O.C. Workers’ Comp Case Goes to Supreme Court : Employment: Garden Grove longshoreman says his disability benefits should not be reduced even though he later found a higher-paying job.

In a case involving an Orange County man, the U.S. Supreme Court agreed Friday to decide whether disability benefits for longshore workers can be reduced or canceled if they later find higher-paying work.

The court said it will hear a California case in which a longshore company argues that benefits can be reduced in such instances even if there has been no improvement in a worker’s physical condition.

Conflicting rulings in similar cases have been made by two federal appeals courts, setting up the confusion that is bringing 49-year-old Garden Grove resident John Rambo’s case to the nation’s highest tribunal.

The ultimate decision will have only a limited effect, mainly on dock and harbor workers who sustain permanent back, neck or head injuries, and Rambo’s weekly partial disability benefit of $80.19 is not a significant amount of money. But the father of three says he is arguing for principle.

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“It’s not a matter of the money,” he said. “But when I got hurt and got this award, it said it was indefinite, and I was told that it was for life. Then they try to take it away.”

Rambo was working as a longshoreman for Metropolitan Stevedore Co. in Wilmington when he suffered a back injury in September, 1980. He filed a disability claim with the federal government under the Longshore and Harbor Workers’ Compensation Act, which covers dock workers across the nation.

He was granted $80.16 a week in benefits for a permanent partial disability.

But in 1989, after Rambo had begun working as a crane operator for another company, Metropolitan asked the Labor Department to modify his benefits. The company argued that because Rambo by then was making $1,550 a week, more than three times what his old job had paid, he was not entitled to the disability payment.

An administrative law judge canceled Rambo’s benefits, saying that he no longer suffered a loss of wage-earning capacity.

That decision was based on a 1985 ruling by the U.S. 4th Circuit Court of Appeals in Virginia, which held that a disability award under the Longshore and Harbor Workers’ Act could be modified if the worker’s economic condition or wage-earning capabilities changed.

Rambo’s Wilmington lawyer, Thomas J. Pierry, appealed, citing a 1933 ruling by the U.S. 9th Circuit Court of Appeals that the only grounds for modifying a disability award would be a change in a worker’s physical condition.

The 9th Circuit Court heard Rambo’s appeal and in June, 1993, reinstated his award--prompting Metropolitan to appeal to the U.S. Supreme Court.

Robert E. Babcock, a Portland, Ore., maritime law specialist representing Metropolitan, said the contradictory rulings by the two appeals courts likely prompted the Supreme Court to hear the case.

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Babcock argues that if a worker is retrained--with or without help from the employer--and can improve his or her earning capabilities, a disability benefit should be modified because its intent was to compensate the worker for a loss of earning capacity.

Pierry, however, said that would encourage employers and employees to petition to modify workers’ compensation benefits based on changes in business conditions, such as an economic recession.

Rambo, he said, “feels that he was double-crossed” by Metropolitan, “but there is also a larger issue.” If Metropolitan succeeds, he said, “it opens a Pandora’s box of litigation.”

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The Associated Press contributed to this report.