Alcoa Steamship Company v. Velez

• Decision Date: 20 April 1967
• Docket Number: No. 6703.,6703.
• Citation: 376 F.2d 521
• Parties: ALCOA STEAMSHIP COMPANY, Inc., et al., Plaintiffs, Appellants, v. Ulpiano VELEZ, Manager, Puerto Rico State Insurance Fund, Defendant, Appellee.
• Court: U.S. Court of Appeals — First Circuit

376 F.2d 521 (1967)

ALCOA STEAMSHIP COMPANY, Inc., et al., Plaintiffs, Appellants, v. Ulpiano VELEZ, Manager, Puerto Rico State Insurance Fund, Defendant, Appellee.

No. 6703.

United States Court of Appeals First Circuit.

April 20, 1967.

Jose L. Novas, Nicolas Jimenez, San Juan, P. R., and William E. Wright, New Orleans, La., with whom J. Ward O'Neill, New York City, Rodolfo Sequeira, Hartzell, Fernandez & Novas, San Juan, P. R., Terriberry, Rault, Carroll, Yancey & Farrell, New Orleans, La., Haight, Gardner, Poor & Havens, New York City, and Rodriguez Ema & Rodriguez Ramon, San Juan, P. R., were on brief, for appellants.

Peter Ortiz, Asst. Sol. Gen., J. F. Rodriguez Rivera, Acting Sol. Gen., for Commonwealth of Puerto Rico, with whom J. B. Fernandez Badillo, Sol. Gen., was on brief, for appellee.

Before ALDRICH, Chief Judge, and MARIS^* and McENTEE, Circuit Judges.

MARIS, Circuit Judge.

The question presented on this appeal is whether the Puerto Rico Workmen's Accident Compensation Act, 11 L. P.R.A. § 1 et seq., is applicable to seamen who have been employed in the continental United States and who are working temporarily in the navigable territorial waters of Puerto Rico as crew-members of foreign¹ owned vessels when they are injured.

The plaintiffs Alcoa Steamship Company, Inc., A. H. Bull Steamship Company, Inc., Lykes Brothers Steamship Company, Inc., and Waterman Steamship Corporation, brought suit in January 1962 against the Manager of the Puerto Rico State Insurance Fund in the United States District Court for the District of Puerto Rico alleging that the defendant in July 1961 had advised each of them that in view of the decision of this court in Fonseca v. Prann, 1960, 282 F.2d 153, he understood that all accidents suffered by members of crews of vessels in the navigable waters of Puerto Rico were covered by the Puerto Rico Workmen's Accident Compensation Act and, therefore, he was serving notice of a new classification and premium assessment with respect to seamen employed by them working in the navigable waters of Puerto Rico.

The plaintiffs refused to file payroll reports pursuant to the Act or to pay the premiums assessed against them, contending that defendant had no authority to make the demand upon them. Their refusal was based on the grounds that the seamen involved were not residents of Puerto Rico and had not been employed there, but were employed by plaintiffs pursuant to federal maritime law under shipping articles executed at continental United States ports. The plaintiffs alleged that their refusal to comply with the defendant's demands subjected them to actions as uninsured employers and to liens by successful claimants against their property, 11 L.P.R.A. § 16, and also subjected them to penalties for failure to insure their seamen, 11 L.P.R.A. § 18, and accordingly they prayed for a judgment declaring that their liability for accidental injury or death suffered by their seamen while in the course of employment within the navigable waters of Puerto Rico arises under federal maritime law and that the local workmen's accident compensation act does not apply.

The parties stipulated that in cases of accidental injury to or death of any seaman employed by plaintiffs aboard their vessels occurring within the navigable waters of Puerto Rico the matter would be referred to the United States Public Health Service as it would upon such an occurrence happening in any port of the United States. It was also stipulated that during 1965 the intervenor Sea-Land Service, Inc., and the plaintiff Waterman Steamship Corporation paid, under protest, the premiums demanded by the defendant and filed petitions for review before the Industrial Commission of Puerto Rico, which at the time of trial were still pending.

The District Court construed our statement in Fonseca v. Prann, 282 F.2d 153, 157, that the "Congress intended to clothe the Government of Puerto Rico with power to provide for the application of its workmen's compensation act to injuries suffered by employees on local navigable waters" to include maritime workers coming from ports outside Puerto Rico aboard vessels belonging to owners outside Puerto Rico. The Court concluded that, since that power was delegated by Congress to Puerto Rico, the only remaining question was whether the Puerto Rico Legislature intended to include such foreign seamen within the coverage of the compensation act and that this question could adequately be resolved under the procedure provided by the Puerto Rico Workmen's Accident Compensation Act. Accordingly, the district court withheld consideration of the merits and dismissed the complaint. This appeal by the plaintiffs followed.

The plaintiffs contend that the district court abused its discretion in dismissing the complaint. It is argued that our holding in Fonseca v. Prann does not support the broad interpretation given that case by the defendant and by the district court. We agree.

In Fonseca v. Prann the sole question for consideration was whether a Puerto Rico seaman could sue his employer, who was insured under the Puerto Rico Workmen's Accident Compensation Act, for negligence under the Jones Act and for unseaworthiness under the general maritime law to recover for injuries sustained while at work within the territorial limits of Puerto Rico. We held that Section 20 of the Act, 11 L.P.R.A. § 21, barred such an action. In that case we had no occasion to deal with seamen who had been employed outside the jurisdiction of Puerto Rico to work on vessels owned by non-resident employers and whose only contact with Puerto Rico was when their vessel entered the waters of Puerto Rico for a temporary visit in the course of its voyage. As we pointed out in Guerrido v. Alcoa Steamship Co., 1 Cir. 1956, 234 F.2d 349, and in Waterman Steamship Corporation v. Rodriguez, 1 Cir. 1961, 290 F.2d 175, 179, Puerto Rican legislation, such as the Puerto...