Boating Industry Associations v. Marshall, 78-1827

• Citation: 601 F.2d 1376
• Decision Date: 13 August 1979
• Docket Number: No. 78-1827,78-1827
• Parties: BOATING INDUSTRY ASSOCIATIONS, a general partnership, National Association of Engine and Boat Manufacturers, a New York Corporation, Northern California Marine Association, a California Corporation, Earl and Robert Cooper, d/b/a Driftwood Marine, a partnership, Sailnetics, a sole proprietorship, and Easom Boat Works, Inc., a California Corporation, Plaintiffs-Appellees, v. Ray MARSHALL, United States Secretary of Labor, Donald Elisburg, Assistant Secretary of Labor for Employment Standards, and Everett P. Jennings, Acting Director, Office of Workers' Compensation Programs, United States Department of Labor, Defendants-Appellants.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

Page 1376

601 F.2d 1376 BOATING INDUSTRY ASSOCIATIONS, a general partnership,
National Association of Engine and Boat Manufacturers, a New
York Corporation, Northern California Marine Association, a
California Corporation, Earl and Robert Cooper, d/b/a
Driftwood Marine, a partnership, Sailnetics, a sole
proprietorship, and Easom Boat Works, Inc., a California
Corporation, Plaintiffs-Appellees,
v.
Ray MARSHALL, United States Secretary of Labor, Donald
Elisburg, Assistant Secretary of Labor for Employment
Standards, and Everett P. Jennings, Acting Director, Office
of Workers' Compensation Programs, United States Department
of Labor, Defendants-Appellants. No. 78-1827. United States Court of Appeals,
Ninth Circuit. Aug. 13, 1979.

Page 1377

Joshua T. Gillelan, II, Washington, D. C., for plaintiffs-appellees.

Robert H. Koehler, Washington, D. C., for defendants-appellants.

Appeal from the United States District Court for the Northern District of California.

Before WALLACE and SNEED, Circuit Judges, and BLUMENFELD, ^* District Judge.

SNEED, Circuit Judge:

Appellants, defendants below, appeal from a summary judgment declaring certain amendatory provisions of the Longshoremen's and Harbor Workers' Compensation Act (LHWCA), 33 U.S.C. § 901 Et seq., inapplicable to recreational boat builders and marinas and directing appellants to rescind a notice and memorandum expressing a contrary view. Appellees, plaintiffs below, sought judicial review, pursuant to 5 U.S.C. § 701 Et seq., of a certain "ruling," more fully described below, and the issuance of a declaratory judgment under 28 U.S.C. §§ 2201 and 2202. Because we have concluded that the appellees did not have standing to challenge the notice and that their attack on the appellants' interpretation

Page 1378

of the LHWCA is not ripe for adjudication, we reverse.

I. BACKGROUND

This action began with a complaint filed November 12, 1976. Named as plaintiffs were the Boating Industry Associations and the National Association of Engine and Boat Manufacturers (two recreational boating-industry associations), the Northern California Marine Association (a recreational boating-industry regional trade association), and three Northern California businesses within that same industry (a marine operator and two boat yards). Hereinafter all are collectively referred to as "boating associations." Named defendants included the Secretary of Labor, the Assistant Secretary of Labor for Employment Standards, and the Director of the Department of Labor's Office of Workers' Compensation Programs.

The "ruling" in question resulted directly from efforts initiated by the two boating associations in response to 1972 changes made by Congress in the LHWCA. Prior to 1972, entitlement to compensation benefits under the LHWCA was limited to individuals who sustained injuries while actually upon the navigable waters of the United States. The 1972 amendments, among other changes, expanded the geographical scope of coverage to include injuries sustained in certain specified land areas adjoining navigable waters. ¹ But Congress at the same time amended the Act so as to limit covered individuals to those persons engaged in maritime employment:

The term "employee" means any person engaged in maritime employment, including any longshoreman or other person engaged in longshoring operations, and any harborworker including a ship repairman, shipbuilder, and shipbreaker . . . .

33 U.S.C. § 902(3).

The LHWCA requires employers whose employees are engaged in "maritime employment" to secure the payment of compensation provided for by the Act either through insurance or by proof of financial ability to act as a self-insurer. ² Section 938 specifies that failure to secure the payment of compensation constitutes a misdemeanor punishable by a fine of $1000 or imprisonment for one year. Officers of corporate employers who fail to secure payment are jointly and severally liable for compensation or other benefits which may accrue under the Act. In addition, section 930 of the Act requires employers to report to the Secretary any injury or death under the Act's coverage. Failure to do so subjects an offending employer to a civil penalty not to exceed $500 per violation. 33 U.S.C. § 930(e).

Shortly after the 1972 amendments to the LHWCA became effective, the Department of Labor, on January 26, 1973, issued implementing regulations governing the administration and procedures applicable under the

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Act. These regulations did not specify whether workers in the recreational boating industry were "maritime employees" under the Act. On May 15, 1973, the boating associations requested "administrative interpretation and guidance" from the Department of Labor Employment Standards Administration as to the applicability of the 1972 amendments to recreational boat manufacturers and marinas and boat yards in which recreational boats are berthed and serviced. The request stated the associations' view that the Act should not apply to these persons. The request concluded by stating:

However, in view of the inconclusiveness of the Act's language and legislative history as to this issue and in view of the general conclusion which exists in our industry relative to these matters, we deem it prudent to seek Official guidance. Accordingly, we respectfully request the Department's Advice as to the correctness of the foregoing conclusions.

Court Transcript (CT) at 15 (emphasis added).

After substantial waiting, on February 19, 1974 the associations wrote the Undersecretary of Labor a letter which stated that a "speedy resolution of . . . our request for a definitive interpretation of the coverage of the '72 amendments would allow assessment of the proper rates for the required insurance coverage." CT at 18. More than a year later, April 21, 1975, the Associate Solicitor for Employee Benefits responded to the associations' request. The letter stated that "we are of the view that the Longshoremen's Act is applicable to recreational boat builders and marinas." CT at 29. The letter enclosed a memorandum setting forth the department's position. Thereafter, on June 6, 1975, the Office of Workers' Compensation Programs (OWCP) issued a Notice No. 21 entitled "Notice to Insurance Carriers, Self-Insured Employers Under the Longshoremen's Compensation Act and Other Interested Parties." The notice stated its purpose was to inform interested parties of the OWCP's "position" with regard to coverage of recreational boat builders and marinas. CT at 38. The notice concluded that "recreational boat builders and marinas are subject to the provisions of the Act, except in certain instances . . . outlined in this notice." ³ Id. The OWCP distributed Notice No. 21 to "(w)orkers' compensation departments and field representatives who service . . . claims under the . . . Act." CT at 41. The notice was signed by the Director of the Office of Workers' Compensation Programs.

In their complaint, the boating associations asserted that the ruling issued by the OWCP forced association members to obtain insurance coverage or assume the risk of enforcement actions under section 38 for failure to do so. Additionally, the complaint claimed that members were subject to sanctions under section 30 for failure to file required accident reports. The additional operating expense entailed in obtaining LHWCA coverage, rather than less expensive state workmen's compensation coverage, allegedly forced one of appellees, a marina, to terminate its employees.

By way of a remedy, appellees requested first a declaration that they and their members were not subject to the LHWCA. In addition, the boating associations requested that the court (1) declare the appellants' ruling incorrect, (2) order appellants to rescind the ruling, and (3) issue a ruling that the provisions of the LHWCA do not apply to recreational boat manufacturers, boat repair facilities, or marinas.

On cross-motions for summary judgment, the district court on January 31, 1978 granted judgment in favor of the boating associations. Its February 16, 1978 judgment declared:

(T)o the extent they are engaged in building or repairing recreational boats or operating

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recreational boat marinas, plaintiffs and their members are not subject to the (LHWCA).

CT at 395. The appellants were directed to rescind the legal memorandum and Notice No. 21, and the judgment further provided that:

The aforementioned rescission shall clearly state that: (a) it is "done pursuant to the 31 January 1978 order of the United States District Court for the Northern District of California in Boating Industry Associations, et al. v. Marshall, et al., C-76-2550 RHS"; (b) it is no longer the official position of the Labor Department that the Longshoremen's and Harborworkers' Compensation Act applies to recreational boat builders and marinas.

CT at 395-96.

II. STANDING

A. The Elements of Standing

Our analysis of the standing of the appellees to bring this suit begins with the proposition that to challenge government action in federal court, a plaintiff must have been "injured in fact." Sierra Club v. Morton,405 U.S. 727, 734-35, 92 S.Ct. 1361, 31 L.Ed.2d 636 (1972). This requirement differentiates a person with a direct stake in the actual outcome of the particular litigation, however small that stake may be, from a person merely concerned with the legal issues raised. United States v. Students Challenging Regulatory Agency Procedures (SCRAP), 412 U.S. 669, 689 n.14, 93 S.Ct. 2405, 37 L.Ed.2d 254 (1973). The latter has no standing.

Standing serves both as a constitutional limitation on judicial power, deriving from the "case or controversy" requirement in Article III for exercise of the federal judicial power, and as a self-imposed discretionary doctrine intended to monitor judicial review of public acts. See C. Wright, A. Miller & E. Cooper, Federal Practice & Procedure: Jurisdiction § 3531, at 54 (Supp.1979)....