Derr v. Kawasaki Kisen K.K.

• Decision Date: 15 December 1987
• Docket Number: Nos. 86-1772,87-1031,s. 86-1772
• Citation: 835 F.2d 490
• Parties: William DERR, Appellant, v. KAWASAKI KISEN K.K. Thomas ROBERTSON, Appellant, v. TOKAI SHOSEN K.K.
• Court: U.S. Court of Appeals — Third Circuit

Page 490

835 F.2d 490

1988 A.M.C. 746

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.

Argued Sept. 9, 1987.

Decided Dec. 15, 1987.

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 OF THE COURT

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.

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 special maritime theory of liability or cause of action under whatever judicial nomenclature it may be called, such as "unseaworthiness", "nondelegable duty", or the like.

House Report at, supra, 4703.

Congress was less clear in defining the vessel's statutory negligence and its resulting liability. "Such issues can only be resolved 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." Id. at 4704. This was the task the Supreme Court took up in Scindia.

Scindia involved a longshoreman who was injured in an unloading operation as the result of a defective winch that was part of the vessel's equipment being operated by the stevedore. In its opinion, the Court defined the line between the responsibilities of the stevedore and of the vessel. The vessel has a duty with respect to the general condition of the ship's gear, equipment, tools, and work space, and a duty to warn the stevedore of hidden dangers which are or should be known to the vessel in the exercise of reasonable care, and that are not known or obvious to the stevedore. 451 U.S. at 167, 101 S.Ct. at 1622. Also, if the vessel actively involves itself in the cargo operation, or fails to exercise due care in protecting longshoremen from dangers they might encounter from equipment under the vessel's active control, it would be negligent. Id. However, with respect to cargo not loaded by or under the active supervision of the vessel, the Court explained that the vessel could rely on the expertise of the stevedore. Id. at 170-71, 101 S.Ct. at 1623-24; see, e.g., Kakavas, 789 F.2d at 118 ("The basic theme of the Scindia opinion is the extensive reliance that a shipowner may justifiably place on an independent contractor.").

The stevedore, in turn, who is in the best position to avoid accidents during the cargo operation, has a statutory duty to provide for the safety of longshoremen under 33 U.S.C. Sec. 941 (1982) and warrants to the vessel that he will perform competently. Scindia, 451 U.S. at 170-71, 101 S.Ct. at 1623-24. On this basis, the Court stated that "absent contract provision, positive law, or custom to the contrary ... the shipowner has no general duty by way of supervision or inspection to exercise reasonable care to discover dangerous conditions that develop within the confines of the cargo operations that are assigned to the stevedore." Id. at 172, 101 S.Ct. at 1624. Against this background, we consider the alleged negligence of the vessels in this case.

III. Discussion

Scindia was, of course, a case in which the longshoreman's injury resulted from the malfunctioning of the ship's gear being used in the cargo operations. The Court held that there was a triable issue as to whether the shipowner knew of the defect or was chargeable with such knowledge. Scindia, 451 U.S. at 178, 101 S.Ct. at 1627. Appellants here argue that nothing in Scindia supports the distinction made by the district courts in Derr and Robertson between unsafe conditions resulting from the manner in which cargo is stowed and other types of unsafe conditions. This argument is...