Opinion ID: 194680
Heading Depth: 4
Heading Rank: 1

Heading: Except as herein modified, the

Text: provisions of the Longshoremen's and Harbor Workers' Compensation Act, approved March 4, 1927 (44 Stat. 1424), as amended, shall apply in respect to the injury or death of any employee engaged in any employment (2) upon any lands occupied or used by the United States for military or naval purposes in any Territory or possession outside the continental United States (including the United States Naval Operating Base, Guantanamo Bay, Cuba; and the Canal Zone); . . . . Section 1651 also makes the LHWCA applicable to employees of contractors and subcontractors on certain public works projects outside the continental United States. 42 U.S.C. 1651(a)(3)-(a)(5). 42 U.S.C. 1651(b)(4) defines continental United States as the States and the District of Columbia. -14- the narrow and specialized purposes of the Defense Bases 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 7. Appellant asserts without analysis that bases in Puerto Rico obviously fall within the definition of any lands occupied or used by the United States for military or naval purposes in any Territory or possession outside the continental United States. The question is not so simple, however. The Defense Bases Act applies to bases in any territory, but that term is not defined by the Act nor has appellant cited any cases interpreting it in that context. As we have noted before: The term territory does not have a fixed and technical meaning accorded to it in all circumstances, and thus Puerto Rico may be found to be included within one act whose coverage extends to territories of the United States and excluded from another. Americana of Puerto Rico, Inc. v. Kaplus, 368 F.2d 431, 436 (3d Cir. 1966), cert. denied, 386 U.S. 943, 87 S.Ct. 977, 17 L.Ed.2d 874 (1967). [W]hether Puerto Rico comes within a given congressional act applicable in terms to a 'territory,' depends upon the character and aim of the act. Puerto Rico v. The Shell Company, 302 U.S. 253, 258, 58 S.Ct. 167, 169, 82 L.Ed. 235 (1937). Garcia v. Friesecke, 597 F.2d 284, 293 (1st Cir.), cert. denied, 444 U.S. 940 (1979). Nor is it clear whether the Defense Bases Act can apply concurrently with local compensation acts. See 42 U.S.C. 1651(c) (making liability of employer under Defense Bases Act exclusive and in place of all other liability of such employer . . . to his employees (and their dependents) within the purview of this chapter, under the workmen's compensation law of any State, Territory, or other jurisdiction); Flying Tiger Lines, Inc. v. Landy, 370 F.2d 46, 51-52 (9th Cir. 1966). In Royal Indemnity Co. v. Puerto Rico Cement Corp., 142 F.2d 237 (1st Cir.), cert. denied, 323 U.S. 756 (1944), this court stated that the purpose of the Defense Bases Act was -15- 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 Bases 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 Bases Act and the pertinent provisions of the LHWCA.8 to provide the same relief to outlying territories, including . . . Puerto Rico, as the existing law affords employees in the United States and held that the Defense Bases Act applied exclusively and in place of the PRWCA. Id. at 239. How much of Royal Indemnity is still good law is unclear given the comprehensive evolution since 1944 of the law of federal and state compensation schemes and, in particular, the subsequent amendment of 3(a) of the LHWCA, upon which Royal Indemnity was based. See Simpson v. Director, Office of Workers' Compensation Programs, 681 F.2d 81, 88 (1st Cir. 1982) (questioning continued vitality of Royal Indemnity after Calbeck v. Travelers Insurance Co., 370 U.S. 114 (1962)), cert. denied sub nom. Bath Iron Works Corp. v. Director, Office of Workers' Compensation Programs, 459 U.S. 1127 (1983); see generally Lusson v. Carter, 704 F.2d 646 (1st Cir. 1983); Garcia v. Friesecke, 597 F.2d 284; 4 Arthur Larson, The Law of Workmen's Compensation, 89.10- .27(c) (1990). 8. Appellant has never applied for LHWCA benefits on the ground of entitlement under the Defense Bases Act, and thus it has never been determined by the Deputy Commissioner in the applicable United States Department of Labor Compensation District whether and to what extent he may in fact be eligible for such benefits. See 42 U.S.C. 1653; 33 U.S.C. 939; 20 C.F.R. pt. 702; AFIA/CIGNA Worldwide v. Felkner, 930 F.2d 1111, 1112-14 (5th Cir.), cert. denied, 112 S. Ct. 297 (1991) (describing procedures for making claims under LHWCA as extended by Defense Bases Act). On the other hand, -16- 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 (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. 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. 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 appellant has applied for, and has received, workmen's compensation benefits under Puerto Rico law. As we have already held, the United States is an immune statutory employer under Puerto Rico law. -17- 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 9. 33 U.S.C. 905(b) establishes a cause of action against vessels for negligence: In the event of injury to a person covered under this chapter caused by the negligence of a vessel, then such person, or anyone otherwise entitled to recover damages by reason thereof, may bring an action against such vessel as a third party in accordance with the provisions of section 933 of this title, . . . . 10. 33 U.S.C. 933(a) provides: (a) Election of remedies If on account of a disability or death for which compensation is payable under this chapter the person entitled to such compensation determines that some person other than the employer or a person or persons in his employ is liable in damages, he need not elect whether to receive such compensation or to recover -18- 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 (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. 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 (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 damages against such third person. -19- 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: 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; . . . . 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. 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), -20- 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): 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. 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). -21- 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 (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. 11. Whether the United States would not be federally immune is by no means clear on this record. To qualify for immunity, the United States would have to show that (a) Vigilantes failed to secure LHWCA compensation as required by section 904; and (b) the United States itself secured the payment of such compensation. The facts pertaining to these issues were not developed below. -22- 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. -23- Moreover, the legislative history of section 905(a) contains no evidence that Congress intended to preempt statelaw 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 (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; 12. The relevant portion of the Joint Explanatory Statement of the Committee of Conference reads: The Senate bill addresses several issues growing out of the liability of employers and third parties for damages or compensation. . . . The Conference substitute deals with the issues of overlapping and indirect liability and of exclusive remedy as follows: . . . . Third, the substitute addresses that issue of immunity in the situation where an employee of a subcontractor brings a third party action against the contractor for a work-related injury. The Supreme Court in Washington Metropolitan Area Transit Authority v. Johnson, 104 S.Ct. 2827 (1984), changed key components of what had widely been regarded as the proper rules governing contractor and subcontractor liability and immunity under the Longshoremen's and Harbor Workers' Compensation Act. The Conference substitute, in disapproving WMATA v. Johnson, achieves the following: First, the obligation of the contractor to secure compensation for -24- Garvin v. Alumax of South Carolina, Inc., 787 F.2d 910, 916 (4th Cir.), cert. denied, 479 U.S. 914 (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 the employee of the subcontractor is a contingent one, which is triggered only upon the failure of the subcontractor to secure compensation for its own employees. Second, the contractor remains amendable [sic] to suit by its subcontractors' employees in those instances where the subcontractor- employer has fulfilled its statutory obligation to secure compensation for its employees. Third, however, where the subcontractor defaults in securing compensation, thus triggering the contractor's obligation, and the latter fulfills that obligation, the contractor is deemed an employer for purposes of section 5(a) and therefore entitled to immunity from suit by the subcontractor's employees. Fourth, if the contractor utilizes a wrap-up insurance policy to provide insurance coverage for the benefit for satisfying the subcontractor's primary obligation to secure compensation, the contractor still remains amenable to suit by employees of the subcontractor; the contractor does not enjoy the immunity afforded by Section 5(a) of the Act. . . . WMATA, the conferees believe, does not comport with the legislative intent of the Act nor its interpretation from 1927 to 1983. The case should not have any precedential effect. H.R. Conf. Rep. No. 1027, 98th Cong., 2d Sess. 23-24 (1984), reprinted in 1984 U.S.C.C.A.N. 2734, 2773-74 (emphasis added). -25- 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. 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 We find no evidence in the 13. That amendment provided: Sec. 4. (a) Section 4(a) is amended to read as follows: Sec. 4. (a) Every employer shall be liable for and shall secure the payment to his employees of the compensation payable under sections 7, 8, and 9. In the case of an employer who is a subcontractor, only if such subcontractor fails to secure the payment of compensation shall the contractor be liable for and be required to secure the payment of compensation. A subcontractor shall not be deemed to have failed to secure the payment of compensation if the contractor has provided insurance for such compensation for the benefit of the subcontractor..