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The enactment of the Washington Hanford workers’ compensation program in 2018 raised a conflict between the state of Washington and the federal government, with the federal government suing the state for illegalities related to the passing of the law. In the State of Washington workers’ compensation program federal government lawsuit, the federal government alleged that the law was discriminative as it applied to employees in a single facility in the state. The law provided a presumption that eased the compensation process for workers at the Hanford site who are considered to be at a higher risk of exposure to toxic nuclear waste. The presumption applies to certain illnesses mentioned in the act that are believed to occur from exposure to this toxic waste.

The Hanford site, located in the state of Washington, was used by the federal government to create nuclear weapons during the Second World War. Many toxic wastes remained at the site, causing serious environmental threats. In 1987, the US government and the state of Washington, among other environmental conservation agencies, embarked on a cleanup project expected to last for about 100 years. The decontamination exercise is undertaken by people employed by private companies contracted by the federal government, state workers, and federal employees. Those working at the site are constantly exposed to these toxic chemicals, which can potentially cause cancers and neurodevelopmental disorders, among other illnesses.

Due to the high risk involved, the presumptive Washington workers’ compensation law made it easier for injured workers to establish their entitlement to compensation benefits. The federal government, supposed to pay these benefits, contested the law in court, alleging that it increased the federal government’s compensation costs.

The lawsuit by the federal government against the state of Washington also argues that the state of Washington presumption law violated the Supremacy Clause by discriminating against the Federal Government. The supremacy clause in the US Constitution establishes that federal law and federal constitution precede state constitutions and state laws.

The case was first presented to a district court, which ruled in favor of the state, concluding that the law was within the scope of the federal waiver of immunity. The federal government then appealed the case at the United States Court of Appeals for the Ninth Circuit, which affirmed the district court’s earlier ruling.

The US Supreme Court heard the State of Washington workers’ compensation program federal government lawsuit on April 11, 2022, and decided on June 21, 2022. It unanimously reversed the ruling in favor of the federal government.

State of Washington workers’ compensation program federal government lawsuit Ruling

In the State of Washington workers’ compensation program federal government lawsuit, the US Supreme Court ruled that the Washington law discriminated against the federal government and its contractors. It found the law unconstitutional because section 3172 is not precise on the immunity waivers for discriminatory state laws. The court also expressed its opinion that Congress does not waive the federal government’s immunity regarding such regulations. Washington argued that Congress waived the federal government immunity on state workers’ compensation laws.

The law gives relevant state authorities the power to enforce state workers’ compensation laws on lands, properties, and projects located in the state but owned by the federal government as if they were under the state’s jurisdiction. However, the waiver doesn’t “clearly and unambiguously” allow states to enact laws that unfavorably facially single out the federal government. The law was discriminative in that it burdened the federal government with compensation costs that private entities and states do not bear. For this reason, the court did not term the case moot despite the state’s amendments to the act.

The court was unconvinced by Washington’s arguments that the waiver statute gave the state power to apply its employee compensation laws on federal property. In the Supreme Court’s opinion, the phrase “in the same way and to the same extent” limits states’ power to only the applicable workers’ compensation laws on federal facilities.

This law was also unconstitutional as it defied the supremacy clause as stated in Article VI Paragraph 2 of the US Constitution, which establishes that federal law and the federal constitution take precedence over state laws and state constitutions. The same clause also prohibits states from getting in the way of the federal government’s activities within its constitutional powers and taking on its constitutionally entrusted roles. However, the Constitution does not grant the federal government powers to review state laws before they are enacted.

In its ruling, the Supreme Court did not find the case moot because it is possible for the court to grant effective relief. The new statute included in the Act changed the original law. However,  the federal government still holds that the ruling in its favor protected it from paying vast sums of money in workers’ compensation claims. However, the court remained uncertain about how Washington state courts would interpret the law.

The court noted that Washington relied on other Congress waivers relating to intergovernmental immunity; however, the cases differed as they did not discriminate against the federal government. For this reason, the court concluded that Congress did not necessarily waive the federal government immunity in the employee compensation context. The Supreme Court also stated that Congress could authorize laws that regulate and discriminate against the federal government.  However, as it stands, the Constitution’s Supremacy Clause protects the government from such laws.

In the unanimous court opinion delivered by Judge Beryer, the court raised the question of whether the Congressional waiver applies to the Washington workers’ compensation law under question. In its opinion, the law fell outside the waiver since it applied to only one federal facility located within the state, and it unfavorably discriminated against the federal government, adding the costs it incurred paying workers compensation. And the supremacy clause rendered the law unconstitutional.

Another provision contested in the law was that it applied only to federal contract workers, leaving out federal employees working at the Hanford site. The law gave the federal contract employees an advantage at Hanford, making it easier for them to establish their entitlement for compensation by offering presumption for certain illnesses believed to occur from nuclear waste exposure. The presumption provided under this law lasted for the lifetime of the federal contract employees working at the site, even after leaving the Hanford site. And the presumption can only be rebutted with adequate evidence. These would mean extra costs for the federal government, which was already paying compensation benefits to workers at the site.

Washington argued that its amendments to the original law made the case moot because the law no longer discriminated against the federal government as it applied to any “worker working at a radiological hazardous waste facility.” The court stated that a case is only moot if the court can’t grant any effectual relief and money is at stake. The federal government had asserted that once the case was ruled in favor of the US government, they would either recoup or avoid paying claims of $17 million to $37 million in workers’ compensation awarded by lower courts in the earlier law. Also, the court further explained that claims of mootness are not final as they could be appealed.

Washington also argued that even if the federal government won the case, it would not recover or avoid the payments as intended because the new statute applies retroactively and broadly encompasses claims all claims filed under the previous law. The court declined to decide the retroactivity and breadth of Washington’s workers’ compensation law. The court further stated that it would not be impossible for the federal government to recover money once the case was ruled in its favor. Also, Washington state courts might have different interpretations of the law.

The court also expressed its opinion that state laws cannot be ruled unconstitutional because they increase the federal government’s costs unless they discriminate against the US government and its contractors. In this case, the Washington law singled out and tried to regulate the federal government unfavorably (North Dakota, 495 U. S., at 438 – plurality opinion).

The judge also stated that Congress must “provid[e] ‘clear and unambiguous’ authorization for” regulations that violate the Federal Government’s intergovernmental immunity (Hancock v. Train, 426 U. S. 167, 179 (1976) and Goodyear Atomic, 486 U. S., at 180 (quoting EPA v. California ex rel. State Water Resources Control Bd., 426 U. S. 200, 211 (1976)).

Even though Washington argues that Congress provided such authorization in the waiver for federal immunity, the court believes the waiver applies “if the premises were under the exclusive jurisdiction of the State.” In the court’s opinion, the waiver did not “clearly and unambiguously” allow a state to enact laws that unfavorably discriminated against the federal government. The clause “in the same way and to the same extent” suggests that the statute should contemplate laws that apply to state and federal premises and employees.

The court also explained that the statute gives to “[t]he state authority charged with enforcing . . . the state workers’ compensation laws” and to “apply the laws to” federal lands and projects. It also emphasized that the language in this law contemplates the application of state provisions that apply at least in part to non-federal workers because those are the laws enforced by state authorities.

The judge referred to the title of the statutory waiver “Extension of state workers’ compensation laws to buildings, works, and property of the Federal Government.” In the court’s opinion, the word “extension” here suggests application to federal premises of a State’s generally applicable workers’ compensation laws.

The court also stated that the Constitution’s intergovernmental immunity doctrine speaks strongly about discrimination against the federal government. If allowed, states would bestow high costs on the federal government for the benefit of its citizens. This nondiscrimination principle, therefore, enhanced financial independence among the states.

For all these reasons, the court concluded that the statutory language of §3172’s waiver permits a reading that does not discriminate against the Federal Government. The waiver thus does not “‘clear[ly] and unambiguous[ly]’” authorize Washington’s discriminatory law. The court found Washington’s arguments unconvincing as they emphasized one phrase in the waiver statute. Washington relied on the Supreme Court’s decision on Goodyear Atomic v. Miller in 1988, which did not undermine but supported their decision on this particular case.



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