HAHN v. ROSS ISLAND SAND & GRAVEL CO.

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Argument of Dwight L. Schwab

Chief Justice Earl Warren: Harry Hahn against Ross Island Sand & Gravel Company.

Mr. Schwab.

Mr. Dwight L. Schwab: May it please the Justices of this Honorable Court.

The issue that is before the Court here involves the following.

An employer ex parte rejects a State Workmen's Compensation Act.

His twilight zone employee is injured by reason of his employer's negligence.

Now, the employee would have been entitled to workmen's compensation, but for the rejection of the Compensation Act.

Unknown Speaker: Oh, I think we'd have some question about that, isn't it?

Mr. Dwight L. Schwab: I don't believe so, Your Honor.

Unknown Speaker: (Inaudible)

Mr. Dwight L. Schwab: The Compensation Act grants to the employee a substitute remedy under these circumstances where the Act had been rejected.

Now, the question is, is the employee prevented by the United States Constitution from exercising that substitute remedy?

The Oregon Supreme Court says, “Yes.

An employee in circumstances like that has no state remedy whatsoever.”

In this case, the plaintiff, Harry Hahn worked for the defendant, respondent, Ross Island Sand & Gravel Company.

Ross Island Sand & Gravel Company incidentally is an Oregon corporation which operates in the Portland area, dredging up sand and gravel and selling it in the Portland area for commercial purposes.

The plaintiff in this case was hurt on March 23rd, 1955.

Prior to the injury of the plaintiff, the defendant Ross Island had rejected the State Workmen's Compensation Act.

Now, in Oregon, the state act is elected and -- however, where a hazardous occupation is involved, which this was, the employer automatically comes under the Act until he rejects it, but he may reject it at anytime by a very simple method of writing a letter to the Commission saying, “I reject the Act.”

Now, in the event the employer of this kind does reject the Act, he is subject, in the event, a workman is injured to an action for negligence with the common defenses of a fellow servant, assumption of risk, contribute -- contributory negligence removed.

I think this is rather common in all of the elective acts and there are about 25 elective acts in the United States.

He also, in Oregon in addition, the employer who rejects is also subject to an action pursuant to the Employers' Liability Act, the Oregon Employers' Liability Act.

Now, both of these sanctions against the rejecting employer are provided for by the Workmen's Compensation Act itself.

In other words, the -- instead of the Act, you can say, “If you don't comply with it, you will as a rejecting employer be subject to the following actions in the case you are negligent.”

Now --

Justice William J. Brennan: Can an employer in Oregon reject the Act as to some of his employees and none as to others?

Mr. Dwight L. Schwab: I don't believe so.

Justice William J. Brennan: (Voice Overlap) --

Mr. Dwight L. Schwab: I think it's one or -- either one way or the other.

Now, that's the basis of this action.

It's a negligence action based on the Oregon Workmen's Compensation Act, the allegations of the complaint are set out on page two of the record and the employee in this case alleged negligence on the part of the employer and he also alleged violation of the Employers' Liability Act.

The case was -- was filed in the Oregon Circuit Court, which is the court of general jurisdiction.

The employer in this case answered by alleging that the Longshoremen's and Harbor Workers Act was the exclusive remedy of this employee.

And of course, we denied that.

It was tried to a jury and there was jury verdict in the amount of $38,242 plus cost and judgment was entered on that verdict.

The employer then moved for judgment notwithstanding the verdict on the grounds that the Longshoremen Act was the exclusive remedy.

The trial court granted that motion and the judgment was set aside on the exclusive grounds that the Longshoremen Act was the exclusive remedy of this employee.

We appeal this to the Oregon Supreme Court, which affirmed on the ground, as far as I can get it from the Courts of Opinion.

One, the Congress had preempted this field.

And two, although the Oregon Supreme Court recognized the twilight zone as being in existence, they held that under the twilight zone, you could only recover pure -- 100% pure compensation and nothing else, just merely workmen's compensation payments.

We petitioned for rehearing and that was denied.

We petitioned for certiorari to this Court which was granted June 2.

Now, the facts of the case are as follows and I think they're important.

I'll go into some detail on them.

Our contention is that Harry Hahn, the plaintiff here was a twilight zone employee and that the defendant in this case was merely of basic elementary negligence.

Now, the reason I say that is this.

That there are still some contention in this case that the Oregon Employers' Liability Act places some sort of burden on uniform view of Maritime Law.

Now, I want to point out right at the beginning that this employer was guilty of the most basic elementary negligence as the record shows from the undisputed evidence.

Now, concerning Ross Island Sand & Gravel Company, as I say Ross Island Sand & Gravel Company was in the sand and gravel business.

They've been dredging up sand and gravel for years and selling it commercially in the Portland area.

If, Your Honors, would care turn to page 85 of the transcript of record, I think it might possibly help in the understanding of the facts here.

There is a -- an exhibit set out, Exhibit Number 4 -- displays Exhibit Number 4.

Now, in the middle of -- of Exhibit Number 4, you'll notice the river there, that's the Willamette River.

This in the heart of Portland, Oregon.

You see the island there, on one part of it, it says Ross.

Well, this all Ross Island, including this whole Horseshoe.

Down below, it says Hardtack, but actually it's all part of Ross Island, part of it -- it's all Ross Island, part of it is sometimes called Hardtack Island.

Now, inside of Ross Island, you'll notice a lagoon and that's where this action all took place.

Where you see the X mark in the lagoon, that is the spot where the plaintiff, Hahn, did his regular work.

That's where they were dredging.

At the place where you see the circle, the zero of the eight circle, that is the spot where Hahn is injured.

Now, that circle there is right next to what was know as the rock pressure.

That's where all the sand and gravel was taken.

When it was dredged up out of the lagoon, it was put through the rock pressure and then it was belted.

There was a -- some of these belts, the tramways that took all of the sand and gravel over to the mainland, which you'll notice off to the right.

Now, the defendant, Ross Island owns all of Ross Island, including that lagoon area, including everything under the lagoon.

They own it in fee simple.

It was patented by the United States Government in 1873 and deeded the Ross Island Sand & Gravel Company in 1926.

If, Your Honors, will notice that the -- as far as Exhibit 1 is concerned on page 83, there -- it shows Ross Island there with a red circle around it.

It stipulated that all of that area, including the lagoon was owned by Ross Island Sand & Gravel Company.

You'll notice that the lagoon itself is cul-de-sac.

In other words, you can only get in on the north end and there was no other way to get in or out.

Now, all of Ross Island Sand & Gravel Company's product came from the lagoon.

It was put on a barge where it was dredged up.

It was taken over a short distance to the rock pressure, which you'll note there in the lagoon on Exhibit 4 and then there was a conveyor belt where it was taken up to shore.

They've done a lot of digging there.

They've completely altered Ross Island.

If the Court cares to compare Exhibit D which appears on 101 of the record with Exhibit 4, the Court will notice the alterations that have been made in there by Ross Island Sand & Gravel Company.

Originally, in 1895, Exhibit D shows that the depths in the lagoon area were some eight or nine feet.

Record shows that some depths in the lagoon is now over a 100 feet.

Now, the defendant operates this lagoon as it pleases.

It has complete jurisdiction over the lagoon.

It takes no orders from anyone.

There are hundreds of piling driven throughout the lagoon, cement tiers and anchors.

They have erected towers for this tramway to take their product to the mainland.

If the Court cares to have a close up of those towers, Exhibit 10 on page 87 or Exhibit 89 -- Exhibit 25 on page 89 will give the Court an idea of how they have built these towers right out in the middle of the only entrance to the lagoon.

They've built the pressure plant which is very large in the lagoon.

They've put hundreds of pilings under that pressure plant.

They rent space in the lagoon regularly to log graph.

Any of this exhibits here, you'll notice all log graph in the lagoon and that's a very profitable business.

They -- they rent so much space in the lagoon at times that it's almost impossible to do anything else in the lagoon, to move around in there to -- even to conduct their dredging operations.

Justice John M. Harlan: What's the thrust of this argument you're making?

Mr. Dwight L. Schwab: The trust of it is --

Justice John M. Harlan: What?

Mr. Dwight L. Schwab: -- Your Honor -- Your Honor, it is this.

We say that the twilight zone case.

Justice John M. Harlan: Is there any dispute about that?

Mr. Dwight L. Schwab: Yes, there is.

If there were none, I wouldn't be making this argument.

Justice John M. Harlan: Well, that is --

Mr. Dwight L. Schwab: The -- the defendant testified at the trial -- the testimony showed at the trial that if anyone attempted to come in to this lagoon with the log graph and refused to pay the going rental rates that they've established that they would eject them and throw them out of the lagoon.

The United States Government has established harbor lines clear around this island and kept out the entire lagoon.

In other words, they have -- that is outside of the harbor lines, which would have -- which had been established in the Willamette River.

The defendant dredges the sand and gravel with no permits from any governmental authority and pays no royalties to anyone.

As far as the record is concerned, there is no reason why the company could not completely block off this lagoon by building a dam or chaining it off of blocking it off to anyone else coming here.

Justice Charles E. Whittaker: Are you arguing thereby and you contend to that this were not navigable waters of the United States?

Mr. Dwight L. Schwab: No, Your Honor, I'm not making that argument.

I have attempted to in the past, but I -- I'm not making that contention.

I'm not admitting that these are navigable waters of the United States.

I'm merely trying to show that assuming for the purpose of argument that they are, that they are grave technically so and not navigable waters of the Unites States that the Longshore Act was talking about or that the United States -- that the Court was talking about in the Jensen case in particular.

Justice Charles E. Whittaker: Did the Supreme Court of Oregon know that they were navigable waters?

Mr. Dwight L. Schwab: The Supreme Court of Oregon said they were navigable waters.

I'm merely trying to show what kind of waters they were.

That if they navigable waters, they are very technically set and as such whatever goes on in there will make little or no difference as far as the uniformity on Maritime Law is concern.

In other words, they are not type of navigable waters that the Jensen case was talking about or concerned about.

Justice John M. Harlan: What you're arguing -- the basis of your position is that this is a twilight case?

Mr. Dwight L. Schwab: Yes, Your Honor.

Justice John M. Harlan: And it is.

Yes.

Mr. Dwight L. Schwab: Now, the plaintiff in this case Hahn --

Justice Charles E. Whittaker: Excuse me.

Mr. Dwight L. Schwab: Yes, sir.

Justice Charles E. Whittaker: If it were -- if it is a twilight case, that gives you what?

That gives you a choice of law, does it?

Mr. Dwight L. Schwab: It's the choice of remedy --

Justice Charles E. Whittaker: Between what?

Mr. Dwight L. Schwab: Between states and federal law.

Justice Charles E. Whittaker: Oh, would it be between Compensation Acts.

Mr. Dwight L. Schwab: Well, that's the argument of the -- of the defendant in this case, Your Honor.

Our argument is that it's a choice between state law and federal law.

Justice Charles E. Whittaker: Sure.

But one -- one law that -- that each has to compensation law.

Mr. Dwight L. Schwab: Oregon --

Justice Charles E. Whittaker: It's the Oregon Workmen's Compensation Law and Federal Longshoremen's Act.

Mr. Dwight L. Schwab: That's right.

Justice Charles E. Whittaker: They both cover the same field except the latter applies only to act -- acting upon navigable waters of the United States.

I wonder where the choice of law or the twilight zone business gets this, isn't clear to me just yet.

Mr. Dwight L. Schwab: Well, assuming that these are navigable waters of the United States, Your Honor, as the law now stands and as I understand it, we would have to show that this was a case that fell within the twilight zone in order for the Oregon law to apply.

Justice Charles E. Whittaker: The Oregon Workmen's Compensation Law?

Mr. Dwight L. Schwab: Yes, sir.

Justice Charles E. Whittaker: What -- all right.

Now suppose it did apply, could have applied, it won't reject it, by the employer, won't he?

Mr. Dwight L. Schwab: Well, the -- the employer rejected it, but as part of the Oregon Workmen's Compensation Act.

Now first, Your Honor, I don't go along with the proposition that the twilight zone and only between, not necessarily between two compensation acts.

I say it's a zone setup between state law and federal law and usually, there are two compensation acts, the Longshore Act in one side and the State Compensation Act on the other side.

In this case, the employer under its own volition, you know, not only rejected the Compensation Act, but the Compensation Act said, “If you reject this Act, you are then subject to an action for negligence.”

Justice Charles E. Whittaker: Right.

Mr. Dwight L. Schwab: And so we have come in here under the Workmen's Compensation Act within action for negligence

Justice Charles E. Whittaker: Well not -- not used -- do you really mean that?

That you're covered under the Workmen's Compensation Act from act -- with an acts over negligence?

Mr. Dwight L. Schwab: Well, I don't want to get into --

Justice Charles E. Whittaker: The Workmen's Compensation Act doesn't actually create the common law or right for -- or damages from negligence, does it?

It just says that you still haven't.

That you always haven't.

Mr. Dwight L. Schwab: The Court --

Justice Charles E. Whittaker: What was taken away from the Compensation Act?

Mr. Dwight L. Schwab: Well, the Compensation Act took it all.

It took away the rights of all workers, except the compensation if the employer complied with the Act.

Justice Charles E. Whittaker: Even the clause?

Mr. Dwight L. Schwab: Now, if the employer takes an affirmative step and refuses to comply with the Act, then of course, the Act exist.

You're entitled to sue for damages with certain defenses removed from under the Employers' Liability Act.

Justice Charles E. Whittaker: That's what?

You had your old common law rights with all common law defenses eliminated?

Mr. Dwight L. Schwab: That's right.

That's right.

I don't want to get into the semantics or anything like that, but that -- that's what I mean when I say it's pursuant to the Workmen's Compensation.

Now, in this case, Hahn was an oiler on a -- on a dredge.

I pointed out on Exhibit 4 that X where he did all of his work in the lagoon.This dredge was anchored to shore.

He never went outside of the lagoon at any time in connection with his work and the dredge, of course, was merely dredging up sand and gravel for sale.

Now, on the day of the jury, he was doing his regular work for several hours and then he was ordered over to the rock pressure which of course is in the lagoon also to do some clean up work.

The respondent had brought in to the lagoon on one of its barges from the sandy river which is nearby a hopper.

Now, a hopper, I'm sorry I didn't include one in the record here, we have some pictures of it.

But a hopper is merely a square object sitting on long legs on which sand and gravel or the sand and gravel is put in the top, a truck drives underneath, a lever is released and the gravel goes into the bed of the truck.

It's a method of loading the truck.

Now, this hopper was owned also by the respondent.

It was brought into the lagoon and by means of a land based crane, they were transferring this hopper from this one barge to another barge tied up right there at the rock pressure.

Hahn was told to go over there in connection with this changing the hopper from one barge to another.

He got there just as the hopper was being set down on the second barge.

This was at night.

It was dark.

Hahn was then ordered to go up the hopper to the top and release the -- the cable which was attached to the crane and to the hopper so they could get the hopper away from crane.

Hahn went up the ladder.

He got through to the top practically and suddenly the ladder pulled away from the hopper completely.

He fell over backwards, of course, landed on his back and was very seriously injured and the ladder fell on top of him.

Now, the evidence shows that he received no warning of the condition of the hopper and that the top of the hopper where the ladder was fastened was so rocking that it just couldn't hold the ladder.

It was -- the ladder was nailed which was in violation of safety rules, which of the course of law in Oregon and there's just no question that there was elementary negligence in this case.

Hahn has not worked since the injury.

Now, the respondent's case is based on the Jensen case and the Jensen case is the basis for which you might say Mr. Hahn's troubles are here.

Jensen case of course was decided 1917.

After a while, the Jensen doctrine was sought and somewhat by the local concerned rule, but this Court found after a number of years of attempting to split hairs that a lot of hardship was being caused and that it was being required to -- to determine from a factual standpoint, a lot of cases and the Court finally decided that it the should not go any further on that and the twilight zone was born.

The Court considered, I believe, and decided not to overrule the Jensen case, although I believe it was seriously considered.

But in order to prevent hardship, this Court set up, of course, the twilight zone in which the workmen's choice of remedy, whether the state or federal law was -- the Court said would be upheld.

If the workmen went in in this twilight zone, in this area of doubt shows you the state law or federal law, his choice should be upheld.

Now, in this case, I don't think there's any question that this employee is -- falls within the twilight zone.

I think the Court is familiar with the -- with the facts in the Davis case, the Baskin case, the Morris case and a simple comparison of the facts, I think, will show that this employee did fall within the twilight zone.

Furthermore, it was a matter purely of local concern in this case.

And even before the twilight zone was setup, this employee could have recovered under the local concerned doctrine.

Now, it's true that in this case, the petitioner is not getting pure compensation.

But I -- I want to emphasize again that what he was he has asked for in this case was provided by the Compensation Law.

Unknown Speaker: That he gets compensation?

Mr. Dwight L. Schwab: No, Your Honor.

Unknown Speaker: He can't get compensation (Inaudible)

Mr. Dwight L. Schwab: He cannot get compensation under the state law because the employer rejected the Act on its own.

Unknown Speaker: (Inaudible)

Mr. Dwight L. Schwab: But for the rejection of the Act, You Honor, there is no question he could have gotten compensation.

No question about it, assuming it falls in the twilight zone.

Now, this Court in the Davis case set up -- not set up, but reaffirmed, I should probably say, the presumption of constitutionality of state law.

And this is of course is purely a constitutional question.

Can Oregon apply its laws in this particular situation?

And of course, the Court said in the Davis case, that prima facie, every state is entitled to enforce in its own courts its own statutes lawfully enacted.

Now, that -- incidentally, that presumption of constitutionality was not discussed by the Oregon Court in its decision and has not been discussed but the respondent in its briefs.

The Oregon Court in its decision relied on cases such as Pennsylvania Railroad Company versus O'Rourke which was decided by this Court some five or six years ago in 330 -- 344 U.S.

The O'Rourke case, in our opinion, is completely inapplicable to this situation here.

That was purely a case of statutory construction and the Court so stated in Footnote 8 of its opinion, purely statutory construction between two federal acts.

This of course is a constitutional question.

The Court relied -- the Oregon Court relied on certain language in the O'Rourke case to the effect that New Jersey could not have provided compensation for this injured work on navigable waters.

Well, obviously, New Jersey could not have done that because the injured workmen in that case was a railroad worker and of course, there's no question that no state can apply its compensation laws to a railroad worker.

I don't -- the Oregon Court is not the only court that has misinterpreted the O'Rourke case.

It's been misinterpreted by other courts and the respondent here relies heavily on a -- on a Fifth Circuit Court of Appeals case and filed a supplemental brief in connection with that case, which this case was decided recently.

I believe there's a New Jersey case in which the O'Rourke case was also misconstrued.

As far as the Fifth Circuit of Appeals is concerned and the Oregon Supreme Court, I think the answer is that those courts do like the twilight zone or the Davis doctrine.

It's just a situation of those court not liking that solution.

They like the cut and dried proposition that was set out in the Parker versus Motor Boat Sales case where you just draw a straight line.

But of course, the Parker case must be construed in connection with the Davis case.

Now, under the Davis case, the Court said under the Jensen hypothesis basic conditions are factual.

Does the state law interfere with the proper harmony and uniformity of Maritime Law?

If the state law does not interfere with proper harmony in uniform with the maritime law, then of course the state has a right to apply its own law.

Now, I have been in connection with this case from the beginning.

This man was hurt in 1955.

I've been through three courts with this case and I'm still unable to figure out how, allowing this injured workman to recover this judgement which he received in the Oregon Court is going to under the facts interfere with the uniformity of Maritime Law.

It's argued that the Jensen that -- that under the Oregon Law, under the Employers' Liability Act that there's two high standard of care.

Now, there is no higher standard of care than Workmen's Compensation.

That's a liability without fault and yet there is not question in the twilight zone, Workmen's Compensation is proper.

If the Employers' Liability Act has a lesser standard of care and of course the ludicrous thing about the whole thing is that the case that setup this entire doctrine, the Jensen case, talking about interfering with the uniformity of Maritime Law was based on the Jensen case which was a workmen's compensation statute.

And yet, there is no question now that workmen's compensation can be -- laws can be applied.

Furthermore, there's a lot situation in Maritime Law where there is a very high standard of care.

In fact, liability without fault.

And of course, in this case as I pointed out before and I would like to say it again, under the fact, this employer was guilty of plain ordinary -- regarding a variety of negligence.

You don't have to go any higher than that.

Justice John M. Harlan: Of course, I want you to (Inaudible) --

Mr. Dwight L. Schwab: My answer to that is this, Mr. Justice Harlan.

In this case, I don't think that is a valid argument.

They make it.

I think you're just posing it here as a question.

In many situations -- or in some situations possibly, it would be considered to -- to interfere with uniformity and it might be a bad situation to subject an employer to a situation like that where he couldn't protect himself.

Now, they cite Gilmore and Black, where Gilmore and Black suggest that there's no twilight zone between the Longshore Act and the Employers Liability -- Federal Employers' Liability Act, the Jones Act and so on.

And suggest that the reason is because this Court doesn't want to subject an employer to that -- the difference between a Compensation Act at one end and a jury verdict on the another end, which they can do nothing to protect themselves against.

All right, in this case, all the employer has to do is to comply with the Oregon Workmen's Compensation Act which most employers do and he can completely protect himself against any judgement under the employer --

Justice John M. Harlan: You said that's a valid consideration where the employer got the right to go under a state act?

Mr. Dwight L. Schwab: I don't think it is, Your Honor.

Anytime this employer wants to comply with the Act, he can get the protection of the Act and only have to make compensation payments.

Justice Potter Stewart: Mr. Schwab, the Longshoremen's Federal Workers Compensation Act requires action on the part of the employer too, doesn't it?

Doesn't it require that he'd call security?

Mr. Dwight L. Schwab: Yes, Your Honor.

It does.

Justice Potter Stewart: And it's a misdemeanor not to actually, isn't it?

Mr. Dwight L. Schwab: Pardon?

Justice Potter Stewart: It's a misdemeanor not to?

Mr. Dwight L. Schwab: That's right.

Justice Potter Stewart: Now, did this -- does the record show that this employer complied with those provisions under the Federal Act?

Mr. Dwight L. Schwab: The record shows this employer did comply with the Longshoremen's Act.

I might say in that connection now that it's -- it's mentioned, Your Honor, that the argument, remedy against an employer who fails to comply with the Workmen's Compensation Act is practically the same as an employer who fails to comply with the Longshoremen's Act.

Both of them are subjected when you -- you mentioned misdemeanor, but in the Longshore Act, he's also subjected to an action for damages, for negligence with all the defense (Voice Overlap)

Justice Potter Stewart: Either that or your common law, as I recollect.

Mr. Dwight L. Schwab: Yes, sir.

That's right.

Justice Potter Stewart: Well --

Mr. Dwight L. Schwab: And all of these common law defenses are taken away from him just like here.

Justice Potter Stewart: Your argument is valid with I believe, the necessity of his complying with both Acts if he wanted to avoid an action against him from which he would be stripped of all his defenses, an action against him in a jury trial.

Mr. Dwight L. Schwab: Well, yes, Your Honor.

If he fails to comply with the Oregon Workmen's Compensation Act.

For the ordinary land-based employee, there is no question he is subjected to this law --

Justice Potter Stewart: The Oregon law.

Mr. Dwight L. Schwab: -- we've talked about.

Yes.

And in the twilight zone, there should be no difference.

Justice Potter Stewart: Now, there is a difference, wasn't it?

Because here in the twilight zone, if this is a twilight zone, as I'd say your argument would necessitate his complying with his posting a security under the Federal Act and indicating his willingness to comply under the State Act in order to prevent his being subject to a lawsuit from a jury in which all of his defenses would be taken away from him.

Mr. Dwight L. Schwab: Of course, that's the Davis case, Your Honor.

That a person in twilight zone is entitled to recover under either Act, whichever --

Justice Potter Stewart: The -- the Davis case affirmed the action of a State in giving state workmen's compensation to Mr. Davis or his -- a plaintiff who fell of the bridge, fell off --

Mr. Dwight L. Schwab: Fell off a barge.

Justice Potter Stewart: -- hard -- a long bridge.

Mr. Dwight L. Schwab: Yes.

He fell off the barge while he was loading steel.

Justice Potter Stewart: Steel.

Mr. Dwight L. Schwab: That's what he was doing.

And the Court in that case held that if he had indicated that whichever Act he'd applied under, whichever one he -- he asked for, he could have gotten.

Now --

Justice Hugo L. Black: In that case, the State of Washington had held that he could not recover.

Mr. Dwight L. Schwab: That's right.

The State of Washington through four different tribunals had held he could not recover and this Court said he could.

Now, on the other hand, in the Parker case where he applied for relief under the Longshore Act and that was a situation that appeared to come under the local concerned doctrine, but in that case where he -- where he required for relief under the Longshore Act.

The Circuit Court of Appeals said, “No, it's a local concern.”

But this Court reversed and said, “No, that's what he asked for, that's what he is going to get.”

Justice Hugo L. Black: What -- what reasoning did the Court find to be so sure that this man could recover under the -- under the Federal Act?

Mr. Dwight L. Schwab: That's what I'd like to know, Your Honor.

There's no assurance that this man --

Justice Hugo L. Black: There were quite a number -- quite a number of cases before the Davis case where I should think strong argument could be made that this was one of those mysterious local situations where and wouldn't know whether which one he could recover on.

Mr. Dwight L. Schwab: That's the exactly the reason Your Honors decided for setting up the twilight zone because whichever way an injured worker went, the employers who naturally -- or their insurance companies are naturally interested in saving money.

They -- they're very clever.

They can always find a reason why this is on the other side of the fence.

Whichever way this men went, it sometimes take four or five years for them to establish their rights.

In this case they say, “Oh, you can get your Longshoremen's benefits.”

Well then, we can and maybe we can't.

They didn't asked for it.

This maybe -- it might go just as far.

They'd say, “Oh, no, you should go over on the state side.”

Justice Hugo L. Black: What argument did the Court of Oregon make in deciding the fact that it was plain that it -- have it to satisfy through the Davis opinion that it knew that this would come under the Federal Act.

Mr. Dwight L. Schwab: None whatsoever.

They just said it did, Your Honor.

I -- I don't think they cited any reason for it all and they just categorically set up that -- on their own that -- that if you couldn't get anymore that compensation either because -- and as I said, they used the O'Rourke case pretty much as their authority for that.

Justice Hugo L. Black: May I ask what your Attorney General has to do with the administration of this role?

Mr. Dwight L. Schwab: The -- Mr. Lafky is here, Your Honor, and he will explain that.

He's -- I'm giving him 10 minutes of my time if -- if that's agreeable.

I have only five minutes.

I'm going to take only 40 minutes, give Mr. Lafky 10 if that's agreeable.

Now, many people are affected by this case.

I want to point this out.

We show in our brief that 25% to 40% of the workers in this country are not covered by compensation and an awful lot of those people at sometime or another and maybe all the time comes within the twilight zone.

You can just let your imaginations run as to all the different situations where all these workers would come in to the twilight zone at sometime or another.

Now, just because all of those people are not covered by state compensation, does that mean that they are -- all of them to be completely deprived of all of their state remedies?

This case holds that.

In Oregon, there is over 2000 miles of navigable waters.

Now, some states don't have that much and some have more and there's 100 of employers, small employers, big employers along those navigable waters.

Now, all the employees of those people to -- to be -- to be deprived of all their state remedies if they reject the Act of if they aren't covered by the Act.

As I say, there's 25% to 40% of the workers in this country that are not covered by any kind of workmen's compensation.

A lot of these employers, the small employers, the loggers, the farmers who float their produce down the river and saw it never heard of the Longshoremen's Act.

They haven't complied with it.

A lot of them wouldn't think they were covered under if they had heard of it.

I think it's 30% of the people in this country don't even know who the president of the United States is.

Now, workmen's compensation, this Court, I think, everyone agrees and practically is a good thing and there's a lot of non-negligent injuries where people should be covered by workmen's compensation.

But employers, some of them, a lot of them, look at it only from a coal dollar and cent standpoint and they like to avoid the expense of taking out workmen's compensation if they can.

So, in order to make these employers comply with Compensation Acts, it's necessary to have coercive measures in the Compensation Acts.

And that's exactly what they have in the Oregon Act, and the reason that it's put in there is clearly and only to force these employers to comply with the Act.

Now, under the decision of the Oregon Supreme Court, the employers are encouraged to reject the Act.

Because they can reject the Act and then if they do reject the Act, they don't come under any of the alternate provisions of the sanctions.

So it's a good example of a man having his cake after he had already eaten.

They can reject the Act and completely avoid liability under state law by rejecting the Act and the Oregon Supreme Court encourages that.

I say that the decision of the Oregon Supreme Court is illogical.

And if you allow the Oregon Supreme Court's decision to stand, you are allowing an employer to unilaterally make a constitutional determination.

In other words, the employer, if he complies with the Oregon Compensation Act, allows his employees -- his employees unconstitutionally come under state law.

On the other hand, if this decision stands and that employer rejects the Compensation Act, he is constitutionally deciding that none of his employees are subject to state law and I'd say that is a ridiculous situation.

There are over two million industrial accidents a year and any decision like this, which encourages employers to reject Compensation Acts should be scrutinized with a great deal of care because this case encourages an employer to reject the Compensation Act.

Now, the United States construction --

Justice Hugo L. Black: (Voice Overlap) -- could give any indication of what cause in this case had been up to date?

Mr. Dwight L. Schwab: About the costs?

Justice Hugo L. Black: Cost, yes.

Mr. Dwight L. Schwab: The cost?

Justice Hugo L. Black: The cost, court cost.

Mr. Dwight L. Schwab: Your Honor, that's --

Justice Hugo L. Black: Is there anything in the record that --

Mr. Dwight L. Schwab: It's not -- it's not in the record, but it's tremendous.

And Harry Hahn, of course, was injured near four years ago and he has had become clear to this Court just to establish his right to obtain state relief and the only difference between this case and the Davis case is that here there's negligence, in the Davis case, it's compensation.

Print this transcript Transcript: 

Argument of Ray H. Lafky

Mr. Ray H. Lafky: May it please the Court.

Justice Hugo L. Black: Mr. Lafky.

Mr. Ray H. Lafky: This case is but another facet of workmen's compensation.

And in my 14 years of legal adviser to the Oregon Commission, I have gradually adjusted and adapted myself to the philosophy of the liberal construction of the law which must accorded all workmen's compensation actions to the growing field, the judicial expansion of the “twilight zone” which was enunciated in the Davis case.

There were more recent cases where the conflict comes between various state jurisdictions where this Court has permitted actions in both States.

And I think the “twilight zone” is certainly a proper judicial expansion of the philosophy of workmen's compensation.

Now, actually, as we compare, for I want to oversimplify the Longshore Act and the Workmen's Compensation Act of Oregon, each of them require a certainty of compensation in the first instance.

And if the employer fails to provide that certainty of compensation, the alternative of a negligence action is provided.

Let us assume that the factual reverse, that the action was under the Longshore Act and he had failed to provide his workmen under the benefits under the Longshore Act.

Then, if action were commenced there, could they say, “No, you have a definite right over into the workmen's compensation.

And also, you can't have a damage action.”

I think that that maybe an oversimplification.

I -- I did wish to answer Judge Stewart's question in -- under the Oregon law, an employer must bring all of his employees in a given occupation under -- he may have separate occupations and have one under and the other.

Justice Potter Stewart: What do this employer could do?

Mr. Ray H. Lafky: This one had rejected, so he hadn't -- so far as I know, none of his --

Justice Potter Stewart: None of his --

Mr. Ray H. Lafky: -- employees were subject to the Workmen's Compensation Law to the extent that they were entitled to compensation.

He could have, at any time withdrawn it and then his workmen would've been entitled to the compensation.

Now, if we were to deal on hypothesis and what can happen, there are two cases cited in the briefs.

One of which is Hess against the United States which have been cited by the respondent, 259 F. 2d 285.

That case involved six workmen on the face of Bonneville Dam who were preparing to repair the floodings and faces of the dam.

They set out from the Oregon shore.

They got too close to the spillway, five of them were drowned.

No question was raised by the Oregon Commission as to the maritime coverage on this particular case.

The employer was shore based, he was out there working on a fix structure but there was a barge, there was an instrument of navigation.

There was some delay of the question of whether Oregon or Washington should take.

I mention this case not because of the law involve but because of the factual situation.

That employer had lost his financial surety in the contract with the Government.

He had state compensation with both Washington and Oregon, but he had a very minimal policy to protect him against any possibility of maritime injury like possibly applied to the skipper of a tug who was drowned, but he was very dubious if it would apply to any of the other carpenters and so forth.

Now, what situation that we have there?

If those workmen had proceeded against that employer, they would have a right but no effective remedy certain.

The Oregon Commission voluntarily accepted those four fails probably, I think, $1000 are better in liability of the state fund.

The Oregon Supreme Court is correct in its very narrow assertion that merely because navigable water are concerned to state laws of jurisdiction and that's just about as far as they went, I have ill-advised my client to the extent of $100,000 in that case.

And in another case mentioned in the briefs, King against the Accident Commission mentioned in the petitioner's brief, 309 P. 2d 159.

There were five workmen drowned on Elsie Bay, the tidewater and the river, navigable waters involved workmen out in a -- in a boat who were repairing a broom, protecting logs, preparatory to having these logs moved up in navigable waters of the Elsie River.

So there are nine fatals along numerous dependent children left without fathers.

And my interpretation of the Davis case would lead me to believe that in both cases, they were “twilight zone” injuries.

Both cases, I -- it is not in the record but I know of known personal knowledge that there was no longshore insurance provided.

And certainly, in this broad scope, I think that looking at the interest of the workmen and as I stand here now, actually, when I say this I -- I am referring to the liability in the State of Oregon and the state fund for these things but I think that that is a proper field of activity.

And you do have the other facet here too and that is -- well, I have no direct interest with Mr. Hahn, I don't even know the gentleman.

I see in these arguments here the question of the standard of care and -- and respondent here feels that the -- this employer should not be subjected to a higher standard of care.

No injured workman can ever be made whole again.

We can't put him back together again.

All you can do is set up a yardstick to measure damages.

But certainly, decision should be geared and tempered so that employers are required to maintain the highest standard of care to workmen because we may not put Mr. Hahn back together again but by insisting upon a high standard of care, we may prevent some other workmen from being injured and I think that that is --

Justice Charles E. Whittaker: (Inaudible)

Mr. Ray H. Lafky: That is the issue they raise that they -- to expose this particular employer to this particular action would incur to him -- require of him a higher degree of care and therefore, by some reason, upset the uniformity of the maritime jurisdiction and do grave damage to this litigant.

I mentioned it because he has raised the issue and I do think that in all of these considerations of this nature in workmen's compensation, that is part of the picture.

He himself has deliberately rejected state compensation, exposed himself to this damage action by virtue of that voluntary election on his part.

Now, it comes before this Court saying, “I shouldn't be exposed to the higher degree of care that I have incurred by my own voluntary election.”

Justice Potter Stewart: Mr. Lafky, I don't want to hear of course the arguments (Voice Overlap) --

Mr. Ray H. Lafky: Well, I am practical through because I don't want to impose on his rebuttal.

Justice Potter Stewart: And perhaps your colleague would be -- would prefer to answer.

Question that occurs to me is this.

The Oregon court has, in fact, held that this injury was within the scope of the federal statute.

Now, would that be res judicata in a subsequent -- to the benefit of the injured workman in a subsequent action of the Longshoremen's Act?

Mr. Ray H. Lafky: I don't believe so.

And --

Justice Potter Stewart: Why?

Mr. Ray H. Lafky: -- of course the -- under the Davis case, there, the Washington Supreme Court all the way through the four courts in Washington had held that he was not entitled to anything.

Justice Potter Stewart: And this Court said that he reversed all those (Voice Overlap) --

Mr. Ray H. Lafky: This -- This court reversed all of that, paid no attention to what the Washington court said, send it back in --

Justice Potter Stewart: But that -- that doesn't quite get my question, does it?

Mr. Ray H. Lafky: But --

Justice Potter Stewart: Let's say perhaps your colleague would rather address himself to that or --

Mr. Ray H. Lafky: Yes.

He was -- let's say -- that is the issue and of course, the question of whether or not my interest of course is whether or not in advising the Oregon Commission, we are properly accepting these borderline cases.

Of course, the Oregon Commission has about 40,000 employers, entertains about 70,000 claims a year and rights not only workmen's compensation but by statute is permitted and also this right longshore workmen's compensation -- the longshore compensation.

But we are interested and we were quite concerned with the Florida Supreme Court decision feeling that perhaps it was too narrow.

It hasn't shown a complete disfavor with the Davis doctrine and the Fifth Circuit decision likewise.

And I feel, as an administrator, having to advise administrators daily in a performance and acceptance of claim 70,000 a year but it is a wise doctrine to permit a little more laxity in leeway of the administrative level of where to accomplish the purposes of this type of legislation.

Argument of Arno H. Denecke

Mr. Arno H. Denecke: Mr. -- Mr. Justices, I feel compelled at the outset to make some remarks which I think would be irrelevant except for the contentions of the petitioner in this case, and that is the inference or the direct statement that the defendant here, Ross Island Sand & Gravel did not carry state workmen's compensation.

The statement of the Attorney General of the State of Oregon was as I said on the briefs here that the State Industrial Accident Commission is the only entity authorized by law to provide workmen's insurance as such in Oregon.

We pointed out in our brief here from the Chairman's report of the Oregon State Workmen's Compensation Law that there is private workmen's compensation in Oregon and that the Chairman's report went on to say that the safer employers carried private workmen's compensation instead of compensation with the State.

Now, in our -- what I think is rather peculiar set up, the state industrial accident fund is the only official -- officially recognized source of workmen's compensation.

And any employer who rejects the state act and carries his own private compensation either with private carriers or self insured, he lays himself open to negligence suits or suits under our Oregon Employers' Liability Act.

But as the report of the State of Oregon here points out, employers who reject the State Workmen's Compensation Act still continue to carry workmen's compensation either in private carriers or self insured.

Justice Hugo L. Black: You mean that -- you mean that this company has private insurance that would protect him in case his judgement was rendered against him?

Mr. Arno H. Denecke: That is a part of the record, Your Honor.

And I mean more than that, Your Honor, I mean that the -- that company is -- and this company although, this is not in the record, Your Honor, but it -- the company --

Justice Hugo L. Black: I'm talking about this company.

Mr. Arno H. Denecke: Pardon?

Justice Hugo L. Black: I'm talking about this company.

Mr. Arno H. Denecke: Your Honor, this company has insurance to cover liability under a judgment also as insurance as to other employers to voluntarily pay workmen's compensation in accordance with the schedule of benefits of the State of Oregon.

Justice Hugo L. Black: In other words, this company is protected by insurance against the judgment of this kind or compensation pay?

Mr. Arno H. Denecke: Correct, Your Honor.

Justice William O. Douglas: That was taken up under the Federal Act?

Mr. Arno H. Denecke: Under -- both the State and the Federal Act, Your Honor.

Justice Charles E. Whittaker: (Inaudible)

Mr. Arno H. Denecke: Your Honor, separate -- I -- I'm speaking now off the record.

There's nothing in the records, Your Honor, but if I may, different private coverage or it's the same private coverage maybe had to cover liability under the Longshoremen's and Harbor Workers' Act to cover employer's liability, to protect against a suit such as this and to voluntarily pay compensation according to the workmen's compensation benefits as stated by the state law.

Justice Hugo L. Black: And I understood you to say he had all of these.

Mr. Arno H. Denecke: He had all of them, yes, Your Honor.

Justice Hugo L. Black: He has to protect --

Mr. Arno H. Denecke: Yes.

Justice Hugo L. Black: -- any judgement rendered against him.

Mr. Arno H. Denecke: Yes, Your Honor.

And --

Justice Potter Stewart: I --

Mr. Arno H. Denecke: Excuse me, Your Honor.

Justice Potter Stewart: Do I understand that an employer by voluntarily paying compensation as -- as would be provided by state law can -- he can't in any way thereby protect himself from --

Mr. Arno H. Denecke: Not from -- not from damage --

Justice Potter Stewart: (Voice Overlap) --

Mr. Arno H. Denecke: -- actions, Your Honor.

No sir.

But --

Justice William J. Brennan: (Inaudible)

Mr. Arno H. Denecke: Yes, he does, Mr. Justice Brennan.

Justice William J. Brennan: All he did is place his insurance to private carriers.

Mr. Arno H. Denecke: That's correct, sir.

And --

Justice William J. Brennan: (Inaudible)

Justice Charles E. Whittaker: (Inaudible)

Mr. Arno H. Denecke: Your Honor, it is -- and I -- I don't want to mislead the Court at all.

It is purely voluntary on the part of the employer.

The policy -- and I set out a standard policy in an appendix to my brief, Mr. Justice, that that -- by that policy, the insurance company agrees to pay workmen's compensation benefits to employees who otherwise would come under the Workmen's Compensation Act.

Justice William J. Brennan: (Inaudible)

Mr. Arno H. Denecke: Pardon, Your Honor?

Justice William J. Brennan: (Inaudible)

Mr. Arno H. Denecke: He would have, Your Honor, yes.

Justice William J. Brennan: He would have.

Mr. Arno H. Denecke: Well, if he had sought the compensation benefits payable according to the Oregon Workmen's Compensation Act, he would have been paid those.

Justice Hugo L. Black: I understood you to say that it protected against this kind of action here.

Mr. Arno H. Denecke: Also, Mr. Justice --

Justice Hugo L. Black: If he gets -- if this judgment is sustained, he is protected by his insurance policy.

Mr. Arno H. Denecke: Oh, that is true, Mr. Justice, but in addition to that, in answer to Mr. Justice Brennan's question, that insurance policy also provides that the insurance carrier will pay Mr. Hahn or any other injured workman the same benefits that that workman would be paid by the state industrial accident fund if the employer had not rejected the Oregon Compensation Law.

Justice William J. Brennan: I don't quite understand how this operates (Inaudible)

Mr. Arno H. Denecke: It is --

Justice William J. Brennan: (Inaudible) judgment workmen's compensation?

Mr. Arno H. Denecke: No, Your Honor.

No, Your Honor.

Justice Charles E. Whittaker: (Inaudible)

Mr. Arno H. Denecke: There would -- may I -- I'll try to -- it's -- I realize, it's a very complicated subject and -- but if I may state it this way --

Justice William J. Brennan: It might mean (Inaudible) of Mr. Hahn.

Mr. Arno H. Denecke: Yes, certainly, Mr. Justice, that in the case --

Justice Hugo L. Black: And this company?

Mr. Arno H. Denecke: Yes, Your Honor.

In the case of Mr. Hahn, he could -- if he had so desired, this company would have paid him compensation, and I'm speaking the insurance company, Mr. Justice Black, rather than the --

Justice Hugo L. Black: Yes.

Mr. Arno H. Denecke: -- employer.

This insurance company would have paid him the same -- the benefits, I -- I better put it, the same benefits that are set out in the Oregon Workmen's Compensation Act.

Justice William J. Brennan: (Inaudible)

Mr. Arno H. Denecke: All he does is -- is apply to the insurance carrier.

There is no administrative tribunal setup to cover private insurance coverage.

Justice William J. Brennan: How would the (Inaudible)

Mr. Arno H. Denecke: If -- Your Honor, if they cannot agree, that is the -- the employee and the insurance carrier cannot agree, if it's medical for example, it's a medical matter, the policies universally at least commonly provide for an arbitration.

If it's other questions of construction, the policy would have to be done by the courts, Your Honor --

Justice William J. Brennan: How about percentage of disability

Mr. Arno H. Denecke: Well, if -- if for example the physicians fixes this at -- at 50% of the loss of an arm for permanent tool disability, then the insurance carrier turns to the Oregon Workmen's Compensation Act and sees that for 50% loss of an arm, he gets so much money.

Justice William J. Brennan: Is that the law?

Mr. Arno H. Denecke: Well, yes, it would be, Your Honor.

He doesn't -- he doesn't care for because I'm -- well, I haven't figured it out.I think it's quite obvious that he would receive more under the longshoremen and harbor workers schedule benefits than he would under the Oregon schedule of benefits.

Now, I make that statement without --

Justice Hugo L. Black: Could he -- could he sue you although you are not under the Act for compensation?

Mr. Arno H. Denecke: Under that policy, Your Honor, yes.

Justice Hugo L. Black: Well, I'm not talking about on the policy, could he sue you under the Act?

Mr. Arno H. Denecke: No, no, Your Honor.

Justice Hugo L. Black: Could he sue you for compensation?

Mr. Arno H. Denecke: Yes, Your Honor.

Justice Charles E. Whittaker: (Inaudible)

Mr. Arno H. Denecke: Yes, Your Honor.

Justice Charles E. Whittaker: (Inaudible)

Mr. Arno H. Denecke: Yes, Your Honor.

Justice Charles E. Whittaker: (Inaudible)

Mr. Arno H. Denecke: And there are --

Justice Charles E. Whittaker: (Inaudible)

Mr. Arno H. Denecke: Yes, Your Honor.

Justice Hugo L. Black: Is that done all the time that day?

Mr. Arno H. Denecke: Well, Your Honor, I -- it isn't -- it hasn't been necessary.

Justice Hugo L. Black: Has it been done?

Mr. Arno H. Denecke: It has been done and I cited one case, Your Honor.

Justice Hugo L. Black: Supreme Court case?

Mr. Arno H. Denecke: An Oregon Supreme Court case, yes, Your Honor.

Justice Hugo L. Black: Now, when was that?

Mr. Arno H. Denecke: In the 1930s, Your Honor.

And (Voice Overlap) --

Justice Hugo L. Black: (Voice Overlap) your compensation law?

Mr. Arno H. Denecke: Pardon?

Justice Hugo L. Black: Was your compensation law the same then as it is now?

Mr. Arno H. Denecke: But as far as this question is concerned, yes, the same, Your Honor.

Justice Hugo L. Black: It provided that a man was not covered unless he accepted it, and yet, a suit was sustained against the man for compensation who was not -- had not accepted yet, is that what I understood you to say?

Mr. Arno H. Denecke: Yes, Your Honor.

And because I'm not certain that I followed you --

Justice Hugo L. Black: Well, I'm just asking.

As I understand it, the law provides that if a man to be on writ has to accept the company employer.

Mr. Arno H. Denecke: He has to reject it or else he is under time.

Justice Hugo L. Black: Well, he did not accept it.

Mr. Arno H. Denecke: Correct.

He -- in this case he rejected it.

Justice Hugo L. Black: And he is not under it, he rejected it.

Mr. Arno H. Denecke: Correct, Your Honor.

Justice Hugo L. Black: And the law -- state law provides that when he is rejected, he is not under it, is that right?

Mr. Arno H. Denecke: He's not insured with the state industrial accident fund, Your Honor.

Justice Hugo L. Black: And yet, you say that he could -- a person can still sue him --

Mr. Arno H. Denecke: On his --

Justice Hugo L. Black: -- for compensation?

Mr. Arno H. Denecke: On his -- on the private contract of insurance that he has procured, Your Honor.

Justice Charles E. Whittaker: But what question is could he sue him, the employer, under the Act?

Mr. Arno H. Denecke: Your Honor, I am unable to answer whether you can sue the employer as distinguished from his insurance carrier.

I am unable to -- to give the Court a -- an answer that I have any reliance in -- at this time.

Justice Hugo L. Black: You are sure, however, that any -- if a suit should be made on that, maintained by the Court and he was held liable, you insured against it and you insured also against the suit for negligence such as this.

Mr. Arno H. Denecke: Yes, Your Honor.

Justice Tom C. Clark: You have direct action (Inaudible)

Mr. Arno H. Denecke: Against the insurer, Your Honor?

No, Mr. Justice.

Justice Tom C. Clark: You can't sue.

Mr. Arno H. Denecke: Well, you could under this type of insurance because it has been -- it has been construed and I think even the -- the contract now states that it's for the benefit of the --

Unknown Speaker: (Inaudible)

Mr. Arno H. Denecke: Yes, Your Honor, and I'm not positive whether that's been by judicial construction or it's now contained in the policy.

At the risk of laboring a point, I would like to go into this subject and make one more statement on it.

In Oregon, an employer who was in a hazardous -- hazardous employment such as this one, he has two choices -- three choices.

Either he can go under the state fund, state insurance -- under the state fund and that's -- there's no actions possible against for damage actions, or he can reject the State Act and he doesn't have to.

I don't want to mislead the Court.

He doesn't have to but as -- as the report state here, they do and did in this case.

He can take out private insurance coverage which will pay the injured employee according to the benefits in the -- is set out by the Oregon Compensation Law, or if he's a large employer, he can do the same thing by being a self insured.

Justice William J. Brennan: (Inaudible) how -- how is the employer benefited (Inaudible)

Mr. Arno H. Denecke: Primarily by lower rates, Mr. Justice.

Justice William J. Brennan: Lower rates than the state fund?

Mr. Arno H. Denecke: Than the state fund, that's correct.

If -- I -- I don't --

Justice Tom C. Clark: (Inaudible) or lose with the statute?

Mr. Arno H. Denecke: He does lose it, Your Honor.

And -- and of course, many times, the employee will prefer to bring a damage action against the employer.

Justice Hugo L. Black: Through all the time, isn't it, except one case you know.

Mr. Arno H. Denecke: Well, the case that I was referring to, Mr. Justice, was one in which the employee was suing the insurance company for compensation benefits.

I -- as I recall, it was the question of whether they had paid him all the compensation benefits that their contract insurance called for.

So that the remarks --

Justice William J. Brennan: Justice Stewart just suggested --

Mr. Arno H. Denecke: Excuse me.

Justice William J. Brennan: -- I suppose this is the answer, if the employee where you projected the Act and established negligence, he's likely to do what was done here, isn't that right?

Mr. Arno H. Denecke: That's -- that's --

Justice William J. Brennan: But if he can't establish negligence, he might take advantage of this private insurance.

Mr. Arno H. Denecke: That is in essence what the situation is.

And of course that is the reason also why this is somewhat difficult for private insurance coverage to -- to stay in the State there because it's a -- they're subject to the verdicts rather than compensation benefits.

Justice Hugo L. Black: Am I correct in thinking that the counsel for the State and for this Board has said it that there is no right to sue under the law?

If you -- for compensation, if your -- the employer has rejected it?

Mr. Arno H. Denecke: I don't understand them to have so assert it, Mr. Justice.

Justice Hugo L. Black: They could sue under the Act?

Mr. Arno H. Denecke: They could -- no, Your Honor, they could not sue under the Compensation Act.

They sue on the -- on the contract insurance.

Justice Hugo L. Black: What you have is a situation where an employer wants to -- is advantage.He has a right like -- like anybody else provided by insurance against any prospects or suits that are filed against him for negligence or anything else.

That's what you're saying, isn't it?

Mr. Arno H. Denecke: Well, Mr. Justice, I think it goes beyond that -- and that is -- that -- that he has provided and employers generally do provide.

Justice Hugo L. Black: But does the statute say that he can provide it that way?

Mr. Arno H. Denecke: No, Your Honor, this is -- this is beyond the statute.

Justice Hugo L. Black: So, it's just a volunteer thing on his part and if he decides, he can make more money that way or to cost him less, why, he buys his insurance.

Mr. Arno H. Denecke: And as the -- as the Oregon Committee pointed out, Mr. Justice, generally, the efficient employers as -- so far as safety worker is concerned may withdraw and take the coverage under private companies.

If I may ask the Court's indulgence to go into the history of this matter very briefly, I think it may be of some benefit in understanding the problem at least as the respondent sees it.

This Court, if I may go back, the grant of admiralty power, and I use power rather than jurisdiction, is found of course in the -- the judicial article of the Constitution regards to all cases involving admiralty and maritime.

It's also found in the grant of power concerning commerce between the States and among foreign countries and also among the -- the grant of all other powers.

Now, it -- it was not until Southern Pacific versus Jensen in 1917 that the conflict between the States and the Federal Government came to focus on this particular point.

And looking at Jensen just a moment, not in regard to compensation laws but generally, the two dissenting justices are the two justices that wrote the dissents in the Jensen case, those were Justices Holmes and -- and Mr. Justice Pitney, both were the opinion in 1917 that in state courts, the State was free to apply state laws and did not have to apply any admiralty laws if -- even if the event happened on navigable waters.

The majority in that case held, and again, I'm leading out compensation laws, the majority in that case held that anything concerning navigable water, anything concerning maritime that there -- the Federal Government was supreme in that regard and that because of this supremacy, the State Workmen's Compensation Law of New York could not apply.

Now, the Jensen decision, as the members of this Court are so well aware, has certainly been blunted.

However, this Court repeatedly reiterates in its decisions the fact that in matters of maritime, the Federal Government is supreme and state law cannot be applied.

Now, as the Court so well knows, this matter was wilt at the way after Southern Pacific versus Jensen.

And courts, this Court as well as other courts held that even though it did occur on navigable waters, in the particular instance of workmen's compensation that the Federal Government was not necessarily supreme simply because the injury or death happened to occur on navigable waters.

And then the Longshoremen's and Harbor Workers' Act was passed which of course gave the -- or was a federal statute covering injuries on navigable waters.

Even after the Longshoremen's and Harbor Workers' Act, this Court as well as other courts said, “Well, even though it happened on navigable waters, still for various reasons, State Compensation Acts could apply."

Then, because an injured workman, it was getting impossible to tell where his remedy was.Was it in the state or was it federal?The same thing was true of employers.

So, this Court in the Davis case in 1942, in an effort to solve this problem of which compensation act applied, solve it for the employees benefit and for the employers benefit instead of leaving the line as Congress drew it under the -- drew it under Longshoremen's and Harbor Workers' Act set up a zone.And said in this zone, either state workmen's compensation or federal workmen's compensation is possible.

Now, the Court, I don't think, attempted to say that that was a legally logical answer but it did point out that it did solve a very definite problem in supplying compensation benefits to employees and at the same time giving some benefit to their employers.

Now, if the respondent understands the Davis case, the thread that the respondent sees in that case is if the only Act which would bring this under maritime and admiralty jurisdiction is the fact that it happened on navigable waters, if that's the only thing, then there's nothing wrong with defying State Workmen's Compensation Acts.

On the other hand, if there is something else in addition to the fact that it happened on navigable waters, if there is something else, then the Davis case cannot apply.

Justice Hugo L. Black: Why?

Mr. Arno H. Denecke: Excuse me, Your Honor.

Justice Hugo L. Black: Why?

Wouldn't it be just as uncertain, if there were other facts to be considered?

What facts ought to be considered?

Who would know?

Mr. Arno H. Denecke: Well, I think --

Justice Hugo L. Black: How could you ever have any certainty?

Mr. Arno H. Denecke: I think, Your Honor, if I may go into another line of cases which -- along this same point, I -- I would like to attempt to answer, Mr. Justice.

Justice Hugo L. Black: Yes.

Mr. Arno H. Denecke: But I -- I've gotten this -- I thought I got this guidance from some other cases of the Court.

This Court has held in other cases where an injury occurred on -- on navigable waters.

This Court has held the fact that it occurred upon navigable waters alone made it a maritime tort.

And this Court has said, if it's a maritime tort, there is federal supremacy and the Court cannot change the federal law in this regard.

Now, I'm referring particularly to three cases of the Court which I think have been within the last six, seven, eight years.

The first case in point of time was the Garrett case, now, that was a seaman's case, true, but the question there was what -- was who had the burden of proof in proving the validity of a seaman's -- of a release taken from a seaman?

Now, the Court in that case said, “This happened on navigable waters, also, of course, it was brought under the Jones Act.”

But the Court stressed the fact that this was a maritime matter and therefore, the state law, on the burden of proof in a release, could not apply that it was necessary to apply the maritime law, that applied customarily in seaman's case that the employer had the burden of proof of proving that this release was taken free from any fraud.

Then I think a more important case on this subject, more important than this particular regard not because of the nature of the case was Pope & Talbot versus Hawn.

Now, in that case, a carpenter was onboard the ship, went onboard the ship to make some repairs.

Now, the ship was in Pennsylvania, in -- in a harbor in Pennsylvania, and the carpenter was injured by something alledgedly wrong with the ship and he sued the ship.

Now, this was not a Jones Act case, he was a -- a ship repair man and was suing a ship for a -- I'll call it a maritime tort.

He brought the suit in the law side of the federal court or perhaps it was removed to the federal court.

In any event, it was on the law side in the federal court.

This -- and the question before this Court, one of the questions was, “Will the Pennsylvania law of contributory negligence apply which would bar Mr. Hahn or will the general admiralty law of -- contributory negligence is merely a mitigation, will that apply?”

Well, this Court held an unmistakable language that if the tort occurs on navigable waters, it's a maritime tort and the state law can have no application.

It must be federal law.

Then this Court in the last term, I believe it was in the McAllister case, when the question was when a seaman sued for both unseaworthiness and under the Jones Act and the question was, would the state statute of limitations on unseaworthiness, would it apply?

If it did, the plaintiff would have been barred because it was brought after the two years, which I think was the Texas statute.

This Court again held that this having occurred on water was a maritime tort and the state law could have no application.

Now, it appears to us, and this, Mr. Justice Black, is an attempt --

Justice Hugo L. Black: Did --

Mr. Arno H. Denecke: -- somewhat.

Justice Hugo L. Black: -- did he, with those cases, say that no state law could ever have any application?

Mr. Arno H. Denecke: No, Your Honor, the -- the Pope & Talbot versus Hawn stated that the state law could supplement.

I believe that was the -- the word that the Court used.

Justice Hugo L. Black: And Moore and -- Moore and McCormack made no such statement as that (Voice Overlap)

Mr. Arno H. Denecke: No, I don't believe it did, Your Honor.

Justice Hugo L. Black: But what was behind that was the Knickerbocker Ice doctrine, there's a difference, isn't there, between supremacy of the law, the Knickerbocker Ice doctrine that even though Congress or the Government wants to leave the State's freedom and enforce their own law that they can't do it under the Constitution?

That's the difference, isn't it?

The Knickerbocker Ice case, in which was a part of the Jensen line, went further than Jensen, knocked out a -- a law of a State on compensation on the ground that a State -- Congress couldn't even agree for a State to have a compensation law, and the Federal Government couldn't agree that it is exclusive.

Mr. Arno H. Denecke: That's correct.

Justice Hugo L. Black: But I don't think any of the cases you cited, unless I'm wrong, and I happen to have written the two as you just said it, if they did indicate that there could be no state law enforceable in that field, the -- I didn't know it.

Mr. Arno H. Denecke: Your Honor, I -- I -- the case did not go that far.

Your Honor used the -- the language there and I -- I can't put my -- in a --

Justice Hugo L. Black: But it's something like it, as I understand it, it was something like the doctrine of interstate commerce that they have -- the State can be left free as it was in the old politics cases.

It was pointed out in that ancient case, States had been doing something in interstate commerce all through the years and if it didn't conflict with the law of Congress or the Constitution itself but they were free to do it.

I don't see where you get the idea that those cases would bar Oregon from having a compensation law whatever the Knickerbocker Ice Company case might be, if it was still the law.

Mr. Arno H. Denecke: Yes, Mr. Justice.

If I may presume --

Justice Hugo L. Black: Yes.

Mr. Arno H. Denecke: -- that same line, I think --

Justice Hugo L. Black: I want to because I -- I'm interested -- greatly interested in your argument.

Mr. Arno H. Denecke: If, and I have tried to think of some difficulties which would arise if this Court would pronounce that the -- that this would reverse the Supreme Court of Oregon and I obviously was not able to think of all of them but some -- some of the difficulties, and when I say difficulties, they are definitely difficulties of legal logic here.

For example, this same Oregon Workmen's Compensation Act, if we can use it and it's not quite as -- well, assuming that in this same body of water here, there was a general contractor and a subcontractor, both not rejecting the Act but contributing to the state fund and those -- and a workman was injured on premises that were jointly controlled by this general contractor and the subcontractor, and it is happened on -- injury occurred on navigable waters.

Now, if Oregon law is going to be applied, when this injured workman who's employed by the subcontractor sues the general contractor, the Oregon Workmen's Compensation Law says he can't bring a suit because it has a provision in there that employees on premises under the joint supervision control of two different employers, both of them have paid into the Act, why, then the suit is not maintainable under the Oregon Workmen's Compensation Act.

So, the question then if such a matter should ever raise this Court would be, can the Oregon Workmen's Compensation Law be applied in one case?

And in this particular case, which I attempted to set up, the hypothetical would not be applied.

Justice Hugo L. Black: Well, unfortunately, they don't have that --

Mr. Arno H. Denecke: I --

Justice Hugo L. Black: (Inaudible)

Mr. Arno H. Denecke: I understand that, Your Honor, but I -- I did think it was of some importance to show the difficulties that may occur, one other possibility --

Justice Hugo L. Black: You mean the logical difficulty.

Mr. Arno H. Denecke: I -- I understand, Your Honor, yes, the logical difficulty.

Justice Hugo L. Black: As I understand the Davis case, it was written on the premise perhaps that not logic but experience has been the life of the law.

We were confronted with a situation where people didn't know how to proceed.

And we just indicated that when one have of them got jurisdiction in that “twilight zone” case was brought there, it could proceed.

Mr. Arno H. Denecke: If I may follow that --

Justice Hugo L. Black: Yes.

Mr. Arno H. Denecke: -- thesis, Mr. Justice, the Davis -- in the Davis case, it was pointed out by, I believe, Mr. Justice Whittaker, the choice there was between no remedy or a remedy of suing as an employer who had failed to subscribed to the Longshoremen's and Harbor Workers' Act or Washington Workmen's Compensation.

So that in there, it may have been that a contrary decision would have meant that this widow would never have received anything, compensation or otherwise.

Now, in this particular instance, there is no question but that Mr. Hahn, at the time of his injury and now -- and for one year after the termination of this lawsuit, in the event that the Court affirms the Oregon court will be eligible to receive compensation under the Longshoremen's and Harbor Workers' Act.

He has a -- he has compensation and he always could have had compensation.

But relying upon the Davis case now, he has chosen to gamble and attempt to get a jury verdict which would substantially exceed the compensation which have him under the -- under the Longshoremen's and Harbor Workers' Act.

Justice William J. Brennan: Well, the question that Justice Stewart put earlier, what about the finding of navigable waters?

Would that be res judicata in a proceeding if you would have bring it under the Longshoremen's Act?

Mr. Arno H. Denecke: Well, I would think so, Your Honor, and -- and I realized that this is completely extra judicial here but I -- there's never been any question raised and -- but his eligibility for longshoremen's and harbor workers' compensation.

Justice Hugo L. Black: There's a plenty of objections raised that if it's covered by the State, it can't be covered by, isn't it?

If it's covered by the State, can -- can the man get protection in the Longshoremen's Act?

Does it say anything about that?

Mr. Arno H. Denecke: No, Your Honor, it doesn't.

But if I -- if the Court needs any assurance that this -- and -- that this man is going to receive that this Court affirms the Oregon court going to receive compensation under the Longshoremen's and Harbor Workers' Act.

And as the -- as I'm sure the Court knows the -- that compensation, he doesn't even have to make a claim for it until one year after this litigation is terminated.

Justice Charles E. Whittaker: (Inaudible)

Mr. Arno H. Denecke: Yes, thank you, Mr. Justice, I -- I didn't --

Justice Charles E. Whittaker: (Inaudible)

Mr. Arno H. Denecke: I would think it would be res --

Justice Hugo L. Black: Why would it be?

Why would it be?

Why would it be conclusive in another case should the federal courts?

Mr. Arno H. Denecke: Pardon, Your Honor?

Justice Hugo L. Black: Why would it be conclusive in another case in the federal courts?

Mr. Arno H. Denecke: Well, it's between parties and -- and privilege --

Justice Hugo L. Black: What parties before the administrative agency?

Mr. Arno H. Denecke: Well, Your Honor, even though I don't think under the Longshoremen's and Harbor Workers' Act, Ross Island would be a party.

Certainly, the insurance company is a privity of Ross Island Sand & Gravel Company.

Justice Hugo L. Black: They've had a litigation in which the Court cited that Oregon law doesn't cover.One of its reasons is that this was navigable water.

And you think if the United States administrator of Employers' Compensation Act would be bound by that finding or would they have a right to hear evidence of their own?

Mr. Arno H. Denecke: Well, Your Honor, I -- I would think that they would be bound.

I would think that we would --

Justice Hugo L. Black: I hadn't suspected that until --

Mr. Arno H. Denecke: Pardon, Your Honor?

Justice Hugo L. Black: I hadn't suspected that before (Voice Overlap) --

Mr. Arno H. Denecke: May I -- may I go this that we would be estopped, and I'm using that in a rather loose sense, or barred from urging that the waters were not navigable.

I suppose that the Deputy Commissioner administering the Longshore Act would still, if he so desired, could -- could hear testimony on it.

Now, I'm -- I'm not certain (Voice Overlap) --

Justice Hugo L. Black: It needed to do so, wouldn't it, if he had doubt about it?

Mr. Arno H. Denecke: I'm not --

Justice Hugo L. Black: It's not -- it's not litigation.

It's -- it's not in the nature of litigations (Inaudible) administrative matter whether use judgment feel whether they don't want to be tangled up in the technicalities of the law.

Mr. Arno H. Denecke: Well, Your Honor, carrying one step further, if I may, Mr. Justice, suppose if the Deputy Commissioner administering the Act found that the waters were not navigable and then the matter were appealed from that decision to the appropriate Federal District Court, I would think there that the matter would be res judicata even if it were not before the Deputy Commissioner.

Justice Hugo L. Black: They take it overrule the Commissioner on the ground that he failed to decide what the -- what the -- one of the grounds that the State based its conclusion on.

Mr. Arno H. Denecke: I think that would be possible, Your Honor.

In any event, I -- I don't see how there could be any question here and I'm -- this a little side, Mr. Justice Brennan, from your question, but I don't see, as a matter of fact, how this could be anything but navigable because it was, as a matter of fact, navigated and as far as the waters of the United States, this area connected up with the Columbia River which connects with other States and which connects with foreign countries.

So, as a matter of fact, I don't see how it would be possible to hold other than these were navigable waters in the United States.

Justice Hugo L. Black: But suppose it did, how could that ended?

Before the -- under the Jensen case and under that doctrine, the Court had held that even one of the things occurred on navigable water, whether they look at the instance, see how local they were and how non-local they were, and how much by reason of the locals, the -- the situation it would interfere with the international aspects of the maritime law, it -- it's far more than just a mere question of navigability under those cases.

What we held was, that the Congress acted on the basis the Jensen doctrine in that line of cases would decide the matter and nobody could tell where it was.

And as I recall it, one of the reason was not merely that a man might be able to file a suit later but he'd already be put to the expense by making a bad guess with the cause in the lawsuit where neither he nor anybody else could predict whether the State or the Federal Government would decide he was within or without the laws.

Mr. Arno H. Denecke: Mr. Justice, as I understand the situation and I think I do on this particular point here, the Deputy Commissioner will never, in the even this Court affirms the Oregon court, this -- the Deputy Commissioner will never see this case simply because as the -- the Act is itself goes into effect automatically.

We pay, we, the insurance payer here, pays Mr. Hahn.

And the Deputy Commissioner in this case and in all other cases does not see the case unless either insurance carrier controverts the thing the compensation or either the employee or the insurance carrier disagree about the amount of and time of compensation.

So, the -- if it is of any assistance, I can give my personal assurance that the compensation would be paid and I -- and I don't -- that has never been an issue in the case.

Justice Hugo L. Black: What about the cause?

Mr. Arno H. Denecke: The cause of this proceeding, Your Honor?

Justice Hugo L. Black: Yes.

Mr. Arno H. Denecke: Your Honor, I would think we would be bound to make such a claim.

Justice Hugo L. Black: Neither with us.

What I meant was if one of the difficulties of the quagmire that the situation put a man in, he might go to all the expense, go on to the highest court of the state of the nation and then have it held when he got there, that he had gone into the wrong court and puts all that expense in trouble and all that loss of time.

So, your statement that you would see that he got compensation, doesn't settle it.

The -- the problem that we saw would be continued if we didn't adopt some kind of rule to protect from the dilemma that the parties found themselves, both the employer and the employee.

Mr. Arno H. Denecke: Mr. Justice, in a case such as ours here, it is not a dilemma because the employee from the very beginning in a case such as ours can receive compensation under the Longshoremen's and Harbor Workers' Act.

If -- if he has a dilemma --

Justice Hugo L. Black: Suppose you oppose?

Mr. Arno H. Denecke: Pardon Your Honor?

Justice Hugo L. Black: Suppose you oppose that?

Suppose you went to him and said he couldn't be paid there.

Mr. Arno H. Denecke: Well, then, Your Honor, he would -- he would have to take this up with the Deputy Commissioner, and the Deputy Commissioner of course and among his award if he found that the employer and the insurance carrier was wrong, why, then, he would award a payment of at least a part of the cost.

And I'm not saying, Mr. Justice, that it completely compensates the (Voice Overlap) --

Justice Hugo L. Black: And then that could be appealed?

Mr. Arno H. Denecke: That's correct, Your Honor.

Justice Hugo L. Black: So it's not merely a question, it is automatically get his money.

I -- I didn't think it was, maybe it is.

Mr. Arno H. Denecke: It's not if the insurance carrier controverts that -- that fact, Your Honor.

Justice Hugo L. Black: That's what I thought.

I thought maybe I misunderstood.

Mr. Arno H. Denecke: No, I -- I didn't mean to --

Justice Hugo L. Black: Yes.

Mr. Arno H. Denecke: -- to mislead the Court.

One other feature which I would like to dwell very briefly on, two other features, if I may, first of all, as it been brought up in the argument here, one of our contentions is that if the petitioner were allowed to prevail in this suit, he is doing it at least partially on the basis of the Oregon Employer's Liability Act and the Oregon Employer's Liability Act imposes a standard, in fact is very different than the admiralty law employed in the ordinary maritime tort.

Now, there are several difficult -- differences and the -- both the Ninth Circuit Court of Appeals and the Oregon Federal District Court have held that suits under the Oregon Employer's Liability Act may not be maintained when it is for a maritime tort.

One of the differences, and as I said there are several, one is that the Oregon Employer's Liability Act imposes the standard of that the employer must use every device, care and precaution and then it has some -- some additions on to that.But it is our belief based upon these and other judicial decisions of inferior courts that the application, the Oregon Employer's Liability Act would not be permitted in the maritime tort simply because it would do as this Court has said in other kinds of cases involved in maritime torts destroy the uniformity if necessary.

Thank you.

Argument of Robert Y. Thornton

Mr. Robert Y. Thornton: May it please the Court.

I wanted to just mention briefly Mr. Denecke's argument concerning a suppose conflict between this case and the Pope & Talbot versus Hawn, Garrett versus Moore-McCormack and the McAllister case.

Now, those cases are all cases where state law attempted to take away admiralty rights.

In this case, no one is trying to deprive anyone of anything.

State law here isn't trying to take away any admiralty rights and all the court said in those cases, as I understand it is that where state law conflicts with established admiralty rights or attempts to deprive a person of those rights that the federal law prevails.

Now, obviously, there is no conflict here because in the -- the Garrett case and the Davis case were both decided the same day, and the opinions were written by the same justice.

And the Davis case merely holds that where you have the “twilight zone” of course and you could -- you can go either way, you can either go for a federal or a state remedy.

So obviously, there's no conflict.

Now --

Justice Potter Stewart: Of course, the Jensen case wasn't the case where the state law was trying to take away something from admiralty, it was this -- it was the opposite wasn't it?

The Jensen case.

Mr. Robert Y. Thornton: The Jensen case was a (Voice Overlap) --

Justice Potter Stewart: For a case in which the State was trying to give something that admiralty hadn't given, isn't that right?

Mr. Robert Y. Thornton: That's right.

And of course, that was a Workmen's Compensation Law --

Justice Potter Stewart: Yes.

Mr. Robert Y. Thornton: -- which this Court has now decided can be applied by a State --

Justice Potter Stewart: Yes.

Mr. Robert Y. Thornton: -- in the “twilight zone”.

So, actually, the -- the Jensen case, the old basis of it is -- is gone, you might say, because those cases can be [Laughs] -- those can be applied now.

However, you want to look at the -- the whole basis of the Jensen case which is a workmen's compensation decision is -- is now been wiped away.

Mr. Denecke mentioned in his argument here, this private insurance, and I think it caused some confusion with the Court and -- and I want clear it up as much as I can, this private insurance, there's -- there's nothing in the record on whatsoever.

The record is completely silent about it, and it wasn't mentioned until we got into this Court.

We went through the trial court, we went through the State Supreme Court and finally when we got into this Court, this private insurance was brought up by Mr. Denecke.

I think in -- in answer to our contention that Ross Island Sand & Gravel Company should be -- should be held responsible in this case under the -- under the Oregon Act because it would hurt the enforcement of Workmen's Compensation Laws if they were not held.

So for the first time it was brought up in this Court and they want this Court to understand that they have a private policy of so-called workmen's compensation insurance.

Now, as I say there's nothing in the record on it whatsoever.

There's nothing in the record on it that Mr. Hahn even knew about it or there was never offered to him.

And they set out in their brief a policy of workmen's -- a private policy of insurance, and I think the inference is or they want this Court to understand that that is their policy.

Now, this is completely outside the record.

Normally, I wouldn't mention it except the Court here seemed to be interested in it and I did point out in the brief, in our reply brief starting at page 10, to the end of the brief, how this private so-called policy of insurance is nothing like workmen's compensation at all.

To begin with, it has no standing under the law whatsoever.

And if the employer rejects the Compensation Act, they are held responsible under the law of negligence whether they have one of these policies or not.

It's a voluntary act on their part.

Now, the quality of this insurance, this so-called compensation insurance is well illustrated by paragraph 16 of that insurance which provides that a simple agreement between the insurer and the employer will cut the injured employee off without one cent.

In other words, all the -- all that has to be done is the insurer and the employer agrees that this fellow gets nothing and he gets nothing.

Now, what a -- what a whip to require an employee to take a smaller inadequate award in a situation like that, all they have to do is agree he'll get nothing and he has no rights.

I think that answers the questions of one of the justices asked as to whether an action of law can be maintained against the insurer or the employer under one of these policies.

Furthermore, in order for the employee to get any rights at all, he must give a full release.

In other words, he has to sign a release to the insurance company before he's paid anything, that's Provision Number 14 (e) of this policy.

Now, if he asked to sign a release before he gets any benefits or before he is in entitled to anything, how can he bring an action under the policy?

Obviously, he can't.

The policy provides that it can be canceled by the insurer or the employer anytime on 10 days notice.

Of course, in Workmen's Compensation, under the Workmen's Compensation Law, he's entitled to it at all times and even if the employer has not complied with the Act by putting -- paying the premiums.

Unknown Speaker: (Inaudible)

Mr. Robert Y. Thornton: He cannot sue under the policy unless he first executes a release.

Unknown Speaker: (Inaudible)

Mr. Robert Y. Thornton: Oh, yes, if he executes a full release to the -- to the insurer, then he can bring an action -- no he can't even then, Your Honor, no he can't even then.

He doesn't get any workmen's compensation benefits unless he executes the release and no action can be brought under the policy at all.

Does the policy provides that if there's any dispute, there should be arbitration and he has to pay half the cost of the arbitration and the policy provides nothing for aggravation.

And under the Oregon law, he has two years if there's aggravation to bring an action for aggravation to get a jury trial.

This type of a policy was discussed in the case of Whitehead versus Montgomery Ward, 194 Or. 106 at page 130.

In which the Oregon court unfavorably compared with the provisions of one of these policies with the Oregon Compensation Act.

That case significantly was not cited by the respondent.

Justice Hugo L. Black: 194 Or. 130?

Mr. Robert Y. Thornton: 194 Or. 130, Your Honor, it's cited at page 14 of our reply brief.

Another example is case of Pease versus Roseburg Lumber Company which is 206 Oregon, cited in our brief here, 206 Or. 56 -- 658, which there was a policy for only $5000.

Now, Mr. Lafky here is telling about some of these cases that was for one accident.

It's -- I mean for one entire incident.

Mr. Lafky was talking about cases where they incurred liability of $100,000 on one accident.

This policy in the Roseburg Lumber Company case would be totally inadequate in a situation like that.

The policy they set out here in the brief is $50,000 and $100,000.

In other words, 50 for one person, 100 for one accident.

You have a -- you have a catastrophe.

It wouldn't begin to cover the injuries and liability.

Now, respondent's attorney states in argument here that Hahn can get longshore benefits.

I think this Court recognized when it set up the “twilight zone” doctrine that which ever way one of these employees went that is the way that he was part.

If there's -- there's no assurance in this case, Mr. Denecke says he hasn't give the personal assurance now that this will be paid.

But whichever way this employee had -- had done, there's no assurance that they wouldn't have said, “He should have gone the other way.”

That's the reason for the “twilight zone”.

Now, the question isn't -- isn't in this case which would be the best remedy for Mr. Hahn to have.

The question in this case is, can the State of Oregon constitutionally apply its laws in the “twilight zone” in this situation?

That's the question for this Court to decide.

And unless it's unconstitutional, under the United States Constitution for Oregon to apply its laws, then Mr. Hahn is entitled to recover.

Justice Potter Stewart: Do you understand that the “twilight zone” doctrine applies and applies only in the -- in an -- where are the facts of the accident make it doubtful?

Whether or not the -- the -- this was an event over which the State constitutionally had jurisdiction or whether on the other hand, this was something covered by the federal longshoreman?

Mr. Robert Y. Thornton: As I understand it, yes.

This Court was -- took notice of all of the cases that --

Justice Potter Stewart: There are --

Mr. Robert Y. Thornton: -- were being --

Justice Potter Stewart: -- many such cases.

Mr. Robert Y. Thornton: -- that were being fought, that's right.

Justice Potter Stewart: Yes.

Mr. Robert Y. Thornton: And this Court finally said, “This has got to stop, just trying to draw a sharp line of distinction between every case.

It's not necessarily under the Constitution.

So, we're going to set up the “twilight zone” where there is an area of doubt as to which law this man could come under.”

Justice Potter Stewart: Because of the -- the ambiguous facts of the accident, isn't that right?

Mr. Robert Y. Thornton: Because if the --

Justice Potter Stewart: If -- if the injury occurred under such circumstance.

Mr. Robert Y. Thornton: Because of the ambiguous facts of the accident also because of the ambiguous questions to whether or not it would be constitutional, whether it would interfere with the uniformity of maritime to apply state law in this particular case.

Justice Potter Stewart: Well, then, that's the result, but do I understand you to say or agree that -- that this “twilight zone” doctrine applies only in cases where there is some doubt as to -- as to whether state or federal jurisdiction attaches?

Mr. Robert Y. Thornton: Yes, in the area of doubt where -- where its questions, as to which -- which remedy a -- a man should have where the -- where the man could go conceivably either way.

Justice Potter Stewart: Based on the facts under which he was injured or killed?

Mr. Robert Y. Thornton: Based on the facts of the case under which he was injured.

And that it doesn't matter whether it -- it's a question of whether federal law or state law will apply in that situation rather than to try to draw a sharp line of distinction.

You allow the -- if a man chooses federal law, that's fine.

If he chooses state law, that's fine.

As Justice Frankfurter said, it may be illogical as a constitutional doctrine but that is -- that is the only sensual way to solve this thing unless the Court should decide to -- to put the Jensen case out which this Court -- the Court decided not to do.

Justice Hugo L. Black: And that would make no difference under our holding, would it, unless we overruled the Davis case (Inaudible)

Well, if the Jensen case should later be overruled or not, because those cases held that the Congress had adopted the rule of the Jensen case, it had said -- left some considerable state of uncertainties, the boundary between the two.

Justice Potter Stewart: That's right.

That's correct, Your Honor.

Justice Potter Stewart: In other words, overruling the Jensen case at this late day in this area or even at the time that Davis was decided, overruling the Jensen case wouldn't -- wouldn't have solve the problem, this particular problem, is that right?

Mr. Robert Y. Thornton: Well, I think that's what Mr. Chief Justice Stone want to do in that Davis case.

He -- he wanted to just get rid of the Jensen case altogether, but this Court, I believe --

Justice Potter Stewart: But Congress had acted in reliance on it and --

Mr. Robert Y. Thornton: And acted in reliance on it.

And so rather than take such drastic action, it was better to set up this “twilight zone” where there was some doubt as to -- as to Mr. Justice Black points out as to -- as to just what Congress meant or just which remedy was proper.

Thank you.