Appendix — Sanger Boats, Inc. v. Schwabenland

Appendix A

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

LAWRENCE SCHWABENLAND and )

DIRECTOR, OFFICE OF WORKERS' )

COMPENSATION PROGRAMS, UNITED)

STATES DEPARTMENT OF LABOR, )

)

No. 81-7064

81-7075

Petitioners,

Vv.

INSURANCE COMPANY,

)

)

)

)

SANGER BOATS and TRAVELERS ) OPINION*

Responc. ents. )

)

Petition for Review of a Decision

of the Benefits Review Board

Argued and Submitted February 12, 1982

Before: CHOY, PREGERSON, and POOLE,

Circuit Judges.

CHOY, Circuit Judge:

Lawrence Schwabenland petitions for

review of the Benefits Review Board's

(the Board) denial of his claim for bene-

fits under the Longshoremen's and Harbor

Workers' Compensation Act, 33 U.S.C.

* Piled July 26, 1982, Phillip B. Winberry

Clerk, U.S. Court of Appeals

Appendix 2

§§ 901-50 (the Act). Because the Board

applied the wrong test for determining

Schwabenland's employee "status" and be-

cause we are convinced that he meets the

test we announced in Weyerhaeuser Co. v.

Gilmore, 528 F.2d 957, 961 (9th Cir. 1975)

cert. denied, 429 U.S. 868 (1976), we

reverse and remand.

I

At the time of his injury,

Schwabenland was employed as the sales

manager for Sanger Boats (Sanger), a man-

ufacturer and seller of custom-built,

high-performance recreational and racing

boats. He spent approximately 30 percent

of his working time inspecting boats in

various stages of production to ensure

that they conformed to the buyers' speci-

fications and were free from cosmetic de-

fects. In addition to his sale and in-

spection duties, Schwabenland acted as

Appendix 3

the primary test driver and pilot of new

model boats (thereby participating in the

development of the models), performed

occasional maintenance on the boats, and

participated in approximately 30 weekend

races per year in which he drove Sanger's

boats for promotional purposes.

Schwabenland was injured on July 29, 1973

when the boat he was testing flipped over.

Sanger paid Schwabenland workers'

compensation disability benefits under

California law but Schwabenland claimed

the higher compensation available under

the Longshoreman's Act. Sanger and its

workers' compensation insurer, Travelers

Insurance Company (Travelers), contested

his claim to benefits under the Act be-

cause they did not believe that he quali-

fied as an “employee,” a term defined by

§ 2(3) of the Act as a “person engaged in

maritime employment." Schwabenland then

Appendix +

filed a claim for compensation with the

United States Department of Labor.

Determining Schwabenland's “employee”

status by reference to his “overall acti-

vities," an administrative law judge den-

ied Schwabenland's claim for compensation

under the Act. The judge ruled that

Schwabenland did not fail within the

class of covered employees because his

employment did not have "a realistic sig-

nificant relationship to the maritime

activities involving navigation and com-

merce over navigable waters contemplated

by Congress in amending the Federal Act.”

On appeal, the Board also focused on

Schwagenland's overall employment and held

that a worker must spend a substantial

amount of work time performing maritime

duties in order to fall within the cover-

age of the Act. Thus, while

Schwabenland's activities at the time of

Appendix 5

the injury “were arguably maritime in

nature," the Board considered it unneces-

sary to determine whether "this work con-

stituted maritime employment since there

is no evidence in the record that claim-

ant's work testing and racing employer's

boats occupied a substantial portion of

his time."

Schwaber land asserts that the Board

was incorrec. in requiring that maritime

activities occupy a "substantial portion"

of his time and also argues that he satis-

fies the employee "status" test required

for coverage under the Act. Sanger and

Travelers dispute Schwabenland's "status"

and argue that in enacting the Act,

Congress never intended to cover the

recreational-boat industry and, there-

fore, Schwabenland's injuries are not

compensable under the Act. i/

Appendix 6

We will set aside the Board's deci-

sion only if it is unsupported by substan-

tial evidence or is predicated upon an

erroneous view of the law. Duncanson-

Harrelson Co. v. Director, Office of

Workers' Compensation Programs, 644 F.2d

827, 830 (9th Cir. 1981). In this case

the facts are uncontroverted and the ques-

tions before this court are purely ones of

law.

II

To be eligible for compensation under

the Act, a claimant must sustain an injury

1. On appeal, Sanger also argues that

Schwabenland, because he was “the master or

member of a crew" of a vessel, is not an

employee under § 2(3) of the Act, 33 U.S.C.

§902(3). We need not consider this ques-

tion because it was not raised before the

Board. See Parker v. Motor Boat Sales, Inc.

314 U.S. 244, 251 (1941); Moore Dry Dock Co.

eh” 169 F.2d 988, 991 (9th Cir.

Appendix 7

within the “situs” defined by § 3(a) of

the Act 2/ and must have the "status" of

an employee as defined by § 2(3). 3/ It

is not disputed that Schwabenland meets

the situs requirement: his injury occurred

on the Oakland Estuary, a navigable water

2. To satisfy the situs r irement, a

claimant must sustain an infesy upon

the navigable waters of the United

States (including any adjoining pier,

wharf, dry dock, terminal, building

way, marine railway, or other ad-

joining area customarily used by an

employer in loading, unloading, re-

pairing, or building a vessel).

33 U.S.C. § 903(a)

3. To satisfy the status requirement, a

claimant must be 7S,

any pe-son engaged in maritime eapley

ment, including any longshoreman or

Other person engaged in longshoring

operations, and any harborworker in-

cluding a ship repairman, shipbuilder,

and shipbreaker, but such term does

not include a master or member of a

erew of any vessel, or any person en-

gaged by the master to load or unload

or repair any small vessel under eight-

een tons net.

33 U.S.C. § 902(3) (emphasis added).

Appendix 8

of the United States. Thus, the main

issue is whether Schwabenland's test-

driving and boat inspection duties make

him an “employee” i.e., a person “engaged

in maritime employment," under § 2(3).

We have stated that for employment

to be maritime, it “must have a realis-

tically significant relationship to

‘traditional maritime activity involving

navigation and commerce on navigable

waters.'" Weyerhaeuser Co. v. Gilmore,

528 F.2d at 961 (quoting Executive Jet

Aviation, Inc. v. City of Cleveland,

409 U.S. 249, 272 (1972)). In

Weyerhaeuser, we noted that "[t]he occu-

pational hazards intended to be guarded

against are the traditional hazards to

the ship's service employee arising in

the course of his employment; i.e., the

perils of the sea and an unseaworthy

vessel recognized under maritime laws.” Id.

Appendix 9

Using the Weyerhaeuser test, courts

have held that the Act covers workers in-

volved in construction related to maritime

activities. See Duncanson-Harrelson Co.

v. Director, Office of Workers’ Compensa-

tion Programs, 644 F.2d at 830-31 (employee

involved in construction of tie-up for in-

coming ships covered under Weyerhaeuser

test); Odom Construction Co. v. United

States Department of Labor, 622 F.2d 110,

113 (5th Cir. 1980) (land-based construc-

tion worker injured after moving concrete

blocks used as tie-ups covered under

Weyerhaeuser test), cert. denied, 450

U.S. 966 (1981); cf. Trotti & Thompson v.

Crawford, 631 F.2d 1214, 1220-22 (Sth Cir.

1980) (carpenter constructing pier engaged

in maritime employment). Coverage has also

been extended to work related to the con-

struction of recreational boats. See

Mississ.ppi Coast Marine, Inc. v. Bosarge,

Appendix 10

637 F.2d 994, 998 (carpenter working on

30-foot pleasure boat resting on blocks

covered under Weyerhaeuser test), modified

in part, 657 F.2d 665 (Sth Cir. 1981). It

is undisputed that Schwabenland conducted

visual inspections of boats under construc-

tion to make certain that they were in

compliance with the orders received. The

inspection duties, the testing of new

models to evaluate their design, and the

performance of occasional maintenance in

connection with the testing activities

would seem to be sufficiently related to

the construction of the vessels to consti-

tute maritime employment covered under the

Act.

The Board, however, determined

Schwabenland's maritime-employee status by

reference to his overall employment and

found that Schwabenland had not spent a

substantial portion of his work time

Appendix 11

performing maritime duties. Consequently,

the Board found that Schwabenland was not

a maritime employee under the Act.

The Board's “substantial portion"

test is a fairly-recent pronouncement.

See Boudloche v. Howard Trucking Co., Inc.,

ll BRBS 687, BRB No. 78-383 (1979), rev'd,

632 F.2d 1346 (Sth Cir. 1980). Only two

circuits have had the opportunity to

examine the test and both have rejected it.

See Graziano v. General Dynamics Corp.,

663 F.2d 340, 343 (lst Cir. 1981);

Boudloche v. Howard Trucking Co., Inc.,

632 F.2d 1346, 1348 (Sth Cir. 1980); cert.

denied, 101 S. Ct. 3049 (1981).

The Supreme Court has never directly

addressed the “substantial portion" test

but is has said that the status requirement

is satisfied as long as "some portion" of

the employee's work time involves maritime

activities. See Northeast Marine

Appendix 12

Terminal Co., Inc. v. Caputo, 432 U.S. 249,

273 (1977) (employees who spend at least

some of their time in indisputably long-

shoring operations are longshoremen under

the Act). To substitute “substantial” for

"some" would depart from the letter and

the spirit of Caputo, see Boudloche v.

Howard Trucking Co., Inc., 632 F.2d at

1348, and would be contrary to the

Supreme Court's directive to take an ex-

pansive view of the coverage to give

effect to the remedial purpose of the Act.

See Northeast Marine Terminal, Co., Inc.

v. Caputo, 432 U.S. at 268; Ramos v.

Universal Dredging Corp., 653 F.2d 1353,

1358-59 (9th Cir. 1981).

We therefore reject the Board's

"substantial portion” test. Because the

facts are not disputed, we are able to

determine whether Schwabenland was a mari-

time employee within the meaning of § 2(3).

Appendix 13

We hold that Schwabenland's regular per-

formance of maritime operations, even

though it constituted less than a "sub-

stantial portion” of his overall working

time, was sufficient to satisfy the status

requirement of § 2(3). 4/

Iil

Sanger and Travelers attempt to

limit the reach of the Act by contending

that it was never meant to cover the small

recreational-boat industry. They argue

that the legislative history shows that

Congress did not intend to include the in-

dustry within the benefited class covered.

4. We need not decide whether

ny my should be able to recover

ause he was e ed in maritime loy-

ment at the manent of his injury. See ~~

Hullinghorst Industries v. Carroll, 650

P.2da 750, 754 (5th Cir. 1981), cert. denied,

102 S. Ct. 1037 (1982). We have previously

rejected the “moment of injury” test when

its adoption would have denied recovery.

See Brady-Hamilton Stevedore Co. v. Herron,

568 F.2d 137, 140 (9th Cir. 1978)

Appendix 14

The only support cited for this contention,

however, is a minor excerpt from a floor

debate in the House of Representatives. 3/

We do not believe that the debate is help-

ful to the resolution of the issue.

5. The following debate occurred on the

floor of the House involving Mr. Graham,

the Chairman of the House Judiciary

Committee (which reported out the 1927

Act,) over the scope of pre-amendment

§ 3(a):

Mr. Abernethy: As I understand the

pretleqea s interpretation of the

ill, it does not include small re-

pair yards.

Mr. Graham: The gentleman spoke

about the words in the four ra-

graph, “including any dry dock”?

Mr. Abernethy: Yes.

Mr. Graham: And the gentleman was

apprehensive that that might possibly

cover a small shipyard. I can assure

the gentleman that it will not. A dry

dock is under admirality, so declared

in the decisions of the Supreme Court,

and a dry dock is defined legally, so

that it can not include a shipyard.

Mr. Abernethy: As I understand, this

bill takes from its provisions seamen,

Appendix 15

The Supreme Court has implied that

the Act does not exclude persons employed

in the recreational-boat industry. In

Parker v. Motor Boat Sales, Inc., 314

U.S. 244 (1941), the Court held that a

janitor, employed by a small motorboat

and outboard-motor supplier, was covered

under the Act. The Court commented that

the janitor had been engaged in a

“clearly maritime activity” when he

drowned after the 18-foot motorboat in

which he was riding capsized while another

employee was testing an outboard motor.

Id. at 247. The type of vessel or the

nature of the industry involved does not

appear to have been significant.

fishermen, and oystermen, and does

not include any shipyard or repairyard

except a dry dock.

Mr. Graham: That is correct.

68 Cong. Rec. 5403 (1927)

Appendix 16

Although the Act has been substan-

tially amended since the Parker decision,

see the Longshoremen's and Harbor Workers’

Compensation Act Amendments of 1972,

Pub. L. No. 92-576, 86 Stat 1251, there is

no indication that Congress, in amending

the Act, intended to limit its coverage

solely to claimants injured in connection

with the nonrecreational-boat industry.

Moreover, to impose the difficult require-

ment of determining which operations are

commercial and which are recreational would

seem to conflict with the goals of the 1972

amendments to provide uniform coverage and

to eliminate jurisdictional problems.

The Fifth Circuit, the only circuit

to have addressed this issue, has deter-

mined that the Act is applicable to re-

creational-boat builders. See Mississippi

Coast Marine v. Bosarge, 637 F.2d at 996.

The Board has likewise concluded that the

Appendix 17

Act applies to the small recreational-boat

industry. See Napoles v. Donzi Marine,

Inc., 5 BRBS 685, 698, BRB No. 76-262

(April 6, 1977) (extending coverage to a

manufacturer of small boats and pleasure

crafts).

The Supreme Court's decision in

Parker, the explicit statutory provisions

of the Act, and the decision by the Fifth

Circuit and the Board persuade us to

reject Sanger's and Traveler's contention.

We therefore hold that the small recrea-

tional-boat industry is covered by the Act.

The Board's decision is reversed and

the case is remanded for proceedings con-

sistent with this opinion.

REVERSED and REMANDED.

Appendix B

BENEFITS REVIEW BOARD

U.S. DEPARTMENT OF LABOR

No. 79-314

& 79-314A

LAWRENCE SCHWABENLAND

Claimant-Petitioner

and

TRAVELERS INSURANCE COMPANY

Employer/Carrier-

Respondents

DIRECTOR, OFFICE OF WORKERS'

COMPENSATION PROGRAMS, UNITED

STATES DEPARTMENT OF LABOR

Petitioner

DECISION AND ORDER*

Appeal from the Decision and Order

of Joseph A. Matera, Administrative

Law Judge, United States Department

of Labor.

Richard C. Watters and David L.

Simerly, (Miles, Sears and Eanni),

Fresno, California, for the claimant.

*Filed Dec. 11, 1980 by Agnes Kurtz, Clerk

Appendix 19

Albert H. Sennett (Hanna, Brophy,

MacLean, McAleer and Jensen), San

Francisco, California, for the

employer/carrier.

Joshua T. Gillelan, II (Carin Ann

Clauss, Solicitor of Labor, Laurie

M. Streeter, Associate Solicitor),

Washington, D.C., for the Director,

Office of Workers' Compensation

Programs, United States Department

of Labor.

Before: SMITH, Chief Administrative

Appeals Judge, MILLER and KALARIS,

Administrative Appeals Judges.

KALARIS, Administrative Appeals Judge:

These are appeals by claimant and the

Director, Office of Workers' Compensation

Programs, from the Decision and Order

(78-LHCA-1118-S) of Administrative Law

Judge Joseph A. Matera pursuant to the

provisions of the Longshoremen's and

Harbor Workers’ Compensation Act, as

amended, 33 U.S.C. $901 et seg., (herein-

after referred to as the Act).

In his decision, the administrative

law judge held that claimant was not an

Appendix 20

"employee," as defined in Section 2(3) of

the Act, 33 U.S.C. §902(3), since his over-

all duties as sales manager lacked a sig-

nificant relationship to maritime activi-

ties. Claimant and the Director appeal, ©

arguing that claimant was engaged in mari-

time employment within the meaning of

Section 2(3) of the Act. Oral argument

in this case was held on January 29, 1980,

in San Francisco, California. i/

Claimant was employed as sales mana-

ger by Sanger Boats (hereinafter referred

to as employer). Employer manufacturers

high performance recreational and racing

boats with a maximum weight of 3,600

1/ For purposes of oral argument,

this case was consolidated with Ziemer v.

The Stone Boat Yard, BRB No. 79-382 and

Palmer v. Delta Marina Industries, BRB

No. 79-293. However, the Decisions and

Orders in these cases are being issued

separately.

Appendix 21

pounds. Claimant was responsible for the

acquisition of new orders for boats.

While testing the racing boat Joker's Wild

on a weekend racing trip. he was injured

when the boat flipped over in the Oakland

Estuary.

In order to be covered by the Act,

Claimant must show that he was an employee

as defined in Section 2(3), 33 U.S.C.

§902(3), and that he was injured on a

situs covered by Section 3(a). 33 U.S.C.

§903(a). Claimant was injured in the

Oakland Estuary, a body of navigable water

and clearly a covered situs under Section

3(a). The sole issue therefore is whether

claimant was a maritime employee as de-

fined in Section 2(3). 2/

2/ Section 2(3) provides as follows:

The term "employee" means any

person esueeel ia maritime em-

ployment, including any long-

Appendix 22

The Director contends that claimant's

work with small, recreational vessels of

under 3,600 pounds was clearly maritime in

nature. The administrative law judge's

denial of benefits was not based on his

interpreting the Act as excluding work in

connection with such vessels. However,

the argument that the size of a vessel may

be dispositive of coverage goes to the

heart of the Board's subject matter juris-

diction and must, therefore, be considered.

See Ramos v. Universal Dredging Corp., 10

BRBS 368, BRB Nos. 78-466/A (1979).

shoreman or other person engaged

in longshoring operations, and

any harbor-worker including a

ship repairman, shipbuilder, and

ship-breaker, but such term does

not include a master or member of

a crew of any vessel, or any

person engaged by the master to

load or unload or repair any

small vessel under eighteen tons

net.

Appendix 23

The Act does not contain an express

exemption from coverage for persons whose

work involves vessels of a certain size or

use. 3/ However, in listing the occupa-

tions specifically covered by Section 2(3),

Congress referred to ship repairmen, ship-

builders, and ship-breakers rather than

persons involved with boats or vessels.

Therefore, it must be determined whether

use of the word “ship” excludes vessels

similar to the small, recreational boats

with which claimant worked.

In Napoles v. Donzi Marine, Inc.,

5 BRBS 685, BRB No. 76-262 (1977), the

3 Section 2(3) contains an express

exemption for all persons engaged by the

master to load, unload or repair any

vessel under 18 tons net. This exclusion

is not applicable herein as claimant was

neither engaged by the master nor was he

involved in loading, unloading, or repair-

ing any vessel. See Fuduli v. Maresca

Boatyard, 7 BRBS 982, BRB No. 77-335

(1978).

Appendix 24

Board considered various constructions of

the terms “ship,” “boat,” and "vessel,"

and concluded that it was impossible to

distinguish a “ship” from a “boat” or

“vessel” based on size or other factors.

4/ ‘The Board found that the technical

definition in U.S. v. Kelly, 26 Fed. Cas.

697 (D.C. Mass. 1863), describes a ship

as a three-masted vessel navigated with

sails. However, in a generic sense, a

ship is any seagoing craft larger than an

undecked boat. The Board also found that

a “boat” is often defined as a "small open

4/ The word “vessel” also appears in

SectiGn 2(3) as well as the legislative

history. See H.R. Rep. No. 92-1441, 92d

Cong., 2d Sess. 10-11 (1972); S. Rep. No.

92-1125, 92d Cong., 2d Sess. 12-13 (1972).

However, the Board has held that the prin-

ciple of ejusdem generis requires that the

work “vesse refer to classes of ships

and not to every class of vessel since the

word “ship” appears firsc in Section 2(3).

Napoles v. Donzi Marine, Inc., 5 BRBS 685,

BRS No. 76-262 (1977).

Appendix 25

vessel or watercraft, usually moved by

oars or by iowing,” while the term

"vessel" in its broadest sense generally

includes “any description of watercraft

or other artificial contrivance used or

capable of being used, as a means of

transportation on water." Napoles, 5

BRBS at 692, 693. Based on these defini-

tions, the Board determined that the

word “ship” could not be defined with

sufficient specificity to be used as a

means of excluding certain types of water-

craft. Therefore, the Board held that

neither the size of a vessel nor its

designation as a ship, boat or otherwise

was determinative in ascertaining the

scope of Section 2(3) of the Act.

In admiralty cases, courts often

construe the term “srip” to include all

navigable structures intended for trans-

portation, other than boats belonging to

Appendix 26

other vessels. See Cope v. Vallette Dry

Dock Co., 119 U.S. 625 (1887); Perry v.

Haines (The Robert W. Parsons), 191 U.S.

17 (1903). In Perry v. Haines, the

Supreme Court held Erie Canal barges,

called canal “boats,” covered as ships or

vessels within the admiralty jurisdiction.

Stating that maritime jurisdiction turns

on the purpose for which the vessel is

built rather than its size or form, the

court cited cases where jurisdiction was

based on navigability of the vessel, in-

cluding coverage of a fishing boat only

24 feet long.

A number of vessels not involved in

trade or commerce, including recreational

boats, have been held covered by admiral-

ty jurisdiction. See London Guarantee and

Accident Co. v. Industrial Accident

Commission, 279 U.S. 109 (1929); Continen-

tal Insurance Co. v. Clayton Hardtop Skiff

Appendix 27

No. NJ 2281 B (The Skipton), 367 F.2d 230

(3d Cir. 1966); Kelly v. United States,

531 F.2d 1144 (2d Cir. 1976); Oppen v.

Aetna Insurance Co., 485 F.2d 252 (9th

Cir. 1973). Moreover, in cases under the

Act, both before and after the 1972

amendments, the Board and the courts have

held the builders and repairmen of numer-

ous vessels covered even though those

vessels could not meet a technical or

traditional definition of "ship." See

Parker v. Motor Boat Sales, 314 U.S. 244

(1941) (18-foot motorboat); Dravo Corp.

v. Maxim, 545 F.2d 374 (3d Cir. 1976),

cert. denied, 433 U.S. 908 (1977) (barge);

Continental Casualty v. Lawson, 64 F.2d

802 (Sth Cir. 1933) (five-ton tug); Ward

v. Newport News Shipbuilding and Dry Dock

Co., 8 BRBS 353, BRB No. 77-718 (1978)

(submarine). Thus, case law construing

the term “ship” does not limit the use of

Appendix 28

the term to vessels of a certain size or

use.

The legislative history of the Act

provides little guidance in interpreting

the scope of Section 2(3) insofar as small

or recreational boats are concerned.

These vessels are not specifically men-

tioned in either the Act or the official

committee reports. Boating associations

representing the recreationai boating

industry did not testify or otherwise

participate in the legislative process in

either 1927 or in 1972. However, as the

Board noted in Napoles, supra, while

failure to include recreational boating

within the scope of the hearings lends

support to the argument that such boating

is not within the jurisdiction of the Act,

the lack of representation at the hearings

and lack of comment or reference to re-

creational boating is insufficient to

Appendix 29

remove the industry from coverage, es-

pecially if the language of the Act and

legislative intent indicate otherwise.

The only indication that those involved

with small boats were to be excluded from

the original Act occurred in floor debate

involving Mr. Graham, Chairman of the

House Judiciary Committee, which reported

out the 1927 Act. However, this discussim

involved the scope of coverage under pre-

amendment Section 3(a). 3/ Therefore,

this discussion is not helpful in ascer-

taining the scope of Section 2(3).

5/ This exchange was as follows:

Mr. Abernethy. As I understand

the gentleman's interpretation

of the bill, it does not include

small repair yards.

Mr. Graham. The gentleman spoke

about the words in the fourth

paragraph, ‘including any dry

dock'?

Mr. Abernethy. Yes.

Appendix 30

Furthermore, employees injured on

small recreational boats were covered by

the pre-amendment Act so long as the Act's

situs requirement was met. For example,

in Parker v. Motorboat Sales, Inc., 314

U.S. 244 (1941), the Supreme Court found

coverage where a janitor employed by a

manufacturer of recreational boats was

killed while riding in an 18-foot

Mr. Graham. And the gentleman

was apprehensive that that might

possibly cover a small ship yard

I can assure gentleman that it

will not. A dry dock is under

admiralty, so declared in the

decisions of the Supreme Court,

and a dry dock is defined le-

gjally, so that it cannot include

a shipyard.

Mr. Abernethy. As I understand,

this bill takes from its provi-

sions seamen, fishermen, and

oystermen, and does not include

any shipyard or repairyard ex-

cept a dry dock.

Mr. Graham. That is correct

68 Cong. Rec. 5403 (1927).

Appendix 31

motorboat on navigable waters. The Court

concluded that claimant's riding in the

boat was “clearly maritime activity.”

314 U.S. at 227. Thus, the pre-amendment

Act did not exclude persons injured on

small or recreational vessels.

While the 1972 amendments made sig-

nificant changes in coverage under the

Act, the amendments did not limit the Act's

coverage to claimants injured in connec-

tion with large, commercial vessels. The

legislative history indicates that the

purpose in amending Section 2(3) was to

eliminate the shifting coverage resulting

from the emphasis on whether the injury

occurred on land or water. These changes

involved the addition of the tnmaritime"

employment requirement to Section 2(3) as

well as expanding the situs requirement in

Section 3(a). In adopting these changes,

Congress gave no indication that coverage

Appendix 32

under the Act was to be restricted to

employees working with vessels of a cer-

tain size or use. Considering the broad

interpretations in case law of the terms

"ship" and “vessel,” the terms used in

the legislative history as well as in the

Act, I cannot conclude that Congress

selected that language to exclude claim-

ants working with a certain type of ship

or vessel. Absent a more specific ex-

pression of congressional intent to ex-

clude these employees, I must conclude

that Congress did not intend to do so.

Accordingly, I agree with the Board's

reasoning in Napoles v. Donzi Marine, Inc.,

that neither size of a vessel nor its de-

Signation as a ship, boat or otherwise can

have any impact upon coverage under the

Act. However, in Napoles the Board fur-

ther held that “shipbuilding involves all

Operations necessary to build a ship or

Appendix 33

vessel when at least part of that construc

tion takes place over navigable waters or

on a dry dock." 5 BRBS at 698. I agree

that shipbuilding involves all operations

necessary to build a ship or vessel;

however, I cannot agree that part of that

construction must take place over naviga-

ble waters or on a dry dock. This holding

requires reading pre-amendment situs re-

quirements into Section 2(3) of the Act, a

result which I do not believe is the

correct interpretation of Section 2(3).

In P.C. Pfeiffer Co., Inc. v. Ford, 44

U.S. 69 (1979), the Supreme Court empha-

sized that Section 2(3) of the Act contains

occupational and not geographical require-

ments for maritime employment. Claimant's

status as a shipbuilder under Section 2(3)

thus requires an examination of his duties

and their relationship to vessel construc-

tion and is not affected by whether his

Appendix 34

employer has employees who work on navi-

gable waters or dry docks.

Furthermore, the analysis of the

Board in Napoles shifts the emphasis

from determining the status of the employee

under Section 2(3) to examinin, the nature

of an employer's business and evaluating

employer's status as a maritime employer

under Section 2(4), 33 U.S.C. §902(4). §/

This approach differs from the approach

usually followed by the Board and courts.

Generally, if a claimant is engaged in

maritime employment within the meaning of

Section 2(3), claimant's employer is auto-

matically a maritime employer as defined

by Section 2(4). See Handcor, Inc. v.

Director, OWCP, 568 F.2d 143, 7 BRBS 413

6/ Section 2(4) provides that an

"employer" is “an employer any of whose

employees are employed in maritime em-

oa. upon a situs listed in Section

a).

Appendix 35

(9th Cir. 1978); Perez v. Sea-Land Service,

Inc., 8 BRBS 130, BRB Nos. 77-274/A (1978).

I continue to believe that this is the

correct approach. Thus, a claimant is

engaged in shipbuilding when his duties

involve the construction of a vessel,

regardless of its size or use. If claim-

ant is engaged in shipbuilding, then em-

ployer is a statutory “employer” within

the meaning of Section 2(4).

However, even if employees working

with small recreational vessels are not

ship repairmen, shipbuilders or ship-

breakers, such claimants may nonetheless

fall within the general category of

"maritime employment" as defined in

Sedmak v. Perini North River Associates,

9 BRBS 378, BRB No. 77-896, et al. (1978),

aff'd sub nom. Fusco v. Perini North River

Associates, 622 F.2d 1111, 12 BRBS 328

(2a Cir. 1980). 2/ In Sedmak, the Board

Appendix 36

held that "a claimant's employment must

have a realistically significant relation-

ship to maritime activities involving na-

vigation and commerce over navigable waters

in order for that employment to be deemed

maritime employment under Section 2(3)."

9 BRBS at 386. In adopting this defini-

tion of maritime employment, the Board

rejected in part the definition of mari-

time employment promulgated in

Weyerhaeuser v. Gilmore, 528 F.2d 957,

3 BRBS 140 (9th Cir. 1975), cert. denied,

429 U.S. 868 (1976), insofar as it re-

quired that claimant's employment have a

relationship to “traditional” maritime

activities. We found that this require-

ment as well as the requirement that em-

ployment relate to the “traditional work

7/ It is clear that Section 2(3)

does not enumerate all possible types of

maritime employment. See P.C. Pfeiffer

Co., Inc. v. Ford, at note 7.

Appendix 37

and duties of a ship's service employment"

was unduly restrictive, particularly in

light of the more recent Supreme Court

decision in Northeast Marine Terminal Co.,

Inc. v. Caputo, 432 U.S. 249 (1977), and

the Ninth Circuit's approach to issues

under Section 2(3) following that decision.

See Brady-Hamilton Stevedore Co. v. Herron,

568 F.2d 137, 7 BRBS 409 (9th Cir. 1978);

Handcor, Inc. v. Director, OWCP, 568 F.2d

143, 7 BRBS 413 (9th Cir. 1978). Thus,

the scope of maritime employment under the

Sedmak definition is not limited to acti-

vities traditionally related to a ship's

service.

It is apparent that small recreational

boats are involved in navigation regardless

of their size or use. However, the Sedmak

definition of maritime employment refers

to maritime activities involving naviga-

tion and commerce. The phrase “navigation

Appendix 38

and commerce" Was originally derived from

Justice Story's opinion in Delovio v. Boit,

7 F. Cas. 418 (C.C.D. Mass. 1815), which

refers to “contracts relating to naviga-

tion, business or commerce of the sea."

See Gilmore and Black, The Law of Admiralty,

2a edition, 21. The conjunctions “and”

and “or” are often used interchangeably

by the courts when referring to the nexus

to navigation and/or commerce. See

Executive Jet Aviation, Inc. v. City of

Cleveland, 409 U.S. 249 (1972); Chapman

v. City of Grosse Point Farms, 385 F.2d

962 (6th Cir. 1967). Thus, the definition

does not require that activities have a

nexus to both navigation and commerce in

order to be maritime in nature.

In determining whether activities

are maritime in nature for the purposes

of admiralty jurisdiction, vessels used

for noncommercial purposes have not been

Appendix 39

excluded. In Campbell v. Loznicka (The

Scorpio), 181 F.2d 356 (5th Cir. 1950),

the Fifth Circuit held that a person fur-

nishing repairs on the order of the owner

of a contrivance which could be used for

navigation had a maritime lien enforceable

in admiralty. The Ninth Circuit held that

the claims of private pleasure craft owners

for damage from an oil spill sounded in

maritime tort. Oppen v. Aetna Insurance

Co., 485 F.2d 252 (9th Cir. 1973). The

extension of admiralty jurisdiction to

the operation of small pleasure craft

engaged in noncommercial nafigation was

before the Eighth Circuit in St. Hilaire

Moye v. Henderson, 496 F.2d 973 (8th Cir.

1974). Applying Executive Jet, the court

rejected petitioner's argument that

traditional maritime activity was limited

to commercial activity and held that

operation of an 18-foot motorboat was

Appendix 40

within the admiralty jurisdiction.

Moreover, excluding vessels used for

noncommercial purposes also raises diffi-

culties in determining what constitutes a

commercial or noncommercial use. Commer-

cial vessels in a traditional sense are

trading ships used for tranportation of

goods by sea. While vessels built for

recreational purposes generally fall out-

side this category and may therefore be

considered noncommercial, others are less

easy to classify. Some water craft built

ostensibly for recreational use are actu-

ally used for business purposes as, for

example, carriage of passengers for hire,

which has been held to be a commercial use.

See London Guaranty and Accident Co. v.

Industrial Accident Commission, supra.

Other vessels such as tugboats, submarines

and fishing boats, also cannot be easily

Classified since they are neither used in

Appendix 41

traditional commercial trade nor used in

recreational activities. Classifying

vessels by use thus would create a variety

of problems in defining coverage under the

Act.

In addition, the exclusion of employ-

ees who work with small or recreational

boats based on technical distinctions

between types of vessels would not be con-

sistent with the often cited principle

that “the Act must be liberally construed

in conformance with its purpose and in a

way which avoids harsh and incongruous

results." Voris v. Eikel, 346 U.S. 328

(1953). A provision excluding boats of a

certain size or use was not included in

the Act itself or mentioned by Congress

in enacting either the original legisla-

tion or the 1972 amendments. Such an

exclusion restricts the scope of this

remedial legislation intended to be broadly

Appendix 42

construed. Therefore, an exclusion for

small or recreational boats cannot be

read into Section 2(3).

Tnerefore, I conclude that the fact

that claimant worked on small, recreational

vessels does not exclude him from the

coverage of Section 2(3).

To determine whether claimant was

covered, it is necessary to examine his

duties at Sanger Boat. Claimant and the

Director, relying on Parker v. Motorboat

Sales, Inc., supra, contend that claimant's

duties in testing and development of

vessels constituted maritime employment.

In Parker, the Supreme Court held that an

employee who drowned while riding on a

navigable river testing an outboard motor

was covered by the Act. The court found

that the fact that decedent was a janitor

and therefore predominantly a non-maritime

employee did not “alter the fact that at

Appendix 43

the time of the accident, he was riding

in a boat on a navigable river, and it is

in connection with that clearly maritime

activity that the award was here made."

314 U.S. at 247. However, the Parker case

was decided before the 1972 Amendments to

the Act. In Sedmak, the Board found that

pre-amendment case law is not controlling

in post-amendment cases, but serves only

as a useful framework in which to ascertain

maritime employment. 8/ Thus, Parker is

not determinative of claimant's status as

a maritime employee. 2/

8/ The Ninth Circuit Court of Appeals

has indicated that it will no longer follow

pre-amendment decisions as the court has

concluded that the 1972 amendments “radi-

cally changed the basis for an employee's

entitlement to federal compensation."

peyerhaeuser Co. v. Gilmore, 528 F.2d at

9/ The fact that claimant was injured

upon navigable waters and would have been

covered pre-amendment under such precedents

as Parker is also an insufficient basis for

finding coverage under the amended Act.

See Sedmak, 9 BRBS at 385.

Appendix 44

Moreover, claimant's work testing

the boat Joker's Wild at the time of

injury is not dispositive of coverage

under Section 2(3). In determining whether

claimant's duties constitute employment

covered by the Act, we must examine his

overall employment rather than his duties

at the time when the injury occurred. See

Boudloche v. Howard Trucking Co., Inc.,

1l BRBS 687, BRB No. 78-383 (1979); Howard

v. Rebel Well Service, 11 BRBS 568, BRB No.

78-502 (1979). Under the standard enun-

ciated in Boudloche and Howard, claimant

msut spend a substantial portion of his

time preforming duties which are maritime

in nature in order to be covered by the

Act. Thus, claimant's overall duties must

constitute either shipbuilding or “maritime

employment" as defined in Sedmak in order

for claimant to be covered.

Claimant, in the instant case,

Appendix 45

performed no actual construction work on

the boats manufactured by employer.

Hearing Transcript at 26. He was employed

as a salesman, performing duties involving

the promotion and sale of employer's boats.

Claimant testified that he spent 30 percent

of his time inspecting boats in order to

insure that they were manufactured in

accordance with a customer's order. Claim-

ant was also involved in testing and de-

veloping new vessels for possible future

construction. Hearing Transcript at 37,

38. Claimant and Director argue that this

work constituted an integral part of the

construction process. However, the admin-

istrative law judge found that claimant's

work inspecting boats was incidental to

his employment as sales manager and there-

fore did not constitute shipbuilding. The

administrative law judge also held that

testing was not a part of vessel construc-

Appendix 46

tion. He based this conclusion upon a

footnote in the Board's decision in

Napoles which stated, "We do not consider

the testing of the boat by an employee of

the employer to be a part of vessel con-

struction." 5 BRBS at 699.

I agree that claimant's testing and

inspection duties cannot be considered an

integral part of the construction of a

vessel. 10/ Claimant inspected boats

under construction to ascertain that the

boat contained the proper equipment as

ordered by the customer, that it was the

proper color and that there were no cos-

metic defects on the hull. These duties

cannot be considered a part of preparing

a vessel for use upon navigable waters;

rather, they were incidental to his

10/ It is clear that his duties

driving employer's racing boats, discussed

infra, bore no relation to vessel construc-

tion.

Appendix 47

employment as sales manager. I also do

not believe that claimant's testing acti-

vities can be considered as an integral

part of shipbuilding. Claimant was not

involved in testing completed vessels for

final adjustment before delivery to a

customer. Rather, he evaluated prototypes

for future boat designs. This work was

not related to and cannot be considered

an integral part of the construction of a

vessel. Claimant lacked the direct involve-

ment with shipbuilding which has been

found in cases where employees have been

held covered by the Act as shipbuilders.

See Jacksonville Shipyards, Inc. v. Perdue,

539 F.2d 533, 4 BRBS 482 (5th Cir. 1976);

vacated and remanded, 433 U.S. 904 (1977),

reaff'd. 575 F.2d 79 (5th Cir. 1978),

cert. denied sub nom. Director, OWCP v.

Jacksonville Shipyards, Inc., 440 U.S. 967

(1979).

Appendix 48

However, although claimant was not

employed as a shipbuilder, he may nonthe-

less be covered if his employment is

within the Sedmak definition of maritime

employment, which requires a "“realisti-

cally significant relationship to maritime

activities involving navigation and

commerce over navigable waters." 9 BRBS

at 386. In the instant case, claimant's

overall duties were directed toward the

male and promotion of the boats manufac-

tured by employer. His work inspecting

new boats was part of his sales job.

Thus, the only duties her performed which

were arguably maritime in nature were

testing and evaluating new models of

vessels for future construction and

driving employer's racing boats in weekend

races for purposes of promoting sales. il/

1l/ These races took place on weekends

during a six to seven month period each year.

Appendix 49

In connection with these racing activi-

ties, claimant also occasionally performed

general maintenance work. Although not a

part of vessel construction, these activi-

ties occupied some of claimant's time and

were arguably maritime in nature. However,

it is not necessary to determine whether

this work constituted maritime employment

since there is no evidence in the record

that claimant's work testing and racing

employer's boats occupied a substantial

portion of his time. Therefore, this work

cannot qualify him for coverage as a mari-

time employee within Section 2(3) of the

Act.

Therefore, although claimant’s work

with recreational boats weighing 3,600

pounds and less does not exclude him from

the Act's coverage, his overall employment

as sales manager places him outside the

scope of Section 2(3) of the Act.

Appendix 50

Accordingly, the Decision and Order

of the administrative law judge denying

claimant benefits is affirmed.

SO ORDERED.

TSMENE M. KALARIS

Administrative Appeals Judge

SMITH, Chief Administrative Appeals Judge,

concurring:

I agree with my colleague that

claimant's overall employment as a sales-

man places him outside the scope of the

Longshoremen's and Harbor Workers' Compen-

sation Act. Therefore, I concur in her

affirmance of the administrative law

judge's denial of benefits to claimant.

I believe, however, that there is an addi-

tional basis upon which to deny coverage.

Unlike Judge Kalaris, I am persuaded by the

legislative history of the Act that

Congress never intended coverage for those

Appendix 51

persons who work with small, non-commercial

vessels.

The Longshoremen's and Harbor Worker's

Compensation Act was enacted to provide

compensation benefits to those workers

involved in the loading, unloading or

repairing of ships who would not otherwise

be entitled to state workers' compensation

benefits. The legislative history of the

Act evidences no intent on the part of

Congress that members of the small boat

industry be included within the benefited

class.

It is apparent from the Congressional

debates and the Committee Reports to the

1927 Act that the concern of Congress at

that time was of a very limited nature.

In short, Congress was acting to provide

coverage only to those persons injured in

the building or repairing of large

commercial vessels. The Act's draftsmen

Appendix 52

and enactors and the many witnesses who

testified before Congress referred exclu-

sively, with one exception, to the commer-

cial ship industry. The one exception took

the form of the following exchange between

Representative Graham, Chairman of the

House Committee that reported out the 1927

Act, and Representative Abernethy in which

the former dispelled any doubt that small

boat workers were not to be included with-

in the scope of the Act:

Mr. Abernethy: As I understand

the gentleman's interpretation of

the bill, it does not include

small repair yards.

Mr. Graham: The gentleman spoke

about the words in the fourth

paragraph, ‘including any dry

dock'?

Mr. Abernethy: Yes.

Mr. Graham: And the gentleman

was apprehensive that that might

possibly cover a small shipyard.

I can assure the gentleman that

it will not. A dry dock is under

admiralty, so declared in the

decisions of the Supreme Court,

and dry dock is defined legally,

Appendix 53

so that it cannot include a

shipyard.

Mr. Abernethy: As I understand,

this bill takes from its provi-

sions seamen, fishermen, and

oystermen, and does not include

any shipyard or repairyard

except a dry dock.

Mr. Graham: That is correct.

68 Congressional Record 5403 (1927)

Congress, in further manifestation of

its intent to address only the needs of

workers in the longshore and ship industry,

specifically incorporated into the Act an

"eighteen ton net” exclusion. Found in

Section 3(a) (1), 33 U.S.C. §903(a) (1), the

exception was directed at excluding fishing

vessels and other small craft.

That the Pre-Amendment Act was not

meant to cover any person injured on small

or recreational boats is therefore clear.

Equally as clear is the fact that the 1972

Amendments did nothing to alter that ori-

ginal design. During the hearings on the

Appendix 54

1972 Amendments Congress heard from such

interest groups as the New York Shipping

Association, the Shipbuilders Council of

America, and the International Longshoremen

Workers Union. Not a single word of testi-

mony was received, however, from anyone

associated with the small boat industry -

a fact that leads inescapably to the con-

clusion that Congress did not consider or

intend that class of workers to be within

the Act's coverage.

Therefore, I would find claimant not

to be an employee for purposes of the

Longshoremen's and Harbor Worker's Compen-

sation Act irrespective of his overall em-

ployment by Sanger Boats as a sales manager.

SAMUEL J. SMITH, Chiet

Administrative Appeals Judge

MILLER, Administrative Appeals Judge,

dissenting:

Appendix 55

Because I would hold claimant is a

“maritime employee" under Section 2(3) of

the Act, I must dissent from my colleagues’

denial of benefits in this case. The fact

that claimant was injured in the course of

his employment over “navigable waters" as

that term was understood prior to the

1972 Amendments to the Act is sufficient

to warrant coverage under the Act as I

have explained in my dissenting opinions

to the line of cases including Churchill

v. Perini North River Associates, BRBS,

BRB Nos. 79-113/A et al. (Oct. 31, 1980),

Miller v. Central Dispatch, Inc., BRBS,

BRB Nos. 78-467/A & 79-655/A (Sept. 26,

1980), Gilliam v. Wiley N. Jackson, Co.,

12 BRBS 556, BRB Nos. 79-388/A (1980),

Boudloche v. Howard Trucking Co., Inc.,

1l BRBS 687, BRB No. 78-383 (1979), and

Sedmak v. Perini North River Associates,

9 BRBS 378, BRB Nos. 77-896 et al. (1978),

Appendix 56

rev'd sub nom. Fusco v. Perini North River

Associates, 601 F.2d 659 (2d Cir.), vacated

and remanded mem., 100 S.Ct. 697 (1979),

aff'd, 622 F.2d 1111 (2d Cir. 1980). For

an extensive discussion of the rationale

behind this rule, see also Stewart v.

Brown & Root, Inc., 7 BRBS 356, BRB No.

76-451 (1978) (Miller responsible), which

was leter overruled by a majority of this

Board in Sedmak, from which I dissented.

This case, therefore, is controlled

by the Supreme Court's decision in Parker

v. Motor Boat Sales, Inc., 314 U.S. 244

(1941), where an employee whose primary

duties were those of a janitor and porter

was found to be involved in “clearly mari-

time activity" while riding in a small

boat on navigable waters testing an out-

board motor. The Supreme Court found that

the employee, who was “predominantly a

non-maritime employee," was covered under

Appendix 57

the provisions of the Act.

It is beyond dispute that this claim-

ant would have been covered under Parker

had he been injured prior to the enactment

of the 1972 Amendments to the Act, amend-

ments which were described by the Supreme

Court as follows: "In 1972 Congress amen-

ded the Longshoremen's and Harbor Workers'

Compensation Act, (LHWCA 33 U.S.C. §901

et seg., in substantial part to ‘extend

[the Act's] coverage to protect additional

workers." S. Rep. No. 92-1125, 92d Cong.,

2d Sess., 1 (1972)." Northeast Marine

Terminal Co., Inc. v. Caputo, 432 U.S. 249,

, 6 BRBS 150 (1977). It stretches the

imagination to conclude that such an

extension would deny coverage to a substan-

tial portion of those employees already

covered prior to the 1972 Amendments.

Furthermore, as to the question of

whether claimant's “regular” duties mili-

Appendix 58

tate against coverage when he was injured

while actually engaging in maritime em-

ployment, Parker is again controlling.

The Supreme Court specifically took note

of the fact that the claimant in Parker

was

hired primarily as a janitor and

porter, was predominantly a non-

maritime employee. For habitual

performance of other and differ-

ent duties on land cannot alter

the fact that at the time of the

accident he was riding in a boat

on a navigable river, and it is

in connection with that clearly

maritime activity that the award

was here made. Cf. Northern Coal

Co. v. Strand, 278 U.S. 142, 144,

49 S.Ct. 88, 73 L.Ed. 232;

Employer's Liability Assurance

Corp. v. Cook, 281 U.S. 233, 236,

50 S.Ct. 308, 309, 74 L.Ed. 823.

Moreover, Section 2(4) of the Act,

33 U.S.C.A. §902(4), expressly

provides for its application to

‘employees [who] are employed ***

in whole or in rt, upon the

navigable waters of the United

States.’

314 U.S. at 247 (footnote omitted) (emphasis

in original). As I noted in my dissenting

opinions in Churchill, Miller, Gilliam,

Appendix 59

Boudlache, Howard v. Rebel Well Service,

11 BRBS 568, BRB No. 78-502 (1979), and

Sedmak, an employee's usual duties are

irrelevant for the purpose of determining

coverage under the Act if his injury

occurred while he was actually engaging

in maritime employment. It is incompre-

hensible as to how my colleagues can adopt

tests which would exclude this claimant

and yet remain true to the Supreme Court's

directive that the "Act must be liberally

construed in conformance with its purpose,

and in a way which avoids harsh and in-

congruous results.” Voris v. Eikel, 346

U.S. 328, 338 (1953). I fail to see how

a liberal construction of the Act is

achieved when a “substantial portion" test

is used to deny benefits to a claimant

working over navigable waters, nor can I

fathom a more harsh and incongruous re-

sult than the denial of benefits to a

Appendix 60

claimant who unquestionably would have

been covered under the pre-1972 Amendments

of the Act. I dissent.

JULIUS MILLER

Administrative Appeals Judge

Dated this llth

day of December 1980

Appendix C

U.S. DEPARTMENT OF LABOR

OFFICE OF ADMINISTRATIVE LAW JUDGES

San Francisco Regional Office

Suite 600-211 Main Street

San Francisco, California 94105

CASE NO. 78-LHCA-1118-S

OWCP NO. 13-39266

In the Matter of —

LAWRENCE SCHWABENLAND

Claimant

vs.

SANGER BOATS

Employer

THE TRAVELERS INSURANCE COMPANY

Carrier

me ee ee ee ee ee ee ee ee ee ee ee ee

Richard Watters

Attorney at Law

Miles, Sears & Eanni

2844 Fresno Street

P.O. Box 1432

Fresno, California 93716

For the Claimant

Frank B. Hugg

Attorney at Law

Hanna, Brophy, MacLean,

McAleer & Jensen

681 Market Street, Suite 300

San Francisco, California 94105

For the Employer

and Carrier

Appendix 62

Before: JOSEPH A. MATERA

Administrative Law Judge

DECISION AND ORDER

Jurisdictional and Procedural History

This is a claim for compensation under

the Longshoremen's and Harbor Workers'

Compensation Act, as amended, 33 U.S.C.

§901, et seq. (hereinafter referred to

as the Federal Act). After due notice to

all parties, a hearing in this matter was

held in an Francisco, California, on

January 5, 1979. The claimant, and em-

ployer/carrier (hereinafter referred to

as respondent) were represented by coun-

sel and were afforded a full opportunity

to be heard, to adduce evidence, to call,

examine and cross-examine the claimant,

to make oral arguments and to supmit post-

hearing briefs.

Prior to the trial the parties enter-

ed into substantial stipulations (Tr. 5-

6). There was agreement that the claim-

Appendix 63

ant on July 29, 1973, sustained a 70 per-

cent permanent partial disability to his

left leg which, in the event coverage

were found under the Feceral Act, would

entitle him to benefits under section 8

(c) (2) of the Act at a compensation rate

based on an average weekly wage of $269.

73 per week. There was a further stip-

ulation that the claimant's injury oc-

curred in the course and scope of his em

ployment upon navigable waters of the

United States.

Part of the facts agreed to by the

parties included a stipulation that a

State of California Workmen's Compensa-

tion claim was filed on February 10, 1975,

under which the respondent voluntarily

paid compensation to claimant for temp-

orary total disability from July 30, 1973

until February 15, 1975, at a compensa-

tion rate of $105.00 per week, at which

Appendix 64

time claimant reached a maximum medical

improvement (Tr. 5). Thereafter payments

to claimant continued from respondent at

a rate of $70.00 per week under this same

state workmen's compensation claim from

February 15, 1975. On April 3, 1975,

however, respondent filed a state form

indicating it was controverting the state

Claim. On January 8, 1976, a stipulated

award was granted to claimant by the

Workers' Compensation Appeals Board of

the State of California for the permanent

partial disability arising out of claim-

ant's work-related injury. (Cl. Exh. #1).

In light of the stipulations of the

parties, the primary issue initially pre-

sented at the hearing was whether there

was coverage under section 2(3) of the

Federal Act for the injury in question.

However, it was noted that in his post-

trial brief respondent's counsel had not

Appendix 65

only requested judicial notice of certain

items, but had also broadened his theory

of lack of coverage under the Federal Act.

In this respect he alleged that the a-

ward to claimant of January 8, 1976, by

the Workers’ Compensation Appeals Board

of the State of California for permanent

partial disability of the left leg, con-

stituted res judicata barring any further

award under the Federal Act pursuant to

the full faith and credit clause of

Article IV, Section 1, of the U.S. Con-

stitution. Counsel for claimant was

thereafter given opportunity to file a

reply brief addressing himself to the

broadened coverage issue as well as the

requested judicial notice (ALJ Exh. No.

1). The briefs regarding these issues

have been duly considered.

Judicial Notice

As to the judicial notice requested

Appendix 66

by respondent, it was not opposed and is

taken as to the Findings and Award of

the California Workers’ Compensation Ap-

peals Board of January 8, 1976, based

upon stipulations of the parties of Dec-

ember 30, 1975, concerning claimant's in-

jury of July 29, 1973. Evidence of this

award had already been received at trial.

(Cl. Exh. #1). Judicial notice is also

taken of the state document entitled

Stipulation With Request For Award filed

with the State Appeals Board, which is

marked and entered into evidence as ALJ

Exh. #2.

As to the judicial notice of the street

location of the employer's manufacturing

and sales facility, this is also already

part of the trial record. (Tr. p. 15).

Judicial notice is, however, not taken as

to the alleged facts that there are no

navigable waters of the United States, no

Appendix 67

marine railways, no dry docks or other

construction areas above the expanded and

navigable waters of the United States at

this location. To take judicial notice

of these alleged facts long after trial

has been concluded, when claimant no

longer has the opportunity to present

evidence to the contrary, would violate

the fundamental principles of the due pro-

cess. Jordon v. Davis Construction Corp.,

9 BRBS 527, 530 (1979).

Findings of Fact

Claimant began work with employer in

1968. He had an informal relationship

based on friendship with the president

of this company since 1958. (Tr. 24,

Jt. Exh. #2, p. 3). This earlier rela-

tionship involved him in the racing of

high-performance race boats owned by

employer. Following his formal employ-

ment he initially was assigned to the

Appendix 68

shipping and receiving department of em-

ployer's business operation, concerned

primarily with the construction and sale

of high-performance pleasure boats, in-

Cluding craft used for racing. After

about two years, claimant became a boat

salesman and manager at the same facility.

In this position claimant basically was

concerned with acquiring orders for the

high-performance craft from customers.

(Tr. 18). However, after taking an order

for a new boat he would “have to watch

the boat from beginning to end, so to

speak, to make sure that all the options

and so forth are included in the manu-

facture of the boat.” (Tr. 19). Every

boat would be inspected by him prior to

delivery, not only in respect to the

equipment ordered, but also to the hull

construction, for possible defects. Any

major repairs needed were performed by

Appendix 69

the factory workers. On racing craft he

was testing he would sometimes perform

general maintenance, such as replacing

fatigued parts, switches, ets. (Tr. 41).

In addition to his sales work, claim-

ant also continued the activity of test-

ing and racing of employer's boats from

from the time of his hiring in 1968, part-

icularly new models to determine the

quality of their performance. He perform-

ed these activities over many different

bodies of water nationally, although the

West Coast was generally the geographical

area. The purpose of the racing activit-

ies was not only to test boat performance,

but also to promote sales of employer's

craft. (Tr. 24). Claimant's activities

in this respect, mostly on weekends, were

all arranged and paid for by employer.

(Tr. 21). He estimated that this pro-

motional racing activity took place 25

Appendix 70

to 30 “times or weekends” a year. (Tr.

21). It was in the course of one of

these weekend trips that claimant on July

29, 1973, was injured when the racing

boat he was operating, "Jokers Wild,” an

eighteen and one-half foot drag boat, ap-

parently turned over in the Oakland

Estuary, an undisputed navigable body of

Water.

Conclusions of Law

Jurisdiction under the Act

The threshhold question to be address-

ed is the defense raised by respondent in

respect to res judicata and full faith

and credit under Article IV, Section l

of the United States Constitution. In

this respect I find that the doctrine of

res judicata is properly applied in this

matter since the application filed by

Claimant under the Workmens’ Compensation

Law of California is the same compensa-

Appendix 71

tion claim for the same work-related in-

juries as that now pursued under the Fed-

eral Act, involving the same essential

parties. Landry v. Carlson Mooring Ser-

vice, et al. 9 BRBS 518, 521 (1979).

Therefore, the crucial question to be an-

swered is what effect an award by the

Appeals Board would be accorded in the

State of California. Under the full faith

and credit clawse of Article IV, Section

1 of the Constitution, the state award

given by the Anpeals Board has the same

effect in federal court as it does in

state court. As pointed out in Landry,

supra, this principle of full faith and

credit applies by statute, 28 U.S.C.

§1738, to federal as well as state courts.

Thus, the fact that there is a feceral

versus a state compensation scheme, as

in the instant case, and not a state

versus a state scheme is not relevant.

Appendix 72

As pointed out in Landry, supra, however,

each case must be considered on its own

facts and be limited by its own set of

circumstances. This would include, of

course, the state law involved and the

effect given under that state law to the

award by the California Appeals Board.

In another relevant decision issued

some nine months before Landry, supra,

Thomas v. Washington Gas Light Co., 9

BRBS 760, the Board recognized that in

the absence of an explicit prohibition

against seeking additional or alternative

relief under the laws of another juris-

diction, the granting of successive a-

wards in different jurisdictions was

valid. In Thomas v. Washington Gas Light

Co., supra, reliance is place upon the

case of Industrial Commission v. McCartin,

300 U.S. 622 (1947). This particular

case is also discussed in Landry, supra,

Appendix 73

at 524. In Landry, supra, the Board re-

cognized the “decisive significance” giv-

en by the Supreme Court in the McCartin

case, supra, to the state statute which

provided that recovery under the Illinois

statute did not preclude recovery under

the statutes of other states. Such a

reservation clause was not contained in

the state act or in the judgment awarded

by the state court in the Landry case,

and the McCartin case, supra, was there-

fore found to be of no precedential value.

Turning to the California state stat-

ute herein involved, and the res judicata

effect to be accorded to that statute, I

find that this matter has been examined

by the Board in an earlier decision, Ekar

v. International Union of Operating En-

gineers, 1 BRBS 406 (1975). 1/ In that

case

1/ See also an essentially pre-'72

Appendix 74

In a later edition of his authoritative

work, Workmen's Compensation Law, §85.10

(1977), Larson also goes on to say: “It

is now generally accepted that the McCartin

case, in general effect, has recognized

the principle of successive awards and

thereby discredited the Mognolia case..."

a California union official, employed by

the parent organization in the District

of Columbia, was murdered in California

under circumstances found to have been

in the course and scope of his employment.

discussion of this problem by Authur

Larson, in 45 Southern California Law

Review 699 (1972). Larson generally

concludes (at p. 729, et seg.) that

where the sequence takes form of

state benefits followed by federal, that

the case of Calbeck v. Travelers Insur-

ance Co., 370 U.S. L114 (1962) and its

progency provides strong authority for

concluding that acceptance of state

benefits does not constitute a binding

election barring award of federal bene-

fits. His discussion provides little

assistance, however, for a post ‘72

amendment view of the application of the

res judicata and full faith and credit

doctrines.

Appendix 75

His widow, who lived in California, filed

a claim under the Workmens' Compensation

statute of the state as well as in the

District of Columbia, where workmen's

compensation claims are administered under

the Federal Act. Benefits were paid and

accepted by the claimant under the Calif-

ornia workmen's compensation statutes.

She then sought her remedies under the

Federal Act. The employer argued, as it

does here, that the full faith and credit

provisions of the U.S. Constitution re-

quired that the District of Columbia re-

cognize as final the award made under

the California workmen's compensation

statute. The argument was based upon an

interpretation of that statute which made

the state remedy exclusive.

The pertinent provisions of the Calif-

ornia statute which were cited by the

Board, and which remained unmodified

Appendix 76

during the periods relevant herein, read

as follows:

Where the conditions of compen-

sation exist, the right to recover

such compensation, pursuant to the

provisions of this division is, ex-

cept as provided in section 3706, the

exclusive remedy for injury or death

of an employee against an employer

or against any other employee of the

employer acting within the scope of

his employment, except that an em-

ployee, or his dependants in the

event of his death, shall, in addit-

ion to the right to compensation a-

gainst the employer, have a right to

bring an action at law for damages

against such other employee, as if

this division did not apply, in

either of the following cases:

(1) Where the injury or death

is proximately caused by the willful

and unprovoked physical act of ag-

gression of such other employee.

(2) When the injury or death

is proximately caused by the intox-

ication of such other employee. Ca-

lifornia Labor Code Section 360l(a),

(1) and (2). (West 1974).

The Board, in examining the California

provisions and the rationale of Califor-

nia case law cited by respondent herein,

concluded that the exclusive workmen's

Appendix 77

compensation remedy referred to acted

only to preclude common law actions in

California and did not contemplate the

exclusion of compensation awards by other

and separate compensation jurisdictions.

Examination of the California state court

decisions led the Board to conclude that

the exclusive remedy provisions referred

to above meant only that the Workmen's

Compensation award was provided in lieu

of permitting an election to file a

state action at common law. It concluded

that the California statute did not con-

template barring an employee “from sub-

sequently seeking workmen's compensation

benefits in another jurisdiction which

has legitimate interest in his claim by

virtue of the employer/employee relation-

ship in effect at the time of the acci-

dent." (Emphasis supplied). In light of

this state statute and the state court

decisions examined by the Board, it was

Appendix 78

found that the subsequent claim filed by

the claimant in that case under the Fed-

eral Act did not conflict with the Calif-

ornia statute and allowing the claimant

to proceed did not constitute a denial of

full faith and credit. On appeal to the

Court of Appeals for the District of

Columbia Circuit, this Board decision was

affirmed, the appeals court finding that

the Board was correct in its decision

that the full faith and credit clause was

not violated by either the extension of

the District of Columbia's workmen's com-

pensation code or the refusal to find that

the California Workers' Compensation Act

was the exclusive remedy for the benefits

Claimed. Director, Office of Workers'

Comp., Etc. v. Boughman, 544 F.2d 210

(1976). The California State Court de-

cisions and the principles established

therein were examined by the Board in the

Appendix 79

Ekar, case, supra. I find that the Board

decision and its subsequent affirmance by

the Court of Appeals for the District of

Columbia Circuit is dispositive of the

issue of full faith and credit in this

case. The claim filed herein uder the

Federal Act does not conflict with the

California statute and allowing the claim-

ant herein to proceed does not constitute

denial of full faith and credit under the

United States Constitution, in the circum-

stances of this case.

In respect to jurisdiction, there re-

mains the determination of whether claim-

ant meets the so-called status and situs

tests under §§2(3) and 3(a) of the Feder-

al Act. As to situs, I accept the stipu-

lation of the parties that claimant's

injury occurred over what is commonly

known to be navigable waters of the United

States, the Oakland Estuary. (Tr. 5, Jt.

Appendix 80

Ex. #2, pps. 10-12). There remains for

consideration, therefore, whether claim-

ant meets the definition of “employee”

under section 2(3), which provides in

pertinent part:

(3) The term “employee” means any

person engaged in maritime employ-

ment, including any longshoreman or

other person engaged in longshoring

operations, and any harbor-worker

including a ship repairman, ship-

builder, and ship-breaker, but such

term does not include a master or

member of a crew of any vessel, or

any person engaged by the naster to

load or unload or repair ary small

vessel under 18 tons net.

Prior to the decision of the Board in

Sedmak v. Perini North River Associates,

9 BRBS 378 (1978), claimant's injury, oc-

curring as it did over navigable waters,

would have satisfied the status test under

the earlier decision of Stewart v. Brown

& Root, Inc., 7 BRBS 356 (1978). In

Sedmak, supra, at p. 385, the Board con-

cluded that injury over navigable waters

in and of itself is insufficient to deter-

Appendix 81

mine the status of maritime employment.

Instead, the Board adopted the standard

that ". . .a Cclainuant’s employment must

have a realistically significant relation-

ship to maritime activities involving

navigation and commerce over navigable

waters in order for that employment to

be deemed martime employment under section

2(3)." In this respect it is necessary

to lock to a claimant's overall employ-

ment, and not simply at the incident giv-

ing rise to the injury. Brown v. Reynolds

Shipyard, et al., 9 BRBS 614, 617 (1979).

Examining the claimant's overall em-

ployment responsibilities, it is clear

at the outset that claimant does not

qualify under section 2(3) of the Federal

Act as a longshoreman or as a person en-

gaged in longshoring operations. Neither

is claimant a harbor worker as that tern

has been defined by the Board in Stewart

Appendix 82

v. Brown & Root, Inc., supra. I further

find that claimant does not fall within

the category of a ship repairman, ship-

builder or ship-breaker. Claimant des-

cribed his own position, at the times

relevant herein, as that of a boat sales-

man, with duties typical of that occupa-

tion. (Tr. pps. 17, 18, 19, 25-28). It

is true that claimant spent some portion

of his office time, perhaps as much as 30

percent, inspecting before delivery var-

ious boars being manufactured by the

employer, to ascertain, for example, that

the boat contained the proper equipment as

ordered by the customer, that it was the

proper color and that there were no cos-

metic defects on the hull. (Tr. 38).

Any required adjustments were made by the

workers in the plant actually working on

the craft in question. (Tr. 41). I find

all of these activities of the claimant

Appendix 83

were incidental to his primary role as

the salesman manager. (Tr. 26). Insofar

as testing of boats was concerned, claim-

ant testified that this was rarely done

with standard models (Tr. 39) but only

with new models. During the course of

this testing, he would on occasion replace

a fatigued part. In respect to any test-

ing of boats the Board has held in dictum,

which I find applicable to tnis case, that:

We do not consider the testing of

a boat by an employee of the employ-

er to be part of vessel construction.

(Napoles v. Donzi Marine, 5 BRBS,

699 (1977).

The occasional replacing of a fatigued

part during this testing cannot meet the

statutory definition of a repairman. Thus,

Claimant cannot qualify as a shipbuilder,

ship-breaker or ship repairman.

Thus, for claimant <o meet this

"status test" it must be shown that he

was engaged in some form of “maritime

Appendix 84

employment" other than those operations

expressively recognized in section 2(3).

Sedmak, supra, at page 384. Claimant

seeks to bring himself within this cate-

gory of maritime employment by relying

upon the fact that he was injured during

the course of qualifying one of the em-

ployer's high-performance boats for a

drag-boat race the next day, an activity

which he performed on numerous previous

occasions. He places his reliance on the

case of Parker v. Motorboat Sales, 314

U.S. 244 (1941), a case involving a jani-

tor who drowned while assisting another

employee to test a motorboat engine. Apart

from the substantial fact disparity be-

tween that case and tne instant one, the

Board has clearly established that pre-

amendment case law is not controlling but

serves only as a useful framework to as-

certain maritime employment. Sedmak,

Appendix 85

Supra, at p. 387. Rather, I must examine

this matter within the parameters pro-

vided by the Sedmak case, supra.

In examining the overall activities of

the claimant, I must conclude that claim-

ant's employment did not have a realistic

and significant relationship to the mari-

time activities involving navigation and

commerce over navigable waters contemplated

by Congress in amending the Federal Act.

It is clear from the evidence that claim-

ant was employed by the respondent herein

as a sales manager for the promotion of

high-performance pleasure boats. In this

work he continued to boat-racing activit-

ies in which he had participated with the

respondent for ten years prior to his

employment in 1968. The purpose of these

racing activities was to promote boat

sales (Tr. 24) as well as to allow claim-

ant to participate in this activity for

Appendix 86

“his own pleasure." (Jt. Exh. #2, p.5).

As such, these activities were incidental

to claimant's primary employment as a

boat salesman and manager for respondent.

As such, it does not fall within any cate-

gory of “maritime employment," expressed

or implied in the Act. In my opinion

Congress, in acting to provide adequate

workmen's compensation coverage for "mari-

time workers" under the Act as amended,

did not have in mind protection of the

Claimant as he operated "Jokers Wild”

in the Oakland Estuary, in preparation

for a drag-boat race.

I therefore conclude from evaluating

Claimant's overall activities, including

the incident of the boat-racing injury,

that none of his activities bring him

within section 2(3) of the Act, nor do

they have a “realistically significant

relationship to maritime activities,

Appendix 87

including navigation and commerce over

navigable waters...." Cf. Rhodes v. Healy

Tibbets Construction Company, et al., 9

BRBS 605 (1979). To provide coverage to

the claimant under these circumstances

would be “to provide coverage to workers

under the Act based solely upon injury

over navigable waters without regard to

their individual status." Sedmak, supra,

p. 386. The Board in that case held that

such a result would create an untenable

situation, namely a dual standard for

determination of jurisdiction; one for

workers, such as claimant, injured over

navigable waters, and another for workers

injured shoreside.

Having failed to establish that he is

an eligible empoyee under the Act, the

Claimant's application for benefits must

be denied.

Appendix Bit

Order

The claim for compensation benefits

under the Longshoremen's and Harbor Work-

ers' Compensation Act filed by Lawrence

Schwabenland is herewith denied.

JOSEPH A. MATERA

Administrative Law Judge

Dated: April 20, 1979

San Francisco, California

JAM:scm