Bush v. Eagle-Picher Industries, Inc.

• Decision Date: 28 February 1991
• Docket Number: EAGLE-PICHER,No. 89-15329,89-15329
• Citation: 927 F.2d 445
• Parties: Palmroy P.K. BUSH, et al., Plaintiff, v.INDUSTRIES, INC., Defendant-Third-Party- Plaintiff-Appellee, v. UNITED STATES of America, Third-Party-Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 445

927 F.2d 445

1991 A.M.C. 2366

Palmroy P.K. BUSH, et al., Plaintiff, v. EAGLE-PICHER INDUSTRIES, INC., Defendant-Third-Party- Plaintiff-Appellee, v. UNITED STATES of America, Third-Party-Defendant-Appellant.

No. 89-15329.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted April 20, 1990.

Decided Feb. 28, 1991.

David S. Fishback, Asst. Director, Torts Branch, Civ. Div., U.S. Dept. of Justice, Washington, D.C., for third-party-defendant-appellant.

Joe G. Hollingsworth, Paul G. Gaston, Spriggs & Hollingsworth, Washington, D.C., for defendant-third-party-plaintiff-appellee.

Sidney S. Rosdeitcher, Paul, Weiss, Rifkind, Wharton & Garrison, New York City, Paul A. Zevnik, Kaye, Scholer, Fierman, Hays & Handler, Washington, D.C., for amicus.

Appeal from the United States District Court for the District of Hawaii.

Before FARRIS, ^* BEEZER and KOZINSKI, Circuit Judges.

KOZINSKI, Circuit Judge:

The Federal Tort Claims Act (FTCA), 28 U.S.C. Sec. 1346(b), Secs. 2671-2680 (1982), waives to a large extent the United States' sovereign immunity from tort liability. The Federal Employees' Compensation Act (FECA), 5 U.S.C. Secs. 8101-8193 (1982), the workers' compensation scheme for federal employees, appears to contradict the FTCA, at least in part, by providing that a federal employee may not bring a tort suit against the government for a work-related injury. We consider the tricky interplay between the general waiver of sovereign immunity embodied in the FTCA and the specific exclusive liability provision set out in the FECA.

Facts

While this case poses a complex legal question, the facts are straightforward. Plaintiffs in the underlying action are more than a hundred present and former civilian government employees, most of whom have built or repaired United States Navy ships at Pearl Harbor Naval Shipyard. Plaintiffs brought suit against an assortment of asbestos manufacturers, alleging that they contracted asbestos-related diseases while working at various government facilities in Hawaii. The asbestos manufacturers, in turn, filed third-party complaints against the United States, seeking contribution and/or indemnity for whatever amounts they may ultimately pay to plaintiffs. The government moved to dismiss the third-party complaints pursuant to Fed.R.Civ.P. 12(b); the underlying plaintiffs joined in this request. The district court dismissed most of the third-party claims, see In re All Asbestos Cases, 603 F.Supp. 599, 613 (D.Haw.1984); others have been dismissed by stipulation. See Memorandum Order of Dec. 29, 1986, at 3.

At this stage, only one theory of contribution remains. Third-party plaintiff Eagle-Picher ¹ alleges that the government acted in a "dual capacity"--as both employer and vessel owner. While conceding that it cannot state a claim for contribution against the United States in its role as employer of the injured workers, Eagle maintains that it can state a valid contribution claim against the United States in its metaphysically distinct role as owner of the vessels on which the employees worked and sustained their injuries. The district court agreed with Eagle and denied the government's motion to dismiss this claim. Order of Jan. 17, 1989, at 2-3. However, recognizing that other circuits have held similar claims barred as a matter of law, id. at 2, the district court certified this question for interlocutory appeal. Id. at 3-4. We granted the petition for interlocutory review and now reverse.

Discussion

I

The United States is immune from suit except to the extent it has unequivocally consented to be sued. LaBarge v. County of Mariposa, 798 F.2d 364, 366 (9th Cir.1986), cert. denied sub nom., County of Mariposa v. United States, 481 U.S. 1014, 107 S.Ct. 1889, 95 L.Ed.2d 497 (1987). The FTCA operates as a limited waiver of this immunity, subjecting the government to tort liability within certain parameters. Specifically, the FTCA provides that the government is liable for tort claims "in the same manner and to the same extent as a private individual under like circumstances." 28 U.S.C. Sec. 2674 (1982). This waiver extends to third-party claims against the government, including claims for contribution. See United States v. Yellow Cab Co., 340 U.S. 543, 547-53, 71 S.Ct. 399, 402-06, 95 L.Ed. 523 (1951). The district court interpreted the language of the FTCA to mean that Eagle could state a valid claim for contribution against the United States under a dual capacity theory.

In evaluating whether a private individual in like circumstances is amenable to suit, the FTCA directs us to look to the law of the state where the tort occurred. Id. As the tortious conduct alleged here took place at Pearl Harbor Naval Shipyard, we must identify the body of law that would govern a private shipyard "under like circumstances" in Hawaii.

The district court noted that Hawaii has a Workers' Compensation Law, see Haw.Rev.Stat. Sec. 386-1, et seq. (1985) but that it does not apply to shipyard employees. As to these employees, Hawaii law expressly gives way to the federal workers' compensation scheme for private shipyard workers the Longshore and Harbor Workers' Compensation Act (LHWCA), 33 U.S.C. Secs. 901-950 (1982). 603 F.Supp. at 604. The district court concluded that the LHWCA is the relevant body of law under the FTCA; in determining whether Eagle can bring its contribution claim against the United States, the district court examined whether the LHWCA would permit Eagle to bring an identical claim against a private shipyard. ² Id. at 603-05 and n. 4. See In re All Maine Asbestos Litigation (PNS Cases), 772 F.2d 1023, 1027 (1st Cir.1985), cert. denied sub nom., Raymark Indus., Inc. v. Bath Iron Works Corp., 476 U.S. 1126, 106 S.Ct. 1994, 90 L.Ed.2d 675 (1986). We now run through this LHWCA analysis.

At first glance, the fate of an identical claim against a private shipyard under the LHWCA seems clear: It would fail. The LHWCA contains an exclusive liability provision. Section 905(a) provides that, because the LHWCA forces an employer to pay compensation to an injured employee regardless of fault, the employee is barred from bringing a tort action against the employer: "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. Sec. 905(a) (Supp. V 1987). This is a classic quid pro quo, one "commonly found in workers' compensation legislation." Lockheed Aircraft Corp. v. United States, 460 U.S. 190, 194, 103 S.Ct. 1033, 1036, 74 L.Ed.2d 911 (1983). The injured employee is assured of receiving compensation promptly, efficiently and in an amount sufficient to cover his medical expenses, regardless of fault. In return, he accepts the LHWCA as his exclusive means of recovery, thereby forfeiting his right to bring a lawsuit that might ultimately have yielded more in damages if he could have proven that his employer was to blame. See id.

To the extent the LHWCA bars a first-party lawsuit by an injured employee against a shipyard, it also bars a third-party lawsuit for contribution from the shipyard. Hawaii law (by which we evaluate an analogous private party's amenability to suit) bars third-party actions against parties that are not directly liable. Petersen v. City and County of Honolulu, 51 Haw. 484, 462 P.2d 1007, 1008 (1970) (Contribution may only be had from a party if "the original plaintiff could have enforced liability against him, had he chosen to do so."); see also In re All Asbestos Cases, 603 F.Supp. at 606; Scruggs v. Meredith, 135 F.Supp. 376, 378 (D.Haw.1955); Haw.Rev.Stat. Sec. 663-12 (1985) (defining joint tort-feasors).

A closer look at the LHWCA reveals that the preceding analysis is not entirely accurate. While section 905(a) appears to immunize shipyards from all employee lawsuits, there existed for a short time a chink in the statutory armor. At the same time section 905(a) bars an injured shipyard worker from bringing a tort action against his employer, section 905(b) expressly reserves the injured worker's right to bring a tort action against the owner of the vessel upon which he sustained his injuries. 33 U.S.C. Sec. 905(b) (Supp. V 1987). ³ Generally, there is no conflict between these two provisions; shipyard workers are most often employed by independent stevedoring companies, thus the injured worker's employer is not commonly the same entity that owns the vessel. Jones & Laughlin Steel Corp. v. Pfeifer, 462 U.S. 523, 528, 103 S.Ct. 2541, 2546, 76 L.Ed.2d 768 (1983). In "the typical tripartite situation," then, the injured shipyard employee is guaranteed fixed compensation from his employer, regardless of fault, plus he may recover tort damages from the vessel owner if his injury was caused by the negligence of the vessel. Id. at 530, 103 S.Ct. at 2547. ⁴

In rare cases, though, a shipyard worker is employed directly by the vessel owner. The vessel owner thus operates in a "dual capacity," as both employer and owner. See, e.g., id. at 528, 103 S.Ct. at 2546. In such cases, the plain language of sections 905(a) and 905(b) conflict: Section 905(a) states that the shipyard is not amenable to suit because it employs the worker; section 905(b), though, provides that the worker can sue the vessel owner for negligence. Id. at 529-30, 103 S.Ct. at 2546-47. Faced with this conflict, the Supreme Court in 1983 created an exception to section 905(a)'s exclusive liability, holding that the injured worker's right to tort damages for negligence of the vessel owner under section 905(b) prevailed even where the vessel owner was also the employer. Id. at 532, 103 S.Ct. at 2548. Thus was born a loophole: After Jones & Laughlin, a private shipyard functioning in a dual capacity was immune from suit only in its role as employer; in its metaphysically distinct role as vessel owner, it remained subject to traditional tort liability, notwithstanding the exclusive...