Source: https://supreme.justia.com/cases/federal/us/347/409/
Timestamp: 2019-04-21 14:18:36+00:00

Document:
The owner and charterer of a vessel which collided with a pier and capsized in navigable waters in Louisiana filed consolidated petitions in admiralty in the Federal District Court in Louisiana to limit their liability under the provisions of 46 U.S.C. § 183 and 186. Subsequently, basing jurisdiction on diversity of citizenship and the Jones Act, the representatives of five seamen who had drowned brought this consolidated action in the same District Court against the liability underwriters of the owner and charterer of the vessel. For their right to proceed against the insurance companies, the plaintiffs relied on § 655 of the Louisiana Insurance Code, which authorizes direct suit "against the insurer within the terms and limits of the policy," and on the McCarran Act, 15 U.S.C. § 1012. The District Court dismissed the consolidated suit against the insurers. The Court of Appeals reversed.
Held: the judgment of the Court of Appeals is vacated, and the case is remanded to the District Court to be continued until after the completion of the limitation proceeding. Pp. 347 U. S. 410-427.
198 F. 2d 536, judgment vacated and cause remanded.
The District Court dismissed a consolidated suit brought by respondents against the petitioner insurance companies. 99 F.Supp. 681. The Court of Appeals reversed. 198 F.2d 536. This Court granted certiorari. 345 U.S. 902. Judgment of the Court of Appeals vacated and cause remanded to the District Court with directions, p. 347 U. S. 423.
On the evening of May 19, 1950, the towboat Jane Smith, in attempting to pass under a bridge over the Atchafalaya River in Louisiana, collided with a concrete pier and capsized. The owner and charterer of the Jane Smith filed consolidated petitioners in admiralty in the United States District Court in Louisiana to limit their liability under the provisions of 46 U.S.C. §§ 183 and 186. [Footnote 1] The owner and charterer having complied with the procedural requirements of the Limitation Act, the District Court issued an injunction prohibiting suit against them elsewhere than in the limitation proceeding.
Insurance Code which authorizes direct suit "against the insurer within the terms and limits of the policy".
also contravene the essential purpose expressed by an Act of Congress in a field already covered by that Act. Title 46, § 183."
Cushing v. Texas & P. Ry. Co., 99 F.Supp. 681, 684.
The Court of Appeals, relying solely on diversity jurisdiction, reversed, holding that, as a matter of local law, the District Court had read the Louisiana statute too restrictively, a question not open here, and that the statute was nothing more than a permissible regulation of insurance authorized by the McCarran Act, 15 U.S.C. § 1012, and not in "conflict with any feature of substantive admiralty law, nor with any remedy peculiar to admiralty jurisdiction." 198 F.2d 536, 539. Deeming this ruling important to the proper enforcement of the Limitation Act, we granted certiorari. 345 U.S. 902.
"the Jones Act, the Limited Liability Act, and the constitutional grant to the federal government of exclusive jurisdiction in maritime matters."
We agree with the Court of Appeals that, since diversity supports federal jurisdiction, the Jones Act need not be drawn upon for jurisdiction. Nor need we be detained by petitioners' contention that, as applied to claims against petitioners as underwriters of the charterer who employed the decedents, the State statute here conflicts with the Jones Act in that it would provide an alternative remedy where Congress has prescribed the means of recovery. Since that Act itself makes its remedy available to a seaman "at his election," we perceive no conflict between the Jones Act and the Louisiana direct action statute.
the business of insurance. . . ."
"It is not the intention of Congress, in the enactment of this legislation, to clothe the States with any power to regulate or tax the business of insurance beyond that which they had been held to possess prior to the decision of the United States Supreme Court in the Southeastern Underwriters Association case."
H.R.Rep. No. 143, 79th Cong., 1st Sess. 3. The question whether application of the direct action statute conflicts with federal maritime law is not touched by the South-Eastern Underwriters case. In the face of this unequivocal expression of congressional meaning, the statute cannot be read as doing something that Congress has told us it was not intended to do. The McCarran Act is not relevant here.
This brings us to the governing issue: does the Louisiana statute enter an area of maritime jurisdiction withdrawn from the States? Since Congress has provided a comprehensive legislative system for adjudicating maritime claims, we pass directly to considering whether the operation of the Louisiana statute conflicts with that system, putting to one side the question whether it encroaches upon the general body of nonstatutory maritime law. Cf. Red Cross Line v. Atlantic Fruit Co., 264 U. S. 109; Just v. Chambers, 312 U. S. 383.
in the competition for world trade. 9 Stat. 635. It provides that, in event of a collision or other maritime mishap occurring "without the privity or knowledge" of the owner (including therein a charterer), liability will be limited to the value of the ship and freight pending. [Footnote 4] The Act also permits the shipowner, by instituting limitation proceedings, to have all claims against him brought into concourse in an admiralty tribunal.
The legislation was designed to induce the heavy financial commitments the shipping industry requires by mitigating the threat of a multitude of suits and the hazards of vast, unlimited liability as a result of a maritime disaster. This Court has been faithful to this ultimate purpose, and has read the statute's words "in a broad and popular sense in order not to defeat the manifest intent." Flink v. Paladini, 279 U. S. 59, 279 U. S. 63. Particularly in view of the fact that Congress subjected the whole limitation scheme to scrutiny in 1935 and 1936 as a result of its application to personal injury and death claims resulting from the sinking of the Morro Castle, and did not alter those provisions of the legislation involved here, we must read the statute in the light of its expressed purposes. It is not for us to sit in judgment on the policy of Congress in having all claims disposed of in one proceeding or in apportioning maritime losses.
"Under the limitation statutes, as we have had them since 1851, they had two different purposes to serve; one was to limit the liability of the owner, and the other was to draw into one court, in the case of a large accident, all of the claims, in order that they might be heard by one judge on one state of facts, in one trial, and intelligently disposed of. Suppose a big sea comes aboard a passenger liner and 15 or 20 people on that deck are washed up against the stanchions or something else, and the claim is that the ship ought to have slowed down, ought to have known by radio. Those passengers may live anywhere from Maine to Texas, and if you have 20 separate laws in 20 different jurisdictions, you just cannot handle an accident of that kind in any possibly intelligent way. One court will say the line was not negligent; another court will say it was negligent; a third court will say you are entitled to $1,500; the next one may say you are entitled to $45,000; and nobody knows where he is."
the country for 2 or 3 years."
Statement by Mr. Charles S. Haight, representing the French Line, Hearings before House Committee on Merchant Marine and Fisheries on H.R. 9969, Part 4, 74th Cong., 2d Sess. 69-70.
"In promulgating the rules referred to, this court expressed its deliberate judgment as to the proper mode of proceeding on the part of shipowners for the purpose of having their rights under the act declared and settled by the definitive decree of a competent court, which should be binding on all parties interested, and protect the shipowners from being harassed by litigation in other tribunals. . . . The questions to be settled by the statutory proceedings being -- First, whether the ship or its owners are liable . . . and, secondly, if liable, whether the owners are entitled to a limitation of liability -- must necessarily be decided by the district court having jurisdiction of the case; and to render its decision conclusive, it must have entire control of the subject to the exclusion of other courts and jurisdictions. If another court may investigate the same questions at the same time, it may come to a conclusion contrary to that of the district court; and if it does (as happened in this case), the proceedings in the district court will be thwarted and rendered ineffective to secure the shipowners the benefit of the statute."
Providence & New York S.S. Co. v. Hill Mfg. Co., 109 U. S. 578, 109 U. S. 594-595.
they could only have been held for $25,000. If they buy the policies and the Louisiana statute is applied to permit these suits, their liability is still $25,000.
"Now, to construe the law in such a manner as to prevent the merchant from contracting with an insurance company for indemnity against the loss of his investment is contrary to the spirit of commercial jurisprudence. Why should he not be allowed to purchase such an indemnity? Is it against public policy? That cannot be, for public policy would equally condemn all insurance by which a man provides indemnity for himself against the risks of fire, losses at sea, and other casualties. To hold that this cannot be done tends to discourage those who might otherwise be willing to invest their money in the shipping business."
118 U.S. at 118 U. S. 504-505.
"No form of agreement could be framed by which [shipowners] could protect themselves. This is a result entirely foreign to the spirit of our legislation."
118 U.S. at 118 U. S. 505.
Of course, wholly apart from the respect to be accorded State legislation, this Court should be slow to find that, even where Congress has exercised its legislative power, it has not left room for State action. Kelly v. Washington, 302 U. S. 1. But where, as in this case, the evident design of Congress can only be carried out by barring State action, it must be barred.
here seeking to rely on the Limitation Act as a defense. But the crucial fact which requires that the conflict between State and federal law be faced now is that the present actions are brought completely independently of the limitation proceeding. If the Court keeps hands off the direct actions, the draining away of the insurance proceeds cannot be challenged at any time by anyone.
This is not a case where some future action remains to be taken by one of the parties to a suit before the critical issue is presented to the Court as clearly as may be. See United Public Workers v. Mitchell, 330 U. S. 75. Nor is this a case where we can postpone our review until a State court gives meaning to a challenged State statute. Albertson v. Millard, 345 U. S. 242. In the suits before us, the Court is at the point of no return. Once the respondents have recovered from the insurers the face amount of the insurance policies in the present actions, and they or other claimants are going after the shipowner and charterer in the limitation action, it will be too late to rely on the Limitation Act to preserve the insurance proceeds.
Thus, it is clear that, if the present direct actions are permitted, they involve substantial hazard to rights granted by an Act of Congress, leaving no way for such impairment to be challenged. Respect for the Act precludes allowance of litigation, based on a State statute, which carries the potentiality of irreparable infringement upon federal law. The point of inadmissible conflict between State and federal legislation is reached as soon as suit is brought against the liability underwriters to get at proceeds of the policies. And if the federal legislation bars such a suit, it would be anomalous to say that the underwriters may not here contest the direct actions.
of art in admiralty. To state the issue in these terms is to misconceive it. The question is whether the Court is to disregard the effect of a direct action on the federal proceedings. The Louisiana statute, as applied to authorize suits against the insurers of shipowners and charterers who have instituted limitation proceedings, is a disturbing intrusion by a State on the harmony and uniformity of one aspect of maritime law. It is accentuated by the fact that the federal law involved is not a more or less ill defined area of maritime common law, incursion upon which need not be here considered, but an Act of Congress, well defined and consciously designed, with detailed rules for its execution established by this Court.
"If the courts having the execution of [the Limitation Act] administer it in a spirit of fairness, with the view of giving to shipowners the full benefit of the immunities intended to be secured by it, the encouragement it will afford to commercial operations (as before stated) will be of the last importance; but if it is administered with a tight and grudging hand, construing every clause most unfavorably against the shipowner and allowing as little as possible to operate in his favor, the law will hardly be worth the trouble of its enactment. Its value and efficiency will also be greatly diminished, if not entirely destroyed, by allowing its administration to be hampered and interfered with by various and conflicting jurisdictions."
Providence & New York S.S. Co. v. Hill Mfg. Co., 109 U. S. 578, 109 U. S. 588-589.
action suits should not be permitted to impair the shipowner's and charterer's right to indemnification, but he would allow the District Court to adjudicate the liability of the petitioners to the respondents after the limitation proceeding has run its course.
"(a) The liability of the owner of any vessel, whether American or foreign . . . for any loss, damage, or injury by collision, or for any act, matter, or thing, loss, damage, or forfeiture, done, occasioned, or incurred, without the privity or knowledge of such owner or owners, shall not, except in the cases provided for in subsection (b) of this section, exceed the amount or value of the interest of such owner in such vessel, and her freight then pending."
"The charterer of any vessel, in case he shall man, victual, and navigate such vessel at his own expense, or by his own procurement, shall be deemed the owner of such vessel within the meaning of the provisions of this chapter relating to the limitation of the liability of the owners of vessels. . . ."
Prior to instituting this action, all five plaintiffs had filed in the limitation proceeding pleadings challenging the shipowner's and charterer's right to limit their liability and asserting claims for damages.
The Protection and Indemnity policy issued by the Home Insurance Company contained the following clauses.
"It is agreed that, if the Assured, as shipowners, shall have become liable to pay, and shall have in fact paid, any sum or sums in respect of any responsibility, claim, demand, damages and/or expenses, or shall become liable for and shall pay any other loss arising from or occasioned by any of the following matters or things. . . ."
There follows the types of injury and loss for which the Company is liable. A subsequent proviso reads "Liability hereunder shall in no event exceed that which would be imposed on the Assured by law in the absence of Contract."
"No action shall lie against the Company to recover upon any claim or for any loss under Paragraph I(b) foregoing unless brought after the amount of such claim or loss shall have been fixed and rendered certain either by final judgment against this Employer after trial of the issue or by agreement between the parties with the written consent of the Company, nor in any event unless brought within two years thereafter."
This Court has interpreted this as meaning the value after the accident. Norwich & N.Y. Transp. Co. v. Wright, 13 Wall. 104.
After the Morro Castle disaster, in which 135 lives were lost and the owners sought to limit their liability to $20,000, Congress changed the statute to provide that if the value of the vessel and freight pending is not enough to cover all claims, that portion of the total recovery applicable to personal injury or death claims shall be at least $60 per ton. 49 Stat. 960, 1479. 46 U.S.C. § 183(b)-(e). This provision is applicable, however, only to "seagoing vessels," defined as excluding towboats which is the type of vessel involved here. 46 U.S.C. § 183(f).
For example, in this case, the representatives of a sixth victim may be relying on the limitation action to prove "privity or knowledge," and thus seek a judgment substantially in excess of the ship's value. They will be penalized for relying on the federal legislation and the Rules if the direct actions drain away the insurance proceeds and the shipowner and charterer are unable to meet additional judgments.
That the cost, and indeed the availability, of insurance depends on limited liability was brought to the attention of Congress in the hearings on the 1936 amendments to the Limitation Act. See Hearings before House Committee on Merchant Marine and Fisheries on H.R. 9969, Part 4, 74th Cong., 2d Sess. 66-67, 129.
This is equally true whatever the vessel is valued at. Of course, we do not know now that the vessel will finally be valued at $25,000. The final valuation may be more or less. Certainly, on the record before us, we cannot assume that the ship is valueless, and it may be that shipowner and charterer will need the full $180,000 face value of the policy to indemnify them for a judgment in the limitation action. The very reason that the present suit should not be allowed to proceed is that it is for the limitation proceeding to determine value.
The allegation of "privity" and "knowledge" is not an assumption on the basis of which this case could be disposed of. The shipowner's and charterer's right to limitation must be determined, as provided by the Act and Rules of this Court, in the limitation proceeding itself, not in the present suits to which they are not parties.
I see no necessity for invalidating Louisiana's law by dismissing these direct actions. In administering the Limited Liability Act, the Court can easily avoid a clear conflict between it and the direct action statute.
themselves from loss of their investment in the ship, it would be contrary to the purpose of Congress, as well as to the spirit of commercial jurisprudence. Here, the damage claims which may be sustained in the limitation proceeding will be chargeable against the Jane Smith, and the owner may lose the damaged hull or its value unless he can recoup through the insurance which is involved in these direct actions and which he purchased for his protection. If the insurance proceeds are exhausted in the direct actions, the owner's recoupment will be impossible. Though the holding in The City of Norwich does not control, I think that the reasoning of that case is pertinent; in other words, the owner of the ship has the same right to protect his investment in the ship by insurance against damage claims arising in its operation and which are chargeable to it [Footnote 2/1] as he has to protect his investment from damage to the ship itself. Unless the owner is afforded an opportunity to provide for such protection, the purpose of Congress to encourage investment in American ships will be just as much thwarted as it would have been had the owner's right to buy insurance protection in The City of Norwich not been recognized.
damaged hull. The owner's motive in purchasing insurance certainly was not to protect his seamen or the public, but to protect himself against damage claims. And, in so doing, he has aided the widows and orphans of the deceased seamen by creating the possibility of an additional recovery against the insurance companies. Nor can the owner "profit" from the accident. The amount he may recover from the insurers under the liability policies could never exceed the amount he is obligated to pay to the claimants in the limitation proceedings. He "profits" only in the sense that he is permitted to receive the protection for which he paid.
This is not to say that the insurance companies in a direct action are liable to damage claimants. That would be a question of Louisiana law. Our only interest is to make certain that such actions do not interfere with the Federal Limitation proceeding. To do this, we need only require that the limitation proceeding be concluded first, and the owner's liability settled under it. The petitioners could then discharge this liability, to the extent their policies covered it, by paying into the limitation proceeding the proper sum. [Footnote 2/2] The door would then be left open for prosecution of the direct actions against the insurance companies on the remaining coverage of the policies. Thus, whatever the insurers' liability may be under Louisiana law in the subsequent direct actions, the owner's purse cannot be touched.
not foreclose the possibility of direct actions by them subsequent to the limitation proceeding.
The business practice of purchasing marine protection and indemnity insurance, the type primarily involved here, to protect the shipowner against this contingency has long been recognized. See testimony of Ira A. Campbell for American Steamship Owners' Association at Hearings before House Committee on Merchant Marine and Fisheries on H.R. 4550, 74th Cong., 1st Sess. 91, 125, 131.
Of course, if the ship is a total loss, and assuming no privity or knowledge, the owner's liability would be nothing under the federal Act. All the insurance would then be available to claimants in the direct actions, if liability is present under Louisiana law.
constitutional objections the insurance companies urge against it. I agree with the Court of Appeals for the Fifth Circuit that the insurance companies' contentions "over-inflate a relatively simple proposition with apparent, but unreal, technical problems." 198 F.2d 536, 539. For that reason, without more, I would affirm this judgment. But because of the confused state in which this case goes back to the District Court, I think it desirable that all questions be discussed. I shall first take up the constitutional objections.
(a) The insurance companies argue that the Louisiana law impairs the obligation of "maritime contracts." The implication is that maritime contracts have more constitutional protection than other kinds of contracts. But Art. I, § 10 of the United States Constitution, which forbids states to impair the obligations of contracts, draws no such distinction. And while, in general, this provision protects valid contracts from impairment by subsequent legislation of states, it does not forbid states to pass laws regulating contracts thereafter to be made. Munday v. Wisconsin Trust Co., 252 U. S. 499, 252 U. S. 503. Cf. Home Building & Loan Assn. v. Blaisdell, 290 U. S. 398. Hence, the Louisiana law, passed before these insurance policies were issued, does not violate the impairment of contract clause and, unless invalid for some other reason, the state's "direct action" statute became a part of the contract when it was made, just as though written into each policy by the companies. New York Life Ins. Co. v. Cravens, 178 U. S. 389, 178 U. S. 395-400. Cf. Farmers' and Merchants' Bank v. Federal Reserve Bank, 262 U. S. 649, 262 U. S. 660.
that this provision not only gives the Federal Government supreme power over maritime affairs, but that it also denies any power in states to legislate in this field. This complete denial of state power is said to have been established by Southern Pacific Co. v. Jensen, 244 U. S. 205, and Knickerbocker Ice Co. v. Stewart, 253 U. S. 149. The opinions in those cases did lend some support to a constitutional doctrine that the Admiralty Clause requires rigid national uniformity in maritime legislation. But this Court rejected that doctrine in Red Cross Line v. Atlantic Fruit Co., 264 U. S. 109. Mr. Justice Brandeis, speaking for the Court in that case, made it absolutely clear that the Admiralty Clause does not deprive states of power to make different regulations in regard to maritime affairs unless a state attempts to modify or displace essential features of the substantive maritime law or to modify the remedial law of admiralty courts. See also Standard Dredging Corp. v. Murphy, 319 U. S. 306. These cases but reaffirmed a power that states have always exercised. When the Constitution was adopted, the Government found state regulatory systems governing local maritime affairs throughout the country. Gibbons v. Ogden, 9 Wheat. 1, 22 U. S. 207. Congress has never attempted to supplant all local maritime regulations, but has left many in effect as useful aids in carrying out national maritime policies. See Cooley v. Board of Wardens, 12 How. 299; The Hamilton, 207 U. S. 398; Kelly v. Washington, 302 U. S. 1, 302 U. S. 14-16. For example, states can even create liens on vessels which may be enforced either in state courts or in courts of admiralty, despite the lack of uniformity brought about by "intricate and conflicting State laws creating such liens. . . ." The Lottawanna, 21 Wall. 558, 88 U. S. 581. In declining to invalidate these state lien laws this Court there pointed out that Congress could terminate the effectiveness of such state legislation at any time it desired to assume control.
"illustrate the alacrity with which admiralty courts adopt statutes granting the right to relief where otherwise it could not be administered by a maritime court. . . ."
Workman v. New York City, 179 U. S. 552, 179 U. S. 563. See also The Hamilton, 207 U. S. 398.
". . . it would seem to be a reasonable provision by the state, in the interest of the public, whose lives and limbs are exposed, to require that the owner in the contract indemnifying him against any recovery from him should stipulate with the insurance company that the indemnity by which he saves himself should certainly inure to the benefit of the person who thereafter is injured."
Merchants' Mutual Automobile Liability Ins. Co. v. Smart, 267 U. S. 126, 267 U. S. 129-130. The Louisiana statute is an application of this same principle. It expresses the public policy of Louisiana that liability insurance exists for the protection and benefit of the injured as well as the insured. Davies v. Consolidated Underwriters, 199 La. 459, 475-476, 6 So.2d 351, 357. Under Louisiana's law, an individual purchases liability insurance not for himself alone but also for those whom he may injure. This bargain is advantageous to the purchaser because claims against him can be satisfied in suits against the insurer.
The majority hold that the Limited Liability Act of 1851, as amended, bestows on the shipowner a right to collect all or part of the insurance money for his profit despite Louisiana's statute requiring insurance companies to make their payments directly to the families of persons injured or killed. I think this construction gives shipowners far more than Congress intended.
"The liability of the owner of any vessel . . . for any act, matter, or thing, loss, damage, or forfeiture, done, occasioned, or incurred, without the privity or knowledge of such owner or owners, shall not . . . exceed the amount or value of the interest of such owner in such vessel, and her freight then pending. [Footnote 3/3]"
(Emphasis supplied.) This Act relieves shipowners from a large part of the liability normally imposed on employers for torts of their employees. Under the Act, a shipowner need pay nothing to tort claimants if the ship is a total loss. If it is not wholly destroyed, the shipowner can simply turn a fund equal to the value of his interest in the damaged ship over to a court in a limitation proceeding. All claims against the shipowner must then be satisfied out of that fund, no matter how large the claims or how small the fund. The purpose of Congress in limiting the liability of shipowners was to encourage investment in American ships. But neither the Act nor its history indicates a purpose to encourage investment in insurance companies by limiting their liabilities. The insurance companies contend, however, that requiring them to pay their policy obligations to these claimants will somehow compel shipowners to pay out money in excess of the liability provided by the Act. For the reasons that follow, I think this contention is without merit.
ship here is without value -- a total loss. If this is true, there would be no fund in the limitation proceedings, and no possibility of any recovery at all against the shipowner. Under these circumstances, the shipowner does not stand to lose a dime if the insurance companies are held liable for the full amount of their policies, and there is no reason for deferring trial of these lawsuits.
to others by the shipowner or his agents. The shipowner has an insurable "interest" in his ship; if it is lost or damaged, any insurance money collected is his own. I cannot believe he has an insurable "interest" in his seamen which could possibly entitle him to reduce the already limited financial obligations the Act imposes by taking for himself insurance money which otherwise would go to compensate seamen or their families for injuries he inflicts. The result of holding that the Act gives the shipowner this insurance benefit is at least in some circumstances, to leave him with more money after a wreck if he injures people than if he does not. It is a far cry from the decision in The City of Norwich that a shipowner is entitled to keep the insurance collected for loss of his own ship to today's holding that states cannot assure seamen that they, instead of the shipowner, can get the full benefit of liability policies bought in order to pay their just claims for injuries caused by the ship.
protests its desire to indulge every presumption in favor of the validity of state legislation. It is hard to reconcile this commendable judicial philosophy with use of attenuated inferences about increased premiums as an excuse for impairing this Louisiana law.
"No Act of Congress shall be construed to invalidate, impair, or supersede any law enacted by any State for the purpose of regulating the business of insurance . . . unless such Act specifically relates to the business of insurance. . . ."
unnaturally narrow construction squarely in the teeth of the plain, normal, everyday meaning of the language used. The Act rather shows the strong purpose of Congress to permit states to continue regulating insurance as they always had. Courts are pointedly told to leave states free to regulate "the business of insurance" in the absence of some congressional act that "specifically relates" to the same subject. The "business of insurance" includes marine insurance and by no stretch of imagination can it be said that the 1851 Act "specifically relates" to insurance. Thus the unambiguous language of the McCarran Act forbids courts to construe federal statutes such as the Limited Liability Act so as to impair a state law like Louisiana's. No legislative history can justify judicial emasculation of this language. I would not disregard its mandate.
Judicial expansion of the Limited Liability Act at this date seems especially inappropriate. Many of the conditions in the shipping industry which induced the 1851 Congress to pass the Act no longer prevail. And later Congresses, when they wished to aid shipping, provided subsidies paid out of the public treasury rather than subsidies paid by injured persons. [Footnote 3/5] If shipowners really need an additional subsidy, Congress can give it to them without making injured seamen bear the cost. It is significant that no shipowner has argued here against direct recoveries from the insurance companies.
the shipping industry the seamen served. It was such results that led to efforts to spread the cost of industrial accidents and disasters through insurance and workmen's compensation laws. Acting consistently with this broad trend in the law, Louisiana has tried to make certain that all liability insurance will get to those for whose protection it was purchased. And application of Louisiana's statute under the circumstances here is also in harmony with the humane policy of the maritime law. Seamen have traditionally been the wards of admiralty, and admiralty has been increasingly solicitous to provide compensation for accidents occurring in their dangerous work. Thus both the general trend of the law and the specific bent of admiralty support the policy of the people of Louisiana which permits recovery here. No language in the Limited Liability Act forbids it; the language of the McCarran Act should compel it.
In the Merchant Marine Act of 1920, Congress recognized that "marine insurance companies" were operating under state laws. Section 29 of the Act defines that term to include companies "authorized to write marine insurance or reinsurance under the laws of the United States or of a State. . . ." 41 Stat. 988, 1000, 46 U.S.C. § 885(a)(2).
In 1935, when Congress was considering amendments to the Limited Liability Act, counsel for the American Steamship Owners' Association strongly contended for continued regulation of marine insurance by the states and against a federal regulation system that would have been uniform in all the states. Hearings before House Committee on Merchant Marine and Fisheries on H.R. 4550, 74th Cong., 1st Sess. 91, 124.
R.S. § 4283, as amended, 49 Stat. 960, 1479, 46 U.S.C. § 183(a).
United States v. South-Eastern Underwriters Assn., 322 U. S. 533.
See Springer, Amendments to the Federal Law Limiting the Liability of Shipowners, 11 St. John's L.Rev. 14; Note, 35 Col.L.Rev. 246.

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