Metropolitan Stevedore Company v. Rambo – Oral Argument – March 17, 1997

Media for Metropolitan Stevedore Company v. Rambo

Audio Transcription for Opinion Announcement – June 19, 1997 in Metropolitan Stevedore Company v. Rambo

del

William H. Rehnquist:

We’ll hear argument now in Number 96-272, Metropolitan Stevedore Company v. Rambo.

Mr. Babcock.

Robert E. Babcock:

Mr. Chief Justice and may it please the Court:

The Ninth Circuit has awarded John Rambo compensation not because he has a disability, but because the panel perceived a possibility that disability would some day occur.

It has awarded compensation to a worker not first determined to have a loss of earning capacity.

The panel took this action to prevent the running of a time limit on modification.

It did so despite this Court’s clear direction in the previous opinion involving the same claim that a claimant is not disabled unless and until he proves an incapacity to earn wages.

Sandra Day O’Connor:

Well, do you take the position that it would be improper for the ALJ to ever make such an award?

Robert E. Babcock:

To ever make a nominal award?

Uh-huh.

Robert E. Babcock:

Yes, I do.

Sandra Day O’Connor:

Because certainly the… I guess the Solicitor General agrees with the respondents that in interpreting the act and the language of the statute that such an award is possible, focusing on the language of section 908(h).

Robert E. Babcock:

The Solicitor takes the position that if a disability is shown, i.e., if an individual is proven to have in all probability a loss of earning capacity, then such an individual could, in the Solicitor’s opinion, properly receive a nominal award.

The Ninth Circuit went further than did the Solicitor and said that if it’s possible that there will be a loss of earning capacity, hence the Solicitor’s request for remand–

Antonin Scalia:

I don’t understand what you’re saying.

If there is a loss of earning capacity and you insist that it be a present one… right?

Robert E. Babcock:

–No, I do not.

Antonin Scalia:

You do not.

So you agree with the Solicitor General.

Robert E. Babcock:

I think there has to be a current determination that there is a loss of earning capacity.

The process of determining may certainly look forward into the future.

I do not agree with the Solicitor General because they want to substitute… the Ninth Circuit speculates… substitutes doubt and speculation for the basic question of whether there is a disability.

If there might be, they’d say that there could be a nominal award.

The Solicitor says, not quite that far, but instead let’s substitute this doubt for something else, and that’s the other element that’s necessary to prove a compensation award.

Antonin Scalia:

I’m not sure of what you’re saying.

You want to explain it to me again?

Robert E. Babcock:

I’ll try.

Antonin Scalia:

I thought the Solicitor General was saying that if there is a determination that there will in the future be a loss of earning capacity, although there is none now, nominal damages can be awarded.

Robert E. Babcock:

Yes, the Solicitor says that.

Antonin Scalia:

And you disagree with that?

Robert E. Babcock:

Yes, because there’s another element required to receive compensation.

A disability, an unspecified, unmeasured proof of a loss, the loss has to be measured, and what the… the process would be a claimant would prove in a normal claim proceeding I have a disability and here is evidence that will allow you, administrative law judge, to determine the degree, because without the degree you can’t determine the compensation.

The numerator is the wage, the denominator is the earning capacity that exists post injury.

Ruth Bader Ginsburg:

Well, let’s take a case that’s not hypothetical so we won’t be talking about this in the abstract.

Somebody is physically injured, a severe back and leg injury, as in this case, is promoted from the line job that he can no longer do to a manager’s office, and the ALJ thinks there’s a good chance, better than not chance that this guy just won’t make it, and within 2, 3 years he’ll be out of work.

From the answer you’ve given to Justice O’Connor and Justice Scalia, I take it you would say tough luck.

Robert E. Babcock:

No.

I would say that you may find a disability but you have to have more to give the award of compensation.

You have to have evidence that would allow the administrative law judge to fix a figure as section 8(h) requires, fix a figure.

The Solicitor–

Ruth Bader Ginsburg:

Well, what figure would you fix… this man is earning as a manager twice what he earned in the factory.

Robert E. Babcock:

–Well, in that–

Ruth Bader Ginsburg:

So how would you fix a figure?

Robert E. Babcock:

–It would depend upon the evidence presented.

The classic case that we deal with with some frequency is, an individual is earning more.

The individual comes in and says, but I don’t think I’ll keep up this pace for long.

He brings in a doctor.

The doctor says, I don’t think he’ll keep up the pace.

Now he’s proved a disability.

Next step, though, in order to get an award of compensation, how much is he losing, and the doctor in a very simple example might say, I don’t think he’ll be able to work for more than 4 days weekly.

Now the administrative law judge has a basis for making a figure, for fixing a figure, but until he has that basis in the evidence, he can’t–

William H. Rehnquist:

Well, what if the doctor were to say, he can keep going in my view for probably 5 years, but after that he’s going to go down?

Robert E. Babcock:

–I think the administrative law judge would need more to fix a figure.

William H. Rehnquist:

What more would he need?

Robert E. Babcock:

How long the individual is going to live… excuse me, going to work, what he can go to after that time–

William H. Rehnquist:

But that could all be determined at the present time on the basis of the doctor’s opinion.

Robert E. Babcock:

–The doctor says he can only stay in longshoring for 5 years.

Yes.

Robert E. Babcock:

He puts on proof saying after that he can be a security guard.

With those two pieces of evidence, the earnings available in longshoring for the remaining 5 years and the earnings available as a security guard, the administrative law judge has a basis for making a figure.

Antonin Scalia:

So there can never be nominal damages.

There can never be nominal damages, is your position.

Robert E. Babcock:

That is my position, because–

Antonin Scalia:

I thought you said earlier that you weren’t saying categorically there could never be.

Robert E. Babcock:

–Nominal damages are a substitute for a real award.

It’s an ersatz version for a real award.

David H. Souter:

Well, except that it seems to me it responds to this problem.

We might indeed all agree that there is some degree of probability or possibility that the individual in the future is going to suffer in fact an incapacity which right now is subject to so many contingencies that nobody could reasonably estimate it.

So we in effect say yes, there is a possibility there, but it’s a very tiny one, and we don’t know how to give it a more specific figure than that, therefore the appropriate thing to do is to give it a very tiny award.

Give it a dollar.

That’s a nominal award which in fact reflects a nominal possibility, or a nominal probability.

Why isn’t that consistent with the act?

Robert E. Babcock:

It may be consistent with what is right, with what is just and what is fair, but it is not consistent–

No–

Robert E. Babcock:

–with the 1-year time limitation.

David H. Souter:

–But the act speaks of disability in the future, and on the hypothesis I was giving there is a very slight chance, there is some chance, more than zero, that there will be a disability in the future, because in fact something the individual used to be able to do to earn his living he can no longer do now, so that there is something more than zero.

So on that assumption there is a finding of a possibility, more than zero, of some disability in the future.

Consistent with that is to give a nominal award of something more than zero, but not much, to reflect that disability.

Robert E. Babcock:

Well, the act doesn’t define disability as a possible future loss of earning capacity.

David H. Souter:

It defines it as a present one, doesn’t it?

Robert E. Babcock:

It defines it as a loss of earning capacity.

David H. Souter:

Shouldn’t I just… I think probably I should have changed my hypothesis and said; the fact that we can make this probability or possibility judgment about what will eventuate at a future time is reflective of a nominal disability now.

Isn’t that a) both consistent with the act and, as you say, fair?

Robert E. Babcock:

No, I think it’s not consistent with the act, because I think it ignores the limitation of section 22.

David H. Souter:

All right.

Take the hypothesis in which he can become a crane operator, or heavy equipment operator, whatever it was, tomorrow, so that you say there’s no disability here.

He’s earning three times his former wages.

Assume that we know, for whatever reason, that that work, at least in the area where he is, is probably going to exist for only about 6 months.

I take it on your theory there would be no present disability, because for the immediate… he has the immediate prospect of earning money even though we know on the hypo that in 6 months he’ll be… he won’t be able to earn the heavy equipment money, nor will he be able to go back to his lifting job.

Robert E. Babcock:

Not at all.

Okay.

Robert E. Babcock:

But we deal with these cyclical types of industries all the time in the shipyards, and you make an assessment of how long he’s going to be able to do that work, the judge gets additional evidence of what other types of work there are available on the open labor market, and from that evidence, not from a substitution of speculation or possibilities, from that evidence he determines what that earning capacity is.

David H. Souter:

Okay.

So it’s a question of degree, then, because that… in theory that’s not different from the earlier example.

The earlier example recognizes the possibility of something that may happen in the future, whereas the example of the 6-month heavy equipment job recognizes a near certainty, so I take it the difference is, is simply one of the predictive degree.

Robert E. Babcock:

No, sir.

I think the difference is one of whether you’re substituting something, a possibility or a predictive degree for evidence, and this is a system that is built on–

David H. Souter:

Yes, but the evidence in the first case is that he cannot go back to lifting.

There are some things that he used to be able to do that in the future he will not be able to do.

There’s an evidentiary basis for that.

Robert E. Babcock:

–And now he has, presumably with those facts, a disability.

David H. Souter:

Yes.

Robert E. Babcock:

The question still remains, what is his numerical earning capacity?

What is, in dollars and cents–

David H. Souter:

And for the present time the disability is at most of nominal value, so put a nominal value on it.

Why do you say he has a disability?

I thought he doesn’t have a disability until you establish that he has a reduction in earning capacity.

Robert E. Babcock:

–One can look for–

Antonin Scalia:

I thought it was your case that he did not have a disability.

Robert E. Babcock:

–No, my… I… everybody–

Antonin Scalia:

No, wait.

If he can’t do heavy lifting any more but he can operate a crane, do you concede that he therefore has a disability?

Robert E. Babcock:

–No.

Antonin Scalia:

Okay.

Well, that’s… I thought you just did.

Robert E. Babcock:

No.

If I did, I sure–

David H. Souter:

But you also concede, I take it, that although he can do the crane operation, it is possible… you would dispute it on these facts, but it is perfectly possible and legally appropriate to find that his present crane-operating capacity is not reasonably reflective of his overall earning capacity.

Robert E. Babcock:

–It’s possible on some facts to find that, but the administrative law judge reached the contrary conclusion.

The administrative law judge found his wage-earning capacity loss had ended, which is tantamount to saying his current earnings are representative of his future capacity to earn.

David H. Souter:

Well, that may be a reason, then, for saying that this individual… if the ALJ’s finding in that respect is not disturbed, that this individual shouldn’t have gotten his nominal damages, but it would still leave the door open for nominal damages had the ALJ said, a) at the present time he can earn three times as much, so that there is not in fact in actuality right at the moment a loss of earnings, but b) this capacity to earn is not reflective of his earning capacity for the long haul, and therefore I want to put a figure on what the capacity is.

It’s hard to put a figure on it, because there are so many future contingencies, so I’m simply going to say, there is some possibility, and reflect that some possibility in a nominal award.

That theoretically would be possible, wouldn’t it?

Robert E. Babcock:

That theoretically is possible, but I think inappropriate, because–

Sandra Day O’Connor:

Well, Mr. Babcock, what do we do here in this case if we disagree with you and think that in some appropriate case it is possible to determine future economic harm as a disability for someone that would entitle that person to some nominal damages award?

Do we have to vacate and remand here so that that can… the ALJ can at least answer the question?

Robert E. Babcock:

–If you determine that a mere possibility of future economic harm is a sufficient basis for a nominal award, and you conclude that a nominal award is–

Sandra Day O’Connor:

No, if we determine that it is possible that an administrative law judge could determine in a case that there is future economic harm here–

Robert E. Babcock:

–Yes.

Sandra Day O’Connor:

–not at the moment, but from the evidence.

The job isn’t going to last, and there’s future economic harm.

Therefore, a nominal award at present is appropriate.

What do we do in this case, because you didn’t present any alternative argument below.

You just wanted all or nothing.

You… never can you have a nominal award.

And if we disagree with you and think it is possible, what do we do at the bottom line in this case then?

Robert E. Babcock:

If you–

Sandra Day O’Connor:

Don’t we have to send it back?

Robert E. Babcock:

–I think you have to send it back to get a determination of the factual issues–

Right.

Robert E. Babcock:

–as identified by the Solicitor in the brief, whether there is or is not a… on a more-probable-than-not basis a likelihood of that harm.

John Paul Stevens:

May I ask a question on the facts of this case?

If, in addition to the evidence that was presented at the time you terminated the disability there had been evidence that the higher paying job would only last 6 years, say, and then he would be working as a night watchman, as you say, and therefore you could make certain computations.

Would you say that the ALJ should then give an award that reflected… that would stay in effect indefinitely, or could he give a nominal damage award in that kind of case to be adjusted later?

Robert E. Babcock:

Well, that’s why the nominal award concept is both a shield and a sword–

Right.

Robert E. Babcock:

–for both claimants and employers.

In the purest view of the longshore system he would have to do what they do now, which is make that assessment and give an award which overcompensates during the period that he continues–

John Paul Stevens:

That’s what you think he should do.

He should overcompensate temporarily and then perhaps undercompensate later.

Robert E. Babcock:

–I think that’s the structure of this system, yes, sir.

Stephen G. Breyer:

That’s exactly the question I have.

I mean, because I want to know what… obviously, this particular man was earning $500 a week before he was hurt.

Now he’s earning $1,500 a week after he’s hurt, so it’s… he may not be a person who will end up being benefited by this.

But how do you write it?

That is to say, I’m interested in the Solicitor General’s argument.

The Solicitor General is saying that it could happen, that all the doctors say he goes along for 3 years, then it’s collapse, right?

So prove he is a person who will… prove he will lose a lot of money.

Imagine that’s our case, but we don’t know now.

They say, this is a perfectly sensible way to do it.

Give him $1 a week now.

If and when he loses all the money, we’ll give him more later.

They say, it’s sensible to do that, and there’s nothing in the statute that stops it.

You say that’s inconsistent with the act.

Robert E. Babcock:

That’s correct.

Stephen G. Breyer:

What part of the act is it inconsistent with?

What words is it inconsistent with?

That’s what I cannot find.

Robert E. Babcock:

It is inconsistent with section 22 and its 1-year time limitation.

Stephen G. Breyer:

What are the words that make it inconsistent, because I don’t see in section 22, that I have here, an inconsistency.

Robert E. Babcock:

Because… and with the definition of disability, which is an incapacity to earn wages.

Stephen G. Breyer:

He has that.

Robert E. Babcock:

That’s the definition.

Stephen G. Breyer:

He is incapacitated to earn wages.

He will, in all likelihood, earn his present wage from 3 to 8 years, and then boom, he earns nothing.

Fourteen doctors testify that that’s the situation.

Robert E. Babcock:

The difficulty is that you are substituting concerns about the future for the requirement of evidence if you give a nominal award.

Stephen G. Breyer:

Is there anything in the act, any language in the act that says what you just said?

Robert E. Babcock:

There is… within 8(h) it is a two-step process of how you determine earning capacity.

If you argue as an individual that the earnings are not representative of your earning capacity, you must prove that fact by a preponderance of substantial evidence.

Antonin Scalia:

Mr. Babcock–

–Mr. Babcock, I thought your position was that there’s no disability unless there’s a reduction of earning capacity, and that if you’re speculating that there may be a reduction of earning capacity, all you’ve established is that there may be a disability, and the act does not allow the award of any damages if there may be a disability, does it?

Doesn’t it require a probability, at least–

Robert E. Babcock:

I think so.

–that there is a disability?

Robert E. Babcock:

That’s correct.

Stephen G. Breyer:

And my question assumed that there is a probability.

My question is assuming it’s certain, 98 percent certain you go along for 5 years, then you fall over, can’t do another day’s work, so there’s no problem of proof.

Then is there something in this act that would prevent what sounds like a reasonable administrative system?

We’ll give you a dollar a week until you keel over, and if and when you do, we’ll up the ante.

Now, that’s what the SG is arguing we should write an opinion to embody, and I want to know what you think, what language or practice prevents that.

Robert E. Babcock:

The practice that prevents that is in this 8(h) two-step process to determine an entitlement.

First, you must prove, if you’re the one alleging that wages are not representative, higher earnings are not representative, you must prove that they are not representative, that something may happen in the future.

Second… or something is probable to happen in the future.

Second, you must prove an alternative figure.

Ruth Bader Ginsburg:

Mr. Babcock, if we can’t get that from the words themselves, is there support… for example, has the benefit review board addressed this question of nominal damages?

Do we have any opinion at the administrative level or from another court that says the nominal damages theory is no good?

Robert E. Babcock:

No.

As I’m sure we’re all aware now, every circuit that has considered the nominal award concept has in varying degrees, ranging from that proffered by the Solicitor to the extreme version adopted by the Ninth Circuit, approved the concept as a reasonable means of assuring protections against possible harm greater than Congress built into–

Ruth Bader Ginsburg:

And the benefits review board hasn’t rejected the concept?

Robert E. Babcock:

–The benefits review board has historically rejected the concept as an impermissible intrusion upon the 1-year limitation.

Anthony M. Kennedy:

Well, could you go back to Justice Breyer’s question under section 22?

What is it in the language of… let’s assume that there’s a significant probability that there will be a loss of earnings in the future.

He doesn’t have the earnings loss now.

He’s going to be earning higher wages for 5 years.

But we want to… but the ALJ says we should give nominal damages.

What in 22 prevents that?

Robert E. Babcock:

Nothing in 22 prevents that, because the effect of a real award is to achieve that.

The problem with the nominal award is that it is not real.

It is not supported by the evidence.

Anthony M. Kennedy:

No, my hypothetical was that there… was that he does give the nominal award under these circumstances.

He says, in 5 years you’re not going to be having any earnings power.

This is significantly likely, and in 5 years I want you to come back and I’ll look at it again, so I’ll give you a nominal award.

What in 22 prevents that?

Robert E. Babcock:

Nothing in 22 prevents a nominal award, other than it sets the standard for the period of time Congress thought protection against possible harm appropriate.

Anthony M. Kennedy:

But that period of time is 1 year after the last payment is made, and if a nominal award continues to be paid, then that is satisfied, correct?

Robert E. Babcock:

No question, a nominal award gives greater protection against the future than Congress provides in section 22.

William H. Rehnquist:

But under your theory, and Justice Kennedy’s facts, you say no nominal award could be made but an award of money damages not nominal could be made.

Robert E. Babcock:

I think not under that hypothetical.

William H. Rehnquist:

Well, there’s some situations in which you would agree that even though there’s no present loss of earning power on appropriate evidence an award for the future could be made.

Robert E. Babcock:

There has to be a determined loss of earning capacity, which is in itself forward-looking, so he’s not losing now, but the administrative law judge determines that over time he will lose.

That is, by definition, the lost–

William H. Rehnquist:

When would that… suppose he says you’ve lost nothing now, but in 3 years I find that you will have lost 30 percent on the evidence.

When would that award kick in, so to speak?

Robert E. Babcock:

–That would kick in on the date of the decision, and as I indicated earlier, that would be overcompensation under this system during the first 3 years and undercompensation thereafter.

I would point out, though, that would be a real award that would be subject to modification as time went on.

William H. Rehnquist:

But just to clarify your answer–

–That would extend the statute indefinitely, too.

Robert E. Babcock:

Excuse me.

John Paul Stevens:

That would also extend the period of… for that modification indefinitely.

Robert E. Babcock:

A real award does–

John Paul Stevens:

The only difference is, you’d be overcompensating before you knew the real facts.

Robert E. Babcock:

–I don’t quarrel with, in some instances, the wisdom of a nominal award.

What I do say is, it’s not… determination about that wisdom is not something that should be for the judiciary.

It’s something that properly belongs to Congress, and Congress hasn’t entered into the act a nominal award.

Sandra Day O’Connor:

Well, but Mr. Babcock, if you look at section 908(h), the proviso at least tells us that you have to look at what might affect his capacity to earn wages in his disabled condition, including the effect of disability as it may naturally extend into the future, so there is certainly some language in the act that directs one’s attention to future earning capacity.

Now, the Ninth Circuit here said it was enough if there’s a significant possibility of future economic harm.

I think other jurisdictions don’t apply a possibility but say that you have to have proof that it’s more probable than not.

Do you have a position on that, and is there a majority position in the circuits?

Robert E. Babcock:

The… my position on that would obviously be that we think there need be a substantial probability, and on that point we would support the Solicitor’s position.

Robert E. Babcock:

If you look among the circuits, in the Hole case out of the Fifth Circuit the administrative law judge had determined there to be a disability, i.e., that the current earnings were not representative of the earning capacity, and then was faced with the choice, do I pick a big speculative award, or do I pick a small speculative award.

He picked a small, nominal alternative, and the Fifth Circuit approved it.

David H. Souter:

Are we doing anything more than arguing about words, because I would suppose, even on your theory, if the judge said, I find that there is a probability that in the future the job market will change, restrict his opportunities, so that that amounts in today’s terms to a 1-percent chance of disability and therefore I’m going to give him damages equal to or an award that reflects the 1-percent chance, he could do that on your theory, couldn’t he?

Robert E. Babcock:

That’s correct.

He would have evidence supportive of it.

William H. Rehnquist:

Thank you, Mr. Babcock.

Robert E. Babcock:

Thank you.

William H. Rehnquist:

Mr. Stewart, we’ll hear from you.

Malcolm L. Stewart:

Mr. Chief Justice, and may it please the Court:

The position of the Director of the Office of Worker’s Compensation Programs is that a continuing nominal award is appropriate whenever an injured claimant has no current loss of earnings but is more likely than not to suffer a loss of wages at some point in the future as a result of a covered injury.

We believe; however, that the court of appeals erred in this case in ordering a continuing nominal award.

Now, with respect to the propriety of continuing nominal awards, I think the heart of our submission is that such an award in appropriate cases is not an extrastatutory device, it’s an award given to the claimant who satisfies all of the statutory prerequisites for an award of benefits, and for that proposition we would rely primarily on the language of section 908(h), which is reproduced at page 2 of the Government’s brief.

Antonin Scalia:

Do you think that this is a reasonable award within the meaning of 908(h)?

I would think that a reasonable one means you calculate what the reduction of earning is as best you can.

Malcolm L. Stewart:

Well, we think that–

Antonin Scalia:

One dollar is not as best you can.

You’re just saying I can’t calculate what it is, so I’m just picking a number out of the air.

Malcolm L. Stewart:

–Well, we think that in determining an award that is reasonable the administrative law judge should take cognizance of the entirety of the statutory scheme.

Now, if there were no provision for a modification of awards, if the award that was originally entered by the ALJ was to be the award for the rest of the claimant’s life no matter what condition changed, then the ALJ’s only alternative would be to do as you suggest, which is take its best shot at estimating the loss that the claimant would incur over the course of his lifetime and enter an award which was designed to compensate him for that loss even though that would mean overcompensation in the early years and perhaps undercompensation in the future.

The great virtue of section 922’s modification provision is that it sharply reduces the need for speculation.

The ALJ can enter a nominal award, the nominal award will preserve the claimant’s right to seek modification down the road, and at the same time it will avoid the risk of overcompensation that would occur if the claimant got–

Stephen G. Breyer:

Where did this come from?

Is this something the… I mean, his objection, I think, your opponent’s, to this system is it’s a kind of gimmick that’s been hoked up here in order to create this thing, nominal awards.

The statute says do it just the way Justice Scalia comes up with saying, and it will come to the same result in virtually every case, so why are we going through this?

The response would be, that’s how the board wants to do it, but where does it come from?

Is this something that is recent?

Have they made up this nominal damages in this way in this case, or is there a history behind it?

Where does this all come from, this interpretation?

Malcolm L. Stewart:

–It’s been around since approximately 1980 or so.

The first court of appeals decision that approved the concept was Hole, which was issued in 1981 by the Fifth Circuit, and I’m not sure of the exact date of the ALJ decision, but it would have been approximately 1980, and–

Sandra Day O’Connor:

Well, I thought that wasn’t the board’s position.

Malcolm L. Stewart:

–For… during the 1980’s, the benefits review board repeatedly issued opinions that disapproved of the practice of continuing nominal awards.

However, starting in 1990, the benefits review board, albeit without much explanation, has reversed course, and–

William H. Rehnquist:

Was that just in… because it felt bound by court of appeals decisions, or on its own?

Malcolm L. Stewart:

–I think that was on its own, and the reason I say that is, we cited at page 20, footnote 8 of our brief the relevant benefits review board’s… board decisions, and one of those was a case called Morin, M-o-r-i-n, and that case arose out of Maine, and there was no First Circuit decision on point that addressed the question of continuing nominal awards, so I think the fact that the board in Morin evidently regarded the practice of continuing nominal awards as legitimate indicates that it wasn’t simply acquiescing in binding circuit court decisions in the relevant circuits.

Antonin Scalia:

Well, they couldn’t adopt one position in some cases and another position in other cases.

I mean, just the fact that it announced its acquiescence in a case from the First Circuit doesn’t mean it wasn’t pushed there by the fact that it was getting all these contrary decisions from other circuits.

Malcolm L. Stewart:

It was certainly influenced by other circuits, but during the 1980’s, even when the board was expressing general opposition to continuing nominal awards, when a case would arise in a circuit in which there was binding circuit precedent saying continuing nominal awards are appropriate the board would say, despite our disagreement, we feel obligated to apply the standard announced by the relevant court of appeals and decide the case on that basis.

William H. Rehnquist:

Did the court of appeals in the eighties when the benefits review board was taken… did they simply direct the award of nominal damages on their own when the benefits review board had said no?

Malcolm L. Stewart:

No.

They would typically remand to the ALJ for… they would–

William H. Rehnquist:

It came from the court of appeals, though.

It didn’t come from the benefit review board?

Malcolm L. Stewart:

–It didn’t come from the benefits review board.

It came initially, I would say, from an ALJ, because in Hole, the first court of appeals case that approved it, the ALJ had fashioned a nominal award.

The benefit… and the court of appeals approved that practice.

But during the period of the 1980’s when the courts of appeals were generally approving this practice, it was over the objection of the benefits review board.

Now, if–

Ruth Bader Ginsburg:

Mr. Stewart, could an employer ever cut this out by saying… take this case.

For 5 years he’s continued to work as a crane operator, we now again ask for a changed circumstances ruling, to cut out the nominal damages?

Malcolm L. Stewart:

–Yes.

I mean, we believe that the standard at any given time is whether it is more likely than not that the claimant will suffer a loss of earnings at some point in the future, and even if a nominal award were entered at one point, if years went by and in fact the claimant showed that he was able to keep his higher paying job, the employer could move for a modification on the ground that it was now no longer more likely or not that the claimant would suffer a loss of earnings at some point in the future.

In further response to your question, Justice Breyer, about where these awards came from, historically they came from the ALJ and then were approved by the courts of appeals.

I think in terms of where in the statute does the authority reside, there are really two provisions of section 908(h) that we think are relevant.

The first is the provision that says the ALJ in determining wage-earning capacity should look to the effect of disability as it may naturally extend into the future, and we think that provision would be meaningless if the ALJ were required to set wage-earning capacity by reference to the wages that the employee was currently capable of earning.

And with respect to the question, why can the ALJ award nominal benefits as opposed to taking a shot at estimating likely losses in the future, we think the statute gives the ALJ wide discretion in that it says that the ALJ may, in the interest of justice, fix such wage-earning capacity as shall be reasonable, and we think that encompasses the freedom not only to weigh the facts, but also to consider the totality of a statutory scheme.

Antonin Scalia:

Mr. Stewart, on the other question, even though you argue that there can be nominal damages you say in this case there’s no basis for it and the ALJ simply found that this was a case in which nominal damages were not appropriate.

That is your–

Malcolm L. Stewart:

Well–

Antonin Scalia:

–That is apparently not the petitioner’s position.

Antonin Scalia:

As I understood his oral argument, he concedes that if we disagree with him on nominal damages this case should be remanded to the ALJ.

You don’t think so?

Malcolm L. Stewart:

–No, we do think so.

We think that the court of appeals erred in entering a nominal award on its own precisely because the resolution of that question would depend on factual findings that the court of appeals was not competent to make.

I mean, essentially, as a practical matter we know that Mr. Rambo is not going to earn less than he was earning at the time of his injury for so long as he continues his current job as a crane operator, but since there’s been no showing that his physical condition has changed, if he should lose his job as a crane operator and be unable to find similar work, there’s every reason to believe that he will be impaired in his ability to obtain alternative longshore employment.

David H. Souter:

So when you say probable, when you talk about the probability judgment, the probability judgment is not a probability judgment that there will be work as a crane operator and he will continue to do it, or be unable to continue to do it, the probability judgment simply is that there is one kind of wage earning physical activity that he cannot do now, and so long as that probability is shown, the nominal damage award is appropriate.

Is that correct?

Malcolm L. Stewart:

No, that’s not our position, with respect.

No.

Then explain that to me again.

Malcolm L. Stewart:

I think in determining whether it is more likely than not that Mr. Rambo will at some point in the future suffer a loss of wages as a result of the injury, in this case really the dispositive question is, how likely is it that he will some day lose his crane operator’s job.

David H. Souter:

Or be unable to continue to operate cranes, I suppose.

Malcolm L. Stewart:

Right.

That’s correct.

Antonin Scalia:

I see.

Hasn’t the ALJ found here that it is not likely?

I mean, the ALJ says, this demonstrates that claimant’s average weekly wages more than tripled from 1980 to ’90.

After taking into consideration the increasing wages due to rate of inflation, blah, blah, it is evident that claimant no longer has a wage-earning capacity loss.

Although he testified that he might lose his job at some future time, the evidence shows that claimant would not be at any greater risk of losing his job than anyone else.

And it goes on like that.

I… as I read this ALJ determination, it’s a finding that there is no probability of future reduction.

Malcolm L. Stewart:

I think the one thing that the ALJ left out is, the ALJ said, he is no more likely to lose his crane operator’s job than anyone else, presumably as a result of his injury, but if it were the case that work as a crane operator was inherently unstable, that anyone working in the field could be expected to lose his job at any moment, that could be true, but it might–

Antonin Scalia:

Well, whose burden is that to establish?

I mean, he has to negate every… the ALJ’s order has to negate every possible fact that it’s the burden of the plaintiff to establish?

Malcolm L. Stewart:

–Well, in this case I think Metropolitan, as the proponent of the order terminating benefits, would bear the burden of proof.

Thank you.

William H. Rehnquist:

Thank you, Mr. Stewart.

Mr. Pierry, we’ll hear from you.

Thomas J. Pierry, III:

Mr. Chief Justice, and may it please the Court:

Nearly 2 years ago in Rambo I, this Court was presented with the issue of what conditions justified modification of a permanent disability award under section 922 of the act.

Thomas J. Pierry, III:

Rambo II presents this Court with very different issues.

Despite petitioner’s attempts to focus this Court’s attentions on and frame the issues around the 1-year limitation in section 922, the primary issue before this Court is whether or not nominal awards are authorized by section 908(h).

This is because the act defines disability in terms of loss of wage-earning capacity, and it is section 908(h), not section 922, which provides the methods to determine the wage-earning capacity of an injured worker.

Antonin Scalia:

Mr. Pierry, did the ALJ decline to make an award in this case, nominal or otherwise, because he felt he had no authority to make nominal awards?

Is that what he thought?

Thomas J. Pierry, III:

I don’t believe so, Your Honor.

Antonin Scalia:

Yes.

I read his opinion as believing he had the authority, but simply finding on these facts no nominal award was justified.

Thomas J. Pierry, III:

The problem is, as we have pointed out, I think the Solicitor has also pointed out, there was a failure to consider, at least a failure to write down in the opinion various factors that have been outlined in section 908(h) as important to consider when determining loss of earning capacity of an injured worker.

I don’t fault the ALJ so much as I fault the employer, and I agree with the Solicitor–

William H. Rehnquist:

Well, do you think the ALJ has to write down and deal with every single one of those sections under section 908 in making an award?

Thomas J. Pierry, III:

–Well, yes, Your Honor.

Under the Administrative Procedure Act, administrative law judges are required to make explicit findings on all relevant matters, factors in the determination that he’s issuing.

William H. Rehnquist:

And so your view is that the ALJ simply has to use kind of a checklist–

Thomas J. Pierry, III:

Well–

William H. Rehnquist:

–of every one of these things that are mentioned in 908(h)?

Thomas J. Pierry, III:

–I think he has to at least go through most of the factors and indicate that based upon all of the factors which have been considered relevant in the determination of loss of wage-earning capacity he does not find any loss of wage-earning capacity.

William H. Rehnquist:

He could skip some of them, I take it.

Thomas J. Pierry, III:

Well, I would think that he should cover all of them, because–

William H. Rehnquist:

I thought you said most.

Thomas J. Pierry, III:

–I did say most, but I think that the Administrative Procedure Act really requires explicit determinations on all relevant factors.

Antonin Scalia:

Why isn’t this enough to show that he hasn’t lost any earning capacity?

No evidence has been offered to show that claimant’s age, education, and vocational training are such that he would be at a greater risk of losing his present job, or in seeking new employment in the event that he should be required to do so.

He’s saying he’s going to be just like every other crane operator in seeking new employment.

Thomas J. Pierry, III:

Yes, Your Honor.

The problem is, though, that he didn’t adequately deal with specific factors listed in 908(h), such as the nature of the injury, the degree of physical impairment, and whether or not the claimant is capable… is performing his usual pre-injury employment.

Antonin Scalia:

And all ALJ orders normally do that, you think?

Thomas J. Pierry, III:

Truthfully, Your Honor, I don’t know if all of them do, but they should in this situation.

Antonin Scalia:

I don’t think any of them do it.

This seems to me a fully adequate finding.

Antonin Scalia:

I wouldn’t… yes, they have to make findings of fact, but I don’t know why on the facts set forth here there’s any basis for saying there’s been a loss in disability.

Thomas J. Pierry, III:

I disagree, Your Honor, just because under the section 908(h) that we’re dealing with here, they specifically list certain factors; qualitative factors, I would admit, such as the nature of the injury, the degree of physical impairment, and whether or not the claimant is capable of doing his usual pre-injury–

William H. Rehnquist:

What if the ALJ simply found… simply made a finding that I’ve reviewed all of the factors set forth in section 908(h) and find no loss of earning capacity?

Thomas J. Pierry, III:

–That would be a very difficult case, Your Honor.

William H. Rehnquist:

Why would it be difficult?

Thomas J. Pierry, III:

Because I believe that the Administrative Procedure Act requires–

William H. Rehnquist:

What provision of the Administrative Procedure Act would require that?

Thomas J. Pierry, III:

–Your Honor, I wish I had that before you at my fingertips but–

William H. Rehnquist:

Well, I thought if you were going to argue it you probably would have it before you.

Thomas J. Pierry, III:

–Yes.

I apologize, Your Honor.

I think there is a section, though, that says that an administrative procedure… an administrative law judge, rather, must make explicit findings on all relevant factors in his determination.

William H. Rehnquist:

But you have no idea what the section is.

Thomas J. Pierry, III:

Your Honor, I have quoted it in my brief, and I forgot it.

I’m sorry.

Ruth Bader Ginsburg:

But what you’re suggesting is it would be a routine thing, and more formal than substantial, if it’s just that, I list these things, I’ve considered every one of them, and that’s it.

Thomas J. Pierry, III:

Well, I think as to certain factors that are very important factors, such as the factors that are set out in 908(h), those ones at least should be dealt with in a very substantial manner by the administrative law judge.

Ruth Bader Ginsburg:

Well, what do you mean?

Two sentences is substantial, or… let me ask you another question, which I think you answered, but I want to be sure that I have your answer right.

The law was less than clear and certain on nominal damages.

The benefits review board resisted it for a long time, and the circuits didn’t get into it until the eighties.

Is it clear that in this very case that issue was focused before the ALJ so that when Mr. Rambo, who was receiving weekly benefits as a disabled person, was threatened with the termination of his benefits, the ALJ knew that that was one of the things he could have done?

Thomas J. Pierry, III:

Well, Your Honor, the record is unclear in that regard.

I believe that the main issue that the administrative law judge felt that he was faced with was whether or not to terminate benefits based upon the earnings that Mr. Rambo was experiencing, the higher earnings, so I don’t believe there really was an explicit determination of that fact.

One thing I would like to point out though that makes this case different and unique from all of the other nominal award cases, different from Hole and LaFaille and Randall, is that all of those cases arose out of an initial claim hearing, where the claimant has the burden of proof of coming forward and proving that he has a disability.

This claim arises out of a modification proceeding where the claimant has already established that he has a disability, and–

Ruth Bader Ginsburg:

But did his lawyer in that modification proceeding initiated by the employer, did Rambo’s lawyer ever say to the ALJ at least give us an award of nominal damages?

Did it enter the fray at all?

Thomas J. Pierry, III:

–No, I don’t think so, Your Honor, and I think as the Ninth Circuit stated Rambo’s contesting of termination of his benefits also included his assertion that he’s entitled to any lesser amount under–

Stephen G. Breyer:

If that’s so… I haven’t even thought about… what’s bothering me in the statutory part of this case is that I guess Mr. Babcock says, read that statute.

Stephen G. Breyer:

They have some words called wage-earning capacity.

That’s a word that you can look at anything in the world, past, present, and future, but it ends up with a number, even if it’s a guess, and subtract from that existing wage-earnings, or whatever, and divide by two-thirds, all right.

Those are two numbers plus a division.

Now, this is providing a jumping system, isn’t it?

Thomas J. Pierry, III:

–Yes, Your Honor.

Stephen G. Breyer:

And he says, how do we make that consistent with those words, wage-earning capacity, and at that point, I think maybe the SG’s interpretation is within the envelope, but it should be the Secretary of Labor to whom we defer on such matters, that has thought this thing through.

Now, you’re familiar with the cases, and the background, and the history.

It would sometimes help the worker, the one system, sometimes hurt the worker.

We don’t know.

What is the state of the art?

Has this matter of what we call the jumping interpretation of the words wage-earning capacity been thought through by the Labor Department, they decide that’s the correct interpretation of the statute, and they advance it, in the history of these cases?

Thomas J. Pierry, III:

Your Honor, I guess what I’d point to is really the language of Congress in terms of the state of the art in section 908(h).

When they list the qualitative factors, such as consideration of the nature of the injury, the degree of physical impairment, whether or not the claimant can do his usual employment, those are all things where it is difficult to imagine how you could ever get to a particular dollar amount.

And I think that when Congress listed that we should consider the effect of his disability as it may naturally extend into the future, they realized that it may be impossible at times to accurately give a particular dollar amount and therefore they envisioned nominal awards.

In fact, I have quoted the 1983 and ’84 committee reports which certainly let us know that Congress is aware of the fact that these type of nominal awards were being issued and they did nothing to change the system.

And also, what I think is important about those committee reports is that there is a concern expressed, a main concern, I believe, that without these type of awards claimants are going to be coming in and filing yearly requests for modification because they aren’t allowed to get a nominal modified award, and that would present an administrative nightmare, and I think that’s why Congress… that’s at least a good explanation of why Congress didn’t change the system.

Your Honor, to follow up on your question, if there is no provision for nominal awards, there is what the circuit courts have termed an onerous burden on the administrative law judge to try to determine what exactly the loss of wage-earning capacity is in a case where there is serious medical disability.

As the court of appeals stated in the Randall case, the act requires omniscience of the judge.

He has to determine whether the claimant will suffer any work-related reduction in his earning capacity at any time in his lifetime.

Antonin Scalia:

Well, that’s not any different from what happens in a normal civil trial, which I assume is the model.

You point out that this is a section… I assume it’s a section 556 proceeding–

Thomas J. Pierry, III:

That’s correct, Your Honor, yes.

Antonin Scalia:

–under the Administrative Procedure Act that’s required to be conducted on the record.

Thomas J. Pierry, III:

That’s correct.

Antonin Scalia:

Well, you know, a regular full dress civil trial is the model for that, and it happens all the time.

You take your best guess as to what the damages will be.

Thomas J. Pierry, III:

The difference is section 922, though.

There’s a provision specifically allowed in this act for modification of awards to account for a wage-earning capacity going up or down over the years.

Antonin Scalia:

Well, there are some civil actions that allow modifications, too.

Divorce decrees can be modified, but I don’t know that a judge in a divorce case would be… would feel that he’s entitled not to even take his best shot at figuring out what the actual amounts ought to be.

Antonin Scalia:

Just say, you know, I’ll give you a dollar for now, and come back 5 years from now.

Thomas J. Pierry, III:

That is true, Your Honor.

However, this involves workers who… and the primary issue to be determined is what is their wage-earning capacity, whereas in a divorce case that is not the primary issue.

We are trying to determine what an injured worker–

William H. Rehnquist:

Well, in a divorce for child support or alimony certainly one of the primary issues is the earning capacity of each spouse.

Thomas J. Pierry, III:

–That’s true, Your Honor.

However, again, in this law there’s a specific provision made for modification because Congress realized that an injured worker’s earnings may fluctuate as the time goes on.

William H. Rehnquist:

But typical divorce statutes in States make exactly the same provision.

Thomas J. Pierry, III:

You may be correct about that, Your Honor.

I don’t know.

Antonin Scalia:

What you propose is so sensible.

It works so well.

I can’t figure out why the benefits review board would have been opposed to it except that it thought the statute didn’t allow it.

Thomas J. Pierry, III:

Yes, I think, Your Honor, you’re right.

They’ve always quoted in the eighties opinions that the Solicitor referred to that it was a judicial infringement on the time limitation.

My point is, the main point, I think, of the petitioner… of the respondent, rather, is that section 922’s time limitation does not even enter into the fray when we’re talking about what type of remedy is allowed to be fashioned.

Rather, section 908(h) is the section which specifically directs how earning capacity of an injured worker is calculated, and therefore the section 922 1-year limitation on modifications should not be seen as a device that prevents entering any type of award.

Ruth Bader Ginsburg:

Mr. Pierry, isn’t it how can we drop out 922?

Isn’t this whole idea driven by the 1-year time limit?

If we didn’t have the 1-year time limit there would be no need for these nominal damages.

Thomas J. Pierry, III:

That’s exactly right.

In fact, as the 1983 and ’84 legislative history makes clear, the committee suggested limiting both the forward-looking language of section 908(h) and the 1-year time limitation and modification.

That would make nominal awards unnecessary and also would reduce the specter of this administrative nightmare of yearly requests of filing requests for modification by workers.

However, Congress chose not to do that, and the petit… the respondent’s point, rather, is that the petitioner is trying to get this Court to do what Congress chose not to do, which is to change the act and disallow nominal awards.

Congress was aware of these nominal awards and chose not to change the act to forbid them.

Sandra Day O’Connor:

Do you defend the Ninth Circuit standard of a possibility instead of a probability?

Thomas J. Pierry, III:

Yes, Your Honor.

That gets to the question of the burden of proof.

Sandra Day O’Connor:

That certainly is not what most courts have followed, is it?

Thomas J. Pierry, III:

In this particular case I do defend it, and if I may explain, I think the question of who has the burden of proof and what that burden of proof is depends on at what stage of the proceedings the question is raised.

Thomas J. Pierry, III:

At the initial claim, respondent would agree with the Solicitor that it’s the claimant who has the burden of proof, preponderance of the evidence, that he has to prove that it’s more likely than not that at some point in the future he will suffer a reduction in earnings.

If he does that, then he’s established a disability.

Rambo did that in this case.

He established that he had a disability, and he was not only awarded a disability–

Sandra Day O’Connor:

Yes, so what’s the employer’s burden of proof on a modification request?

Thomas J. Pierry, III:

–I believe that it’s the same preponderance of the evidence standard, that the employer has to prove–

You’re right, Your Honor.

That’s correct.

Sandra Day O’Connor:

Well, that’s what I asked you.

The Ninth Circuit refers to a possibility rather than a probability, and you said you support that.

Thomas J. Pierry, III:

Yes.

I support it because what the Ninth Circuit was saying is there was a significant possibility that the claimant would suffer a loss of earnings in the future, therefore the employer had not met its preponderance of the evidence standard.

William H. Rehnquist:

But the Ninth Circuit didn’t put it that way, did it?

Thomas J. Pierry, III:

That’s true, Your Honor.

William H. Rehnquist:

I mean, you agree that the burden in this case is on the employer, and what the employer has to show is that it’s less likely than not that there will be a future impairment.

Thomas J. Pierry, III:

Yes, Your Honor, I do.

John Paul Stevens:

Maybe I’m repeating a point Justice Scalia has made before, but the burden of the… in the particular proceeding seeking modification that was had in this case was one in which the employer assumed the burden of proving that there should be a complete termination of benefits, and the ALJ found that that burden of proof had been sustained.

If that’s true, that would even rule out the nominal award.

Thomas J. Pierry, III:

Your Honor, I believe that what the ALJ… the Ninth Circuit said about the ALJ’s decision was that the ALJ’s decision did not take into account certain specified factors, and therefore that his decision was not supported by substantial evidence on the record considered as a whole, and I believe that the Ninth Circuit, when faced with the evidence that was presented, which really was only the increase in earnings, they decided that–

John Paul Stevens:

Well, it was increase in earnings, and also there was testimony that the man might theoretically lose his job later, and so forth and so on.

Thomas J. Pierry, III:

–That’s correct.

That’s correct.

But as far as the evidence the employer presented in terms of supporting termination, I think the Ninth Circuit found that there was not substantial evidence to support the ALJ’s finding that the employer had basically–

John Paul Stevens:

You see, part of the problem is that your client at that stage of the proceedings did not argue in the alternative, a) don’t make any reduction, and b) if you do make a reduction, don’t terminate but allow me to keep the nominal award.

He didn’t even raise that argument.

Thomas J. Pierry, III:

–Your right, Your Honor, and that was because he was relying on years of precedent regarding–

John Paul Stevens:

Right, and I was very sympathetic to his position, but he lost.

Thomas J. Pierry, III:

–That’s correct.

David H. Souter:

I take it your answer to that is, send it back so that findings can be made on some of these various factors that the court… that the ALJ did not specifically address.

That was your earlier answer, wasn’t it?

Thomas J. Pierry, III:

No, Your Honor.

What the respondent’s position is, that since the employer was the one that had the burden of proof at the modification proceeding, and the Ninth Circuit found that the ALJ’s decision that they sustained that burden of proof was not supported by substantial evidence, that therefore the case should be affirmed, and that if the employer then wishes to go ahead and seek another modification hearing, it can then–

David H. Souter:

Start all over again.

Thomas J. Pierry, III:

–Right.

Antonin Scalia:

Well now, is it a substantial evidence… I thought earlier your objection to the ALJ’s decree was not a substantial evidence one, but that he hadn’t made the necessary findings.

Thomas J. Pierry, III:

Your Honor, yes.

The ALJ didn’t specify the certain factors that I talked about in 908(h).

Antonin Scalia:

So… the provision of the Administrative Procedure Act you referred to, by the way, simply requires that the record include a statement of finding and conclusions and the reasons or basis therefore on all the material issues of fact, law, or discretion presented on the record.

Now, what had been presented on the record here that wasn’t–

Thomas J. Pierry, III:

Well, that’s the problem, Your Honor.

In this proceeding the employer didn’t present evidence which it should have in order to sustain its burden of terminating benefits.

It’s respondent’s position that if they wanted to, the employer should have come in with rehabilitative experts saying that there’s no chance that… or very little chance that Rambo will lose his crane job, or that there are many other jobs out there that he can do, or, alternatively, they also could have come in with medical evidence saying, his condition has improved.

There’s many other jobs he can do besides crane operator.

They chose to bring in none of that evidence, and simply rely on the increased earnings.

Antonin Scalia:

–This is a substantial evidence objection you’re making, not a findings objection, it seems to me.

Thomas J. Pierry, III:

Yes, Your Honor.

Your Honor, petitioner quotes the Potomac River… or Potomac Power case for the proposition that the longshore act does not guarantee a completely adequate remedy for all covered disabilities because it’s a compromise of competing interests and represents a legislative choice.

The problem with that argument is that it fails to address the fact that in section 908(h) the specific legislative choice has been made.

There is particular broad, forward-looking language in section 908(h) which represents the legislative choice in this area.

The legislative choice is reflected in the philosophy of the courts in Hole, LaFaille, and Randall when they adopt this nominal award so that it can be altered and amended as time proves it to be wrong or correct.

David H. Souter:

But the same language could be honored by simply assigning present value and saying that’s good for all time.

We may be giving you too much now and too little later on a specific time period basis, but we’ll fix a present value just the way juries fix present values in accident cases.

That would be consistent with the statute, too, wouldn’t it?

Thomas J. Pierry, III:

That is correct, Your Honor.

I guess what I… the respondent’s point is, there’s nothing in the act that prevents issuance of nominal awards, and since Congress chose not to prevent them, neither should this Court.

Ruth Bader Ginsburg:

Is part of the problem that the 1-year time limit works as a one-way street?

That is, the employer can always come in and say, we want a modification, and the employee–

Thomas J. Pierry, III:

That’s true, Your Honor.

It is a difficult situation for the employee, the injured worker.

As I said, without nominal awards, the only alternative for the employee is to come in every year and request for modification simply to keep the statute of limitations from running whether or not there’s actually grounds for it, and that’s a difficult situation, I don’t think one that the courts would want to endorse, because it creates, like I said before, an administrative nightmare of all these requests for modification, perhaps groundless, perhaps some of them have grounds, simply filed just to keep the statute of limitations from running.

David H. Souter:

–Well, maybe they could simply be treated as nominal requests and knocked down.

It wouldn’t take much time, and the rights would be preserved.

Thomas J. Pierry, III:

That’s true, but it would definitely impede judicial efficiency and economy because of all these requests that would be coming in from claimants that had been denied.

Your Honor, petitioner’s statement that the longshore act does not guarantee a completely adequate remedy sounds reasonable, or may sound reasonable and applicable on first reading, but further examination shows that it’s really inapplicable in this context of nominal awards.

That’s because disability under the act is defined in terms of wage-earning capacity.

As the Randall court stated, under the act, any reduction in wage-earning capacity greater than zero is compensable.

Ruth Bader Ginsburg:

Mr. Pierry–

Thomas J. Pierry, III:

There’s no question–

Ruth Bader Ginsburg:

–Mr. Pierry, is it… isn’t it so that anybody who has a physical disability, as Rambo certainly did, anybody who has that, can always get one of these nominal damages award, because there would always be a risk that at some time in the future their disability, physical disability would make it impossible even to do, say, the crane work?

Thomas J. Pierry, III:

–I would like that to be the case, but I don’t think that is the case under the law.

Ruth Bader Ginsburg:

Well, I’d like to see what is the stopping point on your theory.

The Government has the more-probable-than-not, but on your theory, isn’t there always a risk that the disabling condition will cause a reduction in earning capacity?

Thomas J. Pierry, III:

I don’t think there always is.

However, what I would point to in this record is that the nature of the injury and the degree of physical impairment everyone concedes have remained the same as when Rambo was first awarded the disability award of 22-1/2 percent.

In addition, there is testimony, as was pointed out, that he didn’t know how long this higher-paying crane job would last, and–

Antonin Scalia:

You’re relying on the fact that this is a proceeding to alter the original award.

I think Justice Ginsburg’s question goes to the original award.

What is your position as to whether an original nominal award can be made?

What do you need to show, a probability that your wages will be lowered in the future?

Thomas J. Pierry, III:

–Yes, Your Honors.

I do agree with the Solicitor in that sense.

Okay.

Thomas J. Pierry, III:

At the initial claim proceeding I believe that the claimant has the burden of proof, preponderance of the evidence standard, that he will more likely than not suffer some type of loss of earning capacity in the future.

David H. Souter:

But don’t you say that he meets or can meet that standard simply by proof that among the spectrum of things that he might do to earn a living, there is one thing that he can no longer do as well as he did before, and therefore, given the contingencies of job availability, there are some circumstances in which it is more probable than not that he will not be able to earn what he did before, and that satisfies the burden.

Isn’t that your position?

Thomas J. Pierry, III:

No, Your Honor.

I would say that our position is that since the usual employment is a specific factor that’s listed in section 908(h), that really is the key determination, whether or not his injury affects or impairs his ability to perform his usual employment, his usual pre-injury employment, and here there’s no argument that it did.

David H. Souter:

No, but that will… I guess that takes me back to Justice Ginsburg’s question.

Except for the employee who in fact fully recovers, your theory will always support a nominal award.

Thomas J. Pierry, III:

I don’t believe so, Your Honor, because I believe that in this case the usual employment is a broad category term, and he was a longshoreman before this accident.

Thomas J. Pierry, III:

He’s still a longshoreman.

He happens to be doing lighter duty crane job work, but the great majority of longshore work does require a lot of physical labor, and there’s no question that his disability impairs his ability to do the great majority of longshore jobs that do require physical labor.

Antonin Scalia:

So if he had gotten another job as an accountant, let’s say, he got retrained as an accountant, that wouldn’t at all affect his entitlement to awards.

Thomas J. Pierry, III:

I guess… I think it would depend on the evidence, but I would concede–

Antonin Scalia:

Unless he was an accountant for… I guess the longshore companies have accountants, don’t they?

[Laughter]

What don’t longshore companies have.

Thomas J. Pierry, III:

–There’s a wide variety of jobs.

Antonin Scalia:

There must be something they don’t have.

Thomas J. Pierry, III:

But what I would say in that regard is that I can envision circumstances where a claimant has so completely changed industries, become an accountant or a doctor or a lawyer, that in no way would ever require physical labor, and he has also come forward, or someone has come forward with evidence indicating that there is very little chance that he will lose that type of job, that complete termination could be justified.

I just don’t think it is appropriate in this case.

Your Honors, the mechanism of nominal awards fulfills the forward-looking perspective of 908(h) and it lifts the onerous burden from the ALJ.

It lifts the burden inherent in any attempt to pick a disability figure out of thin air, as the circuit courts have stated, rather than simply assigning a nominal value and allowing it to be changed at a later date.

Antonin Scalia:

Just out of curiosity, do… is it your perception that employers generally like it this way, or generally would rather have the ALJ guess as to what the future will be?

Thomas J. Pierry, III:

That’s an interesting question–

Yes.

Thomas J. Pierry, III:

–and I can’t give you an answer to that.

All I know is they’re–

Antonin Scalia:

This doesn’t split out necessarily on the basis of plaintiffs’ versus defendants’ preference.

Thomas J. Pierry, III:

–I think employers generally don’t like to have nominal awards because they have to keep their cases open, and they have to keep looking at cases, rather than closing them.

William H. Rehnquist:

Thank you, Mr. Pierry.

Thomas J. Pierry, III:

Thank you very much.

William H. Rehnquist:

The case is submitted.