O'CONNOR, J., dissenting

Ante, at 137. Until then, the Court rules, the ALJ can award nominal compensation, thereby propping open the agency's door for the worker to seek modification of the award in the future.

In my opinion, the LHWCA does not permit an ALJ to award purely nominal benefits in order to guard against the possibility of a future drop in earning power. Instead, the Act requires that a future reduction in a longshoreman's ability to earn money be immediately factored into a present determination of his wage-earning capacity. That an ALJ must make a concrete, immediate finding about a worker's wage-earning capacity is dictated by the language of §8(h), which calls for a determination whether a worker's actual earnings "fairly and reasonably represent his wage-earning capacity." A comparison between a worker's current wages and his earning potential is possible only if the ALJ assigns a dollar amount to the claimant's wage-earning capacity. Section 8(h) further instructs that, if the worker's current pay does not correspond to his true earning capacity, the adjudicator must "fix such wage-earning capacity as shall be reasonable." Again, "fix[ing]" the worker's wage-earning capacity requires the ALJ to make a definite assessment of whether the claimant's capacity has gone up, down, or remained the same; it leaves no room for the equivocal finding that a worker's capacity might have changed.

The "wage-earning capacity" that an ALJ must fix is a composite concept, measured partly by the claimant's present earning ability and partly by his future earning ability. Accordingly, the ALJ's finding must reflect predictable changes in the worker's ability to earn wages. Section 8(h) lists the main factors to be taken into account: the nature of his injury, the degree of physical impairment, his usual employment, and the effect of the disability as it may naturally extend into the future. Thus, if an ALJ credits a doctor's testimony that a claimant can work for only five years before his injury leaves him bedridden, that worker would

O'CONNOR, J., dissenting

presently have a reduced "wage-earning capacity" within the meaning of the LHWCA, regardless of whether his current wages were as high as his preinjury wages. Just because market conditions and the claimant's physical condition may vary over time does not mean that an ALJ should not consider predicted variations when fixing the worker's wageearning capacity. Quite to the contrary, the ALJ must consider them; otherwise, he would not be "fix[ing]" the worker's capacity at all, but simply putting off that determination for another day.

Because an ALJ must make a definite finding regarding a worker's wage-earning capacity, I disagree with the Court that a worker can ever, for purposes of the LHWCA, have a "nominal current disability." Ante, at 135. A worker either has a reduced wage-earning capacity (however slight it may be), or he does not. To say that a claimant has a "nominal current disability," as far as I can tell, means only that he is currently making as much as his preinjury wages. But that answers only half the question, since the worker's future earning potential is also relevant to whether he has a reduced wage-earning capacity today and, hence, a compensable disability.

The Court conflates a worker's foreseeable future earning power, which must be considered when awarding benefits, with unforeseeable future developments, which justify reopening an award under § 22 of the LHWCA, 33 U. S. C. § 922. Section 22 acknowledges that a worker's wageearning capacity can change over time, since it authorizes the Benefits Review Board to modify compensation orders in light of a "change in conditions." All that means is that when circumstances arise that were not predictable in the original benefits determination, and hence were not factored into a prior determination of a worker's wage-earning capacity, an ALJ can adjust an award. If, on the other hand, those circumstances were predicted in the original proceeding, they should have been included in the initial fixing of

O'CONNOR, J., dissenting

the claimant's wage-earning capacity. The catch is that §22 permits recognition of changed conditions only within one year of the denial of a claim or the last payment on an award.

The Court's mechanism for awarding nominal damages is designed solely to circumvent § 22's 1-year limit for reopening terminated or denied claims. The Court effectively recognizes as much, since it candidly admits that under its approach, “finality is exchanged for accuracy." Ante, at 133. That is, the 1-year limitations period established by §22 is sacrificed in order to avoid the overcompensation and undercompensation that may result from a straightforward application of the LHWCA. Ibid. Congress has already evaluated these policy concerns, however, and has come down on the side of finality by enacting § 22. When a worker cannot demonstrate a reduction in his wage-earning capacity, in terms of his present or future ability to obtain gainful employment, § 22 gives that employee only one year to show that conditions have changed. To hold open a case simply because a "change in conditions" may someday arise certainly violates the spirit, if not the letter, of § 22.

The proper tradeoff between finality and accuracy is open to reasoned debate. Indeed, some state legislatures have agreed with the Court that when a worker does not immediately suffer as a result of his work-related injury, it is better to postpone compensation until his disability manifests itself. Accordingly, they have amended their workers' compensation statutes to allow precisely the sort of nominal-benefits mechanism that the Court approves today. See, e. g., Cal. Lab. Code Ann. § 5802 (West 1989) ("If, in any proceeding under this division, it is proved that an injury has been suffered. . ., but it is not proved that any disability has resulted, the appeals board may, instead of dismissing the application, award a nominal disability indemnity, if it appears that disability is likely to result at a future time"). But until Congress amends the LHWCA, I do not think that the Court's approach is open to us. I would therefore hold that

O'CONNOR, J., dissenting

an ALJ cannot circumvent § 22's 1-year limitations period by awarding nominal compensation. He must instead make a present determination of the longshoreman's wage-earning capacity, taking into account both his present and future ability to earn money.

II

I further believe that the APA requires that a claimant's future economic injury be proved by a preponderance of the evidence before such an injury can provide a basis for awarding disability benefits under the LHWCA. This is true regardless of whether such a finding leads to an award of nominal benefits (as the Court holds) or whether such an injury should instead be factored into a claimant's wage-earning capacity immediately (as I believe). I therefore disagree with the Court's holding that merely a "significant possibility" of a future drop in a worker's wage-earning potential is relevant to a present benefits determination.

As explained in Part I, the ultimate fact to be determined in an LHWCA benefits proceeding is a worker's "wageearning capacity," which has both a present and a future component. Thus, contrary to the Court, I think that "the fact of such a decline [in a worker's wage-earning capacity], rather than some degree of probability of its occurrence," ante, at 138, n. 9, must be shown in order to justify a finding of disability. The Court recognizes that the APA governs benefit determinations under the LHWCA, ante, at 138, so that "the proponent of a rule or order has the burden of proof," 5 U. S. C. §556(d); see 33 U. S. C. §919(d) (“[A]ny hearing held under [the LHWCA] shall be conducted in accordance with the provisions of" the APA). And this proof must be by a preponderance of the evidence. Director, Office of Workers' Compensation Programs v. Greenwich Collieries, 512 U. S. 267, 270-271 (1994). It follows that whether a worker has a reduced wage-earning capacity is a fact to be determined by a preponderance of the evidence.

O'CONNOR, J., dissenting

The Court's "significant possibility" standard falls far short of the APA's preponderance of the evidence standard. Indeed, although the Court fails to define its standard with any specificity, it at least tells us that a "significant possibility" is certainly less than a "high degree of statistical likelihood." Ante, at 137. Thus, a longshoreman whose paycheck has not shrunk, and is unlikely ever to shrink, below preinjury levels is apparently entitled to an award of nominal damages under the Court's holding today. Such a result, it seems to me, is exactly backwards.

Not only does the "significant possibility" standard conflict with the APA, but the Court plucks it out of thin air. The Court seems to rely purely on its perception of "symmetry" in the LHWCA: Where an injury immediately depresses a worker's ability to earn wages, "the payment of actual compensation holds open the option of modification under §22 even for future changes in condition whose probability of occurrence may well be remote at the time of the original award. Consistent application of the Act's wait-and-see approach thus suggests that nominal compensation permitting future modification should not be limited to instances where a decline in capacity can be shown to a high degree of statistical likelihood." Ante, at 136-137. But if symmetry is the goal, then there should logically be no threshold showing (beyond the injury itself) required to award nominal benefits under the LHWCA. Because § 22 permits modification of ongoing awards even for completely unforeseeable changes of conditions, "[c]onsistent application" of the Court's "waitand-see" theory (derived from §22) would call for keeping open every case to guard against the possibility that new events might someday reduce a worker's wage-earning capacity. The Court apparently realizes that such a result would completely eviscerate § 22's 1-year limitations period, and so it feels obliged to screen out at least the most attenuated claims that conditions may change in the future. As a stopgap, it invents the "significant possibility" test.