835 F.2d 490 (3rd Cir. 1987), 86-1772, Derr v. Kawasaki Kisen K.K.

Docket Nº:86-1772, 87-1031.
Citation:835 F.2d 490
Party Name:William DERR, Appellant, v. KAWASAKI KISEN K.K. Thomas ROBERTSON, Appellant, v. TOKAI SHOSEN K.K.
Case Date:December 15, 1987
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit
 
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Page 490

835 F.2d 490 (3rd Cir. 1987)

William DERR, Appellant,

v.

KAWASAKI KISEN K.K.

Thomas ROBERTSON, Appellant,

v.

TOKAI SHOSEN K.K.

Nos. 86-1772, 87-1031.

United States Court of Appeals, Third Circuit

December 15, 1987

Argued Sept. 9, 1987.

Page 491

Charles Sovel (argued), Freedman and Lorry, Philadelphia, Pa., for appellants.

Kevin F. Berry (argued), John Cannon, III, Rawle & Henderson, Philadelphia, Pa., for appellee Kawasaki Kisen K.K.

Carl D. Buchholz, III (argued), Rawle & Henderson, Philadelphia, Pa., for appellee Tokai Shosen K.K.

Before SLOVITER and STAPLETON, Circuit Judges, and FISHER, District Judge. [*]

OPINION

SLOVITER, Circuit Judge.

In 1972, Congress amended the Longshoremen's and Harbor Workers' Compensation Act (the Act) to eliminate any liability of a vessel for injuries to longshoremen during cargo operations unless caused by the negligence of the vessel. This case presents, for the first time in this court since the Supreme Court's decision in Scindia Steam Navigation Co. v. De Los Santos, 451 U.S. 156, 101 S.Ct. 1614, 68 L.Ed.2d 1 (1981), the issue of what liability, if any, a vessel has for injuries to longshoremen caused by cargo improperly loaded by a foreign stevedore.

I.

Background

Appellants William Derr and Thomas Robertson were longshoremen injured in separate but similar accidents in which cargo fell upon them during the unloading of the respective appellees' vessels. Derr, who was discharging packages of lumber, was injured when a package fell and struck his foot. Robertson was injured when a coil of steel rod fell from the stow, striking him on the head and back. In both cases, the cargo had been loaded by independent stevedores in foreign ports. Derr and Robertson were employed by independent stevedores responsible for the discharge of the cargo. The longshoremen filed suits in federal court alleging that the shipowners were liable under section 5(b) of the Act, 33 U.S.C. Sec. 905(b) (1982 & Supp. III 1985), on the ground that their injuries were caused by the vessels' negligence.

Each case was tried to a jury. The juries heard testimony suggesting that the ships had encountered bad weather during passage. In Derr, it was stated that the cargo had shifted during the voyage, meaning that considerable movement of cargo had occurred. In Robertson, there was testimony that there "may have been some movement but not what we [in the shipping business] call shifting," which is more serious. App. at 166-67. The appellants' expert witness testified that the cargo would probably not have moved or shifted had it been properly secured by the foreign longshoremen.

Derr testified that he was aware of the shift in the cargo prior to the accident, and Robertson presented evidence that the movement of the wire coils was apparent. Both plaintiffs stated that it was not unusual to encounter shifted cargo.

The district court in each case granted a directed verdict for the vessel, holding that under the Supreme Court's decision in Scindia Steam Navigation Co. v. De Los Santos, 451 U.S. 156, 101 S.Ct. 1614, 68 L.Ed.2d 1 (1981), the vessel had no duty to inspect or supervise the handling of cargo, and no duty to warn of a dangerous cargo condition which is open and obvious or of which it is unaware. Derr v. Kawasaki Kisen K.K., No. 85-5250, bench op., App. at 106-09 (E.D.Pa. Dec. 2, 1986); Robertson v. Tokai Shosen K.K., 655 F.Supp. 152, 154-55 (E.D.Pa.1987). The cases having been consolidated for purposes of appeal, Derr and Robertson contend that the district courts erred as a matter of law.

Page 492

II.

The Legislative Scheme and Scindia

Until 1972, a tortured liability triangle was played out on the wharves and piers of America. A longshoreman injured in a cargo operation could receive compensation from the stevedore employer, and also prevail in an action against the vessel on either a negligence or breach of the warranty of seaworthiness theory. To show unseaworthiness, the longshoreman had only to prove that there was an unsafe, injurious condition on the vessel; the fact that the condition was the fault of the stevedore did not protect the vessel, although the vessel might in turn recover from the stevedore for breach of warranty to handle the cargo operation safely. Scindia, 451 U.S. at 164-65, 101 S.Ct. at 1620-21.

As Judge Friendly pointed out in Kakavas v. Flota Oceanica Brasileira, S.A., 789 F.2d 112, 117 (2d Cir.), cert. denied, --- U.S. ----, 107 S.Ct. 186, 93 L.Ed.2d 120 (1986), this liability scheme produced "an anomalous and intolerable situation." A considerable part of the longshoreman's award ended up in the hands of his lawyer with much of the remainder going to the stevedore's insurers in repayment of the workmen's compensation received. That compensation was inadequate, and the stevedore, instead of being exposed only to the workmen's compensation award, ended up paying the awards made against the ship as well. The system served neither deterrence nor compensation very well. H.R.Rep. No. 1441, 92d Cong., 2d Sess. (1972), reprinted in 1972 U.S.Code Cong. & Ad.News 4698, 4702-03 (House Report). See generally Note, Shipowners Owe Longshoremen No Duty to Discover Dangers Arising Within the Confines of the Cargo Operation, 56 Tul.L.Rev. 1421, 1422-27 (1982) (Tulane Note ).

Congress "radically changed this scheme of things," Scindia, 451 U.S. at 165, 101 S.Ct. at 1621, by amending the Act in 1972 to increase the longshoremen's workmen's compensation, see House Report, supra, at 4700-01, and by adding subsection (b) to section 5 of the Act. That subsection provides, in pertinent part:

In the event of injury to a [longshoreman] caused by the negligence of a vessel, then such [longshoreman] ... may bring an action against such vessel as a third party in accordance with the provisions of section 933 of this title, and the employer [the stevedore] shall not be liable to the vessel for such damages directly or indirectly and any agreements or warranties to the contrary shall be void.... The liability of the vessel under this subsection shall not be based upon the warranty of seaworthiness or a breach thereof at the time the injury occurred.

33 U.S.C. Sec. 905(b).

The intention of Congress to eliminate the vessel's liability without fault was express and unambiguous. Congress believed that it was fairer, and fully consistent with the goal of promoting safety, for the vessel's liability

to be predicated on negligence, rather than the no-fault concept of seaworthiness....

The purpose of the amendments is to place an employee injured aboard a vessel in the same position he would be if he were injured in non-maritime employment ashore, insofar as bringing a third party damage action is concerned, and not to endow him with any...

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