Ray H. Lafky: May it please the Court.
Hugo L. Black: Mr. Lafky.
Ray H. Lafky: This case is but another facet of workmen's compensation. And in my 14 years of legal adviser to the Oregon Commission, I have gradually adjusted and adapted myself to the philosophy of the liberal construction of the law which must accorded all workmen's compensation actions to the growing field, the judicial expansion of the “twilight zone” which was enunciated in the Davis case. There were more recent cases where the conflict comes between various state jurisdictions where this Court has permitted actions in both States. And I think the “twilight zone” is certainly a proper judicial expansion of the philosophy of workmen's compensation. Now, actually, as we compare, for I want to oversimplify the Longshore Act and the Workmen's Compensation Act of Oregon, each of them require a certainty of compensation in the first instance. And if the employer fails to provide that certainty of compensation, the alternative of a negligence action is provided. Let us assume that the factual reverse, that the action was under the Longshore Act and he had failed to provide his workmen under the benefits under the Longshore Act. Then, if action were commenced there, could they say, “No, you have a definite right over into the workmen's compensation. And also, you can't have a damage action.” I think that that maybe an oversimplification. I -- I did wish to answer Judge Stewart's question in -- under the Oregon law, an employer must bring all of his employees in a given occupation under -- he may have separate occupations and have one under and the other.
Potter Stewart: What do this employer could do?
Ray H. Lafky: This one had rejected, so he hadn't -- so far as I know, none of his --
Potter Stewart: None of his --
Ray H. Lafky: -- employees were subject to the Workmen's Compensation Law to the extent that they were entitled to compensation. He could have, at any time withdrawn it and then his workmen would've been entitled to the compensation. Now, if we were to deal on hypothesis and what can happen, there are two cases cited in the briefs. One of which is Hess against the United States which have been cited by the respondent, 259 F. 2d 285. That case involved six workmen on the face of Bonneville Dam who were preparing to repair the floodings and faces of the dam. They set out from the Oregon shore. They got too close to the spillway, five of them were drowned. No question was raised by the Oregon Commission as to the maritime coverage on this particular case. The employer was shore based, he was out there working on a fix structure but there was a barge, there was an instrument of navigation. There was some delay of the question of whether Oregon or Washington should take. I mention this case not because of the law involve but because of the factual situation. That employer had lost his financial surety in the contract with the Government. He had state compensation with both Washington and Oregon, but he had a very minimal policy to protect him against any possibility of maritime injury like possibly applied to the skipper of a tug who was drowned, but he was very dubious if it would apply to any of the other carpenters and so forth. Now, what situation that we have there? If those workmen had proceeded against that employer, they would have a right but no effective remedy certain. The Oregon Commission voluntarily accepted those four fails probably, I think, $1000 are better in liability of the state fund. The Oregon Supreme Court is correct in its very narrow assertion that merely because navigable water are concerned to state laws of jurisdiction and that's just about as far as they went, I have ill-advised my client to the extent of $100,000 in that case. And in another case mentioned in the briefs, King against the Accident Commission mentioned in the petitioner's brief, 309 P. 2d 159. There were five workmen drowned on Elsie Bay, the tidewater and the river, navigable waters involved workmen out in a -- in a boat who were repairing a broom, protecting logs, preparatory to having these logs moved up in navigable waters of the Elsie River. So there are nine fatals along numerous dependent children left without fathers. And my interpretation of the Davis case would lead me to believe that in both cases, they were “twilight zone” injuries. Both cases, I -- it is not in the record but I know of known personal knowledge that there was no longshore insurance provided. And certainly, in this broad scope, I think that looking at the interest of the workmen and as I stand here now, actually, when I say this I -- I am referring to the liability in the State of Oregon and the state fund for these things but I think that that is a proper field of activity. And you do have the other facet here too and that is -- well, I have no direct interest with Mr. Hahn, I don't even know the gentleman. I see in these arguments here the question of the standard of care and -- and respondent here feels that the -- this employer should not be subjected to a higher standard of care. No injured workman can ever be made whole again. We can't put him back together again. All you can do is set up a yardstick to measure damages. But certainly, decision should be geared and tempered so that employers are required to maintain the highest standard of care to workmen because we may not put Mr. Hahn back together again but by insisting upon a high standard of care, we may prevent some other workmen from being injured and I think that that is --
Charles E. Whittaker: (Inaudible)
Ray H. Lafky: That is the issue they raise that they -- to expose this particular employer to this particular action would incur to him -- require of him a higher degree of care and therefore, by some reason, upset the uniformity of the maritime jurisdiction and do grave damage to this litigant. I mentioned it because he has raised the issue and I do think that in all of these considerations of this nature in workmen's compensation, that is part of the picture. He himself has deliberately rejected state compensation, exposed himself to this damage action by virtue of that voluntary election on his part. Now, it comes before this Court saying, “I shouldn't be exposed to the higher degree of care that I have incurred by my own voluntary election.”
Potter Stewart: Mr. Lafky, I don't want to hear of course the arguments (Voice Overlap) --
Ray H. Lafky: Well, I am practical through because I don't want to impose on his rebuttal.
Potter Stewart: And perhaps your colleague would be -- would prefer to answer. Question that occurs to me is this. The Oregon court has, in fact, held that this injury was within the scope of the federal statute. Now, would that be res judicata in a subsequent -- to the benefit of the injured workman in a subsequent action of the Longshoremen's Act?
Ray H. Lafky: I don't believe so. And --
Potter Stewart: Why?
Ray H. Lafky: -- of course the -- under the Davis case, there, the Washington Supreme Court all the way through the four courts in Washington had held that he was not entitled to anything.
Potter Stewart: And this Court said that he reversed all those (Voice Overlap) --
Ray H. Lafky: This -- This court reversed all of that, paid no attention to what the Washington court said, send it back in --
Potter Stewart: But that -- that doesn't quite get my question, does it?
Ray H. Lafky: But --
Potter Stewart: Let's say perhaps your colleague would rather address himself to that or --
Ray H. Lafky: Yes. He was -- let's say -- that is the issue and of course, the question of whether or not my interest of course is whether or not in advising the Oregon Commission, we are properly accepting these borderline cases. Of course, the Oregon Commission has about 40,000 employers, entertains about 70,000 claims a year and rights not only workmen's compensation but by statute is permitted and also this right longshore workmen's compensation -- the longshore compensation. But we are interested and we were quite concerned with the Florida Supreme Court decision feeling that perhaps it was too narrow. It hasn't shown a complete disfavor with the Davis doctrine and the Fifth Circuit decision likewise. And I feel, as an administrator, having to advise administrators daily in a performance and acceptance of claim 70,000 a year but it is a wise doctrine to permit a little more laxity in leeway of the administrative level of where to accomplish the purposes of this type of legislation.
Arno H. Denecke: Mr. -- Mr. Justices, I feel compelled at the outset to make some remarks which I think would be irrelevant except for the contentions of the petitioner in this case, and that is the inference or the direct statement that the defendant here, Ross Island Sand & Gravel did not carry state workmen's compensation. The statement of the Attorney General of the State of Oregon was as I said on the briefs here that the State Industrial Accident Commission is the only entity authorized by law to provide workmen's insurance as such in Oregon. We pointed out in our brief here from the Chairman's report of the Oregon State Workmen's Compensation Law that there is private workmen's compensation in Oregon and that the Chairman's report went on to say that the safer employers carried private workmen's compensation instead of compensation with the State. Now, in our -- what I think is rather peculiar set up, the state industrial accident fund is the only official -- officially recognized source of workmen's compensation. And any employer who rejects the state act and carries his own private compensation either with private carriers or self insured, he lays himself open to negligence suits or suits under our Oregon Employers' Liability Act. But as the report of the State of Oregon here points out, employers who reject the State Workmen's Compensation Act still continue to carry workmen's compensation either in private carriers or self insured.
Hugo L. Black: You mean that -- you mean that this company has private insurance that would protect him in case his judgement was rendered against him?
Arno H. Denecke: That is a part of the record, Your Honor. And I mean more than that, Your Honor, I mean that the -- that company is -- and this company although, this is not in the record, Your Honor, but it -- the company --
Hugo L. Black: I'm talking about this company.
Arno H. Denecke: Pardon?
Hugo L. Black: I'm talking about this company.
Arno H. Denecke: Your Honor, this company has insurance to cover liability under a judgment also as insurance as to other employers to voluntarily pay workmen's compensation in accordance with the schedule of benefits of the State of Oregon.
Hugo L. Black: In other words, this company is protected by insurance against the judgment of this kind or compensation pay?
Arno H. Denecke: Correct, Your Honor.
William O. Douglas: That was taken up under the Federal Act?
Arno H. Denecke: Under -- both the State and the Federal Act, Your Honor.
Charles E. Whittaker: (Inaudible)
Arno H. Denecke: Your Honor, separate -- I -- I'm speaking now off the record. There's nothing in the records, Your Honor, but if I may, different private coverage or it's the same private coverage maybe had to cover liability under the Longshoremen's and Harbor Workers' Act to cover employer's liability, to protect against a suit such as this and to voluntarily pay compensation according to the workmen's compensation benefits as stated by the state law.
Hugo L. Black: And I understood you to say he had all of these.
Arno H. Denecke: He had all of them, yes, Your Honor.
Hugo L. Black: He has to protect --
Arno H. Denecke: Yes.
Hugo L. Black: -- any judgement rendered against him.
Arno H. Denecke: Yes, Your Honor. And --
Potter Stewart: I --
Arno H. Denecke: Excuse me, Your Honor.
Potter Stewart: Do I understand that an employer by voluntarily paying compensation as -- as would be provided by state law can -- he can't in any way thereby protect himself from --
Arno H. Denecke: Not from -- not from damage --
Potter Stewart: (Voice Overlap) --
Arno H. Denecke: -- actions, Your Honor. No sir. But --
William J. Brennan, Jr.: (Inaudible)
Arno H. Denecke: Yes, he does, Mr. Justice Brennan.
William J. Brennan, Jr.: All he did is place his insurance to private carriers.
Arno H. Denecke: That's correct, sir. And --
William J. Brennan, Jr.: (Inaudible)
Charles E. Whittaker: (Inaudible)
Arno H. Denecke: Your Honor, it is -- and I -- I don't want to mislead the Court at all. It is purely voluntary on the part of the employer. The policy -- and I set out a standard policy in an appendix to my brief, Mr. Justice, that that -- by that policy, the insurance company agrees to pay workmen's compensation benefits to employees who otherwise would come under the Workmen's Compensation Act.
William J. Brennan, Jr.: (Inaudible)
Arno H. Denecke: Pardon, Your Honor?
William J. Brennan, Jr.: (Inaudible)
Arno H. Denecke: He would have, Your Honor, yes.
William J. Brennan, Jr.: He would have.
Arno H. Denecke: Well, if he had sought the compensation benefits payable according to the Oregon Workmen's Compensation Act, he would have been paid those.
Hugo L. Black: I understood you to say that it protected against this kind of action here.
Arno H. Denecke: Also, Mr. Justice --
Hugo L. Black: If he gets -- if this judgment is sustained, he is protected by his insurance policy.
Arno H. Denecke: Oh, that is true, Mr. Justice, but in addition to that, in answer to Mr. Justice Brennan's question, that insurance policy also provides that the insurance carrier will pay Mr. Hahn or any other injured workman the same benefits that that workman would be paid by the state industrial accident fund if the employer had not rejected the Oregon Compensation Law.
William J. Brennan, Jr.: I don't quite understand how this operates (Inaudible)
Arno H. Denecke: It is --
William J. Brennan, Jr.: (Inaudible) judgment workmen's compensation?
Arno H. Denecke: No, Your Honor.
Charles E. Whittaker: (Inaudible)
Arno H. Denecke: There would -- may I -- I'll try to -- it's -- I realize, it's a very complicated subject and -- but if I may state it this way --
William J. Brennan, Jr.: It might mean (Inaudible) of Mr. Hahn.
Arno H. Denecke: Yes, certainly, Mr. Justice, that in the case --
Hugo L. Black: And this company?
Arno H. Denecke: Yes, Your Honor. In the case of Mr. Hahn, he could -- if he had so desired, this company would have paid him compensation, and I'm speaking the insurance company, Mr. Justice Black, rather than the --
Hugo L. Black: Yes.
Arno H. Denecke: -- employer. This insurance company would have paid him the same -- the benefits, I -- I better put it, the same benefits that are set out in the Oregon Workmen's Compensation Act.
William J. Brennan, Jr.: (Inaudible)
Arno H. Denecke: All he does is -- is apply to the insurance carrier. There is no administrative tribunal setup to cover private insurance coverage.
William J. Brennan, Jr.: How would the (Inaudible)
Arno H. Denecke: If -- Your Honor, if they cannot agree, that is the -- the employee and the insurance carrier cannot agree, if it's medical for example, it's a medical matter, the policies universally at least commonly provide for an arbitration. If it's other questions of construction, the policy would have to be done by the courts, Your Honor --
William J. Brennan, Jr.: How about percentage of disability
Arno H. Denecke: Well, if -- if for example the physicians fixes this at -- at 50% of the loss of an arm for permanent tool disability, then the insurance carrier turns to the Oregon Workmen's Compensation Act and sees that for 50% loss of an arm, he gets so much money.
William J. Brennan, Jr.: Is that the law?
Arno H. Denecke: Well, yes, it would be, Your Honor. He doesn't -- he doesn't care for because I'm -- well, I haven't figured it out.I think it's quite obvious that he would receive more under the longshoremen and harbor workers schedule benefits than he would under the Oregon schedule of benefits. Now, I make that statement without --
Hugo L. Black: Could he -- could he sue you although you are not under the Act for compensation?
Arno H. Denecke: Under that policy, Your Honor, yes.
Hugo L. Black: Well, I'm not talking about on the policy, could he sue you under the Act?
Arno H. Denecke: No, no, Your Honor.
Hugo L. Black: Could he sue you for compensation?
Arno H. Denecke: Yes, Your Honor.
Charles E. Whittaker: (Inaudible)
Arno H. Denecke: Yes, Your Honor.
Charles E. Whittaker: (Inaudible)
Arno H. Denecke: Yes, Your Honor.
Charles E. Whittaker: (Inaudible)
Arno H. Denecke: And there are --
Charles E. Whittaker: (Inaudible)
Arno H. Denecke: Yes, Your Honor.
Hugo L. Black: Is that done all the time that day?
Arno H. Denecke: Well, Your Honor, I -- it isn't -- it hasn't been necessary.
Hugo L. Black: Has it been done?
Arno H. Denecke: It has been done and I cited one case, Your Honor.
Hugo L. Black: Supreme Court case?
Arno H. Denecke: An Oregon Supreme Court case, yes, Your Honor.
Hugo L. Black: Now, when was that?
Arno H. Denecke: In the 1930s, Your Honor. And (Voice Overlap) --
Hugo L. Black: (Voice Overlap) your compensation law?
Arno H. Denecke: Pardon?
Hugo L. Black: Was your compensation law the same then as it is now?
Arno H. Denecke: But as far as this question is concerned, yes, the same, Your Honor.
Hugo L. Black: It provided that a man was not covered unless he accepted it, and yet, a suit was sustained against the man for compensation who was not -- had not accepted yet, is that what I understood you to say?
Arno H. Denecke: Yes, Your Honor. And because I'm not certain that I followed you --
Hugo L. Black: Well, I'm just asking. As I understand it, the law provides that if a man to be on writ has to accept the company employer.
Arno H. Denecke: He has to reject it or else he is under time.
Hugo L. Black: Well, he did not accept it.
Arno H. Denecke: Correct. He -- in this case he rejected it.
Hugo L. Black: And he is not under it, he rejected it.
Arno H. Denecke: Correct, Your Honor.
Hugo L. Black: And the law -- state law provides that when he is rejected, he is not under it, is that right?
Arno H. Denecke: He's not insured with the state industrial accident fund, Your Honor.
Hugo L. Black: And yet, you say that he could -- a person can still sue him --
Arno H. Denecke: On his --
Hugo L. Black: -- for compensation?
Arno H. Denecke: On his -- on the private contract of insurance that he has procured, Your Honor.
Charles E. Whittaker: But what question is could he sue him, the employer, under the Act?
Arno H. Denecke: Your Honor, I am unable to answer whether you can sue the employer as distinguished from his insurance carrier. I am unable to -- to give the Court a -- an answer that I have any reliance in -- at this time.
Hugo L. Black: You are sure, however, that any -- if a suit should be made on that, maintained by the Court and he was held liable, you insured against it and you insured also against the suit for negligence such as this.
Arno H. Denecke: Yes, Your Honor.
Tom C. Clark: You have direct action (Inaudible)
Arno H. Denecke: Against the insurer, Your Honor? No, Mr. Justice.
Tom C. Clark: You can't sue.
Arno H. Denecke: Well, you could under this type of insurance because it has been -- it has been construed and I think even the -- the contract now states that it's for the benefit of the --
Speaker: (Inaudible)
Arno H. Denecke: Yes, Your Honor, and I'm not positive whether that's been by judicial construction or it's now contained in the policy. At the risk of laboring a point, I would like to go into this subject and make one more statement on it. In Oregon, an employer who was in a hazardous -- hazardous employment such as this one, he has two choices -- three choices. Either he can go under the state fund, state insurance -- under the state fund and that's -- there's no actions possible against for damage actions, or he can reject the State Act and he doesn't have to. I don't want to mislead the Court. He doesn't have to but as -- as the report state here, they do and did in this case. He can take out private insurance coverage which will pay the injured employee according to the benefits in the -- is set out by the Oregon Compensation Law, or if he's a large employer, he can do the same thing by being a self insured.
William J. Brennan, Jr.: (Inaudible) how -- how is the employer benefited (Inaudible)
Arno H. Denecke: Primarily by lower rates, Mr. Justice.
William J. Brennan, Jr.: Lower rates than the state fund?
Arno H. Denecke: Than the state fund, that's correct. If -- I -- I don't --
Tom C. Clark: (Inaudible) or lose with the statute?
Arno H. Denecke: He does lose it, Your Honor. And -- and of course, many times, the employee will prefer to bring a damage action against the employer.
Hugo L. Black: Through all the time, isn't it, except one case you know.
Arno H. Denecke: Well, the case that I was referring to, Mr. Justice, was one in which the employee was suing the insurance company for compensation benefits. I -- as I recall, it was the question of whether they had paid him all the compensation benefits that their contract insurance called for. So that the remarks --
William J. Brennan, Jr.: Justice Stewart just suggested --
Arno H. Denecke: Excuse me.
William J. Brennan, Jr.: -- I suppose this is the answer, if the employee where you projected the Act and established negligence, he's likely to do what was done here, isn't that right?
Arno H. Denecke: That's -- that's --
William J. Brennan, Jr.: But if he can't establish negligence, he might take advantage of this private insurance.
Arno H. Denecke: That is in essence what the situation is. And of course that is the reason also why this is somewhat difficult for private insurance coverage to -- to stay in the State there because it's a -- they're subject to the verdicts rather than compensation benefits.
Hugo L. Black: Am I correct in thinking that the counsel for the State and for this Board has said it that there is no right to sue under the law? If you -- for compensation, if your -- the employer has rejected it?
Arno H. Denecke: I don't understand them to have so assert it, Mr. Justice.
Hugo L. Black: They could sue under the Act?
Arno H. Denecke: They could -- no, Your Honor, they could not sue under the Compensation Act. They sue on the -- on the contract insurance.
Hugo L. Black: What you have is a situation where an employer wants to -- is advantage.He has a right like -- like anybody else provided by insurance against any prospects or suits that are filed against him for negligence or anything else. That's what you're saying, isn't it?
Arno H. Denecke: Well, Mr. Justice, I think it goes beyond that -- and that is -- that -- that he has provided and employers generally do provide.
Hugo L. Black: But does the statute say that he can provide it that way?
Arno H. Denecke: No, Your Honor, this is -- this is beyond the statute.
Hugo L. Black: So, it's just a volunteer thing on his part and if he decides, he can make more money that way or to cost him less, why, he buys his insurance.
Arno H. Denecke: And as the -- as the Oregon Committee pointed out, Mr. Justice, generally, the efficient employers as -- so far as safety worker is concerned may withdraw and take the coverage under private companies. If I may ask the Court's indulgence to go into the history of this matter very briefly, I think it may be of some benefit in understanding the problem at least as the respondent sees it. This Court, if I may go back, the grant of admiralty power, and I use power rather than jurisdiction, is found of course in the -- the judicial article of the Constitution regards to all cases involving admiralty and maritime. It's also found in the grant of power concerning commerce between the States and among foreign countries and also among the -- the grant of all other powers. Now, it -- it was not until Southern Pacific versus Jensen in 1917 that the conflict between the States and the Federal Government came to focus on this particular point. And looking at Jensen just a moment, not in regard to compensation laws but generally, the two dissenting justices are the two justices that wrote the dissents in the Jensen case, those were Justices Holmes and -- and Mr. Justice Pitney, both were the opinion in 1917 that in state courts, the State was free to apply state laws and did not have to apply any admiralty laws if -- even if the event happened on navigable waters. The majority in that case held, and again, I'm leading out compensation laws, the majority in that case held that anything concerning navigable water, anything concerning maritime that there -- the Federal Government was supreme in that regard and that because of this supremacy, the State Workmen's Compensation Law of New York could not apply. Now, the Jensen decision, as the members of this Court are so well aware, has certainly been blunted. However, this Court repeatedly reiterates in its decisions the fact that in matters of maritime, the Federal Government is supreme and state law cannot be applied. Now, as the Court so well knows, this matter was wilt at the way after Southern Pacific versus Jensen. And courts, this Court as well as other courts held that even though it did occur on navigable waters, in the particular instance of workmen's compensation that the Federal Government was not necessarily supreme simply because the injury or death happened to occur on navigable waters. And then the Longshoremen's and Harbor Workers' Act was passed which of course gave the -- or was a federal statute covering injuries on navigable waters. Even after the Longshoremen's and Harbor Workers' Act, this Court as well as other courts said, “Well, even though it happened on navigable waters, still for various reasons, State Compensation Acts could apply." Then, because an injured workman, it was getting impossible to tell where his remedy was.Was it in the state or was it federal?The same thing was true of employers. So, this Court in the Davis case in 1942, in an effort to solve this problem of which compensation act applied, solve it for the employees benefit and for the employers benefit instead of leaving the line as Congress drew it under the -- drew it under Longshoremen's and Harbor Workers' Act set up a zone.And said in this zone, either state workmen's compensation or federal workmen's compensation is possible. Now, the Court, I don't think, attempted to say that that was a legally logical answer but it did point out that it did solve a very definite problem in supplying compensation benefits to employees and at the same time giving some benefit to their employers. Now, if the respondent understands the Davis case, the thread that the respondent sees in that case is if the only Act which would bring this under maritime and admiralty jurisdiction is the fact that it happened on navigable waters, if that's the only thing, then there's nothing wrong with defying State Workmen's Compensation Acts. On the other hand, if there is something else in addition to the fact that it happened on navigable waters, if there is something else, then the Davis case cannot apply.
Hugo L. Black: Why?
Arno H. Denecke: Excuse me, Your Honor.
Hugo L. Black: Why? Wouldn't it be just as uncertain, if there were other facts to be considered? What facts ought to be considered? Who would know?
Arno H. Denecke: Well, I think --
Hugo L. Black: How could you ever have any certainty?
Arno H. Denecke: I think, Your Honor, if I may go into another line of cases which -- along this same point, I -- I would like to attempt to answer, Mr. Justice.
Hugo L. Black: Yes.
Arno H. Denecke: But I -- I've gotten this -- I thought I got this guidance from some other cases of the Court. This Court has held in other cases where an injury occurred on -- on navigable waters. This Court has held the fact that it occurred upon navigable waters alone made it a maritime tort. And this Court has said, if it's a maritime tort, there is federal supremacy and the Court cannot change the federal law in this regard. Now, I'm referring particularly to three cases of the Court which I think have been within the last six, seven, eight years. The first case in point of time was the Garrett case, now, that was a seaman's case, true, but the question there was what -- was who had the burden of proof in proving the validity of a seaman's -- of a release taken from a seaman? Now, the Court in that case said, “This happened on navigable waters, also, of course, it was brought under the Jones Act.” But the Court stressed the fact that this was a maritime matter and therefore, the state law, on the burden of proof in a release, could not apply that it was necessary to apply the maritime law, that applied customarily in seaman's case that the employer had the burden of proof of proving that this release was taken free from any fraud. Then I think a more important case on this subject, more important than this particular regard not because of the nature of the case was Pope & Talbot versus Hawn. Now, in that case, a carpenter was onboard the ship, went onboard the ship to make some repairs. Now, the ship was in Pennsylvania, in -- in a harbor in Pennsylvania, and the carpenter was injured by something alledgedly wrong with the ship and he sued the ship. Now, this was not a Jones Act case, he was a -- a ship repair man and was suing a ship for a -- I'll call it a maritime tort. He brought the suit in the law side of the federal court or perhaps it was removed to the federal court. In any event, it was on the law side in the federal court. This -- and the question before this Court, one of the questions was, “Will the Pennsylvania law of contributory negligence apply which would bar Mr. Hahn or will the general admiralty law of -- contributory negligence is merely a mitigation, will that apply?” Well, this Court held an unmistakable language that if the tort occurs on navigable waters, it's a maritime tort and the state law can have no application. It must be federal law. Then this Court in the last term, I believe it was in the McAllister case, when the question was when a seaman sued for both unseaworthiness and under the Jones Act and the question was, would the state statute of limitations on unseaworthiness, would it apply? If it did, the plaintiff would have been barred because it was brought after the two years, which I think was the Texas statute. This Court again held that this having occurred on water was a maritime tort and the state law could have no application. Now, it appears to us, and this, Mr. Justice Black, is an attempt --
Hugo L. Black: Did --
Arno H. Denecke: -- somewhat.
Hugo L. Black: -- did he, with those cases, say that no state law could ever have any application?
Arno H. Denecke: No, Your Honor, the -- the Pope & Talbot versus Hawn stated that the state law could supplement. I believe that was the -- the word that the Court used.
Hugo L. Black: And Moore and -- Moore and McCormack made no such statement as that (Voice Overlap)
Arno H. Denecke: No, I don't believe it did, Your Honor.
Hugo L. Black: But what was behind that was the Knickerbocker Ice doctrine, there's a difference, isn't there, between supremacy of the law, the Knickerbocker Ice doctrine that even though Congress or the Government wants to leave the State's freedom and enforce their own law that they can't do it under the Constitution? That's the difference, isn't it? The Knickerbocker Ice case, in which was a part of the Jensen line, went further than Jensen, knocked out a -- a law of a State on compensation on the ground that a State -- Congress couldn't even agree for a State to have a compensation law, and the Federal Government couldn't agree that it is exclusive.
Arno H. Denecke: That's correct.
Hugo L. Black: But I don't think any of the cases you cited, unless I'm wrong, and I happen to have written the two as you just said it, if they did indicate that there could be no state law enforceable in that field, the -- I didn't know it.
Arno H. Denecke: Your Honor, I -- I -- the case did not go that far. Your Honor used the -- the language there and I -- I can't put my -- in a --
Hugo L. Black: But it's something like it, as I understand it, it was something like the doctrine of interstate commerce that they have -- the State can be left free as it was in the old politics cases. It was pointed out in that ancient case, States had been doing something in interstate commerce all through the years and if it didn't conflict with the law of Congress or the Constitution itself but they were free to do it. I don't see where you get the idea that those cases would bar Oregon from having a compensation law whatever the Knickerbocker Ice Company case might be, if it was still the law.
Arno H. Denecke: Yes, Mr. Justice. If I may presume --
Hugo L. Black: Yes.
Arno H. Denecke: -- that same line, I think --
Hugo L. Black: I want to because I -- I'm interested -- greatly interested in your argument.
Arno H. Denecke: If, and I have tried to think of some difficulties which would arise if this Court would pronounce that the -- that this would reverse the Supreme Court of Oregon and I obviously was not able to think of all of them but some -- some of the difficulties, and when I say difficulties, they are definitely difficulties of legal logic here. For example, this same Oregon Workmen's Compensation Act, if we can use it and it's not quite as -- well, assuming that in this same body of water here, there was a general contractor and a subcontractor, both not rejecting the Act but contributing to the state fund and those -- and a workman was injured on premises that were jointly controlled by this general contractor and the subcontractor, and it is happened on -- injury occurred on navigable waters. Now, if Oregon law is going to be applied, when this injured workman who's employed by the subcontractor sues the general contractor, the Oregon Workmen's Compensation Law says he can't bring a suit because it has a provision in there that employees on premises under the joint supervision control of two different employers, both of them have paid into the Act, why, then the suit is not maintainable under the Oregon Workmen's Compensation Act. So, the question then if such a matter should ever raise this Court would be, can the Oregon Workmen's Compensation Law be applied in one case? And in this particular case, which I attempted to set up, the hypothetical would not be applied.
Hugo L. Black: Well, unfortunately, they don't have that --
Arno H. Denecke: I --
Hugo L. Black: (Inaudible)
Arno H. Denecke: I understand that, Your Honor, but I -- I did think it was of some importance to show the difficulties that may occur, one other possibility --
Hugo L. Black: You mean the logical difficulty.
Arno H. Denecke: I -- I understand, Your Honor, yes, the logical difficulty.
Hugo L. Black: As I understand the Davis case, it was written on the premise perhaps that not logic but experience has been the life of the law. We were confronted with a situation where people didn't know how to proceed. And we just indicated that when one have of them got jurisdiction in that “twilight zone” case was brought there, it could proceed.
Arno H. Denecke: If I may follow that --
Hugo L. Black: Yes.
Arno H. Denecke: -- thesis, Mr. Justice, the Davis -- in the Davis case, it was pointed out by, I believe, Mr. Justice Whittaker, the choice there was between no remedy or a remedy of suing as an employer who had failed to subscribed to the Longshoremen's and Harbor Workers' Act or Washington Workmen's Compensation. So that in there, it may have been that a contrary decision would have meant that this widow would never have received anything, compensation or otherwise. Now, in this particular instance, there is no question but that Mr. Hahn, at the time of his injury and now -- and for one year after the termination of this lawsuit, in the event that the Court affirms the Oregon court will be eligible to receive compensation under the Longshoremen's and Harbor Workers' Act. He has a -- he has compensation and he always could have had compensation. But relying upon the Davis case now, he has chosen to gamble and attempt to get a jury verdict which would substantially exceed the compensation which have him under the -- under the Longshoremen's and Harbor Workers' Act.
William J. Brennan, Jr.: Well, the question that Justice Stewart put earlier, what about the finding of navigable waters? Would that be res judicata in a proceeding if you would have bring it under the Longshoremen's Act?
Arno H. Denecke: Well, I would think so, Your Honor, and -- and I realized that this is completely extra judicial here but I -- there's never been any question raised and -- but his eligibility for longshoremen's and harbor workers' compensation.
Hugo L. Black: There's a plenty of objections raised that if it's covered by the State, it can't be covered by, isn't it? If it's covered by the State, can -- can the man get protection in the Longshoremen's Act? Does it say anything about that?
Arno H. Denecke: No, Your Honor, it doesn't. But if I -- if the Court needs any assurance that this -- and -- that this man is going to receive that this Court affirms the Oregon court going to receive compensation under the Longshoremen's and Harbor Workers' Act. And as the -- as I'm sure the Court knows the -- that compensation, he doesn't even have to make a claim for it until one year after this litigation is terminated.
Charles E. Whittaker: (Inaudible)
Arno H. Denecke: Yes, thank you, Mr. Justice, I -- I didn't --
Charles E. Whittaker: (Inaudible)
Arno H. Denecke: I would think it would be res --
Hugo L. Black: Why would it be? Why would it be conclusive in another case should the federal courts?
Arno H. Denecke: Pardon, Your Honor?
Hugo L. Black: Why would it be conclusive in another case in the federal courts?
Arno H. Denecke: Well, it's between parties and -- and privilege --
Hugo L. Black: What parties before the administrative agency?
Arno H. Denecke: Well, Your Honor, even though I don't think under the Longshoremen's and Harbor Workers' Act, Ross Island would be a party. Certainly, the insurance company is a privity of Ross Island Sand & Gravel Company.
Hugo L. Black: They've had a litigation in which the Court cited that Oregon law doesn't cover.One of its reasons is that this was navigable water. And you think if the United States administrator of Employers' Compensation Act would be bound by that finding or would they have a right to hear evidence of their own?
Arno H. Denecke: Well, Your Honor, I -- I would think that they would be bound. I would think that we would --
Hugo L. Black: I hadn't suspected that until --
Arno H. Denecke: Pardon, Your Honor?
Hugo L. Black: I hadn't suspected that before (Voice Overlap) --
Arno H. Denecke: May I -- may I go this that we would be estopped, and I'm using that in a rather loose sense, or barred from urging that the waters were not navigable. I suppose that the Deputy Commissioner administering the Longshore Act would still, if he so desired, could -- could hear testimony on it. Now, I'm -- I'm not certain (Voice Overlap) --
Hugo L. Black: It needed to do so, wouldn't it, if he had doubt about it?
Arno H. Denecke: I'm not --
Hugo L. Black: It's not -- it's not litigation. It's -- it's not in the nature of litigations (Inaudible) administrative matter whether use judgment feel whether they don't want to be tangled up in the technicalities of the law.
Arno H. Denecke: Well, Your Honor, carrying one step further, if I may, Mr. Justice, suppose if the Deputy Commissioner administering the Act found that the waters were not navigable and then the matter were appealed from that decision to the appropriate Federal District Court, I would think there that the matter would be res judicata even if it were not before the Deputy Commissioner.
Hugo L. Black: They take it overrule the Commissioner on the ground that he failed to decide what the -- what the -- one of the grounds that the State based its conclusion on.
Arno H. Denecke: I think that would be possible, Your Honor. In any event, I -- I don't see how there could be any question here and I'm -- this a little side, Mr. Justice Brennan, from your question, but I don't see, as a matter of fact, how this could be anything but navigable because it was, as a matter of fact, navigated and as far as the waters of the United States, this area connected up with the Columbia River which connects with other States and which connects with foreign countries. So, as a matter of fact, I don't see how it would be possible to hold other than these were navigable waters in the United States.
Hugo L. Black: But suppose it did, how could that ended? Before the -- under the Jensen case and under that doctrine, the Court had held that even one of the things occurred on navigable water, whether they look at the instance, see how local they were and how non-local they were, and how much by reason of the locals, the -- the situation it would interfere with the international aspects of the maritime law, it -- it's far more than just a mere question of navigability under those cases. What we held was, that the Congress acted on the basis the Jensen doctrine in that line of cases would decide the matter and nobody could tell where it was. And as I recall it, one of the reason was not merely that a man might be able to file a suit later but he'd already be put to the expense by making a bad guess with the cause in the lawsuit where neither he nor anybody else could predict whether the State or the Federal Government would decide he was within or without the laws.
Arno H. Denecke: Mr. Justice, as I understand the situation and I think I do on this particular point here, the Deputy Commissioner will never, in the even this Court affirms the Oregon court, this -- the Deputy Commissioner will never see this case simply because as the -- the Act is itself goes into effect automatically. We pay, we, the insurance payer here, pays Mr. Hahn. And the Deputy Commissioner in this case and in all other cases does not see the case unless either insurance carrier controverts the thing the compensation or either the employee or the insurance carrier disagree about the amount of and time of compensation. So, the -- if it is of any assistance, I can give my personal assurance that the compensation would be paid and I -- and I don't -- that has never been an issue in the case.
Hugo L. Black: What about the cause?
Arno H. Denecke: The cause of this proceeding, Your Honor?
Hugo L. Black: Yes.
Arno H. Denecke: Your Honor, I would think we would be bound to make such a claim.
Hugo L. Black: Neither with us. What I meant was if one of the difficulties of the quagmire that the situation put a man in, he might go to all the expense, go on to the highest court of the state of the nation and then have it held when he got there, that he had gone into the wrong court and puts all that expense in trouble and all that loss of time. So, your statement that you would see that he got compensation, doesn't settle it. The -- the problem that we saw would be continued if we didn't adopt some kind of rule to protect from the dilemma that the parties found themselves, both the employer and the employee.
Arno H. Denecke: Mr. Justice, in a case such as ours here, it is not a dilemma because the employee from the very beginning in a case such as ours can receive compensation under the Longshoremen's and Harbor Workers' Act. If -- if he has a dilemma --
Hugo L. Black: Suppose you oppose?
Arno H. Denecke: Pardon Your Honor?
Hugo L. Black: Suppose you oppose that? Suppose you went to him and said he couldn't be paid there.
Arno H. Denecke: Well, then, Your Honor, he would -- he would have to take this up with the Deputy Commissioner, and the Deputy Commissioner of course and among his award if he found that the employer and the insurance carrier was wrong, why, then, he would award a payment of at least a part of the cost. And I'm not saying, Mr. Justice, that it completely compensates the (Voice Overlap) --
Hugo L. Black: And then that could be appealed?
Arno H. Denecke: That's correct, Your Honor.
Hugo L. Black: So it's not merely a question, it is automatically get his money. I -- I didn't think it was, maybe it is.
Arno H. Denecke: It's not if the insurance carrier controverts that -- that fact, Your Honor.
Hugo L. Black: That's what I thought. I thought maybe I misunderstood.
Arno H. Denecke: No, I -- I didn't mean to --
Hugo L. Black: Yes.
Arno H. Denecke: -- to mislead the Court. One other feature which I would like to dwell very briefly on, two other features, if I may, first of all, as it been brought up in the argument here, one of our contentions is that if the petitioner were allowed to prevail in this suit, he is doing it at least partially on the basis of the Oregon Employer's Liability Act and the Oregon Employer's Liability Act imposes a standard, in fact is very different than the admiralty law employed in the ordinary maritime tort. Now, there are several difficult -- differences and the -- both the Ninth Circuit Court of Appeals and the Oregon Federal District Court have held that suits under the Oregon Employer's Liability Act may not be maintained when it is for a maritime tort. One of the differences, and as I said there are several, one is that the Oregon Employer's Liability Act imposes the standard of that the employer must use every device, care and precaution and then it has some -- some additions on to that.But it is our belief based upon these and other judicial decisions of inferior courts that the application, the Oregon Employer's Liability Act would not be permitted in the maritime tort simply because it would do as this Court has said in other kinds of cases involved in maritime torts destroy the uniformity if necessary. Thank you.
Robert Y. Thornton: May it please the Court. I wanted to just mention briefly Mr. Denecke's argument concerning a suppose conflict between this case and the Pope & Talbot versus Hawn, Garrett versus Moore-McCormack and the McAllister case. Now, those cases are all cases where state law attempted to take away admiralty rights. In this case, no one is trying to deprive anyone of anything. State law here isn't trying to take away any admiralty rights and all the court said in those cases, as I understand it is that where state law conflicts with established admiralty rights or attempts to deprive a person of those rights that the federal law prevails. Now, obviously, there is no conflict here because in the -- the Garrett case and the Davis case were both decided the same day, and the opinions were written by the same justice. And the Davis case merely holds that where you have the “twilight zone” of course and you could -- you can go either way, you can either go for a federal or a state remedy. So obviously, there's no conflict. Now --
Potter Stewart: Of course, the Jensen case wasn't the case where the state law was trying to take away something from admiralty, it was this -- it was the opposite wasn't it? The Jensen case.
Robert Y. Thornton: The Jensen case was a (Voice Overlap) --
Potter Stewart: For a case in which the State was trying to give something that admiralty hadn't given, isn't that right?
Robert Y. Thornton: That's right. And of course, that was a Workmen's Compensation Law --
Potter Stewart: Yes.
Robert Y. Thornton: -- which this Court has now decided can be applied by a State --
Potter Stewart: Yes.
Robert Y. Thornton: -- in the “twilight zone”. So, actually, the -- the Jensen case, the old basis of it is -- is gone, you might say, because those cases can be [Laughs] -- those can be applied now. However, you want to look at the -- the whole basis of the Jensen case which is a workmen's compensation decision is -- is now been wiped away. Mr. Denecke mentioned in his argument here, this private insurance, and I think it caused some confusion with the Court and -- and I want clear it up as much as I can, this private insurance, there's -- there's nothing in the record on whatsoever. The record is completely silent about it, and it wasn't mentioned until we got into this Court. We went through the trial court, we went through the State Supreme Court and finally when we got into this Court, this private insurance was brought up by Mr. Denecke. I think in -- in answer to our contention that Ross Island Sand & Gravel Company should be -- should be held responsible in this case under the -- under the Oregon Act because it would hurt the enforcement of Workmen's Compensation Laws if they were not held. So for the first time it was brought up in this Court and they want this Court to understand that they have a private policy of so-called workmen's compensation insurance. Now, as I say there's nothing in the record on it whatsoever. There's nothing in the record on it that Mr. Hahn even knew about it or there was never offered to him. And they set out in their brief a policy of workmen's -- a private policy of insurance, and I think the inference is or they want this Court to understand that that is their policy. Now, this is completely outside the record. Normally, I wouldn't mention it except the Court here seemed to be interested in it and I did point out in the brief, in our reply brief starting at page 10, to the end of the brief, how this private so-called policy of insurance is nothing like workmen's compensation at all. To begin with, it has no standing under the law whatsoever. And if the employer rejects the Compensation Act, they are held responsible under the law of negligence whether they have one of these policies or not. It's a voluntary act on their part. Now, the quality of this insurance, this so-called compensation insurance is well illustrated by paragraph 16 of that insurance which provides that a simple agreement between the insurer and the employer will cut the injured employee off without one cent. In other words, all the -- all that has to be done is the insurer and the employer agrees that this fellow gets nothing and he gets nothing. Now, what a -- what a whip to require an employee to take a smaller inadequate award in a situation like that, all they have to do is agree he'll get nothing and he has no rights. I think that answers the questions of one of the justices asked as to whether an action of law can be maintained against the insurer or the employer under one of these policies. Furthermore, in order for the employee to get any rights at all, he must give a full release. In other words, he has to sign a release to the insurance company before he's paid anything, that's Provision Number 14 (e) of this policy. Now, if he asked to sign a release before he gets any benefits or before he is in entitled to anything, how can he bring an action under the policy? Obviously, he can't. The policy provides that it can be canceled by the insurer or the employer anytime on 10 days notice. Of course, in Workmen's Compensation, under the Workmen's Compensation Law, he's entitled to it at all times and even if the employer has not complied with the Act by putting -- paying the premiums.
Speaker: (Inaudible)
Robert Y. Thornton: He cannot sue under the policy unless he first executes a release.
Speaker: (Inaudible)
Robert Y. Thornton: Oh, yes, if he executes a full release to the -- to the insurer, then he can bring an action -- no he can't even then, Your Honor, no he can't even then. He doesn't get any workmen's compensation benefits unless he executes the release and no action can be brought under the policy at all. Does the policy provides that if there's any dispute, there should be arbitration and he has to pay half the cost of the arbitration and the policy provides nothing for aggravation. And under the Oregon law, he has two years if there's aggravation to bring an action for aggravation to get a jury trial. This type of a policy was discussed in the case of Whitehead versus Montgomery Ward, 194 Or. 106 at page 130. In which the Oregon court unfavorably compared with the provisions of one of these policies with the Oregon Compensation Act. That case significantly was not cited by the respondent.
Hugo L. Black: 194 Or. 130?
Robert Y. Thornton: 194 Or. 130, Your Honor, it's cited at page 14 of our reply brief. Another example is case of Pease versus Roseburg Lumber Company which is 206 Oregon, cited in our brief here, 206 Or. 56 -- 658, which there was a policy for only $5000. Now, Mr. Lafky here is telling about some of these cases that was for one accident. It's -- I mean for one entire incident. Mr. Lafky was talking about cases where they incurred liability of $100,000 on one accident. This policy in the Roseburg Lumber Company case would be totally inadequate in a situation like that. The policy they set out here in the brief is $50,000 and $100,000. In other words, 50 for one person, 100 for one accident. You have a -- you have a catastrophe. It wouldn't begin to cover the injuries and liability. Now, respondent's attorney states in argument here that Hahn can get longshore benefits. I think this Court recognized when it set up the “twilight zone” doctrine that which ever way one of these employees went that is the way that he was part. If there's -- there's no assurance in this case, Mr. Denecke says he hasn't give the personal assurance now that this will be paid. But whichever way this employee had -- had done, there's no assurance that they wouldn't have said, “He should have gone the other way.” That's the reason for the “twilight zone”. Now, the question isn't -- isn't in this case which would be the best remedy for Mr. Hahn to have. The question in this case is, can the State of Oregon constitutionally apply its laws in the “twilight zone” in this situation? That's the question for this Court to decide. And unless it's unconstitutional, under the United States Constitution for Oregon to apply its laws, then Mr. Hahn is entitled to recover.
Potter Stewart: Do you understand that the “twilight zone” doctrine applies and applies only in the -- in an -- where are the facts of the accident make it doubtful? Whether or not the -- the -- this was an event over which the State constitutionally had jurisdiction or whether on the other hand, this was something covered by the federal longshoreman?
Robert Y. Thornton: As I understand it, yes. This Court was -- took notice of all of the cases that --
Potter Stewart: There are --
Robert Y. Thornton: -- were being --
Potter Stewart: -- many such cases.
Robert Y. Thornton: -- that were being fought, that's right.
Potter Stewart: Yes.
Robert Y. Thornton: And this Court finally said, “This has got to stop, just trying to draw a sharp line of distinction between every case. It's not necessarily under the Constitution. So, we're going to set up the “twilight zone” where there is an area of doubt as to which law this man could come under.”
Potter Stewart: Because of the -- the ambiguous facts of the accident, isn't that right?
Robert Y. Thornton: Because if the --
Potter Stewart: If -- if the injury occurred under such circumstance.
Robert Y. Thornton: Because of the ambiguous facts of the accident also because of the ambiguous questions to whether or not it would be constitutional, whether it would interfere with the uniformity of maritime to apply state law in this particular case.
Potter Stewart: Well, then, that's the result, but do I understand you to say or agree that -- that this “twilight zone” doctrine applies only in cases where there is some doubt as to -- as to whether state or federal jurisdiction attaches?
Robert Y. Thornton: Yes, in the area of doubt where -- where its questions, as to which -- which remedy a -- a man should have where the -- where the man could go conceivably either way.
Potter Stewart: Based on the facts under which he was injured or killed?
Robert Y. Thornton: Based on the facts of the case under which he was injured. And that it doesn't matter whether it -- it's a question of whether federal law or state law will apply in that situation rather than to try to draw a sharp line of distinction. You allow the -- if a man chooses federal law, that's fine. If he chooses state law, that's fine. As Justice Frankfurter said, it may be illogical as a constitutional doctrine but that is -- that is the only sensual way to solve this thing unless the Court should decide to -- to put the Jensen case out which this Court -- the Court decided not to do.
Hugo L. Black: And that would make no difference under our holding, would it, unless we overruled the Davis case (Inaudible) Well, if the Jensen case should later be overruled or not, because those cases held that the Congress had adopted the rule of the Jensen case, it had said -- left some considerable state of uncertainties, the boundary between the two.
Potter Stewart: That's right. That's correct, Your Honor.
Potter Stewart: In other words, overruling the Jensen case at this late day in this area or even at the time that Davis was decided, overruling the Jensen case wouldn't -- wouldn't have solve the problem, this particular problem, is that right?
Robert Y. Thornton: Well, I think that's what Mr. Chief Justice Stone want to do in that Davis case. He -- he wanted to just get rid of the Jensen case altogether, but this Court, I believe --
Potter Stewart: But Congress had acted in reliance on it and --
Robert Y. Thornton: And acted in reliance on it. And so rather than take such drastic action, it was better to set up this “twilight zone” where there was some doubt as to -- as to Mr. Justice Black points out as to -- as to just what Congress meant or just which remedy was proper. Thank you.