Justices Overturn Washington Workers’ Compensation Law on a Strict Reading of Intergovernmental Immunity

This post was originally published by SCOTUSblog. Reprinted under Creative Commons license CC-BY-NC-ND 3.0.

The Supreme Court on Tuesday unanimously struck down a Washington state law that was aimed at helping federal contract employees get workers' compensation for diseases arising from cleaning up nuclear waste.

The case, United States v. Washington, concerned the federally controlled Hanford nuclear reservation, a decommissioned facility that spans 586 square miles near the Columbia River. The reservation, formerly used by the federal government in the production of nuclear weapons, presents unique hazards to cleanup workers.

Under longstanding law, the federal government is immune from application of state law, including liability rules, on federal property located within a state, unless Congress waives the immunity. As Justice Stephen Breyer explained at the outset of his opinion for the court: "The Constitution's Supremacy Clause generally immunizes the Federal Government from state laws that directly regulate or discriminate against it." This concept is popularly known as "intergovernmental immunity."

Intergovernmental immunity might have meant that nonfederal workers on the Hanford site would automatically have no access to state remedies for work-related injuries or diseases. In 1936, however, Congress, detecting state workers' compensation gaps in injury coverage of nonfederal workers engaged in federal work, authorized application of state workers' compensation laws under a form of waiver:

The state authority charged with enforcing and requiring compliance with the state workers' compensation laws and with the orders, decisions, and awards of the authority may apply the laws to all land and premises in the State which the Federal Government owns or holds by deed or act of cession, and to all projects, buildings, constructions, improvements, and property in the State and belonging to the Government, in the same way and to the same extent as if the premises were under the exclusive jurisdiction of the State in which the land, premises, projects, buildings, constructions, improvements, or property are located.

The purpose of the waiver was to supply nonfederal employees with some form of workers' compensation coverage when engaging in "federal operations." The question in this case concerned the scope of this waiver.

It is widely understood that workers engaging in the type of dangerous cleanup work required at the Hanford site are likely to contract certain diseases at heightened rates. Yet, it can nevertheless be difficult in individual cases for workers to prove workplace causation of those diseases. Accordingly, in 2018, Washington attempted to ease proof of causation by shifting the burden of proof on the issue to the employer — in this context, the Federal Government, which is responsible for paying workers' compensation claims for federal contractors at the Hanford site. The legal issue quickly emerging under the law was that the disparate treatment of causation — a causation presumption in favor of employees — was explicitly applied only to the employees of federal contractors. The Washington law applied by its terms only to Hanford site workers "engaged in the performance of work, either directly or indirectly, for the United States." Furthermore, "[t]he presumption established in the same section extended to an applicable United States department of energy Hanford site worker following termination of service for the lifetime of that individual." According to the Supreme Court, these provisions would necessarily raise workers' compensation costs for federal contractors at Hanford (and thereby increases costs for the federal government) above those normally imposed on employers under Washington state workers' compensation law of general applicability.

Throughout the litigation, Washington had claimed that its different treatment of the Hanford site workers resulted from the dangerous nature of the work and was not discrimination against the federal government per se. Breyer rejected this argument, noting that "on its face, the law applies only to a 'person, including a contractor or subcontractor, who was engaged in the performance of work, either directly or indirectly, for the United States.' The law thereby explicitly treats federal workers differently than state or private workers."

Having found the federal government singled-out as uniquely responsible for more than state-based workers' compensation costs, the question remaining was whether Congress had authorized this discrimination.

The court held that Congress had not done so. Breyer emphasized that waivers of intergovernmental immunity require "is a clear congressional mandate." The workers' compensation waiver, he wrote, "does not 'clearly and unambiguously' authorize a State to enact a discriminatory law that facially singles out the Federal Government for unfavorable treatment. One can reasonably read the statute as containing a narrower waiver of immunity, namely, as only authorizing a State to extend its generally applicable state workers' compensation laws to federal lands and projects within the State."

Breyer further observed that the waiver requires state enforcement authorities to apply state laws to federal premises "in the same way and to the same extent as if the premises were under the exclusive jurisdiction of the State." This language could be interpreted to mean that the waiver applies to laws enforced against state, as well as to federal, premises and employees — in other words, that it does not authorize discrimination.

Breyer also pointed out that the waiver conferred upon "[t]he state authority charged with enforcing … the state workers' compensation laws" the power to "apply the laws to" federal lands and projects. The text of the waiver seems to anticipate application of preexisting state workers' compensation law that also applies to nonfederal workers. Those, Breyer said, are the laws that state enforcement authorities ordinarily enforce. Moreover, the waiver itself is titled "Extension of state workers' compensation laws to buildings, works, and property of the Federal Government." Again, this suggests a preexisting body of state workers' compensation law applicable to nonfederal employees that is being "extended" to employees of federal contractors.

Concluding the analysis by buttressing the entire notion of intergovernmental immunity, Breyer wrote, "if discrimination is permissible here, what prevents Washington from bestowing a windfall upon its residents through an especially generous workers' compensation scheme financed exclusively by the Federal Government?"

Finally, while Washington had argued the entire case was now moot because the state had subsequently, after the filing of the petition in the case, amended the law under consideration by no longer explicitly benefitting the employees of Hanford federal contractors with preferential causation rules, the court found that a decision in the federal government's favor might result in decisions allowing it to recoup or avoid workers' compensation expense under the former law, a possibility rendering the case not moot. Although Washington argued the new law would be applied retroactively, Breyer noted that had not yet occurred and "it is not our practice to interpret statutes in the first instance."