Royal Indemnity Co. v. Puerto Rico Cement Corp.

• Decision Date: 05 April 1944
• Docket Number: No. 3946.,3946.
• Citation: 142 F.2d 237
• Parties: ROYAL INDEMNITY CO. v. PUERTO RICO CEMENT CORPORATION.
• Court: U.S. Court of Appeals — First Circuit

142 F.2d 237 (1944)

ROYAL INDEMNITY CO. v. PUERTO RICO CEMENT CORPORATION.

No. 3946.

Circuit Court of Appeals, First Circuit.

April 5, 1944.

Asa S. Allen and Ralph H. Willard, and Willard, Allen & Mulkern, all of Boston, Mass., for appellant.

L. E. Dubon, Dubon & Ochoteco, Otero Suro & Otero Suro, and Mariano H. Ramirez Bages, all of San Juan, P. R., for appellee.

David L. Kreeger, Sp. Asst. to Atty. Gen. (Francis M. Shea, Asst. Atty. Gen., Philip F. Herrick, U. S. Atty., of San Juan, P. R., and Mrs. Dick Cutter Smiley

and Ward E. Boote, Chief Counsel, United States Employees' Compensation Commission, both of Washington, D. C., on the brief), for the United States as amicus curiae.

Before MAHONEY and WOODBURY, Circuit Judges, and PETERS, District Judge.

PETERS, District Judge.

This is an appeal from the judgment of the United States District Court in Puerto Rico dismissing the complaint on the ground that it sets forth no right to relief.

The complaint alleges that the plaintiff, appellant, was the insurance carrier for a contractor employer doing construction work for the United States in February, 1942, on land occupied and used by the Government for military purposes in Puerto Rico; that an employee, in the course of his employment, was injured through the negligence of the defendant, appellee, owner of an adjoining stone quarry, for which injuries the employee was awarded compensation under the Longshoremen's and Harbor Workers' Compensation Act, approved March 4, 1927, 44 Stat. 1424, 33 U.S.C.A. §§ 901-950, which compensation was paid by the plaintiff insurance carrier who brought the action to recover for the alleged negligence of the defendant, having been subrogated to the rights of the injured workman under the provisions of the Act.

The court held that the plaintiff had shown no cause of action because of the wording of Section 3(a) of the Longshoremen's Act, which provides that:

"Compensation shall be payable under this Act in respect of disability or death of an employee, but only if the disability or death results from an injury occurring upon the navigable waters of the United States (including any dry dock) and if recovery for the disability or death through workmen's compensation proceedings may not validly be provided by State law."

The court considered the effect of the Defense Bases Act of August 16, 1941, 55 Stat. 622, c. 357, 42 U.S.C.A. §§ 1651-1654, which provides, in § 1:

"That except as herein modified, the provisions of the Act entitled `Longshoremen's and Harbor Workers' Compensation Act,' approved March 4, 1927, * * * as amended, and as the same may be amended hereafter, shall apply in respect to the injury or death of any employee engaged in any employment at any military, air, or naval base acquired after January 1, 1940, by the United States from any foreign government or any lands occupied or used by the United States for military or naval purposes in any Territory or possession outside the continental United States * * * irrespective of the place where the injury or death occurs."

But the court was of the opinion that, in spite of the wording of the Defense Bases Act, the "state law" clause in § 3 of the Longshoremen's Act prevented the operation of the latter act in Puerto Rico where there was a local compensation law.

In thus construing the statutes we think the District Court was in error.

In the Longshoremen's Act, Congress set up a complete system of workmen's compensation with appropriate machinery for its operation and made it effective in a federal field which the states could not reach, and which the Supreme Court had held that Congress could not permit them to reach. Knickerbocker Ice Co. v. Stewart, 253 U.S. 149, 40 S.Ct. 438, 64 L.Ed. 834, 11 A.L.R. 1145.

In describing the field in which the law should be operative, — which was the purpose of the paragraph — the language of § 3(a), called the "Coverage" section, had to harmonize with three important decisions of the Supreme Court which preceded passage of the Longshoremen's Act; viz, Southern Pac. Co. v. Jensen, 244 U. S. 205, 37 S.Ct. 524, 61 L.Ed. 1086, L.R.A. 1918C, 451, Ann.Cas.1917E, 900; Knickerbocker Ice Co. v. Stewart, supra; and State of Washington v. W. C. Dawson & Co., 264 U.S. 219, 44 S.Ct. 302, 68 L.Ed. 646.

The clause permitting recovery only where compensation "may not validly be provided by state law" is not an independent condition, but a limitation upon the previous clause referring to navigable waters, necessary in view of the above decisions, and because not all injuries upon navigable waters are exclusively within federal jurisdiction. Grant, Smith-Porter Ship Co. v. Rohde, 257 U.S. 469, 42 S.Ct. 157, 66 L.Ed. 321, 25 A.L.R. 1008; Miller's Indemnity Underwriters v. Boudreaux Braud, 270 U.S. 59, 46 S.Ct. 194, 70 L.Ed. 470; Alaska Packers' Ass'n v. Industrial Accident Commission, 276 U.S. 467, 48 S.Ct. 346, 72 L.Ed. 656.

Both clauses must be read together and, taken together, they describe and limit the maritime field in which the Act was first made operative, automatically adjusting what the Supreme Court has referred to as the somewhat "shadowy limits" of that field to any situation.

In speaking of the Longshoremen's Act and the Jensen, Stewart and Dawson cases above...