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High Court Takes Up Nuclear Site Workers’ Compensation Case (1)

Jan. 10, 2022, 3:26 PM

The U.S. Supreme Court will consider the federal government’s challenge to a Washington state workers’ compensation law in a case that could have costly consequences for U.S. government contracts involving hazardous work on federal property.

The justices agreed Monday to review a U.S. Court of Appeals for the Ninth Circuit decision upholding a Washington law that presumes certain worker health conditions linked to cleanup work at the Hanford Site, a decommissioned federal nuclear production complex, are occupational diseases that can trigger workers’ compensation benefits.

The Department of Energy since 1989 has overseen cleanup at the Hanford Site, which produced weapons-grade plutonium for use in the U.S. nuclear program during World War II and the Cold War. The cleanup of the Hanford site is expected to continue over the next six decades and involve roughly 400 department employees and 10,000 contractors and subcontractors.

In 2018, Washington lawmakers passed legislation, HB 1723, that amended the state’s workers’ compensation law exclusive to the Hanford site, covering at least 100,000 current and former federal contract workers who performed services there over the past 80 years. The law states that presumed occupational diseases stemming from work at Hanford should trigger benefits eligibility, including cancers and other respiratory diseases.

The federal government argued the law exposes government contractors, and by extension the United States, to “massive new costs” that similarly situated state and private employers don’t incur.

‘Uniquely Dangerous Workplace’

The Justice Department had asked the Supreme Court to take up the case, arguing the 2018 law discriminated against the United States and that state law shouldn’t apply to federal contract workers at Hanford. The government warned that the logic applied by a panel of Ninth Circuit judges opened the door to other states passing legislation targeting work at federal facilities.

“Congress did not permit States to adopt laws that impose unique burdens on the United States and the firms that it engages to carry out federal functions,” Justice Department attorneys argued. “The practical consequences of the panel’s mistake are far-reaching. Even if the Hanford site is considered in isolation, the decision is likely to cost the United States tens of millions of dollars annually for the remainder of the 21st century.”

Attorneys for Washington state, however, responded that courts have allowed states to regulate workers’ compensation for injuries or illnesses suffered during work on federal land. They argued Washington state has “long tailored its workers’ compensation laws to the dangers faced by particular employees,” noting statutes that protect firefighters and other workers facing special hazards.

“Hanford is a uniquely dangerous workplace, filled with radioactive and toxic chemicals, and private contractors operating there have routinely failed to provide employees with protective equipment and to monitor their exposures to toxic substances,” they argued.

Justice Department attorneys also argued the Ninth Circuit ruling clashed with Supreme Court precedent in a 1988 decision, Goodyear Atomic Corp. v. Miller, which described a similar situation of a state workers’ compensation award for an employee injured at a federally owned facility.

The full Ninth Circuit previously declined to take up the case, and said the Washington law fell properly within a part of federal law that authorizes states to apply their workers’ compensation laws to federal projects.

In a dissent to the Ninth Circuit’s denial of a rehearing, Judge Daniel P. Collins wrote that the panel’s decision clashed with high court precedent, calling it an “egregious error” that would have sweeping consequences.

The U.S. Solicitor General’s office represents the federal government. The Washington Attorney General’s office is defending the state law.

The case is U.S. v. Washington, U.S., No. 21-404, cert granted 1/10/22.

To contact the reporter on this story: Erin Mulvaney in Washington at emulvaney@bloomberglaw.com

To contact the editors responsible for this story: Jay-Anne B. Casuga at jcasuga@bloomberglaw.com; John Lauinger at jlauinger@bloomberglaw.com; Andrew Harris at aharris@bloomberglaw.com