## Facts

- Pfeifer, a loading helper employed by Jones & Laughlin Steel Corp., was injured while working on the employer’s coal barge in Pennsylvania.
- The injury left Pfeifer permanently unable to return to his prior job and able to perform only light work.
- Pfeifer sued in federal district court under § 5(b) of the Longshoremen’s and Harbor Workers’ Compensation Act (LHWCA), alleging the injury was caused by the negligence of the vessel.
- Jones & Laughlin had already paid Pfeifer workers’ compensation under § 4 of the LHWCA and argued § 5(a) made that liability exclusive.
- The district court found negligence and awarded $275,881.31 in damages for, among other things, future wage loss.
- In computing future wage loss, the court did not separately adjust for inflation and did not discount the future loss stream to present value, relying on a state-law “offset” rule presuming inflation and interest rates cancel out.
- The Third Circuit affirmed.

## Issues

1. Whether § 5(b) of the LHWCA allows a negligence action against the owner of a vessel when the owner is also the plaintiff’s employer that has paid compensation under § 4, notwithstanding § 5(a)’s exclusivity clause.
2. Whether federal maritime law permits a federal court to apply, as a mandatory rule, a state-law presumption that future inflation and discount rates offset each other, eliminating explicit present-value discounting for future lost earnings.

## Decision

- The Supreme Court affirmed that Pfeifer could maintain a § 5(b) negligence action against Jones & Laughlin in its capacity as vessel owner, even though it was also his employer and had paid LHWCA compensation.
- The Court vacated the damages award because the district court improperly adopted a state-law offset presumption as a mandatory federal rule and failed to use an appropriately reasoned federal method addressing inflation and discounting.
- The case was remanded for recalculation of damages consistent with federal maritime standards.

## Legal Principles

- Section 5(b) authorizes an injured longshore or harbor worker to sue for “negligence of the vessel,” including when the vessel owner is also the employer, subject to statutory limits (including a restriction tied to injuries caused by fellow stevedores).
- Section 5(a)’s exclusivity of compensation does not, by itself, bar a § 5(b) negligence action against an owner-employer where the claim is based on vessel negligence.
- Damages for future lost earnings in maritime personal-injury cases are governed by federal maritime law, not state tort-law rules imposed as mandatory federal doctrine.
- A future earnings award generally must be reduced to present value; courts may account for inflation and investment returns through different accepted approaches, but may not impose an irrebuttable assumption that inflation and interest always cancel out.
- Selection of discounting and inflation methodology should be justified by economic reasoning and record support rather than categorical presumptions.

## Conclusion

The Court held that the LHWCA permits a longshore worker to sue an owner-employer for vessel negligence under § 5(b), but required future lost-earnings damages to be recalculated under federal maritime law using a reasoned approach to inflation and present-value discounting rather than a mandatory state offset rule.


Jones & Laughlin Steel Corp. v. Pfeifer, 462 U.S. 523 (1983)