Washington Metropolitan Area Transit Authority v. Johnson

PETITIONER: Washington Metropolitan Area Transit Authority
RESPONDENT: Johnson
LOCATION: National Enquirer, Inc.

DOCKET NO.: 83-747
DECIDED BY: Burger Court (1981-1986)
LOWER COURT: United States Court of Appeals for the District of Columbia Circuit

CITATION: 467 US 925 (1984)
ARGUED: Apr 24, 1984
DECIDED: Jun 26, 1984

ADVOCATES:
E. Barrett Prettyman, Jr. - on behalf of the petitioner
William F. Mulroney - on behalf of the respondents

Facts of the case

Question

Media for Washington Metropolitan Area Transit Authority v. Johnson

Audio Transcription for Oral Argument - April 24, 1984 in Washington Metropolitan Area Transit Authority v. Johnson

Warren E. Burger:

We will hear arguments next in Washington Metropolitan Area Transit Authority against Johnson.

Mr. Prettyman, I think you may proceed whenever you are ready.

E. Barrett Prettyman, Jr.:

Mr. Chief Justice, and may it please the Court.

This case involves an interpretation of three sentences in the longshoremen's Act which at the time of the injuries in this case was the governing law in the District of Columbia for workers compensation.

These three sentences appear in Sections 904(a) and 905(a) of the Act.

WMATA is and has been for many years in overall charge of building the Metro system in the Washington metropolitan area.

It has been doing so pursuant to an interstate compact between the jurisdictions of the District of Columbia, Maryland, and Virginia.

The compact directs WMATA, the Washington Metropolitan Area Transit Authority, to construct the system, and WMATA as the general contractor subcontracts the construction out to hundreds of subcontractors and thousands of sub-subcontractors at various tiers.

Prior to 1979, each sub at whatever tier purchased its own workers compensation, and this simply proved to be unworkable.

The small and minority contracts have trouble getting insurance and competing for the bids.

WMATA was never really certain whether they had secured or not, or whether they were maintaining their insurance, and since the purpose of the Act is to make certain that all employees are covered at all times, WMATA in 1971 introduced the CIP, the coordinated insurance program, or what we call wrap-up.

And this is a single policy for comp, for general liability, for workers' liability, covering every employee at every tier in the entire system.

WMATA did this by being named itself in the policy, and then in order to make sure that all employees are covered, because you obviously couldn't name every employee, by naming every sub as the sub came on board on the policy, and WMATA thereby secured under the Act, and respondents, incidentally, do not deny that we secured.

These suits were brought by seven injured employees.

Compensation was promptly paid to them under the wrap-up, and then the employees brought these tort suits.

Sandra Day O'Connor:

Mr. Prettyman, does the same situation exist outside the Metropolitan Transit Authority in other construction contracts in areas covered by the Longshoremen and Harbor Workers' Act?

E. Barrett Prettyman, Jr.:

Let me answer that in two ways.

The wrap-up itself is being used extensively throughout the United States in every large project.

As it affects the longshoremen, Your Honor, it is rather limited, in the sense that there are other statutes that incorporate the Longshoremen's Act, the Defense Base Act, and other statutes, but it does not apply, and also, of course--

Sandra Day O'Connor:

But this question would have application beyond the boundaries of the Washington Metropolitan Transit Authority, I assume, in other construction contracts under the Longshoremen and Harbor Workers' Act?

E. Barrett Prettyman, Jr.:

--Correct, Your Honor, and it also, of course, would apply in a limited sense in the maritime situation.

It would not apply in your traditional vessel owner, stevedoring, longshoremen situation, but it would where different things such as crane operations and so forth were subcontracted out.

Thurgood Marshall:

You don't have too many subcontracts in the maritime business.

E. Barrett Prettyman, Jr.:

No.

That is absolutely true, Your Honor.

All five district--

Sandra Day O'Connor:

Does the use of the wrap-up insurance result in lower premiums overall and lower administrative costs?

E. Barrett Prettyman, Jr.:

--It results in lower administrative costs, but the premiums, of course, are quite high.

We paid out $177 million in this project in workers comp premiums.

Sandra Day O'Connor:

Is that substantially less than it would have been if the individual subcontractors were all buying it separately?