Opinion
01 Civ. 7590 (AJP)
January 22, 2002
OPINION AND ORDER
Plaintiff Terry J. Williams sued Wilmington Trust Company, the ultimate owner of the vessel on which he had been employed as a seaman, for statutory wage penalties pursuant to 46 U.S.C. § 10313(g). (Dkt. No. 7: Am. Compl. ¶¶ 3, 5, 14.) Section 10313(g) provides that the "master or owner" of a vessel is liable for statutory wage penalties when a seaman has not been promptly paid at the end of a voyage. 46 U.S.C. § 10313(g). Presently before the Court is Wilmington's motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6). (Dkt. No. 5: Wilmington Motion to Dismiss.) Wilmington asserts that it is not the "owner" of the vessel within the meaning of the statute, because Wilmington's bareboat charter to American Ship Management relieved Wilmington of the obligations of ownership. (Dkt. No. 6: Wilmington Br. at 6-9.) The parties have consented to decision of this motion by a Magistrate Judge pursuant to 28 U.S.C. § 636(c). (Dkt. No 13.) For the reasons set forth below, defendant Wilmington's motion to dismiss is DENIED.
FACTS The Allegations of the First Amended Complaint
Williams' original complaint asserted claims against defendants Wilmington, American Ship Management LLC, APL Limited, Captain Jim Londagin, Neptune Orient Lines, Ltd., and the M/V APL Korea. (Dkt. No. 1: Compl.) In response to defendants' motion to dismiss on the ground, inter alia, that the Court lacked personal jurisdiction over American Ship Management and Captain Londagin (Dkt. No. 5: Motion to Dismiss), on November 1, 2001, Williams filed a First Amended Complaint naming only Wilmington and Captain Londagin as defendants (Dkt. No. 7: Am. Compl.). Williams subsequently dismissed Captain Londagin without prejudice for lack of personal jurisdiction (Dkt. No. 12: Stip. Order), leaving Wilmington as the sole defendant.
Seaman Williams, a resident of Blackville, South Carolina, was employed as a crew member aboard the M/V APL Korea (also referred to herein as the "vessel"). (Dkt. No. 7: Am. Compl. ¶ 3.) The amended complaint (hereafter, "complaint") alleges that Wilmington "is the owner of the M/V APL Korea." (Am. Compl. ¶ 5.) Attached to the complaint as Exhibit A is a U.S. Coast Guard Certificate of Ownership of Vessel for the M/V APL Korea which identifies "Wilmington Trust Company . . . as owner trustee under the Trust Agreement dated as of Nov. 5, 1997, for the benefit of American President Lines Ltd." (Am. Compl. ¶ 5 Ex. A.)
That Trust Agreement is not attached to the complaint but has been supplied by Wilmington. Pursuant to the Trust Agreement, trustor American President Lines ("APL") transferred title to the vessel M/V APL Korea to Wilmington as "Owner Trustee." (Dkt. No. 5: Jones Aff. Ex. 1: Trust Agreement §§ 2.01, 2.02(a).) The Trust Agreement required Wilmington, as owner-trustee, to charter the M/V APL Korea to American Ship Management, LLC ("ASM"). (Jones Aff. Ex. 1: Trust Agreement § 1 definition of "Charterer" § 2.02(c).) Wilmington entered into a Bareboat Charter, dated as of December 24, 1997 (also supplied on this motion by Wilmington), which gave ASM the exclusive right to possess, control and operate the vessel, and pay all charges in connection therewith. (Jones Aff. Ex. 2: Bareboat Charter § 5(b).)
The Trust Agreement was designed to enable the vessel to be registered in accordance with the vessel documentation laws of the United States. (Jones Aff. Ex. 1: Trust Agreement Recitals ¶¶ B-C.)
Simultaneously, ASM entered into a time charter with APL, but ASM retained the rights and obligations to operate the vessel and retain and pay the crew. (Jones Aff. Ex. 3: Time Charter § 3(b)-(c), (g).)
Williams became a member of the M/V APL Korea's crew on or about June 9, 2001, and signed shipping articles, entitling him to payment of wages. (Am. Compl. ¶ 7.) On or about June 11, 2001, Williams sent an e-mail to Wilmington's "agents, representatives and/or employees," requesting that he be paid in cash upon his "signing off" the vessel to enable him to pay for his return home to South Carolina. (Am. Compl. ¶ 8.) On June 13, 2001, at the conclusion of the voyage, Williams signed off the M/V APL Korea and was given a wage voucher detailing the amount to which he was entitled, rather than the requested cash payment. (Am. Compl. ¶ 9.) On July 21, 2001, thirty-eight days after signing off the M/V APL Korea, Williams received by mail a check in payment of his June 13, 2001 voucher. (Am. Compl. ¶ 10.) Williams alleges that he is entitled to recover from Wilmington, as owner of the M/V APL Korea, statutory wage penalties of two days' wages for each day payment was late, pursuant to 46 U.S.C. § 10313(g). (Am. Compl. ¶ 14.) The complaint also seeks punitive damages, attorneys' fees, and prejudgment interest. (Am. Compl. ¶¶ 20, 24, 26.)
Section 10313 states in relevant part:
(f) At the end of a voyage, the master shall pay each seaman the balance of wages due the seaman within 24 hours after the cargo has been discharged or within 4 days after the seaman is discharged, whichever is earlier . . . .
(g) When payment is not made as provided under subsection (f) of this section without sufficient cause, the master or owner shall pay the seaman 2 days' wages for each day payment is delayed.46 U.S.C. § 10313(f)-(g) (emphasis added).
Wilmington's Motion to Dismiss
Wilmington moved to dismiss pursuant to Fed.R.Civ.P. 12(b)(6). (Dkt. No. 5.) Wilmington argues that, as a matter of law, it is not subject to the § 10313(g) wage penalty because it is not the "owner" of the M/V APL Korea within the meaning of the statute, since (it contends) the bareboat charter to ASM relieved Wilmington of the obligations of ownership of the vessel. (Dkt. No. 6: Wilmington Br. at 1, 6.)
ANALYSIS
I. THE STANDARD GOVERNING A MOTION TO DISMISS PURSUANT TO FED. R. CIV. P. 12(b)(6)
A district court should deny a motion to dismiss "`unless it appears to a certainty that a plaintiff can prove no set of facts entitling him to relief.'" IUE AFL-CIO Pension Fund v. Herrmann, 9 F.3d 1049, 1052 (2d Cir. 1993) (quoting Ryder Energy Distrib. Corp. v. Merrill Lynch Commodities Inc., 748 F.2d 774, 779 (2d Cir. 1984)), cert. denied, 513 U.S. 822, 115 S.Ct. 86 (1994). A court must accept as true the facts alleged in the complaint and draw all reasonable inferences in favor of the nonmoving party — here, plaintiff Williams. Cosmas v. Hassett, 886 F.2d 8, 11 (2d Cir. 1989).
Accord, e.g., Weinstein v. Albright, 261 F.3d 127, 131 (2d Cir. 2001); In re Scholastic Corp. Sec. Litig., 252 F.3d 63, 69 (2d Cir.), cert. denied, 122 S.Ct. 678 (2001); Tarshis v. Riese Org., 211 F.3d 30, 35 (2d Cir. 2000); Grandon v. Merrill Lynch Co., 147 F.3d 184, 188 (2d Cir. 1998); Pantoja v. Scott, 96 Civ. 8593, 2001 WL 1313358 at *4 (S.D.N.Y. Oct. 26, 2001) (Peck, M.J.); Leemon v. Burns, 175 F. Supp.2d 551, 553-54 (S.D.N.Y. 2001) (Peck, M.J.); LaSalle Nat'l Bank v. Duff Phelps Credit Rating Co., 951 F. Supp. 1071, 1080-81 (S.D.N.Y. 1996) (Knapp, D.J. Peck, M.J.); In re Towers Fin. Corp. Noteholders Litig., 93 Civ. 0180, 1995 WL 571888 at *11 (S.D.N.Y. Sept. 20, 1995) (Peck, M.J.), report rec. adopted, 936 F. Supp. 126 (S.D.N.Y. 1996) (Knapp, D.J.).
Accord, e.g., Weinstein v. Albright, 261 F.3d at 131; In re Scholastic Corp. Sec. Litig., 252 F.3d at 69; Tarshis v. Riese Org., 211 F.3d at 35; Leemon v. Burns, 175 F. Supp.2d at 554; LaSalle Nat'l Bank v. Duff Phelps, 951 F. Supp. at 1081; In re Towers, 1995 WL 571888 at *11; Macmill an, Inc. v. Federal Ins. Co., 764 F. Supp. 38, 41 (S.D.N.Y. 1991).
Additionally, a Rule 12(b)(6) motion challenges only the face of the pleading. Thus, in deciding a 12(b)(6) motion, "the Court must limit its analysis to the four corners of the complaint." Vassilatos v. Ceram Tech Int'l Ltd., 92 Civ. 4574, 1993 WL 177780 at *5 (S.D.N.Y. May 19, 1993) (citing Kopec v. Coughlin, 922 F.2d 152, 154-55 (2d Cir. 1991)).
Accord, e.g., Leemon v. Burns, 175 F. Supp.2d at 554; Aniero Concrete Co. v. New York City Constr. Auth., 94 Civ. 3506, 2000 WL 863208 at *31 (S.D.N.Y. June 27, 2000); Six West Retail Acquisition, Inc. v. Sony Theatre Mgmt. Corp., 97 Civ. 5499, 2000 WL 264295 at *12 (S.D.N.Y. Mar. 9, 2000) ("When reviewing the pleadings on a motion to dismiss pursuant to Rule 12(b)(6), a court looks only to the four corners of the complaint and evaluates the legal viability of the allegations contained therein."); LaSalle Nat'l Bank v. Duff Phelps, 951 F. Supp. at 1081; In re Towers, 1995 WL 571888 at *11.
When additional materials are submitted to the Court for consideration with a 12(b)(6) motion, the Court must either exclude the additional materials and decide the motion based solely upon the complaint, or convert the motion to one for summary judgment under Fed.R.Civ.P. 56. Fed.R.Civ.P. 12(b); Friedl v. City of New York, 210 F.3d 79, 83 (2d Cir. 2000); Fonte v. Board of Managers of Cont'l Towers Condos., 848 F.2d 24, 25 (2d Cir. 1988); Leemon v. Burns, 175 F. Supp.2d at 554 n. 4; LaSalle Nat'l Bank v. Duff Phelps, 951 F. Supp. at 1081; In re Towers, 1995 WL 571888 at *11.
The Court, however, may consider documents attached to the complaint as an exhibit or incorporated in the complaint by reference. E.g., Yak v. Bank Brussels Lambert, BBL (USA) Holdings, Inc., 252 F.3d 127, 130 (2d Cir. 2001) (citing Cortec Indus., Inc. v. Sum Holding L.P., 949 F.2d 42, 47 (2d Cir. 1991), cert. denied, 503 U.S. 960, 1125 S.Ct. 1561 (1992)); Rothman v. Gregor, 220 F.3d 81, 88 (2d Cir. 2000) ("For purposes of a motion to dismiss, we have deemed a complaint to include any written instrument attached to it as an exhibit or any statements or documents incorporated in it by reference . . . ."); Paulemon v. Tobin, 30 F.3d 307, 308-09 (2d Cir. 1994); Brass v. American Film Tech., Inc., 987 F.2d 142, 150 (2d Cir. 1993); Leemon v. Burns, 175 F. Supp.2d at 554; LaSalle Nat'l Bank v. Duff Phelps, 951 F. Supp. at 1081.
Here, Williams attached as Exhibit A to his complaint a U.S. Coast Guard Certificate of Ownership of Vessel naming Wilmington as the owner trustee of the M/V APL Korea. (Dkt. No. 7: Am. Compl. Ex. A.) Although Williams did not attach the Trust Agreement, it is referenced in Complaint Exhibit A, so the Court can properly consider it in ruling upon Wilmington's motion to dismiss. The Bareboat Charter Agreement between Wilmington and ASM was not referred to in the complaint or in any exhibit to the complaint; rather, it was submitted by Wilmington as additional material for consideration on the motion to dismiss. (Jones Aff. Ex. 2: Bareboat Charter.) While the Court ordinarily must either exclude this additional material or convert the motion to one for summary judgment under Fed.R.Civ.P. 56 (see fn. 7 above), this Court will consider the Bareboat Charter Agreement provided by Wilmington without formally converting the motion to one of summary judgment because, as discussed in Point II below, even considering the Bareboat Charter, the Court decides the pending motion in Williams' favor.
II. INTERPRETATION OF SECTION 10313
"We begin with the familiar cannon of statutory construction that the starting point for interpreting a statute is the language of the statute itself. Absent a clearly expressed legislative intention to the contrary, that language must ordinarily be regarded as conclusive." Consumer Product Safety Comm'n v. GTE Sylvania, Inc., 447 U.S. 102, 108, 100 S.Ct. 2051, 2056 (1980).
See also, e.g., Williams v. Taylor, 529 U.S. 420, 431, 120 S.Ct. 1479, 1487-88 (2000); Good Samaritan Hosp. v. Shalala, 508 U.S. 402, 409, 113 S.Ct. 2151, 2157 (1993) ("The starting point in interpreting a statute is its language, for `[i]f the intent of Congress is clear, that is the end of the matter.'"); Reves v. Ernst Young, 507 U.S. 170, 177, 113 S.Ct. 1163, 1169 (1993) ("In determining the scope of a statute, we look first to its language. If the statutory language is unambiguous, in the absence of `a clearly expressed legislative intent to the contrary, that language must ordinarily be regarded as conclusive.'"); Kaiser Aluminum Chem. Corp. v. Bonjourno, 494 U.S. 827, 835, 110 S.Ct. 1570, 1575 (1990).
Section 10313 clearly states that the wage penalty applies not only to the vessel's master but also its "owner":
(f) At the end of a voyage, the master shall pay each seaman the balance of wages due the seaman within 24 hours after the cargo has been discharged or within 4 days after the seaman is discharged, whichever is earlier . . . .
(g) When payment is not made as provided under subsection (f) of this section without sufficient cause, the master or owner shall pay to the seaman 2 days' wages for each day payment is delayed.46 U.S.C. § 10313(f)-(g) (emphasis added). Thus, absent a "clearly expressed legislative intention to the contrary," since Wilmington is the owner trustee of the vessel, § 10313(g)'s wage penalty clearly applies to Wilmington. There is no such clearly expressed intention to the contrary.
"Whenever congressional legislation in aid of seamen has been considered [by the Supreme Court] since 1872, [the Supreme] Court has emphasized that such legislation is largely remedial and calls for liberal interpretation in favor of the seamen." Isbrandtsen Co. v. Johnson, 343 U.S. 779, 782, 72 S.Ct. 1011, 1014 (1952); see also, e.g., Bainbridge v. Merchants' Miners Transp. Co., 287 U.S. 278, 282, 53 S.Ct. 159, 160 (1932) (seamen are a "favored class" so that "statutes enacted for their benefit should be liberally construed.").
In liberally construing the predecessor provision to § 10313 (46 U.S.C. § 596), the Fourth Circuit stated that:
Since ancient times seamen have been accorded special protection by their Governments and Courts, particularly with respect to the prompt payment of wages due them. The right to prompt payment of seamen's wages is especially favored by the law . . . .
To effectuate this well-established governmental and judicial policy the Congress has enacted statutes to insure prompt payment to the seaman of wages due him. . . . Vigorous judicial interpretations have been given to the wage statutes. . . . The wage statutes are to be liberally construed in favor of the seaman.
Arguelles v. U.S. Bulk Carriers, Inc., 408 F.2d 1065, 1069-70 (4th Cir. 1969) (emphasis added, fns. omitted), aff'd, 400 U.S. 351, 91 S.Ct. 409 (1971); see also Forster v. Oro Navigation Co., 228 F.2d 319, 320 (2d Cir. 1955) (§ 596, "designed to protect seamen, must be liberally interpreted for their benefit").
In 1983, Title 46 of the United States Code, containing the laws related to vessels and seamen, was substantially revised. See H.R. Rep. No. 98-338 (1983), reprinted in 1983 U.S.C.C.A.N. 924, 1983 WL 25324. While the predecessor wage statute, 46 U.S.C. § 596, made the master or owner liable for both wages and wage penalty payments, the revised statute, 46 U.S.C. § 10313, made only the master liable for the seamen's wages and maintained the liability of the "master or owner" for penalties for late wage payments. The legislative history to the 1983 recodification of Title 46 indicates that changes from the prior law should be assumed to have been intended and that "as the courts have held, . . . the literal language of the statute should control" in its interpretation. H.R. Rep. No. 98-338 at *120, 1983 U.S.C.C.A.N. at 932. The statutory language thus clearly states that the "master or owner" is liable for wage penalty payments if the master fails to pay wages to the seaman at the end of a voyage.
Wilmington, however, argues that under recognized maritime practices, ASM as bareboat charterer became the vessel's "owner." (Dkt. No. 6: Wilmington Br. at 6-9.) Wilmington quotes Reed v. S.S. Yaka, 373 U.S. 410, 412, 83 S.Ct. 1349, 1352 (1963), for the proposition that "[i]t has long been recognized in the law of admiralty that for many, if not most, purposes the bareboat charterer is to be treated as the owner . . . ." (See Wilmington Br. at 7.) That case, however, involved the question of whether a seaman could sue the bareboat charterer for injury caused by the vessel's unseaworthiness. Indeed, the Supreme Court in Reed, in a footnote, expressly noted that it did not reach the question of "whether a bareboat charter absolves the owner from liability." Reed v. S.S. Yaka, 373 U.S. at 411 n. 1, 83 S.Ct. at 1351 n. 1 (emphasis added).
Wilmington also relies on Aird v. Weyerhaeuser S.S. Co., 169 F.2d 606 (3d Cir. 1948), cert. denied, 337 U.S. 959, 69 S.Ct. 1521 (1949), for the proposition that "the court imposed liability for seaman's wages on the demise charterer," not the owner. (Wilmington Br. at 7.) Wilmington misreads dicta in that opinion for its holding. In Aird, the vessel was owned by the United States and Weyerhaeuser served as the government's agent. Aird v. Weyerhaeuser S.S. Co., 169 F.2d at 608. The seaman sued Weyerhaeuser for wages, and the Third Circuit found that since the United States and not Weyerhaeuser was the owner, Weyerhaeuser had no liability. Id. at 611. The language in the opinion that a demise charterer stands in the place of the owner thus is dicata.
The dicta language is as follows:
The law imposes the liability for wages upon the owner, however, only if he is the operating owner whose agent the master is. If the owner of the vessel has given entire possession and control of it to another by virtue of a demise charter or otherwise and the master is, therefore, the agent of the charterer and not of the owner, the person thus put in possession and control of the vessel becomes special owner for the voyage and assumes all the responsibilities of owner with respect, inter alia, to the wages of the seamen and their wrongful discharge. Such a person is frequently described as "owner pro hac vice" which is merely a convenient expression to indicate that he stands in the place of the owner for the voyage or service contemplated and bears the owner's responsibilities, even though the latter remains the legal owner of the vessel.
Aird v. Weyerhaeuser S.S. Co., 169 F.2d at 609-10 (fns. omitted).
A recent case from the District of Hawaii did clearly hold the bareboat charterer and not the "owner" liable for penalty wages. Madeja v. Olympic Packer, LLC, 155 F. Supp.2d 1183, 1202-03, 1205-06 (D.Haw. 2001) ("when the owner places `the ship in the exclusive possession and control of another, such other becomes the owner pro hac vice with respect to liability for wages and other expenses.'") (quoting Everett v. United States, 284 F. 203, 205 (9th Cir. 1922), cert. denied, 261 U.S. 615, 43 S.Ct. 361 (1923)).
Two other district court cases from outside this Circuit, cited by Williams, hold that the owner of a vessel who has chartered the vessel to the seaman's employer remains liable under the statute for wage penalties. (See Williams Br. at 5-6.) In George v. Kramo Ltd., 796 F. Supp. 1541 (E.D.La. 1992), the court rejected the legal owner's argument that it was not liable for wage penalties because another company operated the vessel, holding:
Section 10313(g) of the Penalty Wage Statute explicitly provides that the owner or master is liable for wages. When the Statute was revamped in 1983, Congress left intact the words that the owner or master is liable for the wages due. There are no exceptions for, explanations of, or references to nonemploying owners and no distinctions are made. Accordingly, Kramo Transportation, as owner of the vessel, is liable for the penalty wages plaintiffs seek.
George v. Kramo Ltd., 796 F. Supp. at 1546 (emphasis in original, fn. omitted).
Similarly, in Redding v. M/V Pembina, No. C-93-1676, 1994 AMC 2364, 2366-67 (N.D.Cal. June 3, 1994), despite the Ninth Circuit's Everett decision, the court followed George and held that the legal owner could be held liable for penalty wages even where the owner is not the seaman's employer:
Seaborne contends that it is not an "owner" subject to liability for § 10313(g) penalty wages because that section only applies to "operating owners (i.e., the party with command, possession, and control over the vessel)." To support its reading of the statute, Seaborne cites the seventy-two year old Ninth Circuit case of Everett v. United States, 284 F. 203, 205-06 (9 Cir. 1922). In that case, the court followed the "rule that where the general owner places the ship in the exclusive possession and control of another, such other becomes the owner pro hac vice with respect to liability for wages and other expenses." Id.
According to Seaborne, Molo was the owner pro hac vice liable for plaintiff's penalty wages because Molo had the Pembina under a "bareboat" charter during plaintiff's period of employment. Because Seaborne gave up control of the Pembina to Molo, Seaborne argues that Molo, not Seaborne, is the "owner" under § 10313.
This argument fails because it ignores the clear wording of the statute. Section 10313(g) explicitly states that the "master or owner" is liable for penalty wages. "There are no exceptions for, explanations of, or references to nonemploying [or noncontrolling] owners and no distinctions are made." George v. Kramo Ltd., 1993 AMC 755, 762, 796 F. Supp. 1541, 1546 (E.D.La. 1992). Moreover, the court is not aware of any case that has interpreted § 10313(g) or its predecessor provision, 46 U.S.C. § 596, to apply only to "operating owners." Because it is undisputed that Seaborne was, at all times, the legal owner of the Pembina, the court holds that Seaborne qualifies as an "owner" under § 10313.
Redding v. M/V Pembina, 1994 AMC at 2366-67 (emphasis added, fn. omitted).
Neither the Supreme Court nor the Second Circuit has explicitly addressed the meaning of "owner" in § 10313(g)'s wage penalty provi sion. As discussed above, the decisions from outside the Circuit are sparse and contradictory. This Court believes that the decisions holding the legal owner liable are correct. Congress could have limited § 10313(g) to the operating owner who employed the seaman, but it did not do so. The statute says "master or owner." Consistent with Supreme Court precedent to liberally interpret legislation in favor of seamen, § 10313(g) should include the legal owner (Wilmington) even where, as here, that owner bareboat chartered the vessel to someone else. The Court need not today decide whether § 10313(g)'s definition of "owner" also would include the bareboat charterer as owner pro hac vice.
Even if the Court were to follow the Madeja decision from the District of Hawaii, however, the Court would deny Wilmington's motion to dismiss. The Madeja decision, which was after a bench trial, noted that "[t]he burden of establishing a valid bareboat charter is on the owner of the vessel." Madeja v. Olympic Packer, LLC, 155 F. Supp.2d at 1203. Although Wilmington has supplied some pages of an agreement with ASM denominated a "Bareboat Charter" (Jones Aff. Ex. 2), it has not supplied the complete agreement, and at this stage of the litigation, the Court could not say that Williams could prove no set of facts entitling him to relief.
The Court's decision affords seamen maximum protection, and is not unfair to the legal owner such as Wilmington here, since it would be entitled to contractual or common law indemnification from the bareboat charterer.
CONCLUSION
For the reasons set forth above, § 10313(g) makes the "owner" liable for wage penalties, Wilmington is the vessel's owner, and accordingly Wilmington's motion to dismiss is DENIED.
SO ORDERED.