Washington Metropolitan Area Transit Authority v. Johnson

467 U.S. 925, 104 S. Ct. 2827, 81 L. Ed. 2d 768, 1984 U.S. LEXIS 122
Supreme Court of the United States·Decided August 16, 1984·No. 83-747·Published·Cited by 118 cases

Opinions

[927]*927Justice Marshall

delivered the opinion of the Court.

Section 4(a) of the Longshoremen’s and Harbor Workers’ Compensation Act (LHWCA or Act), 44 Stat. (part 2) 1426, 33 U. S. C. § 904(a), makes general contractors responsible for obtaining workers’ compensation coverage for the employees of subcontractors under certain circumstances. The question presented by this case is when, if ever, these general contractors are entitled to the immunity from tort liability provided in §5(a) of the Act, 33 U. S. C. § 905(a).

Petitioner Washington Metropolitan Area Transit Authority (WMATA) is a government agency created in 1966 by the District of Columbia, the State of Maryland, and the Commonwealth of Virginia with the consent of the United States Congress.1 WMATA is charged with the construction and operation of a rapid transit system (Metro) for the District of Columbia and the surrounding metropolitan region. Under the interstate compact that governs its existence, WMATA is authorized to hire subcontractors to work on various aspects of the Metro construction project.2 Since 1966 WMATA has engaged several hundred subcontractors, who in turn have employed more than a thousand sub-subcontractors.3

Of the multifarious problems WMATA faced in constructing the Metro system, one has been ensuring that workers engaged in the project in the District of Columbia are cov[928]*928ered by workers’ compensation insurance. Under §4(a) of the LHWCA,4 general contractors “shall be liable for. and shall secure the payment of [workers’] compensation to employees of the subcontractor unless the subcontractor has secured such payment.” 33 U. S. C. § 904(a). A company “secures” compensation either by purchasing an insurance policy or by obtaining permission from the Secretary of Labor to self-insure and make compensation payments directly to injured workers. 33 U. S. C. § 932(a). The effect of §4(a) is to require general contractors like WMATA6 to obtain workers’ compensation coverage for the employees of subcontractors that have not secured their own compensation. See infra, at 938.

During the initial phase of Metro construction, which ran from 1969 to 1971, WMATA relied upon its subcontractors to purchase workers’ compensation insurance for subcontractor employees. However, when the second phase of construction began, WMATA abandoned this policy in favor of a more centralized insurance program. As a financial matter, WMATA discovered that it could reduce the cost of workers’ compensation insurance if it, rather than its numerous subcontractors, arranged for insurance. Practical considerations [929]*929also influenced WMATA’s decision to change its workers’ compensation program. Requiring subcontractors to purchase their own insurance apparently hampered WMATA’s affirmative action program, because many minority subcontractors were unable to afford or lacked sufficient business experience to qualify for their own workers’ compensation insurance policies.6 Moreover, as the number of Metro subcontractors grew, it became increasingly burdensome for WMATA to monitor insurance coverage at every tier of the Metro hierarchy. Periodically, subcontractors’ insurance would expire or their insurance companies would go out of business without WMATA’s being informed. In such cases, a group of employees went uninsured, and WMATA technically breached its statutory duty to ensure that these employees were covered by compensation plans.

For all of these reasons, WMATA elected to assume responsibility for securing workers’ compensation insurance for all Metro construction employees. Effective July 31, 1971, WMATA purchased a comprehensive “wrap-up” policy from the Lumberman’s Mutual Casualty Co. Under the policy, WMATA paid a single premium and, in return, Lumberman’s Mutual agreed to make compensation payments for any injuries suffered by workers employed at Metro construction sites and compensable under the relevant workers’ compensation regimes.7 After arranging for this “wrap-up” coverage, WMATA informed potential subcontractors that WMATA would “for the benefit of contractors and others, procure and pay premiums” for workers’ compensation insurance and that the cost of securing such compensation in[930]*930surance need no longer be included in bids submitted for Metro construction jobs. App. 104, 106. Subcontractors, however, were also advised that, if they deemed it necessary, they could “at their own expense and effort” obtain their own workers’ compensation insurance. Id., at 104. Once subcontractors were awarded Metro contracts, Lumberman’s Mutual issued certificates of insurance confirming that the subcontractor’s employees were covered by WMATA’s policy. On these certificates, both WMATA and the subcontractor were listed as parties to whom the insurance was issued. Id., at 225.

Respondents are employees of subcontractors engaged in the Metro project. Each respondent filed a compensation claim for work-related injuries. Most of these claims alleged respiratory injuries caused by high levels of silica dust and other industrial pollutants at Metro sites. None of respondents’ employers had secured its own workers’ compensation insurance, and respondents’ claims were therefore handled under the Lumberman’s Mutual policy purchased by WMATA. Lumberman’s Mutual paid five of the respondents lump-sum compensation awards in complete settlement of their claims. The remaining two respondents received partial awards from Lumberman’s Mutual.

The instant litigation arose when respondents attempted to supplement their workers’ compensation awards by bringing tort actions against WMATA. These suits, which were filed before five different judges in the United States District Court for the District of Columbia, involved the same work-related incidents that had given rise to respondents’ LHWCA claims. In each of the actions, WMATA moved for summary judgment on the ground that it was immune from tort liability for such claims under § 5(a) of the LHWCA, 33 U. S. C. § 905(a). In all of the District Court cases, WMATA’s motions for summary judgment were granted, each judge agreeing that, by purchasing workers’ compensation insurance for the employees of its subcontractors, WMATA had earned [931]*931§5(a)’s immunity from tort suits brought for work-related injuries.

In a consolidated appeal, the United States Court of Appeals for the District of Columbia Circuit reversed. Johnson v. Bechtel Associates Professional Corp., 230 U. S. App. D. C. 297, 717 F. 2d 574 (1983). The Court of Appeals reasoned that § 5(a) of the LHWCA grants general contractors immunity from tort actions by subcontractor employees only if the general contractor has secured compensation insurance in satisfaction of a statutory duty. According to the Court of Appeals, WMATA had not acted under such a duty in this case.

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Washington Metropolitan Area Transit Authority v. Johnson, 467 U.S. 925, 104 S. Ct. 2827, 81 L. Ed. 2d 768, 1984 U.S. LEXIS 122 (1984).

467 U.S. 925 (Washington Metropolitan Area Transit Authority v. Johnson) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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