INTERCOUNTY CONSTRUCTION CORP. v. WALTER
Legal provision: Longshoremen and Harbor Workers' Compensation
Argument of John C.duncan Iii
Chief Justice Warren E. Burger: We'll hear arguments first this morning in number 74-362, Intercounty Construction Company against Walter and others.
Mr. Duncan, you may proceed whenever you're ready.
Mr. John C.duncan Iii: Mr. Chief Justice and may it please the Court.
The issue before the Court today arises under the Longshoreman's and Harbor Worker's Compensation Act and involves a construction of Section 22 of that Act which deals with time limitations provisions.
The Act as it now exist in Section 22 provides basically that upon its own initiative or upon an application of any party in interest on the ground of a change in conditions or a determination of a mistake, in fact by the Deputy Commissioner, the Deputy Commissioner may at any time prior to one year after the date of last payment of compensation whether or not a compensation word has been issued, review a compensation case.
The facts briefly are that Charles Jones was injured while working for Intercounty Construction in July of 1960.
He filed a written claim for compensation benefits in August of 1960.
The insurance carrier voluntarily paid compensation without an award for a period extending into January of 1965.
At that point, the carrier filed a notice indicating that the claim would be controverted and it then reduced his benefits by 50%.
An informal conference was held before a claims examiner and the matter was adjourned without any resolution of the claim of Mr. Jones.
In January of 1968, the carrier stopped making compensation payments at all because the statutory limit of $17,280 had been reached except for death cases and permanent total disability.
More than two years later, Mr. Jones' attorney requested a hearing on his claim for permanent and total disability and it is the carrier's position that by having let that time run, the claim is not barred.
Principal reluc --
Justice William J. Brennan: Change of what date did you say it was barred.
Mr. John C.duncan Iii: We would say Mr. Justice Brennan that as of January 1969, I believe the date would be the 23rd.
Justice William J. Brennan: This would be a year after the carrier stopped making payments?
Mr. John C.duncan Iii: Yes Your Honor.
Now, we rely principally on the Strachan shipping case from the Fifth Circuit cert was denied by those Court in 1972.
It appears phonetically as Strachan and I believe the pronunciation is Strachan.
In any event, that case considering the identical issue came to the conclusion that by statutory setup and these regulations implementing it, Congress had events an intention that that compensation payments were to be made voluntarily by the carrier and once payments had stopped, it is incumbent upon the claimant to file a further claim if he sought additional benefits.
Now, it might seem at first forced that the filing of additional claims would be an owner's burden, however, there are numerous cases which have held that simple things such as a telephone call to a Deputy Commissioner or a claims examiner or a claimant complained that the carrier had stopped benefits and a memorandum was then placed in the file were sufficient to constitute a claim.
There are cases from the benefit's review board for example which have even held that the filing of an attending physician's report is sufficient to constitute the filing of a claim so that we do not believe that the its unreasonable to require a claimant to pursue his claim with some degree of due diligence.
We have cited in our petitioner for certiorari at least three other decisions, two of which are unreported which reflect basically the long standing way the Act has been applied.
We have the 1942 case in the District of Columbia, the McFadden decision.
We have the Okiff decision decided by the Fifth Circuit in 1962 and we have just recently had a decision by an administrative law judge under the amended act all holding that if more than one year runs after the date of last compensation payment, whether or not a compensation order has been issued, the claim is barred.
Now, the Court of Appeals for the District of Columbia Circuit disagreed and rejected the holding and struck them.
They came to the conclusion first of all that Section 22 was ambiguous and then they said it was necessary to look at the legislative history behind Section and that interpretation suggested that Section 22 was only suppose to apply when the Deputy Commissioner had issued an actual compensation order rather than a situation where a claim had been filed, had never been acted on and the time had merely run subsequent there too.
We believe that the legislative history is capable of more than one interpretation and we suggest that the Court of Appeals respectfully was in error.
I believe that is useful to go to the legislative history as it existed in 1927.
This is found at page 16 and 17 of the Government's brief.
After the Act was initially enacted, the U.S. Employees Compensation Commission which was charged with overseeing the Act complained that there were difficulties arising because by the time the award had seized, the Deputy Commissioner no longer had any power to do anything about it.
The man would get his money and the Deputy Commissioner couldn't change it even if there were some reason why he should change it and therefore, they suggested that there should be some amendments.
Now, in appendix reference 33, we find and this is taken from the Court of Appeal's opinion.
We find the proposed recommendations of the U.S. Employees Commission.
Now, you will note that they are limiting this situation strictly to a situation where a Deputy Commissioner is reviewing a compensation order.
They are not limiting it with any time framework at all so that what they have proposed in effect is the Deputy Commissioner without regard to any time limitation may review a compensation order and he may issue a new compensation order or may make a change by virtue of a compensation order.
All of these of course requiring an action by the Deputy Commissioner with respect to a formal adjudicatory compensation order.
Justice Potter Stewart: This Section 22 on page 33 of the Appendix was proposed but never enacted, is that correct?
Mr. John C.duncan Iii: Yes Mr. Justice Stewart, that's correct, and I think it is significant because we then go to Section 22 as it was actually enacted which would be found at page 21 of the Government's brief and I think if we compare what was done with what was proposed, we see that there are significant differences.
First of all, they indicate that the Deputy Commissioner may at any time prior to one year after the date of last payment of compensation that was not in the proposal from the U.S. Compensation Commission.
It also indicates that he may review a compensation case as oppose to review a compensation order.
So, we feel it is very significant that what was enacted was not what was proposed and as a matter of fact, the House and the Senate reports for the 1934 amendments indicate that the eventual enactments of 1934 were as a results of meetings and compromises between the employee's Unions and the employer's ship building organizations.
So that we do not have a situation where the U.S. Employees Commission makes recommendations, these are immediately adopted by Congress and then we take off from there.
We have a meeting between the interested parties.
We have a compromised.
We then have an enactment which is not at all similar to what was proposed by the U.S. Employees Commission.
Now, I also think that it is helpful to look at some of the testimony and some of the legislative history after 1934 because in 1938, we had another amendment to Section 22.
Now, the problem that arose after the 34th amendment was simply this.
There was no provision with regard to a situation where a Deputy Commissioner had rejected a claim for him to review it again and so amendments were proposed which were eventually enacted in 1938, which would allow a Deputy Commissioner even after he had rejected a claim within one year to review the situation to see if he had made a mistake of fact or if there had been a changed in condition.
Now, on July 31st 1935 and this is House subcommittee number 3 on House Report 8293, 74th Congress First Session, which is also in reference generally in the Government's brief.
We have testimony from Louis Dolby who is general counsel for the U.S. Employees Commission.
At page 14 of the House Subcommittee report, we have the following discussion about these proposed amendments.
Justice William J. Brennan: Is there anywhere in the briefs?
Mr. John C.duncan Iii: It's referred to Your Honor but it is not reproduced.
Mr. Dolby indicates Section refers to the amendment made last year involving Section 22 of the Longshoreman's Act.
He is then asked by Mr. Emmanuel Seller, "where does that limitation appear in the original act?"
"Mr. Dolby: That is in Section 5 of the mandatory Act of May 26, 1934 amending Section 22 of the original Act."
It was amended last year so as to provide for a reopening by the Deputy Commissioner within a year after the last payment of compensation.
Now, the government's position is that the Deputy Commissioner has to issue a formal compensation order.
Our position is that regardless of whether a compensation order is issued or not, the time begins to run within one year from the date of last compensation payment.
Justice William H. Rehnquist: What if this case had come up before the 1934 amendment, how would it have come out with Section 22 reading as it did before Congress amended it?
Mr. John C.duncan Iii: I don't believe there would have been any power in the Deputy Commissioner to do anything because we did not have the time situation involved.
Justice William H. Rehnquist: Well, but you would have a claim filed and no award ever made, wouldn't he have the power to make the award prior to 1934?
Mr. John C.duncan Iii: Oh yes, I misunderstood.
Yes Mr. Justice Rehnquist.
I think what would happen is that we have had the same situation except that we would eventually have had the sealing of $7500.00 which was at applicable maximum then as I understand it reached and then the Deputy Commissioner would have had the power to act on the claim if the man had done something within a year.
Justice William H. Rehnquist: Well, but what -- what is it about the Act before 1934 that prevents the Deputy Commissioner from acting after the expiration of a year from the payment of the last compensation if a claim was timely filed?
Mr. John C.duncan Iii: Well, my recollection is that as long as money was continuing to be paid, there would be no occasion for him to act but if the man said in effect that the carrier had arbitrarily cut me back 50%, then he would have had the power to go ahead and act.
Now, as long as the money is continuing to be paid to the man, he can either make a request for a formal hearing because the amount he is receiving is inadequate or he can sit back and be satisfied with it.
Justice William J. Brennan: Can't the carrier always protect itself by having the -- having an order entered or having an award entered if you -- if the carrier starts to pay voluntarily after a claim is filed which happens which happens I suppose most of the time.
Mr. John C.duncan Iii: It does.
Well, I think that that sounds good theoretically.
Justice William J. Brennan: But it is additional paper work, isn't it?
I mean --
Mr. John C.duncan Iii: Not for the carrier.
The carrier as long it gets protected consistent with what the man's rights are, the carrier is not concerned about the additional paper work but the Deputy Commissioner is, I can assure you that.
Justice William J. Brennan: Well, may not -- the United State is against you, aren't they?
Mr. John C.duncan Iii: Well, I think that they are looking at the statute from the standpoint of how they interpret it rather than how the Deputy Commissioners perhaps actually administer it.
You'll notice in this case for example, the Deputy Commissioner actually rejected the claim the first time around.
Justice William J. Brennan: I suppose you're suggesting -- what you are suggesting is that rather they never start voluntarily, you're just going to wait till there's an order entered.
Mr. John C.duncan Iii: Well, this is correct.
In other words, the whole purpose of the act is the man gets hurt, if you have no issue with respect to his wages or his arising out in the course of the employment, then you start making payments and if you have a situation where eventually you cut the man back, there is perhaps a dispute lets say on a rating for a leg or if you have a lost of wager and incapacity dispute and the man can go all the way back to day one and get full benefits, wouldn't sent off his heir for the carrier to comply with voluntary provisions of the act.
They will always insist on a formal order so that they will be protected in the event more than one year runs after the compensation order was entered.
This is completely contrary to the way the act is administered.
The informal conferences for example, we have statistics in our brief --
Justice William J. Brennan: What would be -- it would be -- you would be protected after a certain length of time after you made the last payment required by the order?
Mr. John C.duncan Iii: Yes, right.
Justice William J. Brennan: Yes.
Mr. John C.duncan Iii: But that is the only -- the only protection, otherwise, the claim can be resurrected at any time.
The Government's position is that if a man files his claim within one year and the carrier keeps on making payments and eventually at some point in time, the man becomes dissatisfied with the rate at which he's paid and the man simply has to say I want a hearing and he can go back to day one and then run this out for x number of years and we think that this is not consistent with the purpose of the act.
The way -- the way the whole scheme of the act works very simply is this.
If there is an issue which is controverted, the parties go to what is called an informal conferences, is called any regulations of pre-hearing time, specifically is called an informal conference.
The claimant is there.
If he is represented, his attorney is there and the carrier is there.
Usually the carriers do not have attorneys present although I have been there in many instances.
The claims examiners will say, “Mr. so and so, what is your claim?”
The man will say, “I'm claiming temporary total disability for x number of days.”
The claims examiner then goes down all the various issues, “are you contesting jurisdiction, statute limitations, wages, all this sort of things?”
He then says to the carrier, “what is your position?"
The carrier will then narrow the issues.
Typically, what happens as in this Strachan shipping case, a recommendation is issued and this is set out in the form of a letter to the carrier.
It is hereby recommended that you do this and you do that.
Either party is given the right to accept or reject that recommendation.
Typically, if there is really no dispute, the carrier will sign it as being accepted which is provided in the form and return it to the bureau and this is the way things are typically handled and I think the statistic show that formal hearings are definitely abnormal and informal adjudications which are consistent with the purpose of the act, other way, this things are handled.
Justice William J. Brennan: On that recommendation, even though accepted by the carrier is not an order?
Mr. John C.duncan Iii: That is correct Mr. Justice Brennan.
Justice William J. Brennan: It is not?
Mr. John C.duncan Iii: It is not.
It is simply a letter, it is not sent out in conformity with Section 19 where it required to send out notice by registered mail and all that sort of thing.
It's simply a letter saying that we'd had informal conference and based on the development at the conference, this is what we recommend and then they have a place where it says you are expected to accept or reject this within 14 days.
If you accept it please sign it and return it to the bureau and that's the way the whole act works but the government is now coming in and saying, “no, this isn't the way it suppose to work.”
In every case, you are to insist on an order if you want the provisions of Section 22 to apply and we that this is terribly an equitable in typical case there is dealt it with at the bureau.
I think that -- that we must if I may just go back one second.
We also have to look at how practical it is, the government's brief for example suggest, well, you can always if you want to protect yourself other than or you can always get the matter settled.
Well, at the time of this act -- accident, the only provision for a settlement was approved by the secretary of labor and I can assure you that to my knowledge, there has only been one or two settlements ever approved by the secretary of labor.
So that is a very impractical suggestion.
Now, I think we must get back again to what happens if this position of the labor department is adopted.
Let's assume that a claim is filed within the first year and the carrier pays without an award and nothing further is done.
This claim under their position can be resurrected at any time in the future and the Strachan Shipping case for example, there was 12 years that run between the date of last compensation and when the claim was actually prosecuted.
Justice William J. Brennan: Yes, yes.
Mr. John C.duncan Iii: Suppose we have a situation where again the claim is filed within a year and the carrier pays without an award and we reached a statutory maximum of in this case $17,280.00 and there has been no adjudication by the Deputy Commissioner and then we have more than a year run.
Are we to say that the man's claim is still open, it is still not time barred by provisions of the act?
We feel that the Government's position is becoming very technical and is completely contrary to the way this act is administered.
And with the Court's permission I would like to reserve my additional time for rebuttal.
Chief Justice Warren E. Burger: Very well Mr. Duncan.
Argument of Frank H.easterbrook
Mr. Frank H.easterbrook: Mr. Chief Justice, may it please the Court.
This case turns on the meaning of a single clause in Section 22 of the Act.
The Clause appears to mark off a period of time.
It reads prior to one year after the date of the last payment of compensation, whether or not a compensation order has been issued.
Petitioners argued that because this clause refers to time, it must be the time within which an injured employee must file a piece of paper to prevent some effect on his claim for compensation.
We agree with the petitioners to this point.
Any application for relief pursuant to Section 22 must be filed within the time established by that clause.
The more difficult question is who is required to file that piece of paper?
We submit that the only people required to file within the time limit established by that clause are those who seek what the section title of Section 22 says it is about, a modification of an award.
Petitioner's argument rest on the premise that because some employees must file within the established time, then all employees must do so.
Nothing in the statute supports that result.
The more accurate reading of the section is that those who seek to modify an award or a compensation order on the grounds of mistake of fact or change in circumstances must file under Section 22 within one year after the date of the last payment of compensation, whether that compensation was paid with or without an award.
But those who seek not modification but an initial adjudication of a claim timely filed long ago need not do so.
They are entitled to at least one adjudication by virtue of that claim and the respondent in this case filed a timely claim less than a mount after his injury.
Justice Potter Stewart: And he -- the original claim must be filed within a year after the --
Mr. Frank H.easterbrook: The original claim must be filed within either a year after the injury or a year after the last payment of compensation without an award.
There are two alternative provisions for filing.
Justice Potter Stewart: That I guess is common ground between you and your adversary.
Mr. Frank H.easterbrook: That's right, right.
There is no disagreement on that and there is no disagreement on the fact that this claim was in fact timely filed.
Once that claim is timely filed, Section 19 (a) of the act gives to the Deputy Commissioner power to adjudicate that claim.
Section 19 (a) provides that subject only to Section 13, subject only to Section 13 which provides for the timely filing of a claim, a Deputy Commissioner has full authority to adjudicate any claim that has been filed.
Justice Potter Stewart: 19 (a) in the briefs here.
Mr. Frank H.easterbrook: Section 19 (a) is in the Government's brief and the statutory section at page 3, procedure in respect of claims subject to the provisions of Section 13, claim for compensation may be filed and the Deputy Commissioner shall have full power and authority to hear and determine all questions in respect of such claim.
A claim was timely filed in this case and Section 19 (a) provides the Deputy Commissioner shall have full power.
Petitioner's assertion is that a new application must be filed under Section 22 even though a timely claim has been filed under Section 13.
The trust of our argument is that that single clause in Section 22 has to be read in context.
Read alone or solely within the bounce of the section, there is little indication who must file the piece of paper to which he refers.
Justice Potter Stewart: What you are talking about is whether or not a compensation order has been issued?
Mr. Frank H.easterbrook: That's right.
Justice Potter Stewart: That's the critical clause?
Mr. Frank H.easterbrook: That's the critical clause in Section 22.
That clause tells us when an application pursuant to Section 22 has to be filed.
It does not tell us and it does not purport to tell us who it is that must file it.
As in most balance of statutory interpretation, we feel that it's necessary to look to the history of the act and to the language and structure of the act to understand who it is that must file.
Justice William H. Rehnquist: How can you have a modification of the award which is I guess the subtitle of Section 22 whether or not a pay -- whether or not a compensation order has been issued?
Mr. Frank H.easterbrook: Justice Rehnquist, if compensation is paid without an award, it may terminate before the award has been issued or it may terminate prior to the award after the award has been issued.
Suppose there is an injury suffered by an employee and under the generally voluntary and cooperative procedure used by the act, the employer begins to make payments without waiting an award as the act says he should and must do.
Then payments may terminate at any time because the employer has decided that the disability has ended.
Has decided that he wants to controvert the claim and seek an adjudication now and so on.
After the payments have terminated, the Deputy Commissioner may well then make an award of compensation which might verify the compensation that has previously been paid without awarding new compensation, so that the compensation would have terminated without an award having been issued.
The date for which time must be computed runs from the date of compensation has terminated and not on the date of the payment.
Justice William H. Rehnquist: Well, I can see that in connection with the payment of compensation but in Section 22, you have a title that says modification of award.
Mr. Frank H.easterbrook: That's correct.
Justice William H. Rehnquist: Suggesting that everything you're talking about there is dealing with the modification of an award previously made and then you have this clause that both of you regard as critical in the middle of that thing that says whether or not a compensation order has been issued.
Is a compensation order the same thing as an award?
Mr. Frank H.easterbrook: Oh, the title originally was inserted in 1927 when the provision supplied only to awards and an award meant in 1927, an order compelling an employer to pay compensation.
In 1938, an amendment was made in this Section providing that a compensation order that denied compensation was also reviewable.
So there are -- there is one general class of this here and that's the compensation order which may award compensation or deny compensation.
It used to be that under this section, you could get review only of an award which gave compensation.
In this case -- in this case you didn't have an award either granting or denying compensation --
Mr. Frank H.easterbrook: That's right.
Justice Potter Stewart: -- by the Deputy Commissioner, you had --
Mr. Frank H.easterbrook: That's correct.
Justice Potter Stewart: -- voluntary payment?
Mr. Frank H.easterbrook: That's correct.
Justice Potter Stewart: And as I understand my brother Rehnquist's question is how can you have a modification of an award when there hasn't been any award?
Mr. Frank H.easterbrook: And the answer is you can't which is why Section 22 does not apply to this case at all.
Justice Potter Stewart: And I thought on the contrary that you were relying very very heavily on the subtitle of Section 22 modification of awards to give -- to explain the meaning of the language and yet the title of -- is simply is inapplicable for the reason suggested by my brother Rehnquist --
Mr. Frank H.easterbrook: The title is inapplicable in all cases in which there has been no award of compensation or any formal or the denying compensation and that's precisely the point upon which we rely Mr. Justice Stewart that the title of this section is inapplicable and indeed the entire section is inapplicable in this case.
Nothing has occurred under section 22 that would trigger its applicability because nothing has occurred under that section.
There is no need to make an application for a review whether or not within a year after the last payment of compensation.
Justice Byron R. White: Did you just read that language out on the section then whether or not any compensation order has been issued.
Mr. Frank H.easterbrook: No we don't.
Justice Byron R. White: You just ignore it?
Mr. Frank H.easterbrook: No we don't Justice White and I think we can make a good deal of sense of it.
Suppose a compensation order has been issued in a --
Justice Byron R. White: Well, suppose it hasn't?
Mr. Frank H.easterbrook: If it has not been issued --
Justice Byron R. White: Let's suppose it hasn't?
Mr. Frank H.easterbrook: That's right, as in this case.
Justice Byron R. White: And this reads right on it whether or not and this covers the possibility and order hasn't been issued and nevertheless says within one year after the date of last payment you're supposed to file something?
Mr. Frank H.easterbrook: No, I think we can make a little bit more sense of it than that.
Is that suppose --
Justice Byron R. White: That's the point.
Well you must concede that's the plain reading of this.
Mr. Frank H.easterbrook: I think there's a plain reading of it that bears on the case where an award has been issued.
Suppose an award had been issued in this case.
Justice Byron R. White: Well, not that I talked about whether it has been one and why doesn't this section apply to a situation where an award has issued because it seems to apply to a case, whether -- where a compensation has not issued.
Mr. Frank H.easterbrook: I think there is a --
Justice Byron R. White: You said nothing.
Mr. Frank H.easterbrook: It's an easily understandable confusion.
The language of the Section --
Justice Byron R. White: Why don't -- who's confused, that's the problem.
Mr. Frank H.easterbrook: It's a question of interpretation.
The language of the section certainly bears on cases where compensation orders have not been issued.
The question is of the nature of the baring.
Does it bear on cases where compensation orders have not been issued so that it sets the time within which you have to apply in those cases?
Or does it bear on cases in which compensation orders have been issued to establish a time that runs from a time before when the order was issued.
Our interpretation is the latter.
Suppose we can make sense of it by saying in all cases where compensation orders have been issued, the time runs from the time of the last payment of compensation whether or not that compensation was pursuant to an award so that the -- whether or not there has been an award determines the time for which you must apply when an award is eventually issued.
If the last payment of compensation terminates prior to an award, the one year period begins to run prior to the award but unless there is actually an award entered, the compensation order entered.
The time limit provision is completely inapplicable to that claimant.
I think this can be understood a little bit more simply by looking back at the history of this act in 1927.
In 1927, the act is enacted clearly provided only for modification of awards.
We think petitioners have so conceded the Court has understood it at that time so understood it.
So that in 1927, if compensation terminated prior to an award, there was no possibility of reviewing that award because the time for computation of review expired the moment the last payment of compensation with our without award.
Justice William H. Rehnquist: Now, wait a minute.
You said compensation terminated prior to an award?
Mr. Frank H.easterbrook: That's correct.
Justice William H. Rehnquist: There was no possibility of reviewing the awards?
Mr. Frank H.easterbrook: That's correct.
Justice William H. Rehnquist: Well, if there hadn't been any award, why would there be the review?
Mr. Frank H.easterbrook: In many cases Justice Rehnquist, employers would pay compensation without the necessity of an award.
They are required to do so under the act within 14 days of the injury.
The administrative process often took a good deal longer than that to enter a formal order even when a formal order was requested.
In any cases, disability is relatively short term.
Disability may last be total but short time, say two months of time lost from the job.
During those two months, the employer is required to pay compensation benefits.
It may be that the Deputy Commissioner would not have time to enter a formal order until six months later so that compensation had terminated prior to the entry of a formal award.
In 1927 --
Justice William H. Rehnquist: But then you wouldn't be reviewing an award if you look at something after that, you would be either giving an initial award or adjudicating to his but at least you wouldn't be reviewing an award.
Mr. Frank H.easterbrook: If the award were actually entered, the only provision in the statute that would allow for any action was Section 22 which said that you could modify an award.
There was no provision for a new initial consideration.
There was no provision for a new initial claim.
Justice Potter Stewart: That was about in the original statute in 1927?
Mr. Frank H.easterbrook: That was in the original version, in 1927.
Justice Potter Stewart: They modified an award and what was the time limitation?
Mr. Frank H.easterbrook: During the term of the award and after it has become final so that if the payment of compensation --
Justice Potter Stewart: And the point is it opted by the time the award came, the term expired.
Mr. Frank H.easterbrook: The term had already ended.
The term had already ended.
Justice Potter Stewart: Alright.
That was the original statute in 1927?
Mr. Frank H.easterbrook: And it was no longer possible to review it.
Justice Potter Stewart: And there is -- and no review of a rejection claim?
Mr. Frank H.easterbrook: That's right.
Now, the act was amended in 1934 --
Justice Potter Stewart: You allow review of a rejection?
Mr. Frank H.easterbrook: No, that was in 1938.
Justice Potter Stewart: Oh.
Mr. Frank H.easterbrook: In 1934, it was amended to expand the time for review.
Justice Potter Stewart: For one year?
Mr. Frank H.easterbrook: To one year but it used the same time for compensation of that year that it had previously, that is the date of last --
Justice Potter Stewart: Where would you find that line?
Mr. Frank H.easterbrook: -- payment of compensation that's on page --
Justice Potter Stewart: I had that line a while ago but it just somewhat --
Mr. Frank H.easterbrook: Page 3 of our brief still contains the operative language.
Justice Potter Stewart: No, no, but this is a present one, you're talking about the 34 about a --
Mr. Frank H.easterbrook: Right, as amended in 34, its on page 21 of our brief.
Justice Potter Stewart: Yeah.
Justice Thurgood Marshall: Mr. Easterbrook, as I read your brief, you've ignored Strachan Shipping, are you going to ignore it in your argument too?
Mr. Frank H.easterbrook: In our view, we have devoted our entire brief to explaining why Strachan Shipping was incorrect.
It simply misread the 1934 revision and the 1927 history of this act and Strachan Shipping also operated under a misapprehension of the available relief to an employer or its insurer.
Strachan Shipping assumed that if after one year the claim did not come to rest, there was no way it could be put to rest.
That's simply incorrect under the statute.
The Fifth Circuit itself had earlier held in the Donovan case that under Section 19 (c) of the act, the employer can demand an adjudication and receive a compensation order at any time.
It's also true now that under Section 8 (I) of the amended act, the employer and the employee can settle claim and with the approval of the Deputy Commissioner, the case will come to rest.
There are other devices available to terminate a claim.
Many claims expire because the disability has completely ended.
So it's not true as was the operative assumption in Strachan Shipping that these cases will linger forever unless they are automatically terminated after one year.
Justice Thurgood Marshall: Well, when was this one end?
Mr. Frank H.easterbrook: Pardon?
Justice Thurgood Marshall: When will this one end?
Mr. Frank H.easterbrook: This claim has now been adjudicated and the Deputy Commissioner has handed an order.
Assume it hadn't been filed, I mean, could he file in 20 years from now?
This one, this one.
Mr. Frank H.easterbrook: We discussed in our brief the possibility that if the employer or his insurer could show actual prejudice from the lingering of the claim that the size of an award might me diminished because of that prejudice.
Justice Thurgood Marshall: That's not the part I'm talking about, that's in extraordinary circumstance.
Mr. Frank H.easterbrook: It's a doctrine --
Justice Thurgood Marshall: Is it?
Mr. Frank H.easterbrook: -- very similar to the doctrine of Latches Your Honor in equitable actions in which there is no statute of limitations.
Justice Potter Stewart: There's nothing in the statute to putting that any such limitation on that?
Mr. Frank H.easterbrook: There is nothing in the statute to put any limitation.
Justice Potter Stewart: As you read the statute --
Mr. Frank H.easterbrook: That's correct.
Justice Potter Stewart: Of all statute, the result suggested by my brother Marshall's question would prevail, i.e. would be no limitation at all?
Mr. Frank H.easterbrook: There would be no formal limitation.
It's very similar to the case in which you filed a civil action in a federal district court within the statute of limitations.
That case might linger on the doctrine of the district court for a very large number of years before it comes to adjudication.
If as a result of informal conferences in the chambers of the judge, formal adjudication is postponed pursuant to a -- looks like it may be a settlement.
That case is alive and will stay there for years if necessary.
Justice Thurgood Marshall: But this remain in place.
Mr. Frank H.easterbrook: Pardon?
Justice Thurgood Marshall: This man remain in Court?
Mr. Frank H.easterbrook: It has however been very similar to that.
A formal claim was filed within a month of the accident.
That's very similar Your Honor to filing a suit in a district court.
That's what meets the statute of limitations for the act, the one year statute of limitations.
A claim was filed in the office of the Deputy Commissioner seeking adjudication.
It was not then adjudicated but the opportunity of adjudication created by that claim lingered on we submit and could not be terminated except by an adjudication of that claim.
Justice has sued and the federal district court cannot be terminated except by an adjudication of that claim by a dismissal, by an order or by anything else of that major.
Justice Thurgood Marshall: I submit is dismissal like a prosecution, its done everyday.
Mr. Frank H.easterbrook: Yes and it might --
Justice Thurgood Marshall: Is there any procedure here for doing that?
Mr. Frank H.easterbrook: Under Section 14 (h) (2) I believe is the number.
The Deputy Commissioner has the power on his own initiative to enter a compensation case in order to protect the rights of the parties.
That section permits the Deputy Commissioner to enter a compensation order that would dismiss or otherwise terminate the claim for compensation and we submit that's identical to the district court's power to dismiss for one prosecution.
Justice Thurgood Marshall: And so because of this any action, this man has a right at any time within his lifetime?
Mr. Frank H.easterbrook: Just -- just as it would be if he filed in the district court but at the same time, the important --
Justice Thurgood Marshall: You think if you give me that -- if you file a case at the district court and you don't do anything with it and then 20 years later you come back and file another one?
Mr. Frank H.easterbrook: Not another claim Your Honor.
Justice Thurgood Marshall: I know you can't.
Mr. Frank H.easterbrook: You seek for adjudication of the claim.
Mr. Frank H.easterbrook: The district court will often dismiss for one prosecution.
Justice Potter Stewart: Well yeah, but the analogy really here, when a complaint is filed in the district court and then the defendant voluntarily begins giving it a relief you asked for in the complaint --
Mr. Frank H.easterbrook: There will be no point in seeking out follow-up.
Justice Potter Stewart: There is no analog -- there's no analog between that situation and this, is there?
Because that just didn't happen.
Mr. Frank H.easterbrook: It doesn't happen --
Justice Potter Stewart: Under the latest filed on the district court, generally, the defendant doesn't voluntarily begin given the relief that the plaintiff wants to the plaintiff.
Mr. Frank H.easterbrook: That's right.
Justice Potter Stewart: If there is any such thing as 3906, it's wrapped in a settlement and the lawsuit is dismissed.
Mr. Frank H.easterbrook: As it could have been done here if the employer had sought a formal order based on its desire to pay a specified amount of money and he could have sought such an order from the --
Justice Thurgood Marshall: Periodically in the district court, the Court called all the cases in and says either move or drop and get out, they claimed it, they keep a clean target.
Mr. Frank H.easterbrook: Yes, and under --
Justice Thurgood Marshall: And these people don't keep, they don't even pretend to do it but you're relying on it.
Mr. Frank H.easterbrook: The Deputy Commissioner has the power to do that.
Justice Thurgood Marshall: You're relying on the fact that the deputy did not act, is that what you're relying on?
Mr. Frank H.easterbrook: That's correct and we're also relying on the fact the employer could have sought action if he wanted but I'd like to point out one other highly salient difference between this and an ordinary toward claim.
The evidence in a compensation action is uniquely persevering.
In a tort action for example, the nature of the question is what happened on the day of the injury?
Who saw this man being knocked off a beam and fall on the ground?
Who is responsible for it?
What happened back in 1960?
That's simply not the question in this case because this is a no fault statute.
The evidence that bears on a compensation claim is evidence that is available at any time even long after the injury.
Justice Potter Stewart: To arise out of the employment, doesn't it?
Mr. Frank H.easterbrook: That's right.
The injury has to occur and arise out of business.
Justice Potter Stewart: And this is --
Mr. Frank H.easterbrook: And there's no question of that here.
Justice Potter Stewart: In this kind of a case, the carrier wouldn't have begun paying unless he had agreed it had or had not in this point.
Mr. Frank H.easterbrook: That's correct.
The question in this case is whether Mr. Jones was in fact disabled.
The evidence that bears on that disability is available now by examining Mr. Jones.
If in fact he's totally disabled, that evidence can be had by an examination today.
It wasn't lost and forgotten from something that happened 15 years ago.
If he is in fact only partially disabled, that evidence is available today too, examinations can be held today.
Justice Potter Stewart: What's 4107
Mr. Frank H.easterbrook: Unless there has been an accident in the interim and there is a question of allotee.
Justice Potter Stewart: Right.
Mr. Frank H.easterbrook: The causality question is very interesting because that often is the subject of separate motions for additional compensation before the Deputy Commissioner and the evidence that would be pertinent to that is not either preserved or dissolved because of the application to review this compensation case.
If it wasn't available, it would not be available if this application had been filed sooner in order to become less available if the application is postponed.
Justice Potter Stewart: Mr. Easterbrook, what would be the undo hardship on claimants if one way to read the language of Section 22, the way it seems to read and the way your brother says we ought to read it.
Mr. Frank H.easterbrook: We're not sure that it seems to read that way.
Justice Potter Stewart: Well, or the way your brother says we ought to read it.
Mr. Frank H.easterbrook: There are several things that might happen to claimants on situations of this sort.
Probably the most important of them is that if Section 22 is applicable to every case in which compensation has been paid without an award, then a large number of claimants will have their benefits terminated completely against their will even if they file an application on the very day those benefits were terminated.
They can never resurrect them and there's a very interesting reason why.
Section 22 gives two reasons to file an application under that Section.
The first reason is a mistake of fact by the Deputy Commissioner.
The second reason is a change in conditions.
If there has been no compensation order, there can have been no mistake of fact by the Deputy Commissioner.
If the claimant has to allege that there has been a change of circumstances, the question then is change since when?
Change since the Deputy Commissioner entered his order?
No, there has been no order.
Change since the time of the accident?
Why should there have been a change in circumstances since the time of the accident to entitle someone to benefits?
Jones, the claimant in this case claimed that he was permanently and totally disabled from the date of the accident and that there has been no change in his circumstances.
Justice Potter Stewart: Did you ever think that the payments were made on the basis of temporary total, weren't they?
Mr. Frank H.easterbrook: The employer claimed that there was temporary total.
Justice Potter Stewart: And that was the basis on which the voluntary payments were made and he accepted those payments?
Mr. Frank H.easterbrook: He accepted those payments although he claim --
Justice Potter Stewart: Now, then now he comes in --
Mr. Frank H.easterbrook: And still claims that he was permanent.
Justice Potter Stewart: And then the payment stopped, the carrier stopped him.
First, I guess cut him in half and then stopped him, wasn't that it?
Mr. Frank H.easterbrook: That's correct.
Justice Potter Stewart: And certainly, he knew when they were reduced by half and he certainly knew when the payment stopped.
Mr. Frank H.easterbrook: That's right, and there was a informal conference held.
Justice Potter Stewart: And he had a year then to say the change in condition is that I'm not permanently and totally disabled.
Mr. Frank H.easterbrook: No, he could not claim that Your Honor.
He claimed as early as 1966, two years before the payments were stopped that he was permanently disabled and he has in fact claimed that since he filed in his initial claim.
He has never asserted that there has been a change in circumstances.
He has asserted that he was disabled from the very beginning and that there is no relevant change.
Justice Potter Stewart: Well, I think it's a little perhaps easier to read the change in circumstances language generously than maybe to read the critical clause and this is the annotation.
Mr. Frank H.easterbrook: The only way we could read change in circumstances in that way Justice Stewart would be to say that the change in circumstance is a change in the positions of the party rather than a change in the physical conditions.
Justice Potter Stewart: And that's not an anomaly tortured meaning.
Mr. Frank H.easterbrook: Right.
It's a change in circumstance that could arise whenever anybody said so and which then would be the equivalents of saying you file an application under Section 22 whenever you want to because you would assert that I now feel that I'm entitled to something else but it doesn't say that.
I think it requires some objective change of circumstance and simply your assertion that you believe something different or want to assert something different.
But in any case, the change of circumstance that he would assert is not his own change of position.
Would be somewhat anomalous for the claimant to assert that the employer and let me take that back too because the employer hasn't change his position either.
Justice Potter Stewart: One change in the condition -- it says on the ground of a change in conditions, don't say assert has said.
Now, one very objectively measurable change in conditions is that the carrier stopped paying?
Mr. Frank H.easterbrook: We think that it would probably be more consistent with the history of this act to read change in conditions as change in the condition of the employee.
Justice Potter Stewart: No one ties you up to that case, this case goes against you, do you?
Mr. Frank H.easterbrook: We have interpreted it that way in the past.
Justice William H. Rehnquist: Mr. Easterbrook, from the government's point of view, taking a look at Section 22 as it appears on page 3 of your brief, the language in about the 8th line on the bottom page issue a new compensation order.
From the government's point of view, isn't it perhaps a better argument to say that that's the critical language rather than concentrating on this whether or not a compensation order has been issued and say that the Jones here didn't ask for the issue of a new compensation order and that's all that Section 22 applies to?
Mr. Frank H.easterbrook: We think that's highly important that the -- all that gives the Deputy Commissioner a power to do is under a new compensation order and if there has been no old compensation order, we don't understand that new compensation order could have any meaning and as I also suggested to Justice Stewart, the language in the Act providing for the reasons for review under Section 22 has the same import.
A mistake of fact by the Deputy Commissioner can't have occurred unless there was a previous compensation order and we think that the better reading of Section 22 is that a change of circumstances refers to a change of circumstances since a compensation order was issued.
Justice Harry A. Blackmun: In any events, something is going to have to be read generously however the case had decided.
Mr. Frank H.easterbrook: I think so but our position to summarize it once more is that that language one year after the date of last compensation whether or not an order has been issued simply fixes the time from which the year begins to run and it does not establish for whom the year runs.
So that in many cases where an order is entered after the last payment of compensation, the year begins to run before the order is entered and that maybe that the year sometimes expires before the order is entered.
Justice Thurgood Marshall: Is that applied to all of the cases that are informally close?
Mr. Frank H.easterbrook: So that an application for review or a resurrection of the claim if you will could be made at some later date?
Justice Thurgood Marshall: You don't suppose to a million nine other than some thousand.I
Mr. Frank H.easterbrook: n most of those cases Your Honor, payments for compensation are no longer due because there's no longer any disability attributable to the act.
Justice Thurgood Marshall: That should be a considerable number.
Mr. Frank H.easterbrook: And in the vast majority of those cases, no Section 13 (a) was ever filed so that within a year after the injury, or within a year after the last payment of compensation in cases in which no formal claim was filed that expires.
Justice Thurgood Marshall: And yes, yes.
For some of those like --
Mr. Frank H.easterbrook: We estimate that several hundred a year are in a position similar to John's.
Justice Thurgood Marshall: That was -- oh, that means several hundred in the past.
Mr. Frank H.easterbrook: For each of past years as well.
Justice Thurgood Marshall: For each of the past years.
Mr. Frank H.easterbrook: That's correct.
Justice Thurgood Marshall: You don't have the slightest idea how many.
Mr. Frank H.easterbrook: There maybe a large number or small number.
Justice Thurgood Marshall: Do you know how many people, how many units do you?
You don't have a clue.
Mr. Frank H.easterbrook: We can't tell with certainty.
Justice Byron R. White: I take that the employee is locked into his -- if more than a year has passed since the injury, he is locked in to the claim that he has originally filed, he can't amend that claim and claim permanent disability when he originally filed for temporary?
Mr. Frank H.easterbrook: He can indeed, although it's not in the nature of an amendment.
Claims are construed rather liberally under this act and the duty to pay compensation does not depend technically upon what is pleaded in a claim but on the actual extend of disability.
The function of the claim is to notify the employer that compensation will be demanded formally if it's not forthcoming otherwise and to otherwise avail himself of his right to an adjudication and it is exactly that right to an adjudication that has dissipated in this case.
If because compensation has terminated, the employer can no longer receive it.
Chief Justice Warren E. Burger: Do you think that the Government's position here would encourage employers to make prompt and informal dispositions of these cases?
Mr. Frank H.easterbrook: We believe it would.
In fact, we believe that if the employer's disposition is adopted, it will create an interesting incentive to terminate payments of compensation without an award.
The employer will be able to terminate the compensation and if the employee does not protest within a year, even meritorious claims are extinguished, so we think it's an incentive disease paying compensation.
Thank you very much.
Chief Justice Warren E. Burger: Do have anything further Mr. Duncan?
Rebuttal of John C.duncan Iii
Mr. John C.duncan Iii: Nothing further Mr. Chief Justice.
Chief Justice Warren E. Burger: Thank you gentlemen.
The case is submitted.