Opinion ID: 663087
Heading Depth: 2
Heading Rank: 6

Heading: The Legal and Legislative History of the Act

Text: 86 Before concluding, it will be valuable to demonstrate how the standards we have set forth interact with the other Scindia duties to implement the workers' compensation scheme Congress intended to erect with the Act. The confounding problem Congress confronted regarding liability to longshore workers suffering work-related injuries in their perilous trade was to apportion liability between the stevedore/employer and the vessel/contractor. Congress intended the 1927 Act (before the 1972 amendments) to institute a workers' compensation scheme, with its attendant advantages and disadvantages, see Ryan Stevedoring Co. v. Pan-Atlantic S.S. Corp., 350 U.S. 124, 140-41, 76 S.Ct. 232, 240-41, 100 L.Ed. 133 (1956) (Black, J., concurring), for longshore and other harbor workers, but Congress apparently gave little thought to the fact that longshore workers  'regularly work on premises (i.e., ships) owned by third parties (shipowners) which are temporarily relinquished to the employers (master stevedores).'  Hurst, 554 F.2d at 1242 (quoting GRANT GILMORE & CHARLES L. BLACK, JR., THE LAW OF ADMIRALTY Sec. 6-46, at 410 (2d ed. 1975)). 87 The implications of Congress' oversight were soon felt when the Supreme Court largely undermined the Act's scheme with three decisions: In Mahnich v. Southern S.S. Co., 321 U.S. 96, 100-04, 64 S.Ct. 455, 458-60, 88 L.Ed. 561 (1944), the Supreme Court expanded the seaman's claim against the shipowner based on the warranty of seaworthiness into a broad species of tort liability without fault, Hurst, 554 F.2d at 1242; in Seas Shipping Co. v. Sieracki, 328 U.S. 85, 99, 66 S.Ct. 872, 879-80, 90 L.Ed. 1099, reh'g denied, 328 U.S. 878, 66 S.Ct. 1116, 90 L.Ed. 1646 (1946), the Supreme Court applied the expanded warranty of seaworthiness to (many) longshore workers; and in Alaska S.S. Co. v. Petterson, 347 U.S. 396, 401, 74 S.Ct. 601, 604, 98 L.Ed. 798, reh'g denied, 347 U.S. 994, 74 S.Ct. 848, 98 L.Ed. 1127 (1954), the Supreme Court extended liability to encompass injuries sustained by a longshore worker on account of his or her employer's (the stevedore's) negligence. To ameliorate the great financial burden these decisions imposed on the shipping industry, the Court in Ryan Stevedoring Co., 350 U.S. at 133-34, 76 S.Ct. at 237-38, recognized a stevedore's implied warranty to perform its contract in a safe manner, a warranty entailing an agreement to indemnify the shipowner for liability it incurred by reason of the stevedore's negligent performance. 88 Another feature of the pre-1972 legal schema was that the employee could bring an action against the vessel although he or she had already recovered the statutory workers' compensation benefits, as a recovery under the workers' compensation portion of the Act did not bar an action against the vessel. See Derr, 835 F.2d at 492. To rectify the worker's double recovery, the stevedore's compensation carrier could demand reimbursement of the compensation benefits from the worker. See Kakavas v. Flota Oceanica Brasileira, S.A., 789 F.2d 112, 117 (2d Cir.) (Friendly, J.), cert. denied, 479 U.S. 853, 107 S.Ct. 186, 93 L.Ed.2d 120 (1986). Now the triangle was complete: the end result of these decisions entirely thwarted the purposes behind the Act. Under this anomalous and intolerable situation, Kakavas, 789 F.2d at 117, attorneys' fees aside, longshore workers could circuitously obtain full tort remedies against their employers and their employer's compensation carriers would get away scot-free (presumably lowering the stevedore's premiums). Hurst, 554 F.2d at 1243; Kakavas, 789 F.2d at 117; see Ryan Stevedoring Co., 350 U.S. at 139-41, 76 S.Ct. at 240-41 (Black, J., dissenting); H.R.REP. NO. 1441, 92d Cong., 2d Sess. 1, 4-5 (1972), reprinted in 1972 U.S.C.C.A.N. 4698, 4699, 4702; S.REP. NO. 1125, 92d Cong., 2d Sess. 4, 8-9 (1972). 89 Congress intended the 1972 amendments to cure these incongruities which beset the compensation scheme under the Act: 90 Under amended section 905(b), the roundabout evasion of the Act's exclusivity provision was ended. The suit based on unseaworthiness was abolished, and an injured longshoremen is now remitted to an action against the third party (i.e., shipowner) only for negligence; the employer (i.e., stevedore) shall not be directly or indirectly liable over to the shipowner if negligence is established. Thus, the shipowner will no longer bear the great burden of broad, no-fault liability via the warranty of seaworthiness, and the stevedore is insulated from double liability. The administrative remedies provided by the Act will once again be the longshoremen's exclusive no-fault remedy, but in turn the Act's benefits and its coverage were greatly expanded. 91 Hurst, 554 F.2d at 1243-44 (footnote and citations omitted); see Kakavas, 789 F.2d at 117. Congress did not delineate its understanding of negligence under the Act, however, leaving it to the courts to resolve the issues  'through the application of accepted principles of tort law and the ordinary process of litigation.'  Id. (quoting H.R.REP. NO. 1441 at 7, reprinted in 1972 U.S.C.C.A.N. at 4704). 92 Congress also intended to provide incentives for stevedores to avoid exposing longshore workers to unreasonable risks of injury. See H.R.REP. NO. 1441 at 1, reprinted in 1972 U.S.C.C.A.N. at 4699; H.REP. NO. 1125 at 2. Congress recognized that the policy of encouraging the stevedore to take reasonable precautions to avoid injury to longshore workers would be frustrated if, under Sec. 33 of the Act, 33 U.S.C.A. Sec. 933 (1986), the stevedore could recover the full amount of the statutory compensation benefits it owes its workers. Section 33 entitles the stevedore to full subrogation of its workers' compensation award obligation whenever the vessel is liable to the longshore worker for the worker's injury. See Scindia, 451 U.S. at 181 n. 2, 101 S.Ct. at 1629 n. 2 (Powell, J., concurring). Hence if the longshore worker could recover damages from the third party vessel even if the stevedore was primarily at fault, the stevedore would lack sufficient financial incentives to ensure a safe workplace. 93 In recognition of Congress' express purpose to preclude these externalities and to implement an actual workers' compensation system (instead of the caricature of one extant before the 1972 amendments), the Supreme Court in Scindia pronounced the limited duties the vessel owes longshore workers in stevedoring situations where both entities are involved but where the vessel's involvement is entirely passive (as owner of the ship and contractor for the stevedore's services) and the stevedore's expertise is at play. A vessel breaches its limited duties when its involvement is passive only when, taking due account of the stevedore's primary role in safely conducting stevedoring operations, the vessel's negligence injures the longshore worker. That is, during stevedoring operations, the vessel properly relies on the experience and expertise of the stevedore to load or unload cargo safely, for this experience and expertise is the precise reason why a vessel hires the stevedore, and hence it must not supervise the stevedore. Cf. Scindia, 451 U.S. at 171-72, 101 S.Ct. at 1624. The vessel, then, may generally assume that the stevedore is an expert and safety-conscious, correspondingly reducing the vessel's duties toward longshore workers. Should the stevedore fail to live up to its responsibility to protect its workers during stevedoring operations, the Act's compensation scheme forces it to pay the price. 94 When, however, the hazard occurs due to the vessel's active operations, as is plausibly the case here, it no longer is proper for the vessel to defer to the stevedore's expertise in handling cargo. The problem of apportioning responsibility between the vessel and stevedore by manipulating the vessel's standard of care to account for both entities disappears, because the vessel is in such events responsible for the injury, and liability, if any, should attach to it according to its comparative fault. It patently is not the stevedore's responsibility to protect the worker against the vessel's active operations. That, quite simply, is the vessel's duty. Congress was not ambiguous when it repeatedly pronounced that a vessel's liability should be premised on its own negligence as garnered from land-based third party tort doctrines. 10 In short, unlike with the turnover duty, which generally applies to hidden defects in cargo areas, the vessel cannot rely on the stevedore's expertise to protect its workers from the vessel's active operations. This much we believe the Court recognized in Scindia, and the corresponding duty it enumerated (but did not develop) for these situations is the active operations duty. 95 There is, moreover, no justification for why the stevedore should through the mechanism of the workers' compensation scheme bear the cost of an injury wrought by the vessel's negligence in an area over which the vessel exercised substantial control. We believe additionally that the vessel's liability is efficacious in these circumstances, because it furnishes the vessel with the financial incentive to provide a safe work environment to mitigate the exceedingly perilous conditions under which longshore workers labor. See H.R.REP. NO. 1441 at 6 (Permitting actions against the vessel based on negligence will meet the objective of encouraging safety because the vessel will still be required to exercise the same care as a land-based person in providing a safe place to work.), reprinted in 1972 U.S.C.C.A.N. 4698, 4704; S.REP. NO. 1125 at 10 (same); 118 CONG.REC. 36,273 (1972) (prepared statement of Sen. Williams) (same); see also S.REP. NO. 1125 at 2 (Longshoring ... has an injury frequency rate which is well over four times the average for manufacturing operations.); 118 CONG.REC. 36,388 (1972) (remarks of Rep. Ashley) (referring to longshoring work as singularly dangerous).