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that he may wish to file later as the case proceeds by way of a rebuttal to whatever is submitted to us by the Bureau.

Mr. VICKERY. Thank you, sir.

Senator MORSE. It may very well be that the complete case will explain this cost, but when you tell me that the longshoremen get $1 and the taxpayers pay $1.90, I must, necessarily in carrying out my duties. as a Senator, ask the question, "Why?" I am asking it now. Other witnesses will read this transcript and know that this bothers the acting chairman of the committee.

I want a full explanation of it, and counsel will please prepare it for me.

Mr. VICKERY. Thank you, sir. These figures that I am using are taken directly from the annual report of the Department of Labor under the title "Bureau of Employees' Compensation," they are taken from the reports of 1965 and 1966.

I might mention here that this fund, special fund, in 1961, had a balance of $691,000 in it. In 1960, I believe it was, it had a balance of $691,000 in it. In 1966, this balance had been reduced to $271,000. That is about $474,000 that the fund had been depleted.

Of this $474,000, only $61,000 of it went to pay benefits. About 13 percent went to pay benefits to the injured longshoremen, and 82.6 percent, or $392,000, paid for the administration of the fund.

I certainly think that this requires careful consideration, as you have indicated will be given to it. I believe the present program under the special fund can be increased by 40 to 50 percent by simply raising the monetary limitation from $1,000, say, to $4,000, and by putting the administration of the fund on a sound and a realistic basis. I don't believe that it is on that basis now.

The section 14 deals with the user charges for the safety program. Section 15 deals with the user charges for the administration of the act, and I believe that these so-called user charges in these two respects need to be very carefully considered.

Once again, because I doubt the wisdom of giving any Government agency a blank-check authorization to take whatever money they want to from any group of employers or businesses, without these employers or businesses or Congress having anything at all to say about the amount of money that they are going to have to pay.

It seems to me that this smacks a little bit of taxation without representation. The bill as now drawn, both for the safety user charges and the administration user charges, permits the Bureau to spend whatever money they think is appropriate, and to make whatever assessments they think are necessary to meet these programs. If they underestimate the amount of money they are going to spend, the bill permits them to make retroactive assessments against the employers, or the self-insurers in connection with these two programs. I think the committee will get information with respect to these user charges, and the problems inherent in them, from people much better qualified to speak with respect to them, but here again, my associations are particularly concerned about the fact that this is, these user charges are a blankcheck authorization to an administrative agency to spend whatever money they want to spend, and to collect this from the employers or the self-insurers under the act.

Now then, the remaining provisions of the bill, for the most part, depend on what is done by the committee insofar as the earlier sections in the bill are concerned.

Section 16 deals with the appropriation which would have to be changed, depending on what is done as far as user charges are concerned.

The repeal of the other sections in section 17 of the bill would also follow the determination by the committee as to what is to be done. as far as user charges are concerned.

Section 18 is a technical amendment, and this is to correct a grammatical error in the statute, and certainly there is no objection to this change in the law being made. It is being applied the way the amendment would have it read, anyway.

Section 19 of the act deals with the effective date of it. I would like to suggest that this particular section of the act be changed to make it perfectly clear that the increased benefits will be paid only for injuries that occur subsequent to the effective date of the act, and that the increased benefits, if any, will be paid on death claims only if the death results from an injury that occurred subsequent to the effective date of the act.

In connection with the effective date of previous amendments to the act, there has been some litigation on the question of which precise dates this involved. I think it is a matter of making clear what the Congress intended, rather than leaving it for judicial interpretation by the courts, and I believe it needs to be more clearly stated.

This covers what I desired to present to the committee, insofar as the particular bill which has been introduced is concerned. I think you can see from what I have said, I firmly, and the associations which I represent firmly, believe that the present bill requires very careful consideration and substantial revision, if a fair and reasonable bill is to be presented to the Congress for its enactment.

There are some other amendments to the act which I think also ought to be considered. As I have indicated in my statement, I have not tried to prepare in the short period of time available to me before these hearings the specific language of any of these amendments, but if the committee or its counsel would like for me to try to draft the language of these proposed amendments, I would be glad to attempt to assist in this regard, in any way possible.

Senator MORSE. Oh, Mr. Vickery, you don't need to prepare them. We will hear your argument as to what ought to be in them, and then the committee can call upon legislative counsel to draft any amendment that it wants to have drafted, carrying out the substantive matters that you discuss.

Mr. VICKERY. Fine. I just wanted to make myself available, if the committee felt that I might be helpful.

Senator MORSE. We appreciate that, but I don't want to assign you any work that the committee ought to do for itself. We have counsel to do that.

Mr. VICKERY. Yes, sir. Thank you. The first amendment. I have already referred to this, with respect to the third-party liability, the specific language of proposed amendments will be presented to the committee by Mr. Scanlan, the witness who I understand will follow me

in testimony today, so I won't go back into that, since I have already alluded to it.

On page 25 of my written statement, the second amendment which I think needs to be made is to section 8 (h) of the act. This refers to an interpretation made of it by the deputy commissioners under the act insofar as wage-earning capacity is concerned.

Section 8 now provides that wage-earning capacity shall be determined by a man's actual earnings, if these actual earnings fairly and reasonably represent his wage-earning capacity. One would have thought that the purpose of this amendment was to permit the deputy commissioner to find that a man's wage-earning capacity was higher than his actual earnings, if he felt the employee was not making a sincere effort to return to full-time employment.

In actual practice, however, the deputy commissioners seldom, if ever, find a wage-earning capacity that is in excess of the man's actual earnings. Contrary to its obvious purpose, the deputy commissioners have interpreted this section to permit them to hold that a man's wageearning capacity is actually less than what he is earning as a longshore


For example, and the courts have approved this interpretation by the Bureau, a man can be making $100 a week, as a longshoreman, but the deputy commissioner can find that his wage-earning capacity is only, say, $50 a week, and compensation to be paid as if he were only making $50 per week. This is a fictitious finding of a $50 wage-earning capacity when the man himself has demonstrated that he can make $100 a week working as a longshoreman.

I submit that this is a gross inequity, and that this section of the statute ought to be amended to provide that in no event can the deputy commissioner hold a longshoreman's wage-earning capacity to be less than he is actually earning.

I believe that this is only fair and reasonable, because I think at least what he demonstrates he is able to earn in the marketplace is a fair test of what his earning capacity is.

The third amendment that I would suggest be considered is one to require the deputy commissioners to give due regard to the medical testimony and the medical evidence in a record in making his decision, and in evaluating the disability.

There is no other area in the adjudication of claims of any kind where the adjudicating officer is permitted to ignore all of the uncontradicted evidence, and decide an issue on the basis of his own personal experience, such as exists under the Longshoremen's and Harbor Workers' Compensation Act.

Deputy commissioners are neither doctors, and with all due respect to them, they are not experts in evaluating physical disabilities, and I believe the act should be amended to specifically require that their disability ratings be based on the evidence and not on their own personal feelings without any support at all in the evidence.

I can give you a concrete example of a case involved in our office several years ago, in which a longshoreman was exposed to some fertilizer dust during the course of his employment. He died almost 6 months to the day later of lung cancer. The claim was made that the

fertilizer dust was a contributing cause of his death, because it had aggravated his lung cancer.

Notwithstanding the fact that we had several extremely well qualified cancer specialists from the Anderson Cancer and Tumor Institute in Houston who testified that it was impossible, the deputy commissioner entered an award of compensation in favor of his beneficiaries, and on the appeal which we took, and which we ultimately won, because the court held there was no evidence in the record to support the deputy commissioner's finding, the Department of Justice and the Bureau of Employees' Compensation contended that the deputy commissioner's award in that case was proper, in all respects, even though it was unsupported by or is even in conflict with the medical evidence in the case, and that the Deputy Commissioner could find facts without any support in the medical testimony.

I submit that there is no other place in American jurisprudence or in the adjudication of the rights between American citizens where an adjudicator is permitted to completely ignore all of the uncontradicted evidence, and make a determination such as was done in this particular


Senator MORSE. Mr. Vickery, could you give us, for the record, a citation of that court decision?

Mr. VICKERY. Yes, sir; I will be pleased to. It involved a longshoreman named Mathew Gee, but that is all I recall now.

Senator MORSE. Just supply it for the record.

Mr. VICKERY. I will be glad to.

(The citation referred to subsequently supplied by Mr. Vickery follows:)

Strachan Shipping Company v. Calbeck, D.C. Tex., 1961, 190 F. Supp. 255 aff'd 5 Cir., 1962, 306 F.2d 693, cert. denied 372 U.S. 954, 9 L.Ed.2d 978, 83 S. Ct. 950.

Mr. VICKERY. The next amendment that I would like to suggest be considered is an amendment to the jurisdictional section of the act, to provide that compensation under the Longshoremen's Act, is not paid if the injury ooccurs on a dock or a pier which is physically or permanently attached to the land. Attempts are now being made to extend the jurisdiction of the act to piers and docks, on the theory that if there is any water under the pier or dock where the injury occurred, that the injury occurred upon the navigable waters, which would give the Longshoremen's Act jurisdiction. Only this year, two such cases have been decided by the Court of Appeals for the Fifth Corcuit in our part of the country, and much litigation is in the offing, if such an amendment. is not passed.

It would be a simple matter to make it perfectly clear in the act that if the injury occurs on the dock, as has been traditionally the intention of the Longshoremen's Act, that the State compensation act controls, and it is not a longshore act case.

Senator MORSE. Would you also supply me, Mr. Vickery, the citation of those two cases?

Mr. VICKERY. I will be pleased to.

(The material referred to above follows:)

Travelers Insurance Company and Levingston Shipbuilding Company v. R. J. Shea, Deputy Commissioner, 5 Cir., 1967, 382 F. 2d 344 and Andrew Nicholson v. C. D. Calbeck, Deputy Commissioner, which was decided by the Court of Appeals for the Fifth Circuit on October 31, 1967 and has not yet been published in the Federal Reporter. A copy of the Court's opinion in the Nicholson case follows:




No. 24342



C. D. CALBECK, Deputy Commissioner, et al, APPELLEES.

Appeal from the United States District Court for the Southern District of Texas.

(October 31, 1967.)

Before WISDOM and GOLDBERG, Circuit Judges, and SEALS, District Judge.

Per curiam: This appeal is from a judgment dismissing the complaint brought by an injured employee, the appellant, under 33 U.S.C. § 921(b) and 5 U.S.C. 700, to review and set aside the determination of the Deputy Commissioner that the claimant was not entitled to benefits under the Longshoreman's and Harbor Workers' Act, 33 U.S.C. § 903 (a).

On May 26, 1960, Andrew Nicholson, claimant-appellant, was injured while performing service as a longshoreman for his employer. He performed his work upon a pier erected on pilings and concrete blocks resting on the bed of navigable waters of the United States. The inshore edge of the pier is attached to the outboard edge of the employer's warehouse, a portion of which is also over water so that the inshore edge of the pier is not attached to or supported by land. In preparing to load the SS "Mary Sophia", some "tween deck beams" were placed on the pier. During the loading it became necessary to move the vessel. Rather than place the beams back on the vessel, forklifts were used to move the beams to the vessel's new position. As Nicholson was assisting in this moving, the beams slid from their resting place on the forklifts, striking him on the back of his legs. The Commissioner and the district court held that the accident did not come within the provisions of the Longshoremen's Act because the claimant was not injured "upon the navigable waters of the United States".

The disposition of this case is controlled by the recent decision of this Court in Travellers Insurance Company v. Shea, Deputy Commissioner, and McCollough, No. 23492, decided August 9, 1967. In McCollough this Court held that the waters under a floating pier permanently attached to the shore were no longer "navigable waters". The Court distinguished between waters under a pier and waters under a vessel. See Michigan Mutual Liability Co. v. Arrien, 2 Cir. 344 F. 2d 640.

In the present case, the Deputy Commissioner found as a fact that the waters underneath the pier continued to be freely navigable by small crafts. Photographs demonstrate that no small craft larger than a canoe could navigate under the pier. The limited navigability of the waters under the pier is characteristic of piers generally and as a matter of law is not navigability within the meaning of the term "navigable waters".

The judgment is affirmed.

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