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demnity absent conduct on its part sufficient to preclude recovery.” Speaking for the Court, Justice Clark noted that the stevedore's liability to indemnify the shipowner was not affected by considerations of "active" or "passive”, or of "primary" or "secondary” negligence.

In ('rumady v. The J. H. Fisser, 358 U.S. 423 (1959), the vessel's winch circuit breaker had been set by the crew to operate at a load which was double the safe working capacity of the ship's unloading gear. The stevedoring company hired by the ship's charterer attached a cargo to a sling in such a way as to overload the boom, causing it to fall, injuring the longshoreman. The latter brought an in rem libel against the vessel, and the vessel impleaded the stevedore. The Supreme Court confirmed the longshoreman's right to recover based on the vessel's unseaworthiness and further held that the stevedore's negligence brought into play the unseaworthy condition of the vessel", a breach of the company's warranty of workmanlike service for which the vessel might recover over, even though the stevedore's contract was only with the charterer and not the ship’s owner.

Again, in Waterman Steamship Corp. v. Dugan & McNamara, 364 U.S. 421 (1960), the Court had to consider the extent of a stevedore's liability to a shipowner. Although the stevedore had been engaged by a consignee rather than by the shipowner to unload cargo, it was held that the stevedore was obligated to indemnify the shipowner for the recovery obtained by an injured longshoreman against the owner of the vessel. The Court observed that the stevedore, regardless of the absence of any specific contract with such owner, had warranted it would perform its service aboard the ship in a workmanlike manner. This warranty, the Court concluded, was for the benefit of the ship and its owner as well as for the consignee, and it made no difference whether the longshoreman's original claim was brought in rem or in personam.

In Gutierrez v. Waterman S.S. Corp., 373 U.S. 206 (1963), the Court held, in a longshoreman's suit against a shipowner, that unseaworthiness extended to a faulty cargo container which, on unloading, had spilled beans on a pier and caused the longshoreman to slip. The proper application of the seaworthiness doctrine was held to be that things about a ship, whether the hull, the decks, the machinery, the tools furnished, the stowage, or the cargo containers, must be reasonably fit for the purpose for which they are to be used. ... A ship that leaks is unseaworthy; so is a cargo container that leaks. When the shipowner accepts cargo in a faulty container or allows the container to become faulty, he assumes the responsibility for injury that this may cause to seamen or their substitutes on or about the ship ...". Further, the Court held that “the duty to provide a seaworthy ship and gear, including cargo containers, applies to longshoremen unloading the ship whether they are standing aboard ship or on the pier."

In Italia Soc. v. Ore. Stevedoring Co., 376 U.S. 315 (1964), the longshoreman was injured aboard ship when an employer-furnished hatch tent rope snapped. He recovered from the shipowner for unseaworthiness, and the latter sought indemnity from the stevedore company. The Court held that under a stevedore's implied warranty of performance by it of workmanlike service, the absence of negligence on its part would not preclude a shipowner's claim against it for indemnity based merely upon defective equipment supplied by the stevedore to the vessel owner.

The principle of the Ryan case has been extended by two recent Supreme Court decisions : Recd v. The Yaka, 373 U.S. 410 (1963), and Jackson v. Lykes Bro8. Steamship Co., 386 U.S. 731, 87 S. Ct. 1419, decided May 8, 1967. As a result, if a harborworker is injured in the performance of his longshore duties, he or his survivors may proceed in an action for unseaworthiness of the vessel against the operator or owner of a vessel even though such operator or owner is performing its own stevedoring operations. The Court reasoned, in effect, 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. Petitioner's need for protection from unseaworthiness was neither more nor less than that of a longshoreman working for a stevedoring company,Reed v. The Yaka, supra, 373 U.S. at 415,

Adhering to the Reed decision, actions in admiralty by injured longshoremen against the shipowner-employer have been allowed in Ilertel v. American Export Lines, Inc., 225 F. Supp. 703 (1964), Carroll v. S.S. Santa Rosa, 257 F. Supp. 688

(1966), and Peros v. Grace Lines, Inc., 255 F. Supp. 294 (1966), notwithstanding the provisions of section 5 of the Longshoremen's Act.


Proposals seeking to accomplish the same general purpose of restricting third-party liability as that which is now proposed have been made to the Congress in the past and rejected. When Congress was initially considering adoption of the Longshoremen's Act in June 1926, a witness representing the Seattle Waterfront Employers' Association, offered a proposal which would have eliminated any third-party liability of the shipowner where injury occurred on the ship in connection with which the longshoreman was employed to perform his work activities. Hearing before the House Judiciary Committee on S. 3170, 69th Cong., Serial 16 Part 2, pp. 162–166.

Later, in 1956, two bills were introduced which again sought to restrict longshoremen's third-party rights against vessel owners. See H.R. 11113 and H.R. 11119, 84th Congress. On June 29, 1956, the Under Secretary of Labor, wrote the General Counsel for the House Committee on Education and Labor with reference to a committee print of a proposed bill dealing with this subject :

“I believe that the proposed provisions for subsection (f) of section 33 of the Longshoremen's Act would have the effect of depriving employees, because they are employees, of the common right of other citizens to sue in State courts. This in my opinion would be wrong, if not unconstitutional, and might do harm to other employees who are not longshoremen but who happen to be on navigable waters in non-maritime employments when injured. Furthermore, I do not wish to be understood as proposing or supporting the denial of the warranty of seaworthiness to longshoremen and others in like situations."

Thereafter, in 1957, a bill was introduced, H.R. 7344, 85th Cong., which provided in effect that the right of stevedores and other harbor workers to sue thirdparty shipowners for seaworthiness should be eliminated. On March 6, 1958, the Acting Secretary of Labor, indicated in a letter to the Bureau of Budget that he was “unaware of any compelling reason why a stevedore should be asked to give up his remedy." It was there said:

“The fact that in a few cases a shipowner against whom a recovery has been made for unseaworthiness has recovered from the employer of the stevedore for the employer's breach of his contractual duty properly to perform the work is not a valid reason for depriving the stevedore of his remedy. The stevedore does not in any event have a double recovery, because, under section 33 (f) of the Longshoremen's Act, any recovery made against the shipowner is applied against compensation benefits due from his employer under the Act."

Thereafter, in 1959, 1961 and 1963, bills identical to the 1957 bill, supra, were introduced. H.R. 6740, 86th Cong., H.R. 207, 87th Cong., and H.R. 76, 88th Cong. In a letter dated June 29, 1961, to the Chairman of the House Merchant Marine and Fisheries Committee, concerning this type of proposal, the Secretary of Labor again expressed disapproval of the curtailing of employee's remedies as is now suggested.

CONCLUSION The foregoing comments with reference to prior bills are equally applicable to the proposal now made. In fact, the present proposal is even more sweeping in scope than the earlier bills since it would abolish-not only actions predicated on unseaworthiness—but even those based on a shipowner's negligence. Because in reality, it cannot be said that there is any double recovery by any injured work. man, or his survivors, under the provisions of Section 33 of the Longshoremen's Act, there would seem to be no equitable reason for changing the existing provisions of the compensation law so as to limit or eliminate third-party actions. To adopt such restrictions with respect to shipowners would virtually destroy all third-party actions; for, as was recognized and stated at committee hearings in 1926, when the Longshore Act was first before the Congress the third-party "in most cases" is the shipowner. See House Hearings on S. 3170, supra, at p. 16.5.

Senator YARBOROUGH. Mrs. Peterson, counsel for the minority have stated they would like to join in that request. That was one of the requests that they had.

Mrs. PETERSON. Very well.

You have so well stated that the bill is a complicated bill and there are many areas that need to be worked out. I think we want to assure you that we, too, feel that there are problems to discuss, certainly keeping in mind the original intent of the act, to give essential protection to those people who need it. I am sure you all agree with that.

Senator YARBOROUGH. Yes, This is a complicated bill. I practiced workmen's compensation law enough to see points of conflict in here, not taking the main points, but the others, such as lifting of the overall ceiling for temporary total disability or for permanent partial disability, second injury provisions, special fund financing, time limitations.

From my own experience in my own State, seeing the workmen's compensation law amended before the State legislature, I can just see the flags of contest coming up on different provisions. It is not a simple thing. It will take a lot of study.

I warn our own attorneys that they have a hard job to work on. Mrs. PETERSON. I agree with you that it is very complicated and it is difficult. But I think also we just have to keep in mind that this is the place where the private sector is working with the Government to provide standards to keep people from falling off the economic shelf into poverty.

I think it is a splendid example of the private person in the private sector working with the Government to do just that. We must keep our objectives in mind, recognizing the rights of the employers and of the companies, to justice and equitable treatment while constantly remembering, as I know you do, the employees.

Senator Y ARBOROUGH. The employers are much more enlightened about these things than they were 10 or 20 years ago, with no comparison to 30 years ago. Most big companies hire psychologists, for example, and they have learned to be concerned with worker satisfaction.

Mrs. PETERSON. That is why now is a good time to be moving ahead on the basis of cooperation.

Senator YARBOROUGH. Thank you.
The subcommittee is in recess until 10 a.m. tomorrow.

(Answers to Senator Javits' questions to Assistant Secretary of Labor Esther Peterson appears on p. 465.)

(Whereupon, at 11:33 the subcommittee recessed, to reconvene at 10 a.m., Friday, November 17, 1967.)







Washington, D.C. The subcommittee met at 10 a.m., pursuant to recess, in room 4232, Senate Office Building, Senator Ralph Yarborough (chairman of the subcommittee) presiding.

Members present: Senators Yarborough and Javits.

Committee stat members present : Robert O. Harris, counsel; Eugene Mittelman, minority counsel; and Peter C. Benedict, minority labor counsel.

Senator YARBOROUGH. Gentlemen, the Labor Subcommittee will come to order and hearings will be resumed on Senate bill 2483, to amend the longshoremen's and harbor workers' compensation act to improve its benefits, and for other purposes.

Since we adjourned yesterday for this morning's session there has been a change in the time limitations. The Senate went in session at 10 o'clock this morning. It was first stated that no committee would be allowed to meet while the Senate was in session. We asked for a special permission to meet and received permission for all committees to meet from 10 to 11, so we must adjourn this meeting at 11 o'clock under the order of the Senate. In fact we pleaded for this meeting and got special permission to hold it, and you will know if you read the Congressional Record today, so I am going to ask the witnesses to move forward as rapidly as possible so that we can fully hear both witnesses today.

The first witness on the list is Mr. Howard McGuigan, legislative representative of the AFL-CIO, here in Washington. Come around, Mr. McGuigan, and if you have assistants, statisticians, accountants, bring them around with you to prove your case. I almost said computers. It is almost that modern society calls for pushing us lawyers out of the picture. It calls for an economist with a computer.



Mr. McGuigan. Thank you, Mr. Chairman, I am accompanied by Mr. James O'Brien of our social security department and by Mr. J. C.

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