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Director v. O'Keefe

argued as amended november 2 1976.: May 6, 1976.

DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, UNITED STATES DEPARTMENT OF LABOR, PETITIONER
v.
ELIZABETH O'KEEFE, RESPONDENT



ON PETITION FOR REVIEW OF AN ORDER OF THE BENEFITS REVIEW BOARD, UNITED STATES DEPARTMENT OF LABOR

Aldisert, Gibbons and Garth, Circuit Judges. Aldisert, Circuit Judge.

Author: Garth

GARTH, Circuit Judge.

On this petition for review of a final order of the Benefits Review Board we are again asked to resolve problems arising under the 1972 amendments to the Longshoremen's and Harbor Workers' Compensation Act (LHWCA),*fn1 33 U.S.C. § 901 et seq. (Supp. 1976).*fn2 Specifically, this petition presents the question of whether weekly death benefits payable under § 9 of the LHWCA as amended, 33 U.S.C. § 909 (Supp. 1976), are subject to the limitations prescribed by § 6(b)(1) as amended, 33 U.S.C. § 906(b)(1) (Supp. 1976), or whether such benefits are unlimited in amount. We conclude, contrary to the Benefits Review Board, that § 6(b) (1) does impose a ceiling upon weekly death benefits and accordingly grant the petition for review.

I.

On March 30, 1974 respondent Elizabeth O'Keefe's husband, Joseph O'Keefe, during the course and scope of his maritime employment was struck by a jitney and immediately killed. His average weekly wage at the time of death was $571.84, and the respondent was his only survivor. The decedent's employer, Morris Boney, Inc., and its insurance carrier, Liberty Mutual Insurance Co., stipulated that the respondent was entitled to the maximum benefits payable under the LHWCA. However, the parties were unable to reach agreement as to what constituted the maximum weekly death benefit payable to the respondent under the statute. 33 U.S.C. § 909 (Supp. 1976). The respondent contended that under the 1972 amendments she was entitled to death benefits equal to 50 per cent of the deceased's average weekly wage or $285.92 subject to no limitations. 33 U.S.C. § 909(b).*fn3 In response the employer and insurance carrier urged that although respondent was entitled to death benefits based upon the formula of 50 per cent of the deceased's average weekly wage that sum was nevertheless subject to the limitations of § 6(b)(1), 33 U.S.C. § 906(b)(1),*fn4 which would result in a weekly benefit less than $285.92.

Their dispute as to the amount of the death benefit payable was referred to an administrative law judge for hearing and decision. See 33 U.S.C. § 919 (Supp. 1976). The administrative law judge, relying upon the Benefits Review Board's decision in Rasmussen v. Geo Control Inc., 1 BRBS 378, BRB 74-204 (April 3, 1975)*fn5 rejected the employer's and the carrier's contention that death benefits were limited by the amended § 6(b)(1). Accordingly, the respondent was awarded 50 per cent of the average weekly wage of the decedent or $285.92 from March 30, 1974 and continuing during her widowhood. 33 U.S.C. § 909(b) (Supp. 1976).

The employer, insurance carrier, and the Director of the Office of Workers' Compensation Programs (Director), appealed to the Benefits Review Board urging that the Rasmussen case had been erroneously decided.*fn6 However, the Board declined to reverse its earlier holding and therefore affirmed the decision and order of the administrative law judge. O'Keefe v. Morris Boney, Inc., 2 BRBS 363, BRB Nos. 75-179, 75-179A (October 16, 1975).

This petition for review was filed by the Director from the final decision of the Benefits Review Board. Our jurisdiction is predicated upon 33 U.S.C. § 921(c) (Supp. 1976).*fn7

II.

The 1972 amendments to the LHWCA constituted a major restructuring of the rights of longshoremen and harbor workers with respect to total disability and death benefits. Prior to 1972 an employee covered by this statute who suffered permanent total disability was entitled to compensation equal to 66 2/3 per cent of his average weekly wage. 33 U.S.C. § 908(a). However, former § 6(b) provided that "[compensation] for disability shall not exceed $70 per week." 33 U.S.C. § 906. Regardless of an employee's average weekly earnings, in the event of permanent total disability his benefits were limited to a maximum of $70 per week.

Where injury resulted in death, former § 9 specified the amount of the death benefit payable to the employee's survivors. Under that section the surviving wife was entitled to 35 per cent of the average wages of the deceased. An additional 15 per cent of the wages of the deceased was allowed for each surviving child, subject to the limitation that the total amount payable under former § 9(b) "shall in no case exceed 66 2/3 per centum of such wages." 33 U.S.C. § 909(b). Furthermore, like the total disability benefit, the death benefit was limited by a maximum monetary sum. Former section 9(e) stated that "[in] computing death benefits the average weekly wages of the deceased shall be considered to have been not more than $105 . . . ." 33 U.S.C. § 909(e). Therefore, despite the actual wages of a deceased employee, if his family qualified for the maximum death benefit of 66 2/3 per cent of the decedent's average weekly wage, that family would be entitled to a maximum benefit of $70 per week (66 2/3 per cent of $105).

Therefore, prior to the enactment of the 1972 amendments, both total disability and death benefits were limited by a fixed dollar maximum of $70 per week irrespective of the actual average weekly earnings of an employee.

In the years following 1961, when the fixed weekly maximum of$70 was established for both total disability and death benefits,*fn8 it became increasingly evident that this level of compensation was grossly inadequate. By 1972 congressional reports indicated that the average weekly wage for private, nonagricultural employees was $135 a week and that longshoremen averaged over $200 per week in some ports. H.R. Rep. No. 92-1441, 92d Cong. 2d Sess. (1972), 1972 U.S. Code Cong. & Ad. News 4698, 4699; S. Rep. No. 92-1125, 92d Cong. 2d Sess. 4 (1972). The $70 limitation precluded most employees or their survivors from receiving 66 2/3 per cent of their average weekly wages, and in some cases the $70 maximum constituted as little as 30 per cent of an employee's average weekly wage. S. Rep. No. 92-1125, 92d Cong. 2d Sess. 5 (1972). Congress recognized that in order to provide an adequate income replacement for the families of disabled and deceased workers, a "substantial increase in benefits" was urgently required.*fn9

The 1972 amendments leave unchanged the basic formula for determining compensation for permanent total disability - 66 2/3 per cent of the average weekly wage. 33 U.S.C. § 908(a) (Supp. 1976). However, § 6(b)(1), as amended, replaces the $70 maximum limitation by creating an entirely new limitation for disability benefits. That section now provides in relevant part:

(b)(1) . . . compensation for disability shall not exceed the following percentages of the applicable national average weekly wage as determined by the Secretary . . .

(A) 125 per centum or $167, whichever is greater, during the period ending September 30, 1973.

(B) 150 per centum during the period beginning October 1, 1973, and ending September 30, 1974.

(C) 175 per centum during the period beginning October 1, 1974, and ending September 30, 1975.

(D) 200 per centum beginning October 1, 1975.

33 U.S.C. § 906(b) (Supp. 1976). The establishment of 200 per cent of the applicable average national weekly wage as the maximum weekly disability payment (or any of the lesser percentages during the transition period to October 1, 1975), constituted a substantial increase over the prior $70 per week maximum. Under this new provision the Senate Committee on Labor and Public Welfare estimated that approximately 90 per cent of the workers covered by the statute would receive benefits which would equal 66 2/3 per cent of their average weekly wages. S. Rep. No. 92-1125, 92d Cong. 2d Sess. 5 (1972). Moreover, this limitation, while reflecting changes in the national average weekly wage, would serve precisely the same purpose as had the old $70 maximum - to fix a ceiling upon compensation payments to workers with especially high average weekly earnings. Id.

While the limitation provisions concerning total disability are clear, unfortunately the 1972 amendments as they pertain to death benefits do not partake of that same clarity. The death benefit amendments increase the surviving spouse's benefit from thirty-five per cent to fifty per cent of the deceased's average weekly wage. See n.3 supra. For each surviving child an additional benefit of 16 2/3 per cent (rather than the former 15 per cent) of the deceased's average weekly wage is payable. These benefits remain subject to the same earlier limitation that "the total amount payable shall in no case exceed 66 2/3 per centum" of the deceased's average weekly wage. 33 U.S.C. § 909(b) (Supp. 1976).

The most important change in § 9 with respect to the maximum benefits payable is found in subsection (e). Unlike the original subsection (e)*fn10 which effectively established both a minimum and a $70 per week maximum benefit, the amended subsection (e)*fn11 establishes only a minimum benefit and is silent with respect to the maximum weekly death benefit payable. It is the absence of any express limitation upon death benefits in § 9 that has resulted in this litigation.

Although the 1972 amendments seemingly do not address the question of maximum death benefits, there is one subsection which arguably imposes the same limitations upon death benefits as are imposed upon total disability benefits. As previously discussed, § 6(b)(1), as amended, 33 U.S.C. § 906(b)(1) (Supp. 1976), fixes a ceiling on disability benefits ultimately reaching 200 per cent of the applicable national average weekly wage. That section is followed by a new § 6(d), 33 U.S.C. § 906(d) (Supp. 1976), which states:

Determinations under this subsection with respect to a period shall apply to employees or survivors currently receiving compensation for permanent total disability or death benefits during such period, as well as those newly awarded compensation during such period. (Emphasis added.)

This subsection specifically refers to both disability and death benefits. However, it is unclear from the language what "determinations" are being made applicable to recipients of disability and death benefits. The parties urge that the question presented to us, whether death benefits are subject to the same limitation as are disability benefits, ultimately depends upon the meaning of § 6(d).

III.

The Benefits Review Board's affirmance of the administrative law judge's award here is based upon its earlier decision in Rasmussen v. Geo Control Inc., supra. In Rasmussen the Board held that death benefits under the 1972 amendments are not subject to any limitation. It is to this analysis that we now turn.

In its opinion the Board recognized that the absence of any limitation upon the amount of death benefits payable under the statute as amended would create "an anomalous situation." App. at 18. For if an employee were permanently disabled, his maximum compensation would be limited by § 6(b)(1) regardless of his actual earnings. However, "[if] the same employee subsequently died, or if he had been killed outright in the accident, his survivors could be entitled to a larger sum in death benefits than was payable in disability compensation." App. at 19.

Based upon this apparent incongruity, the Board looked beyond the "plain language" to consider "persuasive evidence of legislative intent." App. at 19. Specifically, the Board relied upon the Senate and House Committee reports explaining the effects of the amendments upon disability and death benefits. See S. Rep. No. 92-1125, 92d Cong. 2d Sess. (1972); H.R. Rep. No. 92-1441, 92d Cong. 2d Sess. (1972). In particular, the Board found no references in the legislative commentary that the death benefits under § 9, as amended, were to be subject to the same limitations as disability benefits. Nor did the Board find in the explanation of § 6(b)(1) any indication that the limitations upon disability benefits were also applicable to death benefits. Thus, the Board reasoned:

In the absence of any evidence to the contrary, we must conclude that elimination of the maximum provided for disability cases from death benefits cases was intentional. The maximum limit on death benefits is provided in Section 9(b), 33 U.S.C. § ...


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