Cosmopolitan Shipping Co v. Allister

• Decision Date: 27 June 1949
• Docket Number: No. 351,351
• Citation: 337 U.S. 783,93 L.Ed. 1692,69 S.Ct. 1317
• Parties: COSMOPOLITAN SHIPPING CO., Inc. v. McALLISTER
• Court: U.S. Supreme Court

337 U.S. 783

69 S.Ct. 1317

93 L.Ed. 1692

COSMOPOLITAN SHIPPING CO., Inc.

v McALLISTER.

No. 351.

Argued Feb. 1, 2, 1949.

Decided June 27, 1949.

Rehearing Denied Oct. 10, 1949.

See 70 S.Ct. 32.

Mr. Leavenworth Colby, Washington, D.C., for petitioner.

Mr. Jacob Rassner, New York City, for respondent.

[Argument of Counsel from page 784 intentionally omitted] Mr. Justice REED delivered the opinion of the Court.

This case, like Hust v. Moore-McCormack Lines, 328 U.S. 707, 66 S.Ct. 1218, 90 L.Ed. 1534, and Caldarola v. Eckert, 332 U.S. 155, 67 S.Ct. 1569, 91 L.Ed. 1968, presents questions concerning the liability for injury to third persons of a general agent who, under the terms of the wartime standard form of agency agreement, GAA 4-4-42,¹ manages certain phases of the business of ships owned by the United States and operated by the War Shipping Administration. More specifically the issue raised by these facts is whether such a general agent is liable under the Merchant Marine Act of 1920, § 33, known as the Jones Act,² to a member of the crew who suffered physical injury through the negligence of the master and officers of such a vessel, when the injury occurred after March 24, 1943, the date of enactment of the War Shipping Administration (Clarification) Act.³

Respondent was procured from the union hiring hall by petitioner in accordance with the terms of the standard agreement⁴ and made available to the master for employment by him. The master is designated by the contract as an agent and employee of the United States. In July of 1945 respondent was signed on the S. S. Edward B. Haines at New York by the master of that vessel as second assistant engineer. In the space on the shipping articles entitled 'Operating Company on this Voyage' there was written 'Cosmopolitan Shipping Co., Inc., as general agent for the United States.' The articles were stamped at the top as follows: 'You Are Being Employed By the United States.'⁵

In November, 1945, when The Haines was on voyage and either in port or off the coast of China, respondent contracted poliomyelitis. At that time the master exercised 'full control, responsibility and authority with respect to the navigation and management of the vessel' as provided in § 3A(d) of the contract. See 337 U.S. 796, 69 S.Ct. p. 1324, infra. Because of alleged negligence of the master and officers in furnishing proper treatment he suffered permanent injury from the disease. McAllister sued the petitioner, Cosmopolitan, under the Jones Act. The complaint alleged that Cosmopolitan 'managed, operated and controlled' The Haines under a General Agency Agreement with its owner, that McAllister was in the employ of Cosmopolitan, and that his injuries resulted from the negligence of Cosmopolitan, 'its agents, servants, and employees' in failing to take precautions against a known poliomyelitis epidemic and in failing to provide proper treatment. The answer denied these allegations. The jury found a verdict for respondent for $100,000.

On appeal the United States Court of Appeals for the Second Circuit affirmed. McAllister v. Cosmopolitan Shipping Co., 169 F.2d 4. While recognizing that Cosmopolitan was 'a shipping company which contracted with the War Shipping Administration to attend to the accounting and certain other shoreside business of The Haines * * * in accordance with the standard form of General Agency Service Agreement,' Id. 169 F.2d at p. 5, the court felt itself bound by the decision of this Court in Hust v. Moore-McCormack Lines, supra. It relied upon the fact that we expressly distinguished the Hust case in Caldarola. The Court of Appeals reached this conclusion despite the fact that the injury to Hust occurred prior to the Clarification Act, and the injury here occurred subsequent to that act. In its view the Hust case held, as a matter of law, that before the Clarification Act a seaman under the Jones Act could recover for a tort against a service agreement general agent, as an employer. The Court did not perceive how the Clarification Act changed this liability. 169 F.2d 4, 8.

I.

We are impelled to the conclusion that the Clarification Act affords no basis for distinguishing the present case from the Hust case and that the reasoning in the later Caldarola case, which we accept as sound, calls for the rejection of the basis of the Hust case. The Hust case went on the theory that the general agents for the United States under the same standard service agreement were employers of the injured seaman, Hust, for the purposes of liability under the Jones Act.⁶ The general agent was found to be liable to the seaman by two steps of reasoning: first, that the overruling of U.S. Shipping Board Emergency Fleet Corporation v. Lustgarten, 280 U.S. 320, 50 S.Ct. 118, 74 L.Ed. 451, by Brady v. Roosevelt S.S. Co., 317 U.S. 575, 63 S.Ct. 425, 87 L.Ed. 471, gave a seaman a right to sue under the Jones Act such general agents as were employed under contracts like Moore-McCormack's for torts committed against seamen by masters and crew, 328 U.S. 716—722, 66 S.Ct. 1222, 1225, 90 L.Ed. 1534, second, that although 'technically the agree- ment made Hust an employee of the United States,' 328 U.S. at p. 723, 66 S.Ct. at page 1226, 90 L.Ed. 1534, the 'rules of private agency,' 328 U.S. at p. 724, 66 S.Ct. at page 1227, 90 L.Ed. 1534, should not be applied to take away 'protections' from seamen. See 332 U.S. 165—166, 67 S.Ct. 1574, 91 L.Ed. 1968.⁷ This second step was said to find support in the election given to seamen by § 1 of the Clarification Act to proceed under the new Act for claims arising after October 1, 1941, and before the enactment of the Clarification Act, March 24, 1943. 328 U.S. at page 725, et seq., 66 S.Ct. at page 1227, 90 L.Ed. 1534.⁸

As to the first conclusion, we think it arises from a misconception of the ruling of the Brady case. The Brady case decided no more, directly or by implication, than that an action could be maintained against agents of the United States at common law for the agents' own torts. The case did not involve the right to recover against employers under the Jones Act. Brady was a customs inspector suing for injuries sustained when a ship's ladder broke. The opinion said, 317 U.S. at page 577, 63 S.Ct. at page 426, 427, 87 L.Ed. 471, 'The sole question here is whether the Suits in Admiralty Act makes private operators such as respondent nonsuable for their torts.'⁹ Cf. Caldarola v. Eckert, 332 U.S. at pages 159—160, 67 S.Ct. at page 1571, 91 L.Ed. 1968.

As to the second conclusion we are unable to perceive in the statutes relating to sailors' rights or the history behind their enactment any legislative purpose to create in seamen employees of the United States through the War Shipping Administration a right to enforce tort claims under the Jones Act against others than their employers or any recognition that such right existed. The Jones Act was welfare legislation that created new rights in seamen for damages arising from maritime torts. As welfare le islation, this statute is entitled to a liberal construction to accomplish its beneficent purposes. Compare Aguilar v. Standard Oil Co., 318 U.S. 724, 63 S.Ct. 930, 87 L.Ed. 1107; American Stevedores v. Porello, 330 U.S. 446, 67 S.Ct. 847, 91 L.Ed. 1011. In considering similar legislation in other fields, we have concluded that Congress intended that the purposes of such enactments should not be restricted by common-law concepts of control so as to bar from welfare legislation as independent contractors persons who were as a matter of economic reality a part of the processes and dependent upon the businesses to which they render service.¹⁰

The issue in this case is whether a construction of the Jones Act carrying out the intention of Congress to grant those new rights to seamen against their employers requires or permits a holding that the general agent under the contract here in question is an employer under the Jones Act. The decision depends upon the interpretation of the contract between respondent and Cosmopolitan on one hand and that between Cosmopolitan and the United States on the other. We assume without deciding that the rule of the Hearst case applies, that is, the word 'employment' should be construed so as to give protection to seamen for torts committed against them by those standing in the proximate relation of employer, and the rules of private agency should not be rigorously ap- plied.¹¹ Yet this Court may not disregard the plain and rational meaning of employment and employer to furnish a seaman a cause of action against one completely outside the broadest lines or definitions of employment or employer. We have no doubt that under the Jones Act only one person, firm, or corporation can be sued as employer. Either Cosmopolitan or the Government is that employer.¹² The seaman's substantive rights are the same whoever is the employer. Under the Jones Act, his remedy permits him to demand a jury trial. If the Government is the employer, his remedy is in Admiralty without a jury. See the excerpt from the House Report, p. 8, infra.

It was said in Hust that the election of remedies granted seamen injured between October 1, 1941, and the effective date of the Clarification Act, March 24, 1943, indicated that a seaman had broader rights before the Clarification Act than he did after. 328 U.S. at page 725, 66 S.Ct. at page 1227, 91 L.Ed. 1968, Part III. The suggestion was that Congress could not have intended to restrict suits against general agents. This statement springs from the Court's then understanding of the Brady case, which we have heretofore considered. The reason for the election given by the Clarification Act was quite different. It was to give seamen employees of the United States through the War Shipping Administration on public vessels or foreign-flag vessels or otherwise an election to employ the means for redress theretofore possessed by them, such as those...