Opinion
Civil Action No: 04-2121, c/w 04-2849 Section: "R" (2).
January 25, 2005
ORDER AND REASONS
Defendants Latham C. Smith, individually and doing business as Smith Maritime, Latham Maritime (collectively, Smith), and Dana Marine Service dispute the Court's personal jurisdiction over them. Smith and Dana also move the Court to transfer the action to the Middle District of Florida and to stay these proceedings until Smith's limitation of liability action is resolved. For the following reasons, the Court finds that it has personal jurisdiction over Smith and Dana and the Court DENIES the motion to transfer. The Court also GRANTS the motion to stay the proceedings against Smith, but DENIES the motion to stay the proceedings against Dana.
I. BACKGROUND
Petrofac, Inc. commissioned the construction of hydrocarbon modules at the Dynamic Industries shipyard in New Iberia, Louisiana on behalf of Petrobas Netherlands. In the Spring of 2004, Petrofac contracted with Dana for the carriage of the modules from New Iberia, Louisiana to Rio de Janiero, Brazil and then for the return of other equipment to Petrofac from Brazil to Morgan City, Louisiana. The contract negotiations between Petrofac and Dana occurred over the course of several meetings in New Orleans, Louisiana, and the parties had one meeting in New Iberia, Louisiana. (Petrofac's Opp'n to Mot. Transfer, Ex. 1 at ¶ 8.)
In order to complete its contract with Petrofac, Dana bareboat chartered the barges UR 95 and JMC 300. ( See Pl.'s Opp'n to Mot. Transfer, Ex. B.) Dana agreed to provide inland and assist tugs to deliver the barges UR 95 and JMC 300 to New Iberia, Louisiana, where the hydrocarbon modules would be loaded onto the barges. ( Id.) During loading in New Iberia, Dana agreed to supply personnel and pumps to assist in the ballasting of the barges. ( Id.) From New Iberia, Dana agreed to provide inland and assist tugs to transport the barges into the Gulf of Mexico where other tugs would take over the towage. ( Id.)
In July of 2004, Dana and Smith entered a Voyage Towage Agreement. ( See id. at Ex. C.) Smith agreed to supply its tug ELSBETH II to tow the JMC 300 from the Gulf of Mexico to Brazil. Smith also agreed to provide its tug RHEA to tow the UR-95 from the Gulf of Mexico to meet Dana's tug ATABOY, which would be carrying other cargo for Petrofac to Louisiana. ( Id. at Ex. C. Cl. 19.) When they met, the RHEA and the ATABOY were to swap tows. ( Id.) Then, the RHEA was to return with the ATABOY's tow to Morgan City, Louisiana, and the ATABOY was to proceed to Brazil with the UR 95. ( Id.)
On July 16, 2004, Smith brought the RHEA to port in Gretna, Louisiana at Dana's request to be surveyed in preparation for the voyage. On July 20, 2004, Dana's assist tugs handed over the UR 95 to Smith's tug RHEA at South Marsh Island, Block 49, Gulf of Mexico. (Petrofac's Mem. Opp'n Transfer, Ex. 1D.) The next day, Dana's assist tugs handed over the JMC 300 to Smith's tug, the ELSBETH II at South Marsh Island, Block 49, Gulf of Mexico. ( Id.) On or about July 20, 2004, the RHEA and its tow allided with and damaged the plaintiffs' unmanned hydrocarbon production platform, which is located on the outer continental shelf adjacent to Louisiana. (Pl.'s Compl. at ¶ 5.)
On July 29, 2004, El Paso Production sued Smith in an in personam proceeding in the Eastern District of Louisiana. On August 3, 2004, El Paso amended its complaint to add Chevron U.S.A. and Forest Oil corporation as plaintiffs, and Dana and Petrofac as defendants. The plaintiffs allege that the unseaworthiness of the tug and the barge and the negligence of their crew members and owners caused the allision. The plaintiffs pray for compensatory damages in the amount of $7,400,000.00 and punitive damages.
On July 29, 2004, the RHEA and the UR-95 were arrested in an in rem action brought by El Paso in the United States District Court for the Southern District of Florida. On August 6, 2004, El Paso amended its complaint to add Chevron and Forest as plaintiffs in the in rem action. The same day, Smith filed for limitation of liability in the Southern District of Florida. That court consolidated the in rem action and the limitation action on September 13, 2004. Smith then moved to transfer the consolidated action to the Middle District of Florida. The plaintiffs moved the court to transfer the consolidated action to the Eastern District of Louisiana. On October 4, 2004, the district court for the Southern District of Florida denied Smith's motion to transfer the consolidated action to the Middle District of Florida and granted the plaintiffs' motion to transfer the consolidated action to the Eastern District of Louisiana. This Court then consolidated the in rem proceeding and the limitation action with the in personam proceeding already pending here.
Smith and Dana both object to the assertion of the Court's personal jurisdiction over them, and they move the Court to transfer the consolidated action to the Middle District of Florida.
II. PERSONAL JURISDICTION
A. Legal Standard
Smith and Dana allege that this Court lacks personal jurisdiction over them. A court has personal jurisdiction over a nonresident defendant if (1) the forum state's Long-arm Statute confers personal jurisdiction over that defendant, and (2) the forum state's exercise of jurisdiction complies with the Due Process Clause of the Fourteenth Amendment. See Latshaw v. Johnson, 167 F.3d 208, 211 (5th Cir. 1999). Louisiana's long-arm statute extends jurisdiction to the full limits of due process. LA.REV.STAT. § 13:3201 (B). The exercise of personal jurisdiction over a nonresident defendant satisfies due process when (1) the defendant has purposefully availed itself of the benefits and protections of the forum state by establishing "minimum contacts" with that state, and (2) exercising personal jurisdiction over the defendant does not offend "traditional notions of fair play and substantial justice." Latshaw, 167 F.3d at 211 ( citing International Shoe Co. v. State of Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158 (1945)). The contacts with the forum state must be such that the defendant "should reasonably anticipate being haled into court" there. Latshaw, 167 F.3d at 211 ( citing World-Wide Volkswagen Corp. V. Woodson, 444 U.S. 286, 297, 100 S. Ct. 559, 567 (1980)).
Personal jurisdiction may be either specific or general. See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 (1984); Wilson v. Belin, 20 F.3d 644, 647 (5th Cir. 1994). A court may exercise specific jurisdiction over a nonresident defendant when the claim asserted against the defendant arises out of or relates to his contacts with the forum state. See Helicopteros, 466 U.S. at 414 n. 8; Wilson, 20 F.3d at 647. To determine whether specific jurisdiction exists, courts examine whether the defendant purposefully availed itself of the privileges of conducting activities in the forum state, and whether the cause of action arises out of or relates to those activities. See Guidry, 188 F.3d at 625; D.J. Investments, Inc. v. Metzeler Motorcycle Tire Agent Gregg, Inc., 754 F.2d 542, 547-48 (5th Cir. 1985). A single act by the defendant directed at the forum state can be enough to confer personal jurisdiction if the cause of action arises out of that act. See Ruston Gas Turbines, Inc. v. Donaldson Co., 9 F.3d 415, 419 (5th Cir. 1993). A court may exercise general jurisdiction over the defendant when the defendant has engaged in "systematic and continuous" activities in the forum state. See Helicopteros, 466 U.S. at 414 n. 9; Wilson, 20 F.3d at 647. Contacts between a defendant and the forum state must be "extensive" to satisfy the "systematic and continuous" test. Submersible Systems, Inc. v. Perforadora Central, S.A. de C.V., 249 F.3d 413, 419 (5th Cir. 2001).
B. Analysis
(1) Personal Jurisdiction Over Smith
At the outset, the Court notes that a transferee-court should accept as the law of the case the transferor-court's decision to transfer the action and should not disturb that decision "except under the most impelling and unusual circumstances." In re Cragar Indus., 706 F.2d 503, 505 (5th Cir. 1983) (internal citations omitted). The district court for the Southern District of Florida granted the plaintiffs' motion to transfer the consolidated in rem and limitation action to the Eastern District of Louisiana. Implicit in the Florida court's decision to transfer the in rem and limitation actions to this Court is the determination that this Court has personal jurisdiction over Smith and Dana. This is because a court may grant a motion to transfer only if the plaintiffs could have brought the action in the transferee forum. See Hoffman v. Blaski, 363 U.S. 335, 343-44 (1960); In re Volkswagen AG, 371 F.3d 201, 203 (5th Cir. 2004). This means, inter alia, that the transferee forum must have personal jurisdiction over the defendants. Pugh v. Arrow Electronics, Inc., 304 F.Supp.2d 890, 896 (N.D. Tex. 2003). This Court takes the Florida district court's implicit decision that this Court has personal jurisdiction over Smith and Dana into account when it analyzes all of the facts to determine whether there is personal jurisdiction here.
The Smith entities are Florida corporations with their principal places of business in Florida. First, the Court finds that Louisiana's long-arm statute applies to Smith. This is because the Outer Continental Shelf Lands Act applies to this action. The OCSLA applies because the action involves damage to a platform located on the outer continental shelf adjacent to Louisiana. Tennessee Gas Pipeline Co. v. Houston Cas. Co., 881 F.Supp. 245, 250-51 (W.D. La. 1995), aff'd, 87 F.3d 150 (5th Cir. 1996) (finding that the OCSLA applied to an action arising out of a vessel allision with a fixed platform on the outer continental shelf). Under the OCSLA, federal law applies to the action, and when there is no federal law to apply, the law of the adjacent state applies. 43 U.S.C. § 1333. There is no federal long-arm statute. Therefore, Louisiana's long-arm statute applies because Louisiana is the adjacent state. See Hughes v. Lister Diesels, Inc., 642 F.Supp. 233, 235 (E.D. La. 1986) (applying Louisiana's long-arm statute to an action arising under OCSLA because there is no federal long-arm statute); Mote v. Oryx Energy Co., 893 F.Supp. 639, 642 (E.D. Tex. 1995).
Moreover, Louisiana's long-arm statute is satisfied here. The statute provides that a court may exercise personal jurisdiction over a nonresident defendant who has caused damage or injury in Louisiana. La.R.S. 13:3201(3). All fixed structures located on the outer continental shelf adjacent to Louisiana are considered part of Louisiana under the OCSLA, and "any damage or injury occurring on such platforms is deemed to occur in Louisiana." Hughes, 642 F.Supp. at 237. See also Mote, 893 F.Supp. at 642 (noting that platforms on the outer continental shelf "may be considered within the boundaries of the adjacent state for the purposes of determining where an accident 'occurred' for long-arm jurisdiction purposes"). Therefore, the allision in this case is deemed to have occurred in Louisiana because the platform is located on the outer continental shelf adjacent to Louisiana.
The Court also finds that the exercise of specific jurisdiction over Smith is appropriate. This follows because the plaintiffs' claim arises out of Smith's contacts with this state, and Smith's contacts here are sufficient to cause Smith to reasonably anticipate being haled into court here. Smith owned and operated the tug RHEA, which the plaintiffs allege caused the allision in Louisiana. Specifically, the plaintiffs allege that the unseaworthiness of the RHEA and the negligence of the RHEA's crew allegedly caused the allision. See Mote, 893 F.Supp. at 642 (exercising specific jurisdiction over the defendant because the action arose out of an accident that the defendant caused on the outer continental shelf). See also In re Matter of the Libel and Petition of Gemini Navigation, S.A., 1996 WL 544236, at *3 (S.D. Tx. March 1, 1996) (noting that "where all the damage to the platform . . . occurred in Texas [under OCSLA], a Texas forum seems most appropriate"). As noted supra, "[a] single act by the defendant directed at the forum state . . . can be enough to confer personal jurisdiction if that act gives rise to the claim being asserted." Ruston Gas, 9 F.3d at 419.
Notably, however, the allision is not Smith's only contact with the state in connection with this action. For example, Smith brought the RHEA to Gretna, Louisiana to be surveyed in preparation for the voyage. The RHEA was scheduled to pick up the Petrobas cargo coming from New Iberia, Louisiana three days after the survey. Furthermore, under the terms of Smith's agreement with Dana, the RHEA was to swap tows with the ATABOY when the two vessels met at sea, and the RHEA was to return with the ATABOY's tow to Morgan City, Louisiana. The RHEA allided with the platform before it could swap tows with the ATABOY, but it nevertheless traveled to Morgan City, Louisiana after the allision.
In addition to Smith's contacts arising out of the incident that forms the basis of this action, Smith has other contacts with Louisiana. Smith's owned or operated vessels have made several port calls a year to Louisiana since 1997. (Pl.'s Supp. Mem. Opp'n Mot. Transfer, Ex. C, No. 7.) From time to time, Smith vessels make crew changes in Louisiana. ( Id. at No. 3.) Smith has also entered into oral and written contracts with Louisiana entities, and Smith has provided goods and services to Louisiana entities at various times since 1997. ( Id. at No. 4, 5.)
Ultimately, in light of the preparation for the voyage in Louisiana, the allision by Smith's owned and operated vessel with a platform in what is tantamount to Louisiana territory, and Smith's other contacts with Louisiana, the possibility of being haled into a Louisiana court was reasonably foreseeable to Smith, and its contacts are sufficient to justify assertion of personal jurisdiction. (2) Personal Jurisdiction Over Dana
Dana is a Delaware corporation with its principal place of business in Alabama. The plaintiffs allege that Dana's barge was unseaworthy and that Dana's negligence caused the allision. Personal jurisdiction over Dana is appropriate for the same reasons that personal jurisdiction is appropriate over Smith. The Court has specific jurisdiction over Dana because the claims against Dana arise out of its contacts with Louisiana, and Dana's contacts with Louisiana are such that Dana should have foreseen being haled into court in Louisiana. Dana's barge UR 95 caused damage in Louisiana by alliding with the plaintiffs' platform. Additionally, Dana supplied pumps and experienced personnel to assist with ballasting the barge in New Iberia, Louisiana. ( Id. at Ex. B, Cl. 65.) Significantly, the plaintiffs allege that Dana failed to properly ballast the barge in New Iberia, Louisiana, and this contributed to the allision. Thus, the action arose out of Dana's contacts with Louisiana.
Furthermore, Dana negotiated its towage contract with Petrofac in Louisiana, and Dana performed many of the obligations under the towage contract in Louisiana. For example, Dana provided inland and assist tugs in connection with the delivery of the barges to New Iberia, Louisiana. ( See Pl.'s Mem. Opp'n Transfer at 8.) Similarly, Dana provided tugs for the delivery of the barges to the Smith tugs, which required Dana's tugs to travel through Louisiana territorial waters. ( Id.) Dana cannot seriously contend that it could not foresee the possibility of being subject to suit in Louisiana in light of Dana's contacts with Louisiana under the contract and that the cause of action arises directly out of those contacts.
III. MOTION TO TRANSFER
A. Legal Standard
The defendant who brings a motion to transfer venue must demonstrate why the case should be transferred to an alternate forum. Trevino v. Louisiana-I Gaming, 2002 WL 27769, No. Civ. A. 00-3110, at *1 (E.D. La. 2002) (citing Time, Inc. v. Manning, 366 F.2d 690, 698 (5th Cir. 1966)). Under Section 1404(a), the Court may transfer an action to any other district where the plaintiff could have filed suit for the convenience of parties and witnesses. 28 U.S.C. § 1404(a). Therefore, the movant must first demonstrate that the plaintiff could have brought the action in the transferee forum. See Hoffman v. Blaski, 363 U.S. 335, 343-44 (1960); In re Volkswagen AG, 371 F.3d 201, 203 (5th Cir. 2004). This means that the transferee forum must have personal jurisdiction over the defendant. Pugh, 304 F.Supp.2d at 896. In cases involving multiple defendants, the transferee forum must have personal jurisdiction over all of the defendants. See Liaw Su Teng v. Skaarup Shipping Corp., 743 F.2d 1140, 1148 (5th Cir. 1984), overruled on other grounds In re Air Crash Disaster Near New Orleans, Louisiana, 821 F.2d 1147 (5th Cir. 1987). The movant must then show that a transfer of venue will serve the convenience of the parties, the witnesses, and the interests of justice. See 28 U.S.C. § 1404(a).
B. Analysis
The Court again notes that it cannot lightly transfer these actions back to Florida because the district court for the Southern District of Florida has already determined that transfer here is appropriate. Furthermore, the Court finds that transfer here is inappropriate because Smith has not shown that the plaintiffs could have brought the action in the Middle District of Florida. Although Smith and Dana argue that the Middle District of Florida has personal jurisdiction over them, they offer no evidence that the Middle District of Florida would have personal jurisdiction over defendant Petrofac. Petrofac is a Texas corporation with its principal place of business in Tyler, Texas. (Pl.'s Am. Compl. ¶ 4b.) The Florida Department of State Division of Corporations online Public Inquiry includes no listing for Petrofac. (Pl.'s Ex. I.) Therefore, Smith and Dana have failed to carry their burden to show that the plaintiffs could have brought suit in the Middle District of Florida initially.
Moreover, Smith and Dana fail to show that the balance of the convenience of the parties and the interests of justice favor transfer to the Middle District of Florida. Smith is the only party in this multi-party action that hails from Florida. Additionally, Smith can identify only three potential witnesses — all crew members of the RHEA — that reside in Florida. There is no convincing indication that this action should be transferred to the Middle District of Florida. See Carlile v. Continental Airlines, Inc., 953 F.Supp. 169, 171 (S.D. Tex. 1997) (denying motion to transfer on the basis that the selected forum was marginally inconvenient for the defendant). Apparently, the Florida court was similarly unconvinced, as it too had the option to transfer the action to the Middle District of Florida. Accordingly, the Court denies the motion to transfer.
IV. STAY OF PROCEEDINGS PENDING THE LIMITATION ACTION
Smith and Dana initially moved the Court to stay the proceedings against them in this Court pending the outcome of Smith's limitation action. As noted supra, the Florida court transferred the limitation proceeding to this Court. Therefore, Smith and Dana now move the Court to review the sufficiency of the pleadings in the limitation action and issue an injunction against all proceedings against them pending the outcome of Smith's limitation action.
A. Legal Standard
Admiralty Rule F provides the procedures for actions in limitation. Specifically, under Rule F(1), a vessel owner may file for limitation of liability within six months of receiving notice of a claim against it. Fed.R.Civ.P., Supp. Admiralty R. F(1). Then the vessel owner must deposit with the court a sum equal to the amount of the owner's interest in the vessel and pending freight plus interest at the rate of six percent per annum from the date of security. Id. Once the vessel owner has complied with the requirements of Rule F(1), "all claims and proceedings against the owner or the owner's property with respect to the matter in question shall cease." Id. at F(3). Therefore, "[o]n application of the plaintiff the court shall enjoin the further prosecution of any action or proceeding against the plaintiff or the plaintiff's property with respect to any claim subject to limitation in the action." Id.
B. Analysis
On July 29, 2004, the plaintiffs filed their complaint against Smith in this Court. Smith filed for limitation of liability on the basis of the allision with the plaintiffs' platform on August 6, 2004. Therefore, Smith filed its limitation action within the six-month period, as required by Rule F. On August 5, 2004, Smith filed a Ship Special Release Bond in the amount of $2,464,250.00, which is the value of the vessel plus interests and costs. Then, on August 12, 2004, Smith filed a bond for $17,050.00 to cover the pending freight plus interest of two percent over two years and costs of $250.00. None of the plaintiffs objects to the sufficiency of the bond. Because Smith has complied with the requirements of Rule F(1), all claims arising out of the allision should cease. Fed.R.Civ.P., Supp. Admiralty Rule F(3). Accordingly, the Court enjoins the in personam and the in rem actions against Smith.
Dana also moves the Court to enjoin the proceedings pending against it in this Court on the basis of Smith's limitation action. Rule F, however, provides only that the Court can stay proceedings against a vessel owner who has filed in limitation. See Fed.R.Civ.P., Admiralty R. F(3). There is no evidence before the Court that Dana has filed for limitation of liability. Therefore, Dana is not entitled to an injunction of the proceedings against it in this Court under Rule F. Accordingly, the Court denies the motion to stay the proceedings against Dana.
V. CONCLUSION
For the above reasons, the Court DENIES the motion to transfer the action to the Middle District of Florida. The Court GRANTS the motion to enjoin the in personam and in rem actions against Smith, and the Court DENIES the motion to enjoin those proceedings against Dana.