Opinion
Civil Action No. 95-3861 Section: E/3
March 5, 2002
RULING ON MOTION
Defendants, the M/V BONSAI, Evalend Shipping Co., ("Evalend") and Navihouse, S.A. ("Navihouse") filed this motion to dismiss f or lack of personal jurisdiction. Rec. doc. #18. Plaintiff 2 Mai Mangalia Shipyard, S.A. ("2MM") opposes the motion. Rec. doc. #35. The matter was submitted on the briefs at an earlier date.
Although defendant M/V BONSAI joined in the motion, the BONSAI is sued in rem only, and nowhere in its memorandum or motion is there a suggestion that the motion is intended as a motion to dismiss the BONSAI as defendant for lack of personal jurisdiction.
BACKGROUND
The instant complaint was filed by 2MM in accordance with the provisions of Rules B and C of the supplemental Rules for Certain Admiralty and Maritime Claims, and pursuant to 9 U.S.C. § 8, in order to obtain jurisdiction over M/V BONSAI as security for a claim for unpaid repairs to the vessel. 2MM, a Romanian corporation, owns a shipyard located in Mangalia, Romania. Defendants Evalend and Navihouse are both Panamanian corporations whose only offices are in Athens, Greece. As owner/agent of M/V BONSAI, on October 12, 1993, Evaland signed a contract with 2MM for repairs to the vessel. The repair contract provided that the contract was to be governed by Romanian law, and any dispute would be subject to arbitration under Romanian law.
2MM rendered the contracted repair services to the M/V BONSAI, formerly named the M/V LEVANTES, at their shipyard in Romania. A dispute arose between the parties as to the repairs and payment under the contract. 2MM contended that it was due $273,354.10 for materials, labor, and services to the vessel, and that the claim constitutes a maritime lien against the vessel as well as a debt of her owners, operators, and managers, Evalend and Navihouse. 2MM sought to attach the M/V BONSAI (ex LEVANTES) in the Port of New Orleans. Navihouse, as principal, acknowledging that a complaint was filed against the M/V BONSAI and against Evalend Shipping Co., filed a ship release bond in the sum of $350,000.00 to secure the release of the ship and to satisfy any judgment against the M/V BONSAI up to that amount. Rec. doc. *2.
The matter was submitted to arbitration in Romania and this suit was closed for statistical purposes pending resolution of the Romanian arbitration. Rec. doc. #3. According to an English translation of the civil decree from the Constanta Court, Maritime/Fluvial Section dated July 26, 1999, judgment was rendered against the defendant, Evalend, and in favor of 2MM, in the sum of $273,871.76 in United States Dollars, with interest and legal expenses, and rejecting the legal action against Navihouse, on a finding that it "has no legitimate quality." See Exhibit G attached to defendants memorandum in support of motion to dismiss. Navihouse's subsequent motion to release the bond was denied by this Court. Rec. doc. #7. On March 14, 2001, the matter was reopened on motion of plaintiff. Rec. doc. #13. Defendants filed an answer on March 23, 2001, in which Evalend and Navihouse asserted objections to personal jurisdiction. Rec. doc. #14. Neither filed a claim of ownership in the action.
ANALYSIS
Louisiana's Long-Arm Statute extends personal jurisdiction to the limits of due process. See LSA-R.S. § 13:3201. This Court need only determine if subjecting the defendants to suit in Louisiana would offend the Due Process Clause of the Fourteenth Amendment. Interpreting this due process protection, the United States Supreme Court repeatedly has held that personal jurisdiction may be asserted over a nonresident defendant only if that defendant has certain "minimum contacts" with the forum such that the maintenance of the suit does not offend "traditional notions of fair play and substantial justice." The United States Supreme Court has recognized two categories of "minimum contact" with a state that may subject a defendant to jurisdiction in that forum. A state has "specific jurisdiction" over a defendant when the suit arises out of or is related to the defendant's contacts with the forum state. A state has "general jurisdiction" over a defendant when the defendant has "continuous and systematic" contacts with the forum state. In this context, minimum contacts means that the defendant has purposely availed himself of the privilege of conducting activities within the forum state and that he should reasonably anticipate being hailed into Court in the forum state. Thus, personal jurisdiction may be exercised over the defendant even when the suit does not arise out of the defendant's contacts with the forum state.
System Pipe Supply, Inc., v. M/V Viktor Kurnatovskiy, 242 F.3d 322 (5th Cir. 2001)
See, e.g., International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945).
See Helicopteros Nacionales de Columbis, S.A. v. Hall, 466 U.S. 408, 414 n. 8, 104 5.Ct. 1868, 1872 n. 8, 80 L.Ed.2d 404 (1984)
See, e.g., Perkins v. Benguet Consolidated Mining Co., 342 U.S. 437, 72 S.Ct. 413, 96 L.Ed. 485 (1952).
Dickson Marine Inc., v. Panalpina, Inc., 179 F.3d 331, 336 (5th Cir. 1999)
See Helicopteros, 466 U.S. at 415 n. 9, 104 S.Ct. at 1872 n. 9.
In responding to a challenge to in personam jurisdiction, a "plaintiff need only make a prima fade showing of jurisdiction, so that the allegations of the complaint are taken as true except as controverted by the defendant's affidavits and conflicts in the affidavits are resolved in plaintiff's favor." 2MM concedes that its claim against defendants does not arise out of any contacts with Louisiana. The Court must only determine whether either in personam defendant has such continuous and systematic contacts with Louisiana so as to give rise to general personal jurisdiction.
Asarco, Inc. v. Glenara, Ltd., 912 F.2d 784, 785 (5th Cir. 1990), quoting Travelers Indemnity Co. v. Calvert Fire Ins. Co., 798 F.2d 826, 831 (5th Cir. 1986, modified on other grounds, 836 F.2d 850 (1988).
In support of its motion to dismiss, Evalend submitted an affidavit of Mr. Nicholas S. Konstantaras, the Director of Evalend since 1992. He stated that Evalend is not licensed to do business in Louisiana and does no business in the state, has no agent for service of process in the state, has no personnel or employees in the United States, pays no taxes in the state, has executed no contracts in the state, and has never solicited business or advertised for business in the state.
Navihouse submitted an affidavit of Mr. Nicholas M. Pantelias, head of Legal and Claims department of Navihouse, in which Mr. Pantelias makes assertions as to Navihouse that are identical to those made by Mr. Konstantaras for Evalend.
2MM does not dispute the affidavits. In opposition to defendants' motion to dismiss, 2MM submitted both defendants' responses to discovery interrogatories. Evalend admits that it was the managing agent for vessels that have called in ports in Louisiana on 15 occasions between July 1994 and October 2001 (three calls in 1994, three calls in 1996, four calls in 1999, four calls in 2000 and one call in 2001); that as managing agent for vessels calling in Louisiana, on behalf of its principal, Evalend has at various times arranged for Biehl Co., Celtic International Shipping Agency and Compass Shipping, all Louisiana corporations or companies, to act as local agents to provide and pay for port services to the vessels while in port; and that since 1992, Evalend has been named as a defendant in five lawsuits filed in the Eastern District of Louisiana, and retained local counsel for representation in each lawsuit. Evalend denies ownership of any vessels that have ever called in Louisiana, including the BONSAI.
Navihouse's responses to interrogatories admitted that since 1993 it was the managing agent for only one vessel that called in a Louisiana port, the BONSAI in November, 1995, and that it has been named as a defendant in one lawsuit in the Eastern District of Louisiana for which it retained local counsel for representation. Navihouse also denies ownership of the BONSAI.
2MM argues that System Pipe Supply, Inc., v. N/V Viktor Kurnatovskiy, supports a finding of sufficient national minimum contacts for general jurisdiction over Evalend. According to the Court in System Pipe Supply, because plaintiff's claim arose under admiralty jurisdiction, defendant need only have sufficient minimum contacts with the United States as a whole, rather than the forum state in particular, to support the district court's general jurisdiction. 2MM claims that the minimum contacts listed by the Court in System Pipe Supply as supporting general jurisdiction are the "same types" of contacts maintained by Evalend in Louisiana. The argument is not persuasive.
242 F.3d 322 (5th Cir. 2001)
The Fifth circuit cited F.R.Civ.P. 4(k)(2) as allowing personal jurisdiction over foreign defendants for claims arising under Federal law when the defendant has sufficient contacts with "the nation as a whole". Id. at n. 5, citing World Tanker Carriers Corp. v. M/V YA MAWLAYA, 99 F.3d 717 (5th Cir. 1996).
First, 2MM's cause of action against both in personam defendants arises under a repair contract governed by Romanian law, unlike System's claim for damage to cargo delivered in Houston aboard the M/V Viktor Kurnatovskiy. Second, 2MM has not offered any evidence of "national" contacts apart from the defendants' Louisiana contacts. Third, in System Pipe Supply, the plaintiff offered evidence of seven different types of contacts that defendant had in the United States, only three of which are the same types of those offered by 2MM for Evalend. Finally, in System Pipe Supply the district court sua sponte dismissed the action based on a finding that defendant's port call in Houston was merely "fortuitous", therefore was insufficient to support specific jurisdiction over the defendant. The Fifth Circuit reversed, holding only that plaintiff should have been given notice and an opportunity to respond with support for its argument that the court had general jurisdiction over the defendant. Without holding that general jurisdiction existed in that case, the Court simply noted that System's allegations, "if established, or evidence similar thereto, would be sufficient for the plaintiff to make a prima fade showing of national minimum contacts." Id.
See, e.g., Sembawang Shipyard, Ltd. v. Charger, Inc., 955 F.2d 983, 986 (5th Cir. 1992) (plaintiff conceded that Singapore law governed the in personam claim which arose from its repair contract executed and performed in Singapore.)
The factors listed by the court are as follows: 1) Azov's fleet of vessels regularly calls at most major ports in over fifty countries, including the United States; 2) in 1993, Azov established and began to advertise Azsco America Line to provide service for U.S. Gulf Ports to the Mediterranean and Black Seas; 3) Azov maintained another line of vessels to carry cargo from the east coast to Israel; 4) at least one of Azov's vessels had previously been detained in the state of Texas; 5) Azov's ship, the defendant vessel, called and discharged System's cargo at the Port of Houston; 6) since 1993, Azov has been named in approximately fifty actions in United States District courts; and 7) Azov has been a defendant in another suit maintained in the Southern District of Texas which was not dismissed for lack of personal jurisdiction. System Pipe Supply, Inc., 242 at 325.
On the issue of whether the number of calls to Louisiana ports by Evalend and/or Navihouse managed vessels constitutes "continuous and systematic contacts", the Court finds Asarco, Inc., persuasive. In that case, plaintiffs cited 47 calls at Louisiana ports for the period 1985 through early 1989 by vessels managed "at one time or another" by defendant, in support of general jurisdiction. Id. at 787. Defendants countered that only 20 of those calls were made during the periods when defendant managed the involved vessel; two in 1985, nine in 1986, two in 1987, four in 1988, and three in 1989. Id. The Fifth Circuit characterized these contacts as sporadic rather than continuous and systematic, and insufficient to support general jurisdiction. Id. Moreover, the Court noted that the manager of the vessel has no control over where the vessels managed made port calls. Id. Accordingly, the port calls in Louisiana by Evalend and Navihouse managed vessels are sporadic and insufficient to support general jurisdiction.
912 F.2d 785 (5th Cir. 1990).
The Court also disagrees with 2MM's claim that because Evalend has been sued a number times in the Eastern District of Louisiana, and engaged the services of local counsel for representation on such occasions, it has continuous and systematic contacts with the forum state. In Bearry v. Beech Aircraft Corporation, the Fifth Circuit addressed the concept of general jurisdiction as follows:
818 F.2d 370 (5th Cir. 1987).
The notion of general jurisdiction is based on a concept of "exchange." The language of exchange captures both the sovereign interest of the state and the interest of the person in a fairly accessible forum. It accommodates both by invoking constructive consent. That is, by invoking the benefits and protections of the forum's laws, the nonresident is seen as "consenting" to being sued there.Id. at 375. The Court can find no exchange of interest or constructive consent on the part of Evalend, or any foreign defendant who is sued in a forum of the plaintiff's choosing, even multiple times, that would in any way support a conclusion that such "contacts" support general jurisdiction over an foreign defendant. A defendant in a lawsuit can hardly be seen as having "purposely availed himself of the privilege of conducting activities in the forum state." Under such circumstances engaging local counsel to litigate in the plaintiff's forum is merely a defensive necessity, not an exchange of interest or constructive consent to jurisdiction.
See Dickson Marine, Inc., 178 F.3d at 336.
The last argument raised by 2MM in support of jurisdiction over Navihouse concerns Navihouse's act of posting a bond to prevent the arrest or attachment of the BONSAI. The Court understand's 2MM's argument to be that the act of posting the bond as principal is an appearance in the litigation which operates as a waiver of jurisdictional objections.
Quoting International Sea foods of Alaska, Inc. v. Park Ventures, Inc., Navihouse argues that the act of posting a bond to obtain the release of a vessel from maritime attachment is "not a basis for in personam liability." Id. at 756. The argument fails to distinguish between personal jurisdiction and in personam liability. Black's Law Dictionary defines "personal jurisdiction" as "[a] court's power to bring a person into its adjudicative process; jurisdiction over a defendant's personal rights, rather than merely over property interests". BLACK'S LAW DICTIONARY, BRYAN A. GARNER, Ed. in Chief, 7th Ed. (1999). On the other hand, "personal liability" is "[l]iability for which one is personally accountable and for which a wronged party can seek satisfaction out of the wrongdoer's personal assets." Id. While Park Ventures appealed the in personam judgment against it, there is no indication that it disputed personal jurisdiction.
829 F.2d 751 (9th Cir. 1987).
The determinative issue is whether posting a bond for the release of a vessel constitutes an "appearance" in the case. Supplemental Rules for Certain Admiralty and Maritime Claims ("Supplemental Rules"), Rule E(5) (a) provides for the release of a vessel upon the posting of a special bond as follows:
. . . whenever process of maritime attachment and garnishment or process in rem is issued the execution of such process shall be stayed, or the property released, on the giving of security, to be approved by the court or clerk, or by stipulation of the parties, conditioned to answer the judgment of the court or of any appellate court.
Navihouse argues that its posting of the bond was a restricted appearance as provided for by Supplemental Rule E(8) and does not waive its objection to the court's jurisdiction. Supplemental Rule E(8) provides:
An appearance to defend against an admiralty and maritime claim with respect to which there has issued process in rem, or process of attachment and garnishment, may be expressly restricted to the defense of such claim, and in that event is not an appearance for the purposes of any other claim with respect to which such process is not available or has not been served.
In Cactus Pipe Supply, Inc., v. N/V MONTMARTRE, the Fifth Circuit had occasion to discuss the nature of an "appearance" as follows:
756 F.2d 1103 (5th Cir. 1985).
Generally, an appearance in an action involves some presentation or submission to the court. An appearance may result from the filing of an answer without raising jurisdictional defects. An appearance may also arise by implication "from a defendant's seeking, taking or agreeing to some step or proceeding in the cause beneficial to himself or detrimental to plaintiff other than one contesting only the jurisdiction or by reason of some act or proceedings recognizing the case as in court."Id., 756 F.2d at 1108 (citing 6 C.J.S. Appearances § 18 at 22 (1975) (other citations omitted).
Posting a bond merely changes the res against which the plaintiff may seek recovery if his suit is successful. The effect posting the bond for the release of the vessel, or in this case, to prevent the attachment or arrest of the vessel, is to transfer the claim against the vessel as security for a judgment to the fund represented by the bond. It is not an "appearance to defend against an admiralty and maritime claim", such as a claim of owner, as contemplated by Supplemental Rule E(8). It is not a step or proceeding specifically beneficial to the defendant or detrimental to the plaintiff. Rather, it is better characterized as an act or proceeding simply recognizing the case as in court. It is a "neutral" act in that it benefits both parties to the suit. The Court concludes that posting a bond pursuant to Supplemental Rule E(5) is not an appearance in a case and does not waive jurisdictional objections.
International Seafoods of Alaska, Inc., 829 F.2d at 756 (citing 2 Benedict on Admiralty § 63 ed. 1986).
See GRANT GILMORE CHARLES L. BLACK, JR., THE LAW OF ADMIRALTY, 2nd ed. (1975)
See, e.g., Sembawang, 955 F.2d at 989 (holding that defendant waived its defenses to personal jurisdiction when it did not "expressly restrict" its claim of owner as provided in Rule E(8)).
Accordingly, for the above and foregoing reasons,
IT IS ORDERED that the motion of defendants Evalend Shipping Co., S.A., and Navihouse, S.A., to dismiss for lack of personal jurisdiction is GRANTED.