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Washington Workers’ Comp Law Faces Mootness Debate at High Court

April 18, 2022, 6:29 PM

The U.S. Supreme Court should overturn a ruling validating a Washington state workers’ compensation law designed for federal contractors working at the state’s Hanford nuclear waste site, a lawyer for the Justice Department told the high court.

The law, which passed in 2018, presumes certain worker health conditions—such as cancer and respiratory diseases—linked to cleanup work at the decommissioned federal nuclear production complex are occupational diseases that can trigger workers’ compensation benefits.

Washington passed a new workers’ compensation law (S.B. 5890) after the high court agreed to hear the case, but a ruling upholding the prior measures creates uncertainty over whether the federal government still will face financial strain from previous claims made by the workers at the nuclear site, Malcolm Stewart, a deputy solicitor general for the DOJ, argued Monday.

The U.S. Court of Appeals for the Ninth Circuit upheld the older measure in 2020, and last year declined to revisit its decision, prompting the U.S. to seek high court review.

But the new law has retroactive effect and makes the dispute over the old law moot, Tera Heintz, deputy solicitor general for the state of Washington, told the justices Monday. Fewer than 100 claims were filed under the 2018 law, she said, and those claims would be subject to a broader workers compensation law unrelated to this case.

Radioactive

Since 1989, the Department of Energy 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 is expected to continue over the next six decades and involve roughly 400 federal employees and 10,000 contractors.

The federal government challenged Washington’s 2018 workers’ compensation law, which applies exclusively to private contractors and subcontractors who perform cleanup work at the site. The 2018 state law exposes government contractors, and by extension the United States, to “massive new costs” that similarly situated state and private employers don’t incur, according to the U.S.

The DOJ last September asked the Supreme Court to take up the case, arguing that the law discriminated against the United States and that state law shouldn’t apply to federal contract workers at Hanford. The government warned that the Ninth Circuit’s logic opened the door to other states passing legislation targeting work at federal facilities.

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

Focus on Mootness

Arguments before the Supreme Court Monday centered around the question of whether the dispute is moot.

Both the state and the federal government agree that Washington’s new law takes a different approach to workers’ compensation claims at the Hanford Site by applying protections more broadly. Both sides also agreed not to resolve any concerns with that law in the current case.

But the DOJ says some of the claims filed under the 2018 law remain pending, and it’s unclear whether those claims would be allowed under the new law. If those older claims move forward, the federal government would remain on the hook for damages.

“Before the new law was passed, there was no question that the government has a financial interest in the case,” Stewart said. Even if the law were declared invalid, “it wouldn’t produce a financial benefit to the United States, because the claims could be refiled. The new developments don’t eliminate that possibility,” he said.

The legal principles the Ninth Circuit used to decide the case also could have bearing on future disputes, so the justices should vacate the ruling, Steward argued.

From the Bench

Chief Justice John Roberts suggested that the new law’s retroactive effect was ambiguous.

Justice Elena Kagan told Stewart that the federal government’s reading of the new law would be a stretch. “I’m struggling to read it your way,” she said.

Heintz mentioned that Congress passed a federal statute that allows states to regulate federal contractors using all the tools they could to regulate the private sector. But the high court doesn’t need to decide the impact of that law in this case because it’s clear the new Washington law applies retroactively to all existing claims, she said.

“The federal government wants to invalidate a state law that doesn’t exist or have any ongoing effect,” Heintz said. “The only reason they argue there is a live controversy is invalidating a law that could still impact a small number of pending claims under the old law. That is incorrect.”

Justice Stephen Breyer, one of several justices who questioned the state’s mootness argument, said he too struggled to agree with Heintz that the 66 remaining claimants under the 2018 law wouldn’t argue that their claims should fall under the previous rule rather than the new law.

“If it’s a real problem, then I can’t say it’s moot,” Breyer said.

The case is United States v. State of Washington, U.S., No. 21-404, oral argument 4/18/22.

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

To contact the editors responsible for this story: Laura D. Francis at lfrancis@bloomberglaw.com; Andrew Harris at aharris@bloomberglaw.com