Petition for Writ of Certiorari — Waterman Steamship Co. v. Weeks Marine, (1999) (No. 357)

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Supreme Court, U.S.

FILED

99 S57 W290.

NO. OFFGE OE THE CLERK

IN THE

Supreme Court of the Gnited

States

OCTOBER TERM, 1998

WATERMAN STEAMSHIP COMPANY,

Petitioner,

-against-

: WEEKS MARINE, INC.,

Respondent.

PETITION FOR WRIT OF CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE SECOND CIRCUIT

PETITION FOR WRIT OF CERTIORARI

LeRoy S. Corsa, Esq.

DEORCHIS, WALKER &

CORSA, LLP

One Battery Park Plaza, 2™ FI.

New York, New York 10004

(212) 344-4700

Counsel for Petitioner

Dated: July 29, 1999

A LIRR EMBTTOARONSSS MABE RRNA ARI AU LEE STA

QUESTIONS PRESENTED

Whether the Petition for a Writ of Certiorari

Should be Granted to Clarify if a Shipowner’s

Right to Ryan Indemnity Against a Negligent,

Non-Employing Stevedore Survived the 1972

Amendments to the Longshore and Harbor

Workers’ Compensation Act?

Whether the Petition for a Writ of Certiorari

Should be Granted Because the Second Circuit’s

Decision, Concluding that the Ryan Indemnity

Doctrine is Only Applicable to No-Fault Liability

Cases, Conflicts with Decisions of This Court

and Other Courts of Appeal?

TABLE OF CONTENTS

CHES Ee ENED ic eis s Sows cctabaseess i

Tee EE i a A Gh cabins ii

‘SARs A A Ee 6k vu) One oh cRwart oa es Vv

fo Bre rr ey ree secs ee l

FRAN: 6.0 i AR ene ee * 8 89 l

SEALE GOP Dm GE kh ee hate ees l

A. Damian Lubrano Brings a Personal

Injury Suit Alleging Negligence by

Waterman Steamship Company and

Weeks Marine Incorporated............. 2

B. Innocent of any Negligence, Waterman

Seeks to Recover Litigation Costs and

Fees from Weeks, but the District Court

Denies Waterman’s Indemnification

Ee a ho oe Pee eae 3

.. The Second Circuit Court of Appeals

Affirms the District Court’s Denial of

Waterman’s Indemnification Claim. ....... 3

REASONS FOR GRANTING THE PETITION ........ 4

POINT ONE The Petition for a Writ of Certiorari

Should be Granted to Clarify if a

Shipowner’s Right to Ryan Indemnity

;

{

}

Against a Negligent, Non-Employing

Stevedore Survives the 1972

Amendments to the Longshore and

Harbor Workers’ Compensation Act. 5

A. History of the Ryan Indemnity Doctrine ... 6

B. The Second Circuit Concluded that the

1972 Amendments Abrogated Ryan

Indemnity in Cases Involving Negligent

Non-Employing Stevedores. .......... 11

C. The Second Circuit Decision

Overreaches the Remedial 1972

Amendments by Abrogating Ryan

Indemnity as to Non-Employing

ESR SG erates a 13

D. The Second Circuit’s Decision is

Inconsistent with this Court’s

Interpretation of the 1972 Amendments

as Applying Only to Indemnity Claims

Against Employing Stevedores who are

Protected by the Longshoremen and

Harbor Workers’ Compensation Act. .... 15

E. As an Innocent Party, Waterman is

Entitled to Indemnification for

Foreseeable Damages Caused by Week’s

Breach of Warranty of Workmanlike

Sela co ash ahs e's #4. 17

POINT TWO The Petition for a Writ of Certiorar

Should be Granted Because the Second

lil

Circuit’s Conclusion that the Ryan

Indemnity Doctrine is Only Applicable to

No-Fault Liability Cases Conflicts with

Decisions of This Court and Other

Courts of Appeals. ............ 20

A. The Second Circuit Concluded that the

Ryan Indemnity Doctrine Only Applies

to Cases Involving No-Fault Liability. .... 21

B. The Second Circuit’s Decision is

Inconsistent with This Court’s

Allowance of Ryan Indemnity in the

Negligence Case of Weyerhaeuser

Steamship Co. v. Nacirema Operating

EA Oecd cea ben ah apart tact as 22

C. The Second Circuit Opinion is

Inconsistent with Decisions of Other

Courts of Appeal that Have Consistently

Applied Ryan Indemnity to Negligence

Ws se Save ET Pic c Oex td eh 23

D. The Conclusion Reached by the Second

and Ninth Circuits Contravenes the

Purpose of Indemnification and Ignores

the Continuing Necessity of Ryan

Indemnity in Negligence Cases.......... 28

eo Perry Pepe Or Seer eee 30

TABLE OF AUTHORITIES

FEDERAL CASES

California Home Brands, Inc. v. Ferreira

S71 F.26 $50 (Sta Cer. 1909) 20. ce ees 26

Campbell Industries v. Offshore Logistics Int'l

816 F.2d 1401 (9th Cir. 1987) ............ 18, 28

Connecticui Nat'l Bank v. Germaine

Fae I DOP I Ea RV OW olin el CR 13

Cooper Stevedoring Co. v. Fritz Kopke

SIT UB. TOO CIORD a 25 BS 14, 16, 20

Cooper v. Loper

923 F.2d 1045 (3d. Cir. 1991) ... 18, 19, 24, 25, 29

Director, Off. of Workers’ Compensation Programs,

United States Dept. of Labor v. Perini N. River Assoc.

GGUS. Be (ieee 8 bck SII 11

Fairmont Shipping Corp. v. Chevron Int'l. Oil Co.

511 F.2d 1252 (2d Cir.),

cert. denied, 423 U.S. 838 (1975) ............. 8

Garracino v. Luckenbach Steamship Co..,

333 F.2d 646 (2d Cir. 1964).............. 18, 28

Halcyon Lines v. Haenn Ship Ceiling & Refitting Corp.

PRS Ws SURED bakes viaevedes kenseies 7

Henry v. A‘S Ocean

352 F.26 401 (26 Cir. 1975) .. 5... ee 25, 26

Italia Societa v. Oregon Stevedoring Co.

POO Wa SEO COU RA Kae weks sibs ine 9, 19, 28

Knight v. Alaska Trawl Fisheries, Inc.

154 F.3d 1042 (9th Cir. 1998) ............... 26

Lubrano v. Waterman S.S. Co.

eee vey oe Ae) l

Massa v. C.A. Venezuelan Navigacion

kyo we we. th Le a, | 17

Matter of Hechinger

890 F.2d 202 (9th Cir. 1989),

cert. denied, 111 S.Ct. 136 (1990) .. 0... 000... 25

Navieros Oceanikos, S.A. v. §.7. Mobil Trader

hom ee te oy) ee 3, 21

Oglebay Norton Co. v. CSX Corp.

788 F.2d 361 (6th Cir. 1986),

cert. denied, 479 U.S. 849 (1986) ... 16, 18, 23,24

Pastore v. Taiyo Gyogyo, K.K.

ee were’ | > Ae | y) |) nr 24, 25

Ryan Stevedoring Co. v. Pan-Atlantic S.S. Corp.

Fae Wi CO CRUE a wa ees vase cs 3, 6, 8,9

Scindia Steam Navigation Co. v. De Los Santos

GPe ths SORE NREL COA 0b 50b 50s 17, 28

Sea-Land Service v. Crescent Towing and Salvaging, Co.

43 F.36 960 (Ss Cir. TODS) 2... ccc we etens 20

Seas Shipping Co., v. Sieracki

an as 5 6 5s 0-05 ce a bv ou been es 6,7

Tebbs v. Baker-Whiteley Towing Company

407 F.2d 1055 (4th Cir. 1969) ............... 24

Turner v. Japan Lines

651 F.2d 1300 (9th Cir. 1981),

cert. denied, sub. nom., Japan

Lines v. Turner, 459 U.S. 967 (1982)... .... 26, 27

United States v. Bender Welding & Mach. Co.

Pe ee Oe oy re 6

Weyerhaeuser S.S. Co. v. Nacirema Operating Co.

oe | ree 9, 10, 22

vil

FEDERAL STATUTES

OR nc ose ae ise ccctecleeee 1

WUE SO ich eee eee. 1

WORE CIS eee

UGE BOR. 3c A eee 6

BUbe Se eee 6, 11, 13, 15

MISCELLANEOUS

H.R. Rep. No. 92-1441 (1972) ..... 00.0.0. cee cece. 21

S. Rep. No. 92-1125 (1972) ........ 0-0-0000. wera 11

viii

OPINIONS BELOW

The opinion of the court of appeals is reported at

Lubrano v. Waterman S.S. Co., 175 F.3d 274 (2d Cir. 1999).

(App., infra, Al0). The opinion of the district court is not

reported. (App. infra, Al).

JURISDICTION

The United States District Court for the Eastern District

of New York exercised jurisdiction in this case involving a

breach of a maritime contract under 28 U.S.C. § 1333. The

United States Court of Appeals for the Second Circuit had

jurisdiction to hear the appeal from the District Court’s final

judgment pursuant to 28 U.S.C. § 1291. The court of appeals

entered an order affirming the district court’s judgment. The

jurisdiction of this Court is invoked under 28 U.S.C. § 1254(1).

STATEMENT OF THE CASE

Petitioner, Waterman Steamship Company

(“Waterman”), asks this Court to grant this Petition for Writ of

Certiorari to consider the significant issues involving the viability

and scope of the Ryan Indemnity Doctrine. As a non-employing

stevedore, Weeks Marine, Inc. (“Weeks’’) is not covered by the

Longshore and Harbor Workers’ Compensation Act (33 U.S.C.

901 et seq.) and should not be immunized from its negligence

under a workers’ compensation scheme into which Weeks has

not made payments. Further, because the stevedore owes a

warranty of workmanlike performance, the purpose for Ryan

indemnity being that an innocent shipowner not be required to

suffer as a result of a stevedore’s breach of this warranty still

exists in the wake of the 1972 Amendments to the LHWCA.

Consequently, Waterman should receive indemnity for litigation

costs and fees that Waterman bore as a result of Weeks’ breach

of its warranty of workmanlike performance. This Court

should resolve the split among the circuits on the issue of

whether Ryan indemnity is limited to situations involving no-

fault liability or extends to actions sounding in negligence.

A. Damian Lubrano Brings a Personal

Injury Suit Alleging Negligence by

Waterman Steamship Company and

Weeks Marine Inc.

On February 24, 1994, Damian Lubrano (“Lubrano’”’), an

employee of American Stevedoring (“American’’), was loading

cargo onto a barge owned by Waterman. Waterman contracted

with Weeks for the rental of a crane for use during the loading.

While the cargo was being loaded, a piece of ice fell from this

crane and struck Lubrano on the left wrist and forearm. After

recovering compensation benefits from his employer according

to the LHWCA, Lubrano brought suit against Waterman and

Weeks, alleging that their negligence caused his injuries. (App.,

infra, Al2). A jury found that Waterman was not negligent

during the loading of cargo and that Lubrano’s injuries were

caused by the negligence of both American and Weeks. (App.,

infra, A2).

B. Innocent of any Negligence,

Waterman Seeks to Recover

Litigation Costs and Fees from

Weeks, but the District Court Denies

Waterman’s Indemnification Claim.

After being found innocent of negligence, Waterman

sought to recover litigation expenses from Weeks under Ryan

Stevedoring Co. v. Pan-Atlantic Steamship Corp., 350 U.S. 124

(1956). The District Court denied Waterman’s cross-claim for

indemnification relying upon Second Circuit precedent providing

that Ryan indemnity is only appropriate where the shipowner

has been exposed to liability without fault. The district court

concluded that Ryan indemnity was not available in this case

because Lubrano sought to hold Waterman liable under a theory

of negligence. (App., infra, A8-9).

_ The Second Circuit Court of Appeals

Affirms the District Court’s Denial of

Waterman’s Indemnification Claim.

In a published opinion, the Second Circuit affirmed the

District Court’s judgment, holding that Ryan indemnity was only

appropriate in cases involving no-fault liability. (App., infra,

Al4, A22, citing Navieros Oceanikos, S.A. v. S.T. Mobil

Trader, 554 F.2d 43, 44-47 (2d Cir. 1977)). Moreover, the

Second Circuit expanded on Navieros Oceanikos by holding

that the Ryan Indemnity Doctrine was no longer viable in cases

concerning longshoremen. The court reasoned that the impetus

for Ryan indemnity no longer existed because the 1972

amendments to the Longshore and Harbor Workers’

Compensation Act (LHWCA) eliminated the shipowner’s strict

liability under the doctrine of unseaworthiness and because

innocent shipowners could seek contribution from a negligent

non-employing stevedore in lieu of indemnity. (App., infra,

A25). The Second Circuit concluded that the lack of strict

liability and availability of contribution “made it less appropriate

for courts to imply terms of indemnification” in the contract

between shipowner and stevedore. (App., infra, A26).

Consequently, the court immunized Weeks from liability

according to the 1972 Amendments to the LHWCA, even

though Weeks, a non-employing stevedore, was not covered by

the LHWCA and had not paid compensation benefits for

Lubrano.

REASONS FOR GRANTING THE PETITION

The Petition for Writ of Certiorari should be granted

because the decision of the Second Circuit is inconsistent with

federal law and directly conflicts with decisions of this Court

and the other courts of appeals on important issues. The

Second Circuit’s decision denies an innocent shipowner

indemnity as to a negligent stevedore — even though the

longshoreman’s injuries and resulting damages were a direct

result of the stevedore’s breach of an implied warranty of

workmanlike performance. Although the Second Circuit

reasoned that the changing relationships between longshoremen,

stevedores, and shipowners demands such a result, the denial of

indemnity against a non-employing stevedore is not supported

by the plain language of the 1972 amendments to the Longshore

and Harbor Workers’ Compensation Act, nor this Court’s

precedents.

Furthermore, the Second Circuit also improperly limited

such indemnity to cases involving no-fault liability, contrary to

authority from this Court that has been followed by other courts

of appeals. The issues presented in this Petition are particularly

noteworthy because under the Second Circuit’s decision

innocent parties will be forced to bear the costs of defending

personal injury suits routinely brought by injured longshoremen

seeking to recover damages in excess of workers’ compensation

payments. This Petition for Wnt of Certiorari should be granted

to clarify the continuing viability of the Ryan Indemnity

Doctrine and to promote uniformity in decisions between the

courts of appeal.

POINT ONE The Petition for Writ of Certiorari

Should be Granted to Clarify if a

Shipowner’s Right to Ryan Indemnity

Against a Negligent, Non-Employing

Stevedore Survives the 1972

Amendments to the Longshore and

Harbor Workers’ Compensation Act.

This Petition for Writ of Certiorari should be granted to

review the Second Circuit’s conclusion that this Court’s opinion

in Ryan Stevedoring, Co. v. Pan-Atlantic Steamship Corp. is no

longer viable case law. The Second Circuit’s decision is

incorrect for numerous reasons. First, the Second Circuit’s

decision overreaches the remedial nature of the 1972

amendments to the LHWCA and is inconsistent with this

Court’s interpretation of the 1972 amendments. Although the

1972 Amendments to the Longshore and Harbor Workers’

Compensation Act (““LHWCA”) prohibits shipowners from

suing a stevedore who employed the injured longshoreman, the

plain language of the Amendments does not prohibit shipowners

from seeking indemnity from a stevedore who was not the

injured longshoreman’s employer (“non-employing stevedore’”).

Second, Ryan indemnity is necessary in personal injury cases to

avoid unjust results. Under the Second Circuit’s holding,

Waterman, although innocent of any wrongdoing, cannot

recover litigation expenses from Weeks — the party whose

negligence did cause Lubrano’s injuries. Finally, the Second

Circuit’s denial of indemnity does not deter Weeks — and other

stevedores — from creating unsafe work environments, which

stevedores are in the best position to prevent and remedy.

A. History of the Ryan Indemnity Doctrine

The Ryan Indemnity Doctrine evolved over the past

century in response to the hazardous nature of maritime work.

In 1924, Congress passed the Longshoremen and Harbor

Workers’ Compensation Act .' 33 U.S.C. §901, et. seq. This

act created a workers’ compensation scheme for longshoremen

and harbor workers, providing certain compensation for the

injury or death of these workers without regard to fault, while

limiting an employers’ liability to a determinative amount that

could be absorbed by the shipping industry and its clients. Ryan

Stevedoring Co., v. Pan-Atlantic S.S. Corp., 350 U.S. 124, 129

(1956); United States v. Bender Welding & Mach. Co., 558

F.2d 761, 763-64 (Sth Cir. 1977). After the passage of the

LHWCA, a longshoremen injured on a ship while loading or

unloading cargo could still bring a third-party suit against the

shipowner for negligence. 33 U.S.C. § 905.

In 1946, this Court expanded the remedies available to

longshoremen for injuries suffered as a result of a defect or

dangerous condition of a ship. In Seas Shipping Co., v.

Sieracki, 328 U.S. 85 (1946), this Court extended the traditional

obligation of seaworthiness — owed by a shipowner to a seaman

— to longshoremen injured while working on a ship. In that

' This Title was later changed in 1984 to the Longshore and

Harbor Workers’ Compensation Act. Sept. 28, 1984, Pub.L 98-

426, §27 (d)(1), 98 Stat. 1654.

re it ae en tk

case, Sieracki, an employee of a stevedoring company, was

loading cargo on a vessel when a shackle broke and a ten-ton

boom fell and injured him. Sieracki sued the shipowner and the

manufacturer of the shackle for negligence. The district court

held that the shipowner was not negligent because it had no duty

to test the shackle after installation. Jd. at 87. The court of

appeal reversed, finding that Sieracki should recover from the

shipowner based upon the ship’s unseaworthiness. /d. at 88.

This Court affirmed the decision of the court of appeals and held

that shipowners owe a duty of seaworthiness to seamen as well

as to longshoremen who may work on the ship while it is at

dock. Although the duty of seaworthiness often arises from the

seaman’s contract with the shipowner and no contract existed

in Sieracki, this Court reasoned that equity demanded that a

shipowner, who was in a better position to do so, absorb the

costs of hazardous marine service and distribute the loss in the

shipping community which receives the benefit of this service.

Thus, a shipowner became strictly liable for a longshoreman’s

injury or death caused by a dangerous or defective condition

aboard the vessel. /d. at 93-94.

Until 1952, a shipowner held liable to an injured

longshoremen generally sought indemnity or contribution from

the negligent stevedore who created the unseaworthy condition.

In Halcyon Lines v. Haemn Ship Ceiling & Refitting Corp., 342

U.S. 282 (1952), this Court barred a shipowner’s recovery for

contribution against a negligent stevedore for damages paid to

a longshoreman injured while making on-board repairs. /d. at

283. This Court concluded that in light of the delicate balance

Congress struck between the parties in enacting the LHWCA,

“it would be unwise to attempt to fashion new judicial rules of

contribution and that the solution of this problem should await

congressional action.” /d. at 285. Consequently, Halcyon

required an innocent shipowner to pay all damages arising from

a longshoreman’s injuries without any hope of contribution from

the negligent stevedore who actually caused the longshoreman’s

injuries.

The cumulative effect of the LHWCA, Sieracki, and

Halcyon placed shipowners in an “unenviable position.” See

Fairmont Shipping Corp. v. Chevron Int’l. Oil Co., 511 F.2d

1252, 1255 (2d Cir.), cert. denied, 423 U.S. 838 (1975).

Shipowners became strictly liable for any injuries suffered by

longshoremen while working on their ships even if the injuries

were caused by the negligence of a stevedore. Yet the

shipowner could not recover from the negligent stevedore,

whose liability was limited by the LHWCA.

This is exactly what occurred in the case of Ryan

Stevedoring Co. v. Pan-Atlantic Steamship Corp., 350 U.S. 124

(1956). Ryan Stevedoring contracted to provide stevedoring

service to Pan-Atlantic’s ship, the $.S. Canton. While loading

rolls of pulpboard onto the ship in South Carolina, Ryan

employees failed to sufficiently secure the rolls. When the ship

later docked in Brooklyn, a longshoreman, also employed by

Ryan, was injured during unloading when a 3,200 pound roll of

pulpboard broke loose and violently struck his leg. /d. at 126.

The injured longshoreman recovered under the LWHCA and

then sued the shipowner for breach of the warranty of

seaworthiness under Sieracki.

The Ryan Court concluded that the shipowner did have

a right to indemnity against the negligent stevedore. The

injuries suffered by the longshoremen resulted solely from the

stevedore’s negligence in not securing the rolls of pulpwood in

a “reasonably safe manner.” /d. at 134. By its negligence, the

stevedore breached an implicit warranty of workmanlike

performance, forming the essence of the contract between

shipowner and stevedore. /d. at 133-34. Consequently, the

shipowner was held to have a contractual right to indemnity

against a stevedore for “foreseeable damages” resulting to the

shipowner from the stevedore’s improper performance. /d. at

129. ,

This Court also determined that allowing a shipowner

indemnity against a negligent stevedore did not violate the

LHWCA or Halcyon because the Act did not relieve the

stevedore from fulfilling its contractual duty owed to the

shipowner to properly load the cargo. /d. at 130-31. This

contractual warranty and the resulting right to indemnity for its

breach exists regardless whether the negligent stevedore is or is

not the employer of the injured longshoreman. /d. at 131.

By allowing shipowners a right of indemnity against

negligent stevedores, this Court sought to decrease the

dangerousness of longshore work by making stevedores

responsible for competently loading and unloading ships since

the stevedore is in the best position to avoid accidents during

cargo operations. See /talia Societa v. Oregon Stevedoring Co.

376 U.S. 315, 322-23 (1964) (“The shipowner defers to the

qualification of the stevedoring contractor in the selection and

use of equipment and relies on the competency of the stevedore

company.”). Punishing the negligent stevedore through

indemnification would encourage stevedores to perform their

duties in a reasonably safe manner.

In 1958, this Court clarified that Ryan indemnity is not

limited to cases involving a shipowner’s strict liability for

unseaworthiness. In Weyerhaeuser Steamship Co. v. Nacirema

Operating Co., 355 U.S. 563 (1958), a piece of wood fell from

a winch shelter and struck a longshoreman in the head while he

was unloading the ship pursuant to a contract between the

stevedore and the shipowner. Although the temporary winch

shelter was left standing during the sea voyage from New York

to Boston, neither the shipowner nor the stevedore examined

the structure before commencing unloading of the ship. /d. at

566-67. When the longshoremen sued the shipowner on claims

of negligence and unseaworthiness, the jury found that the ship

was seaworthy but that both the shipowner and the stevedore

were negligent. /d. at 565. As in Ryan, this Court found that the

stevedore violated its contractual duty to the shipowner to both

handle the cargo and to use equipment in a reasonably safe

manner. /d. at 567. Finally, the jury finding that the shipowner

was “guilty of some act of negligence” did not automatically

preclude indemnity under Ryan. /d. at 568. In fact, an

application of the theories of active, passive, primary, or

secondary negligence is inappropriate to contractually-based

indemnity. /d. at 569, citing Ryan, 350 U.S. at 132-33. By

allowing indemnification in Weyerhaeuser, this Court

determined that Ryan indemnity was also available to

shipowners even if they were not strictly liable for the

longshoremen’s injuries.

In 1972, Congress amended the LWHCA with the intent

to eliminate the tnrangular liability between injured

longshoremen, longshore employer, and the shipowner. Pub. L.

92-576, 86 Stat. 251 (1972), amending 33 U.S.C. §§ 901-950.

The Amendments provided:

In the event of injury to a person covered under

this chapter caused by the negligence of a vessel,

then such person, or anyone otherwise entitled

to recover damages by reason thereof, may bring

an action against such vessel as a third party in

accordance with the provisions of section 933 of

this title, and the employer shall not be liable to

the vessel for such damages directly or indirectly

and any agreement or warranties to the contrary

shall be void. If such person was employed by

the vessel to provide stevedoring services, no

such action shall be permitted if the injury was

caused by the negligence of persons engaged in

providing stevedoring services to the vessel.

33 U.S.C. § 905(b). By eliminating the shipowner’s duty of

seaworthiness to longshoremen, longshoremen could no longer

recover damages from innocent shipowners and shipowners

would no longer seek indemnity from the negligent longshore

employer. As a trade-off, longshore employers would then pay

increased compensation benefits in lieu of damages payed to

indemnify shipowners. Director, Off. of Workers’ Compensation

Programs, U.S. Dept. of Labor v. Perini N. River Assoc., 459

U.S. 297, 312 (1983), citing S. Rep. No. 92-1125 at 1 (1972)

and H. Rep. No. 92-1441 (1972). The 1972 amendments did

not discuss the continuing viability of Ryan indemnity as against

non-employing stevedores like Weeks. See H. Rep. 92-1441; S.

Rep. No. 92-1125. The 1972 amendments only applied to

parties who were covered by the LHWCA — employing

stevedores who were protected from paying damages in addition

to the increased compensation benefits.

B. The Second Circuit Concluded that

the 1972 Amendments Abrogated

Ryan Indemnity in Cases Involving

Negligent Non-Employing Stevedores.

In the instant case, Lubrano, a longshoreman, sued

Waterman for negligence. Lubrano was injured while loading

Waterman’s barge when a block of ice fell from a crane owned

by Weeks. A jury found that Waterman was not negligent and

that Weeks’ negligence was the sole cause of Lubrano’s injury.

When Waterman sought to recover its litigation expenses from

Weeks, the district court denied indemnification, holding that

Ryan indemnity was not applicable to suits alleging fault-based

liability. (App., infra, A8-9).

After discussing the history of the LHWCA and this

Court’s opinions in Sieracki, Halcyon, and Ryan, the Second

Circuit affirmed the district court’s denial of indemnification

concluding that the purpose for construing a contract between

a stevedore and a shipowner to include an implicit duty of

indemnity by the stevedore no longer existed in the wake of the

1972 amendments. (App., infra, A25). Because shipowners are

no longer strictly liable to a longshoremen under the

seaworthiness doctrine and shipowners can now seek

contribution from non-employer stevedores that are joint-

tortfeasors, the Second Circuit reasoned that it was “less likely

that shipowners and non-employing stevedores would have

chosen — had they considered the matter — to contract for

indemnification.” The court also reasoned that “...these changes

made it less appropriate for courts to imply terms of

indemnification.” (App., infra, A26). The Second Circuit held

that in the absence of an express indemnification clause to the

contrary, the contract between a shipowner and non-employing

stevedore does not obligate the stevedore to indemnify the

shipowner in an action by an injured longshoreman. (App.,

infra, A28).

[ The Second Circuit Decision

Overreaches the Remedial 1972

Amendments by Abrogating Ryan

Indemnity as to Non-Employing

Stevedores.

The Second Circuit employed judicial activism in

expanding the 1972 Amendments beyond their plain language to

prohibit indemnity against non-employing stevedores, despite

the fact that the LHWCA only immunizes the “employer” of the

injured party from liability for indemnity. The 1972 amendments

provide in pertinent part:

In the event of injury to a person covered under

this chapter caused by the negligence of a vessel,

then such person, or anyone otherwise entitled

to recover damages by reason thereof, may bring

an action against such vessel as a third party in

accordance with the provisions of section 933 of

this title, and the employer shall not be liable to

the vessel for such damages directly or indirectly

and any agreements or warranties to the

contrary shall be void.

33 U.S.C. § 905(b). This Court has stated “time and again that

courts must presume that a legislature says in a statute what it

means and means in a statute what it says.” Connecticut Nat'l

Bank v. Germaine, 503 U.S. 249, 253-54 (1992). Thus, when

the words of a statute are unambiguous “judicial inquiry is

complete.” /d. at 254. The Second Circuit decision conceded

that the 1972 Amendments did not “speak directly” to the facts

in this case and that the Amendments did not directly abrogate

Ryan indemnity against non-employing stevedores. (App., infra,

Al9). By using the term “employer,” Congress expressly

limited the 1972 Amendments to longshore employers and

excluded non-employing stevedores, such as Weeks. If

Congress had indeed intended to completely overrule Ryan

indemnity as to all longshore parties, Congress could have

expressly eliminated a cause of action for indemnity against non-

employing stevedores. The language of the 1972 Amendments

clearly only immunizes the employer of the injured party.

Nonetheless, the Second Circuit ignored the plain language of

the statute and concluded that Ryan indemnity was no longer

viable after the elimination of the longshoreman’s ability to sue

the shipowner for breach of the warranty of seaworthiness.

Moreover, the Second Circuit’s decision does not

comport with the remedial nature of the 1972 amendments. As

discussed by this Court in Cooper, Congress intended to prevent

circuitous liability, circumventing the LHWCA. See Cooper

Stevedoring Co. v. Fritz Kopke, Inc., 417 U.S. 106, 113 fn. 6

(1974). Under Ryan, a longshore employer was forced to

indemnify a shipowner for damages the shipowner paid to an

injured longshoremen in addition to the employer’s payment of

workers’ compensation according to the LHWCA. /d. at fn. 6

The impetus for enacting the 1972 amendments is not implicated

by the present facts because Weeks is not an employing

stevedore within the purview of the LHWCA. Thus, the Second

Circuit’s decision barring indemnity as to non-employing

stevedores is not supported by the congressional intent in

enacting the LHWCA or in amending the Act in 1972.

Finally, the Second Circuit’s opinion precluding

indemnity in the absence of an express agreement is

incongruous. (App., infra, A28). On the one hand, the court

interprets the scope of the 1972 Amendments to the LWHCA

as covering non-employing stevedores, and on the other ignores

the plain language of the statute precluding indemnification

Ee ee ee

agreements between shipowners and stevedores. 33 U.S.C. §

905. In other words, the court is effectively re-writing the

statute, writing in a provision precluding indemnity actions by

shipowners against non-employing stevedores, and writing out

the provision prohibiting express agreements of indemnification.

Although the court of appeal’s decision indicates that

shipowners and non-employing stevedores can expressly agree

to indemnification, it fails to explain why such an agreement

would be enforceable under the LWHCA. If such an express

agreement would be enforceable because the 1972 Amendments

do not apply then those amendments cannot be the basis for

eliminating the implied indemnity created by this Court in Ryan.

D. The Second Circuit’s Decision is

Inconsistent with this Court’s

Interpretation of the 1972

Amendments as Applying Only to

Indemnity Claims Against Employing

Stevedores who are Protected by the

Longshoremen and Harbor Workers’

Compensation Act.

The Second Circuit’s decision is inconsistent witli this

Court’s interpretation of the 1972 Amendmenis and the

continuing viability of Ryan. In Cooper Stevedoring, this Court

stated:

The intent and effect of this amendment were to

overrule this Court’s decisions in Seas Shipping

Co. v. Sieracki and Ryan Stevedoring Co. v.

Pan-Atlantic S.S. Corp, insofar as they made an

employer circuitously liable for injuries to its

employee, by allowitig the employee to maintain

an action for unseaworthiness against the vessel

and allowing the vessel to maintain an action for

indemnity against the employer.

Cooper Stevedoring, supra, 417 U.S. at 113 (citations omitted).

This language indicates that this Court only considered Ryan to

be partially abrogated by the 1972 amendments. See Oglebay

Norton Co. v. CSX Corp., 788 F.2d 361, 365 fn.5 (6th Cir.

1986), cert. denied, 479 U.S. 849 (1986) (holding Ryan and

progeny to be valid precedent in cases involving shipowner’s

indemnity action against a non-employing stevedore for injuries

sustained by ship employee — 1972 amendments applied only to

employing stevedores).

Contrary to this Court’s interpretation and that of other

courts of appeal, the Second Circuit concluded that the 1972

amendments effectively abrogated Ryan by redefining the

relationships between stevedores, shipowners, and

longshoremen. By its decision, the Second Circuit presumes

that the 1972 amendments and this Court’s decision in Cooper

abrogated Ryan, even though this Court in Cooper construed

the 1972 amendments as only affecting indemnity claims against

employing stevedores, covered by the LWHCA. Such an

interpretation would allow Weeks to benefit from a

compensation scheme that immunizes the employing stevedore

in exchange for the payment of compensation benefits, even

though Weeks did not pay compensation benefits to Lubrano.

If the Ryan Indemnity Doctrine is no longer applicable to even

those cases involving non-employing stevedores who are

unaffected by the LHWCA and the 1972 amendments to the

LHWCA, this Court — and not an inferior court — should

determine that the equitable principles requiring a negligent

stevedore to reimburse an innocent shipowner for losses

suffered no longer prevail.

E. As an Innocent Party, Waterman is

Entitled to Indemnification for

Foreseeable Damages Caused by

Week’s Breach of Warranty of

Workmianlike Performance.

The stevedore’s warranty of workmanlike performance

clearly survived the 1972 Amendments. This Court has

expressly held that the 1972 Amendments did not “disturb the

contractual undertaking of the stevedore nor the rightful

expectation of the vessel that the stevedore would perform his

task properly without supervision by the ship.” Scindia Steam

Navigation Co. v. De Los Santos, 451 U.S. 156, 170 (1981).

Litigation expenses incurred defending against suits brought by

longshoremen injured by a stevedore’s negligence are also

foreseeable damages recoverable in an indemnity suit pursuant

to Ryan. See Massa v. C.A. Venezuelan Navigacion, 332 F.2d

779 (2d Cir. 1964). In this case, Weeks owed Waterman a

warranty of workmanlike performance in providing and

operating crane equipment during the unloading of Waterman’s

barge, and Waterman should receive indemnity for all

foreseeable damages due to that breach.

In addition to the continuing existence of a stevedore’s

warranty of workmanlike performance, a stevedore’s implicit

duty to indemnify a shipowner for damages caused by its breach

of warranty also. survived the 1972 Amendments.

Notwithstanding the 1972 Amendments’ abrogation of the

seaworthiness doctrine, Ryan indemnity is still necessary to

protect shipowners from damages caused by a stevedore’s

breach of its warranty of workmanlike performance. Although

no longer strictly liable for damages, a shipowner who

successfully defends a suit involving injuries caused by a

stevedore’s negligence still faces out-of-pocket expenses such

as litigation costs and fees, notwithstanding its innocence. In

Garracino v. Luckenbach Steamship Co., 333 F.2d 646, 648

(2d Cir. 1964), the Second Circuit held that a shipowner could

recover attorneys’ fees and expenses even if the shipowner is

exonerated from fault or unseaworthiness. accord, Campbell

Industries, Inc. v. Offshore Logistics Int'l, Inc., 816 F.2d 1401,

1406 (9th Cir. 1987). Such fees are awarded on the theory that

the indemnitee bore a burden properly belonging to the

indemnitor. Cooper v. Loper, 923 F.2d 1045, 1051 (3d. Cir.

1991) (holding that district court erred in not awarding

attorney’s fees to indemnitees in an admiralty matter). As in

Garracino and Cooper, Waterman still suffered damages that

Weeks — the negligent party — should pay. While Waterman

successfully defended the main action, it has suffered loss, in the ~

form of attorney’s fees and expenses in the defense caused by

the actions of Weeks. Such a loss is and should be recoverable

through indemnity. Because Weeks breached its warranty of

workmanlike performance by negligently causing Lubrano’s

injuries, (App., infra, A2), Waterman should not be forced to

pay litigation expenses in defense of a suit arising from Weeks’

breach of contract.

Additionally, Ryan indemnity has continued viability

beyond the facts in this case, notwithstanding the abrogation of

the seaworthiness doctrine. Under the Jones Act, an injured

seaman can sue the employing shipowner for negligence,

notwithstanding the fact that the seaman’s injuries were solely

caused by the negligence of a non-employing stevedore or

wharfinger. See Oglebay Norton Company v. CSX Corp., 788

F.2d 361, 367 (6th Cir.), cert. denied, 479 U.S. 849 (1986)

(seaman brought a personal injury suit against employing

shipowner after seaman fell off a dark, slippery dock that was

negligently maintained by dockowner); Cooper v. Loper, 923

F.2d 1045, 1047 (3d. Cir. 1991) (seaman brought personal

injury suit against employing shipowner after stevedore

employees failed to catch a bucket of fish, which then struck

seaman in head). As is apparent from Og/ebay and Cooper, an

innocent shipowner faces potential liability in suits brought

under the Jones Act for damages caused by a stevedore’s or

dockowner’s breach of its warranty of workmanlike

performance. Thus, the 1972 Amendments’ abrogation of the

seaworthiness doctrine does not preclude a longshoreman or

seaman from suing an innocent shipowner for injuries caused by

a non-employing stevedore, and Ryan indemnity is necessary to

protect an innocent shipowner from bearing the cost of this

litigation.

Moreover, allowing Waterman to recover litigation

expenses would effectuate the purpose of indemnification. As

stated by this Court:

[L]iability should fall upon the party best

situated to adopt preventive measures and

thereby to reduce the likelihood of injury.

Where, as here, injury-producing and defective

equipment is under the supervision and control

of the stevedore, the shipowner is powerless to

minimize the risk; the stevedore is not.

Italia Societa per Azioni di Navigazione v. Oregon Stevedoring

Co., 376 U.S. 315, 324 (1964). In the instant case, requiring

Weeks to indemnify Waterman for litigation costs would deter

Weeks from breaching its duty of workmanlike performance in

the future. This deterrence would foster a safer work

environment for longshoremen and seamen.

Finally, a shipowner’s ability to seek contribution from

a non-employing stevedore should not preclude Waterman’s

right to indemnification in this case. This Court has held that a

shipowner can seek contribution for contractual damages

suffered as a result of a stevedore’s breach of workmanlike

conduct. Cooper Stevedoring Inc. v. Fritz Kopeke, Inc., 417

U.S. 106, 113 (1974). But this remedy between joint-

tortfeasors does not provide a basis for recovery for shipowners

such as Waterman. Contribution also does not contemplate

attorneys fees. See Sea-Land Service, Inc. v. Crescent Towing

and Salvaging, Co., 42 F.3d 960, 963 (Sth Cir. 1995) (“where

contribution is appropriate, an award of attorneys’ fees is not.’’).

Accordingly, a remedy for contribution is not always available

to shipowners, especially those who were innocent of any

negligence, and should, therefore, not be the basis to preclude

recovery under an indemnity theory.

POINT TWO The Petition for Writ of

Certiorari Should be Granted

Because the Second Circuit’s

Conclusion that the Ryan

Indemnity Doctrine is Only

Applicable to No-Fault

Liability Cases Conflicts with

Decisions of This Court and

Other Courts of Appeals.

This Petition for Writ of Certiorari should also be

granted to promote uniformity of decision regarding the scope

of Ryan indemnity. The Second Circuit has held that Ryan

indemnity only applies to cases between involving no-fault

liability. The Ninth Circuit has also generally limited Ryan

indemnity to cases involving no-fault liability. Other courts of

appeals have followed this Court’s holding that Ryan indemnity

is equally applicable to claims alleging fault-based liability. The

Second and Ninth Circuits’ limitation of Ryan indemnity to

ee a en

cases involving no-fault liability also contravenes the purpose of

indemnity and ignores the necessity of Ryan indemnity in fault-

based liability cases to avoid unjust results.

A. The Second Circuit Concluded that

the Ryan Indemnity Doctrine Only

Applies to Cases Involving No-Fault

Liability.

In its decision, the Second Circuit held that Waterman

was not entitled to indemnity because Ryan indemnity applied

only in cases where a stevedore rendered its services to a

shipowner in a way that exposed the shipowner to strict liability.

(App., infra, Al4, A22, citing Navieros Oceanikos, S.A. v. S.T.

Mobil Trader, 554 F.2d 43, 44-47 (2d Cir. 1977)). The Second

Circuit based This conclusion on the legislative history of the

1972 Amendments. In passing these Amendments, Congress

expressed a general belief that by eliminating a shipowner’s

strict liability under the seaworthiness doctrine, the amendments

removed the need for Ryan indemnification altogether. (App.,

infra, A21, citing H.R. Rep. No. 92-1441 (1972)). Yet the

Second Circuit also conceded:

~ ...such a view does not entirely comport either

with the Supreme Court’s rationale for creating

Ryan indemnity or with later Supreme Court

cases that developed the Ryan doctrine, albeit

before the 1972 amendments. On their face,

Ryan and its early progeny do not reflect the

premised essential link between the shipowner’s

warranty of seaworthiness to the longshoreman

and its right of indemnification against the

stevedore.

(App., infra, A22-23). Nonetheless, stressing the dramatic

change in the legal context of the relationship between the

shipowner and the non-employing stevedore since Ryan, the

Second Circuit concluded that such an “essential link” was a

requisite to obtaining Ryan indemnity. (App., infra, A23, A25).

B. The Second Circuit’s Decision is

Inconsistent with This Court’s

Allowance of Ryan Indemnity in the

Negligence Case of Weyerhaeuser

Steamship Co. v. Nacirema Operating

Co.

The Second Circuit’s decision is inconsistent with this

Court’s application of Ryan indemnity to a negligence case

alleging no-fault liability. See Weyerhaeuser S.S. Co. v.

Nacirema Operating Co., 355 U.S. 563 (1958). In that case, a

longshoreman was unloading Weyerhaeuser’s ship when a piece

of wood fell from a temporary winch shelter and struck the

worker. The longshoremen brought suit against Weyerhaeuser

on claims of negligence and unseaworthiness. A jury found that

the ship was seaworthy and that Weyerhaeuser was negligent.

Id. at 564. Despite an absence of strict liability, this Court held

that Weyerhaeuser was eligible for indemnification for damages

it paid to the longshoreman because the stevedore’s breach of -

its warranty of workmanlike performance caused the

longshoreman’s injury. /d. at 567-68. The Second Circuit has

ignored this clear precedent in limiting Ryan indemnity to cases

involving no-fault liability.

C. The Second Circuit Opinion is

Inconsistent with Decisions of Other

Courts of Appeal that Have

Consistently Applied Ryan Indemnity

to Negligence Cases.

The Second Circuit decision limiting Ryan indemnity to

cases involving no-fault liability also creates an irreconciable

split with decisions from other circuits. In accordance with this

Court’s decision in Weyerhaeuser, the Third, Fourth, and Sixth

Circuits have continued to allow Ryan indemnity in cases

involving recovery for negligence.

For example, the Sixth Circuit has allowed

indemnification under Ryan in cases involving negligence claims

under the Jones Act. In Oglebay Norton Co. v. CSX Corp. , 788

F.2d 361 (6th Cir. 1986), cert. denied, 479 U.S. 849 (1986), a

ship employee fell from a dark, coal-strewn dock and was

crushed by the 572-foot steamer. The decedent’s personal

representative brought a wrongful death claim against Oglebay

under the Jones Act. The parties consented to having a

magistrate enter a binding judgment with direct appeal to the

court of appeal. After’ settling the suit, Ogiebay brought an

indemnity claim against the dock owner for the amount of

settlement and litigation expenses. Jd. at 362-63. The

magistrate allowed Oglebay to receive contribution from the

dock owner for 25% of the settlement and litigation expenses.

Id. at 364. In reversing the judgment, the Sixth Circuit only

addressed the negligence claim — the issues of seaworthiness

and no-fault liability did not appear in the court’s opinion. The

court of appeal applied Ryan indemnity to the facts of the

negligence case, holding that the dock owner violated the

implicit warranty of workma:like performance and that Oglebay

was entitled to complete indemnity for damages suffered as a

result of the dock owner’s breach. /d. at 365-67.

The Second Circuit’s decision also conflicts with Fourth

Circuit decisions applying a Ryan analysis to cases involving

negligence, notwithstanding the absence of no-fault liability. In

Tebbs v. Baker-Whiteley Towing Company, 407 F.2d 1055 (4th

Cir. 1969), the court of appeals applied the Ryan indemnity

analysis to a maritime collision case between a yacht and a

government barge that was being towed by Baker-Whitely. The

yacht owner successfully sued the United States government as

well as the towing company on a claim of negligence. The

district court awarded the United States judgment on its cross-

claim against Baker-Whitely for indemnification. /d. at 1057.

Because the tug owner, like a stevedore, owed the government

a warranty of workmanlike service in towing its barge, the tug

owner was responsible for indemnifying the United States for

damages occurring due to his negligence in towing the barge. /d.

at 1058-1059. Therefore, the Fourth Circuit also permitted the

recovery of Ryan indemnity in the absence of no-fault liability.

The Third Circuit has also allowed indemnification in the

absence of strict liability. In Pastore v. Taiyo Gyogyo, K.K.,

571 F.2d 777 (3d Cir. 1978), the court of appeals reinstated a

judgment against a negligent stevedore whose employees had

started a fire aboard a vessel and awarded Ryan indemnity in

favor of the shipowner on whose vessel a fireman was injured

despite the shipowner having been found negligent. Although

the injury arose prior to the 1972 Amendments to the LHWCA,

the fireman was not a covered employee under the LHWCA and

his only cause of action against the shipowner was for

negligence. The Third Circuit noted that the failure of the

stevedore to perform in a careful, workmanlike manner which

The Third Circuit also applied Ryan indemnity to a

negligence action in Cooper v. Loper, 923 F.2d 1045 (3d Cir.

1991). In that case, a ship employee was injured while

unloading a ship. Dock workers, employed by the stevedore,

struck Cooper in the head with a large bucket of fish. The

employee sued the shipowner under the Jones Act and “general

maritime law.” The district court awarded the shipowners

contribution against the negligent stevedore for 80% of their

settlement with the injured employee. /d. at 1047. The Third

Circuit reversed, finding contribution inapplicable to cases

involving a shipowner’s right to indemnity. /d. at 1050. The

Third Circuit applied Ryan indemnity in lieu of contribution.

“Because the court found that the dock owner breached its duty

of workmanlike service through the conduct of its employees,

it should have awarded the shipowners full indemnity.” /d. at

1050.

Contrary to Weeks’ arguments before the Second

Circuit, the Third Circuit in Cooper awarded Ryan indemnity

despite the absence of strict liability. If an owner is not liable for

unseaworthiness, the plaintiff has the burden under the Jones

Act of establishing by a preponderance of the evidence that his

employer’s negligence was a cause, however slight, of his

injuries. Matter of Hechinger, 890 F.2d 202, 208 (9th Cir.

1989), cert. denied, 111 S.Ct. 136 (1990). Although the

employee in Cooper could have claimed unseaworthiness, in

addition to negligence, no evidence existed that the jury found

the ship to be unseaworthy. To the contrary, the worker’s

injury was caused ‘by the stevedore’s negligence off the ship in

failing to catch the bucket. Nowhere in its opinion does the

Third Circuit discuss the seaworthiness doctrine, the application

of strict liability, or that the jury found the vessel to be

unseaworthy. Thus, the Third Circuit awarded indemnity

despite the absence of no-fault liability.

The Second Circuit’s decision also contradicts its own

prior decision in which it affirmed a district court’s granting of

indemnity in a negligence case. In Henry v. A/S Ocean, 512

F.2d 401 (2d Cir. 1975), a longshoreman was injured while

unloading A/S Ocean. Henry was standing on top of an eleven-

foot pile of pontoons when cargo lines struck him in the left

shoulder, knocking him overboard. /d. at 404. A jury found

that the ship was seaworthy, that the shipowner was negligent,

and that Pittson Stevedoring Company had breached its

warranty of workmanlike performance. The district court then

permitted the shipowner’s suit for indemnity from the negligent

stevedore. /d at 403. In affirming the granting of indemnity

despite the absence of no-fault liability, the Second Circuit

declared “[t]he stevedore’s liability for breach of warranty does

not rest upon the nature of the shipowner’s liability (i.e.,

whether it is based upon unseaworthiness rather than upon

negligence) but upon the stevedore’s own contractual obligation

to the shipowner.” /d. at 406, citing Ryan Stevedoring Co.,

supra, 350 U.S. at 131-32. Although the Second Circuit’s

decision in this case reasoned that Henry only allowed indemnity

for injuries arising from a shipowner’s violation of his non-

delegable duties, such is not apparent from a reading of the

Henry opinion, which lacks an analysis of the interplay between

Ryan and non-delegable duties.

The Ninth Circuit’s has also denied recovery of

indemnity in negligence cases by repeatedly holding that a

shipowner cannot obtain Ryan indemnity outside the

seaworthiness doctrine. See Knight v. Alaska Trawl Fisheries,

Inc., 154 F.3d 1042, 1046 (9th Cir. 1998) (“We hold that a

negligent shipowner is not entitled to receive Ryan indemnity

from a negligent contractor when the shipowner is found liable

under both negligence and unseaworthiness theories.’’);

California Home Brands, Inc. v. Ferreira, 87) F.2d 830, 836

negligent shipowner is not entitled to receive Ryan indemnity

from a negligent contractor when the shipowner is found liable

under both negligence and unseaworthiness theories.”’);

California Home Brands, Inc. v. Ferreira, 871 F.2d 830, 836

(9th Cir. 1989) (“Since Jones Act suits are based on negligence,

not any absolute duty of the shipowner, the rationale for

implying a warranty of workmanlike performance does not apply

here.”). Instead of granting indemnity, the Ninth Circuit has

determined that “comparative fault principles best advance the

goals Ryan attempted to achieve.” Knight, 154 F.3d at 1046

(citation omitted).

Like the Second Circuit, the Ninth Circuit has also been

inconsistent in its application of Ryan indemnity. In Turner v.

Japan Lines, 651 F.2d 1300, 1304 (9th Cir. 1981), cert. denied,

sub, nom., Japan Lines v. Turner, 459 U.S. 967 (1982), the

Ninth Circuit allowed a shipowner to recover Ryan indemnity

against a foreign non-employing stevedore whose improper

loading of cargo caused injury to a longshore worker. The

court reasoned that the foreign stevedore was not within the

purview of the LHWCA and that Ryan indemnity was not

barred in the case. /d. at 1304. Such reasoning is equally

applicable to the facts in this case because Weeks is also not

within the purview of the LHWCA.

The Ninth and Second Circuits’ conclusion that

shipowners are not entitled to indemnity from negligent non-

employing stevedores in cases involving negligence conflicts

with decisions of this Court and those of other courts of

appeals. By clarifying the viability and scope of Ryan indemnity,

this Court would provide guidance to the courts of appeal, as

well as uniformity of decisions.

D. The Conclusion Reached by the

Second and Ninth Circuits

Contravenes the Purpose of

Indemnification and Ignores the

Continuing Necessity of Ryan

Indemnity in Negligence Cases.

This Petition for Writ of Certiorari should also be

granted because the Second and Ninth Circuits’ conclusion that

Ryan indemnity only applies to cases concerning no-fault

liability contravenes the purpose of indemnification and ignores

the necessity of Ryan indemnity in negligence cases.

Requiring Waterman to be liable for litigation costs and

fees that resulted from Weeks’ breach of its warranty of

workmanlike performance would nullify the purpose behind

Ryan indemnity. The stevedore’s warranty of workmanlike

performance survived the 1972 Amendments, Scindia Steam

Navigation Co. v. De Los Santos, 451 U.S. 156, 170 (1981)

and any damages arising from this breach of warranty should fall

upon the stevedore. As stated by this Court:

[L]iability should fall upon the party best

situated to adopt preventive measures and

thereby to reduce the likelihood of injury.

Where, as here, injury-producing and defective

equipment is under the supervision and control

of the stevedore, the shipowner is powerless to

minimize the risk; the stevedore is not.

ltalia Societa per Azioni di Navigazione v. Oregon Stevedoring

Co., 376 U.S. 315, 324 (1964). In the instant case, requiring

Weeks to indemnify Waterman for litigation costs would deter

Weeks from breaching its duty of workmanlike performance in

ene

Moreover, notwithstanding the 1972 Amendments’

abrogation of the seaworthiness doctrine, Ryan indemnity

remains necessary to protect innocent shipowners from damages

caused by negligent stevedores. The absence of no-fault liability

does not relieve a shipowner from bearing the brunt of out-of-

pocket expenses notwithstanding their innocence. In Garracino

v. Luckenbach Steamship Company, Inc., 333 F.2d 646, 648

(2d Cir. 1964), the Second Circuit held that a shipowner could

recover attorneys’ fees and expenses even if the shipowner is

exonerated from fault or unseaworthiness. accord, SPM Corp.

v. MV Ming Moon, 22 F.3d 523, 525 (3d Cir. 1994); Campbell

Industries, Inc. v. Offshore Logistics Int'l, Inc., 816 F.2d 1401,

1406 (9th Cir. 1987). Such fees are awarded on the theory that

the indemnitee bore a burden properly belonging to the

indemnitor. Cooper v. Loper, 923 F.2d 1045, 1051 (3d. Cir.

1991) (holding that district court erred in not awarding

attorney’s fees to indemnitees in an admiralty matter). As in

Garracino and Cooper, Waterman still suffered damages that

Weeks should be responsible for paying as the negligent party

who caused Lubrano’s injuries. While Waterman successfully

defended the main action, it has suffered loss, in the form of

attorney's fees and expenses in the defense caused by the actions

of the stevedore’s employees. Because Weeks breached this

warranty of workmanlike performance by negligently causing

Lubrano’s injuries, (App., infra, A2), Waterman should not be

forced to pay litigation expenses in defense of a suit arising from

Weeks’ breach of its warranty of workmanlike performance.

CONCLUSION

For the foregoing reasons, Waterman Steamship

Company respectfully requests that this Court grant the Petition

for Writ of Certiorari and grant it such other and further relief

to which it may be entitled.

Dated: July 30, 1999

Respectfully Submitted,

DE ORCHiS, WALKER, & CORSA, LLP

By: LD er

LeRéy S. Corsa, Esq.

One Battery Park Plaza, 2nd FI.

New York, NY 10004-1480

(212) 344-4700

Attorneys for Petitioner,

Waterman Steamship Company

UNITED STATES DISTRICT COURT NOT FOR

EASTERN DISTRICT OF NEW YORK PUBLICATION

DAMIAN LUBRANO,

Plaintiff, MEMORANDUM

AND ORDER

-against- 95-CV-3642(JG)

WEEKS MARINE INC., s/h/a WEEKS

OFF-SHORE CRANE COMPANY and

WATERMAN STEAMSHIP COMPANY,

Defendants.

APPEARANCES:

MICHAEL N. COTIGNOLA .

108 Greenwich Street:

New York, New York 10006

Attorney for Defendant Weeks Marine, Inc.

MICHAEL E. UNGER

DeOrchis, Walker & Corsa, LLP

One Battery Park Plaza, 2nd floor

New York, New York 10004-1480

Attorneys for Defendant Waterman Steamship

Company

JOHN GLEESEON, United States District Judge:

Damian Lubrano brought suit alleging that the negligence of

defendants Weeks Marine, Inc.(“Weeks”) and Waterman Steamship

Company (“Waterman”) caused him to be injured when a piece of ice

fell from the boom of Weeks’ crane, striking him on the wrist and

forearm. Thereafter, Waterman asserted a cross-claim against Weeks

for indemnification. For the reasons set forth below, I find that Weeks

is not obligated to indemnify Waterman.

FACTS

On February 24, 1994, Lubrano, an employee of American

Stevedoring, was loading cargo onto a Waterman-owned barge. To

help with the loading, Waterman had rented a barge crane from Weeks.

Dunng the course of the loading job, a piece of ice fell from the boom

of Weeks’ crane, striking Lubrano on the left wnst and forearm.

Accordingly, Lubrano brought suit against both Weeks and Waterman,

claiming that the negligence of both caused the ice to fall on him,

causing injury. Thereafter, Waterman asserted a cross-claim against

Weeks, seeking indemnification.

After a three-day tral, a jury found that Lubrano had been

injured and that his injury was the result of the negligence of Weeks

and American Stevedoring, but was not the result of the negligence of

Waterman. Waterman now seeks to recover the litigation expenses it

incurred in defending against Lubrano’s action. Waterman contends

it is that entitled to indemnification because Lubrano was injured as a

result of Weeks’ breach of an implied warranty of workmanlike

performance.

DISCUSSION

The implied warranty of workmanlike performance, “one of the

most a:nbiguous and controversial concepts in all of admiralty law,”!

was created by the Supreme Court in the landmark case of Ryan

Stevedoring Co. v, Pan-Atlantic $.S. Corp., 350 U.S. 124 (1956).

Under Supreme Court precedent prior to the holding in Ryan,

longshoreman “not only . . . were entitled to compensation benefits,

they [also] could recover from vessel owners under the doctrine of

unseaworthiness, a species of liability without fault.” 1 Schoenbaum,

supra note !, § 5-8, at 190 (footnote omitted). By contract, “a vessel

owner who was liable for unseaworthiness could [not] recover in

contribution from a negligent stevedore.” Jd. Accordingly, in those

instances where the longshoremen was injured as a result of the actions

of his employer (the stevedore), the vessel owner was placed in an

“unenviable position”: “A longshoreman might be injured as a result

‘ 1 Thomas J. Schoenbaum, Admiralty & Maritime Law

§ 5-8 at 192 (2d ed. 1994).

of an unseaworthy condition caused wholly by the stevedore’s

negligence, and yet the shipowner, wholly without fault, could be held

liable for the entire amount of compensatory damages.” Fairmont

Shipping Corp, v. Chevron Int’! Oil Co,, 511 F.2d 1252, 1255 (2d

Cir.), cert, denied, 423 U.S. 838 (1975).

In Ryan, the Supreme Court attempted to remedy the

unfairness. It held that contracts between vessel owners and

stevedoring companies contain an implied warranty of workmanlike

performance, and that, when a shipowner is liable to an employee for

failing to supply a seaworthy vessel, it is entitled to indemnification

from a stevedore that caused the unseaworthy condition. See Ryan

Stevedoing Co. v, Pan-Atlantic $$. Corp., 350 U.S. 124 (1956);

Gabourel, 1996 WL 447991, at *l. Thus, after Ryan, those

shipowners who were forced to pay a judgment to an injured

longshoreman as a result of an unsafe condition created by a stevedore

could thereafter recover from that stevedore under a theory of

“The obligation to indemnify includes (litigation

expenses incurred by the shipowner in defending any suit brought against

him as result of the such a breach’” Gabourel v. Bouchard Transportation

Co., No. 94 civ. 5897 1996 WL 447991, at *1(S.D.N.Y. Aug. 7 1996).

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indemnity. This liability scheme has been called a “round robin” :

upon being injured, a longshoreman would bring suit against the

shipowner, who, upon being found liable, would seek indemnity from

the longshoreman’s employer, the stevedore. See 1 Shoenbaum, supra

note 1, § 5-8, at 192.

Congress changed this system with its 1972 amendments to the

Longshore and Harbor Worker’s Compensation Act (“LHWCA”). In

passing the 1972 amendments. Congress (1) “provide[d] that

shipowners can be held liable to longshoremen only for negligence, and

not for unseaworthiness,” Fairmont, 511 F.2d at 1258 n.8; and (2)

“provided that the stevedore employer ‘shall not be liable to the vessel

for such damages directly or indirectly and any agreements or

warranties to the contrary shall be void,” 1 Schoenbaum, supra note

1. § 5-8, at 192.

Thus, in this case, Waterman (the shipowner) would have been

precluded from seeking indemnification from American Stevedoring,

the plaintiff's employer. However, it seeks indemnification from

Weeks, which did not employ plaintiff. The question presented is

whether it may obtain such indemnification even though Congress has

eliminated the prospect of shipowners being held liable without fault.

In seeking indemnification, Waterman argues that the 1972

amendments overruled Ryan only to the extent that Ryan allowed

shipowners to seek indemnification from employing stevedores, and not

the extent that Ryan provided for the indemnification of shipowners by

non-employing stevedores. In support of this argument, Waterman

relies on the holding in Rindone y. Aryan Nationai Shipping Co,, 1980

AMC 196, 1979 U.S.Dist. LEXIS 14968 (S.D.N.Y. 1979). In that

case, the court found that the injuries of the plaintiff, a longshoreman,

had been caused not by the negligence of the shipowner, but rather by

the negligence of a stevedore that did not employ the plaintiff. The

court went on to find that the negligent stevedore was obligated to

indemnify the shipowner for the costs it had incurred in defending

against the action. See id. at *7. In so ruling, the court reasoned that

the 1972 amendments did not, “by [their] own force cut{] off the

availability of pre-1972 indemnification to a vessel by a stevedore who

did not employ the injured party.” Id. at 7.

In response to Waterman’s claim for indemnification, Weeks

contends that the rationale underlying Ryan has no application where

the shipowner has not been exposed to liability without fault. Weeks

notes that, in this case, the plaintiff sought to hold Waterman liable

under a theory of negligence, not pursuant to the doctrine of

unseaworthiness. Because Lubrano did not seek to hold Waterman

liable without fault, Weeks maintains that it would be inappropriate to

apply the warranty of workmanlike performance to these facts.

I agree. As the Second Circuit has held, the Ryan indemnity

doctrine is appropriate only where the following elements are present:

[A] shipowner, relying on the expertise of another party (the

contractor), enters into a contract whereby the contractor

agrees

to perform services without supervision or control by the

shipowner; the improper, unsafe or incompetent execution of

such services would foreseeable render the vessel unseaworthy

or bring into play a pre-existing unseaworthy condition; and

the shipowner would thereby be exposed to liability regardless

of fault.

Fairmont, 511 F.2d at 1258 (footnotes omitted); see also Gabourel,

1996 WI 447991, at *1. According to the Second Circuit, where the

foregoing elements are present, “there will be implied in the contract an

agreement by the contractor to indemnify the shipowner for any

liability it might incur as a result of an unseaworthy condition caused

or brought into play by the improper, unsafe or incompetent

performance of the contractor.” Fairmont, 511 F.2d at 1258.

In the instant case, Lubrano did not seek to hold Waterman

liable under the doctrine of unseaworthiness. Indeed, under the 1972

amendments to the LHWCA. Lubrano could not have proceeded

against Waterman under that theory: as already stated those

amendments abolished the longshoremen’s nght to sue the shipowner

on a theory of unseaworthiness.’ Accordingly, Waterman was not

faced with the possibility of being held liable without fault. Under the

, With the exception of Rindone, with which I disagree,

the cases cited by Waterman, all imposed Ryag indemnity either (1)

where the shipowner was being held liable under the doctrine of

unseaworthiness, see Ip re Joint Eastern & Southern District Asbestos

Litigation, 129 B.R. 710, 789-90 (S.D.N.Y. 1991) (“Plaintiffs base

liability upon the contention that the vesse.s were in an unseaworthy

condition as a result of the presence of asbestos-containing products on

board.”), judgment vacated by 982 F.2d 721(2d Cir. 1992), opinion

modified on rehearing by 993 F.2d 7 (2d Cir., 1993); or (2) where,

because the injured party was a seaman, not a longshoreman, his cause of

action was unaffected by Congress’s 1972 abolition of the doctrine of

unseaworthiness with respect to the longshoremen, see Cooper v. Loper,

923 F.2d 1045, 1047 (3d Cir. 1991) (stating that plaintiff was an

employee of the shipowner); Oglebay Norton Co. v. CSX Corp., 788

F.2d 361, 363 (6th Cir.) (describing injured party as a seaman), cert.

denied, 479 U.S. 849 (1986); see also 1 Schoenbaum, supra note 1, § 5-

8, at 194-98 (comparing application of Ryap indemnity in cases where

shipowner was sued by longshoremen and application of that doctrine in

cases where shipowner was sued by seaman).

holding in Fairmont, Waterman is not entitled to indemnification. Its

cross-claim therefore is denied.

CONCLUSION

For the reasons set forth above, Waterman’s cross-claim for

indemnification is denied.

So Ordered.

John Gleeson, U.S.D.J.

Dated: May 19, 1998

Brooklyn, New York

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

August Term, 1998

(Argued: January 26, 1999 Decided: April 30, 1999)

Docket No. 98-7849

DAMIAN LUBRANO,

Plaintiff

-V-

WATERMAN STEAMSHIP COMPANY,

Defendant-Appellant,

WEEKS MARINE, INC. sued here as WEEKS OFF-SHORE

CRANE COMPANY,

Defendant-Appellee,

BAY CRANE CO., INC., JOHN DOE (1-10) and

XYZ INC. (1-10},

Defendants.

Before:

NEWMAN, WALKER, and CALABRESI,

Circuit Judges.

The appellant, a shipowner, appeals from a decision of the

United States District Court for the Eastern District of New York (John

Gleeson, Judge) denying its cross-claim against the appellee, a

stevedore, for indemnification of the costs that the appellant incurred

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in defending against the plaintiff long-shoreman’s suite for injuries he

received while loading the appellant’s vessel. -

Affirmed.

MICHAEL E. UNGER, of counsel, De Orchis, Walker

& Corsa, LLP (LeRoy S. Corsa, of counsel,

on the bnef), New York, N.Y., for Defendant

-Appellant Waterman Steamship Company.

MICHAEL N. COTIGNOLA, New York, N.Y., for

Defendant-Appellee Weeks Marine, Inc.

CALABRESI, Circuit Judge:

This case presents the issue of whether a shipowner who

successfully defends against a suit by an injured longshoreman may

recover its litigation costs from a stevedore' who caused the

longshoreman’s injuries and who is not the employer of the

longshoreman (hereinafter the “nonemploying stevedore”). The district

court held that an obligation to indemnify is not an implied term of the

contract between a shipowner and a stevedore. We agree, and affirm

the district court’s decision.

BACKGROUND

On February 24, 1994, plaintiff Damian Lubrano, who worked

as a Longshoreman for American Stevedoring, was loading a barge

owned by defendant-appellant Waterman Steamship Company

. A stevedore is a marine contractor who loads and

unloads ships in port.

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(“Waterman”). Waterman had rented a crane from defendant-appellee

Weeks Manine, Inc. (“Weeks”)-- the stevedore whose liability is at

issue in this case--for the the purpose of loading its barge. A piece of

ice fell from the Weeks crane and stuck Lubrano on the left wrist and

forearem.

The Longshore and Harbor Worker’s Compensation Act

(“LHWCA”), 33 U.S. C. §§ 901-950 (1994), prevented Lubrano from

recovering anything more than workers’ compensation benefits from

American Stevedoring. See id § 905(a). The LHWCA allows

recovery, however, against negligent shipowners and any other party

(except the employer responsible for a covered employee’s injury. See

id. $§ 905, 933. Accordingly, Lubrano brought suit against Waterman

and Weeks, alleging that their negligence had caused his injuries.

Waterman asserted a cross claim for indemnification.

At the conclusion of tnal, a jury found that Weeks, but not

Waterman, had negligently caused Lubrano’s injuries.” Waterman

sought to recover its litigation expenses from Weeks, and the district

court denied indemnification. See Lubrano v. Weeks Marine, Inc., No.

95-cv-3642, 1998 WL 765135 (E.D.N.Y. May 19, 1998):

DISCUSSION

Can a shipowner who successfully defends against a suit by an

injured longshoreman recover its litigation costs from a nonemploying

stevedore who caused the longshoreman’s injuries?’ On the basis of

Second Circuit precedents, the answer to this question is clearly “no.”

. Lubrano’s employer, American Stevedoring, also was

found negligent buy, as noted above was protected by the LHWCA from

liability and therefore had not been named as a defendant in the suit.

’ Congress has expressly precluded such recovery by a

shipowner against a stevedore who is the employer of the longshoreman

(hereinafter “the employing stevedore”). See 33 U.S.C. § 905(b) (1994).

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The path to this conclusion is tortuous, however, and merits

In 1946, the Supreme Court held that longshoremen who were

injured by a dangerous or defective condition aboard a vessel on which

they were working could recover from the vessel’s owner on the theory

that the owner had breached its implied warranty of the seaworthiness

of the ship. See Seas Shipping Co. v. Sieracki, 328 U.S. 85, 99-102

(1946). Later, the Court established an implied warranty of

workmanlike performance, which held that a stevedore who contracted

with a shipowner implicitly promised that it would perform its services

competently and safely. See Ryan Stevedoring Co. v. Pan-Atlantic S.S.

Corp., 350 U.S. 124, 130-31 (1956). At the same time, the Court read

the contract between the shipowner and the stevedore to give the

shipowner and implied night of indemnification against the stevedore

for damages sustained as a result of any breach of this warranty. See

id. at 130. To decide the case before us, we must consider the

continued viability of this so-called “Ryan indemnity” in light of our

precedents since Ryan.

In Fairmont Shipping Corp. v. Chevron International Oil Co.,

S11 F.2d 1252 (2d Cir. 1975), we stated that Ryan indemnity applied

only in cases in which a contractor rendered its services to a shipowner

in a way that exposed the shipowner to strict liability (for example,

under the doctrine of seaworthiness) and did not apply to situations

(like the one currently before us) in which the shipowner would be

liable, if at all, only in negligence. See id. at 1257-58 & n.8. But this

statement, although expressed unequivocally and after are fully

reasoned analysis, was made in dicta.* As such, even though the

. Specifically, we made the observation only by way of

distinguishing the contractor’s warranty of workmanlike performance,

which was iavolved in Fairmont Shipping, from a shipowner’s right of

indemnity against the contractor, which was not. See id. at 1259.

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language of Fairmont Shipping directly covers the case now before us,

Fairmont Shipping does not bind us.

Two years later, however, we ruled that a shipowner had no

night of indemnification against the owner of a fuel barge that allegedly

caused a fire while fueling the owmer’s vessel. See Navieros

Oceanikos, S.A. v. S.T. Mobil Trader, 554 F.2d 43, 44-47 (2d Cir.

1977). Citing Fairmont Shipping, we held that Ryan indemnity was

not available because the shipowner seeking indemnification had not

been exposed to liability without fault. See id. at 46-47. Navieros

Oceanikos thus made the dictum in Fairmont Shipping into the binding

precedent of this Circuit.

In the instant case, Lubrano sued Waterman only in

negligence.’ Accordingly, if the rule we stated in Fairmont Shipping

and Navieros Oceanikos applies to the facts before us, we are bound

to affirm the district court’s decision disallowing Waterman’s

indemnification claim. If, instead, Ryan indemnity still obtains, then

Waterman is entitled to recover its litigation costs from Weeks. This

is because in Massa v. CA. Venezuelan Navigacion, 332 F.2d 779 (2d

Cir. 1964), we held that Ryan indemnification applies to compensate

shipowners for the costs of successfully defending against suits

brought by longshoremen injured by a stevedore’s breach of its

contractual duties to the shipowner. See id. at 782.

Whether the Fairmont Shipping-Navieros Oceanikos rule

applies depends on whether Navieros Oceanikos can and should be

distinguished from the situation before us. The factual contexts of the

two cases do differ. Navieros Oceanikos involved a claim for property

' Congress abrogated the longshoreman’s nght to

recover from a shipowner for breach of the warranty of seaworthiness in

1972, thereby eliminating liability without fault from the shipowner-

longshoreman relationship. See 33 U.S.C. § 905(b) (1994); see also

Scindia Steam Navigation Co. v. De los Santos, 451 U.S. 156, 172

(1981) (reading § 905(b) to bar suits based on a shipowner’s vicarious

liability arising out of its non-delegable duty).

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damage by a shipowner against a bunkering contractor, and the instant

case involves personal injury. But nothing in our reasoning in

Fairmont Shipping or Navieros Oceanikos indicates that this

distinction mattered at all to the courts in these cases.* Nor do we see

a basis for making such a differentiation in deciding whether to imply

an indemnification agreement into a contract. We therefore affirm the

district court’s ruling that Weeks had no obligation to indemnify

Waterman.

The Fairmont Shipping-Navieros Oceanikos rule means that

Ryan indemnity is virtually dead, at least in this Circuit.’ How this

came to be, and in particular how it happened that a Supreme Court

doctrine that was neither abrogated nor expressly overruled came no

longer to apply, is a long and tortured tale. Nevertheless, we believe

that we owe it to the litigants to explain how this point was reached.

The answer, in short, is that by the time we decided Fairmont Shipping

and Navieros Oceanikos in the mid-1970s, the legal relationship

among longshoremen, shipowners, and stevedores had come to differ

fundamentally from what it had been when the Supreme Court

established and developed the concept of Ryan indemnity in the 1950s

“Indeed, that the Fairmont Shipping and Navieros Oceanikos

courts held bound to discuss Ryan-a personal injury case-even though

their cesses involved property damage suggests the absence of a relevant

distinction between the two contexts.

, Cf 1 Thomas J. Schoenbaum, Admiralty and

Maritime Law, § 5-8, at 194-99 (2d ed. 1994) (reviewing the relevant

case law and concluding that Ryan indemnity survives in cases involving

“privately employed longshoremen and harbor workers injured outside

the territorial coverage of the LHWCA” and, in some circuits, even m

cases involving personal injuries to seamen who are injured due to the

conduct of a stevedore or other contractor); cf also infra note 10 (noting

the unresolved issue of whether a non-shipowner may seek Ryan

indemnity from an employing stevedore).

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and 1960s. These changes in the legal relations made it unlikely that

the shipowner and stevedore would have intended a duty to indemnify.

Accordingly, such indemnity was no longer appropriately implied into

the shipowner-nonemploying stevedore contract. Cf Great Lakes

Transit Corp. v. Marceau, 154 F.2d 623, 628 (2d Cir. 1946) (L.Hand,

J., concurring) (noting that the task of courts in construing implied

terms of a contract is to determine what the parties would have intended

if they had explicitly considered the issue).

The LHWCA, like most other workers’ compensation systems

in the United States, has always immunized employers covered by the

Act from suit by their injured employees. In return for this protection,

the employers incurred an obligation to compensate their employees for

_ Occupational injuries according to a statutonly prescribed scheme. See

33 US.C. § 904 (a) (establishing the employer’s liability for

compensation); id. § 905(a) (immunizing employers against liability to

injured employees other than under the Statutory compensation

scheme); see generally Note, Exceptions to the Exclusive Remedy

Requirements of Workers’ Compensation Statutes, 96 Harv. L. Rev.

1641, 1643 (1983) (“These limited [statutory] benefits are the

exclusive remedy for injured workers against their employers.

Employer immunity from tort actions for work-related injuries has

frequently been deemed the quid pro quo that tum-of-the-century

employees granted in exchange for the Statutory guarantee of swift and

certain compensation.” (footnotes omitted )).

As onginally enacted, however, the LHWCA did not preclude

longshoremen from bringing a workplace injury suit against persons or

entities other than the longshoremen’s employers. Thus, in 1946, the

Supreme Court held that longshoremen could recover from a shipowner

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under the warranty of seaworthiness® if they were injured by a

dangerous or defective condition aboard the owner’s vessel. See

SeasShipping Co., 328 U.S. at 89-100. The Court also ruled more

generally that the LHWCA had not affected any of a longshoreman’s

common law rights against an owner of a vessel on which the

longshoreman was injured (unless the owner also happened to be his

employer). See id. at 101-02. In the wake of Seas Shipping Co.,

therefore, shipowners could be liable to injured longshoremen not only

for negligence but also strictly for any breaches of the implied warranty

of seaworthiness.

Although the LHWCA’s exclusive remedy rule protected

stevedores from liability (in excess of the statutory compensation) to

their injured employees, it offered no immunity to shipowners against

suits brought by the stevedore’s longshoremen. As a result, when an

employing stevedore caused a shipowner to breach its warranty of

seaworthiness--for example, by improperly stowing cargo--the

shipowner could be held wholly liable, even though without fault, while

the perhaps-negligent stevedore’s liability would seemingly be limited

to the statutory compensation.

Not surprisingly, such fault-free shipowners who found

themselves liable to injured longshoremen sought to recovery (through

indemnification or contribution) from the stevedores who had caused

the injuries. In 1952, however, the Supreme Court ruled that a

shipowner held liable to an injured longshoreman had no right of

contribution from the longshoreman’s employing stevedore. See_

Halcyon Lixes v. Haenn Ship Ceiling & Refitting Corp., 342 US. 282,

287 (1952). Having rejected a shipowner’s claim to a right of

. The warranty of seaworthiness originally applied to

seamen who worked directly for the shipowner. See The Osceola, 189

US. 158, 175 (1903). In Seas Shipping Co., the Supreme Court held

that the warranty did not arise solely out of the employment contract

between a seaman and shipowner, but rather extended to all persons

working on a shipowner’s vessel “with this consent or by his

arrangement.” 328 U.S. at 95.

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contribution against negligent stevedores, the Supreme Court, four

years later in Ryan, endorsed a nght of indemnification in a very

similar situation.

As noted above, Ryan read a warranty of workmanlike

performance into the shipowner-stevedore contract. It then implied a

nght of indemnification by the shipowner against the stevedore for

damages caused by the stevedore’s breach of warranty. See 350 U.S.

at 130-31. Because the warranty gave rise to liability in contract, the

Court reasoned that an indemnity action by a shipowner against a

stevedore was neither barred by the LHW CA, see id. at 128-32, nor by

Halcyon Lines’ prohibition against contnbution actions in tort.

In 1973, the Court resurrected contribution claims by

shipowners against nonemploying stevedores form their apparent death

in Halcyon Lines. In Cooper Stevedoring Co. v. Fritz Kopke, Inc., 417

U.S. 106 (1974), the Court allowed a shipowner sued by an injured

longshoreman to seek contribution form the nonemploying stevedore

whose negligence had caused the longshoreman’s injuries. In so

doing, the Court construed Halcyon Lines narrowly, noting that

“[d]espite the occasional breadth of its dictum,” Halcyon Lines’

prohibition against contribution claims should be confined to claims

against employing stevedores. Jd. at 111, 113. The concer that

animated Halcyon Lines, according to the Court, was the desire to

: The Court expressly declined “to determine whether

contribution in cases such as this should be based on an equal division of

damages or should be relatively apportioned in accordance with the

degree of fault of the parties.” Id. at 108 n.3; cf Doca v. Marina

Mercante Nicaraguense, SA., 634 F.2d 30, 33 (2d Cir. 1980) (affirming

the district court’s allocation of liability between a shipowner and

nonemploying stevedore based on the relative fault of the parties). The

Supreme Court similarly declined to say whether the 1972 amendments to

the LHWCA would have affected the outcome of the case if they had

applied. See Cooper Stevedoring, 417 U.S. at 107 n.1. The amendments

did not apply because the longshoreman filed his suit against the

employer before 1972. See id.

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=... Caillat dices

avoid creating a circuitous route to employer liability that would have

undermined “Congress’ determination that as between an employer and

its injured employee, the right to compensation under the Act should be

the employee’s exclusive remedy.” Jd. at 112-13. “[W]hatever weight

these factors were properly accorded in the factual circumstances

presented in Halcyon,” the Court continued, “they have no application

[in a case involving a claim against a nonemploying stevedore].” Jd. at

113.

Cooper Stevedoring 's view of Halcyon was consistent with

Congress’ 1972 amendments to the LHWCA. Those amendments--

which did not apply to Cooper Stevedoring--had expressly relieved

employing stevedores from the indirect liability for their employees’

injunes that Ryan indemnity had imposed. : They did not speak directly,

however, to Ryan indemnity as against nonemploying stevedores.

The amendments provided in relevant part:

In the event of injury to a person covered under this chapter

caused by the negligence of a vessel, then such person, or

anyone otherwise entitled to recover damages by reason

thereof, may bring an action against such vessel as a third

party in accordance with the provisions of section 933 of

this title, and the employer shall not be liable to the vessel

for such damages directly or indirectly and any agreements

or warranties to the contrary shall be void . . . The liability

of the vessel under this subsection shall not be based upon

the warranty of seaworthiness or a breach thereof at the time

the injury occurred. The remedy provided in this subsection

shall be exclusive of all other remedies against the vessel

except remedies available under this chapter.

33 U.S.C. § 905(b)

The language of § 905(b) refers only to the “vessel” and the

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“employer.” Cf Francis J. Gorman, Jndemnity and Contribution

Under Maritime Law, 55 Tul L. Rev. 1165, 1187-88 (1981) (“[Section

905(b)] applies, however, only to covered employees and, therefore

does not grant an immunity from indemnity or contribution to anyone

other than those specified in the amendment. . . .Moreover, other than

section 905(b), there is no statutory restraint on indemnity or

contribution claims in maritime law.”). And the Supreme Court has

described the amendments in relatively narrow terms:

The intent and effect of this amendment were to overrule

this Court’s decisions in Seas Shipping Co. v. Sieracki,

328 U.S. 85 (1946), and Ryan Stevedoring Co. v. Pan-

Atlantic S.S. Corp., 350 U.S. 124 (1956), insofar as they

made an employer circuitously liable for injuries to its

employee, by allowing the employee to maintain an action

for unseaworthiness against the vessel and allowing the

vessel to maintain an action for indemnity against the

employer.

Cooper Stevedoring, 417 U.S. at 113 n.6. Accordingly, it would be

incorrect to say that the 1972 amendments to the LHWCA directly

abrogated Ryan indemnity against nonemploying stevedores.'°

' Courts are in conflict as to whether Ryan indemnity by

a non-shipowner against an employing stevedore survived the 1972

amendments. Courts that have denied indemnity in such situations have

cited § 905(b)’s intent to immunize employing stevedores from third-

party litigation. See, e.g., Oman v. JohnsManville Corp., 482 F. Supp.

1060, 1072 (E.D. Va. 1980); Spadola v. Viking Yacht Co., 441 F. Supp.

798, 8302-03 (S.D.N.Y. 1977). Courts that have upheld indemnity have

looked to the intent of the parties, as evidenced by their particular

contractual arrangement. See, e.g., Olsen v. Shell Oil Co., 595 F.2d

1099, 1104 (Sth Cir., 1979). When we were confronted with this issue,

we noted that “[g]iven the clear statutory language and the absence of

legislative history at variance with it, we would hesitate to hold that §

905(b) by its own forces cuts off the availability of Ryan indemnity to a

non-vessel in all cases where the concurring negligence of a stevedoring

A20

But this did not mean that the amendments had no bearing on

the question of whether Ryan indemnity survived the 1972 changes.

The amendments affected the interrelationship among longshoremen,

shipowners, and stevedores in another fundamental way: they expressly

discarded the warranty of seaworthiness as a basis for holding

shipowners liable to longshoremen. And, although the legislative

history of the amendments makes clear that Congress considered its

addition of § 905(b) to eliminate Ryan indemnification only against a

covered employer, that same history also expresses a more general

belief that, by eliminating strict liab:lity under the seaworthiness

doctrine, the amendments removed the need for Ryan indemnification

altogether.'' Cf Smith & Kelly Co. v. S/S Concordia TADJ, 718 F.2d

company has caused injuries to the latter’s employees.” Zapico v.

Bucyrus-Erie Co., 579 F.2d 714, 721-22 (2d Cir. 1978). We resolved

the case without deciding the issue, however, because we found that, in

the particular case, no Ryan-like intent to indemnify could be implied

between the paties. Sze id. at 722.

sa The House Committee report said this about the

relevant portions of the amendments:

The Committee also believes that the doctrine of the

Ryan case, which permits the vessel to recover damages for

which it is liable to an injured worker where it can show that

the stevedore breaches an express or implied warranty of

workmanlike performance [,] is no longer appropriate if the

vessel’s liability is no longer to be absolute, as it essentially

is under the seaworthiness doctrine. Since the vessel’s liability

is to be based on its own negeligence, and the vessel will no

longer be liable under the seaworthiness doctrine for injuries

which are really the fault of the stevedore, there is no longer any

necessity for permitting the vessel to recover the damages for

which it is liable to the injured worker from the stevedore or

other employer of the worker.

Furthermore, unless such hold-harmless, indemnity or

contribution agreements are prohibited as a matter of public

policy, vessels by their superio economic strength could

circumvent and nullify the provision of Section 5 of the Act by

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1022, 1027 n.4 (11th Cir. 1983) (“[W]e view the 1972 Amendments

as casting doubt on the continued vitality of the Ryan indemnity

principle.”).

It is not surprising, therefore, that our own cases, after 1972,

deemed the existence of strict liability essential to Ryan indemnity.

See, e.g., Fairmont Shipping, 511 F.2d at 1257-58 (stating in dicta that

Ryan indemnity is available only if a contractor exposes the shipowner

to strict liability); Navieros Oceanikos, 554 F.2d 46 (relying on the

Fairmont Shipping dictum). Indeed, even before the 1972

amendments, we had posited the central role of strict liability to such

indemnity. See Schwartz v. Compagnie General Transatlantique, 405

F.2d 270, 276 (2d Cir. 1968) (“[A]ny equitable considerations

underlying the decision of courts to require indemnity by applying the

implied warranty of workmanlike service are ultimately derived from a

shipowner’s liabilitics under the seaworthiness guarantee . . . .”);

DeGioia v. United States Lines Co., 304 F.2d 421, 425 (2d Cir. 1962)

(“The primary source of the shipowner’s right to indemnity, as a

practical matter, is his nondelegable duty to provide a seaworthy ship.

: 2

The problem with reading Ryan indemnity as contingent upon

the shipowner being subject to strict liability, however, is that such a

view does not entirely comport either with the Supreme Court’s

rationale for creating Ryan indemnity or with later Supreme Court cases

requiring indemnification from a covered employer for

employee injuries.

Accordingly, the bill expressly prohibits such recovery,

whether based on an implied or express warranty. It is the

Committee's intention to prohibit such recovery under any

theory including, without limitation, theories based on contract

or tort.

H.R. Rep. No. 92-1441 (1972), reprinted in 1972 U.S.C.C.A.N. 4698,

4704.

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that developed the Ryan doctrine, albeit before the 1972 amendments.

On their face, Ryan and its early progeny do not reflect the premised

essential link between the shipowner’s warranty of seaworthiness to the

longshoreman and its right of indemnification against the stevedore.

In fact, Ryan itself did not necessarily involve strict liability.

Although Ryan is widely described as involving a shipowner’s liability

for breach of its warranty of scaworthiness the injured longshoreman’s

suit against the shipowner had claimed liability based on both

negligence and unseaworthiness, and the outcome of the trail did not

reveal whether liability was founded on one or the other, or both. See

Ryan, 350 U.S. at 127; see also Palazzolo v. Pan Atlantic S.S. Corp.,

111 F. Supp. 505, 506 (E.D.N.Y. 1953) (noting that the jury had been

| charged on both theories and returned a general verdict) aff'd in part

and rev'd in part, 211 F.2d 277 (2d Cir. 1954), aff'd sub nom Ryan,

350 US. 124.

And Weyerhaeuser S.S. Co. v. Nacirema Operation Co., 355

U.S. 563 (1958), decided two years after Ryan, made even more clear

that at that time the Court did not consider the right to Ryan indemnity

to depend on the basis of the shipowner’s liability to the longshoreman.

In Weyerhauser, as in Ryan, the longshoreman initially claimed both

negligence and breach of warranty of seaworthiness. See id. at 564.

Unlike Ryan, however, the jury in Weyerhaeuser specifically found that

| the shipowner, though negligent, had not breached its warranty of

| seaworthiness. See id. at 564. Yet the Court saw no problem with

applying Ryan indemnity, and it never mentioned the possibility that

the fact that the shipowner’s liability was based on fault rather than

strict liability might affect its nght to indemnification.

It is not easy, therefore, to reconcile our statements declaring

an absolute link between Ryan indemnity and strict liability with the

language of Ryan and its immediate progeny. And some of our own

cases, applying pre- 1972 law, took the position that, under the Ryan

doctrine, the theory underlying the longshoreman’s claim against the

shipowner did not by itself determine whether or not Ryan indemnity

was available.

A23

For example, in Henry v. A/S Ocean, 512 F.2d 401 (2d Cir.

1975), we affirmed the district court’s grant of indemnification by the

shipowner against the employing stevedore in a situation in which (1)

the shipowner acted negligently; (2) the shipowner did not breach its

duty of seaworthiness; and (3) the stevedore had breached its duty of

workmanlike performance to the shipowner,'* See id. At 403, 406-07.

3 Although Henry was decided in 1975, the 1972

amendments did not apply--the longshoreman’s injury occurred in 1966--

and the shipowner’s indemnification claim against the employing

stevedore therefore was not precluded. See 512 F.2d at 404.

In rejecting the stevedore’s argument that indemnification

should not be allowed because the shipowner had been negligent, we

stated:

Where the shipowner’s liability for violation of his non-

delegable duties, whether cognizable under a theory of

unseaworthiness or of negligence, is attributable to the

stevedore’s action or inaction in breach of his contractual

obligation, the recovery of indemnity should not turn on the

particular theory selected by the plaintiff as the basis of his suit

against the shipowner.

Id. At 406.

Waterman relies heavily on this language to support its

contention that the 1972 amendments’ abrogation of the longshoreman’s

right to recover under the doctrine of seaworthiness did not terminate

Ryan indemnity against nonempolying stevedores. But Henry's

apparently broad statement is actually narrower that it appears. The

statement focuses on the shipowner’s non-delegable duty liability. Such

vicarious liability makes shipowners pay, whether or not they are at fault.

Cf Wilson v. City of New York, 89 F.3d 32, 36 (2d Cir. 1996); Wanswer

v. Long Island R.R. Co., 238 F.2d 467, 470 (2d Cir., 1956). And it does

so regardless of whether the independent contractor to whom the

shipowner is not permitted to delegate its responsibility acted negligently

or acted non-negligently but in a way that triggered that shipowner’s strict

liability. For this reason, the 1972 amendments, which had explicitly

eliminated only the shipowner’s non-fault liability for seaworthiness,

A24

i es rere nen rr ra

Henry founded Ryan indemnity on the fact that the stevedore’s conduct

had violated its warranty of workmanlike performance to the shipowner

and in doing so had caused the shipowner to violate its duty to the

longshoreman, thereby becoming liable to the longshoreman for his

injunes. According to this contractually based view, whether the duty

that the shipowner violated was the duty to provide a seaworthy ship

or its nondelegable general duty of care to those working on its vessel

was not important. In either case it was the stevedore’s breach of its

contract with the shipowner that gave rise to the liability.

But the legal context of the relationship between the shipowner

and the nonemploying stevedore has changed dramatically since Ryan,

Weyerhauser, and Henry were decided. And these changes seemingly

have led courts to read shipowner-nonemploying stevedore contracts

differently-- particularly with respect to the implied terms of such

contracts. As Congress noted in the legislative history to the 1972

LHWCA amendmeits, abrogating the nght of the longshoreman to suc

the shipowner under the seaworthiness doctrine removed much of the

impetus for Ryan indemnity. More of the rationale of Ryan was

undercut when the Supreme Court held that the 1972 amendments also

eliminated a shipowner’s vicarious liability for a stevedore’s negligence

that violated a previously nondelegable duty. “[T}he shipowner,” the

Court held, “has no general duty by way of supervision or inspection

to exercise reasonable care to discover dangerous conditions that

develop within the confines of the cargo operations that are assigned to

the stevedore.”” Scindia Steam Navigation, 415 U.S. at 172. Finally,

since 1974, when shipowners are sued in negligence and held liable,

they have been able to seek contribution against nonemploying

were in time read also to bar shipowner liability based on a non-delegable

duty. See Scindia Steam Navigation, 451 U.S. ast 172, Napoli v.

Transpacific Carriers Corp., 536 F.2d 505, 507 (2d Cir. 1976).

A25

contractors. See Cooper Stevedoring, 417 U.S. at 113."

Each of these developments in the law made it less likely that

shipowners and nonemploying stevedores would have chosen--had they

considered the matter--to contract for indemnification. Accordingly,

these changes made it less appropriate for courts to imply terms of

indemnification. Cf Great Lakes Transit Corp., 154 F.2d at 628

(L.Hand, /., concurring) (“As has been so often said in like situations,

the partics had no actual intent whatever; and what we do when we

impute to them an implied intent, is to determine, as well as we can,

how they would have provided for the occassion which as arisen, if it

had been presented to them.”).'*

os Both Fairmont Shipping and Navieros Oceanikos

reflect the link between the availability of contribution and the implication

of a duty to indemnify.

Thus, in Fairmont Shipping, we stated, “Ryan was the

culmination of a series of cases involving the interlocking relationships

among shipowners, stevedoring companies and longshoreman, and must

be read with that backdrop in mind.” 511 F.2d at 1255. One of the key

elements of this backdrop, we noted, was Halcyon Lines’, holding that

shipowners could not pursue contribution against stevedores. See id.

And in Navieros Oceanikos, the district court had allocated

liability for the damage to the vessel between the shipowner and

contractor in proportion to their relative fault--an outcome analogous to

contribution under a comparative negligence paradigm. See 554 F. 2d at

44. We refused to imply a contractual term of indemnification that would

have superseded this loss allocation. See id. at 46. It is reasonable to

infer from our decision that our unwillingness to imply a duty to

indemnify stemmed at least in part from the availability of an alternative

(and, in many ways, more sophisticated) loss allocation mechanism.

= The fact that Judge Mansfield, the author of Henry,

also sat on the panels that decided Fairmont Shipping and Navieors

Oceanikos, and concurred in the relevant portions of those opinions,

corroborates the conclusion that Henry, Fairmont Shipping, and

Naviaeros Oceanikos are fully compatible. See Fairmont Shipping, 511

F.2d at 1261 (Mansfield, /., dissenting on other grounds) (“[The

majority's] thorough and scholarly analysis of the historical developments

A26

CONCLUSION

Our review reveals two diffrent explanations of Ryan

indemnity: one based on equitable considerations and one based on

contract priniciples. The theory of Ryan indemnity that looked to

equitable concerns, as expressed in Fairmont Shipping and Navieros

Oceanikos, posited that shipowners exposed to strict liability--or to

vicarious liability under a nondelegable duty theory--for damages

cuased by contractors should be able to get reimbursement from the

contractors. This made particular sense at the time Ryan was decided,

because shipowners who were strictly liable for unsafe conditions on

their ships had no right of contribution against contractors that caused

unsafe conditions. According to this view, Ryan indemnity was needed

to remedy the unfairness of this situation. The theory of Ryan

indemnity that relied on contract principles, as set forth in Henry,

asserted that courts should read loos-allocation provisions--specifically,

indemnification--into contracts between shipowners and stevedores.

But our review also suggests that while these tw explanations

of Ryan indemnity relied on different grounds, they did not really

conflict. In fact, the equity-based view and the contract-based view are

best read in tandem. The key to reconciling the two perspectives is

recognizing that Ryan indemnification was a judicially created doctrine.

Courts implied a term of indemnification into the shipowner-stevedore

contracts as a reasonable approximation of the parties’ irtent within a

particular context--a context (1) in which a contactor’s defective

performance could expose the shipowner to liability for injurics caused

by that defective performance regardless of whether the shipowner was

at fault for the injury, and (2) in which noncontractual loss allocation

mechanisms--like contribution--were unavailable. 7

The end of shipowner strict liability and the availability of

of the Ryan-type warranty demonstrates that we are not here confronted

witch such an indemnity . . . .”); Navieros Oceanikos, 554 F.2d at 48

(Mansfield, /., concurring in part and dissenting in part).

A27

contribution as an alternative to indemnification made reading a

covenant to indemnify into the shipowner-stevedore contract no longer

seem approproate, either to the House Committee that proposed the

1972 amendments to the LHWCA, or to this court in Fairmont

Shipping and Navieros Oceanikos. Acoodingly, in the absence of an

express indemnification clause to the contrary, the contract between a

shipowner and a nonemploying stevedore does not obligate the

stevedore to indemnify the shipowner for the shipowner’s liability to an

injured longshoreman. It follows that Weeks does not have to

indemnify Waterman for its litigation costs expended in successfully

defending against Lubrano’s suit. The decision of the district court is

therefore AFFIRMED.

A28

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.