Italia Societa per Azioni di Navigazione v. Oregon Stevedoring Company, Inc.

PETITIONER:Italia Societa per Azioni di Navigazione
RESPONDENT:Oregon Stevedoring Company, Inc.
LOCATION:Cumberland Hospital

DOCKET NO.: 82
DECIDED BY: Warren Court (1962-1965)
LOWER COURT: United States Court of Appeals for the Ninth Circuit

CITATION: 376 US 315 (1964)
ARGUED: Jan 08, 1964
DECIDED: Mar 09, 1964

Facts of the case

Question

  • Oral Argument – January 08, 1964 (Part 2)
  • Audio Transcription for Oral Argument – January 08, 1964 (Part 2) in Italia Societa per Azioni di Navigazione v. Oregon Stevedoring Company, Inc.

    Audio Transcription for Oral Argument – January 08, 1964 (Part 1) in Italia Societa per Azioni di Navigazione v. Oregon Stevedoring Company, Inc.

    Earl Warren:

    Number 82, Italia Societa per Azioni di Navigazione.

    Mr. Wood.

    Erskine B. Wood:

    Mr. Chief Justice, if the Court please.

    My name is Erskine B. Wood, from Portland, Oregon.

    I represent the petitioner in this case.

    I have as much — I have a great deal of difficulty pronouncing its name.

    I usually called it the Italian Line for short.

    This is a case in the maritime field involving the question of rights of indemnity.

    These are the ship operators and their contracting stevedores.

    The — specifically, it involves those rights with respect to defective equipment brought aboard a vessel by the contracting stevedore.

    Now, Your Honors recall that this matter of the shipowners or operators recovering indemnity over against their contracting stevedores has been the subject of quite a line of decisions in this case — in this Court starting with the case of Ryan Stevedore Company against Pan-Atlantic.

    And that was followed by Weyerhaeuser versus Nacirema and Crumady against the S.S. Joachim Fisser and Waterman against Dugan & McNamara.

    All of those are decisions by this Court within the last few years dealing with this general topic of indemnity.

    And in those cases, the Court has spelled out the doctrine of indemnification as being one that is based on contract, based on the theory that the contracting stevedore, when it undertakes by contract to do the stevedoring work onboard, the vessel, impliedly warrants that it will do the work in a workmanlike manner and will not render a substandard service.

    And the Court has said that that is an implied — a warranty implied in fact and it is comparable to a manufacturer’s warranty of the soundness of its product and that competency in safety of stowage are at the very essence of the service undertaken.

    Now, that’s the — just the general background of the field that we are in.

    Now, the cases that have been expressly decided by this Court on indemnity, have involved acts of negligence on the part of the stevedore, that is human error committed by the stevedore’s employees rather than the furnishing of defective equipment.

    The case at bar, however, involves a case where the stevedore company in pursuance of its stevedoring work on the ship, brought aboard and used in connection with its work a — a piece of rope that was unfit and defective.

    Now, the facts — the specific facts of this particular case are very simple.

    The stevedore company was doing work on the petitioner’s vessel on Portland, Oregon and it was doing this work under a contract which provided that the stevedore would furnish all ordinary gear required in the work and all labors and supervision and so forth.

    And as a part of the work and as a part of that contract, they furnished an ordinary canvass rain tent, that is simply a tent to protect the cargo from getting wet from rain.

    Now, attached to this tent are what they call tie-down ropes.

    They’re simply a — a short length of rope, that is big around as a person’s thumb to tie the end of the tent down, keep it from ripping around.

    And one of these ropes was defective and as a result, one of the longshoremen, who is the employee of the stevedore contractor in pulling on this rope, it broke and he fell to the deck and sustained injury.

    The longshoreman sued the shipowner, the petitioner here, in the state court and recovered a verdict.

    The shipowner then sued originally in admiralty in the District Court to recover indemnification over and against the stevedore who had brought the tent aboard and furnished the (Inaudible) did not specify.

    However, there was no evidence in any way to connect and to charge any negligence on the part of the shipowner because they had no control over this rope.

    The rope was supplied by the stevedore contractor, brought aboard and it remains continually in the stevedore’s (Inaudible) presented but it was a general verdict and in the complaint — and I think — I think Your Honor it’s actually submitted on a basis to the jury, in that case, on the basis of both unseaworthiness and negligence.

    So you can’t tell —

    Potter Stewart:

    What you say is a matter of a —

    Erskine B. Wood:

    Well, —

    Potter Stewart:

    — is it your position on (Voice Overlap)

    Erskine B. Wood:

    I’m — I’m jumping — I’m jumping a little bit to the findings of the District Court in this particular case which would dispel any possibility of negligence on the part of the steamship company because the Court in this case has found that the sole cause of the accident was a latent defect and that this had been furnished by the stevedore and was exclusively in their control, and so those are the facts in the record before us and I think those facts, the findings of the trial judge dispel any possibility of negligence on the part of the shipowner.

    Earl Warren:

    Was this a new or an old rope Mr. — is there any (Inaudible)

    Erskine B. Wood:

    The rope itself was an evidence in the Court.

    It was not a new rope.

    It was a — a rope which had been in used for some time but there was testimony on the part of the stevedore that they had inspected it before it was brought aboard and that it appeared to be alright.

    And based on the evidence in the case, the District Judge found that they had overcome inferences and negligence, and he found specifically that the stevedore contractor had not been negligent that this was a — a latent defective — latently defective rope that they had furnished.

    Now, —

    Arthur J. Goldberg:

    (Inaudible) assumed that the shipowner was not (Inaudible) and assume the stevedore is not (Inaudible)

    Erskine B. Wood:

    Yes, Mr. Justice Goldberg.

    Neither party was negligence.

    Arthur J. Goldberg:

    (Inaudible)

    Erskine B. Wood:

    That’s exactly and precisely the question, that’s precisely the question on the case.

    Arthur J. Goldberg:

    (Inaudible)

    Erskine B. Wood:

    If that would be irrelevant in this case —

    Arthur J. Goldberg:

    (Inaudible)

    Erskine B. Wood:

    Yes, we are concerned here precisely with the narrow question of whether the contracting stevedore owes an absolute warranty regardless of negligence that when it brings equipment aboard a vessel for use in its own operations, that it warrants the reasonable fitness of that equipment.

    Now, the — we contend of course that such a warranty exist in flowing from it, a right of indemnification exists.

    It’s first important —

    Arthur J. Goldberg:

    (Inaudible)

    Erskine B. Wood:

    Well of course it’s — it’s not in the record but as everybody knows, both parties are insured.Stevedores insure their liability and vessels insure their liability.

    There’s no —

    Arthur J. Goldberg:

    (Inaudible)

    Erskine B. Wood:

    So —

    Arthur J. Goldberg:

    (Inaudible)

    Erskine B. Wood:

    That is right.

    Arthur J. Goldberg:

    (Inaudible)

    Erskine B. Wood:

    That is — that is behind — I — I will say this though that the — the United States Government has filed a brief amicus in this case and because they are among the largest shipowners in the world and their brief supports our position and so far as I’m aware, the Government is not insured.

    Arthur J. Goldberg:

    It’s not insured.

    Erskine B. Wood:

    And this of course is a broad question affecting all stevedores and all shipowners and operators.

    So insofar as the Government’s interest are concerned, they’re self-insured or — now, —

    Earl Warren:

    But the Government is here just as another shipowner?

    Erskine B. Wood:

    The Government is here as another shipowner and they have stated their position in their brief amicus.

    There’s also a brief amicus on file in this case by associations of private ship operators.

    Now, in approaching this question, I want to first call attention to the legal background because when we consider questions whether an implied warranty exists, we have to view that in relation to all the facts, the circumstances and the — the background of the law, the general background of the law.

    (Inaudible) brought aboard the ships by the stevedore contractor.

    In other words, even as to equipment which — over which the shipowner has no control and which it’s brought aboard by the stevedore contractor, yet for humanitarian reasons, the shipowner is held to the absolute warranty to the injured workman of the fitness of that equipment.

    Now — so therefore, you can see that what occurs in this case is that when the stevedore contractor brings equipment aboard in the course of its work which is defective and unfit for the purpose for which it’s to be used and that breaks and causes injury to one of the stevedore’s own employees.

    The stevedore in effect is visited or imposed the liability on the ship.

    It sort of a vicarious liability.

    The ship is held liable for this equipment that the stevedore has been brought — has brought aboard.

    Now, their — this precise question has not been decided but of course by this Court, although as I will say in a few moments, I think there’re very strong indications from a number of recent decisions as to what — that the result would be in accordance to what we urge.

    In these Circuits, there are only two cases.

    The — the Second Circuit in the case of Booth against Meier & Oelhaf decided this precise issue in accordance with what we urge.

    I don’t need to go into the facts of the case other than to say that a contractor brought aboard a ship, a wire strap.

    But — there was no negligence on the part of the contractor but it was lately defective.

    It broke, one of the contractor’s workman was injured, recovered against the vessel owner upon the — its absolute warranty of fitness of the gear and the Court of Appeals held that the shipowner was entitled to full indemnity against the stevedore contractor based upon the theory of an implied warranty of the fitness of the equipment.

    And actually the Court of Appeals, I think wrote a very strong and well recent opinion which I can almost submit in — in lieu of my whole argument here because the — the issues are squarely raised in that opinion, that’s a very well recent opinion in our judgment.

    Now, the — in the present case, the Ninth Circuit decided the case against the implied warranty by two-to-one.

    The majority Justices Barnes and Hamlin felt that they did not want to extend the stevedore contractor’s liability beyond ordinary negligence.

    They reached that result, we think or a rather strained and narrow construction of this Court’s opinion in Ryan in the other cases.

    They mentioned that this Court has frequently referred to the warranty of workmanlike service as being the warranty owed by the contracting stevedore.

    And they said from that that they looked up dictionary definitions of the word “workmanlike” and they went into a question of semantics and the acquainted workmanlike with skillful adopt and things of that nature and therefore, they seem to think that the only warranty was one against negligence.

    Justice Jertberg dissented, he would follow the Booth case in the Second Circuit saying that — it — it was only fair as between these two parties that since that it was the stevedore that brought the equipment aboard and subjected the vessel owner to liability that the stevedore should bear the ultimate loss.

    He also comments on the placing the risk, ultimate risk on the party best able to avoid it.

    Now, in my argument, I wish to make essentially three points.

    The first point really is that, although this Court has not exactly decided this precise question, the — the result for which — which we urge has been foreshadowed by numerous statements in the opinions of the Court.

    Secondly, that just as a simple matter of fairness, the stevedore should owe this warranty.

    And thirdly, as a matter of policy to prevent injuries or minimize injuries, the ultimate risk ought to be placed on the stevedore contractor.

    If you — if you prevail in this case, if there are another question that’s (Inaudible) should be decided —

    Erskine B. Wood:

    Yes.

    — and whether —

    Erskine B. Wood:

    That is what I answered to Mr. Justice Goldberg.

    There is a case of contract — a question — excuse me —

    A contract interpretation.

    Erskine B. Wood:

    A contract interpretation under the specific contract.

    However, that isn’t reached in this case, in the case at bar because the Court of Appeals for Ninth Circuit, the majority opinion did not pass on that but simply said broadly that regardless of contract or in any event, there is no implied warranty.

    Would that mean that if the case should go back to the Court of Appeals for that (Voice Overlap) —

    Erskine B. Wood:

    I think — I think so and I want to confess that I think I asked for a little too much relief when I urged that it should simply be reversed with relief given to us, I think that the — they would have to go back to the Court of Appeals to pass on that contract interpretation point.

    Interpretation of question as whether the provision as to negligence, the stevedore being libeled for its own, that has excluded the entire warranty, is that it?

    Erskine B. Wood:

    Yes, that — that’s it.

    In other words, if we assume there is an implied warranty which we urged and which has been held by the Second Circuit then it would have to be decided whether any expressed clauses in their contract excluded such an implied warranty.

    Earl Warren:

    (Inaudible) the parties as the question of contract interpretation is not here?

    Erskine B. Wood:

    Yes, that — that’s been agreed in the brief on both sides so that question is not before this Court.

    Now, first of all, I want to discuss briefly the — my point that the decisions of this Court have indicated or foreshadowed the result from which we — which we urged.

    In Ryan and all of the cases subsequent to that, it has been repeatedly stated that the stevedore’s warranty is based in contract and it’s not in any way based on the tort and that theories of active and passive negligence and things of that sort have no application in this field of warranty.

    Secondly, this Court has said that the warranty owed by the stevedore is — and I quote “comparable.”

    I — I may not exactly quote, but it’s comparable to the warranty owed by a manufacturer of products as to the soundness of its products.

    And the Court — the Court’s noticed it and — and as it intended to say that warranty of a manufacturer as to the soundness of its product is an absolutely warranty.

    It is no defense to the manufacturer to say that it was not negligent.

    The warrant is absolute.

    In fact, even under the — not only manufacturers but sellers under the Uniform Sales Act where they sell an article to a buyer and the buyer is relying upon the judgment and experience of the seller, they sell him a proper article, and the seller knows the purpose for which the article is going to be used by the seller, owes an absolute warranty of — that is reasonably fit, reasonably suitable for the purpose intended.

    Now — and it’s a — it’s kind of a funny thing.

    I think to some extent, this Court adopted the rule in Ryan perhaps by assuming the very proposition that we urge here.

    The Government’s brief — amicus brief in Ryan referred to this various cases of warranties by the manufacturer, warranties by sellers and the warranty by a supplier.

    And I think from — from that warranty which was pretty well accepted, was urging this Court to adopt the principle that the stevedore also owed a warranty as to its services and there’s a passage in the opinion of this Court in the Ryan case which says — says this, “A light result occurs where a shipowner sues for breach of warranty a supplier of defective ship’s gear that has caused injury or death to a longshoreman using it in the course of his employment on shipboard.”

    Now, that of course is exactly the present case where we had — we have now a shipowner suing the contracting stevedore who supplied defective gear.

    So perhaps in Ryan, the Court was relying upon — generally assuming the result for which we urge and then expanding that into the — the service warranty.

    Now, more important though than these indications because I realized that it’s hard to take single sentences and quotations out of context, that is the case of Reed against Yaka.

    Erskine B. Wood:

    Now, Reed against Yaka was decided by this Court only last term.

    The decision was in May.

    And you recall that — that case didn’t involve the precise issue here but the reasoning by which the majority of the Court reached its result, assumed the correctness of the proposition which we are now urging.

    Now, I’ll explain that.

    In Reed against Yaka, the longshoreman had been injured by his foot going through a wooden pallet board that was defective.

    That had been furnished and brought aboard as in the present case by the stevedore company who is the employer of Reed.

    Now, the — the unusual thing and — and the thing that presented the problem to this Court in Reed against Yaka was that the stevedore employer of the man and the ship operator where one and the same.

    The Pan-Atlantic Steamship Company had chartered this ship, was operating it as a bareboat charter in this — in the position of an owner.

    But they also had a stevedoring department and so this man was their own employee and the question was really — was a procedural one.

    The question is whether the injured longshoreman could maintain a libel in rem against the vessel without a corresponding or supporting in personam liability.

    And so the Court examined the question whether there would be a separate in personam liability on the part of this company that in effect was wearing two hats.

    It was operating the ship but also had a stevedoring department and employed the man.

    And of course the big question was whether in that situation, the injured man could sue a party who albeit, it was operating the ship was at the same time a stevedored company and his employer.

    And we have the Longshoreman and Harbored Workers’ Compensation Act that said that that liability under the Act for compensation was exclusive and it was on that ground that Mr. Justice Harlan and Mr. Justice Stewart dissented because of the provisions for Longshoreman and Harbored Act.

    But now, in reaching the result in Reed against Yaka, the majority said — they — they assumed that the correctness of the proposition that we are now urging.

    In Reed against Yaka, it was a latent defect and the findings of the District Court specifically and expressly said that the sole cause of injury was latent defect.

    There was no negligence on anybody’s part.

    That’s in the District Court’s findings and it’s repeated in this Court’s finding.

    Then this Court said, well, if the — there had been a — a separate shipowner and an independent contractor stevedore, why there is no doubt at all that the man could have recovered against the shipowner for the defective equipment onboard the vessel and the ship operator in turn under Ryan, could then have placed the ultimate loss upon the stevedore contractor.

    The — the Court’s precise words on that are as follow, “Thus, there can be no doubt that if the petitioner here had been employed to do this particular work by an independent stevedoring company rather than directly by the owner, he could have recovered damages for his injury from the owner who could have then under Ryan shift to the burden of recovery to petitioner’s stevedoring employer.”

    And a little bit later, the Court said, “In either case under Ryan, the burden ultimately falls on the company who’s the fault cause the injury.

    So there — really, I think the Court assumed the correctness of the proposition we urged and —

    Byron R. White:

    (Inaudible)

    Erskine B. Wood:

    There was a — this is mentioned by — in my opponent’s brief and I’m glad Your Honor asked this question.

    The — it was a latent defect just as we have here and I think the Court, when it states that the ship operator if it had been held liable, could then under Ryan, have recovered indemnity over against the stevedore contractor if he had been an independent contractor, was stating the broad rule of recovery under implied work.

    Byron R. White:

    Would that regard for it in the (Inaudible) one?

    Erskine B. Wood:

    Yes, because it says under Ryan.

    Now, there was — actually in that case, there was an indemnity agreement, a contractual indemnity agreement and that’s pointed out in my opponent’s brief.

    But —

    (Inaudible)

    Erskine B. Wood:

    — an expressed indemnity agreement —

    (Inaudible)

    Erskine B. Wood:

    No, an expressed contractual in — in Reed against Yaka, but it had no significance to this problem that the Court mentioned because of this.

    Byron R. White:

    (Inaudible) pertinent to the soundness of the statement that —

    Erskine B. Wood:

    Well —

    Byron R. White:

    — questionably, there’d liability over it.

    Erskine B. Wood:

    Well, that — that — that’s the thing I want to explain.

    In Reed against Yaka, the owner of the ship was the Waterman Steamship Company.

    They had — they’re both chartered to Pan-Atlantic as a ship operator.

    Pan-Atlantic had a stevedore department and employed the injured man.

    Now, this indemnity clause was in the contract in the charter party, it wasn’t in the stevedoring contract.

    It was in a charter party between a shipowner chartering his ship out to Pan-Atlantic.

    In other words, it was a clause that regardless of where their ship might go or regardless whether independent contractors or others were doing it, the — the owner was going to be reimbursed by the bareboat charter refer and protected against anything.

    But that is — that’s in a charter party, a lease of the vessel if it wasn’t any indemnity agreement in a stevedore contract.

    And the Court here was — I’m sure was not deciding Reed against Yaka on the very narrow principle that there was an indemnity agreement.

    Now, the Supreme Court, this Court said in Reed against Yaka that the economic effect was really the same when you threw the ultimate loss here on the party who is the man’s employer because that was no different than the situation where an independent contracting stevedore would be the employer, would suffer the ultimate loss.

    And the Court uses the words “Who could then, under Ryan, have recovered.”

    Now, under Ryan, the Court didn’t — did not say under the indemnity clause and the charter party, it said under Ryan which I take it means, under the principles of implied warranty laid down in Ryan.

    And I’m sure that Reed against Yaka, if the case came up again, even with no expressed indemnity in the charter party, the Court would be reaching the same result as it did in Reed against Yaka.

    I think the Court was laying down a broad principle there, at least I so — I so read it.

    And on this particular point, I — I don’t think that the — Mr. Justice Harlan and Mr. Justice Stewart disagree.

    Their dissent was on the expressed language of the Longshoreman’s Act, I don’t think they disagreed or they didn’t express any disagreement with this particular passage which we think really declared the result here.

    Now, of course this decision came out after our Ninth Circuit decision in the instant case.

    The Ninth Circuit decided this case last winter and Reed against Yaka was decided in May.

    Now that brings me now to the second point which is really just appointed fairness as between the parties and I’ve already perhaps touched on that the — it’s the stevedore who brings this equipment aboard has exclusive control and possession of it.

    The stevedore contractor owns the equipment.

    The shipowner has absolutely nothing to do with it except he may have a — a mate who possibly is on the ship if he asked to watch the whole shipment but — and the stevedore, but bringing defective equipment aboard puts the shipowner in a position where under its warranty to the injured men, it has to bear a loss.

    The steve — the stevedore has placed this loss upon the shipowner.

    And just as a simple matter of fairness, it seems that the stevedore who has visited the loss imposed the loss on the shipowner ought to indemnify him.

    I’ve been thinking about this and it seems to me that implied warranties — let me speak in implied warranty.

    Erskine B. Wood:

    It’s — it’s merely what the parties probably would have intended and would have expressed if they had thought about the matter and discussed it.

    And think that if the parties — if a shipowner and a stevedore thought about this while they sit down and they’d say something like this.

    The shipowner would say, “Well now Mr. Stevedore, I’m hiring you to do the stevedoring work on my ship.

    You’re an expert in these matters.

    We rely upon you as an expert,” and the cases have uniformity said that this shipowner does rely on the stevedore as an expert in his field.

    “Now you’re going to be bringing a lot of equipment aboard the vessel.

    It’s your equipment, you have charge of it, you know how old it is, I don’t.

    You’ll be using it in your operations but you know, under this law of Sieracki and Petterson why — if any of your equipment turns out to be bad and somebody gets hurt — why — they’re going to hold me liable even though it’s your equipment, so I want you to warranty to me that any equipment you bring aboard will be reasonably fit.

    I don’t ask if you be an insurer or that it be the most perfect equipment in the world but I ask you to warrant that it will reasonably fit for the purpose.”

    And the fairness of that would probably be apparent and the stevedore will probably say, “Well sure, that seems fair, it’s my equipment.

    If I’m going to put you on a spot by putting you in a hole for my equipment, I ought to warrant it.”

    Earl Warren:

    Well, I understand (Inaudible) what and why if a shipowner did feel that way, why he wouldn’t make it more clearer in this contract that he wrote than — than he did here because here, he — well, while you say this isn’t —

    Erskine B. Wood:

    Yes.

    Earl Warren:

    — an issue here, still he didn’t say and any such thing, did he, in — in language?

    Erskine B. Wood:

    Well Mr. Justice Warren, of course the parties are free to contract as they please.

    Earl Warren:

    Yes.

    Erskine B. Wood:

    But it occurs to me that that would be an answer to any implied warranty that we really wouldn’t have any room in the law for implied warranties if you could always say, “Well, the parties are free to write it down in their contract or agree to it,” so we don’t need implied warranties.

    We — we wouldn’t have needed an implied warranty in Ryan and Crumady, in those cases because we could have said, “Well, the shipowner and the stevedore are free to contract,” if the shipowner wants to get the stevedore to agree that his — that to render a workmanlike service, he could make him agree to it expressly.

    Doesn’t that the same answer applied to — virtually all implied warranty, at least in this field.

    Earl Warren:

    Well, you may have contracted in a way by this language.

    Erskine B. Wood:

    Well, that of course is a question —

    Earl Warren:

    I know that question isn’t here but you were telling me how you would feel if you’re a shipowner and I thought that I would feel the same way.

    But if I did then I was linking a division of responsibility because of negligence and so forth in equipment.

    I think I would express it to the contract.

    Erskine B. Wood:

    Well, I would if I thought about it.

    That’s so — that’s why we have to —

    Earl Warren:

    Well, I (Voice Overlap) —

    Erskine B. Wood:

    That’s why —

    Earl Warren:

    — but you said that’s what you would do.

    Erskine B. Wood:

    But I think — I think that’s why in all of these implied warranty cases, really the parties haven’t thought about it and so they — and they don’t express it so you fall back on implied warranty and I think that’s why we have implied warranties in the law.

    Erskine B. Wood:

    I’m talking now of implied in facts in the relationship of the parties.

    Earl Warren:

    Yes.

    Erskine B. Wood:

    I’m not talking about implied in law, which was different of course.

    Now, the stevedore company urges that this would virtually make them an insurer and I want to answer that point briefly.

    It would not make them an insurer because the standard is not perfection.

    The standard as this Court laid down in Mitchell against the Trawler Racing, is simply that the article to the gear be reasonably fit, reasonably suitable for the purpose intended.

    Now, it’s true that the — the warranty is absolute, they owe an absolute warranty but they don’t warrant that no accident will happen or they don’t warrant that the gear is absolutely safe and — and will — and will prevent any in all accidents.

    They merely warrant that the gear is reasonably suitable and reasonably fit.

    Byron R. White:

    Were you — I think that you’re really asking for — for a rule generally relating to — or at least it’s in the area of the general liability in — in the contract process of the formal services with equipment.

    What do you think the state of the law is around the country if (Voice Overlap) —

    Erskine B. Wood:

    Yes, not — well, —

    Byron R. White:

    — independent contractors when they — they come to your house to repair — have a vision or — or all sorts of the — merely the situation.

    Erskine B. Wood:

    Yes.

    Yes, Mr. Justice White.

    Byron R. White:

    What do you think the law is?

    Erskine B. Wood:

    Well, I think the law is in a state of flux.

    Byron R. White:

    Do you know of any cases that hold a — any cases that hold an independent contract of libel for a non — where there’s no negligence involved or an accident caused by defective equipment?

    Do you know of any cases?

    Erskine B. Wood:

    Well, I had not — the briefs amicus on behalf of the Government and the associations went into that much more fully than I did.

    The extension going from the warranty of a manufacturer, to the warranty of a seller, to the warranty of a supplier and in this case, I — I guess it’s a supplier and the cases —

    Byron R. White:

    What (Inaudible) supplier?

    He has to sell anyone here.

    Erskine B. Wood:

    Well — well, no.

    He isn’t selling it.

    In a sense, he supplies it Your Honor because he — he brings it aboard —

    He brings it aboard.

    Byron R. White:

    (Inaudible) he uses it in connection with the purpose —

    Erskine B. Wood:

    He uses it — he uses it and —

    Byron R. White:

    — of the warrant.

    Erskine B. Wood:

    — he takes it away again when he leaves.

    Byron R. White:

    Yes.

    Erskine B. Wood:

    That is true.

    I do not myself know of any cases.

    I know that the — the text —

    Byron R. White:

    If you had, you probably would’ve assigned too?

    Erskine B. Wood:

    Well, to be honest with you, I didn’t search fully for those and I’d be perfectly candid, I — I left a lot of that to the Government and the associations who wrote the briefs amicus but I feel —

    Byron R. White:

    Did you find any — did you find any in the — in each one of those briefs along the side?

    Erskine B. Wood:

    Not, not squarely but I remember of it.

    There maybe some but I don’t recall in the briefs amicus.

    The — the difference, though that I wish to point out Your Honor here is that I’m not asking the Court to adopt any broad rule as to all independent contractors here.

    We are in a field here of maritime law.

    We’re dealing with a maritime contract between people who — who are dealing against the background of maritime law.

    Now, in — in the cases you’re talking about, of course the — the customer, the contractors had held to an absolute liability to the contractors workmen that if the contractor brings some defective equipment aboard where the customer is going to be liable to the contractors workmen on an absolute liability.

    But here, we’re in a maritime field that the parties know about and the shipowner is going to be held absolutely liable regardless of negligence to the — to the very workmen employees of this contractor.

    So certainly, it seems that under the circumstances and relationship of the parties, they would give rise to a warranty here.

    And when we’re speaking of fairness and equities —

    Byron R. White:

    So I suppose, would argue the same way if the damage is done by the equipment was to the ship and there was no injured longshoreman involved?

    Erskine B. Wood:

    Yes, I think I would.

    Byron R. White:

    You’ll have to do.

    Erskine B. Wood:

    I think I would.

    Byron R. White:

    Although the pressure, the fairness part isn’t here at all.

    Erskine B. Wood:

    It — it might not be — strongly, that isn’t the case we have.

    I would take the position that they did and because it’s in a — in — in maritime field although we wouldn’t have the same situation of the vessel being held to a strict liability —

    Byron R. White:

    That’s right.

    Erskine B. Wood:

    — to the employee.

    Byron R. White:

    Wouldn’t you — wouldn’t you almost have to say the shipowner could recover for damage to the ship of defective equipment of the longshoreman —

    Erskine B. Wood:

    The —

    Byron R. White:

    — or the stevedore?

    Erskine B. Wood:

    — this Court in the — in the Ryan case and some of the others refers to the famous English case of Mowbray versus Merryweather where the shoe is on the other foot.

    There, the — the bit of the ship’s own gear was defective and caused injury to an employee of the stevedore contractor and the stevedore contractor had to pay off his employee and then he’s entitled to recovery against the vessel owner.

    Erskine B. Wood:

    Now, that case is a little fuzzy because some of these cases are little fuzzy, they speak of warranty and yet, it’s little fuzzy because there maybe elements of negligence in the case.

    But that Mowbray versus Merryweather is one of the leading cases where the shoe is on the other foot and they hold that the shipowner owes a — a warranty to the stevedore contractor as it’s here.

    Now, the result holding the stevedore liable in this case is surely not merely so harsh on the stevedore as the well set of law of Crumady against Joachim Fisser where the vessel owner furnishes — where the ship’s equipment is unfit or unsafe.

    Now, in the Crumady case, the ship furnished or supplied for the work and unseaworthy and defective winch, didn’t have a proper — didn’t have its cutoff device set properly.

    And even there, the stevedore is held liable in indemnity if it does something that brings out into play or — or activates that unseaworthiness.

    So here is a case where the shipowner has — really had no part in the thing at all and has no control over the equipment.

    And yet, speaking of equities and fairness, the — the stevedore the a situation like this, even escapes his liability to pay compensation because — although he ordinarily pays compensation under the Federal Longshoremen and Harbored Workers’ Act to his injured man, by the result in this case where the injured man recovers damages against the ship.

    The injured man is compensated at the expense of the ship.

    The stevedore goes off scot-free and yet he brought the defective equipment aboard.

    Now, the final thing and perhaps this is the most forceful —

    Potter Stewart:

    I’m not sure I understood the — the last point you make it.

    Erskine B. Wood:

    Yes, Mr. Justice Stewart.

    I — I’m just talking here in the — the equities and the fairness.

    Potter Stewart:

    I understand that.

    Erskine B. Wood:

    I’m pointing out that the stevedore company under the Federal Longshoremen’s and Harbored Workers’ Act imposed compensation and other benefits, medical benefits.

    Potter Stewart:

    To its employees.

    Erskine B. Wood:

    To its employees.

    Potter Stewart:

    He was injured regardless of fault.

    Erskine B. Wood:

    Regardless of fault.

    But in this case, since the equipment furnished by the stevedore was defective, the injured man had a perfect case of liability for damages against the ship under Petterson so he makes his election, sues the ship and recovers damages.

    Potter Stewart:

    I didn’t realize that he needed to make an election.

    That’s — that’s what I’m asking.

    Erskine B. Wood:

    Yes.

    In other words, he — he — when he gets damages from us, from the ship, as long as those damages exceed what his comp would be why he takes his damages and the stevedore goes free (Voice Overlap) —

    Potter Stewart:

    And if he can’t previously received comp —

    Erskine B. Wood:

    He has to pay it back.

    Potter Stewart:

    — then that would’ve been payable, I meant that.

    Erskine B. Wood:

    And in this case, did.

    Potter Stewart:

    Yes.

    Erskine B. Wood:

    In this case, after recovering the judgment against that, he has to pay back (Voice Overlap) —

    Potter Stewart:

    Pay back his compensation.

    Erskine B. Wood:

    So it — it’s a little — you — you reach the anomalous result of a kind of a windfall here to the stevedore contractor, their own employee when they furnished defective equipment and yet they got back whatever they paid out in comp, all at the expense of the shipowner.

    Now finally, does this question of the — the policy which should be a strong one in the law to prevent injuries rather than merely compensate for them.

    The — paying compensation under the shipowner’s absolute warranty compensates for injuries but it doesn’t prevent accidents.

    There should be — and the rule should be such that there will be an incentive placed on the party that’s most able to eliminate, prevent the risks of these accidents.

    The stevedore companies bring vast amounts of gear and equipment on the ships.

    They are the ones that are in position — in a position to keep track of that equipment, know how old it is, take periodic tests if they think that’s necessary and eliminate insofar as possible the risk of accidents like this happening.

    Now, the shipowner has absolutely nothing to do with this equipment.

    And if you place the ultimate risk on the shipowner, and I submit you’re not placing it on the — on the party who’s in the best position to eliminate these accidents.

    Now, that thought was strongly expressed in Booth and by Justice Jertberg and by another panel of the Second Circuit in the DeGioia case where they suggest that it should be the policy of the law to place the ultimate risk on the party who is in the best position to eliminate it.

    Now, I’m not talking here about negligence.

    The stevedore can probably satisfy the requirements of due care by just having some evidence that they inspected the equipment, but I’m talking about the opportunity that the stevedore contractor has to prevent accidents, to go further to eliminate accidents and perhaps go beyond the call of duty of ordinary care by keeping a record of this equipment.

    This — in this case that the equipment is a very similar thing, just an ordinary piece of rope and if they had — undoubtedly, if they renew that rope periodically, we wouldn’t have had this accident or if this — put it to some test.

    But of course all they did was look at it and that satisfied the requirements of due care.

    Hugo L. Black:

    (Inaudible)

    Erskine B. Wood:

    Well after all, the stevedore —

    Hugo L. Black:

    After all these questions — one of the questions involved I suppose is what’s been infected?

    Insurance were — what are we going to do, are we going to break up the practice required chain that — why does he buy the insurance policies after he went to for a new ship and a new realignment of cause?

    Erskine B. Wood:

    Your Honor, may I answer that in two ways?

    One, a — a court —

    Hugo L. Black:

    I’m not saying you’re not right.

    Erskine B. Wood:

    Yes.

    And of course, it was generally assumed under the Booth decision in Booth against Meier & Oelhaf, it was generally assumed that the stevedore did have this liability.

    The Booth was decided by the Second Circuit some five or six years ago so the stevedores have insured against this liability.

    Now, it was only this recent split decision in the Ninth Circuit, the cast dealt on that proposition.

    So in a — a reversal here which would be inconformity with Booth would not change the insurance picture at all because the stevedores have had to insure this liability ever since the Booth decision five or six years ago.

    Hugo L. Black:

    I suppose it’s — it’s a matter of irrelevant so far as imposing liability to prevent accidents in the future which company has appeals.

    Erskine B. Wood:

    The — I wouldn’t think so.Even if they have to — even if you only look at the cost of the insurance premiums, the insurance premiums or a substantial cost of the company doing business.

    And I think if you place the risk on the stevedore who furnishes this gear and has the opportunity to keep track of it and keep records, you are putting the risk on the part of this — in the best position to in — to — to take ultimate care that this gear be in the best of conditions so that there won’t be any accidents.

    Byron R. White:

    Well, the indemnity (Inaudible) it was an indemnity of — of operation of — but supposed the ship has to be liable with somebody else before the stevedore is liable?

    Erskine B. Wood:

    Yes.

    Byron R. White:

    And so what, it really — well, you wouldn’t be making this argument or would you if it was just an injury to the ship?

    Erskine B. Wood:

    Well, this argument would not apply to the ship.

    No, because I’m talking now about the policy to protect the injured workman.

    Of course an injury to the ship may be an accident which also cause injuries to workmen.

    Byron R. White:

    Suppose that — that there ought to be indemnity here or there ought to be a liability of the stevedore for — on a contractual warranty?

    Erskine B. Wood:

    I — I’m — I’m arguing for indemnity.

    I’m arguing with the indemnity principles of Ryan, should be — should be applied to the equipment bought aboard the vessel.

    Arthur J. Goldberg:

    (Inaudible)

    Erskine B. Wood:

    That’s exactly our point.

    Arthur J. Goldberg:

    (Inaudible)

    Erskine B. Wood:

    That — that’s exactly my point.

    You’ve stated it much more clearly for me than I did myself.

    Hugo L. Black:

    (Inaudible) if — if it’s merely a question of which insurance company is going to have to put the pressure on him and make him do the right thing, what difference does it make to the policy of it?

    Erskine B. Wood:

    Well, —

    Hugo L. Black:

    Whether if you (Inaudible) not only —

    Erskine B. Wood:

    I know, but it runs the — it runs the cost up to the stevedore if he’s paying for that insurance.

    And that puts the pressure on him.

    Thank you.

    Earl Warren:

    Mr. Fredrickson.

    Floyd A. Fredrickson:

    Mr. Chief Justice and members of the Court.

    My name is Floyd Fredrickson from Portland, Oregon.

    Our client is the Oregon Stevedoring Company.

    Preliminary action just to point to the terms which I’ll use and maybe they’re already clear in your mind but to — when I use the term longshoremen, I refer to the employee, the worker and the term stevedore refers to the company or the employer.

    Now, it’s — it’s probably already been developed here.

    There are two premises with which we start this argument.

    Number one, Mr. Griffith has long since had the benefit of this warranty of seaworthiness and has recovered his money and has departed the scene.

    Number two, that the stevedore in this case is free from any negligence and that the stevedore has in fact inducted the test and inspections required of the industry.

    I might say that in the trial of this case, the Steamship Company was given the benefit of the res ipsa loquitor doctrine or the inference of negligence and the trial judge found that the stevedore company had overcome that presumption by evidence that the trial of the inspections of the equipment which they supplied to the ship.

    Finding 22, the respondent reasonable care provide the libellant with the proper tent tie-down rope and has overcome any inference of negligence which might be inferred on behalf of libel acts.

    Floyd A. Fredrickson:

    Finding 21, the tent line was a proper type of rope for use and there was no evidence that it was in an unsatisfactory condition so that we start out with the premise that there is no negligence on the part of the stevedore company and that we have in fact the — the shipowner has failed in — in proving any negligence or any failure to conduct the test and inspections that they indicate should be made.

    I think (Inaudible) truth that there’s nothing to indicate the shipowner, (Inaudible)

    Floyd A. Fredrickson:

    We agree.

    We take — we take no umbrage with that at all Your Honor.

    Now, I might say in that respect that this Court has laid down the guidelines of not interfering with findings of fact by — of triers of fact even in the indemnity situation.

    I refer Your Honors to the Atlantic & Gulfs Stevedore case versus Ellerman Lines in which — in which in the trial court —

    (Inaudible)

    Floyd A. Fredrickson:

    I’ll pass that then, Your Honor.

    (Inaudible)

    Floyd A. Fredrickson:

    Well, it seemed to me that perhaps no one did question the — the findings of facts so far as the lack of negligence are concerned.

    It seems to us then that this case lays open to bear question of whether the stevedore hasn’t insured of its equipment, reasonable fitness of its equipment.

    Now, as Mr. Wood has indicated, of course this is an admiralty case and the federal laws the — is the law which is applicable to federal common law.

    And the Ryan case was the initial case which imposed the warranty of workmanlike service on the stevedore company.

    And of course in the Ryan case, the Court came out with this definition of — of workmanlike service.

    The Court in the Ryan case was concerned with the Halcyon case which preceded it.

    In the Halcyon case, this Court had determined that the shipowner could not recover from a stevedore company on a tort theory because of no contribution among tortfeasors and they would not apply the admiralty rule of — by the damages in non-collision cases.

    So the Court was faced with a situation of say a stevedore which was 75% negligent and a shipowner maybe 25% negligent, the shipowner can’t make any recovery from the stevedore company because of the — of the Halcyon rule.

    So the Court said, “We must lay this on principles of contract,” which they did and they said that there is this warranty, this implied warranty which flows out of the relationship.

    Now, they did not say or this Court did not say that the stevedore owed a warranty of seaworthiness to the shipowner.

    The shipowner’s warranty to a longshoreman or a seaman aboard the ship is a warranty of seaworthiness as if this Court has said a liability without fault.

    This Court did not say in the Ryan case that the stevedore owed a warranty of seaworthiness to the shipowner.

    It said it owed a warranty of workmanlike service.

    Now, the — the question in this case of course —

    Arthur J. Goldberg:

    (Inaudible)

    Floyd A. Fredrickson:

    Well, Your —

    Arthur J. Goldberg:

    (Inaudible)

    Floyd A. Fredrickson:

    — Your Honor, it doesn’t arrive in our field because we have the Longshoreman and Harbored Workers’ Act in anything that occurs offshore and the state acts so far as anything occurs onshore and the stevedore company is never faced with a problem of the appellee.

    Arthur J. Goldberg:

    (Inaudible)

    Floyd A. Fredrickson:

    The —

    Arthur J. Goldberg:

    (Inaudible)

    Floyd A. Fredrickson:

    Yes and I think the liability of the shipowner is — is more far reaching than the FELA.

    For example, the FELA Your Honor does refer to negligence.

    Now, this Court has said, “That’s just a scintilla rule.”

    But still Your Honor, there has to be a finding of negligence on the part of the employer.

    Now, the — the —

    Arthur J. Goldberg:

    (Inaudible)

    Floyd A. Fredrickson:

    That’s correct, Your Honor, that’s correct.

    Now, the three cases as my opponent has pointed out that it come down particularly since the — since the Ryan Case are Weyerhaeuser versus Nacirema, the Crumady case and Waterman versus Dugan & McNamara.

    Now, in each of those cases, each of these three cases, there is negligence on the part of the stevedore company’s employees.

    So inline of those cases, do we reach the question involved here and as a matter of fact in Weyerhaeuser versus Nacirema, this Court said that the principles of liability of the shipowner to the longshoreman or the seaman aren’t different than the principles of liability between the shipowner and the stevedore, and this is simply our — the basis for our position in this case.

    We recognize of course as we must that the shipowner is responsible for unseaworthiness, a liability without fault.

    But our position simply is that our position, vis-à-vis the shipowner is that there must be some fault on our part, some fault, some negligence.

    Now, — (Inaudible)

    Yes.

    (Inaudible)

    Floyd A. Fredrickson:

    No, no.

    In this case, against the shipowner.

    (Inaudible)

    Floyd A. Fredrickson:

    Oh certainly.

    From — yes — yes, sir — yes, sir.

    (Inaudible)

    Floyd A. Fredrickson:

    Oh yes, that’s correct.

    We — we would be required to pay him compensation without regard to any — yeah as you pointed out Justice.

    (Inaudible) longshoreman?

    Floyd A. Fredrickson:

    The longshoreman Harbor Workers’ Compensation Act.

    Yes.

    (Inaudible) that’s a question on which (Inaudible)

    Floyd A. Fredrickson:

    Oh you mean our liability under the Longshoreman Harbor Workers’ Act.

    Yes.

    Floyd A. Fredrickson:

    Well, I suppose so except —

    Liabilities (Inaudible)

    Floyd A. Fredrickson:

    Yes, but that absolutely liability Your Honor is a very limited one in the sense of the certain amount of weekly compensation.

    (Inaudible)

    Floyd A. Fredrickson:

    And — and certainly if there are some partial disabilities, some — some awards, some sort of course —

    (Inaudible)

    Floyd A. Fredrickson:

    Shipowner?

    The shipowner (Inaudible)

    Floyd A. Fredrickson:

    That is true, Your Honor.

    And as — and is might —

    (Inaudible)

    Floyd A. Fredrickson:

    The — the longshoreman himself is required to reimburse the stevedore company for his compensation that he received under the Act.

    Of course —

    (Inaudible)

    Floyd A. Fredrickson:

    Oh yes, but in a practical sense Your Honor that in almost every case now, we turn around and get sued by this Steamship Company for the amount that it had to pay out.

    So in that sense, we’re in worst position, I might say.

    Now, if I might turn to Reed versus Yaka for just — for just a moment.

    I — I think it’s — it’s clear of course that — that the Court in that case wasn’t concerned with our problem, as it’s been indicated.

    Mr. Reed filed a libel in rem against this vessel and it’s been bareboat chartered to his employer.

    And the owner of the ship wouldn’t have — didn’t — didn’t have any responsibility because the unseaworthiness role is after the chartering.

    And the — we have thought that the man’s employer didn’t have any liability to — at as to the charter because he was also the man’s employer protected under the Longshoreman and Harbor Workers’ Compensation Act.

    And that is — is a problem that faced the Court in — in that case and that stevedore was responsible because he happens to also be a shipowner and operator and would be responsible under the warranty of seaworthiness to a longshoreman so that — that case did not concern the issue that’s facing us here.

    And further as we indicated in our brief, in fact in the District Court’s opinion, there was absolute expressed written hold-harmless agreement between the shipowner and the stevedore bareboat charter.

    And there was no question that if liability was visited on the shipowner that it would be passed on to the stevedore bareboat charter as the expressed contract hold and harmless for everything that occurs during the course of operation.

    Now — and I might say further, I — I think the Reed case is an example of — of this Court’s concern for people who don’t have the opportunity to make a contract to protect themselves.

    Mr. — Mr. Reed obviously didn’t know whether the bareboat charter of the ship was his employer or the man in the moon.

    And this Court said, “It’s unfair in that instance,” that because his employer happened to be the bareboat charter, that his employer could escape liability for this condition of the ship.

    And they — they — you visited liability on the — on the stevedore company there but I think primarily, because we have the — the economic unequal situation.

    Arthur J. Goldberg:

    (Inaudible)

    Floyd A. Fredrickson:

    Yes, this was a — not a jury case Your Honor.

    Yes, yes.

    Arthur J. Goldberg:

    (Inaudible)

    Floyd A. Fredrickson:

    Oh, I agree, Your Honor.

    There are three steps that should be taken but I — I think it ties in with — with something Mr. Justice White expressed it for that the stevedore company is not a manufacture of any equipment.

    Arthur J. Goldberg:

    (Inaudible)

    Floyd A. Fredrickson:

    Yes.

    Arthur J. Goldberg:

    (Inaudible)

    Floyd A. Fredrickson:

    That we had in fact that —

    Arthur J. Goldberg:

    (Inaudible)

    Floyd A. Fredrickson:

    I think there was —

    Arthur J. Goldberg:

    (Inaudible)

    Floyd A. Fredrickson:

    I think there was also evidence we did that Your Honor but of course not on the record.

    Your Honor, I — I don’t know what effect, imposing an absolute warranty we’d have.

    Now, we’ve already discussed the question of insurance, what you’re really talking about is two insurance companies.

    I suppose one of the — one of the real answers is — is that these people, the shipowner and stevedore are not remote consumers of somebody’s goods.

    They’re dealing at arm’s length and they make contracts between each other.

    And all this work is done in the — in terms in the — in the background of a written contract.

    Potter Stewart:

    Well, I think — I think we both agree that you could expressly contract the ship the anyway you wanted to.

    Floyd A. Fredrickson:

    Right, correct.

    Potter Stewart:

    And if that (Inaudible) and what this particular contract in this particular case provided is not before us here.

    Floyd A. Fredrickson:

    Oh, we agree, we agree, we agree.

    But I just say that — that an answer to Justice Goldberg that that up here, you’ve got two people who were agreeing by contract who’s going to be responsible.

    I might say further that at that point Mr. Justice that I think if there are many instances in which the shipowner could do something —

    Arthur J. Goldberg:

    (Inaudible)

    Floyd A. Fredrickson:

    Now you — if you were restricting to this — this particular case, I don’t know but I take it that there would be situations perhaps where the shipowner himself could do something to be sure the condition is safe.

    Now, if we make it an absolute warranty then you take the reverse of your argument and say what — what incentive is there for the shipowner to do anything, none.

    Arthur J. Goldberg:

    (Inaudible)

    Floyd A. Fredrickson:

    No, he doesn’t do that.

    Well, I — I think Mr. Justice that — that there’s no question that the shipowner does make very periodic, regular, frequent inspections of the work as it’s in the course of progress that in fact if the mate doesn’t like, if — if a mate comes down and says, “You brought a three-quarter inch rope and we need a one-inch rope.”

    He has authority on that ship and you stop and you do what he tells you to do.

    And longshoremen sometimes like to sit down for an hour while they change ropes.

    Floyd A. Fredrickson:

    If I could pass on then, it is also true that the Court of Appeals’ cases that have been — that have come down subsequent to Ryan, neither of them have reached this problem either except the — the two cases that are the background of this case here, the Booth case which was eluded to by my opponent in which that Circuit said, “There should be a little — an absolute warranty so far as the suppliers, equipment is concerned and this case — the case at bar which the Ninth Circuit says “No”.

    So that Your Honor, the other Court of Appeals’ decisions that we’ve been able to find that — that our concern with this — this problem.

    Now, I might say that the — the thrust of the Government’s brief which we have tried to answer in some respect in our brief is to rely on common law of state — common law cases.

    And of course as I’ve indicated, the state common law doesn’t control here anyway because Your Honors are the authorities so far as the maritime contract is concerned.

    Now — but turning for a moment to the state cases, we of course concede that a manufacturer or seller does have a warranty or does there — goes with this product, a warranty of the fitness of it and primarily, I think it’s because of the Uniform Sales Act which is provided so by statute — I — I see my time has expired.

    I —

    Earl Warren:

    (Inaudible)