Opinion
Civil Action No. 03-2722 Section "C" (5).
November 2, 2004
ORDER AND REASONS
This matter comes before the Court on motion to dismiss or, alternatively, motion for summary judgment filed by Adriatico, Ltd. ("Adriatico") (Rec. Doc. 21), motion to dismiss or, alternatively, motion for summary judgment filed by Mosaic Maritime, Inc. ("Mosaic") and Tritea Maritime Ltd. ("Tritea") (Rec. Doc. 23) and the plaintiffs' motion to stay and strike action on the motions to dismiss (Rec. Doc. 26). Having considered the record, the memoranda of counsel and the law, the Court has determined that dismissal based on the lack of personal jurisdiction is appropriate for the following reasons.
According to the complaint, the plaintiffs, Petro Mykhaylov ("Mykhaylov") and his wife are Ukrainian citizens who sue under the Jones Act and general maritime law for personal injuries allegedly sustained by Mykhaylov on October 8, 2000, while he was working as a seaman having been placed by Adriatico, a Liberian company with offices in Greece, aboard the M/V GREVENO, a Greek flag vessel owned by Mosaic and managed by Tritea, also Liberian companies based in Greece. At the time of the accident, the vessel was on the high seas in the Atlantic Ocean traveling to Baltimore from Russia and Poland. Mykhaylov was transported by helicopter from the vessel to Massachusetts for medical treatment.
The defendants move for dismissal on a number of grounds: lack of personal jurisdiction, enforcement of a forum selection clause in the seaman plaintiff's employment contract, forum non conveniens, improper venue, lack of subject matter jurisdiction and failure to state a claim upon which relief can be granted. The plaintiffs argue in motion and opposition that discovery is required under Fed.R.Civ.P. 56(f), that the forum selection clause is invalid, that this forum is convenient, and that personal jurisdiction over the defendants exists.
The plaintiffs have opposed the defendants' dispositive motions in their supplemental memorandum in support of the motion to strike or stay. (Rec. Doc. 43).
Personal jurisdiction
When faced with multiple grounds for dismissal in a motion, a federal district court should consider subject matter jurisdiction before any determination on the merits, but "the same principle does not dictate a sequencing of jurisdictional issues." Ruhrgas v. Marathon Oil Co., 526 U.S. 574, 584 (1999) (emphasis added). "When a relatively straightforward jurisdictional basis is available for disposition, the Court does not abuse its discretion in addressing that issue rather than a more difficult or novel issue bearing on subject matter jurisdiction. Id. Given the relative complexity of the other issues raised in this motion, the Court exercises its discretion by addressing the issue of personal jurisdiction first.
On a motion to dismiss for lack of personal jurisdiction, the party who attempts to invoke the jurisdiction of the court bears the burden of establishing a prima facie case of personal jurisdiction over the defendant. D.J. Investments, Inc. v. Metzeler Motorcycle Tire Agent Gregg, Inc., 754 F.2d 542, 545 (5th Cir. 1985). The court may consider affidavits, oral testimony, "or any combination of the recognized methods of discovery." Stuart v. Spademan, 772 F.2d 1185, 1192 (5th Cir. 1985). As regards an issue of fact, "uncontroverted allegations in the plaintiff's complaint must be taken as true, and conflicts between the facts contained in the parties' affidavits must be resolved in the plaintiff's favor." D.J. Investments, 754 F.2d at 546.
Here, the plaintiffs allege in their complaint that "[b]etween January 1998 and January 2001, the M/V GREVENO made frequent stops at ports of call in the United States, including Houston, New London, Baltimore, New Orleans, Beaumont, Galveston, and Tampa." (Rec. Doc. 1, ¶ 14). The plaintiffs allege that:
Masaic (sic), as the owner of the Greveno, was engaged in substantial business activities in the United States and has availed itself of the benefits of doing business here. Pursuant to LA.REV.STAT. § 13:3201(a)(1), this Court has personal jurisdiction over Masaic (sic).
(Rec. Doc. 1, ¶ 15). In a similar vein, the plaintiffs allege that:
Tritea, as the manager of the Greveno, was engaged in substantial business activities within the United States and has availed itself of the benefits of doing business here. Pursuant to LA.REV.STAT. ¶ 13:3201(a)(1), this Court has personal jurisdiction over Tritea.
This allegation against Tritea is based on the claim that other vessels allegedly managed by Tritea made port calls in the United States between 1998 to 2000, although those calls are not quantified in the complaint. (Rec. Doc. 1, ¶ 14). The plaintiffs allege that "[t]he shipping of goods to and from New Orleans during the time period in question entails purposeful availment by Masaic (sic) and Tritea of the benefits of doing business in the United States and with the State of Louisiana," that "[t]he shipping activities occasioned by the Greveno's port calls in the United States involved substantial and continual contacts with the United States," and that "Masaic (sic) and Tritea are engaged in extensive business in the United States; they maintain substantial and continual contacts with the United States." (Rec. Doc. 1, ¶¶ 21 — 23).
According to the complaint, Adriatico placed plaintiff on the Greveno and "enters into contracts that involve staffing of vessels that make shipments to and from U.S. ports" and therefore "was engaged in substantial business activities within the United States and availed itself of the benefits of doing business here. Pursuant to LA.REV.STAT. § 13:3201(A)(1), this Court has personal jurisdiction over Adriatico." (Rec. Doc. 1, ¶¶ 25 — 27).
The Court's reading of these allegations indicates the plaintiff's anticipation of the personal jurisdiction challenge facing the Court. The defendants by their motions establish that the unsubstantiated allegations of the complaint are factually unfounded and that the plaintiffs are unable to approach the prima facie mark for personal jurisdiction.
In response to this predicament, the plaintiffs have filed a motion to stay and strike action on the motions to dismiss. For present purposes, the Court construes this motion as on seeking discovery on the personal jurisdictional issue. "Discovery on matters of personal jurisdiction . . . need not be permitted unless the motion to dismiss raises issues of fact." Wyatt v. Kaplan, 686 F.2d 276, 284 (5th Cir. 1982). See also Kelly v. Syria Shell Petroleum Development B.V., 213 F.3d 841 (5th Cir. 2000). "When the lack of personal jurisdiction is clear, discovery would serve no purpose and should not be permitted." Id.
In general, two requirements must be met in order to satisfy constitutional due process. Burger King v. Rudzewicz, 471 U.S. 462, 476 (1985). First, the nonresident corporation must have purposefully established "minimum contacts" with the forum . . . such that "it enjoys the benefits and protection of the laws of that [forum'." International Shoe Co. v. Washingto, 326 U.S. 310, 319 (1945). In making this determination, there must be "some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State."Hanson v. Denckla, 357 U.S. 235, 253 (1958). Second, the exercise of jurisdiction over the nonresident must not "offend traditional notions of fair play and substantial justice."International Shoe, 326 U.S. at 320. Some of the factors that may be considered under this second "reasonableness" requirement include "the burden on the defendant" of litigating in the forum as well as the "plaintiff's interest in obtaining convenient and effective relief." World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292 (1980).
The requisite minimum contacts can be established by either "general" or "specific" personal jurisdiction. Wilson v. Belin, 20 F.3d 644, 647 (5th Cir. 1994). Specific jurisdiction is invoked when the cause of action "arises out of" the defendant's contacts with the forum, Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 (1984), such that the defendant should reasonably anticipate being haled into court there. World-Wide, 444 U.S. at 297. General jurisdiction attaches where the nonresident defendant's contacts with the forum state, although unrelated to the cause of action, are continuous and systematic.Kelly, 213 F.3d at 854.
The Court does not read the complaint as alleging specific jurisdiction in this case, as there is no alleged connection between the alleged injury and any contact with Louisiana or the United States, and finds that the allegations of the complaint are insufficient as a matter of law to support a prima facie case of specific personal jurisdiction or to justify discovery on the issue.
It also appears that the plaintiffs concede that "[d]efendants do not appear to be subject to the jurisdiction of any particular state," albeit in response to an order for briefing on the effect of Fed.R.Civ.P. 4(k)(2) on the issues presented herein. (Rec. Doc. 57, p. 3). The test for general jurisdiction is formidable:
As commentators have recognized, the continuous and systematic contacts test is a difficult one to meet, requiring extensive contacts between a defendant and a forum. 16 JAMES WM. MOORE ET AL., MOORE'S FEDERAL PRACTICE ¶ 108.41[3] (3d ed. 1999). The Supreme Court has upheld an exercise of personal jurisdiction when the suit was unrelated to the defendant's contacts with a forum only once.Submersible Systems, Inc. v. Perforadora Central, S.A., de C.V., 249 F.3d 414, 419 (5th Cir. 2001). Again, the Court finds as a matter of law that the record does not establish the existence of a prima facie case of general jurisdiction with regard to minimum contacts with Louisiana.
The Court ordered supplemental memoranda on the effect of Rule 4(k)(2), which provides in relevant part:
If the exercise of jurisdiction is consistent with the Constitution and laws of the United States, serving a summons or filing a waiver of service is also effective, with respect to claims arising under federal law, to establish personal jurisdiction over the person of any defendant who is not subject to the jurisdiction of the courts of general jurisdiction of any state.
This rule has been applied to cases brought under the general maritime law. World Tanker Carriers Corp. v. M/V YA MAWLAYA, 99 F.3d 717, 722-723 (5th Cir. 1996). Submersible Systems, supra. Due process is measured with reference to the Fifth Amendment. Id. Therefore, the Court's inquiry is reduced to whether the defendants contacts with the United States have been sufficiently "continuous and systematic" to support a finding of personal jurisdiction.
The Court finds that the record as it stands does not support such a finding, given the fact that plaintiffs claim that the M/V GREVENO made only nine port calls in U.S. waters in the three years preceding the plaintiff's alleged injury. Compare Adams v. Unione Mediterranea Di Sicurta, 364 F.3d 646, 651-652 (5th Cir. 2004) (personal jurisdiction over insurer existed based on "extensive" contacts with United States consisting of payment of 155 claims in a three year period, coverage of other United States companies without claims, insuring of hundreds of cargo shipments to United States in a six year period, and the insurer's use of and payment to a number of individuals in United States to enable it to conduct business in United States);Submersible Systems, 249 F.3d at 420-421 (no personal jurisdiction existed in suit for conversion of equipment on a vessel in Mexican waters where defendant had few contacts with United States other than related to construction of a rig, maintaining an account at Houston bank, sending employees to Houston conference once a year, purchasing spare parts and vessels in United States and occasional visits by its vessels to United States ports, where defendant "conducts no operations in the United States, maintains no office in the United States . . . and owns no real or personal property located in the United States"); Helicopteros, 466 U.S. at 416. (no personal jurisdiction in suit about helicopter crash in Columbia where defendant helicopter operator had negotiated a contract in Texas to provide services that led to the crash in Columbia, had purchased 80% of its fleet from a Texas company, had sent pilots to Texas for training, had sent managers to Texas for technical consultations in connection with purchase of its fleet, and had accepted payment for services that led to crash drawn on Texas bank).
According to the affidavit of Captain George Kalathakis, the M/V GREVENO made 85 voyages over the last ten years, visited the United States only 10 times, and visited New Orleans only eight times.
The plaintiffs have argued the need for further discovery pursuant to Fed.R.Civ.P. 56(f) in the affidavit of John E. Sutherland. (Rec. Doc. 31). As it relates to the issue of personal jurisdiction and the motion to dismiss, the affidavit specifies that discovery is sought pertaining to the vessel's calls to the United States for a ten year period and "the identity of the owners of the various Defendants and other ships that they own or businesses that own ships that they own." The Court notes initially that most of the factual information relevant to the issue of personal jurisdiction is affirmatively provided in the extensive affidavits provided by the movers. The plaintiffs have failed to raise an issue as to the potential existence of any fact which would support personal jurisdiction. The facts presented establish contacts between the defendants and the United States sufficiently limited so as not to justify further discovery.
To the extent that the plaintiffs seek discovery relating to an "alter ego" arguments, the plaintiffs have failed to raise a factual issue sufficient to justify further discovery. Courts presume the independence of related companies. Kelly, 213 F.3d at 856-857.
In addition, the record is not devoid of evidence of delay. This suit was filed nearly three years after the alleged accident, and the plaintiffs delayed service for another eight months. Given the ample time afforded to investigate the defendants prior to filing, the failure to raise an issue of fact as to the motion to dismiss for lack of personal jurisdiction, and the lack of any proof suggesting continuous and systematic contact with the United States by any defendant, further discovery on the jurisdictional issue is not warranted.
Accordingly,
IT IS ORDERED that the motion to dismiss or, alternatively, motion for summary judgment filed by Adriatico, Ltd. is PARTIALLY GRANTED and PARTIALLY DISMISSED without prejudice (Rec. Doc. 21), the motion to dismiss or, alternatively, motion for summary judgment filed by Mosaic Maritime, Inc. and Tritea Maritime Ltd. is PARTIALLY GRANTED and PARTIALLY DISMISSED without prejudice (Rec. Doc. 23) and the plaintiffs' motion to stay and strike action on the motions to dismiss is DENIED (Rec. Doc. 26).