Opinion ID: 6897
Heading Depth: 2
Heading Rank: 1

Heading: Applicability of Scindia

Text: The Longshore and Harbor Workers' Compensation Act (LHWCA) establishes a comprehensive framework to provide a federal workers' compensation program for longshoremen injured or killed in job-related accidents. 33 U.S.C. §§ 901-950; Gilmore & Black, The Law of Admiralty 408-412 (1975). The 1972 congressional amendments to the LHWCA were the first significant effort to reform the 1927 Act and the judicial gloss that had been attached to it. Northeast Marine Terminal Co. v. Caputo, 432 U.S. 249, 261, 97 S.Ct. 2348, 2356, 53 L.Ed.2d 320 (1977). Prior to 1972, an injured longshoreman could receive benefits from his stevedore-employer under LHWCA and also recover damages from the shipowner for injuries caused by the negligence or unseaworthiness of the vessel being serviced. Gilmore & Black, The Law of Admiralty 411 (1975). In order to prevail in an unseaworthiness cause of action, the longshoreman did not have to prove fault on the part of the shipowner but only needed to show an unsafe, injury-causing condition on the vessel. Seas Shipping Co. v. Sieracki, 328 U.S. 7 85, 66 S.Ct. 872, 90 L.Ed. 1099 (1946). Under the Sieracki doctrine, a shipowner could be held liable even if the stevedore created or caused the injury-causing condition. See, e.g., Crumady v. The Joachim Hendrik Fisser, 358 U.S. 423, 79 S.Ct. 445, 3 L.Ed.2d 413 (1959).2 Moreover, the shipowner thus held liable to the longshoreman could maintain an indemnity action against the stevedore for breach of an implied or express warranty to handle the cargo in a reasonably safe manner. Ryan Stevedoring Co. v. Pan-Atlantic S.S. Corp., 350 U.S. 124, 76 S.Ct. 232, 100 L.Ed. 133 (1956). The Supreme Court has described the 1972 amendments as a legislative compromise between three groups: (1) shipowners dissatisfied with decisions permitting longshoremen compensated under LHWCA to recover in unseaworthiness actions; (2) stevedores subject to indemnification suits by vessel owners; (3) longshoremen seeking increased compensation benefits. Northeast Marine Terminal Co., 432 U.S. at 263-65, 97 S.Ct. at 2357. Discussing the 1972 amendments, the Supreme Court has stated, The design of these changes was to shift more of the responsibility for compensating injured longshoremen to the party best able to prevent injuries: the stevedore-employer. Howlett v. Birkdale Shipping Co., S.A., --- U.S. ----, ----, 114 S.Ct. 2057, 2063, 129 L.Ed.2d 78 (1994). 2 In Usner v. Luckenbach Overseas Corp., 400 U.S. 494, 91 S.Ct. 514, 27 L.Ed.2d 562 (1971), the Supreme Court held that a single act of operational negligence by the stevedore did not render the vessel unseaworthy. 8 The legislative compromise incorporated in the 1972 amendments radically reformulated the triangular relationship between vessel owners, stevedores, and longshoremen. First, Congress substantially increased the benefits payable to longshoremen under the LHWCA. Second, the amendments abolished the longshoreman's right to recover from the shipowner for unseaworthiness. Finally, Congress eliminated the stevedore's obligation to indemnify the shipowner if it was held liable for damages suffered by the longshoreman. Gilmore & Black, The Law of Admiralty 411 (1975). The 1972 amendments, however, preserved a longshoreman's right to recover from the vessel owner for negligence. 33 U.S.C. § 905(b).3 Because Congress did not recite the acts or omissions of a vessel that would amount to negligence, the scope of the duty owed by a vessel to longshoremen was left to be resolved through the application of accepted principles of tort law and the ordinary process of litigation. H.R.Rep. No. 92-1441, 92nd Cong., 2nd Sess. (1972), reprinted in 1972 U.S.C.C.A.N. 4698, 4704. In Scindia Steam Navigation Co. v. De Los Santos, 451 U.S. 3 33 U.S.C. § 905(b) provides: 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, and the employer shall not be liable to the vessel for such damages directly or indirectly and any agreements or warranties to the contrary shall be void.... The liability of the vessel under this subsection shall not be based upon the warranty of seaworthiness or a breach thereof at the time the injury occurred. 9 156, 101 S.Ct. 1614, 68 L.Ed.2d 1 (1981), the Court articulated the scope of a shipowner's duty to longshoremen under section 905(b) and outlined three general duties shipowners owe to longshoremen. This Court has summarized the three scenarios under which a vessel owner may be liable under Scindia: 1) if the vessel owner fails to warn on turning over the ship of hidden defects of which he should have known. 2) for injury caused by hazards under the control of the ship. 3) if the vessel owner fails to intervene in the stevedore's operations when he has actual knowledge both of the hazard and that the stevedore, in the exercise of obviously improvident' judgment means to work on in the face of it and therefore cannot be relied on to remedy it. Pimental v. LTD Canadian Pacific BUL, 965 F.2d 13, 15 (5th Cir.1992) (citations omitted). NOSC argues that the duty a loading stevedore owes a discharging longshoreman is equivalent to the duty a shipowner owes a longshoreman under Scindia. NOSC asserts that it cannot be liable under Scindia because its stow constituted an open and obvious condition, therefore not triggering a breach of the first Scindia duty to warn of hidden defects. Scindia does hold that in a suit under section 905(b) by a longshoreman against a shipowner, the vessel's duty does not extend to open and obvious conditions. Scindia, 451 U.S. at 172-74, 101 S.Ct. at 1625. The district court refused to apply Scindia, citing crucial differences between the position of the vessel owner in relation to the discharging longshoremen and the position of the loading stevedore in relation to the discharging longshoremen. We hold that the district court was correct for several reasons. NOSC argues that Scindia applies to the facts of this case and 10 establishes that it owed no duty to protect Couch or any other discharging longshoreman from open and obvious hazards. Scindia involved a suit by an injured longshoreman against a shipowner under section 905(b), the longshoreman's statutory right to recover from the vessel owner for negligence as preserved in the 1972 amendments. The LHWCA defines the term vessel to mean any vessel upon which or in connection with which any person entitled to benefits under this chapter suffers injury or death arising out of or in the course of his employment, and said vessel's owner, owner pro hac vice, agent, operator, charter or bare boat charter, master, officer, or crew member. 33 U.S.C. § 902(21). Although Couch originally asserted a section 905(b) claim against Cro-Marine as the owner of the unmanned barges, the district court granted Cro-Marine's motion for summary judgment on the grounds that it breached no duty owed to Couch under Scindia, thereby eliminating section 905(b) from the suit.4 NOSC, the onloading stevedore, remained in the litigation as the sole defendant, and Couch proceeded with his cause of action against NOSC under the general maritime law as provided for in the pretrial order. In its supplemental brief and at oral argument on appeal, NOSC contends that Howlett v. Birkdale Shipping Co., --- U.S. ----, 114 S.Ct. 2057, 129 L.Ed.2d 78 (1994), strongly reinforces its argument that the Scindia standard should govern the relationship between 4 In the same order, the district court granted defendant Erlanger's motion for summary judgment on the ground that a cargo owner owed no duty with respect to the cargo operations. Couch did not appeal the district court's order dismissing Erlanger and Cro-Marine. 11 the onloading stevedore and the discharging longshoremen. The issue addressed by the Court in Howlett, a section 905(b) suit against a shipowner, was the scope of a shipowner's duty to warn of latent hazards in the cargo stow. Although Howlett elaborates the scope of the first Scindia duty, it does not help NOSC overcome the insurmountable hurdle of applying the Scindia standard to a case involving a suit by an injured longshoreman against a loading stevedore. Scindia and Howlett are section 905(b) cases brought against shipowners and do not support NOSC's contention that the Scindia standard should apply in this case, a negligence suit under the general maritime law against a party other than the vessel owner. The facts in this case may be somewhat unusual because they involve a domestic onloading stevedore (NOSC) loading a stow which causes injury to a domestic discharging longshoreman (Couch). Perhaps more typically, the vessel being unloaded by the injured longshoreman will have been loaded by a foreign stevedore over whom the discharging longshoreman is unable to obtain jurisdiction, and the injured discharging longshoreman hence sues only the vessel owner for negligence under section 905(b). See Howlett v. Birkdale Shipping Co., S.A., --- U.S. ----, 114 S.Ct. 2057, 129 L.Ed.2d 78 (1994) (section 905(b) suit by discharging longshoreman injured when he slipped on a plastic sheet improperly placed in the stow by the loading stevedore in Ecuador); Woods v. Sammisa Co., 873 F.2d 842 (5th Cir.1989), cert. denied, 493 U.S. 1050, 110 S.Ct. 853, 107 L.Ed.2d 847 (1990) (section 905(b) suit against shipowner by 12 longshoreman injured while unloading steel pipes improperly loaded by stevedore in Brazil); Clay v. Lykes Bros. S.S. Co., 525 F.Supp. 306 (E.D.La.1981) (section 905(b) suit against vessel owner by two longshoremen injured while unloading cargo negligently loaded by stevedores in London).5 The facts of this case give rise to an important distinction between vessel owners and stevedores. The Court in Scindia held that a vessel owner has no general duty by way of supervision or inspection to exercise reasonable care to discover dangerous conditions that develop within the confines of the cargo operations that are assigned to the stevedore. Scindia, 451 U.S. at 172, 101 S.Ct. at 1624. As support for this rule, the Court discussed at great length the fact that the stevedore is the expert in cargo operations hired by the nonexpert shipowner. Id. at 168-74, 101 S.Ct. at 1623-1625. Accordingly, the Court in Scindia described the justifiable expectations of the vessel that the stevedore would perform with reasonable competence and see to the safety of the cargo operations. Id. at 172, 101 S.Ct. at 1624.6 5 The court in Clay stated [t]here is no question but that parties who are not before the court, the riggers in London who tied the cable and the stevedores who placed the bundles of pipe on top of the cable, were negligent and that this negligence was a cause of the resultant accident and injuries to plaintiffs. 525 F.Supp. at 308. 6 The indemnity cases decided before the 1972 amendments reason that the stevedore was in the best position to avoid accidents during cargo operations and that the shipowner could rely on the stevedore's warranty to perform competently. Id. Section 41 of the LHWCA mandates that the stevedore provide its employees with a reasonably safe work place and implement safeguards necessary to prevent injuries. Further, 33 U.S.C. § 941(a). 33 U.S.C. § 941(a) also authorizes the Secretary of 13 In Scindia and Howlett the Court considered the relationship between and roles of the stevedore-employer and the vessel owner. Emphasizing the role of the stevedore-employer as a specialist in cargo operations on one side and the nonexpert vessel on the other side, the Court reasoned that, as between these two parties, the stevedore-employer was in the best position to prevent injuries to longshoremen. Unlike the shipowner in Scindia, NOSC, as loading stevedore, is indeed an expert in cargo operations, thus creating a very different relationship, with experts in stevedoring on both sides. Therefore, the reasoning of the Court in Scindia for crafting a limited scope of liability for the nonexpert vessel based on the justifiable expectations of the shipowner does not logically apply to the facts of this case. Accordingly, based on the facts of this case, the onloading stevedore was in the best position to avoid creating a dangerous stow and therefore may be held liable for any injuries suffered by discharging longshoremen caused by its negligent stow.7 Labor to promulgate regulations to protect the life, health, and safety of longshoremen. For example, an OSHA regulation governing cargo stows provides: (a) When necessary, cargo shall be secured or blocked to prevent its shifting or falling. (b) In breaking down, precautions shall be taken, when necessary, to prevent the remaining cargo from falling. 29 C.F.R. § 1918.83(a)-(b). 7 By way of analogy, the district court observed that a stevedore may be held liable for cargo damage due to its negligence. Maurice Pincoffs Co. v. Dravo Mechling Corp., 697 F.Supp. 244, 249-50 (E.D.La.1987), aff'd without op., 880 F.2d 411 (5th Cir.1989) (holding that an unloading stevedore has a duty to exercise reasonable care and may be liable for any damage 14 NOSC argues that the purpose of the 1972 amendments to the LHWCA was to shift the responsibility for compensating injured longshoremen to the party best able to prevent injuries, the stevedore-employer. In order to further this congressional purpose, NOSC contends that we should apply Scindia and Howlett to place the responsibility for compensating Couch on his stevedore-employer. The Scindia Court described the 1972 amendments abolishing a longshoreman's unseaworthiness cause of action against a vessel owner as reflecting congressional intent to make the vessel answerable for its own negligence and to terminate its automatic, faultless responsibility for conditions caused by the negligence or other defaults of the stevedore. Scindia, 451 U.S. at 168, 101 S.Ct. at 1622-23. Therefore, the Court in Scindia reasoned that it would be inconsistent with the LHWCA as amended in 1972 to hold that a shipowner has a continuing duty to discover and remedy dangerous conditions that develop during the loading or unloading of cargo. As the Court observed: Such an approach would repeatedly result in holding the shipowner solely liable for conditions that are attributable to the stevedore, rather than the ship. True, the liability would be cast in terms of negligence rather than unseaworthiness, but the result would be much the same. [C]reation of a shipowner's duty to oversee the stevedore's activity and insure the safety of longshoremen would ... saddle the shipowner with precisely the sort of nondelegable duty that Congress sought to eliminate by amending section 905(b).'  Id. [at 169, 101 S.Ct.] at 1623 (citations omitted). When Congress enacted the 1972 amendments, it adjusted the rights between shipowners, stevedore-employers, and longshoremen. done to the cargo due to its negligence). 15 Applying the 1972 amendments to the facts of this case, the three affected parties are Cro-Marine as the barge owner, CIDC as the stevedore-employer, and Couch as the injured longshoreman. The 1972 amendments, however, did not purport to adjust the rights of one stevedoring company versus another stevedoring company for injuries sustained by longshoremen. Thus, the 1972 amendments and Court decisions interpreting section 905(b) do not affect the outcome of Couch's suit against NOSC under the general maritime law. We are not persuaded by NOSC's contention that Scindia 's trilogy of duties should apply to the loading stevedore/discharging stevedore or longshoreman relationship. A review of the Scindia duties reinforces our conclusion that the Scindia duties were formulated specifically to govern section 905(b) suits between vessel owners and injured longshoremen. For example, under the third Scindia duty, a shipowner has a duty to intervene in the stevedore's operations when it knows of the hazard and knows that the stevedore cannot be relied upon to remedy it. Scindia, 451 U.S. at 176-78, 101 S.Ct. at 1627. Because a loading stevedore such as NOSC will never be present when the discharging stevedore unloads the cargo, the loading stevedore could not be liable under the third duty.8 As the facts of this case demonstrate, NOSC was not present in Peoria, Illinois, when CIDC unloaded the cargo. 8 The only conceivable way a loading stevedore could be held liable under the third Scindia duty would be if someone informed it that the discharging stevedore could not be relied on to remedy the situation. 16 Again, this distinction underscores the thrust of Scindia, which was to prevent resuscitating, albeit under a negligence label, the unseaworthiness cause of action abolished in 1972 and not to reformulate the general maritime law governing negligence suits brought against a party other than a vessel owner.