515 U.S. 291, 115 S. Ct. 2144, 132 L. Ed. 2d 226 (1995)
In 1980, John Rambo injured his back and leg while working as a longshore frontman for Metropolitan Stevedore Company.1 Rambo filed a claim with the Department of Labor that was submitted to an Administrative Law Judge.2 After the parties stipulated that Rambo sustained a 22% permanent partial disability and a corresponding $120.24 decrease in his $534.38 weekly wage, the ALJ awarded Rambo $80.16 per week.3
The ALJ also found that Rambo’s disability was not due solely to his work-related injury and was materially and substantially greater than that which would have resulted from the subsequent injury alone.4 He limited the period of Metropolitan Stevedore’s liability to 104 weeks under section 8(f)(1).5 Later payments were to issue from the special fund administered by the Director of the Office of Workers’ Compensation Programs.6
After the award, Rambo began attending crane school and obtained longshore work as a crane operator while also working in his spare time as a heavy lift truck operator.7 Between 1985 and 1990, Rambo’s average weekly wages ranged between $1,307.81 and $1,690.50, more than three times his preinjury earnings, though his physical condition remained unchanged.8
Metropolitan Stevedore filed an application to modify the disability award under section 22, asserting there had been a change in conditions so that Rambo was no longer disabled under the Act.9 The ALJ agreed that an award may be modified based on changes in the employee’s wage-earning capacity even absent a change in physical condition.10 After discounting wage increases due to inflation and considering Rambo’s risk of job loss and other employment prospects, the ALJ concluded Rambo no longer has a wage-earning capacity loss and terminated his disability payments.11
The Benefits Review Board affirmed, relying on Fleetwood v. Newport News Shipbuilding & Dry Dock Co.12 A panel of the Court of Appeals for the Ninth Circuit reversed.13 The panel rejected the Fourth Circuit’s approach in Fleetwood and held that section 22 authorizes modification of an award only where there has been a change in the claimant’s physical condition.14 The Supreme Court granted certiorari to resolve this split.15
Whether Section 22 of the Longshore and Harbor Workers’ Compensation Act authorizes modification of a disability award on the ground of a change in conditions when there has been no change in the employee’s physical condition, but rather an increase in the employee’s wage-earning capacity due to the acquisition of new skills?16
Section 22 of the Longshore and Harbor Workers’ Compensation Act provides the mechanism for modification of compensation awards on the ground of a change in conditions or a mistake in a determination of fact.17 The term 'change in conditions' encompasses changes in the employee's wage-earning capacity, which is the economic foundation of disability under the Act's definition in section 2(10) and the compensation formula in section 8(c)(21).18 This interpretation follows from the plain language of the statute, which uses the plural 'conditions' to refer to all factors bearing on the initial entitlement to benefits.19
Yes. Applying this rule to the established facts shows that modification is authorized.20 Rambo's acquisition of crane operating skills led to substantially higher wages between 1985 and 1990, demonstrating an increase in wage-earning capacity despite no change in physical condition.21 The ALJ properly considered factors such as inflation and risk of job loss under section 8(h) before concluding that Rambo no longer suffered a loss in wage-earning capacity.22
Because the Act compensates economic disability rather than physical injury alone, the change in these conditions permits the deputy commissioner to review and modify the award under section 22.23
The Supreme Court held that the disability award may be modified under section 22 based on the change in wage-earning capacity.24
Related opinions on this issue
Justice Stevens dissented, maintaining that over sixty years of consistent precedent had interpreted the phrase 'change in conditions' in section 22 to refer exclusively to a change in the physical condition of the employee.25 He relied on Judge Warriner's dissent in Fleetwood, which catalogued early cases holding that the term addressed only physical condition and rejected modification based on economic shifts such as imprisonment, commitment to an asylum, or fluctuations in the broader economy.26 In his view, any departure from that settled construction required an explicit directive from Congress rather than judicial revision of the statute.27