Court Opinion

ID: 9474707
Source: CourtListenerOpinion
Date Created: 2023-08-05 05:06:23.939845+00
Date Added: 2024-06-11T17:44:16.983234
License: Public Domain

TANG, Circuit Judge,
dissenting:
I dissent. Despite the majority’s attempt to distinguish Wood v. United States, 590 F.2d 321 (9th Cir.1979), I believe that Wood requires reversal of the tax court.
First, the majority casts the § 105(c)(2) computation “with reference to the nature of the injury” requirement in a form Congress could not have intended. The majority states that an employee qualifies for the 105(c) exclusion “only if the amount an employee receives ... varies according to the type or severity of the injury suffered____” (emphasis added). Section 105(c)(1), however, specifically addresses the severity issue. Section 105(c)(1) requires that the injury constitute “a permanent loss or loss of use of a member or function of [the] body.” An injury is sufficiently severe, then, if it is permanent and results in the loss of use of a member or function of the body. The majority’s belief that the § 105(c)(2) nature-of-the-injury requirement again addresses the severity issue is illogical.
Second, a close reading of Wood indicates that the court consciously endeavored to interpret tbe § 105(c)(2) “with reference to the nature of the injury” requirement. In Wood, the employer disability plan did not define its permanent disability requirement on the basis of specific physical injuries. According to Wood, then, the threshold finding of a localized or nonlocalized permanent physical injury is sufficient to satisfy the requirement if that is the reason for the payment. A qualifying disability plan need not necessarily vary award amounts according to distinctly different types of physical injuries.
As the majority notes, the taxpayer in Wood was totally and permanently disabled. The majority’s conclusion that a totally and permanently disabled employee will always be entitled to the maximum possible benefit not only assumes that 105(c)(2) requires a severity index, which it does not, but also begs the question. The real question is whether the 105(c)(2) nature-of-the-injury computation requires that award amounts vary according to the type of injury. Wood clearly answers that question in the negative.
The disability payments awarded to Beisler under the NFL Plan do not differ from those awarded to the taxpayer in Wood. Under the NFL Plan, a player receives disability benefits if he incurred “a substantial disablement” from any regular NFL game. Once the threshold of “substantial disablement” for a given injury is reached (50% disablement in the case of a neck injury), disability benefits vest. As in Wood, the threshold finding of a localized or nonlocalized permanent physical injury is sufficient to satisfy the § 105(c)(2) requirement. The computation of entitlement itself satisfies the “computation with reference to the nature of the injury” requirement.
I do not disagree that a refinement of the disability award based upon the type and location of the injury falls within the contemplation of the 105(c)(2) language. Wood teaches, however, that such refinement, while acceptable, is simply not a necessary requirement.
Watts does not speak to the § 105(c)(2) “with reference to the nature of the injury” issue. As the majority must acknowledge, the only issue in Watts is the adequacy of the evidence of permanent disability under section 105(c)(1); compliance with 105(c)(2) was assumed. The Watts court held that high blood pressure was not in itself a disabling injury; rather, it was a medical condition.
Likewise, Hines involved the identical “condition” versus “injury” distinction. In Hines, an airline pilot suffered a heart attack but recovered fully. Nevertheless, the heart attack permanently disqualified the pilot from reobtaining his pilot’s li*1332cense. The tax court found that the § 105(c)(1) “permanent loss or loss of use of a member or function of the body” requirement was not met when the disability disqualified the taxpayer only from a specific kind of job or work. The claimant, the court held, must be physically and functionally disabled for all purposes.
Hines then addressed the § 105(c)(2) “with reference to the nature of the injury” requirement and concluded that to qualify a disability plan must base award amounts upon distinctly different types of physical injuries. This holding directly conflicts with the Ninth Circuit holding on this issue in Wood.
Wood is controlling authority in this matter and I am hard-pressed to see how one can distinguish it from the facts now before us. We are bound by our own circuit precedent. The court in Wood was confronted with the identical issue before us now and that court, our court, made a conscious interpretive choice. I feel obligated to follow that choice. Therefore, I would reverse the judgment of the tax court.