-
USCA1 Opinion
April 21, 1993 UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
____________________
No. 92-1659
DAVID VEGA-MENA,
Plaintiff, Appellant,
v.
UNITED STATES OF AMERICA,
Defendant, Appellee.
____________________
ERRATA SHEET
The opinion of this Court issued on April 13, 1993, is
amended as follows:
On page 12, last line, delete "is" after "it".
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
____________________
No. 92-1659
DAVID VEGA-MENA,
Plaintiff, Appellant,
v.
UNITED STATES OF AMERICA,
Defendant, Appellee.
____________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Carmen C. Cerezo, U.S. District Judge]
___________________
____________________
Before
Torruella, Circuit Judge,
_____________
Campbell, Senior Circuit Judge,
____________________
and Skinner,* Senior District Judge.
_____________________
____________________
Eli B. Arroyo with whom Andres Garcia Arache and Alcides Oquendo
_____________ _____________________ ________________
Maldonado were on brief for appellant.
_________
Silvia Carreno Coll, Assistant United States Attorney, with whom
___________________
Daniel F. Lopez-Romo, United States Attorney, was on brief for the
____________________
United States.
____________________
April 13, 1993
____________________
____________________
*Of the District of Massachusetts, sitting by designation.
CAMPBELL, Senior Circuit Judge. Appellant, a
______________________
security guard injured on the job at a United States naval
station in Puerto Rico, brought this negligence action
against the United States and others after he collected
benefits under Puerto Rico's workers' compensation system.
The United States District Court for the District of Puerto
Rico granted summary judgment for the United States, finding
that the United States was appellant's "statutory employer"
and thus immune from suit under the Puerto Rico Workmen's
Compensation Act. Appellant argues on appeal that the court
misapplied Puerto Rico law, and, in the alternative, that
federal law preempts the statutory employer immunity rule of
Puerto Rico law. We affirm the grant of summary judgment.
I.
I.
In 1988, appellant David Vega-Mena was employed by
Vigilantes, Inc. ("Vigilantes"), a Puerto Rican corporation,
as a security guard. Pursuant to a contract with the United
States of America, Vigilantes provided security guard
services at the United States Naval Station, Roosevelt Roads
in Ceiba, Puerto Rico. On the evening of October 13, 1988,
Vega-Mena was performing his duties as a security guard at
the Roosevelt Roads naval station when he fell into a tank of
waste diesel fuel and sustained serious injuries.
Vigilantes was an insured employer pursuant to the
Puerto Rico Workmen's Compensation Act ("PRWCA"), 11 L.P.R.A.
-3-
1 et seq., and Vega-Mena applied for, and collected, all
_______
the benefits available to him as an employee of Vigilantes
under the PRWCA. Thereafter, in October 1990, Vega-Mena and
other plaintiffs brought this civil action in the United
States District Court for the District of Puerto Rico against
the United States, Vigilantes, and certain other defendants.
Plaintiffs alleged that defendants' negligence had caused
Vega-Mena's injuries. For reasons not relevant to this
appeal, the complaint was amended in April 1991 to name Vega-
Mena as the sole plaintiff and Vigilantes and the United
States as the only defendants.
Both the original and amended complaints alleged
that the district court had jurisdiction pursuant to 28
U.S.C. 1346, the jurisdictional provision of the Federal
Tort Claims Act. The complaints also referred to 28 U.S.C.
2671, which defines terms used in the Federal Tort Claims
Act. The only cause of action alleged was for "negligence."
The district court dismissed the claims against
Vigilantes on jurisdictional grounds. Vega-Mena does not
appeal from that ruling. In July 1991, the United States
moved for summary judgment on the claims against it. The
government argued that the Puerto Rico Workmen's Compensation
Act entitled it to "statutory employer" immunity against
appellant's action. Vega-Mena replied that the United States
did not meet the requirements of Puerto Rico for statutory
-4-
employer status. In the alternative, he contended, the
Longshore and Harbor Workers' Compensation Act, 33 U.S.C.
901 et seq. which applied to his case, appellant argued,
_______
by force of the Defense Bases Act, 42 U.S.C. 1651
preempted Puerto Rico's statutory employer rule, disentitling
the United States to statutory employer immunity.
The district court granted summary judgment to the
United States, finding no genuine issue of material fact and
holding that the PRWCA provided the United States with
statutory employer immunity. The court noted that
plaintiff's original and amended complaints made no reference
to the Longshoreman and Harbor Workers' Compensation Act or
the Defense Bases Act, but stated that "the outcome would
have been the same" even if he had "brought the claim" under
those acts. Appellant Vega-Mena appeals from the district
court's final order to the extent it granted summary judgment
for appellee, the United States.
II.
II.
A. Puerto Rico Statutory Employer Doctrine
_______________________________________
Vega-Mena contends that the district court
misconstrued Puerto Rican law in determining that the United
States was immune as a "statutory employer" from tort
liability for appellant's injuries.
Under the workers' compensation scheme in Puerto
Rico, when an employee suffers an injury, illness, disability
-5-
or death as a result of "any act or function inherent in
[his] work," and his employer is insured according to law,
the employee's right to compensation from the employer is
limited to the statutory compensation offered through the
State Insurance Fund. 11 L.P.R.A. 2, 21; Santiago Hodge v.
______________
Parke Davis & Co., 126 D.P.R. 1 (1990) (hereinafter Santiago
_________________ ________
Hodge P.R.) (reprinted in Santiago Hodge v. Parke Davis &
__________ _________ __ ______________ ______________
Co., 909 F.2d 628, 635 (1st Cir. 1990) (hereinafter Santiago
___ ________
Hodge II)). The injured worker lacks a cause of action
_________
against his employer for damages regardless of the employer's
degree of negligence. Santiago Hodge P.R., reprinted in 909
___________________ _________ __
F.2d at 636-37. The PRWCA does not, however, prevent the
injured worker from suing a third party in tort for the
worker's insured injuries, such a defendant being a stranger
to the employer-employee relationship. Id. at 637; see 11
___ ___
L.P.R.A. 32.1
____________________
1. 11 L.P.R.A. 32 provides in part:
In case where the injury, the
professional disease, or the death
entitling the workman or employee or his
beneficiaries to compensation in
accordance with this chapter has been
caused under circumstances making a third
party responsible for such injury,
disease, or death, the injured workman or
employee or his beneficiaries may claim
and recover damages from the third party
responsible for said injury, disease, or
death, within one year following the date
of the final decision of the case by the
Manager of the State Insurance Fund, who
may subrogate himself in the rights of
-6-
The concept of "statutory employer" was fashioned
by the Puerto Rico courts to extend an employer's immunity to
certain persons who were not technically employers but were
thought to deserve immunity from tort liability because of
their close involvement in the employer-employee
relationship. See Santiago Hodge v. Parke Davis & Co., 859
___ _______________ __________________
F.2d 1026, 1029 (1st Cir. 1988) (hereinafter Santiago Hodge
______________
I). The courts took note of the fact that a contractor is
_
not only compelled to provide workmen's compensation
insurance for his own employees, see 11 L.P.R.A. 19, but is
___
also "subsidiarily liable for the premium payments ('taxes')
____________
of the workers of a person who 'contracted' with him [the
contractor] or the workers of 'a contractor or independent
subcontractor' hired by him when the latter were not
insured[.]" Santiago Hodge P.R., reprinted in 909 F.2d at
___________________ _________ __
637 (emphasis in original); see 11 L.P.R.A. 20.2 The term
___
____________________
the workman or employee or his
beneficiaries to institute the same
action . . . .
2. 11 L.P.R.A. 20 provides:
Every insured employer shall, on
reporting his annual payrolls, include in
said payrolls the wages paid to all the
workmen and employees working for or
employed by him, whether by the job or
under some person with whom the employer
contracted for the job, or under a
contractor or independent subcontractor
employed or contracted by said employer;
and all accounts or taxes collected by
the State shall be based on the
-7-
"statutory employer" is thus used by the Puerto Rico courts
to refer to "the principal contractor and to distinguish him
from the subcontractor, the real or contractual employer of
an employee who seeks compensation for a work-related
accident, when the principal contractor may be protected by
the employer immunity." Santiago Hodge P.R., reprinted in
___________________ _________ __
909 F.2d at 638. One purpose for making contractors
responsible for the premiums incurred by subcontractors is to
encourage principal contractors, when choosing
subcontractors, to insist that they carry the appropriate
workers' compensation insurance. Id. at 637.
___
Puerto Rico case law "has only recognized the
'statutory employer' within the context of a contract or
subcontract for work or services, and only for project
owners, principal contractors or subcontractors who had, with
regard to the injured worker, the mutual legal obligation to
insure him with the State Insurance Fund." Id. at 638. "The
___
determinant factor of immunity is the existence of that
direct or indirect link between the workman who suffers the
accident and the employer in the course of whose employment
and as consequence of which the injury takes place." Ruiz
____
____________________
employer's current payroll in which shall
be included the above-mentioned laborers;
Provided, That this provision shall not
be applicable to employers for whom work
is done by an independent contractor who
is insured as an employer under the
provisions of this chapter.
-8-
Diaz v. Vargas Reyes, 109 D.P.R. 761, 9 P.R. Sup. Ct. Off'l
____ ____________
Translations 1019, 1024 (1980).
Unless there exists a legal nexus linking the
worker's direct employer to the wrongdoer in the mutual legal
obligation to insure the employee with the Fund, the alleged
wrongdoer is a mere "third party" lacking statutory
protection against claims by injured workers, and not an
immune "statutory employer." Santiago Hodge P.R., reprinted
____________________ _________
in 909 F.2d at 638. The crucial factor in determining
__
whether the requisite legal nexus exists is the nature and
terms of the contractual relationship between the contractor
and subcontractor. Id. at 639. In Lugo S nchez v. Puerto
___ _____________ ______
Rico Water Resources Auth., 105 D.P.R. 861, 5 P.R. Sup. Ct.
__________________________
Off'l Translations 1198 (1977), the Puerto Rico Supreme Court
held that a principal contractor who requires his independent
subcontractors to take out workmen's compensation insurance
has "insured" the workmen of the independent subcontractor
and is therefore immune from suit under the exclusive remedy
provision, 11 L.P.R.A. 21. See Garcia v. Friesecke, 597
___ ______ _________
F.2d 284, 288-89 (1st Cir.), cert. denied, 444 U.S. 940
_____________
(1979); Santiago Hodge P.R., reprinted in 909 F.2d at 638.
___________________ _________ __
In the present case, the district court ruled that
the United States qualified as a statutory employer because
it shared the legal obligation to insure Vigilantes'
employees under the Puerto Rico workers' compensation
-9-
program. The United States and Vigilantes clearly had a
principal contractor-subcontractor relationship. Under their
written agreement, Vigilantes was obligated to provide guard
services to the United States at specified locations for the
term of the contract. Vigilantes' employees, including
appellant, worked as guards at United States naval
facilities, and appellant sustained his injuries while
working as a Vigilantes guard on patrol at such a facility.
Even more to the point, the United States contractually
required Vigilantes to obtain state workers' compensation
insurance for the security guards as required by Puerto Rico
law.3 It was under this insurance that appellant, following
____________________
3. The relevant provision in the contract reads:
H.18 INSURANCE
_________
Within fifteen (15) days after the award of this
contract, the Contractor [Vigilantes] shall furnish the
OIC [a United States government agency] certificate of
insurance as evidence of the existence of the following
insurance coverage in amounts not less than the amounts
specified below in accordance with the "INSURANCE - WORK
ON A GOVERNMENT INSTALLATION" clause, Section I.
COVERAGE
COVERAGE PER PERSON PER ACCIDENT PROPERTY
Comprehensive $300,000 $1,000,000 $100,000
General
Liability
Automobile $300,000 $1,000,000 $100,000
Liability
Worker's AS REQUIRED BY STATE LAW
Compensation
(Other as required by State Law)
-10-
injury, brought his claim for compensation and recovered.
Given the terms of the contract between the parties, it is
clear that under Puerto Rico law the requisite legal nexus
existed between the United States and Vigilantes, and thus
that the United States was properly found by the district
court to be immune as appellant's statutory employer.
Appellant makes only one attack on the district
court's application of Puerto Rico law to the facts, arguing
that the contract between Vigilantes and the United States
was essentially a "contract for hire" recognized by 31
L.P.R.A. 4111, and that this type of contract creates only
a relationship of employer-employee, not contractor-
subcontractor.4 However, section 4111 only entitles
____________________
The Certificate of Insurance shall provide for thirty days
written notice to the OIC by the insurance company prior to
cancellation or material change in policy coverage. Other
requirements and information are contained in the
aforementioned "Insurance" clause.
4. 31 L.P.R.A. 4111 provides:
Period of contract for services;
____________________________________
remuneration The services of servants
____________
and laborers may be contracted for a
fixed period of time, or without a fixed
period. A hiring for life shall be void.
Professional services, as regards the
remuneration therefor, shall be subject
to the agreement of the parties; and
where there is no agreement as to
remuneration, and a disagreement should
arise respecting the same, the party
entitled to such remuneration may sue and
recover from the adverse party the
reasonable value of such services in any
court of competent jurisdiction.
-11-
servants and laborers to collect the reasonable value of
their services from an employer if there is no written
employment agreement, and prohibits "hiring for life." 31
L.P.R.A. 4111. It does not in any way alter or void the
terms of the written contract between the United States and
Vigilantes, which clearly establishes a contractor-
subcontractor relationship sufficient to entitle the United
States to statutory employer immunity under Puerto Rico
law.5
We find no error, therefore, in the district
court's holding that, under Puerto Rico law, the United
States is immune as a "statutory employer" from suit by
appellant under Puerto Rican tort law.
B. Applicability of the Longshore and Harbor Workers'
_______________________________________________________
Compensation Act
________________
Appellant argues, in the alternative, that the
United States is not immune because the federal Longshore and
Harbor Workers' Compensation Act preempts Puerto Rico's rule
of statutory employer immunity. The district court applied
Puerto Rico law because appellant's complaint stated its
____________________
5. Appellant argues that the United States waived the
affirmative defense of statutory employer immunity by failing
to raise it in its answer to the complaint. We decline to
consider appellant's argument because he never advanced it
before the district court. Clauson v. Smith, 823 F.2d 660,
_______ _____
666 (1st Cir. 1987).
-12-
claim against the United States under the Federal Tort Claims
Act ("FTCA"). The complaint expressly invoked the
jurisdictional provision of the FTCA, 28 U.S.C. 1346,
without mentioning any other federal or state law. Under 28
U.S.C. 1346(b), the district court has jurisdiction over
actions against the United States for money damages:
for injury or loss of property, or
personal injury or death caused by the
negligent or wrongful act or omission of
any employee of the Government while
acting within the scope of his office or
employment, under circumstances where the
_____________________________
United States, if a private person, would
_________________________________________
be liable to the claimant in accordance
_________________________________________
with the law of the place where the act
_________________________________________
or omission occurred.
____________________
28 U.S.C. 1346(b) (emphasis supplied). The district court
applied the law of the place where the act or omission
occurred, Puerto Rico, and reached the conclusion, affirmed
supra, that under Puerto Rico law the United States was
_____
immune as a statutory employer.
Appellant concedes that he sued the United States
pursuant to the FTCA and that the FTCA mandates application
of local law. However, he argues: (1) the Longshore and
Harbor Workers' Compensation Act ("LHWCA"), 33 U.S.C. 901
et seq., also applies to this case, as extended by the
________
Defense Bases Act, 42 U.S.C. 1651 et seq.; (2) the LHWCA
_______
exclusive liability provision, 33 U.S.C. 905(a), entitles a
contractor to statutory employer immunity only if the
subcontractor actually fails to secure payment to the injured
-13-
worker; (3) the subcontractor here, Vigilantes, did not fail
to secure compensation payments for appellant; (4) therefore,
under the LHWCA, the United States is not immune from
appellant's suit for damages; and, (5) since the LHWCA is
federal law, it preempts the inconsistent PRWCA rule and thus
should have been applied by the district court.
Appellant's preemption argument presupposes that,
because his accident occurred on a naval base in Puerto Rico,
the Defense Bases Act, 42 U.S.C. 1651 et seq., applies,
_______
mandating application of the Longshore and Harbor Workers'
Compensation Act. See 42 U.S.C. 1651(a).6 This
___
supposition may or may not be so. It can be argued that, for
____________________
6. 42 U.S.C. 1651 provides that:
(a) Except as herein modified, the
provisions of the Longshoremen's and
Harbor Workers' Compensation Act,
approved March 4, 1927 (44 Stat. 1424),
as amended, shall apply in respect to the
injury or death of any employee engaged
in any employment
(2) upon any lands occupied or used
by the United States for military or
naval purposes in any Territory or
possession outside the continental United
States (including the United States Naval
Operating Base, Guantanamo Bay, Cuba; and
the Canal Zone);
. . . .
Section 1651 also makes the LHWCA applicable to employees of
contractors and subcontractors on certain public works
projects outside the continental United States. 42 U.S.C.
1651(a)(3)-(a)(5). 42 U.S.C. 1651(b)(4) defines
"continental United States" as "the States and the District
of Columbia."
-14-
the narrow and specialized purposes of the Defense Bases Act,
Puerto Rico is not a "Territory or possession outside the
continental United States" as those terms are there intended
to be understood.7 We need not, however, decide this
____________________
7. Appellant asserts without analysis that bases in Puerto
Rico "obviously" fall within the definition of "any lands
occupied or used by the United States for military or naval
purposes in any Territory or possession outside the
continental United States." The question is not so simple,
however. The Defense Bases Act applies to bases in any
"territory," but that term is not defined by the Act nor has
appellant cited any cases interpreting it in that context.
As we have noted before:
The term "territory" does not have a
fixed and technical meaning accorded to
it in all circumstances, and thus Puerto
Rico may be found to be included within
one act whose coverage extends to
territories of the United States and
excluded from another. Americana of
_____________
Puerto Rico, Inc. v. Kaplus, 368 F.2d
__________________ ______
431, 436 (3d Cir. 1966), cert. denied,
____________
386 U.S. 943, 87 S.Ct. 977, 17 L.Ed.2d
874 (1967). "[W]hether Puerto Rico comes
within a given congressional act
applicable in terms to a 'territory,'
depends upon the character and aim of the
act." Puerto Rico v. The Shell Company,
___________ _________________
302 U.S. 253, 258, 58 S.Ct. 167, 169, 82
L.Ed. 235 (1937).
Garcia v. Friesecke, 597 F.2d 284, 293 (1st Cir.), cert.
______ _________ _____
denied, 444 U.S. 940 (1979). Nor is it clear whether the
______
Defense Bases Act can apply concurrently with local
compensation acts. See 42 U.S.C. 1651(c) (making liability
___
of employer under Defense Bases Act "exclusive and in place
of all other liability of such employer . . . to his
employees (and their dependents) within the purview of this
chapter, under the workmen's compensation law of any State,
Territory, or other jurisdiction"); Flying Tiger Lines, Inc.
________________________
v. Landy, 370 F.2d 46, 51-52 (9th Cir. 1966).
_____
In Royal Indemnity Co. v. Puerto Rico Cement Corp., 142
___________________ _________________________
F.2d 237 (1st Cir.), cert. denied, 323 U.S. 756 (1944), this
____________
court stated that the purpose of the Defense Bases Act "was
-15-
difficult question in order to resolve the present appeal.
Even assuming the Act applies, and appellant falls within it,
appellant cannot prevail. Hence, for purposes of this case
only and specifically without deciding the issue, we shall
assume that the Defense Bases Act applies to military bases
in Puerto Rico. We shall also assume, again solely for
purposes of argument and without actually deciding, that
appellant could show on the particular facts of his case that
he satisfied all other requirements of the Defense Bases Act
and the pertinent provisions of the LHWCA.8
____________________
to provide the same relief to outlying territories,
including . . . Puerto Rico, as the existing law affords
employees in the United States" and held that the Defense
Bases Act applied exclusively and in place of the PRWCA. Id.
___
at 239. How much of Royal Indemnity is still good law is
_______________
unclear given the comprehensive evolution since 1944 of the
law of federal and state compensation schemes and, in
particular, the subsequent amendment of 3(a) of the LHWCA,
upon which Royal Indemnity was based. See Simpson v.
________________ ___ _______
Director, Office of Workers' Compensation Programs, 681 F.2d
___________________________________________________
81, 88 (1st Cir. 1982) (questioning continued vitality of
Royal Indemnity after Calbeck v. Travelers Insurance Co., 370
_______________ _______ _______________________
U.S. 114 (1962)), cert. denied sub nom. Bath Iron Works Corp.
_____________________ _____________________
v. Director, Office of Workers' Compensation Programs, 459
____________________________________________________
U.S. 1127 (1983); see generally Lusson v. Carter, 704 F.2d
___ _________ ______ ______
646 (1st Cir. 1983); Garcia v. Friesecke, 597 F.2d 284; 4
______ _________
Arthur Larson, The Law of Workmen's Compensation, 89.10-
__________________________________
.27(c) (1990).
8. Appellant has never applied for LHWCA benefits on the
ground of entitlement under the Defense Bases Act, and thus
it has never been determined by the Deputy Commissioner in
the applicable United States Department of Labor Compensation
District whether and to what extent he may in fact be
eligible for such benefits. See 42 U.S.C. 1653; 33 U.S.C.
___
939; 20 C.F.R. pt. 702; AFIA/CIGNA Worldwide v. Felkner,
____________________ _______
930 F.2d 1111, 1112-14 (5th Cir.), cert. denied, 112 S. Ct.
____________
297 (1991) (describing procedures for making claims under
LHWCA as extended by Defense Bases Act). On the other hand,
-16-
We proceed, therefore, on the supposition,
arguendo, that Vega-Mena's accident occurred within the
________
concurrent jurisdiction both of the Longshore and Harbor
Workers' Compensation Act and of the Puerto Rico Workers'
Compensation Act. See Sun Ship, Inc. v. Pennsylvania, 447
___ _______________ ____________
U.S. 715, 717-19 (1980) (reviewing history of concurrent
jurisdiction of state workers' compensation systems and
LHWCA). When both the LHWCA and a state act apply
concurrently, the injured worker is free to apply for
benefits under either system. Id. at 724. "When laborers
___
file claims under the LHWCA, they are compensated under
federal standards. And workers who commence their actions
under state law will generally be able to make up the
difference between state and federal benefit levels by
seeking relief under the Longshoremen's Act, if the latter
applies." Id.
___
That appellant could have applied (as we assume
_____ ____ _______
arguendo) for benefits under the LHWCA, does not mean that
________
any tort claim he may have against a third party is a federal
cause of action. Though appellant's injury occurred on a
naval base, he has neither alleged nor does he or could he
argue that he has a federal maritime cause of action against
____________________
appellant has applied for, and has received, workmen's
compensation benefits under Puerto Rico law. As we have
already held, the United States is an immune statutory
employer under Puerto Rico law.
-17-
the United States. The LHWCA itself clearly creates no cause
of action against the United States as the allegedly
negligent third-party contractor. Griffis v. Gulf Coast Pre-
_______ _______________
Stress Co., 850 F.2d 1090, 1091 (5th Cir. 1988); Ward v.
___________ ____
Norfolk Shipbuilding & Drydock Corp., 770 F. Supp. 1118, 1121
____________________________________
(E.D. Va. 1991). The only cause of action for negligence
against third parties expressly referred to in section 905 is
that against vessels pursuant to 33 U.S.C. 905(b).9 Hence
while section 905(a), and 33 U.S.C. 933, provide that the
LHWCA does not limit an injured worker's right to sue a third
_____
party, those provisions do not create, nor do they purport in
______
any way to establish, the third party's liability for
negligence.10 The liability of a third party, other than a
____________________
9. 33 U.S.C. 905(b) establishes a cause of action against
vessels for negligence:
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, . . . .
10. 33 U.S.C. 933(a) provides:
(a) Election of remedies If on
___________________________
account of a disability or death for
which compensation is payable under this
chapter the person entitled to such
compensation determines that some person
other than the employer or a person or
persons in his employ is liable in
damages, he need not elect whether to
receive such compensation or to recover
-18-
vessel, must arise under some federal or state law other than
the LHWCA. Griffis, 850 F.2d at 1091; Ward, 770 F. Supp. at
_______ ____
1121-22. Here, the only cause of action against the United
States is based on Puerto Rico negligence law as made
applicable by the Federal Tort Claims Act. "[W]hen state law
creates a cause of action, the State is free to define the
defenses to that claim, including the defense of immunity,
unless, of course, the state rule is in conflict with federal
law." Ferri v. Ackerman, 444 U.S. 193, 198 (1979).
_____ ________
Therefore, unless the statutory employer immunity rule of the
PRWCA is in conflict with the LHWCA rule, in particular 33
U.S.C. 905(a), under the circumstances of this case, the
Puerto Rico defense to appellant's claim applies and, as held
above, the United States is immune from appellant's
negligence action.
After examining the precise scope of the federal
and Puerto Rico rules, and keeping in mind the Supreme
Court's admonition to avoid "seeking out conflicts between
federal and state regulation where none clearly exists,"
Huron Portland Cement Co. v. City of Detroit, 362 U.S. 440,
_________________________ _______________
446 (1960), we find no conflict in these circumstances
between the LHWCA's exclusive liability provision and the
Puerto Rico rule of statutory employer immunity. As
____________________
damages against such third person.
-19-
explained in Part II.A. supra, under Puerto Rico's workers'
_____
compensation scheme all employers must insure their own
employees and, in return, their liability for their
employees' injuries is limited by 11 L.P.R.A. 21 to
workers' compensation payments. 11 L.P.R.A. 21 provides:
21. Exclusiveness of remedy When an
_______________________
employer insures his workmen or employees
in accordance with this chapter, the
right herein established to obtain
compensation shall be the only remedy
against the employer, even in those cases
where maximum compensations and benefits
have been granted in accordance
thereof; . . . .
In shorthand, 11 L.P.R.A. 21 entitles complying employers
to "immunity" from damages actions by injured employees. In
addition, a contractor is secondarily liable for the
insurance premium payments for its subcontractor's employees
when the subcontractor is not properly insured. 11 L.P.R.A.
20. As interpreted by the Puerto Rico Supreme Court, this
mutual obligation entitles contractors to the same immunity
enjoyed by employers and so such contractors are deemed to be
"employers" for the purposes of 11 L.P.R.A. 21. They have
so-called "statutory employer immunity." This means that
such a contractor can invoke 11 L.P.R.A. 21 as a defense
against claims by his subcontractors' injured employees.
Under the LHWCA, as under the Puerto Rico statute,
an employer must "secure the payment to his employees of the
compensation payable" under the LHWCA, 33 U.S.C. 904(a),
-20-
and in exchange is liable to injured employees only to the
extent of the workers' compensation payments. 33 U.S.C.
905(a). In contrast to the PRWCA, however, the LHWCA
requires contractors to secure compensation for their
subcontractor's employees only if the subcontractors are
________
actually uninsured. 33 U.S.C. 904(a). The more limited
responsibility of contractors for their subcontractors'
employees is mirrored by the limited immunity for contractors
granted by 33 U.S.C. 905(a):
The liability of an employer prescribed
in section 904 of this title shall be
exclusive and in place of all other
liability of such employer to the
employee, . . . except that if an
employer fails to secure payment of
compensation as required by this chapter,
an injured employee . . . may elect to
claim compensation under this chapter, or
to maintain an action at law or in
admiralty for damages on account of such
injury or death. . . . For purposes of
this subsection, a contractor shall be
deemed the employer of a subcontractor's
employees only if the subcontractor fails
to secure the payment of compensation as
required by section 904 of this title.
Thus, a contractor is entitled to so-called "statutory
employer" immunity under section 905(a) only if the
contractor is compelled by section 904(a) to secure workers'
compensation for the subcontractor's employees because the
subcontractor fails to do so and the contractor actually does
secure the payment. Louviere v. Marathon Oil Co., 755 F.2d
________ ________________
428, 429-30 (5th Cir. 1985).
-21-
Clearly, then, the statutory employer immunity
provisions of the LHWCA and the PRWCA are different. Cf.
___
Garcia v. Friesecke, 597 F.2d 284, 293 (1st Cir.) (explaining
______ _________
differences between Puerto Rico Supreme Court's
interpretation of PRWCA, which grants immunity to contractors
who require subcontractor to acquire insurance, and the
former 1st Circuit interpretation of the PRWCA, which did
not), cert. denied, 444 U.S. 940 (1979). It is far less
_____________
clear, however, that they are in "conflict." We think they
are not. As we decided supra, the United States is entitled
_____
to immunity as an "employer" within the meaning of 11
L.P.R.A. 20 against a Puerto Rico negligence action brought
by this employee who was both insured, and has recovered
compensation, under Puerto Rico's Act. Even assuming the
United States would fail were it to try to invoke the
statutory employer immunity created by section 905(a),11
this shows only that the federal statute does not go so far
as Puerto Rico's to bar third-party actions by employees who
come within its own program. The LHWCA does not express
disapproval of a state's affording a different or wider
employer's immunity in the case of its own insureds.
____________________
11. Whether the United States would not be federally immune
___
is by no means clear on this record. To qualify for
immunity, the United States would have to show that (a)
Vigilantes failed to secure LHWCA compensation as required by
section 904; and (b) the United States itself secured the
payment of such compensation. The facts pertaining to these
issues were not developed below.
-22-
Conflict is lacking because, although section
905(a) does not give the United States immunity from
____
appellant's suit, neither does it take away the immunity
____ ____
separately created by Puerto Rico's workmen's compensation
laws. The last sentence of section 905(a) seems crucial:
"For purposes of this subsection, a contractor shall be
__________________________________
deemed the employer of a subcontractor's employees only if
the subcontractor fails to secure the payment of compensation
as required by section 904 of this title." 33 U.S.C. 905(a)
(emphasis added). On its face, section 905(a) limits the
extent of immunity for contractors only "for purposes of this
subsection." That is, a contractor cannot invoke the first
sentence of section 905(a) which limits the liability of
an "employer" who complies with 33 U.S.C. 904(a) as a
shield against liability to employees of a subcontractor
unless the subcontractor actually fails to secure
compensation. Section 905(a) does not refer to or otherwise
implicate immunities granted by other federal or state laws.
In this case, the United States did not invoke section 905(a)
as a defense against appellant's action. Instead, it found
shelter in a Puerto Rico statute, 11 L.P.R.A. 21. So,
while section 905(a) does not confer immunity upon the United
States here, neither does it facially prohibit the
application of immunity created by Puerto Rico law.
-23-
Moreover, the legislative history of section 905(a)
contains no evidence that Congress intended to preempt state-
law rules of statutory employer immunity when the LHWCA and
state acts have concurrent jurisdiction. Congress amended
sections 4(a) and 5(a) of the LHWCA, 33 U.S.C. 904(a),
905(a), to legislatively overturn the Supreme Court's
decision in Washington Metropolitan Area Transit Auth. v.
____________________________________________
Johnson, 467 U.S. 925 (1984). See H.R. Conf. Rep. No. 1027,
_______ ___
98th Cong., 2d Sess. 24 (1984), reprinted in 1984
_________ __
U.S.C.C.A.N. 2734, 2774;12 Griffis, 850 F.2d at 1091;
_______
____________________
12. The relevant portion of the Joint Explanatory Statement
of the Committee of Conference reads:
The Senate bill addresses several
issues growing out of the liability of
employers and third parties for damages
or compensation. . . .
The Conference substitute deals with
the issues of overlapping and indirect
liability and of exclusive remedy as
follows:
. . . .
Third, the substitute addresses that
issue of immunity in the situation where
an employee of a subcontractor brings a
third party action against the contractor
for a work-related injury. The Supreme
Court in Washington Metropolitan Area
______________________________
Transit Authority v. Johnson, 104 S.Ct.
_________________ _______
2827 (1984), changed key components of
what had widely been regarded as the
proper rules governing contractor and
subcontractor liability and immunity
under the Longshoremen's and Harbor
_________________________________________
Workers' Compensation Act.
_________________________
The Conference substitute, in
disapproving WMATA v. Johnson, achieves
_____ _______
the following: First, the obligation of
the contractor to secure compensation for
-24-
Garvin v. Alumax of South Carolina, Inc., 787 F.2d 910, 916
______ _______________________________
(4th Cir.), cert. denied, 479 U.S. 914 (1986). The Supreme
____________
Court in Washington Metropolitan Area Transit had held that,
_____________________________________
under section 5(a) before it was amended in 1984, contractors
were entitled to immunity as "employers" so long as they had
not defaulted on their obligation under section 4(a) to
____________________
the employee of the subcontractor is a
contingent one, which is triggered only
upon the failure of the subcontractor to
secure compensation for its own
employees. Second, the contractor
remains amendable [sic] to suit by its
subcontractors' employees in those
instances where the subcontractor-
employer has fulfilled its statutory
obligation to secure compensation for its
employees. Third, however, where the
subcontractor defaults in securing
compensation, thus triggering the
contractor's obligation, and the latter
fulfills that obligation, the contractor
is deemed an "employer" for purposes of
________________
section 5(a) and therefore entitled to
_____________
immunity from suit by the subcontractor's
employees. Fourth, if the contractor
utilizes a "wrap-up" insurance policy to
provide insurance coverage for the
benefit for satisfying the
subcontractor's primary obligation to
secure compensation, the contractor still
remains amenable to suit by employees of
the subcontractor; the contractor does
not enjoy the immunity afforded by
_____________
Section 5(a) of the Act.
_______________________
. . . WMATA, the conferees believe,
_____
does not comport with the legislative
intent of the Act nor its interpretation
from 1927 to 1983. The case should not
have any precedential effect.
H.R. Conf. Rep. No. 1027, 98th Cong., 2d Sess. 23-24 (1984),
reprinted in 1984 U.S.C.C.A.N. 2734, 2773-74 (emphasis
_________ __
added).
-25-
secure back-up compensation for subcontractor employees,
regardless of whether or not the subcontractor actually
failed to secure compensation for its own employees. 467
U.S. at 936-40. Three months after the Court issued
Washington Metropolitan Area Transit, Congress amended
________________________________________
sections 4(a) and 5(a) to narrow the scope of section 5(a)
immunity by making it available to contractors only where the
subcontractor defaults in securing compensation and the
contractor is obliged by the amended section 4(a) to secure
it instead. See Longshore and Harbor Workers' Compensation
___ ___________________________________________
Act Amendments of 1984, Pub. L. No. 98-426, 4, 98 Stat.
_______________________
1639, 1641 (1984).13 We find no evidence in the
____________________
13. That amendment provided:
Sec. 4. (a) Section 4(a) is amended to
read as follows:
"Sec. 4. (a) Every employer shall be
liable for and shall secure the payment
to his employees of the compensation
payable under sections 7, 8, and 9. In
the case of an employer who is a
subcontractor, only if such subcontractor
fails to secure the payment of
compensation shall the contractor be
liable for and be required to secure the
payment of compensation. A subcontractor
shall not be deemed to have failed to
secure the payment of compensation if the
contractor has provided insurance for
such compensation for the benefit of the
subcontractor.".
(b) Section 5(a) is amended by
adding at the end thereof the following
new sentence: "For purposes of this
subsection, a contractor shall be deemed
the employer of a subcontractor's
employees only if the subcontractor fails
-26-
legislative history, however, of an intent to supplant all
state-law statutory employer immunity doctrines where the
LHWCA and state compensation schemes have concurrent
jurisdiction. See Garvin, 787 F.2d at 916-17. Congress
___ ______
expressly stated that the amendment's purpose was to change
the rules governing "immunity under the Longshoremen's and
Harbor Workers' Compensation Act," the "immunity afforded by
Section 5(a) of the Act," and the definition of "'employer'
for purposes of section 5(a)." Congress did not mention
state-created immunity or state law workers' compensation
laws. Absent such evidence, we see no reason to find that
Congress intended such a sweeping preemption of state
workers' compensation laws, a change that would contradict
the general presumption that the LHWCA "supplements, rather
than supplants, state compensation law" where the two
overlap. Sun Ship, 447 U.S. at 720. Because neither the
________
text nor legislative history of section 905(a) support
appellant's contention that it conflicts with Puerto Rico law
in this situation, we find no preemption and thus affirm the
district court's application of Puerto Rico workers'
compensation law without regard for the LHWCA.
____________________
to secure the payment of compensation as
required by section 4.".
Pub. L. No. 98-426, 4, 98 Stat. 1639, 1641 (1984).
-27-
Our holding today is consistent with the decision
of the Fourth Circuit in Garvin v. Alumax of South Carolina,
______ _________________________
Inc., 787 F.2d 910 (4th Cir.), cert. denied, 479 U.S. 914
____ ____________
(1986), which held that section 905(a) does not conflict
with, and hence does not preempt, the statutory employer rule
of South Carolina workers' compensation law, when both
regimes apply concurrently and the injured worker brings a
common-law negligence claim against a contractor. The Garvin
______
court found that a contractor was entitled to immunity under
South Carolina law and was not entitled to the immunity
extended by section 905(a), as amended in 1984.
There is nothing in that amendment or its
legislative history, however, to indicate
a congressional intention to restrict the
application of state created immunity of
contractors in situations in which the
state statute traditionally had been
applied.
It was necessary, of course, for the
Congress in the LHWCA to deal in some
fashion with employer immunity. That
statute has exclusive application in the
District of Columbia and to most injuries
suffered on the navigable waters of the
United States. In those areas, the
Congress was free to determine for itself
under what circumstances a general
contractor would be immune from tort
actions by employees of a subcontractor,
but nothing done in the Congress suggests
that it intended to modify immunities
provided general contractors by state
workmen's compensation laws, when those
laws are applicable. . . .
The South Carolina rule of immunity
of a contractor in the position of
[defendant] is different from that under
the LHWCA, but not in conflict with it,
for Congress has not purported to
-28-
prescribe the immunity rules to be
applied by states in actions brought upon
state law claims.
Id. at 916-17. Because plaintiff had a state-law cause of
___
action, the LHWCA immunity rule did not apply and hence did
not conflict with the South Carolina rule. Id. Similarly,
___
the Virginia Supreme Court held that where both the LHWCA and
Virginia workers' compensation act apply to an injured worker
who brings a state-law negligence suit against a contractor,
the Virginia statutory employer immunity rule, which is also
essentially the same as Puerto Rico's, is not preempted by
section 905(a). McBride v. Metric Constructors, Inc., 239
_______ __________________________
Va. 138, 387 S.E.2d 780 (1990).
We recognize that under significantly different
circumstances the question of whether the LHWCA preempts
state-law defenses of statutory employer immunity might have
a different answer. See, e.g., Gates v. Shell Oil, 812 F.2d
___ ____ _____ _________
1509, 1513-14 (5th Cir.), cert. denied, 494 U.S. 1017 (1990)
____________
(holding that the Louisiana statutory employer rule is
inapplicable to a federal statutory claim under the Outer
Continental Shelf Lands Act by injured offshore worker
because it is "inconsistent," within meaning of 43 U.S.C.
1333, with the federal LHWCA rule); Ward v. Norfolk
____ _______
Shipbuilding & Drydock Corp., 770 F. Supp. at 1121-22
_______________________________
(applying LHWCA statutory employer rule instead of state-law
rule where injured worker had a "general [federal] maritime
-29-
negligence cause of action" against a contractor); Kramer v.
______
Bouchard Transp. Co., 741 F. Supp. 1023, 1025-26 (E.D.N.Y.
_____________________
1990) (applying federal rule where LHWCA bar on indemnity
actions between vessel owner and employer, 33 U.S.C.
905(b), conflicted with state U.C.C. rule); see also Lewis v.
________ _____
Modular Quarters, 487 U.S. 1226, 1226-27 (1988) (denying
_________________ _______
certiorari to 508 So. 2d 975 (La. 1987)) (White, J.,
__________ __
dissenting, arguing that Supreme Court should have granted
certiorari to settle the question whether the LHWCA preempts
state-law statutory employer immunity rules). But the above
cases are all factually distinguishable from ours, which fits
squarely within the rules of Garvin and McBride.
______ _______
III.
III.
In summary, (1) the district court properly found
that, under Puerto Rico law, appellee United States is immune
from appellant's negligence action; and (2) for purposes of
immunity the district court properly chose to apply Puerto
Rico law, instead of section 905(a) of the Longshore and
Harbor Workers' Compensation Act, because under the facts of
this case the federal act does not preempt the Puerto Rico
statutory employer doctrine. We affirm the grant of summary
judgment for appellee United States.
Affirmed. No costs.
________ ________
-30-
Document Info
Docket Number： 92-1659
Filed Date： 4/21/1993
Precedential Status： Precedential
Modified Date： 9/21/2015