John H. Smith, Plaintiff-appellant, v. M/v Captain Fred, Her Engines, Boilers, Furniture, Gear,tackle and Apparel, in Rem, Defendant-appellee.john H. Smith, Plaintiff, v. Delta Iron Works, Inc., Defendant-appellee, 546 F.2d 119 (5th Cir. 1977)

In this appeal we are asked to decide whether the rule of Reed v. The Yaka, 373 U.S. 410, 83 S. Ct. 1349, 10 L. Ed. 2d 448 (1963), survived the passage of the 1972 Amendments to the Longshoremen's and Harbor Workers' Compensation Act (LHWCA), 33 U.S.C. §§ 901 et seq. (Supp. II, 1972). The district court, on stipulated facts, decided in the negative and held that a repairman could not sue the vessel on which he was injured for its negligence as a third party if the owner of that vessel was also his employer. We disagree and reverse.

Since its enactment in 1927, the LHWCA has provided that the liability of an employer "shall be exclusive and in place of all other liability of such employer to the employee. . . ."¹  That this provision in time became but a hollow promise is well known. Following Seas Shipping Co. v. Sieracki, 328 U.S. 85, 66 S. Ct. 872, 90 L. Ed. 1099 (1946), and Ryan Stevedoring Co. v. Pan Atlantic Steamship Corp., 350 U.S. 124, 76 S. Ct. 232, 100 L. Ed. 133 (1956), the employee could sue the vessel for unseaworthiness and the vessel could then demand indemnity from the stevedore/employer on the theory that it had breached an express or implied warranty of workmanlike performance to the vessel. This procedure in effect made an end run around the exclusive liability provision of the LHWCA.² 

In Reed v. The Yaka, 373 U.S. 410, 83 S. Ct. 1349, 10 L. Ed. 2d 448 (1963), the Supreme Court was faced with the situation of the vessel also being the employer of the injured worker. Noting that the LHWCA "must be liberally construed in conformance with its purpose,"³  the Court extended the Sieracki and Ryan rationale. It held that "it would produce a harsh and incongruous result, one out of keeping with the dominant intent of Congress to help longshoremen, to distinguish between liability to longshoremen injured under precisely the same circumstances because some draw their pay directly from a shipowner and others from a stevedoring company doing the ship's service." Id. at 415, 83 S. Ct. at 1353 (footnote omitted).⁴ 

There can be no doubt that a major purpose of the 1972 Amendments was to eliminate Sieracki-Ryan actions. Congress added subsection 905(b) to put substance back into the exclusive liability provision:

In the event of injury to a person covered under this chapter caused by the negligence of a vessel, then such person, or anyone otherwise entitled to recover damages by reason thereof, may bring an action against such vessel as a third party in accordance with the provisions of section 933 of this title and the employer shall not be liable to the vessel for such damages directly or indirectly and any agreements or warranties to the contrary shall be void. If such person was employed by the vessel to provide stevedoring services, no such action shall be permitted if the injury was caused by the negligence of persons engaged in providing stevedoring services to the vessel. If such person was employed by the vessel to provide ship building or repair services, no such action shall be permitted if the injury was caused by the negligence of persons engaged in providing ship building or repair services to the vessel. The liability of the vessel under this subsection shall not be based upon the warranty of seaworthiness or a breach thereof at the time the injury occurred. The remedy provided in this subsection shall be exclusive of all other remedies against the vessel except remedies available under this chapter.⁵ 

The appellees and several amicus curiae argue that this renewed commitment by Congress to the idea of compensation benefits being an employer's sole liability for injuries covered by the LHWCA mandates the conclusion that Congress also sought to do away with Yaka -type suits. Their argument is bolstered by Cooper Stevedoring Co. v. Fritz Kopke, Inc., 417 U.S. 106, 94 S. Ct. 2174, 40 L. Ed. 2d 694 (1974). In Cooper, an action brought under the LHWCA prior to the 1972 amendments, the Court explained a prior decision, Atlantic Coast Line R. Co. v. Erie Lackawanna R. Co., 406 U.S. 340, 92 S. Ct. 1550, 32 L. Ed. 2d 110 (1972), and its interrelation with Yaka.⁶  The Court there stated, "In other words, even if Erie were negligent, its injured employee was entitled to claim compensation from it under the (LHWCA), and Erie was accordingly entitled to the protective mantel of the Act's limitation-of-liability provisions." 417 U.S. at 115, 94 S. Ct. at 2179.⁷  Since section 905(b) now limits actions against the vessel to those based on negligence, it seems to follow that Yaka actions, premised as they were on unseaworthiness, are no longer permissible.

It is important to note, however, that the basic problem envisioned in Yaka is still present. Why should an employee be treated differently solely because the ship on which he is injured happens to be owned by his employer instead of by a third party? We think that Congress was sympathetic to this problem when it amended the LHWCA.⁸  Section 905(b) allows an employee to sue a "vessel" for its negligence. The term "vessel" is defined in the 1972 Amendments to include "said vessel's owner, owner pro hac vice, agent, operator, charterer or bare boat charterer, master, officer, or crew member." 33 U.S.C. § 902(21) (Supp. II, 1972).⁹  Our legislators were well aware of the fact that shipowners, owners pro hac vice and charterers frequently have their own employees perform tasks covered by the LHWCA, but no special provision was made for that situation.

Our interpretation of the statute is amply supported by its legislative history. Far from expressing an intent to overrule Yaka legislatively as it had done with Ryan and Sieracki,¹⁰  the House Report demonstrates that Congress intended the Yaka rule to survive:¹¹ 

The Committee has also recognized the need for special provisions to deal with a case where a longshoreman or ship builder or repairman is employed directly by the vessel. In such case, notwithstanding the fact that the vessel is the employer, the Supreme Court, in Reed v. S.S. Yaka, 373 U.S. 410 (83 S. Ct. 1349, 10 L. Ed. 2d 448) (1963) and Jackson v. Lykes Bros. Steamship Co., 386 U.S. 731 (87 S. Ct. 1419, 18 L. Ed. 2d 488) (1967), held that the unseaworthiness remedy is available to the injured employee. The Committee believes that the rights of an injured longshoreman or ship builder or repairman should not depend on whether he was employed directly by the vessel or by an independent contractor. Accordingly, the bill provides in the case of a longshoreman who is employed directly by the vessel there will be no action for damages if the injury was caused by the negligence of persons engaged in performing longshoring services. Similar provisions are applicable to ship building or repair employees employed directly by the vessel. The Committee's intent is that the same principles should apply in determining liability of the vessel which employs its own longshoremen or ship builders or repairmen as apply when an independent contractor employs such persons.¹² 

We hold, then, that an employee may sue his employer qua vessel if he was injured as a result of the vessel's negligence. We note that the other two circuits which have considered this issue have resolved it as we have. Napoli v. Hellenic Lines, Ltd., 536 F.2d 505 (2d Cir. 1976); Griffith v. Wheeling Pittsburgh Steel Corp., 521 F.2d 31 (3d Cir. 1975), cert. denied, 423 U.S. 1054, 96 S. Ct. 785, 46 L. Ed. 2d 643 (1976).¹³  Since the district court dismissed this action because the vessel and the employer were one and the same we must reverse and remand for proceedings not inconsistent with this opinion.

REVERSED AND REMANDED.