The U.S. Supreme Court case Bath Iron Works Corporation, et al. v. Director, Office of Workers' Compensation Programs, Etc., et al., 1992 revolved around the interpretation of a provision in the Longshore and Harbor Workers' Compensation Act (LHWCA). The dispute was whether an employer could receive credit for overcompensation paid to an employee under one section of LHWCA against liability for disability benefits due under another section. Bath Iron Works had been paying its injured employees more than required by law and sought to offset these excess payments against future obligations it owed these workers when their conditions worsened or they suffered new injuries. However, the court ruled that such offsets were not allowed under LHWCA as it would undermine the act's purpose - ensuring compensation for longshoremen who suffer work-related injuries regardless if they received prior overpayments from their employers.

In the dissenting opinion for Bath Iron Works Corporation v. Director, Office of Workers' Compensation Programs, Justice Scalia argued that the majority's interpretation of Section 8(f) was incorrect and inconsistent with its plain language. He contended that Congress intended to limit relief under this provision to employers who hired or retained disabled workers despite knowing about their disabilities and facing a significant risk of liability as a result. The majority's ruling would allow any employer whose employee suffered an injury at work to claim relief under Section 8(f), even if they had no knowledge of the worker’s pre-existing disability when they were hired or retained. This broad interpretation could potentially lead to abuse by employers seeking unjustified financial benefits from the government, undermining Congress’ intent in enacting this law.