Opinion ID: 604125
Heading Depth: 2
Heading Rank: 2

Heading: Applicability of the Longshore and Harbor Workers' Compensation Act

Text: 15 Appellant argues, in the alternative, that the United States is not immune because the federal Longshore and Harbor Workers' Compensation Act preempts Puerto Rico's rule of statutory employer immunity. The district court applied Puerto Rico law because appellant's complaint stated its claim against the United States under the Federal Tort Claims Act (FTCA). The complaint expressly invoked the jurisdictional provision of the FTCA, 28 U.S.C. § 1346, without mentioning any other federal or state law. Under 28 U.S.C. § 1346(b), the district court has jurisdiction over actions against the United States for money damages: 16 for injury or loss of property, or personal injury or death caused by the negligent or wrongful act or omission of any employee of the Government while acting within the scope of his office or employment, under circumstances where the United States, if a private person, would be liable to the claimant in accordance with the law of the place where the act or omission occurred. 17 28 U.S.C. § 1346(b) (emphasis supplied). The district court applied the law of the place where the act or omission occurred, Puerto Rico, and reached the conclusion, affirmed supra, that under Puerto Rico law the United States was immune as a statutory employer. 18 Appellant concedes that he sued the United States pursuant to the FTCA and that the FTCA mandates application of local law. However, he argues: (1) the Longshore and Harbor Workers' Compensation Act (LHWCA), 33 U.S.C. § 901 et seq., also applies to this case, as extended by the Defense Base Act, 42 U.S.C. § 1651 et seq.; (2) the LHWCA exclusive liability provision, 33 U.S.C. § 905(a), entitles a contractor to statutory employer immunity only if the subcontractor actually fails to secure payment to the injured worker; (3) the subcontractor here, Vigilantes, did not fail to secure compensation payments for appellant; (4) therefore, under the LHWCA, the United States is not immune from appellant's suit for damages; and, (5) since the LHWCA is federal law, it preempts the inconsistent PRWCA rule and thus should have been applied by the district court. 19 Appellant's preemption argument presupposes that, because his accident occurred on a naval base in Puerto Rico, the Defense Base Act, 42 U.S.C. § 1651 et seq., applies, mandating application of the Longshore and Harbor Workers' Compensation Act. See 42 U.S.C. § 1651(a). 6 This supposition may or may not be so. It can be argued that, for the narrow and specialized purposes of the Defense Base Act, Puerto Rico is not a Territory or possession outside the continental United States as those terms are there intended to be understood. 7 We need not, however, decide this difficult question in order to resolve the present appeal. Even assuming the Act applies, and appellant falls within it, appellant cannot prevail. Hence, for purposes of this case only and specifically without deciding the issue, we shall assume that the Defense Base Act applies to military bases in Puerto Rico. We shall also assume, again solely for purposes of argument and without actually deciding, that appellant could show on the particular facts of his case that he satisfied all other requirements of the Defense Base Act and the pertinent provisions of the LHWCA. 8 20 We proceed, therefore, on the supposition, arguendo, that Vega-Mena's accident occurred within the concurrent jurisdiction both of the Longshore and Harbor Workers' Compensation Act and of the Puerto Rico Workers' Compensation Act. See Sun Ship, Inc. v. Pennsylvania, 447 U.S. 715, 717-19, 100 S.Ct. 2432, 2434-36, 65 L.Ed.2d 458 (1980) (reviewing history of concurrent jurisdiction of state workers' compensation systems and LHWCA). When both the LHWCA and a state act apply concurrently, the injured worker is free to apply for benefits under either system. Id. at 724, 100 S.Ct. at 2438. When laborers file claims under the LHWCA, they are compensated under federal standards. And workers who commence their actions under state law will generally be able to make up the difference between state and federal benefit levels by seeking relief under the Longshoremen's Act, if the latter applies. Id. 21 That appellant could have applied (as we assume arguendo ) for benefits under the LHWCA, does not mean that any tort claim he may have against a third party is a federal cause of action. Though appellant's injury occurred on a naval base, he has neither alleged nor does he or could he argue that he has a federal maritime cause of action against the United States. The LHWCA itself clearly creates no cause of action against the United States as the allegedly negligent third-party contractor. Griffis v. Gulf Coast Pre-Stress Co., 850 F.2d 1090, 1091 (5th Cir.1988); Ward v. Norfolk Shipbuilding & Drydock Corp., 770 F.Supp. 1118, 1121 (E.D.Va.1991). The only cause of action for negligence against third parties expressly referred to in section 905 is that against vessels pursuant to 33 U.S.C. § 905(b). 9 Hence while section 905(a), and 33 U.S.C. § 933, provide that the LHWCA does not limit an injured worker's right to sue a third party, those provisions do not create, nor do they purport in any way to establish, the third party's liability for negligence. 10 The liability of a third party, other than a vessel, must arise under some federal or state law other than the LHWCA. Griffis, 850 F.2d at 1091; Ward, 770 F.Supp. at 1121-22. Here, the only cause of action against the United States is based on Puerto Rico negligence law as made applicable by the Federal Tort Claims Act. [W]hen state law creates a cause of action, the State is free to define the defenses to that claim, including the defense of immunity, unless, of course, the state rule is in conflict with federal law. Ferri v. Ackerman, 444 U.S. 193, 198, 100 S.Ct. 402, 406, 62 L.Ed.2d 355 (1979). Therefore, unless the statutory employer immunity rule of the PRWCA is in conflict with the LHWCA rule, in particular 33 U.S.C. § 905(a), under the circumstances of this case, the Puerto Rico defense to appellant's claim applies and, as held above, the United States is immune from appellant's negligence action. 22 After examining the precise scope of the federal and Puerto Rico rules, and keeping in mind the Supreme Court's admonition to avoid seeking out conflicts between federal and state regulation where none clearly exists, Huron Portland Cement Co. v. City of Detroit, 362 U.S. 440, 446, 80 S.Ct. 813, 817-18, 4 L.Ed.2d 852 (1960), we find no conflict in these circumstances between the LHWCA's exclusive liability provision and the Puerto Rico rule of statutory employer immunity. As explained in Part II.A. supra, under Puerto Rico's workers' compensation scheme all employers must insure their own employees and, in return, their liability for their employees' injuries is limited by 11 L.P.R.A. § 21 to workers' compensation payments. 11 L.P.R.A. § 21 provides: 23 § 21. Exclusiveness of remedy. When an employer insures his workmen or employees in accordance with this chapter, the right herein established to obtain compensation shall be the only remedy against the employer, even in those cases where maximum compensations and benefits have been granted in accordance thereof; .... 24 In shorthand, 11 L.P.R.A. § 21 entitles complying employers to immunity from damages actions by injured employees. In addition, a contractor is secondarily liable for the insurance premium payments for its subcontractor's employees when the subcontractor is not properly insured. 11 L.P.R.A. § 20. As interpreted by the Puerto Rico Supreme Court, this mutual obligation entitles contractors to the same immunity enjoyed by employers and so such contractors are deemed to be employers for the purposes of 11 L.P.R.A. § 21. They have so-called statutory employer immunity. This means that such a contractor can invoke 11 L.P.R.A. § 21 as a defense against claims by his subcontractors' injured employees. 25 Under the LHWCA, as under the Puerto Rico statute, an employer must secure the payment to his employees of the compensation payable under the LHWCA, 33 U.S.C. § 904(a), and in exchange is liable to injured employees only to the extent of the workers' compensation payments. 33 U.S.C. § 905(a). In contrast to the PRWCA, however, the LHWCA requires contractors to secure compensation for their subcontractor's employees only if the subcontractors are actually uninsured. 33 U.S.C. § 904(a). The more limited responsibility of contractors for their subcontractors' employees is mirrored by the limited immunity for contractors granted by 33 U.S.C. § 905(a): 26 The liability of an employer prescribed in section 904 of this title shall be exclusive and in place of all other liability of such employer to the employee, ... except that if an employer fails to secure payment of compensation as required by this chapter, an injured employee ... may elect to claim compensation under this chapter, or to maintain an action at law or in admiralty for damages on account of such injury or death.... For purposes of this subsection, a contractor shall be deemed the employer of a subcontractor's employees only if the subcontractor fails to secure the payment of compensation as required by section 904 of this title. 27 Thus, a contractor is entitled to so-called statutory employer immunity under section 905(a) only if the contractor is compelled by section 904(a) to secure workers' compensation for the subcontractor's employees because the subcontractor fails to do so and the contractor actually does secure the payment. Louviere v. Marathon Oil Co., 755 F.2d 428, 429-30 (5th Cir.1985). 28 Clearly, then, the statutory employer immunity provisions of the LHWCA and the PRWCA are different. Cf. Garcia v. Friesecke, 597 F.2d 284, 293 (1st Cir.) (explaining differences between Puerto Rico Supreme Court's interpretation of PRWCA, which grants immunity to contractors who require subcontractor to acquire insurance, and the former 1st Circuit interpretation of the PRWCA, which did not), cert. denied, 444 U.S. 940, 100 S.Ct. 292, 62 L.Ed.2d 306 (1979). It is far less clear, however, that they are in conflict. We think they are not. As we decided supra, the United States is entitled to immunity as an employer within the meaning of 11 L.P.R.A. § 20 against a Puerto Rico negligence action brought by this employee who was both insured, and has recovered compensation, under Puerto Rico's Act. Even assuming the United States would fail were it to try to invoke the statutory employer immunity created by section 905(a), 11 this shows only that the federal statute does not go so far as Puerto Rico's to bar third-party actions by employees who come within its own program. The LHWCA does not express disapproval of a state's affording a different or wider employer's immunity in the case of its own insureds. 29 Conflict is lacking because, although section 905(a) does not give the United States immunity from appellant's suit, neither does it take away the immunity separately created by Puerto Rico's workmen's compensation laws. The last sentence of section 905(a) seems crucial: For purposes of this subsection, a contractor shall be deemed the employer of a subcontractor's employees only if the subcontractor fails to secure the payment of compensation as required by section 904 of this title. 33 U.S.C. § 905(a) (emphasis added). On its face, section 905(a) limits the extent of immunity for contractors only for purposes of this subsection. That is, a contractor cannot invoke the first sentence of section 905(a)--which limits the liability of an employer who complies with 33 U.S.C. § 904(a)--as a shield against liability to employees of a subcontractor unless the subcontractor actually fails to secure compensation. Section 905(a) does not refer to or otherwise implicate immunities granted by other federal or state laws. In this case, the United States did not invoke section 905(a) as a defense against appellant's action. Instead, it found shelter in a Puerto Rico statute, 11 L.P.R.A. § 21. So, while section 905(a) does not confer immunity upon the United States here, neither does it facially prohibit the application of immunity created by Puerto Rico law. 30 Moreover, the legislative history of section 905(a) contains no evidence that Congress intended to preempt state-law rules of statutory employer immunity when the LHWCA and state acts have concurrent jurisdiction. Congress amended sections 4(a) and 5(a) of the LHWCA, 33 U.S.C. §§ 904(a), 905(a), to legislatively overturn the Supreme Court's decision in Washington Metropolitan Area Transit Auth. v. Johnson, 467 U.S. 925, 104 S.Ct. 2827, 81 L.Ed.2d 768 (1984). See H.R.Conf.Rep. No. 1027, 98th Cong., 2d Sess. 24 (1984), reprinted in 1984 U.S.C.C.A.N. 2734, 2774; 12 Griffis, 850 F.2d at 1091; Garvin v. Alumax of South Carolina, Inc., 787 F.2d 910, 916 (4th Cir.), cert. denied, 479 U.S. 914, 107 S.Ct. 314, 93 L.Ed.2d 288 (1986). The Supreme Court in Washington Metropolitan Area Transit had held that, under section 5(a) before it was amended in 1984, contractors were entitled to immunity as employers so long as they had not defaulted on their obligation under section 4(a) to secure back-up compensation for subcontractor employees, regardless of whether or not the subcontractor actually failed to secure compensation for its own employees. 467 U.S. at 936-40, 104 S.Ct. at 2833-36. Three months after the Court issued Washington Metropolitan Area Transit, Congress amended sections 4(a) and 5(a) to narrow the scope of section 5(a) immunity by making it available to contractors only where the subcontractor defaults in securing compensation and the contractor is obliged by the amended section 4(a) to secure it instead. See Longshore and Harbor Workers' Compensation Act Amendments of 1984, Pub.L. No. 98-426, § 4, 98 Stat. 1639, 1641 (1984). 13 31 We find no evidence in the legislative history, however, of an intent to supplant all state-law statutory employer immunity doctrines where the LHWCA and state compensation schemes have concurrent jurisdiction. See Garvin, 787 F.2d at 916-17. Congress expressly stated that the amendment's purpose was to change the rules governing immunity under the Longshoremen's and Harbor Workers' Compensation Act, the immunity afforded by Section 5(a) of the Act, and the definition of  'employer' for purposes of section 5(a). Congress did not mention state-created immunity or state law workers' compensation laws. Absent such evidence, we see no reason to find that Congress intended such a sweeping preemption of state workers' compensation laws, a change that would contradict the general presumption that the LHWCA supplements, rather than supplants, state compensation law where the two overlap. Sun Ship, 447 U.S. at 720, 100 S.Ct. at 2436. Because neither the text nor legislative history of section 905(a) support appellant's contention that it conflicts with Puerto Rico law in this situation, we find no preemption and thus affirm the district court's application of Puerto Rico workers' compensation law without regard for the LHWCA. 32 Our holding today is consistent with the decision of the Fourth Circuit in Garvin v. Alumax of South Carolina, Inc., 787 F.2d 910 (4th Cir.), cert. denied, 479 U.S. 914, 107 S.Ct. 314, 93 L.Ed.2d 288 (1986), which held that section 905(a) does not conflict with, and hence does not preempt, the statutory employer rule of South Carolina workers' compensation law, when both regimes apply concurrently and the injured worker brings a common-law negligence claim against a contractor. The Garvin court found that a contractor was entitled to immunity under South Carolina law and was not entitled to the immunity extended by section 905(a), as amended in 1984. 33 There is nothing in that amendment or its legislative history, however, to indicate a congressional intention to restrict the application of state created immunity of contractors in situations in which the state statute traditionally had been applied. 34 It was necessary, of course, for the Congress in the LHWCA to deal in some fashion with employer immunity. That statute has exclusive application in the District of Columbia and to most injuries suffered on the navigable waters of the United States. In those areas, the Congress was free to determine for itself under what circumstances a general contractor would be immune from tort actions by employees of a subcontractor, but nothing done in the Congress suggests that it intended to modify immunities provided general contractors by state workmen's compensation laws, when those laws are applicable.... 35 The South Carolina rule of immunity of a contractor in the position of [defendant] is different from that under the LHWCA, but not in conflict with it, for Congress has not purported to prescribe the immunity rules to be applied by states in actions brought upon state law claims. 36 Id. at 916-17. Because plaintiff had a state-law cause of action, the LHWCA immunity rule did not apply and hence did not conflict with the South Carolina rule. Id. Similarly, the Virginia Supreme Court held that where both the LHWCA and Virginia workers' compensation act apply to an injured worker who brings a state-law negligence suit against a contractor, the Virginia statutory employer immunity rule, which is also essentially the same as Puerto Rico's, is not preempted by section 905(a). McBride v. Metric Constructors, Inc., 239 Va. 138, 387 S.E.2d 780 (1990). 37 We recognize that under significantly different circumstances the question of whether the LHWCA preempts state-law defenses of statutory employer immunity might have a different answer. See, e.g., Gates v. Shell Oil, 812 F.2d 1509, 1513-14 (5th Cir.1987), cert. denied, 494 U.S. 1017, 110 S.Ct. 1320, 108 L.Ed.2d 495 (1990) (holding that the Louisiana statutory employer rule is inapplicable to a federal statutory claim under the Outer Continental Shelf Lands Act by injured offshore worker because it is inconsistent, within meaning of 43 U.S.C. § 1333, with the federal LHWCA rule); Ward v. Norfolk Shipbuilding & Drydock Corp., 770 F.Supp. at 1121-22 (applying LHWCA statutory employer rule instead of state-law rule where injured worker had a general [federal] maritime negligence cause of action against a contractor); Kramer v. Bouchard Transp. Co., 741 F.Supp. 1023, 1025-26 (E.D.N.Y.1990) (applying federal rule where LHWCA bar on indemnity actions between vessel owner and employer, 33 U.S.C. § 905(b), conflicted with state U.C.C. rule); see also Lewis v. Modular Quarters, 487 U.S. 1226, 1226-27, 108 S.Ct. 2886, 2886-87, 101 L.Ed.2d 920 (1988) (denying certiorari to 508 So.2d 975 (La.App.1987)) (White, J., dissenting, arguing that Supreme Court should have granted certiorari to settle the question whether the LHWCA preempts state-law statutory employer immunity rules). But the above cases are all factually distinguishable from ours, which fits squarely within the rules of Garvin and McBride.