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Novelties Distribution Corp. v. Molee

June 29, 1983

NOVELTIES DISTRIBUTION CORPORATION AND NEW JERSEY MANUFACTURERS INSURANCE COMPANY, PETITIONERS
v.
ANTHONY MOLEE AND DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, UNITED STATES DEPARTMENT OF LABOR, RESPONDENTS



ON PETITION FOR REVIEW OF AN ORDER OF THE BENEFITS REVIEW BOARD BRB No. 80-1164

Author: Adams

Before: ADAMS and GARTH, Circuit Judges, and ACKERMAN, District Judge*fn*

Opinion OF THE COURT

ADAMS, Circuit Judge.

Novelties Distribution Corporation (Novelties) and its insurance carrier, New Jersey Manufacturers Insurance Company, petition for review of an order of the Benefits Review Board (Board), affirming a decision of an Administrative law Judge (ALJ). The ALJ and the Board granted benefits to Anthony Molee, Novelties employee, pursuant to the Longshoremens' and Harbor Workers' Compensation Act (LHWCA), 33 U.S.C. § 901-50. Petitioners argue that Molee's claim was not covered by the Act because Molee was not engaged in "martitime employment" within the meaning of 33 U.S.C. § 902(3) and Novelties was not an employer under 33 U.S.C. § 902(4). For the reasons set forth below, we will affirm.

I

Novelties is in the business of receiving, warehousing, and distributing lumber. It is a wholly owned subsidiary of Maher Terminals, Inc. (Maher), a stevedoring company. Novelties' lumber operation occupies two areas: Berth 78, a ten acre area directly adjacent to the water, and a sixteen acre "Bay Avenue Area," 2500 feet inland. Molee spent virtually all his working time on Berth 78 and at most one day a year at the larger area, taking inventory.

When ships anchored at Berth 78, Maher's employees would unload lumber from the vessel to the "stringpiece," the edge of the dock closest to the ship. Novelties' employees would then move the lumber from the stringpiece to the storage area. Molee testified that, although he had no official job title, he was a "checker" or "location man." App. 30-31; 34-35. He explained that his "work was always checking, checking trucks, checking the lumber off the ship. . . ." App. 49, 60, 30-31, 34-35.Molee would normally be stationed somewhere in the middle of Berth 78. Although he would sometimes work alongside the stringpiece, "any movement he may have made would end at the water's edge." App. 28.

On August 11, 1977, Molee was performing his usual job of directing and organizing the placement in Berth 78 of lumber that was being removed from a ship, when he was struck and run over by a lift truck bringing lumber from the stringpiece. It is stipulated that Molee was totally disabled by the accident.

Because the parties were unable to agree that Molee was covered under the LHWCA, the matter was referred to an ALJ for hearing and decision. See 33 U.S.C. § 919. The ALJ found in favor of Molee and ordered that payments be made under the Act. Molee, the ALJ explained, "played an integral and essential role in the longshore process" and, therefore, was an employee covered by the Act. App. 102. The Board affirmed this decision. 15 Ben. Rev. Bd. Serv. 1 (1982). The employer and its insurance carrier petitioned for review ander 33 U.S.C. § 921(c) on the grounds that neither Molee nor Novelties is covered by the LHWCA.

II

Petitioners assert that Molee functioned as an agent of land-based consignees, that he did not engage in maritime employment, and, consequently, that he was not covered by the Act.*fn1 Their argument is based principally on the fact that Novelties, because of its separate corporate identity from Maher, is an agent of the consignees and not of the stevedoring company. Molee urges that the nature of his work brings him under the Act, regardless of how Novelties, Maher, and the consignees choose to structure their legal relationships.

When Novelties' employees take possession, the cargo has in effect, according to petitioners, already been delivered to the consignees.The trucks that take the lumber from the stringpiece for storage in Berth 78 are, according to petitioners, the first step in the land-based transportation of the cargo. Novelties stresses that it does not deliver cargo stored in Berth 78 to the consignees. Rather Novelties insists that the stored cargo has already been delivered to the consignees as soon as Novelties takes possession, and that, when Novelties releases it for further transshipment, it gives the cargo to the customers of the consignees. By divorcing itself from Maher, Novelties has, in its view, transformed its employees, including Molee, from longshoremen into completely land-based lumberyard workers.*fn2 This argument reintroduces the type of checkered, arbitrary coverage that Congress labored to eliminate in amending the Act in 1972, and runs counter to the liberal spirit in which "coverage" is to be construed.

In 1972 Congress addressed "the continuing anomaly that the schedule of benefits to be applied in any case depended on whether the injury occurred on the land or water side of the gangplank."*fn3 Sea-Land Service, Inc. v. Director, Office of Workers' Compensation Programs (Johns), 540 F.2d 629, 633 (3d Cir. 1976); P.C. Pfeiffer Co. v. Ford, 444 U.S. 69, 72-73, 62 L. Ed. 2d 225, 100 S. Ct. 328 (1979). In place of a "situs' test of eligibility for compensation, Congress substituted a two-part test "looking both to the "situs' of the injury ...


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