Jones & Laughlin Steel Corp. v. Pfeifer

Background

A man who worked for 19 years loading and unloading coal barges slipped on snow and ice on a barge and was permanently injured. His employer had paid statutory workers’ compensation under the Act’s §4, but he also sued the barge owner for negligence under §5(b). The District Court awarded about $275,881, applied a Pennsylvania “total offset” method that ignored inflation and did not discount future earnings, and the Court of Appeals affirmed.

Reasoning

The Court addressed two questions: whether a longshoreman employed directly by a vessel can sue that vessel for negligence, and how lost-earnings damages should be calculated in an inflationary economy. Relying on the Act’s language and legislative history, the Court held that a longshoreman employed by a vessel may bring a negligence action against the vessel despite having received statutory compensation. On damages, the Court said federal maritime law controls and rejected a fixed state rule. If parties rely on a specific forecast of future price inflation, the court should discount by the after-tax market interest rate; if not, a below-market “real” discount rate (the Court indicated 1–3% as acceptable) may be used. The Court emphasized that the trial court must make a deliberate choice about inflation and discounting rather than follow state law automatically.

Real world impact

The decision lets longshore workers employed by vessel owners pursue tort recovery for negligence while also receiving statutory compensation. Trial courts must now recalculate lost-wage awards with a clear method for handling inflation and discounting. The case was vacated and remanded so the damages issue can be revisited with these standards in mind.