author: Mr. Justice Stewart Mr. Justice Douglas, Mr. Justice Marshall,

text:
    RICHARDSON, SECRETARY OF HEALTH, EDUCATION, AND WELFARE v. BELCHER
    No. 70-53.
    Argued October 13, 1971
    Decided November 22, 1971

      Richard B. Stone argued the cause for appellant. With him on the brief were Solicitor General Griswold, Assistant Attorney General Gray, and Kathryn H. Baldwin.

      John Charles Harris argued the cause and filed a brief for appellee.

      William E. Miller and Richard A. Whiting filed a brief for the American Mutual Insurance Alliance et al. as amici curiae urging reversal.
    Briefs of amici curiae urging affirmance were filed by Edward J. Kionka for the American Trial Lawyers Association, and by Edward L. Carey, Harrison Combs, and M. E. Boiarsky for United Mine Workers of America.
   Mr. Justice Stewart

delivered the opinion of the Court.

The appellee was granted social security disability benefits effective in October 1968, in the amount of $329.70 per month for himself and his family. In January 1969, the federal payment was reduced to $225.30 monthly under the “offset” provision of Section 224 of the Social Security Act, 79 Stat. 406, 42 U. S. C. § 424a, upon a finding that the appellee was receiving workmen’s compensation benefits from the State of West Virginia in the amount of $203.60 per month. After exhausting his administrative remedies, the appellee brought this action challenging the reduction of payments required by § 224 on the ground that the statutory provision deprived him of the due process of law guaranteed by the Fifth Amendment. The District Judge, disagreeing with other courts that have considered the question, held the statute unconstitutional. 317 F. Supp. 1294. The Secretary of the Department of Health, Education, and Welfare appealed directly to this Court under 28 U. S. C. § 1252. We noted probable jurisdiction, 401 U. S. 935, and the case was briefed and argued on the merits. We now reverse the judgment of the District Court.

In our last consideration of a challenge to the constitutionality of a classification created under the Social Security Act, we held that “a person covered by the Act has not such a right in benefit payments as would make every defeasance of ‘accrued’ interests violative of the Due Process Clause of the Fifth Amendment.” Flemming v. Nestor, 363 U. S. 603, 611. The fact that social security benefits are financed in part by taxes on an employee’s wages does not in itself limit the power of Congress to fix the levels of benefits under the Act or the conditions upon which they may be paid. Nor does an expectation of public benefits confer a contractual right to receive the expected amounts. Our decision in Goldberg v. Kelly, 397 U. S. 254, upon which the District Court relied, held that as a matter of procedural due process the interest of a welfare recipient in the continued payment of benefits is sufficiently fundamental to prohibit the termination of those benefits without a prior evidentiary hearing. But there is no controversy over procedure in the present case, and the analogy drawn in Goldberg between social welfare and “property,” 397 U. S., at 262 n. 8, cannot be stretched to impose a constitutional limitation on the power of Congress to make substantive changes in the law of entitlement to public benefits.

To characterize an Act of Congress as conferring a “public benefit” does not, of course, immunize it from scrutiny under the Fifth Amendment. We have held that “[t]he interest of a covered employee under the [Social Security] Act is of sufficient substance to fall within the protection from arbitrary governmental action afforded by the Due Process Clause.” Flemming v. Nestor, supra, at 611. The appellee argues that the classification embodied in § 224 is arbitrary because it discriminates between those disabled employees who receive workmen’s compensation and those who receive compensation from private insurance or from tort claim awards. We cannot say that this difference in treatment is constitutionally invalid.

A statutory classification in the area of social welfare is consistent with the Equal Protection Clause of the Fourteenth Amendment if it is “rationally based and free from invidious discrimination.” Dandridge v. Williams, 397 U. S. 471, 487. While the present case, involving as it does a federal statute, does not directly implicate the Fourteenth Amendment’s Equal Protection Clause, a classification that meets the test articulated in Dand-ridge is perforce consistent with the due process requirement of the Fifth Amendment. Cf. Bolling v. Sharpe, 347 U. S. 497, 499.

To find a rational basis for the classification created by § 224, we need go no further than the reasoning of Congress as reflected in the legislative history. The predecessor of § 224, enacted in 1956 along with the amendments first establishing the federal disability insurance program, required a full offset of state or federal workmen’s compensation payments against benefits payable under federal disability insurance. 70 Stat. 816. It is self-evident that the offset reflected a judgment by Congress that the workmen’s compensation and disability insurance programs in certain instances served a common purpose, and that the workmen’s compensation programs should take precedence in the area of overlap. The provision was repealed in 1958, 72 Stat. 1025, because Congress believed that “the danger that duplication of disability benefits might produce undesirable results [was] not of sufficient importance to justify reduction of the social security disability benefits.” H. R. Rep. No. 2288, 85th Cong., 2d Sess., 13.

In response to renewed criticism of the overlap between the workmen’s compensation and the social security disability insurance programs, Congress re-examined the problem in 1965. Data submitted to the legislative committees showed that in 35 of the 50 States, a typical worker injured in the course of his employment and eligible for both state and federal benefits received compensation for his disability in excess of his take-home pay prior to the disability. Hearings on H. R. 6675 before the Senate Committee on Finance, 89th Cong., 1st Sess., pt. 2, p. 904. It was strongly urged that this situation reduced the incentive of the worker to return to the job, and impeded the rehabilitative efforts of the state programs. Furthermore, it was anticipated that a perpetuation of the duplication in benefits might lead to the erosion of the workmen’s compensation programs. The legislative response was § 224, which, by limiting total state and federal benefits to 80% of the employee’s average earnings prior to the disability, reduced the duplication inherent in the programs and at the same time allowed a supplement to workmen’s compensation where the state payments were inadequate.

The District Court apparently assumed that the only basis for the classification established by § 224 lay in the characterization of workmen’s compensation as a "public benefit.” Because the state program was financed by employer contributions rather than by taxes, the court held that the “public” characterization afforded no rational basis to distinguish workmen’s compensation from private insurance. We agree that a statutory discrimination between two like classes cannot be rationalized by assigning them different labels, but neither can two unlike classes be made indistinguishable by attaching to them a common label. The original purpose of state workmen’s compensation laws was to satisfy a need inadequately met by private insurance or tort claim awards. Congress could rationally conclude that this need should continue to be met primarily by the States, and that a federal program that began to duplicate the efforts of the States might lead to the gradual weakening or atrophy of the state programs.

We have no occasion, within our limited function under the Constitution, to consider whether the legitimate purposes of Congress might have been better served by applying the same offset to recipients of private insurance, or to judge for ourselves whether the apprehensions of Congress were justified by the facts. If the goals sought are legitimate, and the classification adopted is rationally related to the achievement of those goals, then the action of Congress is not so arbitrary as to violate the Due Process Clause of the Fifth Amendment.

The judgment is

Reversed.

Mr. Justice Douglas,

dissenting.

I would affirm the judgment of the District Court. The statutory classification upheld today is not “rationally based and free from invidious discrimination.” Dandridge v. Williams, 397 U. S. 471, 487. It is, in my view, violative of the Federal Government’s obligation under the Fifth Amendment’s Due Process Clause to guarantee to all citizens equal protection of the laws. Bolling v. Sharpe, 347 U. S. 497.

Eligibility for social security disability benefits is premised upon a worker’s having attained “insured” status in the course of an employment “covered” by the Act. It is undisputed that Raymond Belcher, and through him his wife and two minor children, had so qualified in 1968 when he broke his neck while employed by the Pocahontas Fuel Co. in Lynco, West Virginia. Indeed, his application for such benefits has been approved, and the benefits authorized and paid.

Section 224 of the Social Security Act, however, requires that these benefits be substantially reduced solely because Belcher also receives state workmen’s compensation payments. It is said that the duplication of benefits impedes rehabilitation, and may lead to a cutting back of state workmen’s compensation programs. Ante, at 83.

The rehabilitation goal does not explain the special treatment given to workmen’s compensation beneficiaries. There are many other important programs, both public and private, which contain provisions for disability payments affecting a substantial portion of the work force, and which do not require an offset under the Social Security Act.

Thus, had Belcher’s supplemental disability payment come from a Veterans’ Administration program, a Civil Service Retirement Act or Railroad Retirement Act annuity, a private disability insurance policy, a self-insurer, a voluntary wage-continuation plan, or the proceeds in an action in tort arising from the disabling injury, there would have been no reduction in his social security benefits. The offset under § 224 applies only to federal social security disability beneficiaries also receiving workmen’s compensation payments, a group which in 1965 totaled only 1.4% of all social security disability beneficiaries. Yet, of the 849,000 disabled workers who in 1965 received social security disability benefits, over sixteen percent also received overlapping veteran’s benefits, and almost fourteen percent received benefits from private insurance maintained under the auspices of an employer or a union. Congress is, of course, not required to address itself to all aspects of a social problem in its legislation. It must, however, justify the distinctions it draws between people otherwise similarly situated. Rehabilitation incentives are not a rational justification for the discrimination worked by § 224. If it is at all rational to argue that duplicating payments “impede rehabilitation,” the argument must apply to all such payments regardless of their source. The nature of the supplemental benefit has no relation to a worker’s incentive to return to work.

Nor is § 224 designed to stem a possible “erosion” of state workmen’s compensation plans. As Mr. Justice Marshall points out, post, at 94, § 224 itself provides that there shall be no reduction of federal social security benefits with respect to those state workmen’s compensation plans which themselves offset federal social security benefits against state payments. Thus, the statute encourages States concerned about overcompensation of disabled workers to cut back on their own programs. But the “rational basis” discerned by the majority requires the statute to have precisely the opposite purpose.

I would affirm the judgment of the District Court.

Mr. Justice Marshall,

with whom Mr. Justice Brennan joins,

dissenting.

In my view, the offset provision of § 224 of the Social Security Act, 42 U. S. C. § 424a, 79 Stat. 406, creates an unlawful discrimination finder the Due Process Clause of the Fifth Amendment.

Before this 53-year-old appellee became disabled in March 1968, he was supporting his wife and two children on total yearly earnings of approximately $6,600. Once disabled, he could not work, but he and his family were awarded federal social security disability benefits totaling $329.70 per month. Because his employer had chosen to set up a workmen’s compensation fund, ap-pellee also became entitled to workmen’s compensation benefits totaling $203.60 per month. These were his only forms of disability compensation. Had appellee been allowed to keep his initial award of federal benefits, his income would have totaled nearly $6,400 a year, somewhat less than he had earned before his disability. But because of the offset provision of § 224, appellee’s monthly federal payments were reduced, solely because the supplement to his federal benefits was in the form of state workmen’s compensation. As a result, appellee’s total yearly income was reduced to $5,146.80.

Appellee complains that the offset provision is unconstitutional because it places its severe burden on a single class of disabled persons without adequate justification. Under the challenged offset provision, federal social security disability benefits are reduced only for those persons whose disability entitles them to workmen’s compensation. Other persons who receive other kinds of disability compensation — for example, private insurance benefits or tort damages — are allowed the full amount of federal social security benefits. The question here is whether workmen’s compensation beneficiaries may be singled out in this way for a reduction in federal benefits.

Starting from the assumptions that federal social security insurance, like welfare assistance, is a “public benefit” in which the beneficiaries have neither contract nor property interests, and that statutory classifications affecting the basic needs of individuals are viewed no differently under the Constitution from classifications in the area of business regulation, the Court concludes that the classification here has a reasonable basis and is consistent with the Fifth Amendment. To reach today’s result, the Court revitalizes Flemming v. Nestor, 363 U. S. 603 (1960), and extends the doctrine of Dandridge v. Williams, 397 U. S. 471 (1970), to statutory classifications under federal law. Thus, the Court today holds that Congress can take social security benefits from a disabled worker as long as it does not behave in an “arbitrary” way; classifications in the federal social security law are consistent with the Fifth Amendment if they are “rationally based and free from invidious discrimination.”

In opposing this course, I adhere to my dissenting views in Dandridge v. Williams. I continue to believe that the “rational basis” test used by this Court in reviewing business regulation has no place when the Court reviews legislation providing fundamental services or distributing government funds to provide for basic human needs. In deciding whether a given classification is consistent with the requirements of the Fifth or Fourteenth Amendment, we should look to “the character of the classification in question, the relative importance to individuals in the class discriminated against of the governmental benefits that they do not receive, and the asserted state [or federal] interests in support of the classification.” Dandridge v. Williams, supra, at 521 (Marshall, J., dissenting); cf. Williams v. Rhodes, 393 U. S. 23, 30 (1968). Under this approach, it is necessary to consider more than the character of the classification and the governmental interests in support of the classification. Judges should not ignore what everyone knows, namely that legislation regulating business cannot be equated with legislation dealing with destitue, disabled, or elderly individuals. Thus, in assessing the lawfulness of the special disadvantages suffered here by workmen’s compensation beneficiaries, the Court should consider the individual interests at stake. Federal disability payments, even when supplemented by other forms of disability compensation, provide families of disabled persons with the basic means for getting by. I would require far more than a mere “rational basis” to justify a discrimination that deprives disabled persons of such support in their time of need.

It is unnecessary to elaborate further the analysis required by the principles of my Dandridge dissent. For even under the Court’s “rational basis” test, the discriminatory offset provision here cannot be sustained. There simply is no reasonable basis for singling out recipients of workmen’s compensation for a reduction of federal benefits, while those who receive other kinds of disability compensation are not similarly treated.

This is not to say that an offset scheme is intrinsically impermissible. Arguably, Congress has an interest in paying greater benefits to people who are relying completely on the federal social security program, and lesser benefits to people who have other sources of disability compensation. But the question here is not whether Congress has the power to prevent “duplicative” payments that might exceed previous take-home pay and might thereby discourage disabled workers from returning to work. The issue is whether Congress may single out for the purpose of applying the offset only those who are receiving workmen’s compensation, and exclude those who are receiving similar supplemental disability compensation from other sources. A concern about excessive combined benefits and “rehabilitation” does not explain that distinction.

What, then, is the “rational basis” for the disfavored treatment of persons receiving workmen’s compensation? The majority, in its conclusory treatment of this question, appears to say that workmen’s compensation “satisfies] a need” which is special; and, claiming to rely on “the reasoning of Congress as reflected in the legislative history,” the majority finds that Congress “anticipated that a perpetuation of the duplication in benefits might lead to the erosion of the workmen’s compensation programs.” I cannot accept that argument as a justification for this statute. There is nothing in the Senate, House, or Conference Reports indicating that this was the basis for the legislation actually passed. And I do not think that the argument is in fact rational. The statutory discrimination exceeds the maximum amount of irrationality and arbitrariness countenanced by the Fifth Amendment.

Workmen’s compensation programs serve precisely the same function as other forms of disability insurance and tort damage suits. The payments assist workers in the same way, and satisfy the same need. Indeed, in ap-pellee’s home State of West Virginia, as in most States, workmen’s compensation is by statute the complete functional equivalent of tort liability, since employers who participate in workmen’s compensation cannot be sued for tort damages by disabled employees. W. Va. Code Ann. § 23-2-6. Moreover, no distinction can be drawn on the basis of the source of the payments. In West Virginia, as in most States, workmen’s compensation is financed privately, just like other forms of insurance and like tort damages. Usually the benefits are paid directly by the employer (as a self-insurer) or by the employer’s insurance carriers (in which case the employer pays the premiums). See 3 A. Larson, Law of Workmen’s Compensation § 92.10, p. 444 (1971); W. Va. Code Ann. § 23-2-1 et seq. I see no basis for singling out workmen’s compensation programs for special protection or solicitude.

More pointedly, however, it defies logic to claim that § 224 could to any extent protect or encourage workmen’s compensation in the manner suggested by the Court. In support of its claim that § 224 might discourage the erosion of workmen’s compensation, the appellant relies heavily on a statement made by a representative of the Council of State Chambers of Commerce to the Senate Committee on Finance:

“A matter of equal concern is the impact of Federal disability payments on State workmen’s compensation programs. Legislative proposals have been offered in several States (Colorado, Florida, Maryland, and Minnesota) to reduce workmen’s compensation benefits by the amount of [social security] disability benefits payable to a disabled worker. If other States follow this direction ... we believe it will be only a matter of time until State workmen’s compensation programs are destroyed.” Hearings on H. R. 6675 before the Senate Committee on Finance, 89th Cong., 1st Sess., pt. 1, p. 259.

In addition, the Government refers to the testimony of another Chamber of Commerce representative:

“Encroachment by social security is hampering efforts to improve the State workmen’s compensation systems where improvements are needed. Faced with sharply rising costs and the duplication of benefits, employers in several States have supported legislative proposals to reduce workmen’s compensation benefits by the amount of social security disability benefits.” Id., at 252.

I am unable to see how § 224 is connected to this asserted rationale. The federal offset provision provides for the reduction of federal benefits if the total of those benefits and the workmen’s compensation benefits exceeds 80% of “average current earnings.” However, federal benefits may not be reduced if the workmen’s compensation plan provides for a reduction of its benefits in the event of an overlap. § 224 (d). Thus, if a State or employers in the State want to save money, the federal statute invites them to reduce workmen’s compensation benefits by means of an offset provision of their own. I do not see how it is possible to argue that the federal statute is designed to prevent States from adopting their own offset provisions. If anything, the States are encouraged to cut back on their programs.

Even if it were possible to believe that the challenged federal offset provision might in some way forestall States and employers from creating offset provisions in their workmen’s compensation programs, I do not see how state offset provisions could to any degree “lead to the gradual weakening or atrophy of [those] programs.” Ante, at 84. How do offset provisions hurt a program? It is as preposterous to suggest that state offset provisions could lead to the destruction of workmen’s compensation as it would be to argue that the current federal offset provision might destroy the federal social security program. Such manufactured and totally illusory concerns cannot be deemed rational.

The plain fact is that Congress passed this offset provision because it thought disabled persons should not receive excessive combined disability payments. Perhaps by oversight, it arbitrarily singled out workmen’s compensation benefits from the universe of disability compensations, and required that workmen’s compensation alone was to be offset against federal social security. If the majority’s “rational basis” test in fact is to have any meaning, Congress cannot be permitted to single out recipients of workmen’s compensation for this adverse treatment. The burden of reduced federal benefits — so devastating to the families of the once-working poor— cannot be imposed arbitrarily under the Fifth Amendment. In my view, that has happened here. I dissent.

       Section 224 provides, in pertinent part:
      “(a) If for any month prior to the month in which an individual attains the age of 62—
      “(1) such individual is entitled to benefits under section 423 of this title, and
      “(2) such individual is entitled for such month, under a workmen’s compensation law or plan of the United States or a State, to periodic benefits for a total or partial disability (whether or not permanent), and the Secretary has, in a prior month, received notice of such entitlement for such month,
      “the total of his benefits under section 423 of this title for such month and of any benefits under section 402 of this title for such month based on his wages and self-employment income shall be reduced (but not below zero) by the amount by which the sum of—
      “(3) such total of benefits under sections 423 and 402 of this title for such month, and
      “(4) such periodic benefits payable (and actually paid) for such month to such individual under the workmen’s compensation law or plan,
      “exceeds the higher of—
      “(5) 80 percentum of his ‘average current earnings,’. . .
      “For purposes of clause (5), an individual’s average current earnings means the larger of (A) the average monthly wage used for purposes of computing his benefits under section 423 of this title, or (B) one-sixtieth of the total of his wages and self-employment income (computed without regard to the limitations specified in sections 409 (a) and 411 (b) (1) of this title) for the five consecutive calendar years after 1950 for which such wages and self-employment income were highest. . . .” 42 U. S. C. §424a (a).

         E. g., Gambill v. Finch, 309 F. Supp. 1 (ED Tenn. 1970); Lofty v. Cohen, 325 F. Supp. 285, aff’d sub nom. Lofty v. Richardson, 440 F. 2d 1144 (CA6 1971); Bartley v. Finch, 311 F. Supp. 876 (ED Ky. 1970); Bailey v. Finch, 312 F. Supp. 918 (ND Miss. 1970); Benjamin v. Finch, Civ. No. 32816, ED Mich., May 26, 1970, aff’d sub nom. Benjamin v. Richardson, No. 20,714, CA6, Apr. 29, 1971; Gooch v. Finch, Civ. No. 6840, SD Ohio, July 13, 1970; Rodatz v. Finch, Civ. No. 69-170, ED Ill., Sept. 4, 1970, aff’d sub nom. Rodatz v. Richardson (CA7 1971).

       “Any party may appeal to the Supreme Court from an interlocutory or final judgment, decree or order of any court of the United States . . . , holding an Act of Congress unconstitutional in any civil action, suit, or proceeding to which the United States or any of its agencies, or any officer or employee thereof, as such officer or employee, is a party.”

       The primary federal workmen's compensation programs are the Longshoremen’s and Harbor Workers’ Compensation Act, 44 Stat. 1424, 33 U. S. C. § 901 et seq., applicable to employees in the District of Columbia and in maritime-related occupations, and the Federal Employees’ Compensation Act, 80 Stat. 532, 5 U. S. C. § 8101 et seq., applicable to employees of the Federal Government. The overwhelming majority of workers in the United States are covered by state rather than federal programs, and thus we may refer generally to workmen’s compensation as a program of the States.

       The Senate Committee on Finance, with which the 1965 amendment originated, took note of “the concern that has been expressed by many witnesses in the hearings about the payment of disability benefits concurrently with benefits payable under State workmen’s compensation programs.” S. Rep. No. 404, 89th Cong., 1st Sess., pt. 1, p. 100. Testimony concerning the anticipated effects of duplication upon the future of the state programs appears in Hearings on H. R. 6675 before the Senate Committee on Finance, 89th Cong., 1st Sess., pt. 1, pp. 252, 259, 366, pt. 2, pp. 540, 738-740, 892-897, 949-954, 990.

       In fiscal 1970, over 2,000,000 veterans received compensation for service-connected disabilities under statutes administered by the Veterans’ Administration. Statistical Abstract of the United States 264 (1971) (hereinafter cited as Statistical Abstract). See generally 38 U. S. C. § 301 et seq. Benefits are also provided to certain veterans for non-service-connected disabilities. See generally 38 U. S. C. § 501 et seq. In 1967, total disability benefits from all Veterans’ Administration programs amounted to $3,197,906,000. Berkowitz & Johnson, Towards An Economics of Disability: The Magnitude and Structure of Transfer and Medical Costs, 5 J. Human Resources 271, 282 (1970) (hereinafter cited as Economics of Disability). Raymond Belcher indicated on his application for social security disability benefits that he served for three years during World War II. Transcript of Hearings before Appeals Council 37. The record is silent, however, as to his potential eligibility for non-service-connected veteran’s benefits.

       Employees covered by the Civil Service Retirement Act, 5 U. S. C. § 8301 et seq., are entitled to a disability annuity after five years of civilian service. Id., §8337. In fiscal 1970, there were 184,000 disabled annuitants. Statistical Abstract 284.

       Title 45 U. S. C. § 228a et seq. provides disability benefits for railroad workers with 10 or more years of covered service. Covered employment under this Act and the Civil Service Retirement Act is excluded from coverage under the Social Security Act. If, however, a worker’s employment history separately qualifies him for dual coverage, supplemental payments under neither of these Acts results in an offset of social security disability payments. HEW publication, Social Security Programs in the United States 46, 108 (1968) (hereinafter cited as Programs).

       Participation in West Virginia’s state workmen’s compensation fund is optional with the employer. W. Va. Code Ann. §§23-2-1, 23-2-8 (1970). An employer who declines to participate, however, must provide equivalent benefits through private insurance or as a self-insurer. Id., at § 23-2-9. Had the Pocahontas Fuel Co. elected to pay premiums to a private carrier rather than to the state fund — a decision over which Mr. Belcher presumably had no control other than that which might be exerted through the collective-bargaining process — the private insurance benefits would not have been offset under § 224. Over 26,000,000 employees are covered by some sort of private insurance program. Programs 115. In 1967, disability benefits from private insurance amounted to 1.3 billion dollars. Economics of Disability 278. This figure alone exceeded the total of all benefits paid by workmen’s compensation programs for that year. Ibid.

       Were Mr. Belcher’s employer large enough, it might have determined to become a self-insurer with respect to employee disability claims. Disability payments from self-insurers were required by state law to be at least equivalent to benefits available through the state fund, n. 3, supra, and they would also not be offset under § 224.
      In 1969, employers who were covered by private carriers and who were self-insurers paid a combined total of $2,008,000,000 in benefits. State and federal workmen’s compensation funds paid only $604,-000,000 in benefits. Statistical Abstract 289.

       1966 Survey of Disabled Adults, Office of Research & Statistics, Social Security Administration, Table 5 (hereinafter cited as Survey). This figure was confirmed during the hearings which led to the adoption of § 224 by Anthony J. Celebrezze, then Secretary of the Department of Health, Education, and'Welfare. Hearings on H. R. 6675; before the Senate Committee on Finance, 89th Cong., 1st Sess., pt. 1, p. 152.

       Survey, Table 5.

        Ibid.

         Ibid.

       Assuming the rationality of rehabilitation as a goal with respect to temporary disabilities, there is still no justification for applying an offset with respect to disabilities concededly permanent in nature. Nevertheless, the statute requires this to be done. The record does not reveal the status of Mr. Belcher’s disability.

       The test for disability under the federal statute is a stern one. With an exception for elderly blind people, disability means “inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months . . . .” 42 U. S. C. §423 (d)(1)(A).

        Flemming was a 5-4 decision upholding a federal statute that terminated the old-age benefits of the family of a fully eligible worker, because he was deported as a former member of the Communist Party. The case has not met with unanimous critical acclaim. See Reich, The New Property, 73 Yale L. J. 733, 768-771, 775 (1964). Prematurely, it would appear, some scholars had predicted its demise. E. g., The Supreme Court, 1969 Term, 84 Harv. L. Rev. 1, 103-104 (1970).

       In Dandridge, the Court held that a State’s maximum grant regulation for welfare recipients did not unconstitutionally discriminate between children in large and small families. The regulation was challenged under the Equal Protection Clause of the Fourteenth Amendment.

       I would use essentially the same approach when statutory classifications are challenged under either Amendment. Cf. Bolling v. Sharpe, 347 U. S. 497 (1954).

       The offset idea has had a rocky history. As the majority notes, a prior offset provision was repealed in 1958 because Congress believed that “the danger that duplication of disability benefits might produce undesirable results [was] not of sufficient importance to justify reduction of the social security disability benefits.” H. R. Rep. No. 2288, 85th Cong., 2d Sess., 13. The present offset provision was restored to the Act in 1965. It was estimated at the time that no more than 2% of the federal social security disability beneficiaries also received workmen’s compensation. Hearings on H. R. 6675 before the Senate Committee on Finance, 89th Cong., 1st Sess., pt. 1, p. 152.
      It is perhaps plausible to reason that duplicative benefits might in some circumstances discourage rehabilitation and a return to work. It is worth noting, however, that even without the offset provision, appellee’s combined benefits would not have exceeded his earnings before disability. See supra, at 88.

       The sole concern expressed in these documents is that Congress should prevent “excessive combined benefits.” S. Rep. No. 404, 89th Cong., 1st Sess., pt. 1, p. 100; see also H. R. Conf. Rep. No. 682, 89th Cong., 1st Sess.; H. R. Rep. No. 213, 89th Cong., 1st Sess.

       Indeed, where they are free to do so, see 3 A. Larson, Law of Workmen’s Compensation 522, Appendix A, Table 7 (1971); W. Va. Code Ann. §§23-2-1, 23-2-8, individual workers are encouraged to opt out of workmen’s compensation and purchase private disability insurance.

       It is worth noting that payments for total and permanent disability are only a small part of the total scheme of compensation of any workmen’s compensation act. Benefits are also provided for medical and hospital expenses, funeral expenses, rehabilitation, specific scheduled losses, temporary disability, and other forms of loss, see, e. g., W. Va. Code Ann. §§ 23-4-3, 23-A4, 23-4-6, all of which are unaffected by social security.

       Secretary of HEW Celebrezze opposed the present offset provision, arguing that any change should await a more thorough study of the overlap problem. Hearings on H. R. 6675 before the Senate Committee on Finance, 89th Cong., 1st Sess., pt. 1, p. 146. The Committee chose not to wait.

       Since, in my view, the present discriminatory offset provision cannot stand, there is no need to decide finally whether Congress has the power to pass an offset provision that would qualify an already accrued interest in social security benefits. Whatever might be said about the characterization of welfare assistance as “property,” see Goldberg v. Kelly, 397 U. S. 254, 262 n. 8 (1970), surely a worker who is forced to pay a social security tax on his earnings has a clearly cognizable contract interest in the benefits that justify the tax. The chacterization of this interest as “noncontractual” in Flemming v. Nestor, 363 U. S. 603, 611 (1960), is, in my view, incorrect. The analogy to an annuity or insurance contract, rejected there, seems apt. Id., at 624 (Black, J., dissenting). See also Reich, The New Property, supra. Of course, as the Court says, Congress may “fix the levels of benefits under the Act or the conditions upon which they may be paid.” But once Congress has fixed that level and those conditions, and a worker has contributed his tax in accord with the law, may Congress unilaterally modify the benefits in a way that defeats the expectations of beneficiaries and prospective beneficiaries? At the least, it would seem that after a worker has contributed the tax for 20 quarters, 42 U. S. C. §423 (e)(1), and his interest in the benefits has fully accrued, Congress may not unilaterally qualify that interest by introducing an offset provision not previously contemplated by the parties.


source: Caselaw Access Project

author: Mr. Justice Stewart Mr. Justice Douglas.

license: Public Domain

text:
    CHEVRON OIL CO. v. HUSON
    No. 70-11.
    Argued October 20, 1971
    Decided December 6, 1971

      Lloyd C. Melancon argued the cause and filed a brief for petitioner.

      Samuel C. Gainsburgh argued the cause and filed a brief for respondent.
   Mr. Justice Stewart

delivered the opinion of the Court.

The respondent, Gaines Ted Huson, suffered a back injury while working on an artificial island drilling rig owned and operated by the petitioner, Chevron Oil Co., and located on the Outer Continental Shelf off the Gulf Coast of Louisiana. The injury occurred in December 1965. Allegedly, it was not until many months later that the injury was discovered to be a serious one. In January 1968 the respondent brought suit for damages against the petitioner in federal district court. The respondent’s delay in suing the petitioner ultimately brought his case to this Court.

The issue presented is whether the respondent’s action is time barred and, more particularly, whether state or federal law determines the timeliness of the action. That issue must be resolved under the Outer Continental Shelf Lands Act, 67 Stat. 462, 43 U. S. C. § 1331 et seq. (hereinafter “Lands Act”), which governs injuries occurring on fixed structures on the Outer Continental Shelf. When this lawsuit was initiated, there was a line of federal court decisions interpreting the Lands Act to make general admiralty law, including the equitable doctrine of laches, applicable to personal injury suits such as the respondent’s. The petitioner did not question the timeliness of the action as a matter of laches. While pretrial discovery proceedings were still under way, however, this Court announced its decision in Rodrigue v. Aetna Casualty & Surety Co., 395 U. S. 352. That decision entirely changed the complexion of this case. For it established that the Lands Act does not make admiralty law applicable to actions such as this one. Relying on Rodrigue, the District Court held that Louisiana’s one-year limitation on personal injury actions, rather than the admiralty doctrine of laches, must govern this case. It concluded, therefore, that the respondent's action was time barred and granted summary judgment for the petitioner.

On appeal, the respondent argued that Rodrigue should not be applied retroactively to bar actions filed before the date of its announcement. But the Court of Appeals declined to reach that question. Instead, it held that the interpretation of the Lands Act in Rodrigue does not compel application of the state statute of limitations or prevent application of the admiralty doctrine of laches. It concluded that the doctrine of laches should have been applied by the District Court and, therefore, reversed that court’s judgment and remanded the case for trial. 430 F. 2d 27. We granted certiorari to consider the Court of Appeals’ construction of the Lands Act and of Rodrigue. 402 U. S. 942. We hold that the Lands Act, as interpreted in Rodrigue, requires that the state statute of limitations be applied to personal injury actions. We affirm the judgment of the Court of Appeals, however, on the ground that Rodrigue should not be invoked to require application of the Louisiana time limitation retroactively to this case.

I

The Lands Act makes the Outer Continental Shelf, including fixed structures thereon, an area of exclusive federal jurisdiction, 43 U. S. C. § 1333 (a)(1). The Act extends the laws of the United States to this area, 43 U. S. C. § 1333 (a)(1), and provides that the laws of the adjacent State shall also apply “[t]o the extent that they are applicable and not inconsistent” with applicable federal laws, 43 U. S. C. § 1333 (a)(2). To the extent that a comprehensive body of federal law is applicable under § 1333 (a)(1), state law “inconsistent” with that law would be inapplicable under § 1333 (a)(2).

In Rodrigue, we clarified the scope of application of federal law and state law under § 1333 (a) (1) and § 1333 (a)(2). By rejecting the view that comprehensive admiralty law remedies apply under § 1333 (a)(1), we ^recognized that there exists a substantial “gap” in federal law. Thus, state law remedies are not “inconsistent” with applicable federal law. Accordingly, we held that, in order to provide a remedy for wrongful death, the “gap” must be filled with the applicable body of state law under § 1333 (a)(2).

The Court of Appeals acknowledged that Rodrigue clearly establishes that the remedy for personal injury, as for wrongful death, cannot be derived from admiralty law but must be governed by the law of the adjacent State, Louisiana. But the court held that Louisiana’s time limitation on personal injury actions need not be applied with the substantive remedy. It supported this holding by reference to the terms of § 1333 (a) (2) that limit the application of state law under the Lands Act. The Louisiana time limitation, the Court of Appeals reasoned, is not “applicable” of its own force and is “inconsistent” with the admiralty doctrine of laches. The court held that, despite the holding in Rodrigue, the laches doctrine is applicable as a matter of federal common law. We must disagree.

The Court of Appeals did not suggest that state statutes of limitations are per se inapplicable under § 1333 (a)(2). Rather, it focused on the peculiar nature of the Louisiana time limitation on personal injury actions found in Art. 3536, La. Civ. Code Ann. Article 3536 provides that personal injury actions shall be “prescribed” by one year. The Court of Appeals attached much significance to the fact that Art. 3536 “prescribes,” rather than “perempts,” such actions. Under Louisiana law, “prescription,” unlike “peremption,” bars the remedy but does not formally extinguish the right to recovery. See Page v. Cameron Iron Works, 259 F. 2d 420, 422-424; Istre v. Diamond M. Drilling Co., 226 So. 2d 779, 794-795 (La. App.); Succession of Pizzillo, 223 La. 328, 335, 65 So. 2d 783, 786. This characterization has importance under principles of the conflict of laws. It has been held, as a matter of Louisiana conflicts law, that mere “prescriptive” time limitations are not binding outside their own forum. See Fidelity & Casualty Co. v. C/B Mr. Kim, 345 F. 2d 45, 50; Kozan v. Comstock, 270 F. 2d 839, 841; Istre v. Diamond M. Drilling Co., supra, at 795. Reasoning from this principle of conflicts law, the Court of Appeals concluded that the “prescriptive” limitation is not “applicable” in a federal court adjudicating a claim under the Lands Act.

We hold, however, that the “prescriptive” nature of Art. 3536 does not undercut its applicability under the Lands Act. Under § 1333 (a) (2) of the Act, “[s]tate law bec[omes] federal law federally enforced.” Rodrigue v. Aetna Casualty & Surety Co., supra, at 365. It was the intent of Congress, expressed in the Senate Committee Report, in the Conference Report, and on the floor of the Senate, that state laws be “adopted” or “enacted” as federal law. See id., at 357-358. Thus a federal court applying Louisiana law under § 1333 (a) (2) of the Lands Act is applying it as federal law — as the law of the federal forum. Since the federal court is not, then, applying the law of another forum in the usual sense, ordinary conflict of laws principles have no relevance. Article 3536 is “applicable” in federal court under the Lands Act just as it would be applicable in a Louisiana court.

The policies underlying the federal absorption of state law in the Lands Act make this result particularly obvious. As we pointed out in Rodrigue, Congress recognized that “ 'the Federal Code was never designed to be a complete body of law in and of itself’ ” and thus that a comprehensive body of state law was needed. Id., at 358, 361. Congress also recognized that the “special relationship between the men working on these artificial islands and the adjacent shore to which they commute” favored application of state law with which these men and their attorneys would be familiar. Id., at 365; see id., at 363. If Congress’ goal was to provide a comprehensive and familiar body of law, it would defeat that goal to apply only certain aspects of a state personal injury remedy in federal court. A state time limitation upon a remedy is coordinated with the substance of the remedy and is no less applicable under the Lands Act.

The application of Louisiana’s Art. 3536 is, of course, subject to the absence of “inconsistent” and applicable federal law. The Court of Appeals acknowledged that Rodrigue forecloses direct applicability of the “inconsistent” laches doctrine through admiralty law. But, by applying laches as a matter of federal common law, it sought to reintroduce the doctrine through a back door. This approach subverts the congressional intent documented in Rodrigue, id., at 359-366, that admiralty doctrines should not apply under the Lands Act.

Moreover, the Court of Appeals’ approach amounts to an inappropriate creation of federal common law. Even when a federal statute creates a wholly federal right but specifies no particular statute of limitations to govern actions under the right, the general rule is to apply the state statute of limitations for analogous types of actions. See Auto Workers v. Hoosier Corp., 383 U. S. 696; Cope v. Anderson, 331 U. S. 461; Campbell v. Haverhill, 155 U. S. 610; Note, Federal Statutes Without Limitations Provisions, 53 Col. L. Rev. 68 (1953). A special federal statute of limitations is created, as a matter of federal common law, only when the need for uniformity is particularly great or when the nature of the federal right demands a particular sort of statute of limitations. See Holmberg v. Armbrecht, 327 U. S. 392; McAllister v. Magnolia Petroleum Co., 357 U. S. 221. But, under the Lands Act, there is not even such limited freedom to create a federal statute of limitations, for Congress specified that a comprehensive body of state law should be adopted by the federal courts in the absence of existing federal law. Congress specifically rejected national uniformity and specifically provided for the application of state remedies which demand state, not federal, statutes of limitation. Thus, Congress made clear provision for filling in the “gaps” in federal law; it did not intend that federal courts fill in those “gaps” themselves by creating new federal common law.

II

Although we hold that Louisiana’s one-year statute of limitations must be applied under the Lands Act as interpreted in Rodrigue, we do not blind ourselves to the fact that this is, in relevant respect, a pre-Rodrigue case. The respondent’s injury occurred more than three years before the announcement of our decision in Rodrigue. He instituted the present lawsuit more than one year before Rodrigue. Yet, if the Louisiana statute of limitations controls in this case, his action was time barred more than two years before Rodrigue. In these circumstances, we must consider the respondent’s argument that the state statute of limitations should be given nonretro-active application under Rodrigue.

In recent years, the nonretroactive application of judicial decisions has been most conspicuously considered in the area of the criminal process. E. g., Mackey v. United States, 401 U. S. 667; Hill v. California, 401 U. S. 797; Desist v. United States, 394 U. S. 244; Linkletter v. Walker, 381 U. S. 618. But the problem is by no means limited to that area. The earliest instances of nonretro-activity in the decisions of this Court — more than a century ago — came in cases of nonconstitutional, noncriminal state law. E. g., Gelpcke v. City of Dubuque, 1 Wall. 175; Havemeyer v. Iowa County, 3 Wall. 294; Railroad Co. v. McClure, 10 Wall. 511. It was in a noncriminal case that we first held that a state court may apply its decisions prospectively. Great Northern R. Co. v. Sunburst Oil & Refining Co., 287 U. S. 358. And, in the last few decades, we have recognized the doctrine of nonretroactivity outside the criminal area many times, in both constitutional and nonconstitutional cases. Cipriano v. City of Houma, 395 U. S. 701; Allen v. State Board of Elections, 393 U. S. 544; Hanover Shoe v. United Shoe Machinery Corp., 392 U. S. 481; Simpson v. Union Oil Co., 377 U. S. 13; England v. State Board of Medical Examiners, 375 U. S. 411; Chicot County Drainage Dist. v. Baxter State Bank, 308 U. S. 371.

In our cases dealing with the nonretroactivity question, we have generally considered three separate factors. First, the decision to be applied nonretroactively must establish a new principle of law, either by overruling clear past precedent on which litigants may have relied, see, e. g., Hanover Shoe v. United Shoe Machinery Corp., supra, at 496, or by deciding an issue of first impression whose resolution was not clearly foreshadowed, see, e. g., Allen v. State Board of Elections, supra, at 572. Second, it has been stressed that "we must . . . weigh the merits and demerits in each case by looking to the prior history of the rule in question, its purpose and effect, and whether retrospective operation will further or retard its operation.” Linkletter v. Walker, supra, at 629. Finally, we have weighed the inequity imposed by retroactive application, for “[w]here a decision of this Court could produce substantial inequitable results if applied retroactively, there is ample basis in our cases for avoiding the 'injustice or hardship’ by a holding of nonretroactivity.” Cipriano v. City of Houma, supra, at 706.

Upon consideration of each of these factors, we conclude that the Louisiana one-year statute of limitations should not be applied retroactively in the present case. Rodrigue was not only a case of first impression in this Court under the Lands Act, but it also effectively overruled a long line of decisions by the Court of Appeals for the Fifth Circuit holding that admiralty law, including the doctrine of laches, applies through the Lands Act. See, e. g., Pure Oil Co. v. Snipes, 293 F. 2d 60; Movible Offshore Co. v. Ousley, 346 F. 2d 870; Loffland Bros. Co. v. Roberts, 386 F. 2d 540. When the respondent was injured, for the next two years until he instituted his lawsuit, and for the ensuing year of pretrial proceedings, these Court of Appeals decisions represented the law governing his case. It cannot be assumed that he did or could foresee that this consistent interpretation of the Lands Act would be overturned. The most he could do was to rely on the law as it then was. “We should not indulge in the fiction that the law now announced has always been the law and, therefore, that those who did not avail themselves of it waived their rights.” Griffin v. Illinois, 351 U. S. 12, 26 (Frankfurter, J., concurring in judgment).

To hold that the respondent’s lawsuit is retroactively time barred would be anomalous indeed. A primary purpose underlying the absorption of state law as federal law in the Lands Act was to aid injured employees by affording them comprehensive and familiar remedies. Rodrigue v. Aetna Casualty & Surety Co., supra, at 361, 365. Yet retroactive application of the Louisiana statute of limitations to this case would deprive the respondent of any remedy whatsoever on the basis of superseding legal doctrine that was quite unforeseeable. To abruptly terminate this lawsuit that has proceeded through lengthy and, no doubt, costly discovery stages for a year would surely be inimical to the beneficent purpose of the Congress.

It would also produce the most “substantial inequitable results,” Cipriano v. City of Houma, supra, at 706, to hold that the respondent “slept on his rights” at a time when he could not have known the time limitation that the law imposed upon him. In Cipriano v. City of Houma, supra, we invoked the doctrine of nonretroactive application to protect property interests of “cities, bondholders, and others connected with municipal utilities”; and, in Allen v. State Board of Elections, supra, we invoked the doctrine to protect elections held under possibly discriminatory voting laws. Certainly, the respondent’s potential redress for his allegedly serious injury— an injury that may significantly undercut his future earning power — is entitled to similar protection. As in England v. State Board of Medical Examiners, supra, nonretroactive application here simply preserves his right to a day in court.

Both a devotion to the underlying purpose of the Lands Act’s absorption of state law and a weighing of the equities requires nonretroactive application of the state statute of limitations here. Accordingly, although holding that the opinion of the Court of Appeals reflects a misapprehension of Rodrigue, we affirm its judgment remanding this case to the trial court.

It is so ordered.

Mr. Justice Douglas.

Rodrigue v. Aetna Casualty & Surety Co., 395 U. S. 352, does not, with all respect, require reversal in this case. Accordingly, I would affirm the judgment of the Court of Appeals without reaching the question of the retroactivity of Rodrigue.

Rodrigue, like the present case, arose under the Outer Continental Shelf Lands Act, 67 Stat. 462, 43 U. S. C. § 1331 et seq. That Act created a federal cause of action for offshore injuries enforceable in the federal courts, but made state laws applicable. 43 U. S. C. § 1333 (a)(2).

In Rodrigue, La. Civ. Code Ann., Art. 2315 (1970) was relevant, which provides in part: “The right to recover all other damages caused by an offense or quasi offense, if the injured person dies, shall survive for a period of one year from the death of the deceased . . . .”

In the present case Art. 3536 of the Code is applicable and it reads: “The following actions are also prescribed by one year:

“That for injurious words, whether verbal or written, and that for damages caused by animals, or resulting from offenses or quasi offenses.”

The latter limitation is “prescriptive” only, i. e., that while the Louisiana remedy is barred, the right is not. Under Art. 3536, the limitation runs only to the remedy and would not be applicable in another forum applying the substantive right. Istre v. Diamond M. Drilling Co., 226 So. 2d 779, 794-799 (La. App. 1969). Respondent, therefore, argues that the federal doctrine of laches is the only limitation upon his right of recovery and that it is inapplicable where, as here, there is no prejudice to the defendant and any delay in filing the lawsuit was reasonably excusable. See, e. g., Akers v. State Marine Lines, 344 F. 2d 217.

The Louisiana courts consider the distinction between peremptive and prescriptive limitations important; and by reason of the federal statute, making Louisiana law applicable, federal courts are bound by the distinction. Richards v. United States, 369 U. S. 1. As stated in Rodrigue the federal Act “supplemented gaps in the federal law with state law through the 'adoption of State law as the law of the United States.’ ” 396 U. S., at 357.

In Rodrigue — an action for wrongful death — the right is extinguished, if the action for recovery is not brought within a year of the death. Kenney v. Trinidad Corp., 349 F. 2d 832; Mejia v. United States, 152 F. 2d 686. Under Art. 3536 — which governs here — Louisiana law holds that it i's merely a “procedural restraint which bars the remedy, but does not extinguish the right.” Fidelity & Casualty Co. v. C/B Mr. Kim, 345 F. 2d 45, 50 (CA5 1965). See also Page v. Cameron Iron Works, 259 F. 2d 420, 422 (CA5 1958); Jackson v. Continental Southern Lines, 172 F. Supp. 809 (WD Ark. 1959); Succession of Pizzillo, 223 La. 328, 65 So. 2d 783 (1953); Devoe & Raynolds Co. v. Robinson, 109 So. 2d 226 (La. App. 1959).

A district court, sitting in diversity jurisdiction in Arkansas, applied these principles of Louisiana law and held — properly in my mind — that Art. 3536 did not bar an action filed more than one year after the injury complained of. Jackson v. Continental Southern Lines, supra. See also Page v. Cameron Iron Works, supra. That decision is in perfect harmony with long-established rules of conflict of laws. A different result should not obtain here where federal jurisdiction, 43 U. S. C. § 1333, flows from a head other than diversity.

Apart from traditional conflict of laws is the congressional mandate to apply state laws to these federal causes of action. If we are faithfully to apply the state law of Louisiana we would apply here not the Louisiana per-emption rule applied in Rodrigue but the Louisiana prescriptive rule applicable to the instant personal injury case.

Today’s decision conflicts with Levinson v. Deupree, 345 U. S. 648, where the District Court was enforcing in admiralty a state cause of action for wrongful death. Although procedural irregularities in the appointment of the administrator would have barred — under the state statute of limitations — an action in state court, we held that federal courts were free to formulate their own procedural rules. If we were to follow Levinson, we would not bind federal courts to state rules of procedure designed to have no application beyond the state forum for which they were created. Cf. Byrd v. Blue Ridge Electric Cooperative, 356 U. S. 525, 533-539; Angel v. Bullington, 330 U. S. 183, 192; Atkins v. Schmutz Manufacturing Co., 435 F. 2d 527 (CA4 1970); Note, 71 Col. L. Rev. 865 (1971).

Today’s decision also conflicts with our decision in Richards v. United States, supra. There, the Federal Tort Claims Act referred us to the local law for a rule of decision, just as Rodrigue and the Lands Act do in the present case. We concluded that the Act “require[d] application of the whole law of the State where the act or omission occurred,” 369 U. S., at 11, including its conflict of laws decision. If we were to follow Richards and Rodrigue in the present case, we would apply Louisiana’s prescriptive rule as it has been construed by Louisiana courts and not use it to bar an action in a different forum.

For in that other forum — here the federal district court — Louisiana law allows the federal court, consistently with conflict of laws, to apply a different limitation than Louisiana would apply in her own courts.

In Rodrigue, we said:

“The purpose of the Lands Act was to define a body of law applicable to the seabed, the subsoil, and the fixed structures such as those in question here on the outer Continental Shelf. That this law was to be federal law of the United States, applying state law only as federal law and then only when not inconsistent with applicable federal law, is made clear by the language of the Act.” 395 U. S., at 355-356.

We then concluded: “It is evident from this that federal law is ‘exclusive’ in its regulation of this area, and that state law is adopted only as surrogate federal law.” Id., at 357.

Since the federal court is not a Louisiana forum, the Louisiana law of prescription permits enforcement of this claim after Louisiana’s one-year statute has run. Therefore, if we are to be faithful to the federal scheme we must apply Louisiana law; and Louisiana law would not apply Rodrigue in a personal injury case where the suit is not brought in a Louisiana forum.

The Court of Appeals, speaking through our leading admiralty authority, Judge Brown, so held and went on to rule that in harmony with Louisiana’s prescriptive rule this personal injury suit was not barred under the laches doctrine familiar to maritime law.

This is not a stale claim and its assertion after the one-year period ran was not prejudicial; no prejudice was indeed pleaded. Cf. Holmberg v. Armbrecht, 327 U. S. 392.

One who reads this record will be impressed with the grave injustice of applying the Louisiana one-year statute as if it were peremptive, rather than prescriptive. Death comes with a finality lacking in some personal injury cases; and the rigid rule applied in Rodrigue can do no injustice. But personal injuries are often lingering and one may not know for months whether he is partially or permanently crippled, whether he must be retrained for wholly different work, and so on. In this case it took some months after the injury for respondent (1) to realize that he could not return to his old work, and (2) to discover the kind of work he could do.

If we followed Louisiana law, as Congress directed, we would affirm the judgment of the Court of Appeals, reflecting as it does good law and a measure of justice not always allowable when the rigidity of Rodrigue governs a case.

       See infra, at 107.

       The decision of the District Court is unreported (ED La., Civil Action No. 68-19D).

       The respondent has made the same argument to this Court.

       The full text of § 1333 (a) (1) and § 1333 (a) (2) reads:
      “(a) (1) The Constitution and laws and civil and political jurisdiction of the United States are extended to the subsoil and seabed of the outer Continental Shelf and to all artificial islands and fixed structures which may be erected thereon for the purpose of exploring for, developing, removing, and transporting resources therefrom, to the same extent as if the outer Continental Shelf were an area of exclusive Federal jurisdiction located within a State: Provided, however, That mineral leases on the outer Continental Shelf shall be maintained or issued only under the provisions of this subchapter.
      “(2) To the extent that they are applicable and not inconsistent with this subchapter or with other Federal laws and regulations of the Secretary now in effect or hereafter adopted, the civil and criminal laws of each adjacent State as of August 7, 1953 are declared to be the law of the United States for that portion of the subsoil and seabed of the outer Continental Shelf, and artificial islands and fixed structures erected thereon, which would be within the area of the State if its boundaries were extended seaward to the outer margin of the outer Continental Shelf, and the President shall determine and publish in the Federal Register such projected lines extending seaward and defining each such area. All of such applicable laws shall be administered and enforced by the appropriate officers and courts of the United States. State taxation laws shall not apply to the outer Continental Shelf.”

       This is not to imply that a federal court adjudicating a claim under state law as absorbed in the Lands Act must function as it would in a diversity case. See Erie R. Co. v. Tompkins, 304 U. S. 64; Guaranty Trust Co. v. York, 326 U. S. 99; Levinson v. Deupree, 345 U. S. 648, 651. We hold only that the state statute of limitations is part of the law to be applied in federal court as it would be part of the law to be applied in a state court.

       Here we are not dealing with mere “housekeeping rules” embodied in state law. Cf. Hanna v. Plumer, 380 U. S. 460, 473.

       The Court of Appeals justified its creation of federal common law in this instance by suggesting that personal injury actions under the Lands Act are in a “quasi maritime area which is traditionally imbued with the laches doctrine and which presents a strong federal urge toward uniformity.” 430 F. 2d, at 32.

       Contrary to the suggestion by Mr. Justice Douglas, our holding today is consonant with Levinson v. Deupree, supra, n. 5. Since Levinson involved a federal court’s obligation to adopt state procedural rules in an admiralty action, it has very limited relevance to the instant case, which involves an action under a statute which ousts admiralty law and specifically directs that state law shall be adopted as federal law. Moreover, Levinson held only that state “procedural niceties relating to amendments of pleadings” need not be applied by federal admiralty courts, and the opinion emphasized that it was not dealing with an important part of the state action, such as a statute of limitations. 345 U. S., at 651-652. As pointed out above, our holding today does not extend to such state “housekeeping rules.” See n. 6, supra.

        Richards v. United States, 369 U. S. 1, also referred to by Mr. Justice Douglas, held that, under the Federal Tort Claims Act, a federal court must apply “the whole law of the State where the act or omission occurred.” Id., at 11. Insofar as Richards bears on the present case, it supports our holding that federal courts should not create interstitial federal common law when the Congress has directed that a whole body of state law shall apply.

       These cases were decided in the era before Erie R. Co. v. Tompkins, supra, n. 5. The first case involving nonretroactive application of state law concerned interpretation of the Mississippi Constitution. Rowan v. Runnels, 5 How. 134.

       We do not hold here that Rodrigue, in its entirety, must be applied nonretroactively. Rather, we hold.only that state statutes of limitations, applicable under Rodrigue’s interpretation of the Lands Act, should not be applied retroactively. Retroactive application of all state substantive remedies under Rodrigue would not work a comparable hardship or be so inconsistent with the purpose of the Lands Act.

        Guillory v. Avoyelles R. Co., 104 La. 11, 15, 28 So. 899, 901 (1900):
      “When a statute creates a right of action and stipulates the delay within which that right is to be executed, the delay thus fixed is not properly speaking one of prescription, but is one of peremption.

      “Statutes of prescription simply bar the remedy. Statutes of per-emption destroy the cause of action itself. That is to say, after the limit of time expires the cause of action no longer exists; it is lost.”

       G. Stumberg, Principles of Conflict of Laws 146-147 (3d ed. 1963):
      “The traditional reaction in Conflict of Laws . . . has been that ordinarily limitation is procedural. This view was taken by the Dutch jurists, and where the question arises out of a general statute, it is the view generally accepted by Anglo-American courts. The result is that in the absence of a statute to the contrary in most jurisdictions, when the claim is based upon foreign facts, even though the foreign period of limitation has not run, the plaintiff may not recover if the time allowed for suit at the forum has expired. Conversely, if the foreign period has expired, suit may nevertheless be brought at the forum if the time specified there has not run.’’ (Footnotes omitted.)
      Accord, Restatement of Conflict of Laws §§ 603-604 (1934); Restatement (Second) of Conflict of Laws §§ 142, 143 (1971); 3 J. Beale, Conflict of Laws § 584.1 (1935); B. Currie, Conflict of Laws 232-234, 255 (1963); A. Ehrenzweig, Conflict of Laws 428-436 (1962); H. Goodrich, Conflict of Laws 267 (4th ed. 1964); Ailes, Limitation of Actions and the Conflict of Laws, 31 Mich. L. Rev. 474 (1933); Comment, The Statute of Limitations and the Conflict of Laws, 28 Yale L. J. 492 (1919).
      While still sitting on the Court of Appeals for the Second Circuit, Mr. Justice Harlan said:
      “In actions where the rights of the parties are grounded upon the law of jurisdictions other than the forum, it is a well-settled conflict-of-laws rule that the forum will apply the foreign substantive law, but will follow its own rules of procedure.” Bournias v. Atlantic Maritime Co., 220 F. 2d 152, 154 (CA2 1955).
      Mr. Justice Harlan went on to hold that a Panamanian statute of limitations was not applicable where a Panamanian statutory right was being enforced under the admiralty jurisdiction of the Federal District Court.

       The majority supports its limitation on actions by saying that “we are not dealing with mere ‘housekeeping rules’ embodied in state law. Cf. Hanna v. Plumer, 380 U. S. 460, 473.” Ante, at 103 n. 6. This conclusion, however, is directly contrary to the characterization given the prescriptive limitation by Louisiana courts:
      “. . . It is conceded by the five defendants-appellees that had plaintiff filed this suit in the federal court, the doctrine of laches would apply. The cases cited by plaintiff . . . were filed in the federal forum and are distinguished on this basis.
      “But plaintiff chose the State forum. Plaintiff may have preferred some procedural advantages afforded in the State court, such as: agreement of only nine of twelve jurors needed; ability to call under cross-examination any employee of a party as opposed to the federal rule wherein the right to call witnesses under cross-examination is limited to executive or top supervisory personnel; no procedural vehicle provided for directed verdict or judgment n. o. v. in State court; or shorter delay in State court between filing petition and trial. Having chosen the State forum, he is bound by State procedural rules. The argument that uniformity requires us to import the Federal procedural law of laches rather than use the Louisiana procedural law of prescription, is unacceptable. If we adopt the federal procedural rule in this instance, it would logically follow that more Louisiana procedural rules will, for the same reason, be abandoned in the future. We hold that our State courts are bound to apply State procedural rules.” Istre v. Diamond M. Drilling Co., 226 So. 2d 779, 794.
      The court then concluded, “The applicable Louisiana prescription statute, LSA-C.C. Art. 3536, is procedural.” Id., at 794 — 795.

       The majority would limit Richards’ reasoning “that federal courts should not create interstitial federal common law when the Congress has directed that a whole body of state law shall apply.” Ante, at 105 n. 8. It is precisely because we must apply the “whole body” of state law, however, that we should apply the Louisiana interpretation of that law and not use the prescriptive rule to bar an action in a federal forum. H. Hart & H. Wechsler, The Federal Courts and the Federal System 456-457 (1953).

       The majority acknowledges that the federal court still retains its identity as a federal forum when it indicates that it is not to “function as it would in a diversity case,” ante, at 103 n. 5, and that only certain state rules are adopted, ante, at 103 n. 6.

         O’Sullivan v. Felix, 233 U. S. 318, does not require a contrary result because there we considered only whether Art. 3536 could be applied to a federal action in a federal court and not how it should be applied. Petitioner conceded that his action was barred if Art. 3536 applied and “the sole question pressed by counsel and which we [were] called upon to decide [was] the application of the state statute to the conceded [federal] cause of action.” Id., at 321.