UNITED STATES COURT OF APPEALS FOR
THE SECOND CIRCUIT
August Term, 2000
(Argued: April 27, 2000 Decided:
September 18, 2000 )
Docket No. 99-7898
STEVEN GRAVATT and DELORES GRAVATT,
THE CITY OF NEW YORK,
SIMPSON & BROWN, INC.,
N. MASSAND, P.E., L.S., P.C., a/k/a/
BARGE "ABC" and BARGE "DEF", their
Boilers, Tackles, etc. in rem,
Before: JACOBS, LEVAL and SACK, Circuit
Plaintiff, employed as a dock builder,
was injured on a barge while working on a mid-river bridge repair project.
His employer on the construction project was also the statutory owner of
the barge. He and his wife brought a personal injury suit against his employer
in its capacity as vessel owner under section 5(b) of the Longshore and
Harbor Workers' Compensation Act ("LHWCA"), as amended 33 U.S.C. §
905(b). After bench trial, the United States District Court for the Southern
District of New York (Robert W. Sweet, Judge) entered judgment in
favor of both husband and wife plaintiffs for $2,024,529.73 and $230,327.75
respectively. The employer appealed.
The Court of Appeals, Leval, J.,
holds: (1) employee covered by LHWCA may recover in a 905(b) negligence
suit against his employer who is also the vessel owner, but only to the
extent that the employer was negligent in its capacity as a vessel; (2)
because the negligence of the employer was in its capacity as employer
and not in its capacity as vessel, the employer is not liable in tort under
JOHN J. WALSH, Freehill, Hogan &
Mahar, LLP, New York, NY, for Appellant.
NICHOLAS P. GIULIANO, Waesche, Sheinbaum
& O'Regan, P.C., (William R. Bennett, III and Claurisse C. Orozco,
on the brief), New York, NY, for Appellees.
LEVAL, Circuit Judge:
Defendant Simpson & Brown, Inc. ("S&B")
appeals from the final judgment of the United States District Court for
the Southern District of New York (Robert W. Sweet, Judge) entered
against it on July 6, 1999. Plaintiff Steven Gravatt ("Gravatt") was employed
as a journeyman dock builder by defendant S&B-the sole appellant-a
construction contractor retained by the City of New York to repair one
of its bridges. Gravatt was injured while working on a barge chartered
by S&B at this mid-river construction site. Gravatt's employment made
him a "harbor-worker"-a person covered by the terms of the Longshore and
Harbor Workers' Compensation Act of 1972 ("LHWCA"), as amended, 33 U.S.C.
§§ 901 et seq. Under the definitions of the LHWCA,
S&B acted in two capacities-first, as Gravatt's employer, see
33 U.S.C. § 902(4), and second, as the owner of the vessel on which
Gravatt was injured, see id. § 902(21).
We must decide whether S&B's conduct renders
it liable to Gravatt in tort given that it acted in this dual capacity
of employer and vessel owner. The LHWCA provides that as Gravatt's employer,
S&B was required to pay Gravatt statutory compensation for injuries
suffered in the course of his employment, regardless of fault, see
33 U.S.C. § 904, but that an employer's no-fault liability for compensation
to its employee under section 904 is "exclusive and in place of all other
liability." Id. § 905(a). Therefore, Gravatt has no tort remedy
against S&B in its capacity as his employer. On the other hand, the
injured employee's receipt of compensation from his employer does not bar
him from suing responsible third parties. See 33 U.S.C. § 933(a).
In this regard, the LHWCA provides that, with certain exceptions, an injured
maritime worker may bring an action for negligence against a vessel as
a third party. See 33 U.S.C. § 905(b). The statute implies,
and has been interpreted to provide, that an employer that is also a vessel
owner can be liable to its employees as if it were a third party for negligence
in its vessel capacity. We must decide how to reconcile S&B's section
905(a) immunity as employer to suit in negligence, with its potential liability
in negligence as a vessel under section 905(b).
The district court found Gravatt liable under
alternate theories. First, relying on its reading of Fanetti v. Hellenic
Lines Ltd., 678 F.2d 424 (2d Cir. 1982), it concluded that S&B
was liable in negligence to Gravatt regardless "whether the acts of negligence
are attributable to the owner- employer in its capacity as [vessel] owner
or as employer." Gravatt v. City of New York, 53 F. Supp. 2d 388,
424 (S.D.N.Y. 1999). Second, the district court found that S&B's negligence
was in its capacity as vessel owner. See id. at 421-24. In
our view, a dual-capacity employer-vessel is liable to its covered employees
under section 905(b) only to the extent that it breached its duties of
care in its capacity as vessel, and is not liable for negligence committed
in its capacity as employer. Accord Morehead v. Atkinson-Kiewit,
J/V, 97 F.3d 603 (1st Cir. 1996) (en banc); Levene v. Pintail Enters.,
943 F.2d 528 (5th Cir. 1991); Castorina v. Lykes Bros. S.S. Co.,
758 F.2d 1025 (5th Cir. 1985); see also Smith v. Eastern
Seaboard Pile Driving, Inc., 604 F.2d 789, 795 (2d Cir. 1979) (holding
that the "key issue" in a dual-capacity case was whether negligent employees
acted "in their capacity as agents of the vessel on the one hand or as
employees performing [LHWCA-covered harbor work] on the other"). Because
we find that S&B was not negligent in its vessel capacity, we reverse
the judgment against S&B.1
The facts of the case are set out in detail
in the several opinions below, in particular the court's opinion on the
parties' summary judgment motions, see Gravatt v. City of New
York, No. 97 CIV 0354(RWS), 1998 WL 171491 (S.D.N.Y. Apr. 10, 1998),
and in two post-trial opinions, see Gravatt v. City of New York,
1999 WL 111922 (S.D.N.Y. Mar. 3, 1999) ("Original Opinion"); Gravatt
v. City of New York, 53 F. Supp. 2d 388 (S.D.N.Y. 1999) ("Revised Opinion").
The following facts relevant to this appeal are as found by the district
Gravatt and his wife Delores sued the City
of New York (the "City"), N. Massand, P.C. ("Massand"), and S&B for
injuries that Gravatt sustained in an accident on January 31, 1996, while
he was working on a construction project repairing the 145th Street Bridge
across the Harlem River. The City owned the bridge. Massand-a New York
professional corporation-was the engineering firm retained by the City
to design the bridge repair project, supervise the construction, and monitor
that the repair work was carried out safely. S&B was the construction
contractor hired to perform the repair work under the supervision and control
of Massand and the City. Gravatt was employed by S&B.
The repairs to the 145th Street Bridge involved
the demolition and replacement of the bridge's "fender systems"-the wooden,
pier-like structures that surround a bridge's mid-river stanchion in order
to protect it in case of collision with shipping. The repairs required
the removal of the old fender system, the excavation of the river-bed,
and the driving of new piles, on which the new fender system could be constructed.
This mid- river construction work required the use of several barges, which
S&B had chartered to perform the work. A crane barge carried the heavy
equipment used to extract the old piles, drive new piles, and excavate
the river-bed. Materials barges were used to transport new materials, consisting
primarily of piles, braces and whalers to the site from Newark, New Jersey,
and to transport debris-primarily old timbers-to Newark for disposal. The
crane was used to unload new materials from the materials barges and to
load them with debris. When a barge loaded with new materials arrived at
the site, it would be lashed to the crane barge. As work progressed, the
new materials would be offloaded from the barge and debris loaded in their
place. When this was accomplished, the materials barge would be towed back
to Newark to dispose of the debris and repeat the cycle.
Gravatt's duties as a dock builder required
him to spend nearly all his time working directly on the fender system
of the bridge. He spent less than one percent of his time on the barges.2
His normal duties did not include handling materials on the barges. The
discharging of the new materials and the stowing of the debris on the barges
was usually performed by a "deck man."
On January 31, 1996, however, Gravatt, together
with a fellow dock builder, Liming, was instructed by the site foreman
Holzheuer to go onto a materials barge to help move old piles so as to
clear access to new materials. The debris had been loaded on top of new
materials, obstructing access to them. The loading of debris on top of
new materials violated S&B's safety policies as set out in its safety
handbook. This storage decision had been Holzheuer's. It is not disputed
furthermore that Holzheuer instructed Gravatt and Liming to move the old
piles in an unsafe and negligent manner. Standard industry practice requires
the use of a "choker" to move piles. A "choker" is a chain, which is wrapped
around the pile, the noose tightening as the crane lifts the chain. "Timber
tongs" are used to raise the pile two or three feet onto a "sleeper," which
provides enough clearance from the deck to allow the choker to be attached
around the pile. Holzheuer, however, instructed Gravatt and Liming to use
the timber tongs, rather than the choker, to move piles. There was evidence
that S&B routinely engaged in this misuse of timber tongs, in violation
of industry-wide safety standards.3
Gravatt and Liming stood on the material barge.
The crane operator and deck man were on the crane barge. The crane barge
was secured to the fender system; the material barge was lashed to the
crane barge. The crane operator could not see Gravatt who stood on the
debris material some 60 to 70 feet away from him. Gravatt climbed over
the debris to attach the timber tongs to a twelve-foot piling. Liming gave
a signal, which the crane operator interpreted as a signal to hoist. Liming
did not use the signals specified in S&B's safety handbook.
At this point Gravatt had climbed back onto
the new lumber, some eight feet above the deck of the barge, and was facing
away from the raised piling. As the crane raised the pile some 10 feet
into the air, the lower end of the pile snagged on debris on the barge.
The pile slipped from the teeth of the timber tongs, and fell, hitting
another pile, which bounced up and struck Gravatt on the back of his legs.
Gravatt was knocked some twenty- five feet into the near-freezing water
of the Harlem River.
Gravatt was seriously injured and has undergone
several operations on his legs. He has received the statutory compensation
payments from S&B due under the LHWCA.
B. Relevant Prior Proceedings
A bench trial was held from November 30 through
December 4, 1998. On March 3, 1999, the district court issued an opinion
ruling in favor of the Gravatts on their state labor law claims against
the City and Massand, pursuant to N.Y. Labor Law §§ 200(1), 240,
241(6), and on their federal claim against S&B, pursuant to section
5(b) of the LHWCA, 33 U.S.C. § 905(b). See Gravatt,
1999 WL 111922, at *21-*31. Gravatt was held to have been one-third contributorily
negligent. See id. at *19, *32. The court awarded punitive
damages against Massand, but held that punitive damages could not be awarded
against S&B as a matter of law under the LHWCA. See id.
The Gravatts filed a motion to amend, pursuant
to Fed. R. Civ. P. 52(b). On May 24, 1999, the district court granted the
motion and filed a revised opinion. See Gravatt, 53 F. Supp.
2d 388. The revised opinion reversed the court's rulings that Gravatt was
contributorily negligent, see id. at 392- 94, and that punitive
damages were not available in a tort action under section 905(b), seeid.
Judgment was entered on July 6, 1999, in favor
of Gravatt and his wife against S&B in the total amount of $2,254,857.48,
plus post-judgment interest and costs. As against Massand and the City
a similar judgment was not reduced to a single amount, but was structured
pursuant to New York's structured judgment statute, see N.Y. CPLR
50-B, which requires that part of the judgment be paid out over time. The
three defendants were held jointly and severally liable for all amounts
due under the judgment, with the exception of the punitive damages entered
separately against Massand and S&B, for which they were held severally
After the judgment was entered, on July 16,
1999, the City and Massand settled with the Gravatts, paying $1,350,000
in exchange for general releases from the Gravatts and a partial satisfaction
of judgment. S&B then moved pursuant to Fed. R. Civ. Proc. 59(e) to
amend the July 6 judgment entered against it by reducing the judgment by
the $1,350,000 received by the Gravatts in their settlement with the City
and Massand. On November 5, 1999, the district court denied the motion.
v. City of New York, 73 F. Supp. 2d 438, 440-41 (S.D.N.Y. 1999).
S&B appeals from the judgment and from
the order denying its Rule 59(e) motion to amend the judgment. We reach
only the issue whether S&B was liable under section 905(b).
S&B contends on appeal that the district
court improperly held it liable for vessel negligence under LHWCA §
5(b), 33 U.S.C. § 905(b). It does not dispute that it was negligent
in its capacity as employer and that Gravatt was injured by reason of that
negligence,4 but denies it was negligent
in its capacity as vessel owner. The district court held S&B liable
under alternate theories. First, citing Fanetti v. Hellenic Lines Ltd,
678 F.2d 424 (2d Cir. 1982), the court ruled that any negligence on the
part of a dual-capacity employer-vessel owner is actionable under section
905(b), regardless whether the negligence was committed in its capacity
as vessel owner or in its capacity as employer.
53 F. Supp. 2d at 424. Second, citing Morehead v. Atkinson-Kiewit, J/V,
97 F.3d 603 (1st Cir. 1996), and Smith v. Eastern Seabord Pile Driving,
Inc., 604 F.2d 789 (2d Cir. 1979), the district court found that, in
any case, S&B was negligent in its vessel capacity. See Gravatt,
53 F. Supp. 2d at 421- 24. S&B argues that its negligence was only
in its role as Gravatt's employer and not in its role as vessel owner,
and that, as Gravatt's employer, its liability was limited to the statutory
workers' compensation payments required by the LHWCA. See 33 U.S.C.
§§ 904, 905(a). We agree that S&B can be held liable under
905(b) only for negligence in its role as vessel and that no such negligence
was shown. We therefore reverse the judgment.
1.Vessel liability under section 905(b)
of the LHWCA .
LHWCA is a comprehensive workers' compensation
system, under which employers are required to compensate covered employees
injured in the course of their employment, regardless of fault. In relevant
part, section 4 of the LHWCA provides:
(a) Every employer shall be liable for and
shall secure the payment to his employees of the compensation payable under
sections 907, 908, and 909 of this title. . . . 5
(b) Compensation shall be payable
irrespective of fault as a cause for the injury.
33 U.S.C. § 904. It is not disputed that
Gravatt's employment was as a "harbor-worker" covered by the LHWCA, see
33 U.S.C. § 902(3),6 and that S&B
was his "employer," see id. § 902(4).7
Like most state workers' compensation schemes,
the LHWCA provides that the statutory, no-fault compensation payments are
the employer's exclusive liability to its employees when they are injured
in the course of their employment. "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 . . . ." 33 U.S.C. § 905(a).
The employee is, therefore, barred from suing his employer in tort. SeeMoragne
v. State Marine Lines, Inc., 398 U.S. 375, 394 n.11 (1970). On the
other hand, as with most state workers' compensation schemes, the employee
may sue negligent third parties in tort, notwithstanding his entitlement
to no- fault compensation provided by the employer. See 33 U.S.C.
§ 933(a) ("If . . . the person entitled to . . . compensation determines
that some person other than the employer . . . is liable in damages, he
need not elect whether to receive such compensation or to recover damages
against such third person."). In particular, under section 905(b), in accordance
with section 933, an employee may bring an action in negligence against
the "vessel as a third party." 33 U.S.C. § 905(b). It is undisputed
that S&B, as owner or charterer of the crane barge and charterer of
the materials barges, falls within the statutory definition of "vessel."
33 U.S.C. § 902(21).8
The question presented by this case is whether,
and under what circumstances, S&B can be liable to its employee for
its negligence given its dual-capacity as employer (enjoying immunity from
tort liability under section 905(a)) and vessel owner (against which liability
for negligence may lie under section 905(b)).
This question requires an understanding of
the significant amendments to the LHWCA enacted by the Longshoremen's and
Harbor Workers' Compensation Act Amendments of 1972, Pub. L. No. 92-576,
86 Stat. 1251 (hereafter "1972 Amendments"). Prior to 1972, the exclusivity
of the employer's liability under section 905 had been severely undermined
as a result of two Supreme Court decisions. See generally
H.R. Rep. No. 92-1441 (1972), reprinted in 1972 U.S.C.C.A.N.
4698. First, in Seas Shipping Co. v. Sieracki, 328 U.S. 85, 95-96
(1946), the Supreme Court held that longshoremen and other employees covered
under the LHWCA, who were injured while working on a vessel, were entitled
to maintain an action against the vessel, as a third party, based on the
theory of unseaworthiness-a doctrine of strict liability. Under Sieracki,
vessels were liable as third parties to longshoremen for injuries resulting
from the vessels' "unseaworthy" condition. An action for unseaworthiness
had previously been available only to seamen.9
Because the responsibility of a vessel to be in seaworthy condition calls
for strict liability, regardless of fault, the vessel could be liable to
longshoremen, notwithstanding that the unseaworthy condition may have been
caused by the stevedore and not by the vessel's crew. See H.R. Rep.
No. 92-1441, 1972 U.S.C.C.A.N. at 4702; see also Scindia
Steam Navigation Co. v. De Los Santos, 451 U.S. 156, 164-65 (1981).
Second, in Ryan Stevedoring Co. v. Pan
Atlantic S.S. Corp., 350 U.S. 124, 132-35 (1956), the Supreme Court
held that the vessel could seek indemnity from the stevedore-employer for
the vessel's liability to an injured longshoreman-employee for unseaworthiness,
based on the theory that the stevedore had breached an express or implied
warranty of workmanlike performance to the vessel. In this manner, the
stevedore-employer became indirectly liable in maritime tort to its injured
longshoreman-employee under the no-fault doctrine of unseaworthiness, notwithstanding
that the LHWCA provided that the stevedore-employer's exclusive liability
to its injured employees was for the statutory compensation payments. See
33 U.S.C. §§ 904, 905(a). In effect, the injured employee could
get tort damages from his employer despite the statutory proscription against
suing his employer directly.10
The 1972 Amendments made substantial changes
to this framework. The statutory compensation benefits provided under the
LHWCA were substantially increased. See Northeast Marine Terminal
Co. v. Caputo, 432 U.S. 249, 261- 62 (1977). At the same time, section
5(b) of the LHWCA, 33 U.S.C. § 905(b), was amended to overrule Sieracki
See Edmonds v. Compagnie Generale Transatlantique,
443 U.S. 256, 262 (1979). The longshoreman- employee's right to recover
for unseaworthiness was abolished; his right to recover from the vessel
was preserved but was limited to an action for negligence; and the vessel
owner's right to indemnity from the stevedore was abolished. SeeScindia,
451 U.S. at 165. Under these amendments, section 905(b) provided in relevant
In the event of injury to a person
covered under this Act 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 . . . 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.
If such person was employed by the vessel to provide stevedoring services,
no such action shall be permitted if the injury was caused by the negligence
of persons engaged in providing stevedoring services to the vessel. If
such person was employed by the vessel to provide ship building or repair
services, no such action shall be permitted if the injury was caused by
the negligence of persons engaged in providing shipbuilding or repair services
to the vessel. 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. The remedy provided in this subsection shall
be exclusive of all other remedies against the vessel except remedies available
under this Act.
33 U.S.C. § 905(b) (as in effect
In two respects, these 1972 Amendments expressly
addressed the dual- capacity problem that arises where the covered maritime
worker is employed by the owner of the vessel on which (or by which) he
is injured, rather than employed by a contractor that is independent of
the vessel. See H.R. Rep. No. 92-1441, 1972 U.S.C.C.A.N. at 4705.The
second sentence of § 905(b) relieves a dual-capacity vessel of negligence
liability to a worker "employed by the vessel to provide stevedoring services
. . . if the injury was caused by the negligence of persons engaged in
providing stevedoring services to the vessel." Similarly, the third sentence
of section 905(b), as in effect in 1972, provided that a person employed
directly by the vessel to provide shipbuilding or repair services had no
cause of action against the vessel for injuries caused by the negligence
of others providing the same services. See id. In 1984, Congress
further amended section 905(b) (the "1984 Amendments") to broaden the vessel's
immunity from liability for negligence in the case of certain classes of
employees. As the result of this amendment, the third sentence of Section
905(b) now provides that:
If such person was employed to provide
shipbuilding, repairing, or breaking services and such person's employer
was the owner, owner pro hac vice, agent, operator, or charterer of the
vessel, no such action shall be permitted, in whole or in part or directly
or indirectly, against the injured person's employer (in any capacity,
including as the vessel's owner, owner pro hac vice, agent, operator, or
charterer) or against the employees of the employer.
Longshore and Harbor Workers' Compensation Act
Amendments of 1984, Pub. L. No. 98-426, § 5(a)(1), 98 Stat. 1639,
1641. Thus, under the 1984 Amendments, maritime workers engaged directly
by a vessel owner to provide shipbuilding, repairing or breaking services
cannot sue the dual-capacity employer for injuries caused by the negligence
of the vessel or its employees, no matter what were the work activities
of the negligent employees.
In amending section 905(b) Congress clearly
intended that the "vessel's liability is to be based on its ownnegligence."
H.R. Rep. No. 92-1441, 1972 U.S.C.C.A.N. at 4704 (emphasis added);
("The vessel will not be chargeable with the negligence of the stevedore
or employees of the stevedore."). However, Congress "did not specify the
acts or omissions of the vessel that would constitute negligence."
451 U.S. at 165. The House Committee Report on the 1972 Amendments conceded
that the contours of the action for vessel negligence under 905(b) were
to be worked out by federal courts "through the application of accepted
principles of tort law and the ordinary process of litigation-just as they
are in cases involving alleged negligence by land-based third parties."
H.R. Rep. No. 92-1441, 1972 U.S.C.C.A.N. at 4704. At the same time, through
the Committee Report, Congress provided substantial guidance as to the
principles that should shape the evolution of the action.
First, the House Committee specified that
the employee's rights and the vessel's liability under a 905(b) action
for vessel negligence should approximate those of a land-based employee
and a land-based third party.
The Committee intends that on the
one hand an employee injured on board a vessel shall be in no less favorable
position vis a vis his rights against the vessel as a third party than
is an employee who is injured on land, and on the other hand, that thevesselshallnotbeliable
asa third party unless it is proven to have acted or have failed to
act in a negligent manner such as would render a land-based third party
in non-maritime pursuits liable under similar circumstances.
H.R. Rep. No. 92-1441, 1972 U.S.C.C.A.N.
at 4704 (emphasis added).
Second, the 905(b) action was to be developed
as a matter of uniform federal maritime law, not by incorporating the tort
law of the particular state in which the action arose. See id.
at 4705 ("[T]he Committee does not intend that the [section 905(b) action]
shall be applied differently in different ports depending on the law of
the State in which the port may be located . . . [but] that legal questions
. . . shall be determined as a matter of Federal law."). In particular,
the Report specified that
the Committee intends that the admiralty
concept of comparative negligence, rather than the common law rule as to
contributory negligence, shall apply in cases where the injured employee's
own negligence may have contributed to causing the injury. Also, the Committee
intends that the admiralty rule which precludes the defense of "assumption
of risk" in an action by an injured employee shall also be applicable.
Id. at 4705.
Third, by eliminating the no-fault action of
unseaworthiness against the vessel and increasing the level of statutory
compensation recoverable from the employer, the 1972 Amendments intended
"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., 512 U.S. 92, 97 (1994); see also
H.R. Rep. No. 92-1441, 1972 U.S.C.C.A.N. at 4699 ("[A]dequate workmen's
compensation benefits[,] . . . by assuring that the employer bears the
cost of unsafe conditions, serve to strengthen the employer's incentive
to provide the fullest measure of on-the-job safety."). Recognizing that
Congress conceived statutory compensation payments "as the usual source
of making the [covered employee] whole," we have cautioned that "[c]ourts
must be exceedingly careful in defining the contours of the [covered employee's]
action for negligence against the ship . . . lest too expansive notions
of the ship's duty vitiate Congress' intent to do away with absolute liability
for vessels . . . and make greatly improved compensation benefits the primary
remedy for longshoremen and harbor workers." Canizzo v. Farrell Lines,
Inc., 579 F.2d 682, 688, 687 (2d Cir. 1978) (Friendly, J., dissenting).
Fourth, and important for our case, the Report
specifies as to "dual- capacity" cases,
the rights of an injured
longshoreman . . . should not depend on whether he was employed
directly by the vessel or by an independent contractor. Accordingly,
the bill provides in the case of a longshoreman who is employed directly
by the vessel there will be no action for damages if the injury was caused
by the negligence of persons engaged in performing longshoring services.
. . . The Committee's intent is that the same principles should apply
in determining liability of the vessel which employs its own longshoremen
. . as apply when an independent contractor employs such persons.
H.R. Rep. No. 92-1441, 1972 U.S.C.C.A.N. at 4705
(emphases added). As the Supreme Court has concluded, under the 1972 Amendments,
"all longshoremen are to be treated the same whether their employer is
an independent stevedore or a shipowner-stevedore and . . . all stevedores
are to be treated the same whether they are independent or an arm of the
shipowner itself." Edmonds v. Compagnie Generale Transatlantique,
443 U.S. 256, 266 (1979). While the Edmonds opinion focused on longshoremen,
it is clear that Congress intended a general principle that the rights
and liabilities of employee and employer should not turn on whether the
employer acted in a dual-capacity as vessel owner. See, e.g.,Smith
v. Eastern Seaboard Pile Driving, Inc., 604 F.2d 789, 795 (2d Cir.
1979) (observing in context of nonstevedoring case that "the legislative
history of the 1972 amendments makes it clear that the rights of an employee
are not dependent on who the employer is").
It is not disputed that an employee of a dual-capacity
employer-owner retains his right to sue the vessel for negligence under
section 905(b). Even before the 1984 Amendments, the Supreme Court held
unanimously in Jones & Laughlin Steel Corp. v. Pfeifer, 462
U.S. 523 (1983), that a longshoreman, injured on a vessel during the course
of his employment, could bring a section 905(b) negligence suit against
the vessel, notwithstanding that the owner was also his employer, from
whom he had already received statutory compensation pursuant to section
904. The Court found that the language of section 905(b) compelled this
result. It reasoned that if section 905(a) had been intended to bar all
employee suits against dual-capacity employers for third-party vessel negligence
there would have been no need to insert the language expressly barring
such actions where the injury was caused by the negligence of a fellow
worker "`engaged in providing stevedoring services to the vessel.'" Jones
& Laughlin, 462 U.S. at 530 (quoting 33 U.S.C. § 905(b)).
By expressly delineating the circumstances in which a dual-capacity vessel
may not be sued for its negligent injury to its covered employee,
section 905(b) implies that the vessel may be sued for negligence by its
covered employees in circumstances falling outside the specified exceptions.
In further support of its holding, the Jones & Laughlin Court
cited the unequivocal language of the 1972 Committee Report, quoted supra
at [page 16], indicating that the rights and liabilities of employee
and employer should not depend on whether the employee was employed directly
by the vessel or by a stevedoring contractor. See Jones &
Laughlin, 462 U.S. at 531-32 (quoting H.R. Rep. No. 92-1441, 1972 U.S.C.C.A.N.
The Supreme Court's textual argument in Jones
& Laughlin is even more compelling after the 1984 Amendments, which
barred employees providing "shipbuilding, repairing, or breaking services"
from bringing a negligence action against a dual-capacity employer-vessel
owner in any circumstances. 33 U.S.C. § 905(b) (as amended
by Pub. L. No. 98-426, § 5(a)(1), 98 Stat. 1639, 1641). As we concluded
in a case heard after the 1984 Amendments, "[t]he 1984 change . . . shows
that Congress knew how to preclude a class of employees from being able
to sue an employer-vessel if it chose to do so." Guilles v. Sea-Land
Serv., Inc., 12 F.3d 381, 386 (2d Cir. 1993); see also
H.R. Rep. No 98-570(I), reprinted in 1984 U.S.C.C.A.N. 2734,
2741 ("The Committee intends that this language [in section 905(b)] not
be construed to limit an employee's right to bring a cause of action, except
in the circumstances indicated within the language.").
The Jones & Laughlin Court recognized,
however, that section 905(b) "does make it clear that a vessel owner acting
as its own stevedore is liable only for negligence in its `owner' capacity,
not for negligence in its `stevedore' capacity." Jones & Laughlin,
462 U.S. at 531 n.6. While the last clause, excluding liability for negligence
"in its `stevedore' capacity," is dictum,11
this conclusion is the logical result of the text and structure of the
statute, and comports with the instruction of the legislative history.
Insofar as the employer-vessel is negligent in its stevedore-employer capacity,
it is immune from suit under section 905(a). However, insofar as it is
negligent in its vessel capacity, it will be liable under section 905(b)
in the same manner as a third party. This bifurcated approach gives effect
to the express legislative intent that the rights and liabilities of employer,
employee and vessel be affected as little as possible by the happenstance
of whether the employee is employed by an independent contractor or by
the owner of the ship.
2. A vessel's duties of care.
In Scindia Steam Navigation Co. v. De Los
Santos, 451 U.S. 156 (1981), the Supreme Court examined the issue of
a vessel's duties of care under section 905(b) in the context of the classic
triangular relationship among a vessel owner, an independent stevedoring
contractor and an injured longshoreman employed by the stevedore. A longshoreman
employed by an independent stevedoring contractor was injured when he was
struck by cargo falling from a pallet. The pallet was suspended from a
crane, which while undisputedly part of the vessel's gear, was operated
by a fellow longshoreman also employed by the stevedore. It was alleged
that the ship's crane had been malfunctioning for two days before the accident.
At issue was (1) whether the cargo had fallen because the winch's braking
mechanism had slipped due to the alleged malfunction; and (2) whether the
vessel owner knew or should have known of the winch's faulty condition
and had a duty to warn the stevedore and its employees of this hazardous
condition. Finding no duty, the district court had entered summary judgment
for the ship. The Court of Appeals vacated and remanded for trial. SeeScindia,
451 U.S. at 159-64. The Supreme Court affirmed. Seeid. at 179. However,
the Supreme Court disagreed with the court of appeals's conclusion that
the vessel owner owed a continuing duty to inspect the vessel's gear, once
the vessel had been turned over to the stevedore in safe condition.
at 451 U.S. at 163, 172. While noting the legal duties placed on the stevedore
under section 41 of the LHWCA, 33 U.S.C. 941,12
and the vessel's justifiable expectation that the stevedore will perform
those duties, see Scindia, 451 U.S. at 176, the Supreme Court
articulated three duties that defined the scope of the vessel's duty of
care in the classic tripartite situation under section 905(b). These have
become known as the "Scindia duties."
E.g., 1 Thomas J. Schoenbaum,
and Maritime Law 442 (2d ed. 1994).
First, before turning over the ship or any
portion of it to the stevedore, the vessel owner must exercise "ordinary
care under the circumstances to have the ship and its equipment in such
condition that an expert and experienced stevedore will be able by the
exercise of reasonable care to carry on its cargo operations with reasonable
safety." Scindia, 451 U.S. at 167. As part of this duty, the vessel
owner must also warn the stevedore of hidden dangers that could not be
discovered through the exercise of reasonable care. See id.
This set of obligations is usually referred to as the "turnover duty."
v. Birkdale Shipping Co., 512 U.S. 92, 98 (1994).
Second, once stevedoring operations have begun,
the vessel will be liable "if it actively involves itself
in the cargo operations and negligently injures a longshoreman." Scindia,
451 U.S. at 167 (emphasis added). A passive vessel owner has no ongoing
duty to supervise or inspect the stevedore's work-absent contractual, regulatory
or customary obligations to the contrary. See id. at 172.
However, even where the vessel does not actively involve itself in the
stevedoring operations, it may be liable "if it fails to exercise due care
to avoid exposing longshoremen to harm from hazards they may encounter
in areas, or from equipment, under the active control ofthevessel
during the stevedoring operation." Id. at 167 (emphasis added).
Therefore, the vessel must take care to prevent unreasonable hazards in
areas of the vessel under its direct control. These related obligations
arising either from the vessel's "active involvement" in cargo operations
or its "active control" of areas of the vessel encountered by longshoremen
are commonly known as the "active control duty." E.g.,
v. Reinauer Transp. Cos., 194 F.3d 265, 270 (1st Cir. 1999);
512 U.S. at 98.
Third, Scindia articulated an exception
to the generally limited duties imposed on the vessel once operations have
begun. With respect to obvious dangers in areas under the principal control
of the stevedore, the vessel owner must intervene if it acquires actual
knowledge that (1) a condition of the vessel or its equipment poses an
unreasonable risk of harm and (2) the stevedore is not exercising reasonable
care to protect its employees from that risk. See Scindia,
451 U.S. at 175-76. It was on this theory of liability that the plaintiff-longshoreman
in Scindia may have been entitled to go to a jury. If the vessel
knew of the dangerous condition of the winch and the "improvident" failure
of the stevedore to protect its employees from that known hazard, the vessel
was under a "duty to intervene." Id. at 175-77; Howlett,
512 U.S. at 98.
3. The application of Scindia to
dual-capacity cases not involving stevedoring operations.
In Jones & Laughlin, the Supreme
Court instructed that a covered employee may bring a section 905(b) action
for negligence against a dual-capacity defendant in its vessel owner capacity;
however, the Court has not yet explained how to distinguish between the
employer responsibility and the vessel responsibility. See Morehead
v. Atkinson-Kiewit, J/V, 97 F.3d 603, 605 (1st Cir. 1996) (en banc).
Nor has the Court yet explained how the principles it set out in Scindia
apply to claims brought by non-stevedoring harbor workers covered under
the LHWCA against a vessel owned by their own employer. This case presents
the question how to define a dual-capacity defendant's negligence in its
role as vessel, so as to distinguish such actionable negligence from its
non-actionable negligence in its role of construction contractor employing
covered harbor workers.
As noted, Scindia defined the vessel's
duty of care in the context of the traditional arrangement of stevedoring
operations involving the triangular relationship of vessel, independent
stevedore-employer, and longshoreman employee. See also Howlett,
512 U.S. at 96 (suggesting that this is the typical relationship in the
longshoring business); Jones & Laughlin, 462 U.S. at 528 ("Most
longshoremen who load and unload ships are employed by independent stevedores,
who have contracted with the vessel owners to provide such services.").
This case presents two variations from that fact pattern. First, Gravatt
was a dock builder- a harbor worker covered under the LHWCA but not a longshoreman.
Second, S&B was acting as a dual-capacity employer-vessel. The Supreme
Court has not addressed the extent to which
Scindia's analysis defines
the vessel's duties to LHWCA-covered harbor workers not engaged in longshoring
operations; nor has it ruled on how Scindia applies in dual-capacity
cases. See Morehead, 97 F.3d at 611.
As to the first question, lower federal courts
have generally held that Scindia provides the appropriate point
of departure for analyzing a vessel's liability in a section 905(b) action
brought by non-longshoring harbor workers. See, e.g., Morehead,
97 F.3d at 613 (applying Scindia in a case concerning a bridge construction
worker); Elberg v. Mobil Oil Corp., 967 F.2d 1146, 1149-51 (7th
Cir. 1992) (affirming district court's application of Scindia analysis
to define scope of vessel duties to welder employed by ship repair company);
v. Pintail Enters., 943 F.2d 528, 533-36 (5th Cir. 1991) (applying
analysis where harbor worker was heavy equipment operator who was injured
on the deck of another owner's barge); Teply v. Mobil Oil Corp.,
859 F.2d 375, 377 (5th Cir. 1988) (noting in principle that
analysis of scope of vessel liability under section 905(b) "applies to
other harborworkers who work on board vessels as well" and applying analysis
to worker employed by independent contractor who was injured on an oil
well accessible only by barge); Cook v. Exxon Shipping Co., 762
F.2d 750, 752 (9th Cir. 1985) (holding that Scindia duties "apply
to employees of independent repair companies who are working on a vessel");
v. Texaco, Inc., 674 F.2d 447, 451 (5th Cir. 1982) (applying
analysis where plaintiff harbor worker was employee of repair contractor
hired to inspect storage tanks of oil tanker for rust).
The more troublesome question, however, is
how Scindia's instruction regarding the scope of the vessel's duties
in the tripartite situation of employee, independent employer and third-party
vessel is to apply to the dual-capacity case, where the LHWCA provides
that the employer-vessel owner is immune from suit for negligent conduct
in its "employer" capacity, see 33 U.S.C. § 905(a), but liable
for suit under section 905(b) for negligence in its "owner capacity." Jones
& Laughlin, 462 U.S. at 531 n.6.
The relationship seems clear as to the first
prong of the Scindia duties-the "turnover duty." If because of negligence
of the ship's crew, the vessel's equipment is faulty, or hidden dangers
beset the contracted operation, so that an experienced contractor could
not safely carry out its operations, such negligence would seem to constitute
negligence in the capacity as vessel and render the ship liable whether
the contracting operations were carried out by an independent stevedore
or by the same entity as owns the vessel.13
The application of Scindia's second
and third prongs-the active control duty and the duty to intervene upon
actual knowledge-to the circumstance where the harbor-work contractor and
the owner of the vessel are the same entity is more problematic. Where
the contracted service is performed by employees of the entity that owns
the vessel, by definition the vessel owner would have "actively involved"
itself in the operation and would have "actual knowledge" of the failure
of the personnel undertaking the task to operate in a manner that protected
their coworkers from danger. Thus, if any "active control" or "actual knowledge"
on the part of the dual-capacity defendant were sufficient to constitute
actionable negligence under section 905(b)-regardless whether the defendant
took control or had knowledge in its employer capacity or its vessel capacity-the
availability of a tort remedy against the vessel would turn on whether
the harbor-working operations were performed by a contractor independent
of the vessel or by the same entity that owned the vessel-except in the
four circumstances covered by the second and third sentences of section
905(b). Harbor-working employees not within these four specifically excluded
categories would have more expansive tort remedies if employed by a dual-capacity
employer-vessel owner than they would have if employed by an independent
contractor. By the same token, the dual-capacity employer-vessel owner
would have greater liabilities than if the work arrangement involved a
single-capacity employer and a third-party vessel.14
This result would be contrary to the express
intent of Congress, which sought generally in drafting section 905(b) to
provide the same result regardless whether the covered work was performed
by an independent contractor or by the ship through personnel it hired
directly to perform it. See H.R. Rep. 92-1441, 1972 U.S.C.C.A.N.
It therefore appears that the Scindia
tests for vessel negligence, developed in the context of a tripartite relationship
between employee, independent contractor and third-party vessel, cannot
fully serve as the test for the negligence of a dual-capacity defendant
in its vessel capacity without undermining the intent of Congress that
the availability of a section 905(b) negligence action against the vessel
should not depend on whether the vessel is owned by a third party or by
In Morehead v. Atkinson-Kiewit, J/V,
97 F.3d 603 (1st Cir. 1996), the First Circuit, sitting en banc, recognized
that the liability of vessel owners would be greatly expanded in dual-
capacity cases if the knowledge or active control of the dual-capacity
defendant acting in its capacity as employer could be imputed to it in
its capacity as vessel, thereby exposing it to liability under section
905(b) for breach of the second or third of the Scindia duties.
97 F.3d at 611. Following the analytical approach previously employed in
the Fifth Circuit, Morehead ruled that the dual-capacity vessel
could be held liable under section 905(b) only to the extent that it breached
its Scindia duties of care while acting in its capacity as vessel.
at 613 (following Castorina v. Lykes Bros. S.S. Co., 758 F.2d 1025,
1033 (5th Cir. 1985) (holding that the LHWCA "requires us to separate the
negligence of the shipowner and that of the stevedore, even when the shipowner
performs its own stevedoring activities" and that "the duty owed by a shipowner
to a longshoreman under section 905(b) is that established by Scindia
. . . ; this duty is neither heightened nor diminished when the longshoreman
is employed directly by the vessel")).
Morehead is particularly instructive
for our case because the plaintiff, like Gravatt, was a harbor worker of
a type not expressly mentioned in the second and third sentences of section
905(b). Morehead recognized that when the vessel owner is also the
employer, failure to distinguish between its negligent conduct in its employer
capacity, for which it is immune to suit in tort under section 905(a),
and its negligence in its vessel capacity, for which it is liable to suit
under section 905(b), has the effect of undermining the statutory scheme
"by expanding the liability of employers that act simultaneously as vessel
owners, when the statute does not call for such a reading and the Supreme
Court has cautioned against it." Id. at 613. The Morehead
court concluded that in determining whether the dual- capacity vessel-employer
had breached its Scindia duties while acting in its vessel capacity,
"a court may have to divide the employer-shipowner into a hypothetical
independent employer and independent vessel owner, each separately holding
the duties allocated under principles suggested in Scindia." Id.
Plaintiff Morehead was employed as a carpenter
on a bridge construction project and a line-handler on a barge used in
the construction project. See id. at 605. Defendant
Atkinson-Kiewit ("A-K"), the construction contractor, was Morehead's employer,
33 U.S.C. § 902(4), and, as the charterer of the barge, the vessel
owner, see 33 U.S.C. § 902(21). Morehead was injured on the
barge when he stepped into an open hatch. The hatch had been left open
negligently by a co-worker, whose regular duties also included both carpentry
and linehandling. See Morehead, 97 F.3d at 605. Under normal
principles of respondeat superior the negligence of the co-worker
would be imputed to A-K. The court framed the question as whether the negligent
act of leaving the hatch open was attributable to A-K acting in its employer
capacity, thereby precluding a tort remedy under section 905(a), or acting
in its vessel capacity, thereby exposing it to liability in tort under
section 905(b). See id. at 608. The plaintiff argued that
A-K, acting in its vessel capacity, violated the Scindia duties
it owed him because "at the time he was injured, A-K as vessel (rather
than A-K as employer) . . . had `active control' over or `actual knowledge'
of the open hatch." Id. at 614.
The First Circuit rejected the argument. It
found that Morehead's co- worker, in opening the hatch, was acting as an
agent of his employer not as an agent of the vessel, because the hatch
was opened in furtherance of A- K's operations as a bridge builder, rather
than in its capacity as vessel owner. Id. at 616. It concluded that
the barge tended by Morehead and his co-worker were "operated within A-K's
control and knowledge qua employer." Id. at 614. The
barge was "analogized to the areas of a vessel taken over by longshore
workers in the Scindia setting." Id. Morehead's co-worker
was found to have acted "as Morehead's fellow employee pursuing assigned
harbor-worker duties rather than as A-K's agent in its distinct shipowner's
Id. at 616. Any negligence imputed to A-K was therefore attributable
to its capacity as employer, for which it was immune from liability in
tort under section 905(a).
We agree with that analysis of the application
of Scindia duties to the dual-capacity employer. Liability in vessel
negligence under section 905(b) will only lie where the dual-capacity defendant
breached its duties of care while acting in its capacity as vessel owner.15
The negligent actions of a dual-capacity defendant's employees must be
analyzed to determine whether they were undertaken in pursuance of the
defendant's role as vessel owner or as employer. The negligence of the
employer's agents, acting in tasks constituting harbor-work employment,
may not be imputed to their employer in its capacity as vessel owner. Congress's
intention is best carried out through analysis of the dual-capacity defendant's
allegedly negligent conduct to determine whether it constituted negligence
of the defendant in its role as vessel owner, rather than within the scope
of its harbor-working activities. If the negligent conduct occurred in
the course of activity within the scope of the covered harbor work-such
that if a contractor independent of the vessel were performing the work,
its liability would have been limited under section 905(a) to statutory
compensation payments-then liability should not lie against the vessel
under section 905(b) simply because the defendant was both employer and
The approach adopted by the First and the
Fifth Circuit comports with our own cases in which we have consistently
recognized that Congress did not intend the rights of employees and the
liabilities of employers and vessels under the LHWCA to turn on whether
the injured employee was employed by an entity acting in the dual capacity
of employer and vessel owner. See, e.g., Napoli v. Hellenic
Lines, Ltd., 536 F.2d 505, 507 (2d Cir. 1976) ("The expressed intent
of Congress was that the same principles should apply in determining the
liability of a vessel which employs its own longshoremen as apply when
they are the servants of an independent contractor."). As a corollary,
in dual-capacity cases "in order to determine whether a shipowner-employer
may be held liable for damages, a court must decide if the negligence that
caused the accident was owner occasioned," and "the key issue is whether
the shipowner's employees who were at fault committed the negligent acts
in their capacity as agents of the vessel on the one hand or as employees
performing longshoring, shipbuilding or repair services on the other."
v. Eastern Seaboard Pile Driving, Inc., 604 F.2d 789, 795 (2d Cir.
1979) (internal quotation marks omitted).
In summary, when the employer of an injured
harbor worker is also the owner of the vessel and is sued by the harbor
worker for negligence under section 905(b) for vessel negligence, the court's
task is to analyze the allegedly negligent conduct to determine whether
that conduct was performed in the course of the operation of the owner's
vessel as a vessel or whether the conduct was performed in furtherance
of the employer's harbor-working operations.
4. The application of the test to S&B's
The application of this test to the present
facts leads to the conclusion that S&B was negligent in its capacity
as employer, not in its capacity as vessel. Neither the materials barge,
nor the crane barge, nor anybody present at the bridge repair site was
engaged in vessel duties at the time of the accident.
The task of the materials barge, as a vessel,
was to transport building materials from Newark to the work site and to
transport debris from the work site to Newark. On the other hand, the task
assigned to the negligent Holzheuer and the harbor-working gang of which
Gravatt was a part was to make repairs to the 145th Street Bridge, which
included the unloading of construction materials brought by the barges
and the reloading of the barges with debris. The performance of the construction
work was separate and apart from the vessel's work. Gravatt's injury occurred
by reason of Holzheuer's negligent conduct within the scope of Holzheuer's
employment as a supervisory harbor worker overseeing materials handling
in making repairs to the bridge-not in the performance of vessel-related
duties. Holzheuer was negligent as agent of S&B in its capacity as
contractor performing bridge repairs not in its capacity as vessel owner.
Had the bridge repairs been performed by a contractor independent of the
vessel, Gravatt, the injured employee, and Holzheuer, the negligent employee,
would both have been employees of the construction contractor, not of the
barge used to transport materials to the construction site. In such circumstances
it would have been clear that Gravatt's recovery was limited by section
905(a) to his compensation remedy against his employer. He would have had
no basis for asserting negligence on the part of the barge owner, who would
have delivered the barge loaded with materials to the construction site
and been waiting to tow it back to Newark once it was loaded with debris.
The fact that Gravatt's injury, resulting from the negligence of his supervisor
Holzheuer, took place on a barge owned by their employer, does not justify
imposing negligence liability on S&B as owner of the barge, as a third
party. Because S&B's negligence was attributable to its capacity as
employer rather than its capacity as vessel, its exclusive liability to
its injured employee is for the statutory compensation payments under section
904. See 33 U.S.C. § 905(a). There was no negligence of anyone
acting in a vessel capacity to justify a tort action against the vessel
as third party under section 905(b).
As for the crane barge, for a long time it
had been tied up at the bridge, dedicated to the harbor-working project
of bridge repair. The crane barge was deployed directly in the construction
activity-to drive new piles, to extract old piles and to excavate the river
bed; it was also used to handle materials in support of that construction
activity. All the personnel working on the crane barge were engaged in
bridge repair; none was engaged in seafaring work. At the time of the accident,
the specific task of the crane barge, whose negligent performance led to
Gravatt's injury, was the stevedoring of the materials barge. Stevedoring
work is treated by
section 905(b) as not a part of vessel duties.Employees
injured while employed by a vessel to provide stevedoring services are
expressly barred from bringing a suit for negligence against the vessel
under section 905(b), when their injury was caused by the negligence of
other persons engaged in providing stevedoring activities. See 33
U.S.C. § 905(b).
It may be viewed as an unhappy result to limit
a worker seriously injured by the negligence of an agent of his employer
to his statutory compensation payments. But that is the intent of workers'
compensation laws and it is the result intended by Congress under the LHWCA.
The employer's immunity from liability in tort for its negligence is the
rule established by section 905(a), while an employee's ability to recover
from the vessel under section 905(b) is the exception. See Canizzo
v. Farrell Lines, Inc., 579 F.2d 682, 687 (2d Cir. 1978) (Friendly,
dissenting) ("Courts must be exceedingly careful in defining the contours
of the [covered employee's] action for negligence against the ship . .
. lest too expansive notions of the ship's duty vitiate Congress' intent
to do away with absolute liability for vessels . . . and make greatly improved
compensation benefits the primary remedy for longshoremen and harbor workers.");
97 F.3d at 613; Levene v. Pintail Enters., 943 F.2d 528, 531 (5th
Cir. 1991) ("The availability of a tort remedy for vessel negligence is
a limited exception to the . . . LHWCA, which . . . generally replaces
negligence causes of action against employers with a system of predetermined,
standardized benefits.") (footnote omitted). Congress adopted this position
in part because it believed that the best way to protect harbor workers
from injury was to place no-fault responsibility for compensation on their
employers. To place tort liability on the vessel merely because it is owned
by the same entity as employed the covered workers would be contrary to
the scheme Congress developed.
(5) The district court's reasoning.
The district court imposed liability on S&B
on the basis of separate, alternative lines of reasoning. It read Fanetti,
678 F.2d 424, to mean that in a dual-capacity case "the owner-employer
is liable to the worker for injuries caused by the owner-employer's negligence
. . . [regardless] whether the acts of negligence are attributable to the
owner-employer in its capacity as owner or as employer." Gravatt,
53 F. Supp. 2d at 424. Alternatively, the district court ruled that "[e]ven
under Morehead, S&B as vessel owner" breached its Scindia
duties, Gravatt, 53 F. Supp. 2d at 421 (emphasis added); and relying
on a passage from Smith v. Eastern Seaboard Pile Driving, Inc.,
604 F.2d 789 (2d Cir. 1979), it concluded that "Gravatt is entitled to
recover against S&B because the injuries were caused by S&B in
its capacity as vessel owner." Gravatt,
53 F. Supp. 2d at 423 (emphasis added). We believe the court misinterpreted
the authorities on which it relied.
The district court recognized that Morehead's
analysis requires the court to distinguish a dual-capacity defendant's
conduct in its employer capacity from its conduct in its vessel capacity,
and that in undertaking this analysis the "`court may have to divide the
employer-shipowner into a hypothetical independent employer and independent
vessel owner, each separately holding the duties allocated under principles
suggested in Scindia.'" Gravatt, 53 F. Supp. 2d at 421 (quoting
97 F.3d at 613).16 Applying this mode
of analysis, the district concluded that:
S&B as vessel owner had active control
over the vessel and its cargo of debris and new material, and knew or should
have known about the hazards created
when commingling debris and new material and the potential for injury-causing
accidents to occur, making it liable under
Scindia standards. S&B
did not exercise ordinary care in keeping its debris/material barge, crane
barge, and vessel equipment in a condition that would permit its workers,
who were not expert and experienced stevedores, to carry on cargo operations
safely. . . . S&B failed to fulfill its
Scindia duty to intervene
and correct the hazardous condition created by commingling the debris and
good materials on its barges and the use of timber tongs. Morehead
also holds that the Scindia duty arising from active control over
a hazardous condition is triggered when the dangerous condition is on the
Id. at 421-22 (citations omitted).
In our view the district court's observations
justify the conclusion that S&B was negligent, but not that it was
negligent in its capacity as vessel owner. A-K, the vessel owner in Morehead,
also had been negligent in circumstances where its agents exercised active
control of the barge and had actual knowledge of the hazard. Nonetheless
it was not held liable under section 905(b) because its negligence was
in its capacity as the employer of construction workers, rather than in
its capacity as vessel owner. See Morehead, 97 F.3d at614,
616. Although the dangerous condition arose on A-K's vessel through the
negligence of A-K's employee, it was caused by the negligence of a worker
acting within the scope of his employment as a harbor worker who had been
employed by the dual-capacity defendant in its capacity as construction
contractor. In its role as vessel owner, A-K had turned the vessel over
to the care of its harbor workers assigned to the construction project.
The same is true of this case. Gravatt and
his foreman Holzheuer were hired by S&B in its capacity as construction
contractor to make repairs to the bridge's fender system. S&B also
chartered barges. S&B's crane barge had been turned over to S&B's
harbor construction workers: it was used either directly in construction
activities-extracting old piles, driving new piles and excavating the river
bed-or in the materials handling operations. S&B's materials barge,
having transported construction materials from Newark to the bridge site,
was turned over to S&B's construction employees to have the new materials
offloaded and the debris materials loaded on. In performing this materials
handling operation, these employees acted negligently, but this negligence
arose from operational decisions made by S&B in its capacity as construction
contractor not in its capacity as vessel owner. While S&B had "active
control" over the barge, and "actual knowledge" of the negligent conduct,
those facts are not sufficient to render it liable, unless that active
control or actual knowledge was in its role as vessel owner.18
In further support of its conclusion that
Gravatt's injuries "were caused by S&B in its capacity as vessel owner,"
53 F.Supp. 2d at 423, the court also cited our opinion in Smith,
604 F.2d 789, and quoted language from that opinion which stressed that
the "`acts and omissions found to constitute actionable negligence all
took place prior to the actual dive'" in which the covered worker drowned.
53 F. Supp. 2d at 424 (quoting Smith, 604 F.2d at 796). The district
court reasoned that "S&B's negligence [also] preexisted the date of
the injury," id., because the evidence showed that S&B's negligent
work practices-the mixing of debris and new material on the materials barges
and the use of timber tongs as hoisting equipment-"were consistent practices
adopted prior to the accident." Id.
We do not agree with this understanding of
In Smith, decided before Scindia, Fanetti and the
1984 Amendments, we recognized that in dual- capacity cases "in order to
determine whether a shipowner-employer may be held liable for damages,
a court must decide if the negligence that caused the accident was owner
occasioned." Id. at 795 (internal quotation marks omitted). Therefore,
"the key issue [was] whether the shipowner's employees who were at fault
committed the negligent acts in their capacity as agents of the vessel
on the one hand or as employees performing longshoring, shipbuilding, or
repair services on the other." Id. Our approach in Smith,
therefore, is consistent with the bifurcated analysis of the conduct of
a dual-capacity defendant adopted by the First Circuit in Morehead
and the Fifth Circuit in Castorina. The key question is, in what
capacity was the defendant negligent?
In Smith, plaintiff's deceased husband
was employed by defendant as a diver to inspect underwater damage to a
dredge, owned by the defendant. He worked off a tug which was also owned
by the defendant. When he jumped into the water, the heavy equipment he
wore overturned him, putting him in distress. The efforts of the tug personnel
to right him, buoy him and haul him from the water were unsuccessful and
he drowned. The jury at trial determined that the defendant was negligent
by reason of the tug's failure to have (i) an emergency plan, (ii) a rescue
line, life ring or life raft, and (iii) a ladder to facilitate reboarding.
The district court, however, entered judgment for the defendant because
it held that the negligence was that of tug employees who, like the decedent,
were involved in the provision of repair services. See Smith,
604 F.2d at 792-93.
We reversed, directing the entry of judgment
for the plaintiff. See id. at 798. Plaintiff argued to us
that defendant's "negligence as shipowner rather than the negligence of
its employees acting as repairmen caused the drowning." Id. at 793.
We agreed. We observed that in ruling for the defendant, the district court
did not undertake
sufficient scrutiny of the particular
negligent acts that were found to have been committed. The acts and omissions
found to constitute actionable negligence all took place prior to the actual
dive and were akin to a failure to provide a safe place to work.
The absence of a rescue plan, the improper placement of emergency apparatus,
and the failure to provide a ladder or platform were all defects in the
general operation of the tug, and it is merely fortuitous that they came
to light during a dive that was part of a repair program.
Id. at 796 (footnotes omitted).
The negligence was found to be in the vessel
capacity because it consisted of the failure to equip the tug properly
for emergencies. That the negligent acts occurred prior to the accident,
the fact upon which the district court in our case focused, was not the
crucial point in Smith; it was merely a facet of the overall conclusion
that the negligence was in the role of vessel and not in the role of employer
performing the task for which the plaintiff was hired.
As we have seen, that bifurcated analysis
leads to an opposite conclusion in this case. It may be that the patterns
of negligent conduct-the loading of debris so as to obstruct access to
new materials and the use of tongs-had been established prior to the accident
that resulted in the injury. But those negligent work practices were undertaken
as part of the materials handling process in performance of the bridge
repairs for which plaintiff was hired. They were not, as was the case in
a part of the "operation of the [vessel]." Accordingly, the record of consistently
negligent work practices establishes only that S&B was a consistently
negligent employer that routinely failed to provide a safe place to work.
And Gravatt's remedy against S&B in its capacity as his employer is
limited to the statutory compensation payments under section 904. See
33 U.S.C. § 905(a). The record proves only negligence in S&B's
role as the employer of Gravatt and his crew, not in S&B's role as
As noted, the district court's second basis
for imposing liability was its reading of Fanetti, 678 F.2d 424.
In response to S&B's argument that it was negligent in its role as
employer, not in its role as vessel owner, the court explained,
[i]n Fanetti, the Second Circuit
answered the question of whether a shipowner choosing to act as its own
stevedore is entitled to insulation from liability, partial or total, which
hiring an independent stevedore might otherwise afford. The Second Circuit
answered that question in the negative, affirmed a verdict in favor of
the plaintiff, and held that a shipowner choosing to act as its own stevedore
is not entitled to insulation from liability under the LHWCA. S&B as
vessel owner in this case, acted as its own [contractor], and anynegligenceonitspart
is actionable vesselowner negligenceunder § 905(b).
Gravatt, 53 F. Supp. 2d at 420-21 (emphasis
added). The district court concluded that:
Under Fanetti, . . . when
an owner-employer does not use an independent stevedoring contractor to
load, unload, or restow cargo, the owner-employer is liable to the worker
for injuries caused by the owner-employer's negligence. There is no
need to determine whether the acts of negligence are attributable to the
owner-employer in its capacity as owner or as employer.
Id. at 424 (emphasis added).
This conclusion is contrary to the Supreme
Court's observation in Jones v. Laughlin that "a vessel owner acting
as its own stevedore is liable only for negligence in its `owner' capacity,
not for negligence in its `stevedore' capacity." Jones v. Laughlin,
462 U.S. at 531 n.6. It conflicts with Congress's express intent, and the
logic and language of the LHWCA, that the worker's entitlement to a tort
remedy should not depend on whether he was employed directly by the vessel
or by an independent contractor. See id. at 532; Edmonds
v. Compagnie Generale Transatlantique, 443 U.S. 256, 266 (1979). Finally,
it conflicts with our own previous case law which recognizes this intent.
536 F.2d at 507; Smith, 604 F.2d at 795;
Albergo v. Hellenic
Inc., 658 F.2d 66, 68-69 (2d Cir. 1981).
We believe the district court read the pertinent
passage from Fanetti out of context. Pasquale Fanetti worked as
a longshoreman loading containers on board the Hellenic Splendor. Hellenic
Lines Ltd. ("Hellenic"), the owner of the vessel, made a practice of hiring
its own longshoremen, rather than engaging a stevedoring contractor. Thus
Hellenic stood in a dual capacity with respect to Fanetti, acting both
as his employer and as the vessel on which he worked. Fanetti was injured
when he slipped and fell by reason of greased and oily lashing gear, which
the vessel's crew negligently had left obstructing a walkway. The vessel's
crew was responsible for lashing down the cargo containers after they had
been loaded by the longshoremen. The crew had left the lashing gear on
the deck in preparation for that task. Both Fanetti and his hatch boss
on the stevedoring crew had complained to the vessel's crew about the obstruction
to the walkway, but to no avail. See id. at 426.
Not surprisingly, the jury found that Fanetti
was injured as the result of negligence on the part of the vessel, and
the district court entered judgment against Hellenic. It was clear that
"[c]rew negligence created the hazard." Id. at 427. The negligence
had been in the dual-capacity employer's role as vessel owner. On appeal,
Hellenic did not dispute that proposition. See id. at 426
("We do not understand Hellenic to dispute on the appeal that the vessel's
crew, in the performance of work unrelated to the longshoremen's loading
of cargo, created a condition on deck dangerous to the longshoremen who
had to work there."). Rather Hellenic contended that notwithstanding that
the dangerous condition arose from the negligent conduct of its vessel's
crew, the jury should have been instructed that the "stevedore bears the
primary responsibility to correct dangerous conditions" and that liability
under section 905(b) lies against the vessel only if the vessel could reasonably
anticipate that the stevedore would not correct the hazard. Id.
at 427. Hellenic argued that the jury should have been instructed on the
distinction between the safety responsibilities of the shipowner and the
stevedore; in particular Hellenic complained that the jury was not instructed
that the stevedore was responsible for insuring compliance with health
and safety regulations relating to longshoring. Id. at 427.
We disagreed and affirmed the district court.
We noted that even if the jury had been instructed in the manner that Hellenic
requested, "exoneration of Hellenic on the evidence in this case [was]
unlikely." Id. However, we declined to affirm on the basis that
any error in the charge was harmless. We noted that in Doca v. Marina
Mercante Nicaraguense, S.A., 634 F.2d 30 (2d Cir. 1980), this court
had imposed a 10% share of responsibility on a stevedore, which had failed
to discharge a non- delegable duty imposed by an OSHA regulation requiring
it to keep its work area free of tripping hazards, notwithstanding "`[t]he
fact that the hazard was primarily the ship's responsibility.'" Fanetti,
678 F.2d at 427-28 (quoting Doca, 634 F.2d at 33). Because we were
"not prepared to say that no reasonable jury could find that the obstruction
was at a place where an independent [stevedore] contractor (if one existed)
would have been expected to remove it," we therefore reached the question
"whether a shipowner choosing to act as its own stevedore is entitled to
that insulation from liability, partial or total, which hiring an independent
contractor might have afforded." Id. at 428
We answered the question "in the negative,"
citing the language of Judge Van Graafeiland in Napoli, 536 F.2d
at 508, and of Judge Friendly in a dissenting opinion in Canizzo v.
Farrell Lines, 579 F.2d 682, 689 (2d Cir. 1978), to the effect that
to relieve a shipowner of liability for a dangerous condition it had created
because that hazard was known to the stevedore was clearly inappropriate
where the shipowner acts as its own stevedore. See Fanetti,
678 F.2d at 428.
While it is true we concluded in Fanetti
that "a shipowner choosing to act as its own stevedore is [not] entitled
to that insulation from liability, partial or total, which hiring an independent
contractor might have afforded," id. at 428, the district court
read far too much into the statement.20SeeGravatt,
53 F. Supp. 2d at 424 ( "There is no need to determine whether the acts
of negligence are . . . in its capacity as owner or as employer."). Fanetti
did not mean that when a vessel hires its own personnel to perform harbor
work, rather than bringing in an independent contractor, it is liable to
the workers in tort for all injuries caused by the negligence of its employees,
regardless whether the negligent conduct occurred while the defendant was
operating in the capacity of vessel or of employer.
It was undisputed that Hellenic's negligent
acts in Fanetti were committed in its role as vessel by the vessel's
permanent crew. Had the negligent obstruction of the walkway resulted from
the carelessness of the stevedoring gang, which Hellenic had hired directly
rather than retaining a stevedoring contractor, Fanetti does not
suggest that the vessel would have been liable in tort under section 905(b).
Such a result would make the vessel's liability turn on whether the shipowner
hired a stevedoring contractor or directly hired the longshoring crew-the
very result Congress sought to avoid. See H.R. Rep. 92-1441, 1972
U.S.C.C.A.N. at 4705; see also Jones & Laughlin,
462 U.S. at 532 ("`[A]ll longshoremen are to be treated the same whether
their employer is an independent stevedore or a shipowner- stevedore .
. . .'") (quoting Edmonds, 443 U.S. at 266); Napoli, 536
F.2d at 507 ("The expressed intent of Congress was that the same principles
should apply in determining the liability of a vessel which employs its
own longshoremen as apply when they are the servants of an independent
What we meant in Fanetti was that a
shipowner that has incurred liability in its vessel capacity by the negligent
acts of its vessel's crew cannot escape any part of that liability by pointing
to the failure of its own stevedoring employees to correct the hazard.
A dual-capacity defendant, negligent in its vesselcapacity,
cannot escape liability under section 905(b) by asserting that it should
have removed the hazard in its stevedoring capacity.21
In this case, however, the threshold question is whether S&B was negligent
in its vessel capacity.
If the dual-capacity defendant acts negligently
as an employer, its exclusive liability under LHWCA is for compensation,
just as if it were an independent contractor. If its negligence is in its
vessel capacity, it is liable to its employee in tort under section 905(b),
to the same extent as a third-party vessel would be liable to the injured
employee of an independent employer injured as the result of the third-party
vessel's negligence, and the vessel does not escape liability on the theory
that its employees acting in furtherance of its employer capacity ought
to have prevented the injury.
Because S&B's negligence which caused
Gravatt's injury was committed only in its role as his employer in the
bridge repairs, and not in its role as owner of the barge on which he was
injured, S&B's liability is limited by the LHWCA to compensation. The
judgment against it must be vacated. It is, therefore, not necessary to
reach the other arguments raised.
The judgment against S&B is reversed.
Because we conclude that S&B
was not liable in negligence under section 905(b) and reverse the judgment,
we need not reach the other arguments S&B raised on appeal regarding:
(1) S&B's entitlement to a judgment credit to reflect the payments
the Gravatts received in their post-judgment settlement with codefendants
the City of New York and N. Massand, P.C.; (2) whether punitive damages
may be awarded in suits brought under section 905(b); and (3) whether Gravatt
was contributorily negligent.
For this reason the district
court correctly dismissed Gravatt's claims under the Jones Act, concluding
that Gravatt had an insufficiently substantial connection to a vessel in
navigation to qualify as a seaman under the standard set out in Chandris,
Inc. v. Latsis, 515 U.S. 347 (1995). See Gravatt v. City
of New York, 1998 WL 341941, at *5-*6 (S.D.N.Y. June 26, 1998).
The district court concluded
that this "use of timber tongs . . . violated an industry-wide safety standard.
It also violated § 1981.81 of OSHA, 29 CFR § 1981.81, as well
as [New York State] Industrial Code §§ 23-1.5(c)(2), 23-2.1,
23-3.3(k), 23-6.1(d), 23-6.1(e), 23-8.1(e)(3), 23-8.1(f)(1)(iv), 23-8.1(f)(2)(ii),
and 23-8.2(c)(3)." Gravatt, 53 F. Supp. 2d at 417.
It has been undisputed throughout
that S&B's conduct was negligent. See, e.g., Gravatt,
1998 WL 171491, at *10 n.2 ("The [hoisting] procedure adopted was unsafe
and recognized to be so.").
In turn, section 907 sets out
in detail the employer's obligations to provide certain medical services
and supplies "for such period as the nature of the injury or the process
of recovery may require." 33 U.S.C. § 907(a). Section 908 sets out
a detailed schedule of payments that the employer must make in the case
of permanent total, temporary total or permanent partial disability. Seeid.
§ 908. Section 909 sets out a schedule of death benefits and specifies
the beneficiaries to whom they are payable in the event that an employee's
injury is fatal. See id. § 909
"The term 'employee' means
any person engaged in maritime employment, including any longshoreman or
other person engaged in longshoring operations, and any harbor-worker including
a ship repairman, shipbuilder, and ship-breaker . . . ." 33 U.S.C. §
902(3). The term does not include certain employees "subject to coverage
under a State workers' compensation law," id. § 902(3), including
"master[s] or member[s] of a crew of any vessel." Id. § 902(3)(G).
"The term 'employer' means
an employer any of whose employees are employed in maritime employment,
in whole or in part, upon the navigable waters of the United States (including
any adjoining pier, wharf, dry dock, terminal, building way, marine railway,
or other adjoining area customarily used by an employer in loading, unloading,
repairing, or building a vessel)." 33 U.S.C. § 902(4).
"[T]he term `vessel' means
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 charterer, master, officer, or crew
member." 33 U.S.C. § 902(21).
Longshoremen thus came to be described
Lastly, by 1972, the incentive
to sue the vessel for unseaworthiness, and thereby impose this liability
indirectly on the stevedore, was especially great because the maximum compensation
available under the LHWCA had not been increased for 12 years. As a result
many workers received statutory disability benefits under the LHWCA "as
low as 30% of their average weekly wage." H.R. Rep. 92-1441, 1972 U.S.C.C.A.N.
Plaintiff Pfeifer, a longshoreman,
slipped and fell on a barge owned by his employer, which had "negligently
failed to remove [snow and ice] from the gunnels." Jones & Laughlin,
462 U.S. at 526. The only issue of liability before the Supreme Court was
whether Pfeifer's suit was precluded by the exclusive liability language
of section 905(a). The defendant did not contest that its negligence was
attributable to it in its capacity as vessel owner.
Section 941(a) requires that
"[e]very employer shall furnish and maintain employment and places of employment
which shall be reasonably safe for his employees in all employments covered
by this chapter" and authorizes the Secretary of Labor to determine by
regulation particular "devices . . . safeguards . . . and working conditions."
33 U.S.C. § 941(a).
We use the example of stevedoring
operations to illustrate the issues involved in applying Scindia's
analysis to the dual-capacity employer-vessel owner. The vessel-stevedore-longshoreman
relationship is intended only as a concrete example of any vessel-employer-employee
relationship that may arise under the LHWCA's definition of those terms.
11 U.S.C. § 902(3), (4), (21); cf. Canizzo v. Farrell Lines,
Inc., 579 F.2d 682, 687 n.1 (2d Cir. 1978) (Friendly,
In our case, the relationship is between vessel (S&B qua vessel),
construction contractor (S&B qua employer) and dock builder
(Gravatt). The question of how Scindia applies outside the context
of stevedoring operations is analytically distinct from the question of
how it applies outside the triangular relationship of parties.
This can be seen by simple
example. Suppose covered workers are performing harbor work that is not
within the express statutory exclusions, and that the work involves the
use of a vessel. One of the workers is injured as the result of another's
negligent performance of the work. If those workers were employed by a
contractor independent of the vessel, the injured worker is limited to
compensation; he has no negligence action against the vessel. If on the
other hand, the function is performed by the same entity that owns the
vessel, then by definition the vessel's employees will have directly involved
themselves in the activities and will have actual knowledge of the unsafe
practices being used by the personnel performing the task. Liability of
the vessel in tort would follow.
We also agree with Morehead
that Scindia may be an appropriate starting point for determining
the scope of those duties, but recognize that certain harbor-work arrangements
"may be so foreign to those in Scindia's stevedoring context that
analysis [regarding the scope of those duties] will become no more than
a point of departure." Id. at 613. The central question in each
case will be whether the negligence of a dual-capacity defendant is attributable
to its capacity as vessel owner or its capacity as employer.
The district court went on
to quote, with added emphasis, Morehead's observation that "`[o]n
occasion, however, the duties and work arrangements pertaining to a suing
harbor worker may be so foreign to those in Scindia's stevedoring
context that Scindia's analysis will become no more than a point
of departure.'" Gravatt, 53 F. Supp. 2d at 421 (quoting Morehead,
97 F.3d at 613 (emphasis added in Gravatt)). We think the district
court misread the significance of Morehead's caution that Scindia
will sometimes provide only a starting point for defining the scope of
a vessel's duties of care. That caution does not abrogate the need to distinguish
in dual-capacity cases between defendant's negligence qua vessel
and its negligence qua employer. As we recognized as early as Smith,
that distinction is always the "key issue" in dual-capacity cases. Smith,
604 F.2d at 795. Morehead cautions only that in defining the vessel's
duties of care qua vessel in a non-stevedoring case, Scindia's
instruction may sometimes not be that pertinent. It provides no support
for the conclusion that "[t]here is no need to determine whether the acts
of negligence are attributable to the owner-employer in its capacity as
owner or as employer." Gravatt, 53 F. Supp. 2d at 424.
Even under Scindia's
duty to intervene, "should-have-known" constructive knowledge is insufficient
to meet the actual knowledge requirement. See 1 Thomas J. Schoenbaum,
and Maritime Law 447 & n.74 (2d ed. 1994).
As we have noted, in a nonstevedoring
case involving harbor work, Scindia's delimitation of the scope
of the duties of care owed by the vessel may only provide a starting point
for the analysis of whether the vessel was negligent. See supra
note 15. Even applying Scindia's tests mechanically, we conclude
no agent of S&B in its vessel capacity "actively involve[d]" itself
in the material handling operations. Scindia, 451 U.S. at 167. And
there were no areas of the barge that remained outside the control of the
construction workers and therefore under "the active control of the vessel."
The district court's assertion that "Morehead . . . holds that the
duty arising from active control over a hazardous condition is triggered
when the dangerous condition is on the vessel itself,"
53 F. Supp. 2d at 422, misreads Morehead's holding and reasoning.
No liability was found in Morehead, notwithstanding that the hazardous
condition (the open hatch) was "on the vessel itself," because the hazard
arose while the barge was not in the active control of the dual-capacity
employer acting in its capacity as vessel owner. That the hazard was "on
the vessel" is insufficient ground to impose liability.
In this respect, there is a
somewhat confusing observation in the Smith opinion. After explaining
that the negligent acts justifying the vessel's liability were defects
in the general operation of the tug and not a part of the repair program,
the court observed that "Eastern [the employer and owner of both the tug
and the damaged dredge] might have escaped liability if it had surrendered
control over the operation to a subcontractor that could supply and supervise
its own divers." Smith, 604 F. 2d at 796. That observation might
seem to contemplate that a different result would obtain depending whether
an independent contractor were employed. But if Eastern had employed an
independent contractor for the dive, nonetheless using its own tug to bring
the diver to the repair site, and the accident had happened in the same
fashion, Eastern would have remained liable for its negligence as third
party under the first sentence of 905(b) because the negligence giving
rise to the liability was premised not on how the diving operation was
performed but rather on Eastern's failure as tug owner to equip its tug
with a proper rescue plan and rescue equipment. What the court must have
contemplated in the sentence was that Eastern might not only have hired
an independent contractor to provide the diver but also relied on that
independent contractor to supply the tug that brought the diver to the
site. In those circumstances, it is true Eastern would have escaped liability-because
there would have been no negligence whatsoever on Eastern's part. Nonetheless
the result would have been similar in that the tug owner would have incurred
liability for furnishing a negligently equipped tug. From the point of
view of the vessel and the plaintiff, the result would have been the same.
The only change would have been in the identity of the owner of the vessel
held liable to the plaintiff.
We recognize that the district
court was not alone in reading Fanetti to establish that a dual-capacity
defendant will be liable in negligence under section 905(b) regardless
whether its negligent conduct was in its capacity as the employer of harbor
workers covered under the LHWCA or in its capacity as vessel. See,
97 F.3d at 611 (hypothesizing that we would no longer endorse Fanetti
in the light of the Supreme Court's decision in
Jones & Laughlin);
v. City of New York, 699 N.Y.S.2d 426, 431 (2d Dep't 1999) (adopting
the First and Fifth Circuits' analysis as "consistent with Congressional
intent and the limitations on employer liability set forth in the LHWCA"
and suggesting we would no longer endorse Fanetti); Frazor T. Edmondson,
a Vessel Owner's Interpretation of Dual Capacity: Why Fanetti Should
be Deemed Implicitly Overruled, 18 Del. J. Corp. L. 477 (1993). We
agree that such a reading of Fanetti endorses a result that conflicts
with the intentions expressed in the House Committee Report, with the Supreme
Court's admonition that "all longshoremen are to be treated the same whether
their employer is an independent stevedore or a shipowner-stevedore," Edmonds,
443 U.S. at 266; accordJones & Laughlin, 462 U.S. at 532, and
with our own case precedents,
see Napoli, 536 F.2d at 507;
604 F.2d at 795;
Albergo, 658 F.2d at 68- 69. We respectfully believe
that the district court and the cited commentators have read more into
than we intended.
We note a further reason why
the Fanetti discussion cannot justify the result reached by the
district court. When Fanetti entertained the question whether a
shipowner acting as its own stevedore is entitled to "that insulation from
liability, . . . which hiring an independent contractor might have
afforded," it was considering a speculative possibility. Fanetti,
678 F.2d at 428 (emphasis added). But the supposition entertained by Fanetti
that a shipowner that had negligently created a dangerous condition in
its vessel capacity could diminish its liability simply by hiring an independent
stevedore is contrary to fact. As the Supreme Court made clear in Edmonds,
in the classic triangular situation in which the covered worker is employed
by an independent contractor, if the worker's injury is caused by negligence
on the part of both the vessel and the worker's independent employer, the
employer will be shielded from liability in tort by the exclusivity of
the compensation remedy and the vessel will be liable for the full extent
of the harm. See Edmonds, 443 U.S. at 264 ("[T]he longshoreman
may recover the total amount of his damages from the vessel if the latter's
negligence is a contributing cause of his injury, even if the [employer]
stevedore, whose limited liability [compensation] is fixed by statute,
is partly to blame.").
The Fanetti court contemplated
that the vessel's employment of an independent contractor might diminish
its liability because, in Doca, a ten percent allocation of liability
had been placed on the independent stevedore by reason of its failure to
clear up the hazard negligently created by the vessel. But Doca
did not involve the relationship between ship and independent stevedore
634 F.2d at 32. In Doca, the injured harbor worker was employed
by a subcontractor which in turn had been retained by the independent stevedore.
In their relation to the injured worker, both the stevedore and the vessel
were third parties. Neither was shielded from liability by the exclusivity
of the compensation remedy, and neither was barred from seeking contribution
against the other. The judgment was presumably joint and several. The injured
worker was therefore able to recover 100% of his judgment against either
Although it is true that the ship
was able to recoup a part of the judgment by virtue of the independent
stevedore's comparative fault and that this would not have been possible
if the ship had acted as its own stevedore, that is simply because the
division of roles in Doca resulted in a larger number of third-party
tortfeasors. It did not affect the amount the plaintiff was entitled to
recover. If the plaintiff in Doca had been the employee of the independent
stevedore, the full liability would have fallen on the ship, without right
of contribution. See 33 U.S.C. § 905(b) (overruling Ryan