Court Opinion

ID: 9429675
Source: CourtListenerOpinion
Date Created: 2023-08-02 23:27:38.074552+00
Date Added: 2024-06-11T17:23:20.834167
License: Public Domain

Justice Rehnquist,
with whom Justice Brennan and Justice Stevens join,
dissenting.
The Court today takes a 1927 statute and reads into it the “modern view” of workers’ compensation, whereby both the contractor and the subcontractor receive immunity from tort suits provided somebody secures compensation for injured employees of the subcontractor.1 In practical terms, the result is undoubtedly good both for the construction industry *942and for our already congested district courts. The result may even make overall economic sense. See 2A A. Larson, Law of Workmen’s Compensation § 72.31(b) (1982). But one can hardly pretend that it “adhere[s] closely to what Congress has written.” Rodriguez v. Compass Shipping Co., 451 U. S. 596, 617 (1981). The Court has simply fixed upon what it believes to be good policy and then patched together a rationale as best it could. Believing that it is for Congress, not this Court, to decide whether the LHWCA should be updated to reflect current thinking, I dissent.
The Court admits, as it must, that the subcontractors in this case have “secured” the payment of compensation to their employees as required by § 4(a) of the LHWCA. Ante, at 940-941, n. 14. The fact that those subcontractors did not each sign the check that paid for the “wrap-up” insurance policy is beside the point. The policy was purchased for their benefit, bore their names as the insured parties, and was paid for in the form of reduced bids. See App. 104, 106, 113. In subscribing to this “wrap-up” scheme, the subcontractors fulfilled their statutory obligation to secure compensation. An alternative view would not only exalt form over substance; it would also subject most of the 355 subcontractors and 2,765 sub-subcontractors working on the second phase of the Metro construction to criminal prosecution under § 38(a) merely because they did not purchase additional, wholly superfluous insurance for their employees.
The Court also admits that WMATA has not “secured” the payment of compensation to the employees of the subcontractors within the meaning of §4(a). . Under § 4(a), a contractor has a secondary, contingent obligation. As the Court explains, the contractor need secure compensation only when a subcontractor has failed to do so. Ante, at 938. Since the subcontractors in this case did not default on their statutory obligations, WMATA’s secondary obligation never matured. Therefore, WMATA was not “liable for” and did not “secure” the payment of compensation under §4(a). The fact that *943WMATA “acted above and beyond its statutory obligations” by arranging for the “wrap-up” insurance, ante, at 940, is, thus, beside the point.2 Because the subcontractors met their § 4(a) obligations, WMATA’s duty was never triggered “and WMATA has therefore had no opportunity to default on [or to satisfy] its statutory obligations.” Ante, at 941.
Despite these two concessions, the Court still concludes that WMATA is entitled to the immunity of § 5(a). Contractors such as WMATA are, thus, cast in the role of backup quarterbacks who get paid for sitting on the bench. They need do nothing; as long as the starting quarterbacks perform, the backups receive equal benefits.
The Court reaches this conclusion by means of a rather clumsy sleight of hand. In Part II-A, the Court argues that the term “employer” as used in the LHWCA must be capable of embracing contractors. Otherwise, when a subcontractor defaulted on its § 4(a) duty, there would be no way of enforcing or even making sense of the backup duties imposed on contractors since all the statutory provisions other than § 4(a), which flesh out the obligation imposed by that section, speak only of an “employer.” In Part II-B, the Court then argues that the language of § 5(a) grants immunity to an “employer” unless the employer fails to honor its statutory duty to secure compensation. Since the statutory duty of a contractor does not even arise until the subcontractor defaults, a contractor has not failed to honor its statutory duty as long as the subcontractor secures compensation. Thus, WMATA *944receives the immunity of § 5(a) as an “employer” who has not “failed” in its statutory duty.
The problem with this argument is that the term “employer” is given one meaning in Part II-A, but is then used in a different sense in Part II-B. That is, for purposes of the duty to secure compensation in § 4(a), a contractor is seen as only a backup “employer” who steps into that role when the subcontractor — the actual employer — defaults. But for purposes of the immunity granted in § 5(a), the Court treats a contractor as a full-fledged employer, filling that role regardless whether the subcontractor defaults or not.
Even assuming that a contractor can be an “employer” for purposes of the LHWCA,3 a contractor at best fills that role contingently. A contractor is certainly not an “employer” of the subcontractor’s employees for all purposes and at all times under the statute. Otherwise, to continue the previous metaphor, there would be two quarterbacks on the field at all times. Both the contractor and the subcontractor would be directed to make the payments required by §§ 7, 8, and 9, and both would simultaneously be entitled to the assignment of the injured worker’s right to recover damages *945from third parties under § 33(b). Everything directed by the Act would be done in duplicate.
Thus, even accepting the Court’s analysis in Part II-A, the most that follows is that a contractor becomes an “employer” within the meaning of the various provisions of the LHWCA when the subcontractor has defaulted on its statutory obligations. It follows that a contractor is an “employer” entitled to the immunity of § 5(a) only when the subcontractor has defaulted on its obligation and the contractor has stepped in to secure the payment of compensation to the subcontractor’s employees.
The Court’s reading of the statute, alternately contracting and expanding the term “employer,” is, therefore, internally inconsistent.4 That reading also runs counter to the settled *946principle that a provision limiting common-law rights “must be strictly construed, for ‘[n]o statute is to be construed as altering the common law, farther than its words import. It is not to be construed as making any innovation upon the common law which it does not fairly express.’ Shaw v. Railroad Co., 101 U. S. 557, 565.” Herd & Co. v. Krawill Machinery Corp., 359 U. S. 297, 304-305 (1959). The common-law right of the respondents in this case to maintain a negligence action against WMATA has been eliminated on what seems to me to be a less than fair reading of the statute. Accordingly, I dissent.

 The Court appears to qualify the “modern view” in one respect. The Court implies that an affirmative default by the subcontractor would strip the subcontractor of its statutory immunity even if the contractor fulfilled its backup obligation to secure compensation. Ante, at 940-941, n. 14. In that case the contractor, but not the subcontractor, would receive immunity. Aside from the fact that this view requires precisely the difficult factual inquiry which the Court, in another portion of its opinion, ante, at 939, says Congress could not have intended, the result is paradoxical. Contractors will receive greater protection from suit than subcontractors under the statute even though, as the Court admits, it requires “a slightly strained reading of the word ‘employer’ ” to grant immunity to contractors at all. Under the Court’s reading, as long as anyone secures compensation for the employees of the subcontractor, the contractor is immune from a third-party tort suit. But the subcontractor receives immunity only if it itself secures the compensation, whether directly or, as here, indirectly.

 It is clear from the Court’s opinion that WMATA would have received the statutory immunity of § 5(a) even if it had played no part in obtaining the “wrap-up” insurance for the subcontractors. The Court states that “§§ 4(a) and 5(a) of the LHWCA render a general contractor immune from tort liability provided the contractor has not failed to honor its statutory duty to secure compensation for subcontractor employees when the subcontractor itself has not secured such compensation.” Ante, at 939-940. In other words, if the subcontractor secures the required insurance, the contractor need not raise a finger in order to gain the immunity of § 5(a).

 The Court makes a persuasive argument that the term “employer” in the LHWCA must in some circumstances be read to embrace contractors. But the argument is by no means conclusive. The definition of “employer” given in §2(4) contains no hint that Congress intended such a reading. And in § 4(a), “employer” is used in direct contrast to “contractor.” Also, § 4(a) specifically directs a contractor, upon default by the subcontractor, to secure the payment of “the compensation payable under sections 7, 8, and 9.” Thus, since those three sections are incorporated by reference, the word “employer” in them need not, as the Court claims, be read to embrace contractors in order for them to give content to the contingent liability of contractors. On the other hand, it is reasonable to conclude that Congress intended contractors, upon default by subcontractors, to be subject to the enforcement provisions of § 38 and, if they secure compensation, to be entitled to the assignment of third-party tort suits under § 83(b). Those sections do speak only of an “employer.” Fortunately, in my view, it is unnecessary to resolve the question in this case.

 Aside from its “plain language” claim, the Court offers two additional arguments in favor of its reading of the statute. Neither is worth much. First, the Court argues that if contractors did not receive immunity until subcontractors had affirmatively elected to default, inevitable gaps in coverage would occur because “contractors would be reluctant to incur the considerable expense of securing compensation insurance until they were absolutely convinced that subcontractors were in statutory default.” Ante, at 938. But that same reluctance will be present regardless of the scope of immunity afforded contractors by § 5(a). Even if they are granted immunity whenever the subcontractor secures compensation, contractors will still be reluctant to incur the “considerable expense” of securing compensation insurance unless they are sure that the subcontractors have not done so. Otherwise, the money is simply thrown away gratuitously. The Court offers no reason to believe that its tortured reading of the statutory language provides any extra incentive for contractors to obtain insurance for the employees of subcontractors. Furthermore, standard workers’ compensation coverage for contractors apparently already includes backup, contingent coverage for the employees of subcontractors. The contractor only has to pay for that backup insurance if it is unable to show that the subcontractor has secured the necessary coverage. National Council on Compensation Insurance, Basic Manual for Workers’ Compensation and Employers’ Liability Insurance, Rule IX-C, pp. R-20-21 (3d reprint 1983). Thus, gaps in coverage are not likely to occur.
Second, the Court argues that a rule granting immunity to a contractor who secures insurance only after default by the subcontractor would *946require a difficult factual inquiry into whether “the worker’s direct employer had been given a reasonable chance to secure compensation for itself and then had failed to respond to the opportunity.” Ante, at 939. As noted, however, see n. 1, supra, the very same factual inquiry is required by the Court’s own reading, which would deny immunity to defaulting subcontractors.