Opinion of the Court

2. Although the Ninth Circuit adopted the correct legal standard, it erred in directing entry of a nominal award based on its own appraisal of the evidence, rather than remanding the case to the ALJ for further findings of fact. Since the ALJ is the factfinder under the Act, see $$21(b)(3), (c), it is the ALJ's duty, not the Court of Appeals's, to consider whether a future decline in Rambo's earning capacity is sufficiently likely to justify nominal compensation. The ALJ failed to do so.

Pp. 138–141. 81 F. 3d 840, vacated and remanded.

SOUTER, J., delivered the opinion of the Court, in which REHNQUIST, C. J., and STEVENS, KENNEDY, GINSBURG, and BREYER, JJ., joined. O'CONNOR, J., filed a dissenting opinion, in which SCALIA and THOMAS, JJ., joined, post, p. 141.

Robert E. Babcock argued the cause and filed a brief for petitioner.

Malcolm L. Stewart argued the cause for the federal respondent. With him on the brief were Acting Solicitor General Dellinger, Deputy Solicitor General Kneedler, J. Davitt McAteer, Allen H. Feldman, Nathaniel I. Spiller, and Scott Glabman. Thomas J. Pierry III argued the cause for respondent Rambo. With him on the brief was Thomas J. Pierry.*

JUSTICE SOUTER delivered the opinion of the Court.

This case under the Longshore and Harbor Workers' Compensation Act is before us a second time, now raising the question whether the Act bars nominal compensation to a worker who is presently able to earn at least as much as before he was injured. We hold nominal compensation proper when there is a significant possibility that the worker's wage-earning capacity will fall below the level of his preinjury wages sometime in the future.

*Briefs of amici curiae urging reversal were filed for the National Association of Waterfront Employers et al. by Charles T. Carroll, Jr., F. Edwin Froelich, and Franklin W. Losey; and for the National Steel and Shipbuilding Co. by Alvin G. Kalmanson and Roy D. Axelrod.

Opinion of the Court


Respondent John Rambo injured his back and leg in 1980 while doing longshore work for petitioner Metropolitan Stevedore Company. Rambo claimed against Metropolitan for compensation under the Longshore and Harbor Workers' Compensation Act (LHWCA or Act), 44 Stat. 1424, as amended, 33 U. S. C. $ 901 et seq., and the parties stipulated that Rambo had sustained a 2212% permanent partial disability, which would normally reflect a $120.24 decline in his preinjury $534.38 weekly wage. This, in turn, was reduced to an award of $80.16 per week under $8(c)(21) of the Act, 33 U. S. C. $ 908(c)(21), providing for compensation at the rate of 6623% of the difference between an employee's preinjury wages and postinjury wage-earning capacity. An Administrative Law Judge (ALJ) entered an order incorporating this stipulated award. App. 51; Metropolitan Stevedore Co. v. Rambo (Rambo I), 515 U. S. 291, 293 (1995).

Rambo was later trained as a longshore crane operator and got full-time work with his new skills, with occasional stints as a heavy-truck operator to earn extra pay. His resulting annual earnings between 1985 and 1990 were about three times what he had made before his injury. As a consequence, Metropolitan moved in 1989 to modify Rambo's earlier disability award, see $ 22, 33 U. S. C. $ 922, and a hearing was held before an ALJ. While there was no evidence that Rambo's physical condition had improved, the ALJ ordered the disability payments discontinued based on the tripling of Rambo's preinjury earnings:

"After taking into consideration the increase in wages due to the rate of inflation and any increase in salary for the particular job, it is evident that [Rambo] no longer has a wage-earning capacity loss. Although [Rambo] testified that he might lose his job at some future time, the evidence shows that [Rambo] would not be at any

Opinion of the Court

greater risk of losing his job than anyone else. Moreover, no evidence has been offered to show that [Rambo's] age, education, and vocational training are such that he would be at greater risk of losing his present job or in seeking new employment in the event that he should be required to do so. Likewise, the evidence does not show that [Rambo's] employer is a beneficent one. On the contrary, the evidence shows that [Rambo) is not only able to work full time as a crane operator, but that he is able to work as a heavy lift truck operator when the time is available within which to do so." App. 55.

See also Rambo I, supra, at 293–294.

The Benefits Review Board affirmed the modification order, App. 57, 61, but the Court of Appeals for the Ninth Circuit reversed on the ground that $ 22 authorizes modification of an award only for changed physical conditions, Rambo v. Director, OWCP, 28 F. 3d 86 (1994). We in turn reversed in Rambo I, holding that “[t]he fundamental purpose of the Act is to compensate employees (or their beneficiaries) for wage-earning capacity lost because of injury; where that wage-earning capacity has been reduced, restored, or improved, the basis for compensation changes and the statutory scheme allows for modification.” 515 U. S., at 298. Since the essence of wage-earning capacity is economic, not physical, id., at 296–298, that capacity may be affected "even without any change in the employee's physical condition," id., at 301.

On remand, the Court of Appeals again reversed the order discontinuing compensation payments. It recognized that when a worker suffers a significant physical impairment without experiencing a present loss of earnings, there may be serious tension between the statutory mandate to account for future effects of disability in determining a claimant's wage-earning capacity (and thus entitlement to compensa

Opinion of the Court

tion), see $8(h), 33 U. S. C. $ 908(h), and the statutory prohibition against issuing any new order to pay benefits more than one year after compensation ends or an order is entered denying an award, see $ 22, 33 U. S. C. $ 922. The Court of Appeals reconciled the two provisions by reading the statute to authorize a present nominal award subject to later modification if conditions should change. Rambo v. Director, OWCP, 81 F. 3d 840, 844 (1996). The court reversed the order ending Rambo's benefits as unsupported by substantial evidence, due to “overemphasi[s on] Rambo's current status and fail[ure] to consider the effect of Rambo's permanent partial disability on his future earnings,ibid., and it remanded for entry of a nominal award reflecting Rambo's permanent partial disability, id., at 845. We granted certiorari. 519 U. S. 1002 (1996). While we agree that nominal compensation may be awarded under certain circumstances despite the worker's present ability to earn more than his preinjury wage, we vacate the judgment of the Court of Appeals directing entry of such an award and remand for factfinding by the ALJ.

II The LHWCA authorizes compensation not for physical injury as such, but for economic harm to the injured worker from decreased ability to earn wages. See Rambo I, supra, at 297–298. The Act speaks of this economic harm as “disability,” defined as the "incapacity because of injury to earn the wages which the employee was receiving at the time of injury in the same or any other employment,” $2(10), 33 U. S. C. $ 902(10). Such incapacity is conclusively presumed for certain enumerated or "scheduled” injuries, which are compensated at 6643% of the worker's preinjury wages over specified periods of time. See $$8(c)(1)-8(c)(20), 8(c)(22), 33 U. S. C. $$ 908(c)(1)-908(c)(20), 908(c)(22); Potomac Elec. Power Co. v. Director, Office of Workers' Compensation Pro

1 Judge Reinhardt dissented in part on other grounds. 81 F. 3d, at 845.

Opinion of the Court

grams, 449 U. S. 268, 269 (1980). For other, so-called “unscheduled” injuries resulting in less than total disability, the Act sets compensation at “662/3 per centum of the difference between the average weekly [preinjury] wages of the employee and the employee's wage-earning capacity thereafter.” $8(c)(21), 33 U. S. C. $ 908(c)(21) (permanent partial disability); see also $ 8(e), 33 U. S. C. $ 908(e) (temporary partial disability). For figuring this difference, $8(h) explains that the claimant's postinjury "wage-earning capacity” is to be determined

"by his actual earnings if such actual earnings fairly and reasonably represent his wage-earning capacity: Provided, however, That if the employee has no actual earnings or his actual earnings do not fairly and reasonably represent his wage-earning capacity, the deputy commissioner may, in the interest of justice, fix such wageearning capacity as shall be reasonable, having due regard to the nature of his injury, the degree of physical impairment, his usual employment, and any other factors or circumstances in the case which may affect his capacity to earn wages in his disabled condition, including the effect of disability as it may naturally extend

into the future.” § 8(h), 33 U. S. C. $ 908(h). See also $ 10, 33 U. S. C. § 910 (method for determining preinjury wages). See generally Rambo 1, 515 U. S., at 297–298.

We may summarize these provisions and their implications this way. Disability is a measure of earning capacity lost as a result of work-related injury. By distinguishing between the diminished capacity and the injury itself, and by defining capacity in relation both to the injured worker's old job and to other employment, the statute makes it clear that disability is the product of injury and opportunities in the job market. Capacity, and thus disability, is not necessarily reflected in actual wages earned after injury, see id., at 300–301; Potomac Elec. Power, supra, at 272, n. 5, and when

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