Federal Marine Terminals v. Burnside Shipping, 394 U.S. 404 (1969)

Federal Marine Terminals, Inc. v. Burnside Shipping Co., Ltd.

No. 291

Argued January 16, 1969
Decided April 1, 1969
394 U.S. 404

CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

Syllabus

Petitioner, Marine Terminals, was hired by its affiliate, the time charterer of respondent’s ship, to continue readying the vessel, then in Chicago, for its grain cargo. While that operation (which the ship’s crew had begun) was in progress, one of petitioner’s employees was killed by falling into an unprotected deep tank opening. The employee’s widow filed a claim under the Longshoremen’s and Harbor Workers’ Compensation Act, and compensation was awarded against petitioner for weekly payments, the potential total liability for which is about $70,000. As administratrix of the estate, the widow also filed a wrongful death action against respondent in the District Court, under an Illinois statute which then limited the amount recoverable to $30,000. Respondent sued Marine Terminals for indemnification for any judgment it might be required to pay in the wrongful death action, charging that petitioner’s negligence had breached its warranty that services to the vessel would be performed "in a safe, workmanlike and seamanlike manner," and gave rise to an obligation to save respondent harmless from liability occasioned by the employee’s death. Petitioner counterclaimed for compensation benefits paid or to be paid to the employee’s dependents, alleging that respondent owed petitioner as stevedoring contractor, "the duty of providing and maintaining a safe place to work" which respondent allegedly breached by failing to protect the deep tank opening. The District Court granted respondent’s motion to dismiss petitioner’s counterclaim. Though it recognized the availability at common law in certain situations of a direct right over, the court concluded that petitioner’s sole remedy is under § 33 of the Longshoremen’s and Harbor Workers’ Compensation Act, which provides that an employer paying compensation benefits to a deceased employee’s representative may be subrogated to the rights of the representative against third persons. The Court of Appeals, holding the statutory remedy, in any event, exclusive, affirmed.

Held:

1. Nothing on the face of § 33 of the Longshoremen’s and Harbor Workers’ Compensation Act or in the Act’s legislative history limits the employer’s remedy against third persons to subrogation to the rights of the deceased employee’s representative. Pp. 412-414.

2. Federal maritime law imposes on the shipowner a duty to the stevedoring contractor of due care under the circumstances, and recognizes a direct tort action against the shipowner to recover the amount of compensation payments occasioned by the shipowner’s negligence. Pp. 414-418.

3. Direct action otherwise than in tort by the stevedoring contractor against the shipowner may also be available. Pp. 418-422.

392 F.2d 918, reversed and remanded.