Opinion
Case No. 02-1173-KI
April 29, 2004
Michael E. Haglund, Timothy J. Jones, Haglund Kelley Horngren Jones, LLP, Portland, Oregon, Attorneys for Plaintiff.
John M. Toriello, Holland Knight LLP, New York, New York, Christopher W. Angius, Courtney C. Dippel, Holland Knight LLP, Portland, Oregon, James S. Smith, David C. Rocker, Davis Wright Tremaine, LLP, Portland, Oregon, Attorneys for Defendants.
OPINION
Plaintiff Elias Androutsakos, through his guardian Stavros Androutsakos, brings an action against the M/V PSARA, Psara Shipping Corporation (together "the Psara defendants"), and Chevron U.S.A., Inc. ("Chevron"), for personal injuries sustained by plaintiff after he was struck in the head by a mooring line on the deck of the M/V PSARA while the vessel was docked at Chevron's pier in Portland, Oregon. Plaintiff asserts negligence claims against the Psara defendants and Chevron, and an unseaworthiness claim against the M/V PSARA. Before the court are plaintiff's Motion for Application of U.S. law (#138) and the Psara defendants' Motion for Application of Greek Law and Dismissal of Plaintiff's Claims (#200). For the following reasons, I grant plaintiff's motion and deny defendants' motion.
For ease of reference, I will refer to Elias Androutsakos as "plaintiff."
FACTS
The procedural and factual background of this case is set forth in this court's Opinion dated January 22, 2004, and I will not repeat it here. I will note additional facts relevant to the motions before the court.The M/V PSARA is an oil tanker greater than 4,500 Deadweight Tons registered in Piraeus Ship's Registry and flies the Greek flag. The M/V PSARA is owned by Psara Shipping Corporation ("Psara Shipping"), which is a Liberian corporation.
Eletson Holdings, Inc. ("Eletson Holdings"), also a Liberian corporation, owns Psara Shipping as a wholly-owned subsidiary.
All of the members of the Board of Directors of Psara Shipping are Greek nationals, who hold their meetings in Piraeus, Greece, at the offices of Eletson Corporation ("Eletson"). Pursuant to an agreement dated July 11, 1997, between Eletson and Psara Shipping, Eletson assumed the responsibilities of crewing, management and operation of the M/V PSARA. Decisions related to the employment and operation of the M/V PSARA are made in Piraeus.
Eletson has one affiliate with a presence in the United States. Eletson Maritime, Inc. ("Eletson Maritime") is a corporation organized and existing under the laws of Connecticut. Eletson Maritime maintains an office in Stamford, Connecticut and employs a staff of three people. Eletson Maritime monitors and collects information on the petroleum transportation market and passes the information on to Eletson in Piraeus. Eletson and Eletson Maritime are owned by Eletson Holdings.
The M/V PSARA makes frequent calls to United States ports and was largely dedicated to U.S. oil trade preceding and around the time of the injury in question. Eletson Holdings, which owns Psara Shipping, raises money in the U.S. markets. Eletson Holding's 2001 Security and Exchange Commission filing states that all of its vessels are constructed to comply with the requirements of the U.S. Oil Pollution Act for trading in the U.S. market, which accounts for approximately 30 percent of its trade in petroleum products.
DISCUSSION
Plaintiff moves the court for an order declaring that U.S. law applies to all of plaintiff's claims in this action. The Psara defendants oppose plaintiff's motion and contend that Greek law should apply as against them. In responding to plaintiff's motion, the Psara defendants also file a cross motion for application of Greek law and a motion to dismiss plaintiff's claims for failure to state a claim.
The parties do not dispute that the traditional test for determining which country's laws apply in maritime personal injury cases is the test set forth in two seminal decisions,Lauritzen v. Larsen, 345 U.S. 571 (1953), and Hellenic Lines, Ltd. v. Rhoditis, 398 U.S. 306 (1970). In Lauritzen andRhoditis, the Supreme Court set forth the following factors for determining which country's laws apply: 1) the place of the wrongful act, 2) the law of the ship's flag, 3) the domicile of the injured party, 4) the domicile of the shipowner, 5) the place of the contract, 6) the accessibility of the foreign forum, 7) the law of the forum, and 8) the shipowner's base of operations.Lauritzen, 345 U.S. at 583-92; Rhoditis, 398 U.S. at 308-10. Although Lauritzen was a Jones Act case, the Court has held that the same factors are to be used in the choice of law analysis for all maritime tort cases. Romero v. International Terminal Operating Co., 358 U.S. 354, 382 (1959).
I. Whether Chevron Must Be Considered in the Lauritzen Analysis
Before applying each of the factors to the facts of this case, I will address the broader question of whether the court should engage in a choice of law analysis on a defendant by defendant basis instead of with respect to the case as a whole. Plaintiff brings this action against two foreign defendants, the Psara defendants, and one American defendant, Chevron. Plaintiff's claims against Chevron will be decided under U.S. law. The question before the court is whether the claims against the Psara defendants should be decided under U.S. law or Greek law. Examining the factors set forth in Lauritzen will help the court resolve the issue. The question remains, though, in conducting the Lauritzen analysis, what role should Chevron's presence in this lawsuit play.
The court was under the impression it was undisputed that U.S. law would apply to defendant Chevron. At oral argument, counsel for the Psara defendants made a passing reference to his position that Greek law could be held to apply to Chevron with respect to damages. Counsel for Chevron would not take a specific position, but stated that Chevron was most concerned with a single body of law being applied to plaintiff's claims against Chevron and the Psara defendants. Plaintiff strenuously argues that U.S. law applies to Chevron. No party has requested that Greek law apply to Chevron with respect to damages, and I see no basis for ruling as such. Accordingly, U.S. law will be applied to Chevron in all respects.
Plaintiff argues that because this case involves joint tortfeasors and a single indivisible injury, the court must consider both the foreign and American defendants in theLauritzen analysis. In a case that was cited with approval by the Supreme Court in Rhoditis, the Second Circuit noted that the decision as to whether to apply U.S. law to a tort claim by a seaman against his employer "involves the ascertainment of facts which constitute contacts between the transaction involved in the case and the United States, and then deciding whether or not they are substantial." Bartholomew v. Universe Tankships, Inc., 263 F.2d 437, 441 (2nd Cir. 1959) (emphasis added). Plaintiff relies on Carbotrade S.p.A. v. Bureau Veritas, 99 F.3d 86 (2nd Cir. 1996), which involved multiple parties of different nationalities, including an Italian vessel charterer that brought suit against a French certification society for negligent misrepresentation after the vessel sank in international waters. In doing the Lauritzen analysis, the court noted that the case was unlike the typical Jones Act case with one seaman and a defendant shipowner, and instead the domiciles of the vessel charterer, the certification society, and the vessel owner were all relevant to the analysis. Id. at 91. Additionally, the court noted the Supreme Court's focus on "applying the law of the state with the most substantial contacts to the event giving rise to the claim." Id. at 90-91 (emphasis added). See also Bailey v. Dolphin Int'l, Inc., 697 F.2d 1268, 1278 n. 25 (5th Cir. 1983) ("[A] sufficient American interest in a particular transaction can rest on the presence of even one substantial contact between the transaction and this country. . . .") (emphasis added). While none of these cases is on all fours with the facts of this case, the cases suggest that courts should analyze the entire transaction rather than issue by issue or defendant by defendant.
The Psara defendants argue that the court must look exclusively to the seaman and the shipowner when conducting the Lauritzen analysis. The Psara defendants assert that it is "well established under general maritime law that a separate choice of law analysis is required for each issue in a case." Based on the cases noted above, I disagree that this is a well established principle of maritime law. Defendants rely on a Third Circuit case, Calhoun v. Yamaha Motor Corp., 216 F.3d 338 (3rd Cir. 2000), and a number of district court cases. In Calhoun, the Third Circuit upheld the district court's application of the "depecage" doctrine, under which the court had applied the laws of different states to resolve issues in the same case. However,Calhoun did not involve a single plaintiff suing joint tortfeasors arising out of an indivisible injury, nor did it involve the potential to undermine the substantive principles of admiralty law.
In Neely v. Club Med Management Services, Inc., 63 F.3d 166 (3rd Cir. 1995), the Third Circuit discussed at length the purposes of the Lauritzen choice of law analysis. The court stressed the importance of determining whether the United States has a sufficient interest in a given case. Keeping this goal in mind, I find it hard to ignore the presence of an American alleged joint tortfeasor in a case about a grievous injury that occurred while the vessel was docked at the American corporation's pier. I conclude that Chevron's presence in this action must be considered in applying Lauritzen.
II. Lauritzen Factors
A. Place of the Wrongful Act
Plaintiff was injured while the M/V PSARA was docked in U.S. waters. This factor indisputably points toward the application of U.S. law. The Psara defendants argue, however, that this factor is typically of little importance in the analysis. See, e.g., Romero, 358 U.S. at 384 ("The amount and type of recovery which a foreign seaman may receive from his foreign employer while sailing on a foreign ship should not depend on the wholly fortuitous circumstances of the place of injury."); Pereira v. Utah Transport, Inc., 764 F.2d 686, 689 (9th Cir. 1985) (noting that the place of the wrongful act is "often of little help" in a choice of law analysis).
Plaintiff acknowledges that sometimes courts discount this factor on fortuity grounds, but he argues that in this case this factor is of greater importance because of Chevron's involvement and the role of a U.S dock. Plaintiff argues that unlike other seaman injury cases in which an onboard injury happens to occur in another country's waters, there was nothing fortuitous about plaintiff's injury occurring in the U.S. in this case. The M/V PSARA was delivering her cargo of petroleum as scheduled at a U.S. port at the time of plaintiff's injury, and the Willbridge Pier is a stationary port that welcomes tankers and other vessels daily and employs Chevron personnel to assist in mooring vessels so that they can offload cargo safely.
This factor points toward the application of U.S. law and I believe it is an important consideration in this case.
B. Law of the Flag
The M/V PSARA flies a Greek flag, which points to the application of Greek law. This factor is given great weight in the traditional analysis. See Lauritzen, 345 U.S. at 584 ("Perhaps the most venerable and universal rule of maritime law relevant to our problem is that which gives cardinal importance to the law of the flag."); Bilyk v. Vessel Nair, 754 F.2d 1541, 1545 (9th Cir. 1985) ("Lauritzen itself firmly mandates that the law of the flag presumptively controls, unless other factors point decidedly in a different direction.").
Plaintiff acknowledges as he must that this factor points toward the application of Greek law and that Lauritzen and other cases have noted the importance of this factor. But plaintiff argues that the law of the flag need not always be of paramount importance, relying on several more recent cases which give this factor less weight. See, e.g., Neely, 63 F.3d at 171 (noting that under certain circumstances, the law of the flag may have diminished or even "virtually no significance"). Plaintiff also relies on Jose v. M/V Fir Grove, 765 F. Supp. 1024 (D. Or. 1991), a case from this district in which the Honorable Malcom F. Marsh analyzed whether to apply U.S., Vanuatu, or Phillippines law to claims for unpaid wages, blacklisting, and personal injuries. Judge Marsh noted that "[u]nder theLauritzen/Romero/Rhoditis trilogy, I find that traditional strict adherence to the law of the flag has been superseded by a more pragmatic approach. Beginning with Rhoditis, courts have stressed the flexibility of the test and have begun to place greater emphasis on the contacts of the parties and the national interests involved rather than a strict application of the law of the flag." Id. at 1032. Although the facts of the case are distinguishable, it is useful to note that Judge Marsh ultimately concluded that the law of the flag should be given much less than its ordinary weight.
Defendants argue that unlike this case, many of the cases which discount the law of the flag as a factor are cases involving a "flag of convenience," meaning that a ship flies a flag of a state that does not itself have vast fleets of vessels in order to avoid certain regulations. I agree with defendants that plaintiff has submitted insufficient evidence to suggest the M/V PSARA's Greek flag is a flag of convenience. I conclude that this factor points toward the application of Greek law, but as discussed further below, in keeping with the fluid manner in which courts have applied the Lauritzen factors in recent years, I do not believe this factor necessarily controls.
C. Domicile of the Injured Party
Plaintiff is a Greek citizen who has resided in Greece his entire life and who at the time of trial continues to reside in Greece. Plaintiff has no contacts with the U.S., other than that he was injured while in U.S. waters and received medical care for approximately one year in the U.S. This factor indisputably points to the application of Greek law.
D. Domicile of the Shipowner
Defendant Psara Shipping is a Liberian corporation and is a wholly-owned subsidiary of Eletson Holdings, also a Liberian corporation. This factor would point toward the application of Liberian law, but no party is requesting this and there appears to be no reason to evaluate Liberia's interests in this case.
The Psara defendants suggest that the court look to the allegiance of the shipowner, which goes beyond a simple look at the place of incorporation. Defendants note that all of the members of the board of directors of Psara Shipping are Greek nationals who hold their meetings in Piraeus, Greece, at the offices of Eletson. Psara Shipping relies exclusively on Eletson, for crewing, management and operation of the M/V PSARA. Defendants also point to the fact that all decisions regarding employment and operation of the M/V PSARA are made in Piraeus, Greece.
Plaintiff criticizes as unsupported by the case law defendants' reliance on, for example, the residency of Psara Shipping's directors. I note, however, that in Carbotrade, one of plaintiff's cases, the Second Circuit looked to the residency of the shipowner's board members in analyzing this factor.Carbotrade, 99 F.3d at 92. More importantly, however, plaintiff disputes the Psara defendants' analysis under this factor for failing to consider Chevron's domicile, which is clearly the United States. As discussed above, I agree that Chevron must be considered in the Lauritzen analysis. As a consequence, I believe this factor points equally to the application of Greek and U.S. law.
E. The Place of the Contract
The employment contract in this case was negotiated and signed in Greece. The place of the contract would thus point toward the application of Greek law. However, this factor is given little or no weight in most instances. See Villar v. Crowley Maritime Corp., 782 F.2d 1478, 1481 (9th Cir. 1986).
The Psara defendants concede that the place of the contract is typically given little weight, but they argue that this factor should be given more weight when the contract specifies which law will apply. See e.g., Bylik, 754 F.2d at 1444 ("[f]or claims not on the contract, the Lauritzen Court found this factor useful only insofar as the contract stipulated whose law would apply.")
As discussed at length in the Opinion dated January 22, 2004, there are two underlying contracts at issue, plaintiff's employment contract and the Greek Collective Agreement. Both contracts contain a choice of law provision. In the context of deciding issues related to forum selection, I ruled that the provisions at issue either did not apply to this dispute or were not incorporated into plaintiff's employment contract. I will not revisit that ruling in this context. I find the place of the contract of little relevance in this Lauritzen analysis.
F. Accessibility of the Foreign Forum
Plaintiff argues that a foreign forum is not available in this case given the presence of Chevron as a defendant, and because the court denied the Psara defendants' motions to dismiss the case on forum non conveniens grounds, this factor adds little weight to the analysis other than being another factor that points to the application of U.S. law.
Defendants argue that Greece is an adequate forum for plaintiff's claims and would provide guaranteed payment to plaintiff. But, the Psara defendants simply ignore the fact that Chevron is a defendant and alleged to be a joint tortfeasor. In my prior ruling, I noted:
The Psara defendants submit the declaration of Professor Athanassios Yiannopoulos, a Greek law expert. His opinion suggests that plaintiff would be able to recover from Psara Shipping under what looks to be similar to U.S. workers' compensation law. He also suggests there are additional remedies, such as monetary compensation for the reparation of moral prejudice. The court assumes based on representations of counsel that such an award would be substantially less than what plaintiff could recover in this jurisdiction.
Defendants argue that Greece is an adequate forum for resolution of plaintiff's claims. If the Psara defendants were the only defendants in this action, the Psara defendants may have been able to meet their burden on this factor. However, there is a significant advantage in having all parties assert their claims in one forum. Contact Lumber Co. v. P.T. Moges Shipping Co. Ltd., 918 F.2d 1446, 1452 (9th Cir. 1990). As both Judge Jelderks and Judge Jones correctly decided, plaintiff's claims against Chevron will proceed in this district.
January 22, 2004 Opinion at 14-15.
Considering Chevron's presence in this action, this factor points toward the application of U.S. law.
G. Law of the Forum
Plaintiff chose to bring his claims in the United States. Thus, this factor points to the application of U.S. law. Both sides note, however, that this factor is of little importance in the analysis. See e.g., Warn v. M/Y Maridome, 169 F.3d 625, 628 n. 2 (9th Cir. 1999) (observing that "Lauritzen indicates that the law of the forum is largely irrelevant"). I find this factor of little relevance in this analysis.
H. Shipowner's Base of Operations
The test in the Ninth Circuit for whether an entity has a base of operations in the United States is whether the entity "has substantial and continuing contacts with this country." Dalla v. Atlas Maritime Co., 771 F.2d 1277, 1278 (9th Cir. 1985). As with the fourth factor (the shipowner's domicile), plaintiff argues that this factor should take into account both the Psara defendants and Chevron's base of operations. I agree. Looking to Chevron's base of operations clearly points to the application of U.S. law. Plaintiff also argues that the shipping defendants have substantial and continuous contacts with the U.S. Plaintiff points to the fact that the shipping history of the M/V PSARA shows that she has at times been largely dedicated to the U.S. oil trade and boasts of her compliance with U.S. pollution laws. Plaintiff also notes that Eletson Holdings, which owns Psara Shipping, raises money in the U.S. capital markets and its subsidiary has an office in Connecticut.
The shipping defendants argue that the presence of an Eletson affiliate in the U.S. is irrelevant because Eletson Maritime has nothing to do with operating the ship. I find this argument to be persuasive with respect to Eletson Maritime, and I find it important that most operational decisions about the vessel appear to be made in Greece.
I do believe it is appropriate to consider the shipping defendants' contacts with the U.S via oil trade, but this would not lead me to the conclusion that defendants' base of operations is in the United States. In Rhoditis, a Greek seaman was injured while onboard a Greek-flagged vessel afloat in U.S. waters. Despite several factors pointing to the application of Greek law, the Supreme Court held:
The flag, the nationality of the seaman, the fact that his employment contract was Greek, and that he might be compensated there are in the totality of the circumstances of this case minor weights in the scales compared with the substantial and continuing contacts that this alien owner has with this country. . . . [T]he facade of the operation must be considered as minor, compared with the real nature of the operation and a cold objective look at the actual operational contacts that this ship and this owner have with the United States.Rhoditis, 398 U.S. at 310.
In contrast, in Rodriguez v. Flota Mercante Grancolombiana, S.A., 703 F.2d 1069, 1073-74 (9th Cir. 1983), the court found that "the fact that [the defendant] has agents in the United States to husband its vessels while in American ports is of no significance in determining [its] base of operations." Id. The court went on to add that "[t]he fact that [the defendant's] vessels have grossed an impressive amount of income in calling on ports of the United States does not prove that its base of operations is in the United States. Id.
The facts of this case regarding the shipping defendants' base of operations more closely resemble Rodriguez than Rhoditis. Like the domicile factor, however, when Chevron's base of operations is considered in this analysis, this factor points equally to the application of Greek and U.S. law.
III. Balancing the Lauritzen Factors and the Need for Uniformity and Fairness
As I noted at oral argument, I believe this issue presents a very difficult question for the court. The parties have strong arguments on each side, and balancing the Lauritzen factors with the appropriate weight discussed above does not point clearly to the application of either country's laws. As the Supreme Court noted, "[t]he Lauritzen test, however, is not a mechanical one . . . [and] [t]he list of seven factors inLauritzen was not intended as exhaustive." Rhoditis, 398 U.S. at 308-09. In this case, I find that it is also important to consider the fundamental principles of admiralty law that are implicated by Chevron's presence in this case.
Liability under admiralty law is joint and several with a right of contribution apportioned according to relative fault. See Edmonds v. Compagnie Generale Transatlantique, 443 U.S. 256 (1979). Both plaintiff and defendant Chevron cite to numerous admiralty cases emphasizing the principles of fairness and the need for uniform application of law, as well as the importance of the proportionate fault rule. Plaintiff and Chevron contend it is simply unworkable to apply, consistently with those principles, Greek workers compensation law to the shipping defendants while applying U.S. law to Chevron.
Aside from asking the court to dismiss the Psara defendants from the action, the Psara defendants present no solution as to how the court would actually go about applying Greek law to the shipping defendants and U.S. law to Chevron. The Psara defendants simply maintain that Chevron's presence is irrelevant. They contend, as discussed above, that the court must do a choice of law analysis for each defendant. According to the Psara defendants, if the court takes each claim and each defendant separately, then there is no need to be concerned about the uniform application of admiralty law or the potential for U.S. law to conflict with Greek workers' compensation law. In other words, defendants contend that it is the very existence of this conflict that requires the Lauritzen analysis. If the result of the Lauritzen analysis suggests application of Greek law as to the Psara defendants, then the court need go no further.
The problem with this analysis is that the presence of a joint tortfeasor, against which it is undisputed that U.S. maritime law — including joint and several liability — applies, means that the uniformity principles of U.S. maritime law are necessarily relevant. As noted, I agree that Chevron should be considered in the Lauritzen analysis. I also agree that the presence of a joint tortfeasor, the unworkability of applying two different bodies of law to a potentially indivisible harm, and the likelihood of upsetting the well-established rules of joint and several liability with a right of contribution based on proportionate fault are important considerations above and beyond the Lauritzen test. Considering all of these factors, I find that the United States' interests are sufficiently implicated and I conclude that this country's laws should apply to all of plaintiff's claims.
CONCLUSION
For the foregoing reasons, plaintiff's Motion for Application of U.S. Law (#138) is granted and defendants' Motion for Application of Greek Law and for Dismissal of Plaintiff's Claims (#200) is denied.