 1619 (1992); United States v. Gaubert, 499 U.S. 315, 324 (1991 ) ; Martin, 499 U.S. at 157. Those interpreta- tions are entitled to a measure of deference regard- less of the form that they take. Ibid. The issue of deference in this case, however, can be set to one side. The Director's interpretation should prevail because it is the most reasonable construction of the statute. See Gov't Br. 25-30. 3. Rambo also asserts (Resp. Br. 29-31) that the Director's construction of the term "change in condi- tions" would allow virtually unlimited reopening of cases and create administrative problems for the De- ---------------------------------------- Page Break ---------------------------------------- 9 partment and uncertainty for insurance carriers. That policy issue, however, is for Congress rather than the courts. Congress has elected to allow a reopening of benefit awards based upon a "change in conditions. " That choice does indeed permit more reopenings than if Congress had allowed modification of awards only upon a change in the claimant's "physical condition." But Congress was entitled to strike that balance in formulating "a scheme for fair and efficient resolution of a class of private dis- putes." Director, OWCP v. Newport News Shipbuild- ing & Dry Dock Co., slip op. 10. See Estate of Cowart, 112 S. Ct. at 2598. In any event, Rambo's concerns are overstated. As we explain in our opening brief (Gov't Br. 28- 30), the Director's construction does not lead to un- limited reopening. Indeed, eleven years of experience since the Board's decision in Fleetwood v. Newport News Shipbuilding & Dry Dock Co., 16 Ben. Rev. Bd. Serv. (MB) 282 (1984), aff'd, 776 F.2d 1225 (4th Cir. 1985), confirms that the Director's con- struction is workable. Rambo's construction presents the more serious problems of administration, because it creates perverse incentives for employers to delay claims adjudication and for employees to delay re- habilitation. Gov't Br. 19; see also Pet. Br. 12; Brief of Indus. Indem. Ins. Co. as Amicus Curiae in Sup- port of Pet'r 15. Rambo also argues ( Resp. Br. 33-35) that re- opening benefits awards on a ground other than a change in the claimant's physical condition would result in the use of one method for evaluating claims in the initial hearing and a different method in the modification proceeding, That assertion, however, is ---------------------------------------- Page Break ---------------------------------------- 10 incorrect. In both cases, a claimant is entitled to a non-schedule award of benefits only if the claimant has suffered a physical injury that has caused a loss of wage-earning capacity. See Gov't Br. 12-16. In both cases, an employer can defeat an award by es- tablishing either an absence of injury or no loss of wage-earning capacity. See 33 U.S.C. 908(a) and (c) (21) (benefits awarded for disability) ; 33 U.S.C. 902 (10) ("disability" defined as "incapacity because of injury to earn the wages which the employee was receiving at the time of injury"); Gov't Br. 28. Thus, the same method is used for a modification as for an initial decision. See Fleetwood, 776 F.2d at 1232. * __________________(Footnotes) * This Court recently ruled that the Director cannot seek court of appeals review of Benefits Review Board decisions un- less she satisfies Section 21 (c) of the LHWCA, 33 U.S.C. 921 (c), which allows appeals by those who are "adversely af- fected or aggrieved" by the Board's decision. See Director, OWCP V. Newport News Shipbuilding & Dry Dock CO., supra. The question of the Director's standing to appeal is not directly before the Court here, because the Director participated as a respondent supporting the Benefits Review Board's decision in the court of appeals, the Court has not granted the Direc- tor's petition for a writ of certiorari, and the Director is par- ticipating as a respondent supporting the private petitioner in this proceeding. See slip op. 5 n.2. The Court has expressly reserved the question whether the Director can establish standing to appeal based on a decision's impact on the LHWCA Special Fund. See id. at 3 n.1, 6 n.3. ---------------------------------------- Page Break ---------------------------------------- 11 For the reasons stated in our opening brief and herein, the judgment of the court of appeals should be reversed. Respectfully submitted. DREW S. DAYS, III Solicitor General THOMAS S. WILLIAMSON, JR. Solicitor of Labor APRIL 1995 * U. S. GOVERNMENT PRINTING OFFICE; 1995 387147 20062