Coats v. Penrod Drilling Corp. ( 1993 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 92-7378
EARL WAYNE COATS,
Plaintiff-Appellee,
Cross-Appellant,
versus
PENROD DRILLING CORPORATION,
ET AL.,
Defendants,
PENROD DRILLING CORPORATION, and
HYTORC, M.E.,
Defendants-Appellants,
Cross-Appellees.
Appeal from the United States District Court
for the Southern District of Mississippi
(October 18, 1993)
Before KING, HIGGINBOTHAM, and DEMOSS, Circuit Judges.
HIGGINBOTHAM, Circuit Judge:
This is a maritime personal injury suit filed by a United
States citizen against his employer, a corporation formed under the
law of the United Arab Emirates, and the owner and operator of a
jack-up drilling rig, a Delaware corporation with its principal
place of business in Dallas, Texas. Plaintiff was injured aboard
the rig off the coast of the United Arab Emirates. Under the
general maritime law of the United States, a jury determined that
the rig was unseaworthy, that its owner and plaintiff's employer
were negligent, and awarded substantial damages. The employer
appeals the district court's denial of its motion to dismiss for
lack of personal jurisdiction, the application of American law, and
the failure to dismiss based on forum non conveniens. The
defendant appeals, urging us to abolish or modify the doctrine of
joint and several liability in the context of comparative fault as
well as reverse the district court's application of American law.
Plaintiff cross-appeals the court's ruling that he was not a Jones
Act seaman, the sufficiency of the evidence to support the jury's
finding of contributory negligence, the directed verdict for
defendants denying punitive damages under the general maritime law,
the denial of prejudgment interest, and the amount of costs
awarded. We affirm.
I.
MIS is a corporation organized under the laws of Ras Al-
Khaimah, United Arab Emirates with branch offices in Dubai and Abu
Dhabi. It performs repair and maintenance services for oilfield
and marine vessels, and its employees are all expatriates,
primarily from India, Pakistan, and the United States. MIS uses
Lee's Materials Services, Inc. in Houston, Texas to perform various
services in the United States. Through Lee's, MIS advertised its
job openings in the Houston Chronicle (Texas), Lafayette Advertiser
(Louisiana), and Mobile Register (Alabama). During his trip,
Shelton held a meeting in Laurel, Mississippi that was attended by
several young men, including the plaintiff, Earl Wayne Coats.
2
Shelton explained that he was soliciting employees to operate MIS
equipment on certain offshore vessels.
In 1987, David Shelton, manager of the Hytorc Division of
Maritime Industrial Services, travelled from the United Arab
Emirates to Mississippi on vacation and to interview prospective
employees for MIS. At the meeting, Shelton offered a job to Coats,
and Coats accepted. Their agreement included thirty days per year
of paid vacation with airfare back to Mississippi. MIS also
promised to pay for Coats' return to Mississippi at the termination
of his employment. The term of Coats' employment was indefinite.
Coats obtained an updated passport as instructed by Shelton, and
MIS, through Lee's Materials, sent him a plane ticket to Dubai.
Coats arrived in the United Arab Emirates and started work on
December 1, 1987.
While working for MIS, Coats lived on shore and worked on
various jack-up rigs owned by different customers of MIS. The
majority of Coats' work consisted of operating a hydraulically
powered torque wrench used to loosen and tighten large nuts and
bolts. During Coats' employment with MIS, Penrod Drilling
Corporation, a Delaware corporation with its principal place of
business in Dallas, Texas contracted for MIS to perform pressure
testing on Penrod's Rig 69. The pressure testing was necessary to
prepare the rig for its next drilling operation. At the time, Rig
69, a jack-up drilling rig, was located in the Port of Mina Saqr in
the territorial waters of the United Arab Emirates. It was twenty
feet from shore in forty feet of water and connected to land by a
3
gangway. Rig 69 flies the United States flag, and its home port is
New Orleans, Louisiana. Penrod maintained a local office in the
United Arab Emirates to assist in the operation of Rig 69.
MIS assigned Coats to perform the pressure testing for Penrod.
Coats was inexperienced at this task and had to ask for assistance
from Penrod personnel. As Coats was working aboard Rig 69,
Penrod's "bullplug" failed at a pressure less than it was rated to
withstand, causing the fluid under pressure to erupt. The eruption
knocked Coats down, resulting in a severe and disabling injury to
his knee. After the accident, MIS flew Coats to Hattiesburg,
Mississippi for treatment and started paying his medical expenses.
Most of these payments were made through Lee's Materials.
Meanwhile, MIS filled Coats' job with Chris Stennett, another
Mississippi resident who attended Shelton's meeting in Laurel.
On April 10, 1989, Coats sued Penrod, MIS, and Lee's1 in the
Southern District of Mississippi. The complaint asserted federal
jurisdiction based on diversity of citizenship and admiralty and
alleges, inter alia, negligence on the part of Penrod and MIS, the
unseaworthiness of Rig 69, and entitlement to maintenance and cure
from MIS under the Jones Act. Soon thereafter, MIS terminated its
payment of benefits to Coats. Coats then amended his complaint
against MIS to seek compensatory and punitive damages under the
general maritime law for wrongful termination of maintenance and
cure and to allege wrongful termination of health insurance
1
The district court granted Lee's motion for summary
judgment and dismissed it from the case.
4
benefits under ERISA. Penrod cross-claimed against MIS for
indemnity and contribution under the general maritime law.
Before trial, the district court issued a number of orders in
response to motions filed by the parties. The court ruled that MIS
had sufficient contacts with Mississippi to justify the assertion
of personal jurisdiction and that it would apply United States law,
rather than the law of the United Arab Emirates, to Coats' personal
injury claims. Under American law, the court determined that Coats
was not a Jones Act seaman, and therefore not entitled to
maintenance and cure damages, but that Coats qualified as a
Sieracki seaman with the attending right to sue under the warranty
of seaworthiness. See Seas Shipping Co. v. Sieracki, 328 U.S. 85
(1946).2 The court also declined to dismiss the case under the
doctrine of forum non conveniens.
The case proceeded to trial on Coats' claims against Penrod
for negligence and unseaworthiness and against MIS for negligence,
wrongful termination of maintenance and cure, and wrongful
termination of benefits under ERISA. After the court directed a
verdict against Coats on his claim for punitive damages based on
MIS' termination of maintenance and cure, the jury returned a
verdict for Coats, assessing damages of $925,000 and assigning 20%
fault to Coats, 20% to Penrod, and 60% to MIS. The court reduced
the award by Coats' comparative fault to $740,000 and entered
2
The court also dismissed Coats' claims under the Longshore
and Harbor Workers' Compensation Act because Coats' injuries did
not occur "upon navigable waters of the United States." 33
U.S.C. § 905(b).
5
judgment against Penrod and MIS jointly and severally.3 The court
also awarded costs to Coats in the amount of $7,889.04. All
parties appealed.
II.
A.
We first address the issue of personal jurisdiction over MIS,
a question that requires us to apply Mississippi's long-arm
statute. See DeMelo v. Toche Marine, Inc., 711 F.2d 1260 (5th Cir.
1983).4 MIS contends that the Mississippi statute does not confer
3
In an advisory capacity, the jury determined that MIS
terminated Coats' medical benefits with the specific intent to
discriminate against Coats in violation of ERISA. The court
adopted this finding and entered judgment for Coats on his ERISA
claims in the amount of $26,524.82, less a credit for $23,335.15
in medical expenses previously paid by MIS to Coats. This
judgment was not appealed.
4
At the time this suit was filed, § 13-3-57 provided:
Any non-resident person, firm, general or limited
partnership, or any foreign or other corporation not
qualified under the constitution and laws of this state as
to doing business herein, who shall make a contract with a
resident of this state to be performed in whole or in part
by any party in this state, or who shall commit a tort in
whole or in part in this state against a resident or non-
resident of this state, or who shall do any business or
perform any character of work or service in this state shall
by such act or acts be deemed to be doing business in
Mississippi. Such acto or acts shall be deemed equivalent
to the appointment by such nonresident of the secretary of
state of the State of Mississippi, or his successor or
successors in office, to be the true and lawful attorney or
agent of such nonresident upon whom all lawful process may
be served in any actions or proceedings accrued or accruing
from such act or acts, or arising from or growing out of
such contract or tort, or as an incident thereto, by any
such nonresident or his, their, or its agent, servant or
employee.
. . .
Miss. Code Ann. § 13-3-57 (Supp. 1988) (amended 1991).
6
jurisdiction, and alternatively, that applying the statute to MIS
violates due process.5 The relevant facts are undisputed, and thus
our review of this issue is de novo. Command-Aire Corp. v. Ontario
Mechanical Sales and Serv. Inc., 963 F.2d 90, 93 (5th Cir. 1992).
Because Coats' claims are not based on contract and the
alleged tortious conduct of MIS occurred in the United Arab
Emirates, the district court asserted personal jurisdiction over
MIS under the catchall or "doing business" prong of the Missisippi
statute. See Jones v. Chandler, 592 So. 2d 966, 971 (Miss. 1991)
(referring to "doing business" as the catchall provision).6 The
first question is whether MIS was "doing business" in Mississippi.7
5
We must address both arguments separately, because the
Mississippi courts have not held that the state's long-arm
statute reaches to the limits allowed by the Constitution. See
Rittenhouse v. Mabry, 832 F.2d 1380, 1383 (5th Cir. 1987);
Southern Pac. Transportation Co. v. Fox, 609 So. 2d 357, 365
(Miss. 1992) (Lee, P.J., dissenting).
6
The district court found it unnecessary to decide whether
MIS' termination of Coats' maintenance and cure benefits
constituted an intentional tort committed in whole or in part in
Mississippi. We also decline to address this issue.
7
The district court applied a three-pronged test for "doing
business" that originated in Mladinich v. Kohn, 164 So. 2d 785,
790 (Miss. 1964): (1) the non-resident defendant must
purposefully do some act or transaction in Mississippi, (2) the
cause of action must be connected to or arise from this
transaction, and (3) the assumption of jurisdiction must not
offend traditional notions of fair play and substantial justice.
See also Rittenhouse v. Mabry, 832 F.2d 1380, 1385 (5th Cir.
1987) (applying this test); Aycock v. Louisiana Aircraft, Inc.,
617 F.2d 432, 434 (5th Cir. 1980) (same). This is also the
analysis employed by the parties on appeal. The two most recent
decisions from the Mississippi Supreme Court on this issue,
however, did not apply this test, but instead focused on the
7
Under the statute, one is "deemed to be doing business" if he
"perform[s] any character of work or service in this state." Miss.
Code Ann. § 13-3-57. In McDaniel v. Ritter, 556 So. 2d 303 (Miss.
1989), the Mississippi Supreme Court further defined the term to
include doing "various acts here for the purpose or realizing a
pecuniary benefit or otherwise accomplishing an object." Id. at 309
(citing Restatement (Second) of Conflict of Laws § 35 cmt. a
(1971)). The Mississippi Supreme Court recently stated that the
doing business prong "is so broad that it belies any suggestion it
be limited to commercial activity." Jones, 592 So. 2d at 971.
MIS' recruitment and hiring of employees in Mississippi meets
the Restatement definition adopted by the Mississippi Supreme
Court. MIS performed various acts in Mississippi to recruit Coats.
Shelton, on behalf of MIS, held a meeting in Laurel. At that
meeting, MIS hired Coats -- and under terms that contemplated
future contacts with Mississippi. MIS agreed to fly Coats back to
Mississippi every year of his employment for his thirty-day
vacation, and MIS employed Coats for an indefinite term. When
Coats was injured, MIS returned him to Mississippi for treatment
and started paying for his medical expenses. Moreover, Coats was
not the only Mississippi resident MIS recruited and hired. After
Coats' accident, MIS replaced him with Chris Stennett, another
actual language of the long-arm statute. See Southern Pac.
Transportation Co. v. Fox, 609 So. 2d 357 (Miss. 1992); McDaniel
v. Ritter, 556 So. 2d 303 (Miss. 1989). Although we do not infer
a substantive change in the law from these decisions, we will
follow the most recent guidance from the state's highest court.
8
Mississippi resident who attended Shelton's meeting in Laurel. MIS
also advertised its job openings in newspapers from three
neighboring states, and there is evidence in the record that these
newspapers are distributed to Mississippi residents. Cf.
Rittenhouse, 832 F.2d at 1385 (finding a failure to meet the "doing
business" requirement while noting that the defendant did not
solicit patients from Mississippi or advertise there). These
actions constitute "various acts [in Mississippi] for the purpose
or realizing a pecuniary benefit or otherwise accomplishing an
object."
Concluding that MIS does business in Mississippi is not by
itself sufficient to establish jurisdiction. The nexus requirement
must also be met. That is, the "act or acts" performed by MIS in
Mississippi will confer jurisdiction only "in any actions or
proceedings accrued or accruing from such act or acts . . . or as
an incident thereto . . . ." Miss. Code Ann. 13-3-57 (emphasis
added).8 As explained by the Mississippi Supreme Court,
[t]he long-arm statute requires no direct nexus to the non-
resident's business done here, only that the claim be incident
thereto. The statute thus requires far less than that the
liability generating conduct have occurred in Mississippi.
McDaniel, 556 So. 2d at 309; see also Southern Pac. Transp. Co. v.
Fox, 609 So. 2d 357, 360 (Miss. 1992). McDaniel was a wrongful
death action arising from a plane crash in Missouri. Jack Ritter,
8
Effective July 1, 1991, the Mississippi legislature amended
§ 13-3-57 and repealed the nexus requirement. The amended
statute applies prospectively to actions commenced after its
effective date and therefore has no effect on Coats' suit, filed
in 1989. Southern Pac. Transp. Co. v. Fox, 609 So. 2d 357, 360
n.5 (Miss. 1992).
9
plaintiffs' decedent, and Alton Jerry Speaks, defendants' decedent,
were killed in the accident. Ritter was a Mississippi resident,
and Speaks resided in Tennessee. The two men worked for
Consolidated Enterprises, a Mississippi corporation with an office
in Columbus. Speaks had organized the company and was its
principal shareholder. Most important, they were travelling on
behalf of Consolidated when the plane crashed. After concluding
that Speaks had a continuing and substantial presence in
Mississippi, the court held that plaintiffs' claim arose from
"facts sufficiently incident to business done by Speaks in
Mississippi" to satisfy the long-arm statute. 556 So. 2d at 309.
Although the crash occurred in Missouri and the plane never
travelled through Mississippi, the fact that they were travelling
on behalf of the defendant's corporation which was doing business
in Mississippi furnished the required nexus. See id.
In Fox, the court found the required nexus lacking on facts it
characterized as "in sharp contrast with McDaniel." 609 So. 2d at
361. Fox, a Texas resident, sued his employer, Southern Pacific
Transportation Co., to recover for injuries suffered while working
in Southern Pacific's railroad yard in Hearne, Texas. Southern
Pacific's principal place of business was Lafayette, Louisiana.
Although Southern Pacific did transport goods through Mississippi
in interstate commerce, critical to the court was the fact that
neither Fox nor his accident had "even the slightest connection
with this state or with any business Southern Pacific does here."
Id. at 359.
10
We are persuaded that Coats' claims arise from facts
sufficiently incident to MIS's activities in Mississippi to meet
the nexus requirement for personal jurisdiction under Mississippi
law. MIS held a meeting in Mississippi and recruited Coats to come
work for them. This contact with Mississippi resulted in Coats'
employment and Coats was injured on the job. Moreover, Coats
claims damages, in part, as compensation for his medical expenses
while in a Mississippi hospital, where MIS flew him for treatment.
Finally, MIS terminated its payment of Coats' medical expenses
while Coats was hospitalized in Mississippi.
B.
Due process requires that a defendant have sufficient minimum
contacts with the forum state such that maintenance of the suit
does not offend traditional notions of fair play and substantial
justice. International Shoe Co. v. Washington, 326 U.S. 312, 316
(1945). The nature and quality of these contacts must justify the
conclusion that defendant should have reasonably anticipated being
haled into court in the forum state. World-Wide Volkswagen Corp.
v. Woodson, 444 U.S. 286 (1980); Jones v. Petty-Ray Geophysical
Geosource, Inc., 954 F.2d 1061, 1068 (5th Cir. 1992). As an
analytic device, the Supreme Court draws a distinction between
specific and general jurisdiction. See Burger King Corp. v.
Rudzewicz, 105 S. Ct. 2174, 2182 (1985); Helicopteros Nacionales de
Colombia, S.A. v. Hall, 104 S. Ct. 1868, 1872 (1984). For specific
jurisdiction, the defendant must have purposely directed his
activities at the resident of the forum and, the litigation must
11
result from the alleged injuries that arise out of or relate to the
defendant's activities directed at the forum. Burger King, 471
U.S. at 474; Aviles v. Kunkle, 978 F.2d 201, 204 (5th Cir. 1992).
The focus is on the relationship between the defendant, the forum,
and the litigation. Burger King, 471 U.S. at 474. "The
appropriate inquiry is whether the defendant purposefully availed
[itself] of the privilege of conducting activities in-state,
thereby invoking the benefits and protections of the forum state's
laws." Bullion v. Gillespie, 895 F.2d 213, 216 (5th Cir. 1990)
(citing Burger King, 471 U.S. at 474-75). Where the cause of
action is not related to or does not arise from the defendant's
activities in the forum, the forum may still have general
jurisdiction if the defendant's contacts with the forum are of a
continuous and systematic nature. Helicopteros, 466 U.S. at 414-
15. We hold that the exercise of personal jurisdiction over MIS
satisfies the Constitution under the specific jurisdiction
analysis.
MIS could reasonably anticipate being haled into court in
Mississippi as a result of its relationship with Coats. MIS'
recruitment activities in Mississippi that led to his hiring, such
as holding a meeting in the state and buying ads in papers that
circulated in the state, are the sort of "reach[ing] out" to
Mississippi that the Supreme Court saw as creating personal
jurisdiction in Burger King, 105 S. Ct. at 2186. See also
Pedelahore v. Astropark, 745 F.2d 346, 349 (5th Cir. 1984). MIS
12
further cemented that bond by signing a contract obligating it to
return Coats there once a year for as long as he worked for MIS.
Then, after Coats' injury, he and MIS jointly decided that he
would return to Mississippi for treatment.9 MIS flew him there and
began paying his medical bills. Flying an employee to Mississippi
and assuming a financial obligation there is not a "random,"
"fortuitous," or "attenuated" act that is an improper basis of
jurisdiction. See Burger King, 105 S. Ct. at 2186. Backing out of
that commitment, an act that ultimately cost MIS over $20,000 in
the judgment below, was also a choice by MIS that could lead it to
foresee appearing in a Mississippi court. See Bearry v. Beech
Aircraft, 818 F.2d 370, 375 (1987); Thompson v. Chrysler Motors,
755 F.2d 1162, 1172 (5th Cir. 1985).
Once minimum contacts are shown, a court should decide whether
the assertion of jurisdiction would comport with fair play and
substantial justice, considering the burden on the defendant, the
9
Coats testified in his deposition that once it was
determined that his injury required surgery:
He [Mr. Shelton] first suggested that I would fly to
Houston. They would do surgery on me in Houston there.
He would have me met by members of his family. I would
be transported to a hospital. He said he could take
care of all the arrangements.
Then Shelton changed his mind and offered Coats another choice:
[T]he following day he had mentioned to me that if I
was going to be in the hospital for so long, that it
would be very expensive for my family to have to come
to Houston to see me and stay there; that if there was
anywhere in Mississippi that I would like to have the
surgery done, he could arrange it where I could be
transported to Mississippi.
13
forum state's interest in adjudicating the dispute, the plaintiff's
interest in obtaining convenient and effective relief, the
interstate judicial system's interest in obtaining the most
efficient resolution of controversies, and the shared interest of
the several states in furthering fundamental substantive social
policies. Burger King, 105 S. Ct. at 2184. Requiring MIS to
defend this suit in Mississippi would not offend these principles.
Coats is a resident of Mississippi, and Mississippi has a strong
"interest in providing effective means of redress of its
residents." McGee v. Int'l Life Ins. Co., 355 U.S. 220, 223
(1957); see also Holt, 801 F.2d at 780; Pedelahore, 745 F.2d at
349. It was not unreasonably inconvenient to require MIS to defend
a suit in Mississippi given that many of its employees are
American. See Burger King, 105 S. Ct at 2184 ("[t]hese
considerations sometimes serve to establish the reasonableness of
jurisdiction upon a lesser showing of minimum contacts than would
otherwise be required").
III.
A.
Turning to the district court's application of United States
law, MIS first argues that the choice of law is between the law of
the United Arab Emirates and Mississippi law, rather than the
general maritime law. This conclusion rests on the contention that
the district court lacked subject matter jurisdiction in admiralty,
and therefore, the only basis for federal jurisdiction is
diversity. If so, the district court should have applied
14
Mississippi's choice of law rules in deciding between foreign and
state law. See Klaxon Co. v. Stentor Electric Mfg. Co., Inc., 313
U.S. 487, 496 (1941); Erie R.R. Co. v. Tompkins, 304 U.S. 64
(1938).10 MIS asserts that Mississippi would apply the law of the
United Arab Emirates to this case.11
MIS argues that the activity giving rise to Coats' accident
does not have a sufficient connection to traditional maritime
activity to support admiralty tort jurisdiction. See Sisson v.
Ruby, 110 S. Ct. 2892 (1990); Foremost Ins. Co. v. Richardson, 102
S. Ct. 2654 (1982); Executive Jet Aviation v. Cleveland, 409 U.S.
249 (1972). In this circuit, we examine four factors to determine
the relationship to maritime activity: (1) the functions and roles
of the parties; (2) the types of vehicles and instrumentalities
involved; (3) the causation and type injury; and (4) traditional
concepts of the role of admiralty law. Kelly v. Smith, 485 F.2d
520, 525 (5th Cir. 1973). Our analysis today is further guided by
the Supreme Court's recent pronouncement in Sisson. See also
Broughton Offshore Drilling v. South Central Machine, Inc., 911
F.2d 1050, 1052 & n.1 (5th Cir. 1990) (applying Kelly after noting
10
Mississippi follows the Restatement Second approach which
requires application of the law of the place of injury, absent a
more significant relationship with another state. Mitchell v.
Craft, 211 So. 2d 509, 515 (Miss. 1968).
11
Penrod has not joined MIS in this argument, apparently
because Penrod's claim for contribution or indemnity against MIS
is based on general maritime law. If the law of the United Arab
Emirates is not applicable, Penrod may prefer to have general
maritime law apply rather than Mississippi law.
15
that Sisson recognized but neither approved nor disapproved our
approach).
Applying the first factor, the functions and roles of the
parties, MIS performs repair and maintenance services for oilfield
and marine vessels. Penrod is engaged in offshore oil drilling.
Penrod contracted with MIS, because Rig 69 needed pressure testing
before its next drilling operation. Because "the primary focus of
admiralty jurisdiction is unquestionably the protection of maritime
commerce," the Supreme Court has considered the effect of an
activity on maritime commerce. Foremost, 102 S. Ct. at 2658;
Sisson, 110 S. Ct. at 2895; see also Exxon Corp. v. Central Gulf
Lines, Inc., 111 S. Ct. 2071, 2074 (1991). The repair and
maintenance of a jack-up drilling rig on navigable waters is
certainly a maritime activity with an effect on maritime commerce.
The second factor is the types of vehicles and
instrumentalities involved. Coats' injury occurred aboard a vessel
on navigable water which strengthens the nexus with traditional
maritime activity. That Coats was operating MIS equipment aboard
Rig 69 does not diminish the importance of a ship-board injury.
As to the causation and type of injury, the third factor, MIS
refers to the fact that Coats was injured while pressure testing,
and the cause of the accident was the failure of Penrod's bullplug.
These events, MIS contends, could just have easily occurred on
land. Moreover, according to MIS, its negligent failure to train
Coats in pressure testing bears no special relation to maritime
activities. We are not persuaded that these facts could overcome
16
the otherwise substantial connection with maritime activity. In
any event, this factor is entitled to little weight after Sisson,
where the Court refused to engage in this sort of detailed inquiry
into causation. That case involved a fire that began on a
noncommercial vessel at a marina on a navigable waterway. Before
judging the nexus with traditional maritime activity, the Court
first had to determine the relevant activity involved. As the
Court explained,
Our cases have made clear that the relevant "activity" is
defined not by the particular circumstances of the incident,
but by the general conduct from which the incident arose . .
. This focus on the general character of the activity is,
indeed, suggested by the nature of the jurisdictional inquiry.
Were courts required to focus more particularly on the causes
of the harm, they would have to decide to some extent the
merits of the causation issue to answer the legally and
analytically antecedent jurisdictional question.
110 S. Ct. at 2897. Declining to ascertain the precise cause of
the fire, the Court determined the relevant activity to be "the
storage and maintenance of a vessel at a marina on navigable
waters." Similarly, the relevant activity in this case is the
repair and maintenance of a jack-up drilling rig on navigable
waters.
Traditional concepts of the role of admiralty, the final
factor, also support admiralty jurisdiction. This case arises from
a tort that occurred aboard a vessel on navigable waters. One of
the traditional roles of admiralty law is to provide compensation
for injuries aboard ship. See Sisson, 110 S. Ct. 2898-02 (Scalia,
J., concurring) (arguing that all vessel-related torts fall within
the admiralty jurisdiction).
17
MIS's reliance on Sohyde Drilling & Marine Co. v. Coastal Gas
Producing Co., 644 F.2d 1132 (5th Cir. 1981), is misplaced. There,
we applied the Kelly factors and concluded that admiralty
jurisdiction was lacking in a suit for property damage arising from
the blowout of a high-pressure gas well located in a dead-end canal
slip in Louisiana. Coastal, the operator of the well, had hired
Sohyde to perform workover operations to correct a loss of
production. Critical to the court's decision was its distinction
between property damage and personal injury. While denying
jurisdiction over the property damage at issue, the court remarked
that claims for personal injury suffered on navigable waters would
certainly fall within admiralty. Id. at 1136-37; see also
Broughton, 911 F.2d at 1052.12 Therefore, Sohyde actually supports
the exercise of admiralty jurisdiction in this case, one involving
only personal injury. MIS's arguments are without merit.
B.
Because this is an admiralty case, the Lauritzen-Rhoditis
factors govern the choice of law: (1) the place of the wrongful
act; (2) the law of the flag; (3) the allegiance or domicile of the
injured worker; (4) the allegiance of the defendant shipowner; (5)
the place of the contract; (6) the inaccessibility of the foreign
forum; (7) the law of the forum; and (8) the shipowner's base of
operations. Hellenic Lines, Ltd. v. Rhoditis, 398 U.S. 306, 308-09
12
Sohyde has been criticized for its distinction between
property damage and personal injury, and we have vowed not to
extend it beyond its facts. Broughton, 911 F.2d at 1053. See
also Houston Oil and Materials Corp. v. American Int'l Tool Co.,
827 F.2d 1049, 1054 (5th Cir. 1987).
18
(1970); Lauritzen v. Larsen, 345 U.S. 571, 583-91 (1953). "The
test is not a mechanical one in which the court simply counts the
relevant contacts; instead, the significance of each factor must be
considered within the particular context of the claim and the
national interest that might be served by the application of United
States law." Fogleman v. Aramco, 920 F.2d 278, 282 (5th Cir.
1991). The type of vessel involved in this case, a jack-up oil
drilling rig, is particularly relevant to our analysis. "The
significance of each factor in a nontraditional maritime context
like offshore oil production may vary from that in the traditional
shipping context in which the Lauritzen-Rhoditis test arose." Id.;
see also Bailey v. Dolphin Int'l, Inc., 697 F.2d 1268, 1275 (5th
Cir. 1983) (jack-up drilling rig); Cuevas v. Reading & Bates Corp.,
770 F.2d 1371 (5th Cir. 1985) (same); Jack L. Albritton, Choice of
Law in a Maritime Personal Injury Setting: The Domestic
Jurisprudence, 43 La. L. Rev. 879 (1983) (discussing the difference
between "bluewater" and "brownwater" cases). The place of the
wrongful act, the allegiance or domicile of the injured, and the
place of the contract, which are less important in the shipping
context, are more significant in nontraditional cases such as this
one. Chiazor v. Transworld Drilling Co., 648 F.2d 1015, 1019 (5th
Cir. 1981). Our review of the district court's decision to apply
United States law is de novo. E.g. Fogleman, 920 F.2d at 282.
The first factor is the place of the wrongful act. Coats'
accident occurred in the territorial waters of the United Arab
19
Emirates, and because this is a nontraditional maritime case, this
factor is entitled to considerable weight.
The second factor is the law of the flag. "The law of the
flag has traditionally been of cardinal importance in determining
the law applicable to maritime cases." Id. (citing Lauritzen, 345
U.S. at 583-84). MIS is not a shipowner and therefore this factor
has no specific application to it. Penrod's Rig 69 flew the United
States flag. Penrod argues that the flag of the vessel in this
case is fortuitous, because Coats was assigned to six different
drilling rigs with different owners and allegiances. the record
indicates that in addition to the PENROD 69, Coats worked aboard
the MARESK VICTORY, the TRIDENT III, the TRANSOCEAN V, the W.T.
ADAMS, and the SEDCO 91. Penrod, however, does not say what flag
each of these vessels flew and we are unable to find this
information in the record. We cannot concluded that Coats' injury
aboard a United States flagged vessel, as opposed to a vessel
registered in another country, was fortuitous without knowing what
flag these other rigs flew.
The third factor is the allegiance or domicile of the
plaintiff, and one that gains added significance in this context.
Coats is a United States citizen, and despite his move overseas, he
maintained his residence in Mississippi. That is where MIS agreed
to fly him for his vacations, and that is where he returned after
the accident. Nevertheless, defendants contend that Coats'
domicile was in the United Arab Emirates. They argue that he moved
to that country with the intent to remain, because his job with MIS
20
was for an indefinite term and one is generally domiciled where he
works. In Fogleman, however, the plaintiff was a Louisiana
resident who had worked in Saudi Arabia for eight years, and we
determined his domicile to be in the United States. Therefore,
Coats is, a fortiori, domiciled in the United States.
Fourth is the allegiance of the defendant shipowner. Penrod's
allegiance is without question to the United States. Rig 69 flies
the United State flag and Penrod's principal place of business is
Dallas, Texas. MIS is not a shipowner, but we still take into
account its organization under the laws of the United Arab
Emirates. This allegiance, however, is diminished somewhat by the
fact that MIS has no employees from that country and a large
percentage of them are from the United States.
The place of the contract is the fifth factor, and another
that is entitled to more weight in this context. As the district
court stated, Coats apparently executed an Arabic contract in the
United Arab Emirates for the purpose of obtaining a work visa;
however, the parties agreed to all of the contract terms in
Mississippi. Thus, Coats' employment contract was formed in
Mississippi, and this factor favors United States law. Cf.
Fogleman, 920 F.2d at 283 (noting that plaintiff signed all eight
of his contracts in Saudi Arabia). The contract between MIS and
Penrod is not relevant to our analysis. See id. (focusing on
plaintiff's contract with his employer without considering
employer's contract with owner/operator of oil platform).
21
The sixth factor, inaccessibility of the forum, is only
relevant to forum non conveniens. Lauritzen, 345 U.S. at 589-90.
The seventh factor is the law of the forum. The general maritime
law of the United States is the law of the forum; however, this
factor is entitled to little weight because, by definition, it
supports the law of the forum. Fogleman, 920 F.2d at 283.
The final factor is the base of operations. In the
nontraditional context, we have held that "'it is the base from
which the rig is operated on a day-to-day basis rather than the
base of operations of the corporate or ultimate owner of the rig
which is important for choice of law purposes.'" Id. at 284
(quoting Bailey, 697 F.2d at 1275 n.22). Penrod has a local office
in the United Arab Emirates to assist in the operation of Rig 69.
The record shows that this office is occupied by the rig
superintendent who frequently communicates with Penrod's office in
Dallas, Texas by facsimile. We addressed a similar situation in
Bailey. There, the local office in Singapore "was in daily contact
with the Houston office by telex or telephone, usually providing it
with drilling reports." 697 F.2d at 1271 n.6. In addition, "the
day-to-day decisions respecting the activities and operations of
the [rig] were made by [the area manager] or [the rig manager and
drilling superintendent] or by personnel on the rig." Id. We
nevertheless agreed that the base of operations was not in the
United States. Id. at 1274. Therefore, we are constrained to
find that Penrod's base of operations for purposes of this case is
in the United Arab Emirates. MIS's base of operations is also in
22
the United Arab Emirates; it has no offices anywhere else. Despite
the business it conducts through Lee's Materials in the United
States and the fact that it has a substantial number of American
employees, its day-to-day operations are clearly conducted in the
United Arab Emirates.
After considering the above factors and giving them the weight
they deserve in this offshore oil drilling context, we agree with
the district court's decision to apply United States law. Of the
factors deemed more significant in this context, only the place of
the wrongful act favors foreign law; the allegiance of the
plaintiff and the place of contract refer us to United States law.
The law of the flag and the allegiance of the defendant shipowner
also point to United States law. In short, the United States has
a greater interest in applying its law to this case than the United
Arab Emirates. Coats was recruited in the United States, accepted
the job while in this country, was supervised by American
employees, suffered injury aboard an American ship, and was flown
home to recover. See Albritton, Choice of Law, supra (noting the
unlikelihood of courts denying the benefit of American maritime law
to an American citizen who is recruited to work overseas and does
not give up his permanent United States residence).
Although prior cases are less instructive in this area, where
our analysis must be based on the facts of each case, our decision
today is consistent with our precedent. With one exception, our
decisions involving nontraditional, "brownwater," vessels have
involved a foreign plaintiff injured off the coast of a foreign
23
country seeking the protections of American law. We have uniformly
rebuffed these attempts. See, e.g. Cuevas v. Reading & Bates
Corp., 770 F.2d 1371 (5th Cir. 1985); Koke v. Phillips Petroleum
Co., 730 F.2d 211 (5th Cir. 1984); Bailey v. Dolphin Int'l, Inc.,
697 F.2d 1268 (5th Cir. 1983); Vaz Borralho v. Keydril Co., 696
F.2d 379 (5th Cir. 1983); Chiazor v. Transworld Drilling Co., 648
F.2d 1015 (5th Cir. 1981).
The one exception is Fogleman, where we refused to allow an
American plaintiff to sue under United States law for an injury
that occurred in Saudi Arabia. Fogleman, a Louisiana resident,
went to work for Fluor Arabia in Saudi Arabia. He applied for the
job by completing a "Foreign Employment Application" and mailing it
to Saudi Arabia. Fluor Arabia is a subsidiary of Fluor
Corporation, a Delaware corporation with its principle place of
business in California, but is only authorized to do business in
Saudi Arabia. Fogelman worked under a series of eight one-year
contracts, all signed in Saudi Arabia, and lived aboard a boat
flying the Saudi Arabian flag. Fluor Arabia had a contract with
ARAMCO, and pursuant to that contract, Fluor Arabia assigned
Fogleman to work with ARAMCO. Fogelman sustained a sharp pain in
his chest while transferring from an oil platform to a workboat
that flew the Panamanian flag and later suffered a heart attack,
allegedly caused by excessive work hours aboard ARAMCO's oil
platform. Fogleman sued ARAMCO and Fluor Arabia, and we affirmed
the district court's application of Saudi Arabian law to ARAMCO and
Fluor Corporation. 920 F.2d at 281.
24
The contacts with the United States in Fogleman were not as
strong as in this case. The vessels involved did not fly the
United States flag, and all of the plaintiffs contracts were signed
in the foreign country. Moreover, the allegiance of both
defendants was foreign. Id. at 282-83. "[T]he only significant
factor pointing to the application of United States law [was] the
domicile of the plaintiff." Id. at 284. As discussed, the
connections with the United States in this case are substantial and
justify a different result than the one we reached in Fogleman.
IV.
Given our affirmance of the district court's application of
the general maritime law, we find no abuse of discretion in the
denial of MIS's motion to dismiss for forum non conveniens. The
private and public factors to be considered do not overcome the
deference due Coats' choice of his home state as the forum and the
fact that this case has already been tried. See In re Air Crash
Disaster Near New Orleans, 821 F.2d 1147, 1167 (5th Cir. 1987) (en
banc) (stating that "[t]he fact that a trial on the merits has
occurred in the plaintiff's selected forum does have some effect on
our decision of whether the district court abused its discretion").
MIS has not shown that it was "greatly prejudiced" by having to
defend the case in Mississippi. Id. at 1168.
V.
Penrod has devoted much of its energy in this appeal to urging
us to abolish or modify the doctrine of joint and several
liability. The jury found Penrod and MIS to be 20% and 60%
25
responsible, respectively, but as a result of joint and several
liability, Coats can look to Penrod for the entire 80%. Coats
would obtain 80% from Penrod though the jury determined Coats and
Penrod to be equally at fault. Thus, Penrod maintains, joint and
several liability is incompatible with comparative fault.13 We
rejected this proposition in Simeon v. T. Smith & Son, Inc., 852
F.2d 1421, 1429-30 (5th Cir. 1988), and we are bound by Simeon
without the en banc court. But see id. at 1436 (Garwood, J.,
concurring in part and dissenting in part) (arguing for "modified
joint liability").
Additionally, Penrod points out that at least thirty-three
states have either abolished or modified the doctrine of joint and
several liability and urges us to change the federal maritime law
based on this statement of policy. We are well aware of our duty
as an admiralty court to look to legislative enactments for policy
guidance. Miles v. Apex Marine Corp., 111 S. Ct. 317, 323 (1990);
Moragne v. States Marine Lines, 90 S. Ct. 1772, 1781-83 (1970).
However, this change in policy among the states is in conflict with
the maritime policy recognized in Simeon:
To date, under general maritime [law], the policy of the
Supreme Court has been clear -- ensure that injured plaintiffs
are made whole, even at the expense of overburdening
defendants.
13
Penrod appears to be motivated in this argument by a fear
that the judgment is unenforceable against MIS in the United Arab
Emirates, and Penrod may have to absorb the effect of MIS's good
fortune. It is true that the doctrine of joint and several
liability places such risk of nonrecoverability entirely on the
defendants, but we are not convinced that this is an unjust
result in this case. The decision to do business with MIS was
Penrod's, not Coats.
26
852 F.2d at 1454 (citing Edmonds v. Compagnie Generale
Transatlantique, 443 U.S. 256, 271-72 n.30 (1979)) (King, J.,
joined by Williams, J., specially concurring). While a strong
statement of policy from the states has much force in this context,
that sentiment must nevertheless give way to a contrary policy
established by the Supreme Court.
Penrod also contends that applying joint and several liability
in the context of comparative fault ignores the jury's findings of
fault and thereby amounts to a violation of its right to a jury
trial under the Seventh Amendment. Under current law, however, a
defendant forced to pay more than its share can recover against its
codefendants for contribution based on the jury's findings of
fault. Thus, the jury's findings are adhered to. This system
simply forces the defendants to work it out between themselves and
ensures the plaintiff that he will in fact recover the judgment.
Ideally, the end result with or without joint and several liability
is the same.
VI.
Coats' cross-appeal does not raise any grounds for reversal.
First, we affirm the district court's summary judgment ruling that
Coats was not a Jones Act seaman. The determination of seaman
status is "an inherently factual question." Barrett v. Chevron
U.S.A., Inc., 781 F.2d 1067, 1074 (5th Cir. 1986) (en banc).
"Nonetheless, if the requisite proof is absent, a court may decide
that seaman status is lacking as a matter of law." Kerr-McGee
27
Corp. v. Ma-Ju Marine Servs., Inc., 830 F.2d 1332, 1335 (5th Cir.
1987). Seaman status is a jury question only if there is evidence
that (1) the plaintiff was "assigned permanently to a vessel . . .
or performed a substantial part of his work on the vessel" and (2)
the work he performed assisted the vessel in accomplishing its
mission or contributed to the function or maintenance of the
vessel. Offshore Company v. Robison, 266 F.2d 769, 779 (5th Cir.
1959). The requirement of assignment to a vessel also includes
assignment to "an identifiable fleet of vessels." Braniff v.
Jackson Ave.--Gretna Ferry, Inc., 280 F.2d 523, 528 (5th Cir.
1960).
Because Coats was not permanently assigned to a vessel and did
not perform a substantial part of his work aboard a vessel, his
seaman status turns on whether he worked aboard a fleet. A fleet
is "an identifiable group of vessels acting together or under one
control." Barrett, 781 F.2d at 1074. Although we have decided
that the employer need not be the owner or operator of the group of
vessels, Bertrand v. International Mooring & Marine, Inc., 700 F.2d
240, 245 (5th Cir. 1983), we have "reject[ed] the notion that fleet
of vessels in this context means any group of vessels an employee
happens to work aboard." Barrett, 781 F.2d at 1074. In New v.
Associated Painting Servs, Inc., 863 F.2d 1205, 1208 (5th Cir.
1989), plaintiff, like Coats, worked for an independent contractor
that assigned its employees to perform jobs for owners and
operators of various vessels. He performed sandblasting and
painting aboard vessels owned by at least eight unrelated entities.
28
He was injured aboard a semi-submersible drilling rig owned by one
of these entities and sued his employer under the Jones Act. Id.
at 1207 We affirmed the summary judgment denying seaman status,
because the vessels plaintiff worked aboard were not under common
ownership or control. Id. at 1208. See also Langston v.
Schlumberger Offshore Servs, 809 F.2d 1192, 1194 (5th Cir. 1987)
(plaintiff who performed jobs for ten unrelated owners aboard
fifteen different vessels not a seaman). Likewise, the vessels
Coats worked on were owned by the customers of MIS. MIS did not
own or control these vessels. Therefore, the district court
correctly determined that Coats did not work on a fleet.
Second, by failing to include the transcript of trial in the
record, Coats has waived his contentions regarding the sufficiency
of the evidence to support the jury's finding of contributory
negligence and the directed verdict for Penrod and MIS on the issue
of punitive damages under general maritime law. Rule 10(b)(2) of
the Federal Rules of Appellate Procedure requires an appellant who
intends to argue that a finding or conclusion is unsupported by the
evidence or contrary to the evidence to include a transcript of all
relevant evidence. Fed. R. Civ. P. 10(b)(2). Defendants' appeals
only pertain to pre-trial rulings of law and therefore neither
needed the trial transcript for its arguments, and they did not
order it. Therefore, Coats was required to include the transcript
to challenge the jury's finding of contributory negligence and the
directed verdict. Because the transcript is not in the record, we
cannot consider these arguments.
29
Third, Coats has also waived his claim for prejudgment
interest. Prejudgment interest may only be awarded for past
damages, but Coats did not request a segregation of past and future
damages in the jury interrogatories. See Brister v. AWI, Inc., 946
F.2d 350, 362 (5th Cir. 1991).
We finally consider whether the district court abused its
discretion in failing to award certain costs to Coats. Coats
submitted a Bill of Costs for $34,405.25, and the Clerk taxed that
amount against defendants. After defendants moved the court to
review the taxation of costs, the court agreed that the costs were
excessive and instructed the parties to attempt to reach a
compromise on a lower amount. After their efforts to compromise
failed, the district court awarded $7,889.04. Coats contends for
an additional $23,937.34.
Rule 54(d) of the Federal Rules of Civil Procedure provides
for an award of costs "to the prevailing party unless the court
otherwise directs." Fed. R. Civ. P. 54(d). 28 U.S.C. § 1920
defines recoverable costs,14 and a district court may decline to
award the costs listed in the statute but may not award costs
14
28 U.S.C. § 1920 lists
(1) fees of the clerks and marshals;
(2) fees of the court reporter for any and all of the
stenographic transcript necessarily obtained for use in
the trial;
(3) fees and disbursements for printing and witnesses; and,
(4) fees for exemplification and copies of papers
necessarily obtained for use in a case;
(5) docket fees under § 1923 of this title;
(6) compensation of court appointed experts, compensation
of interpreters, and salaries, fees, expenses and costs
of special interpretation.
30
omitted from the list. Crawford Fitting Co. v. J.T. Gibbens, Inc.,
107 S. Ct. 2494, 2498 (1987). "Only when a clear abuse of
discretion is shown can an award of costs be overturned." In re
Nissan Anti-Trust Litigation, 577 F.2d 910, 918 (5th Cir. 1978);
see also Fogleman, 920 F.2d at 285-87.
Coats claims an additional $1,179.14 for the cost of
obtaining transcripts of several depositions. Under § § 1920(2)
and (4), prevailing parties are entitled to the costs of original
depositions and copies if "necessarily obtained for use in the
trial." We do not require that a deposition be actually introduced
into evidence to meet this requirement.
If, at the time it was taken, a deposition could reasonably be
expected to be used for trial preparation, rather than merely
for discovery, it may be included in the costs of the
prevailing party. Similarly, a deposition copy obtained for
use during trial or for trial preparation, rather than for the
mere convenience of counsel, may be included in taxable costs.
Whether a deposition or copy was necessarily obtained for use
in the case is a factual determination to be made by the
district court. We accord great latitude to this
determination.
Fogleman, 920 F.2d at 285. The district court awarded $3,548.45
for depositions it determined, as stated in its order, to be
necessarily and reasonably obtained in preparation for trial.
Coats has not demonstrated that the district court's determination
of which depositions were necessary was a clear abuse of
discretion.
The district court denied Coats' request for travel expenses
in the amounts of $711.69 and $642.35, $1,744.96 for "blow-ups"
used at trial, and $1,175.00 in video technician fees incurred for
31
video depositions. These expenses are not included in § 1920 and
therefore are not recoverable.
Coats seeks payment of a witness fee, $87.50, and expert fee,
$1,232.65, for an expert who attended trial but did not testify as
a result of the court's directed verdict and $3,298.84 for a
foreign law expert. Because the expert witness did not testify, we
find no clear abuse of discretion in the refusal to tax the witness
fee. Additionally, expert fees are not recoverable. See 28 U.S.C.
§ § 1821, 1920; Crawford, 107 S. Ct. 2494.
Coats also claims $518.65 for certified copies of various
documents and the cost to photocopy certain documents attached to
depositions in the amounts of $1,831.73 and $121.88. The cost of
these copies may be taxed if the copies were "necessarily obtained
for use in the case." 28 U.S.C. § 1920(4). The district court
awarded $3,045.63 for copies and exemplifications it determined, as
stated in its order, to be necessarily and reasonably obtained. We
will not disturb the court's determination of which copies were
necessary.
Finally, Coats claims an additional $11,392.95 for the "[c]opy
cost of pleadings, correspondence and documents necessary due to
defense counsel's 'paper war.'" According to Coats' Bill of Costs,
almost all of this amount covers "in-house" copying. We cannot
judge the necessity of these expenses without a more specific
statement. In any event, the district court was in the best
position to assess the equities of the alleged "paper war."
AFFIRMED.
32
DeMOSS, Circuit Judge, dissenting:
I am unable to concur with the decision of my colleagues
in one crucial respect: I think proper evaluation of the
Lauritzen-Rhoditis factors requires that the choice of law
determination in this case be made in favor of the law of the
United Arab Emirates (UAE) rather than that of the United States.
My differences with the panel on the Lauritzen-Rhoditis choice of
law factors involve the first factor, i.e. the place of the
wrongful act; the fourth factor, i.e. the allegiance of the
defendant ship owner; and the fifth factor, i.e. the place of the
contract.
Looking first at the place of the wrongful act, the panel
opinion devotes one sentence to analysis of this subject. It
recognizes that "the accident occurred in the territorial waters of
the United Arab Emirates" and that since this is a "nontraditional
maritime case," that factor is entitled to considerable weight.
There is no doubt that Coats was injured while on board the Penrod
69, a jackup drilling rig owned and operated by Penrod Drilling
Corporation (Penrod). Where the Penrod 69 was at the time of the
accident is ambiguously stated in the panel opinion. In the opening
paragraph, the rig is described as being "off the coast of the
United Arab Emirates," but later on in the factual description, it
is described as being "located in the Port of Mina Saqr in the
territorial waters of the United Arab Emirates." In my judgment
there is a crucial difference between being "off the coast" and
being "in port," for the latter necessarily implies that the vessel
was within the boundary recognized for international law purposes
as the boundary of the United Arab Emirates and within what would
be referred to under United States nomenclature as the "inland
waters" of Ra's Al Khaymah, the particular emirate in which that
port is located. We are talking about the Penrod 69 being within
inland waters of Ra's Al Khaymah just like we would talk about it
being within the inland waters of the State of Texas if it were in
the Port of Galveston or within the inland waters of the State of
Mississippi, if it were it the Port of Biloxi. Secondly, the
Penrod 69 had been in these inland waters for some eight or nine
months prior to the date of Coats' injury. The records are clear
that on August 12, 1987, the Penrod 69 was surveyed for its annual
condition certificate; and at that time, the survey report
indicates that the "vessel lay jacked-up" in this port. The Penrod
69 was out-of-service, deactivated, not operated, and not occupied
by any personnel other than a watchman, up until January 1988, when
as a result of a new contract for its use in a Persian Gulf
drilling activity, Penrod commenced the task of preparing Penrod 69
to go back into service. During this interval that it was
deactivated, the Penrod 69 functioned solely as an artificial wharf
or dock for the purpose of storing the equipment and facilities
thereon, with its legs standing on the bottom of the port and its
hull up out of the water. In accomplishing the refurbishing work,
Penrod used its own personnel (assumptively the crew of the Penrod
69) and other categories of "contract labor, catering, and service
personnel." MIS was hired by Penrod to assist in the refurbishing
34
work and MIS designated Coats to operate the MIS pump which was
brought on board to provide pressure to test certain pressurized
systems of the rig. The daily reports as to the personnel working
on board the rig, which are in the record, reflect that the totals
of contract labor, catering, and service personnel always exceeded
the number of Penrod personnel. The record does not clearly
indicate whether on the date of injury, April 12, 1988, the Penrod
69 was still in a "jacked-up" position, or whether its hull had
been lowered into the water. Obviously, if it was still at a
jacked-up position, its categorization as a "vessel" is in serious
doubt. Even if it had been lowered into the water, however, the
nature and extent of the work going on, and the number of outside
personnel deployed in such work, clearly demonstrate that the
repair and refurbishing activities were beyond the capacity of the
"crew" of the Penrod 69 to accomplish; and that such work could be
accomplished only with the ready availability and access of shore-
based personnel and facilities. In my view, under these facts, the
"place of the wrongful act" element of the Lauritzen-Rhoditis
factors should be given more than just "considerable weight" as the
panel does. It should be the controlling factor in the choice of
law decision. I have looked for and have been unable to find any
Supreme Court decision or Fifth Circuit decision which has applied
United States law to resolve the claim of a shore-side worker
injured while assisting in the refurbishing of a jacked-up drilling
rig while it was located within the inland waters of another
nation; and in my opinion the panel decision constitutes an
35
unacceptable extension of United States law into areas where simple
comity among nations requires that the law of the place of the
casualty apply.
My second area of disagreement with the panel regarding the
Lauritzen-Rhoditis factors concerns the factor of allegiance of the
defendant shipowner. I do not quarrel with the panel's
determination that the allegiance of Penrod as owner of the Penrod
69, is to the United States. But, in my view, the factor of
"allegiance of the defendant shipowner" has materiality only in the
circumstance where the flag of the vessel and the allegiance of the
defendant shipowner are different (i.e. the flag is a flag of
convenience), and the law of the nation of allegiance of the
defendant shipowner can appropriately be applied to the
determination of rights between that shipowner and his seaman
employee when that vessel is engaged in international commerce. In
this case, however, the allegiance of the defendant shipowner is an
inconsequential factor: first, because Penrod 69 is documented
under the United States flag and Penrod's allegiance is to the
United States and there is no flag of convenience involved; and
secondly, and more importantly, because both the district court and
the panel opinion recognize that there was no employment
relationship as seaman, or otherwise, between Penrod and Coats.
The majority's use of the allegiance of the defendant shipowner to
tip the scales in favor of application of United States law would,
in my judgment, be improvident even if the only defendant in this
case were Penrod; because that factor should be applied only where
36
there is an employment relationship between the injured plaintiff
and the defendant shipowner. But, Penrod is not the only defendant
in this case; and the other defendant, MIS, is not a shipowner; it
is an entity whose allegiance is owed to the laws of the United
Arab Emirates; and it is in fact the employer of Coats. I am truly
puzzled by the statement of the panel opinion that the allegiance
of a MIS is "diminished somewhat" because it has no employees from
the UAE and a large percentage of its employees are from the United
States. When, where, and how did the "allegiance" of a corporate
entity come to be determined (or "diminished") by consideration of
the citizenship or nationality of its employees? Does a
corporation owe "allegiance" to any nation other than the nation
which created it? Would the panel say that a corporation organized
under the laws of the state of Delaware is not truly a Delaware
corporation for purposes of our diversity law unless most of its
employees are from Delaware? I have looked and have not found any
Supreme Court or any Fifth Circuit decision which has applied
United States law to determine the rights and obligations between
a citizen of the United States who is injured in a foreign country
during the course and scope of his employment with a corporate
entity organized under the law of that foreign country. In my
judgment, the panel opinion improvidently extends United States law
to the set of circumstances involved in this case by giving greater
weight to the allegiance of the defendant shipowner instead of to
the allegiance of the defendant employer.
37
Finally, I question the correctness of the panel decision in
evaluating the place of contract factor in the Lauritzen-Rhoditis
analysis. Here again, the majority misconstrues the significance
of this factor. I recognize that Coats was recruited by
representatives of MIS at his home in Mississippi and that the
basic terms of his employment agreement were negotiated and orally
agreed upon during this recruitment visit. However, it is clear
beyond doubt that he was recruited and "employed" to work in the
United Arab Emirates and not aboard any vessel. Furthermore, it is
clear that in order to get the necessary visa to enter the United
Arab Emirates, Coats and MIS "executed an Arabic contract," and
that Coats then applied for and received the necessary work permit
from the UAE which would permit him to reside there during his
employment. This circumstance of a work permit is a special factor
present in this case which has not been present in any of the other
choice of law cases cited in the majority opinion; and, in my view,
necessitates a determination that the law of the UAE should apply
to an injury occurring in the UAE during employment under a work
permit.
In his original appellee's brief, Coats argued: "U.S. Maritime
Law applies whenever a U.S. citizen is injured on a U.S. flag
drilling vessel anywhere in the world." (p. 52). The cases cited
by Coats as precedent for that proposition do not support his
assertion. But the majority opinion in effect arrives at the same
conclusion by misinterpretation and misevaluation of the Lauritzen-
Rhoditis factors. Because I think such a conclusion is bad law
38
under the facts of this case, and will produce undesirable effects
when applied as a precedent, I would reverse the district court's
judgment and remand the case to the district court for retrial in
accordance with the laws of the United Arab Emirates.
In arriving at this result, I rely on the following line of
Fifth Circuit cases: Chiazor v. Transworld Drilling Co., Ltd., 648
F.2d 1015 (1981); Zekic v. Reading & Bates Drilling Co., 680 F.2d
1107 (1982); Bailey v. Dolphin Intern., Inc., 697 F.2d 1268 (1983);
Koke v. Phillips Petroleum Co., 730 F.2d 211 (1984); Schexnider v.
McDermott Intern., Inc., 817 F.2d 1159 (1987); and Fogleman v.
Aramco, 920 F.2d 278 (1991). All of these involve "nontraditional"
vessels similar in nature and function to the Penrod 69 and all of
which determined that the law of another nation, other than the
United States, applied.
c:br\opin\92-7278.dis 39