Opinion
No. 7:02-cv-212-F1.
January 26, 2004
ORDER
This case arises from an alleged injury sustained by plaintiff while he claims he was working for defendants on their commercial fishing vessel. Plaintiff raises a claim for maintenance and cure. This matter is before the court upon defendants' motion to dismiss the complaint pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure. The parties have fully briefed the matter and the issue is ripe for disposition.
RELEVANT FACTS AND PROCEDURAL HISTORY
The facts are taken largely from the complaint and the facts established by evidence accompanying memoranda filed by the parties. Defendants own a fishing vessel, the F/V MM, which they operate as a commercial offshore, deep sea fishing vessel. Plaintiff claims that he slipped and fell while he worked as a crewmember for defendants. Plaintiff allegedly fell on July 14, 2002 while he was stepping onto the vessel from a pier at a commercial fish house in South Carolina. Plaintiff alleges that he fractured his right knee and has subsequently needed medical treatment and been unable to work. Plaintiff's only claim is for maintenance and cure from defendants.
Within weeks after the accident, in August of 2002, defendants ceased selling all of their catch to dealers in South Carolina and began selling all of their catch to dealers in North Carolina. Mr. Hair testified that he moved operations to North Carolina because the plaintiff was harassing him (presumably by pressing his claim for maintenance and cure) and a third party associated with plaintiff was taking pictures of his boat. (Hair Dep. at 7.) The defendants continue to sell their catch in North Carolina only. The defendants reside in South Carolina and presumably store the F/V MM in South Carolina. The court is unaware of any other fishing operations or other business ventures, if any, of the defendants.
Plaintiff moved to North Carolina sometime after his fall. He filed suit in this court on December 23, 2002. Plaintiffs were served personally with the summons and complaint at their residence in South Carolina on February 26, 2003. After answering the complaint pro se, defendants obtained counsel, who filed the present motion to dismiss.
DISCUSSION
The sole issue before the court is whether this court may exercise personal jurisdiction over the defendants. Defendants' argument is that they did not have any ties with the state of North Carolina at the time plaintiff was injured. The court agrees that there are no facts plead or evidence establishing that defendants had any ties with North Carolina when plaintiff was allegedly injured. However, the court finds that it is not dispositive that defendants had no contacts with North Carolina at the time of plaintiff's underlying injury. For the following reasons, the court concludes that the point at which the court should assess defendants contacts with this state for the purposes of personal jurisdiction is when the lawsuit commenced. Using this time frame, the court concludes that it may exercise personal jurisdiction over defendants.
Plaintiff raises a claim for "maintenance and cure" relating to injuries suffered while he was allegedly working as a crewmember aboard a vessel owned by defendants. Such a claim is brought under federal maritime common law, over which there can be no dispute this court has subject matter jurisdiction. See generally Calmar S.S. Corp. v. Taylor, 303 U.S. 525, 527 (1938) (recognizing the ancient duty of a vessel owner to provide maintenance and cure for seamen injured while in service). The duty to provide maintenance and cure to an injured seaman is implied at law from the contract of employment, not from negligence on the part of the vessel owner. Id. These implied rights arise from the recognition of the fact that the seaman's work is "an arduous and perilous service." Id. at 528. Since seaman are considered "wards" of the "admiralty courts," any ambiguities or doubts in determining maintenance and cure issues are resolved in favor or the seaman. Vaughan v. Atkinson, 369 U.S. 527, 532 (1962). This duty of maintenance and cure extends until the seaman reaches maximum medical recovery or when his injury is diagnosed as permanent. Id. at 531; Vella v. Ford Motor Co., 421 U.S. 1, 5 (1975).
Congress has not authorized nationwide service of process in admiralty cases. Accordingly, North Carolina's long arm statute must be applied in determining whether defendants are amenable to suit in North Carolina federal district court. Federal Ins. Co. v. Lake Shore, Inc., 886 F.2d 654, 657 n. 2 (4th Cir. 1989). However, any exercise of personal jurisdiction must comport with due process protections of the United States Constitution. Id. Although North Carolina law determines whether a section of its long-arm statute authorizes jurisdiction, federal law controls whether the exercise of that jurisdiction violates federal due process protections. However, where the state long arm statute has been construed to extend jurisdiction to the limits of due process, the two questions essentially collapse together. Id. Here, the North Carolina Supreme Court has held the long arm statute extends jurisdiction to the limits of federal due process. Dillon v. Numismatic Funding Corp., 291 N.C. 674, 675, 231 S.E.2d 629, 630-31 (1977).
The North Carolina long arm statute allows for the exercise of personal jurisdiction when a party is properly served, pursuant to the North Carolina Rules of Civil Procedure, and when one of several enumerated circumstances exist. N.C.G.S. § 1-75.4. Under the North Carolina Rules, service may be effected, within or outside the state, on a natural person:
By delivering a copy of the summons and of the complaint to him or by leaving copies thereof at the defendants dwelling house or usual place of abode with some person of suitable age and discretion then residing therein.
N.C.R. CIV. P. 4(j)(1)(a). The court finds that the record establishes that service was made to defendants in their residence in South Carolina in compliance with Rule 4(j)(1)(a). (Returns of Service, DE-2 DE-3.) Defendants do not dispute that they were properly served.
Once the technical service requirements are satisfied, the North Carolina long arm statute allows for the exercise of personal jurisdiction in relevant part as follows:
(1) Local Presence or Status. — In any action, whether the claim arises within or without this State, in which a claim is asserted against a party who when service of process is made upon such party:
a. Is a natural person present within this State; or
b. Is a natural person domiciled within this State; or
c. Is a domestic corporation; or
d. Is engaged in substantial activity within this State, whether such activity is wholly interstate, intrastate, or otherwise.
N.C.G.S. § 1-75.4 (emphasis added). The long arm statute thus evaluates a party's level of activities in the state at the time of service, not at the time the cause of action arose. The court finds that N.C.G.S. § 1-75.4(1)(d) of the state long-arm statute applies to defendants because they engaged in "substantial activity" within North Carolina at the time of service. The evidence establishes that defendants have sold all of their catch in North Carolina since shortly after plaintiff was injured. Defendants themselves admit they have had business dealings with this state after plaintiff's alleged injury: "Defendants [sic] only business dealings with the State of North Carolina occurred after Plaintiff's injury. In fact, Defendants only moved their business dealings from South Carolina to North Carolina because they felt threatened after Plaintiff's injury." (Def. Mem. Motion to Dismiss (DE-11) at 2.) In August 2002, the defendants had a North Carolina Land and Sell License and started selling their catch only in North Carolina. They have continued to sell only in North Carolina, as Mr. Hair testified to in his deposition. Defendants were served on February 26, 2003. On May 21, 2003, the North Carolina Department of Environment and Natural Resources reported that their records revealed that Mr. Hair landed fish at a North Carolina dealer eighteen times since August 1, 2002. Defendants were conducting all of their sales relating to their commercial fishing vessel in North Carolina at the time of service. This level of business activity qualifies as "substantial activity" for the purposes of the state long arm statute.
The exercise of personal jurisdiction based on defendants' contacts with North Carolina also satisfies the due process requirements of the Constitution. Due process protects defendants from being bound in personam by judgments of a forum with which they lack meaningful relations. Burger King Corp. v. Rudzewick, 471 U.S. 462, 471-72 (1985). "[T]he constitutional touchstone remains whether the defendant purposefully established `minimum contacts' in the forum," id. at 474, such that the exercise of personal jurisdiction does not offend "traditional notions of fair play and substantial justice," Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)). There are two ways in which a court may assume power over an out-of-state defendant: by a "finding [of] specific jurisdiction based on conduct connected to the suit or by [a proper] finding [of] general jurisdiction." ALS Scan, Inc. v. Digital Serv. Consultants, Inc., 293 F.3d 707, 711 (4th Cir. 2002). Specific jurisdiction is lacking here, because plaintiff's injury and subsequent claim for maintenance do not arise out of defendants' business dealings in North Carolina. But general jurisdiction may be proper here. In order for a state to exercise general jurisdiction, or jurisdiction over a defendant in a suit not arising out of the defendant's contacts with the state, the defendant must purposely maintain "continuous and systematic" contacts with the state. Lake Shore Inc., 886 F.2d at 660; Perkins v. Benguet Consol. Mining Co., 342 U.S. 437, 448 (1952); Lee v. Walworth Valve Co., 482 F.2d 297, 300 (4th Cir. 1973) ("If a foreign corporation's contacts with a forum state are sufficiently substantial, the forum state may constitutionally authorize the judicial assertion of in personam jurisdiction, even though the plaintiff has had no contacts with the forum state and the cause of action did not arise there."). The relevant time at which to assess whether a defendant's contacts satisfy the "continuous and systematic" standard is over a period that is reasonable under the circumstances, up to and including the date the suit was filed. Metropolitan Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 569-70 (2d Cir.), cert. denied, 519 U.S. 1006 (1996).
Though the few courts that have spoken on the issue have found it reasonable to consider the defendant's activities for a period of years up to the filing of suit, see Metropolitan Life Ins. Co., 84 F.3d at 569-70, this court finds that such a long period of contacts is not required in order to exercise general jurisdiction. In the case at bar, the defendants purposefully availed themselves of North Carolina by directing all their sales to this state some five months prior to the commencement of the lawsuit. With such purposeful, substantial, and continuous activities directed towards this state, the court finds that it is reasonable to consider them as supporting general jurisdiction even though they took place over a period of months rather than years prior to the commencement of the action.
Here, defendants run a commercial fishing business, and they have sold all of their catch in this forum, the state of North Carolina, since about August 1, 2002. The lawsuit was filed on December 23, 2002. Though defendants live in South Carolina, likely dock in South Carolina, and likely fish in the high seas, they derive all their economic gain from sales made in the state of North Carolina to North Carolina dealers. Thus, the court concludes that it would be fair to hold the defendants answerable to suit in North Carolina under the exercise of general jurisdiction. The only question that remains is whether that exercise of general jurisdiction is limited to suits which arise out of incidents occurring after the defendants' contacts with the state were substantial enough to make them amenable to general jurisdiction in North Carolina. Though the court finds little direct guidance on this issue, it is helpful to scrutinize how courts have viewed the time when cause of action arose/time of forum contacts relationship in analogous contexts.
In a line of cases discussing the general federal venue statute, courts have found that a defendant's cessation of contacts with a forum immediately after a plaintiff's cause of action arose does not defeat the venue in the forum. E.g., Snyder v. Eastern Auto Distribs., Inc., 357 F.2d 552, 556 (4th Cir), cert. denied, 384 U.S. 987 (1966) (holding that the time to determine whether a defendant is found or doing business in a forum is when the cause of action arose). The Fourth Circuit later applied a seemingly inapposite result when it held that venue was proper on facts similar to the case at bar: in a suit in which a corporate defendant was doing business in the district when suit was brought, but not at the time the cause of action arose in another district of another state. Tenefrancia v. Robinson Export Import Corp., 921 F.2d 556, 558-59 (4th Cir. 1990). In Tenefrancia, the Court reasoned that the earlier line of cases adopted an interpretation of the venue statute which would avoid manifest injustice under those facts, and that those cases did not require venue to always be measured at the time the cause of action arose. Id. Though venue does not correlate exactly with personal jurisdiction, this court notes that venue cannot lie where the court cannot first exercise personal jurisdiction. Principles of proper venue and the propriety of exercising personal jurisdiction are related. Venue statutes exist in part to ensure that a defendant is not called upon to litigate in an unfair or inconvenient forum. Leroy v. Great Western United Corp., 443 U.S. 173, 183-84 (1979). Likewise, overall fairness and the convenience of the forum to defendants play a part in evaluating whether it is reasonable to exercise personal jurisdiction. See Int'l Shoe, 326 U.S. at 327 (the court should consider the burden on defendants to litigate in the forum). Thus, the court is persuaded that if it is fair for venue purposes to allow venue to lie when a defendant's contacts with the district began after the cause of action arose in another district, it is similarly fair to exercise personal jurisdiction over a defendant in the same circumstances.
Furthermore, one rationale behind the exercise of general jurisdiction is that when a defendant has purposefully availed himself of the privilege of conducting business in a state, he should bear the correlative burden of submitting to the forum's courts. See id., 326 U.S. at 319. Here, defendants derive all their economic benefits from sales made in North Carolina, so they have acquired the burden of submitting to North Carolina courts. The court believes that it is not unreasonable to extend this "burden" to claims which arose in a neighboring state immediately prior to defendants' contacts with this state, particularly on these facts: when plaintiff's claim initially arose only weeks before defendants availed themselves of North Carolina business; when defendants' contacts with North Carolina are connected to plaintiff's claims to the extent that defendants began doing business in North Carolina to avoid plaintiff's and another party's "harassment" (seeking to enforce defendants' alleged obligation to plaintiff); and when plaintiff raises a claim of an on-going nature such that the bulk of the claim can be understood as "arising" after the defendants had began substantial contacts with North Carolina. In the absence of any contrary authority indicated by the defendants, the court finds it may exercise general jurisdiction over defendants for the purposes of this action.
CONCLUSION
Accordingly, the defendants' motion to dismiss (DE-10) is DENIED. The Clerk is DIRECTED to continue management of this case.
SO ORDERED.